Faden and Faden (No 3)
[2011] FamCA 897
•11 November 2011
FAMILY COURT OF AUSTRALIA
| FADEN & FADEN (NO 3) | [2011] FamCA 897 |
| FAMILY LAW – PROCEDURAL – Subpoena to give evidence |
| Family Law Act 1975(Cth) Family Law Rules 2004 (Cth) |
| Blann and Blann (1983) FLC 91-322 Commissioner for Railways v Small (1938) 38 SR (NSW) 564 Mallet & Mallet (1981) FLC 91-091 R v Barton[1981] 2 NSWLR 414 Re Z (1996) 20 Fam LR 651 Waind and Hill (1978) 1 NSWLR 372 |
| APPLICANT: | Mr Faden |
| RESPONDENT: | Ms Faden |
| FILE NUMBER: | SYC | 8240 | of | 2007 |
| DATE DELIVERED: | Orders 11 November 2011 Reasons 24 November 2011 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Le Poer Trench J |
| HEARING DATE: | By written submissions |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Blackah |
| SOLICITOR FOR THE APPLICANT: | Caroline Chung & Associates |
| COUNSEL FOR THE RESPONDENT: | Mr Schonell SC |
| SOLICITOR FOR THE RESPONDENT: | Barkus Doolan Kelly |
Orders
Pending further order, neither party is to issue any subpoena unless it is approved by Justice Le Poer Trench.
Leave is granted to each party to apply to Justice Le Poer Trench in chambers to issue any subpoena from this point forward.
The matter is to be re-listed for the purpose of considering further directions in relation to the preparation of the single experts valuation of relevant entities of the parties. Such listing to be arranged by the Court at a time convenient to the Court and the parties.
The subpoena to produce and to give evidence issued to Mr Mr T and Mr Mr U 11 July 2011, to the extent that the subpoena are unanswered by production of documents are struck out.
IT IS NOTED that publication of this judgment under the pseudonym Faden & Faden 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 SYDNEY |
FILE NUMBER: SYC 8240 of 2007
| Mr Faden |
Applicant
And
| Ms Faden |
Respondent
REASONS FOR JUDGMENT
Before the Court is an application by the husband to examine Mr Mr T and Mr Mr U in relation to their responses to subpoena issued against them by the Registrar on 11 July 2011. When the matter was before the Court on 30 August 2011, I ordered that the husband provide written submissions setting out the provisions of the Act and Rules and general law which would empower the Court to make the orders sought by him, together with argument to support his application for the Court to exercise such power. As will be seen from the submissions set out below there is also an application for the wife to pay the husband’s costs.
On 12 September 2011 the husband provided those submissions by email addressed to my associate. The submissions are succinct and contain relevant history and I here incorporate them into these reasons. I have amended the submissions to remove obvious mistakes and omissions:
Dear Madam Associate,
We refer to the Orders made by His Honour on 30 August 2011.
One of His Honour’s Orders required that we email His Honour’s Associate with a copy to be provided to the solicitors for the wife and Mr Radman, the solicitor for the subpoenaed parties, [Mr U] and [Mr T], advising of the legislative or common law foundation of the Court’s jurisdiction to hear an application for the oral examination of [Mr U] and [Mr T].
The background is that on 25 June 2009 the Court by consent appointed [V Accounting] to prepare a single expert report as to the value of various entities in which the parties directly or indirectly have an interest. The entities controlled by the parties, [K Pty Ltd] (a company controlled by the husband) and [M Pty Ltd] (a company controlled by both parties) hold minority shareholdings in several companies known collectively as the [N Associates] and that is where the issue presently before the Court in relation to [Mr U] and [Mr T] arises.
On 3 December 2010 V Accounting wrote to [Mr U] who at that time was for want of a better term the principal of the [N Associates] asking for documents to be provided but also for information to be given which would enable [V Accounting] to understand the reasoning behind the way in which various of which the company’s financial records were structured. Put shortly they wanted explanations as to various items appearing in the company’s Balance Sheet.
This led to a number of phone conferences between the parties legal representatives and Registrar George and ultimately it was the joint position of the parties and the Registrar that the most efficient way to proceed was for the issuing of Subpoenas to [Mr U] and [Mr T] for the production of documents and to give evidence before His Honour so that the information could be obtained and provided to [V Accounting]. That had not been able to occur because initially [Mr U] and later when he retired from the [N Associates] [Mr T] were wanting the parties to sign a Confidentiality Agreement. The husband had agreed to sign it but the wife did not because the husband is a competitor of the [N Associates] and the proposed Confidentiality Agreement contained an indemnity in favour of the [N Associates] by the wife in the event that the husband dealt inappropriately with confidential information.
This then was the background to the issuing of the two Subpoenas. It is understood that [Mr U] disposed of his interest in the [N Associates] by way of sale to [Mr T] and entities associated with him. The circumstances of that sale, the way in which the sale price was calculated and other related matters are some of the things that it is sought to examine [Mr U] about. [V Accounting] have provided an updated letter dated 29 August 2011 which is a template for the examination of [Mr U] and [Mr T]. There are also matters relating to times prior to [Mr T] involvement in the [N Associates] that only [Mr U] will be able to answer.
The Subpoena to [Mr T] seeks to establish the financial affairs of the [N Associates] at the present time and that is something that [Mr U] is unable to give evidence about.
That then brings us to an examination of the Family Law Rules.
The starting point is Rule 16.04 which gives the Court broad power to make Orders about the conduct of a trial including Orders related to the issues on which the Court requires evidence including granting permission to issue Subpoenas to produce documents or to attend or both (see Rule 16.04(1)(iv)) and for the determination of any evidentiary questions that arise (Rule 160.4(1)(iv).
These proceedings are unable to go to trial without the single expert report of [V Accounting]. Their report is unable to be prepared until they have the information that is needed from [Mr U] and [Mr T]. It is therefore appropriate that the Court determine the evidentiary question as to the value of the parties’ interests held indirectly in entities previously controlled by [Mr U] and now controlled by [Mr T].
Of course Rule 16.04 commences by saying that the Rule is applicable in cases to which Rules 16.08 to 16.13 apply.
In that regard the relevant Rule in this regard is Rule 16.11 the first procedural hearing before a Judge. The matter was first before His Honour for procedural Orders on 25 June 2009..
To the extent that it is necessary for the husband to make submissions at this stage about costs they are as follows; firstly he was prepared to sign the Confidentiality Agreement and it was only the wife’s refusal to do so that gave rise to the need to issue Subpoenas to [Mr U] and [Mr T]. Accordingly it is submitted that any costs payable to [Mr U] and [Mr T] should be visited upon the wife.
It is also submitted that [Mr U] and [Mr T’s] costs should be limited to the costs that would have been incurred by the collation of the documents required to be produced and in providing answers to the questions initially submitted to them by [V Accounting] by letter of 4 December 2010. In that regard it is notable that on 30 August 2011 Mr Radman simply sought an Order that access to the commercially sensitive documents be limited to the parties’ legal representatives and the expert. That is something that could have been done without the necessity for an appearance on 30 August 2011.
The wife’s submissions in relation to the matter were received on 27 September 2011. In her submissions she recited relevant history and attached relevant documents. The submission then continues from paragraph 4 to paragraph 12 under the heading “The power of the Court to issue subpoenas to give evidence on a date prior to final hearing.” Those submissions are as follows:
The power of the Court to issue subpoenas to give evidence on a date prior to the final hearing
4.The Family Law Rules are silent as to when subpoenas to give evidence may be returnable. There is no legal restriction which requires subpoenas to give evidence to be listed at final hearing, albeit such subpoenas usually are so listed. The form of subpoena requires that a date time and place for attendance be stated on it, and this appears to be the limit of the requirement.
5.By way of comparison rule 33.3(6) of the Uniform Civil Procedure Rules (NSW) similarly does not restrict the date on which a subpoena might be listed. Rule 24.13(6) of the Federal Court Rules 2011 is in identical terms to rule 33.3(6) UCPR. Both rules require that the date specified on the subpoena be the date of the trial or any other date permitted by the Court.
6.Noting the trial in these proceedings commenced on 25 June 2009 before His Honour, Le Poer Trench J under Part 16 of the Family Law Rules 2004 and has continued on a number of days since then, the Court has, as part of its broad discretion under rule 16.4, the power to list a subpoena to give evidence on a specified day as part of the continuation of the trial.
7.Subpoenas to produce documents are, as a matter of course, listed prior to the final hearing. The rationale is succinctly stated in Pyoja Pty Ltd v 284 Bronte Road Developments Pty Ltd [2006] NSWSC 831. The Court said at paragraph 6:
" UCPR 33.3(6) provides that a subpoena may be made returnable for the date of the trial “or any other date as permitted by the Court”. It is common practice in this Court for subpoenas to be issued and made returnable before the Registrar well before the date fixed for trial, so that documents required for preparation may be procured."
8.This rationale (the early listing of subpoenas so that information and documents required for preparation may be procured in advance of trial) applies equally to the present subpoenas. Documents and information are required in relation to entities in which the parties have minority interests for those interests to be valued for the proceedings. [Mr U] and [Mr T] are in a position to provide that information and those documents. They can be subpoenaed to give evidence accordingly. Since the valuation of the parties' interests is required prior to a final hearing of the proceedings, it makes sense for the evidence to be given prior to final hearing.
9.As a general submission, but particularly in the context of Part 16, there seems to be no legal basis in support of the proposition that a subpoena to give evidence cannot, in appropriate cases, be returnable on a day prior to the final hearing.
10.While it was open to His Honour in the alternative to require the third parties to attend to be examined upon their oath under Part 15.6 of the Rules, in His Honour's management of the trial pursuant to rule 16.04, His Honour granted leave for subpoenas to give evidence to issue instead, consistent with His Honour's approach on 18 May 2011.
11.It is submitted this case management approach was open to His Honour and the subpoenas to give evidence have properly been given a date for attendance prior to final hearing, for the reasons just set out.
12.If this submission is not accepted, His Honour is requested to direct [Mr U] and [Mr T] to attend before a Registrar to be examined pursuant to rule 15.71.
The wife also made submissions in response to the husband’s application for costs:
Husband's submission wife should pay cost
13.The wife's objection to signing the confidentiality agreement was a reasonable one.
14.The response of the subpoenaed parties to the objection was unreasonable. It is not clear why the wife should be required to indemnify the third parties against breaches of confidentiality by someone she does not control. The third parties were legally advised. It is reasonable to infer they were advised that one likely consequence of holding out on producing the documents by agreement was the issue of a subpoena, and that if a subpoena was issued, they could not require the parties to execute a confidentiality agreement prior to production.
15.As such the wife's refusal to sign the confidentiality agreement is not a circumstance which would cause the Court to depart from the usual rule that each party pay their own costs.
16.The subpoenaed parties did not have the opportunity to consider His Honour's views about s 121 of the Family Law Act 1975 as the husband would not consent to a letter being sent to them, even after the wife had the letter prepared at her expense and sent to his solicitor. Had that letter been sent, the subpoenas may well have been unnecessary. The husband chose to issue the subpoenas instead of continuing correspondence with the third parties (albeit with the wife's support, given the husband's decision not to send the joint letter she had had prepared to the third parties).
17.This lends further support to no order for costs being made as between the husband and the wife.
18.Since 30 August 2011 the wife has sent to Grace Lawyers a further request for production of documents and the provision of information required by [V Accounting] to complete their report. Attached and marked "H" is a letter sent to Grace Lawyers on 1 September 2011. No information and/or documents have been received in response.
19.In relation to any application for costs by the subpoenaed parties themselves, over and beyond reasonable conduct money and witness fees:
a.The subpoenas have not been set aside.
b.The third parties were given ample opportunity to provide the documents voluntarily.
c.The basis of refusing to provide them (the wife's refusal to accept joint and several liability for any breach of confidentiality by the husband) was ill founded and the third parties had the benefit of independent legal advice.
d.The subpoenas have been validly and appropriately issued with the Court's leave following a case management path explored at the hearing on 18 May 2011.
e.The alternative being considered by His Honour (an examination under Part 15.6) is from the point of the third parties, no different from attending to give evidence under subpoena, and as such a costs issue does not arise.
f.Costs were not wasted for the subpoenaed parties on 30 August 2011 as their objections to the subpoenas were heard.
On 27 September 2011 submissions were received from the subpoenaed parties. Paragraphs 20 to 45 of those submissions reply to the submissions of the husband. The submissions are as follows:
Reply to submissions of issuing party
1. The Court placed the onus on the Applicant to provide a basis upon which the Court could (and should) compel the subpoenaed parties to produce and attend. As such, these submissions are limited to the matters identified by the Applicant in their submissions.
History/background
2. Referring to the Applicant’s unnumbered submissions, at paragraphs 1-6 and note that a history of the alleged relationship between the parties and the subpoenaed parties has been provided together with their of factual matters which are not substantiated by evidence or relevant to the question which is before the Court for determination. As such, we kindly request that the Court no consider the submissions made by the issuing party in relation to the alleged factual background contained in its submissions.
3. Should the Court wish to accept the history/background provided in the submissions of the issuing party, [Mr T] and [Mr U] deny the accuracy of such factual matters and submit that these are matters which are not in evidence before the Court.
Legislation
4. The issuing party relies upon Chapter 16, Court Events – Judge Managed of the Family Law Rule 2004 (the Rules) which, pursuant to Regulation 16.01 of the Rules:
....applies to all Applications for final orders, except:
(a) a Medical Procedure Application;
(b) a Maintenance Application;
(c) a child support application or appeal;
(d) an application for an order that a marriage is a nullity or a declaration as to the validity of a marriage, divorce or annulment; and
(e) an application in which the only order sought relates to a passport (see Division 4.2.7).
5. Given that this matter does not involve an application for final orders and was an interlocutory application, the assertion that any part of Chapter 16 of the Rules applying is misconceived and we would submit that the submissions made by the issuing party ought to be rejected in their entirety.
Other matters
Conduct Money
6. Pursuant to Regulation 15.24 of the Family Law Rules 2005
15.24(1) A named person does not have to comply with the subpoena if:
(a) the named person was not served in accordance with these Rules (see rule 15.22 and subrule 15.28 (1)); or
(b) conduct money was not tendered to the person at the time of service or within a reasonable time before the Court date.
7. Referring to the preceding paragraph, neither [Mr T] or [Mr U] are required to comply with the subpoena issued to each of them as neither party was provided with conduct money. However, in order to be as cooperative with the Court and the parties, documents which were in the possession of [Mr T] and/or [Mr U] have been produced to the Court.
Subpoena to attend
8. The Applicant bears the onus of establishing to the Court, the basis upon which it may compel the subpoenaed parties to comply with the subpoena to attend to give evidence based upon the orders made by the Court.
9. The subpoenaed parties, pursuant to the subpoena have been required to attend Court on 30 August 2011 to give evidence at an interlocutory application relating to parental obligations and the objection to the subpoena.
10. The purpose of a subpoena to attend, is in order to require a person to attend Court to give evidence on a matter which is to be determined before the Court. The Applicant, in its submissions asserts the purpose for the subpoena is to obtain information from [Mr T] and [Mr U] to provide to an expert to make a determination in relation o the value of property.
11. In circumstances where the application before the Court is in relation to the parental obligations of the parties together with the objection to the subpoena, the subpoenaed parties cannot be expected to give evidence on any matter other than those to be determined by the Court.
12. The subpoenaed parties are in no way aware of any matters which would effect the outcome of the interlocutory application regarding parental rights and in the circumstances should not be required to attend.
13. In the circumstances, there is no utility in requiring the subpoenaed parties to attend to give evidence and the subpoenas to attend to attend should be set aside.
Subpoena to Produce - Relevance
14. It is well established law that the issuing party bears the onus of proving that the documents sought have apparent relevance to the issues in the matter.[1] In the decision of Andrew Garrett Wine Resorts & Anor v National Australia Bank Limited (No. 6) (2005) SASR 419 at paragraph 428, the Court held that “It is not enough for the party issuing the subpoena to raise a speculative possibility that the documents sought would assist the resolution of the dispute. The party supporting the subpoena must demonstrate that the documents sought in the subpoena are of real relevance to the issues in the care. It must be more than an outside chance that something useful might turn up in the documents.”
i)[1] Allport and Anor & Allport [2008] FAmCA 336 (15 May 2008 at para 7 and Santos Lts and Other v Pipelines Authority of SA [1996] SASC 5578 at para 52
15. Referring to the preceding paragraph, the issuing party has failed to provide any basis upon which the documents sought are relevant to the proceedings or the issues in dispute which is supported by any evidence or material which is before the Court.
16. In circumstances where the issuing party has failed to establish any link to relevance between the issues before the Court and the documents sought, it is our submission that the Court ought to uphold the objection made by the subpoenaed parties.
Oppressive
17. The subpoenas to produce issued to [Mr T] and [Mr U] are identical in the documents/commentary which they seek to have produced to the Court.
18. In considering whether the subpoenas to produce are oppressive, the Court is required to determine whether the subpoena is “seriously and unfairly burdensome or prejudicial” which involves looking ”at the matter from the point of view of the person or organization who has sought the setting aside of the subpoena.”[2]
ii)[2] Allport and Anor & Allport [2008] FAmCA 336 (15 May 2008) at para 6
19. A majority of the documents sought from [Mr T] and [Mr U] would be available to both the parties to the proceedings. Further, the description of the documents is unclear and unspecific and has not enabled [Mr T] and [Mr U] to properly identify the documents which they are required to produce.
20. The schedule attached to the subpoena seeks that the subpoenaed parties form an opinion on a variety of matters and then based upon that opinion requests that they create a document which is then to be produced pursuant to the subpoena.
21. [Mr T] and [Mr U] have consulted an external source for the costs of production of all of the documents sought and have been notified that the costs would be approximately $5,000.00 - $10,000.00 plus gst.
22. The list of documents which are sought to be produced from [Mr T] and [Mr U] are commercially sensitive and relate to business records of several companies involved in management. The issuing party alleges that the documents are sought for these proceedings although he is involved in the operations of companies which are direct rivals of the relevant companies which the documents relate to and in the circumstances, regardless of the allegations made by the issuing party, there is a concern in relation to the commercial sensitivity of the documents sought pursuant to the subpoena.
23. We refer to the decision in Hatton v Attorney–General of the Commonwealth of Australia & Anor [2000] FamCa 892 and Allport & Anor & Allport [2008] FamCA 336 and submit that in circumstances where a subpoena is oppressive in nature the Court ought to set aside the subpoena. In our submission, the subpoena is oppressive for several reasons including the unspecified documents which are sought to be produced amounting to a ‘fishing expedition’, compliance with the subpoena requires the creation of documents containing specified information and the subpoenaed parties would be faced with excessive costs is attempting to comply with the subpoena. In the circumstances, compliance with the subpoena places an unreasonable and excessive burden on [Mr T] and [Mr U] and we would respectfully request that the Court exercise its discretion and set aside each subpoena issued to [Mr T] and [Mr U].
24. In our respectful submission, for the reasons outlined in these submissions, the issuing party has failed to satisfy to the Court any basis upon which the subpoena ought to be maintained, and further, [Mr T] and [Mr U] have provided several alternative grounds upon which the subpoena may be set aside. In the circumstances, we would respectfully request that the Court set aside each subpoena issued to [Mr T] and [Mr U].
Costs
25. The issuing party has addressed the Court in relation to costs, which in our submissions provide no basis upon which to limit the costs that [Mr T] and [Mr U] ought to be entitled to depending on the outcome of the final decision.
26. However, in accordance with the orders of the Court, we do not wish to make any submissions until a judgment has been provided and we respectfully request that [Mr T] and [Mr U] be provided the opportunity to address the issue of costs after the determination of the current application before the Court.
Does the Court have power to conduct an examination of a witness compelled to appear before the Court by subpoena as a preliminary to the evidence being required to be provided by the parties in support of applications in a final hearing for property orders?
Rule 15.17 of the Family Law Rules 2004 (Cth) (“the Rules”) does not place any limitations on the power of the Court to require a stranger to the proceedings to give evidence, save the requirement that appropriate conduct money should be paid. Rule 15.17(1) states:
Rule 15.17 – Issuing a subpoena
(1) Subject to rule 22.34, the Court may issue:
(a) a subpoena for production;
(b) a subpoena to give evidence; or
(c) a subpoena for production and to give evidence
The only further requirement in relation to a subpoena to give evidence is that it correctly state the date and time that the party subpoenaed is to appear at Court. It is therefore necessary to briefly look at whether the Court has the power to direct the way in which the evidence is to be given.
In the case of Re Z (1996) 20 Fam LR 651, the Full Court (Nicholson CJ and Frederico J in the majority) held that the Family Court has the inherent jurisdiction of a Court of Superior Record to issue such writs as it thinks necessary. Their Honours examined the inherent powers of a Court generally, then concluded, in relation to the power of the Family Court(at 678-679):
Bryson J in Danieletto v Khera (1995) 35 NSWLR 684 at 686 recently said:
The power of the superior Courts by subpoena to order witnesses to attend and persons to produce documents has existed for centuries and is based on the inherent power of the Court, because power to compel attendance and production is necessary for the determination of the facts on which decisions are based and for the attainment of justice. There can be no effective proof of facts unless attendance and production can be compelled. The power of the [Supreme Court of New South Wales] is restated in Pt 37, r 2 of the Rules, but neither the rule nor the rules generally should be taken as the exclusive or exhaustive statement of the powers of the Court relating to subpoenae."
Following from this analysis, his Honour determined that a person to whom a subpoena is directed is entitled to an order for the payment of reasonable expenses relating to the subpoena even though the application did not fall within the terms of the Rules of Court.
We would therefore conclude that the status of the Court gives rise to powers which are an additional source of power in respect of subpoenas to that advanced by Mr McDonald: ie the Court and its judges have an inherent power that derives from the exercise of judicial power as a superior Court of record. As that power derives from the Family Court as a Ch III Court which is established by s 21 of the Family Law Act, Commonwealth Law for the purposes of s 79 of the Judiciary Act has ``otherwise provided'.
Alternately, the Full Court held in that instance that if they be wrong in relation to inherent powers of, the Court has the power to issue writs as it thinks necessary under s 34 of the Family Law Act1975(Cth) (“the Act”).That section states:
Section 34 – Issue of certain writs etc.
(1)The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, and to issue, or direct the issue of, writs of such kinds, as the Court considers appropriate.
10.Within that frame of power, the Court must balance the intrusion of privacy of the stranger to the proceedings against the utility of providing necessary information to properly determine the matter between the husband and the wife.
11.In R v Barton[1981] 2 NSWLR 414 at 419 (followed by this Court in Blann & Blann (1983) FLC 91-322), the Court pointed out that it is always a matter of evaluating competing interests:
It seems to me that there is involved within this field the resolution by the Court of competing interests. To require a witness to produce to the Court his documents in proceedings in which he is not a party and in which he has no interest must involve an invasion of his private rights including his right to privacy and his right not to be required to busy himself seeking, identifying, bringing together and producing his documents to the Court.
The other right which seems to me to be involved is the right of a party to litigation to obtain access to documents, even where they are in the possession of a stranger, in order to further the ends of justice in those proceedings so that he may advance his case on all issues in the case. These respective rights of the stranger and the litigant will generally conflict.
In many instances a mere consideration of the nature of perusal of documents in such a subpoena will disclose that they have or may well have relevance to the issues in the litigation. On the other hand consideration of the nature of the documents sought in such a subpoena may indicate with equal clarity that on the face of the subpoena the documents do not and cannot bear any relevance to the issues in the litigation.
There is a significant area between these two extremes which is the area in which, it would appear, there is no simple guideline to follow. What is required, as I have stated, is a balancing of the competing and generally conflicting interests of the party to the proceedings and the stranger to the proceedings.
The Court will consider the nature of the documents specified and will determine as best it can the issues likely to arise. If it appears an issue may arise in litigation to which the documents may relate then I believe the right of the litigant should prevail over the right of the witness. Unless it appears that an issue may arise to which the documents may relate then the right of the witness will prevail.
12.In this instance, it is necessary for me to balance the imposition placed on the non-party to the proceedings against the contribution toward the determination of the case that the evidence will make. The evidence that the non-parties are likely to be asked about is that relating to the value of their companies, in which the husband’s company has shares. This is crucial information in determining the asset pool of the parties, and as such I am of the opinion that on balance the Court does have the power to cause that evidence to be provided.
Alternatively, does the Court have the power to examine a witness in order to obtain evidence required by a single expert engaged by the parties pursuant to the rules of the Court or appointed by the Court itself to carry out the requirements of the parties and/or the Court to produce evidence required for the final hearing of a property application?
13.As I have outlined above, the Court has the power to order a witness to give evidence, but there is also the question as to how far that power may and ought to be exercised.
14.There is a great deal more case law as to the requirements relating to subpoenas to produce documents than there is for subpoenas to give evidence, but it would be appropriate to apply principles relating to the former when determining matters relating to the latter.
15.In Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 573, which has been widely followed in this Court, Jordan CJ set out the limit to which a subpoena to produce documents could force a non-party to the proceedings to comply:
A writ of subpoena duces tecum may be addressed to a stranger to the cause or to a party. If it be addressed to a stranger, it must specify with reasonable particularity the documents which are required to be produced. A subpoena duces tecum ought not to be issued to such a person requiring him to search for and produce all such documents as he may have in his possession or power relating to a particular subject matter. It is not legitimate to use a subpoena for the purpose of endeavouring to obtain what would be in effect discovery of documents against a person who, being a stranger, is not liable to make discovery. A stranger to the cause ought not to be required to go to trouble and perhaps to expense in ransacking his records and endeavouring to form a judgment as to whether any of his papers throw light on a dispute which is to be litigated upon issues of which he is presumably ignorant: Lee v Angas (1866) LR 2 Eq 59 ; Burchard v Macfarlane [1891] 2 QB 241 at 247 ; Attorney-General v Wilson (1839) 9 Sim 526 ; Newland v Steer (1865) 13 LT 111; 13 WR 1014 . And if a subpoena duces tecum is issued to such a person in an objectionable form, the witness may apply to the Court to have it set aside …
16.In this instance, the witnesses called by subpoena to give evidence are to give specific evidence as to the value of the companies in which the husband’s company holds shares. Such evidence would be given for the benefit of the single expert witness engaged to value the assets and companies of the parties to the proceedings. It is evidence that would require some effort on the part of the witness, being evidence as to the financial dealings of a working company.
17.Drawing from the principle outlined in the case law above, it would be, in my opinion, within the Court’s power to order such evidence be provided and clearly the most appropriate method of requiring attendance at Court for the purpose of obtaining the evidence is by way of subpoena. The Court would then be diligent to ensure the questions asked of the persons being examined are no more intrusive to their privacy than is absolutely necessary to fulfil the requirements of justice in the proceedings before the Court. In this the Court seeks to minimise the impact on the witnesses while at the same time ensuring that the Court is provided with all relevant information to the matter.
18.In this case there is a further complicating factor which has the potential to cause damage to the persons to be examined under the subpoena. The potential damage arises in the circumstances where the husband in this case is engaged in a business which competes in the same market as the companies who the persons to be examined represent. Thus there is a legitimate concern on the part of the recipients of the subpoena that the information sought will provide a commercial advantage to the husband which could then be used to the disadvantage of the companies providing evidence. Additionally the recipients of the subpoena, in this case, are directors of the relevant corporations. As such they have obligations which are set by legislation and the terms of the memorandum and articles of association for the particular corporations. This then raises the question as to what the Court can do to ensure the husband does not take advantage of the circumstances referred to.
19.It seems to me there are a variety of possible actions the Court can take to reduce the potential prejudice and damage to the abovementioned corporations and persons. This might include limiting in the first place, access by the parties, to certain specific pieces of evidence. There are potential difficulties about that if the parties dispute the conclusions of the single expert as to the value of the interest of the parties or their relevant corporations in the corporations whose directors are required to give evidence under subpoena. There are other actions the Court could consider with the parties.
Objections Raised By The Recipients Of The Subpoena
20.In this matter the recipients of the subpoena are Mr T and Mr U. As it has transpired Mr U has complied with the subpoenas by the production of no records. His reason is because the records sought to be produced to the Court are records that are no longer in his control or capacity to produce. The subpoena under consideration is therefore that issued to Mr T.
21.The objections raised by Mr T fall into two broad categories:
a.Failure to comply with the requirements of the Rules and the subpoena in that conduct money was not tendered to Mr T at the time of service of the subpoena;
b.Objection as to the form of part of the subpoena.
Objection As To The Form Of The Subpoena
22.In relation to the subpoena seeking documents for N Associates Pty Limited objections are taken to paragraphs 12, 13, 14, 15, 17, 18, 19, 20, and 21. All other paragraphs have been complied with and documents, if available, have been produced.
23.The notice of objection filed by Mr T raises similar objections to the wording of the balance of the subpoena which seeks documents relating to other entities. Further, it states objection on the basis that it is claimed it cannot be demonstrated that the documents sought are of any relevance to the parties or their disputes in the proceedings in this Court.
The Law
24.Part 15.3 of the Family Law Rules deals with Subpoenas within the Family Court. Rule 15.17 sets out the basic principles relating to the issuing of a subpoena:
Rule 15.17 – Issuing a subpoena
(1) Subject to rule 22.34, the Court may issue:
(a) a subpoena for production;
(b) a subpoena to give evidence; or
(c) a subpoena for production and to give evidence.
(2)Subject to rule 15.21, the Court will issue a subpoena mentioned in subrule (1) at the request of a party only if:
(a) the party has requested permission from the Court; and
(b) the Court has granted permission.
Note A request for permission should generally be made at a Court event.
(3) For subrule (2), a request for the Court's permission:
(a) may be made orally or in writing;
(b) may be made without giving notice to any other parties; and
(c) may be determined in chambers in the absence of the other parties.
(4)A subpoena must identify the person to whom it is directed by name or description of office.
(5) A subpoena may be directed to 2 or more persons if:
(a) the subpoena is to give evidence only; or
(b)the subpoena requires the production of the same documents from each named person.
(6) A subpoena for production:
(a)must identify the document to be produced and the time and place for production; and
(b)may require the named person to produce the document before the date of the trial.
25.It is of use to note also the Explanatory Guide at the end of the Family Law Rules, although it is not held out to be part of the Rules themselves. The guide provides a glossary of words used within the text of the Rules. Relevantly, the guide defines the following terms:
Evidence – A statement to a Court that is oral or written and tends to prove or disprove a fact
Producing, for disclosure of a document – includes searching for, arranging, copying and providing the document, if necessary
Subpoena for production – a witness summons requiring a named person to attend as directed and produce a document or thing
26.In neither the Rules nor the Explanatory Guide is there an indication by the legislators that there was an intention that the production of documents should include the creation of documents specifically for the trial. Sub-rule 15.17(6)(a) sets out that the document must be identified, which I take, in the broader context, to mean that the document must exist prior to such identification. Further, the Explanatory Guide clearly illustrates that “production” relates only to the collection and collation of the documents requested in the subpoena. There is nothing to suggest that a subpoena to produce documents may call for the creation of new documents.
27.The recipient of a Subpoena may object to the subpoena if it is too widely drawn or is oppressively drawn. There are a number of reasons that a subpoena may be deemed to be oppressive, including where a party is unsure of the description of the documents, where a party is uncertain as to who is in possession of the documents, where a party is uncertain of the contents of the documents, or where the recipient is required to make judgments as to the relevance of documents in their possession.
28.The underlying aim of the Court in allowing the setting aside of subpoenas is to create a balance between the necessity of obligating a person who is not a party to a matter to produce documents and that obligation being overly onerous on the non-party.
29.In Mallet & Mallet (1981) FLC 91-091, the judgment of Cook J examined what would be ‘oppressive’ to a recipient of a subpoena, as it relates to the purpose of a subpoena. His Honour (at 76636) adopted the reasoning in the judgment in American Express Warehousing Ltd. v Doe [1967] 1 Lloyd's Rep 222:
The purpose of the process of subpoena is to facilitate the proper administration of justice between parties. For that purpose it is the policy of the law that strangers who have documents may be put to certain trouble in searching for and gathering together relevant documents and bringing them to Court. It is according to the same principle that persons who have knowledge of facts are put to the inconvenience of being brought to Court and required to give evidence.
Assessment of the reasonableness of burdens involved in complying with a subpoena must take account, inter alia, of the desirability that justice must be administered effectively. The capacity of a party to collect and produce the documents referred to is a relevant circumstance. Large business entities may be thought to be highly organized and well staffed. What may be burdensome to lesser entities may be of small significance to a larger one.
30.Cook J then adopted the reasoning of Jordan CJ in 573-574 of Commissioner of Railways v. Small (1938) 38 S.R. (N.S.W.) 564 in relation to the limit which may be reasonably required from a notice to produce:
It would, no doubt, be a good reason for failure to produce documents that the effort and expense involved in doing so was greater than ought reasonably be required. This is a matter which would at that stage be capable of rational resolution by the Court according to the circumstances. So far as the effort and expense in arranging for production of particular documents in any case exceeded what was reasonable, their non-production would be acceptable to the Court. But if a subpoena be wholly set aside on the grounds that on its face it is oppressive, then the subpoena wholly fails and there is the possibility that although some or even substantial compliance might have been undertaken with a minimum of effort, the whole procedure may be needlessly frustrated.
31.Clearly the objections raised are meritorious. A subpoena for the production of documents is restricted to that very description namely the production of specific documents. The recipient of such a subpoena is not required to create a document. The subpoena relates to the production of existing documents which are capable of being identified by the recipient of the subpoena from the terms of the subpoena :Waind and Hill (1978) 1 NSWLR 372
32.The subpoena issued to Mr U and Mr T required not only production of documents but their attendance at Court. Quite apart from the issue of whether the Court has power to examine the recipient of a subpoena such as the two mentioned persons, objection is taken to the failure to provide conduct money at the time of serving the subpoena. No affidavit of service in relation to the subpoena has been relied upon by the applicant husband.
Rules in relation to the service of subpoena
33.Rule 15.23 provides as follows:
Conduct money and witness fees
(1) A named person is entitled to be paid conduct money by the issuing party at the time of service of the subpoena, of an amount that is:
(a) sufficient to meet the reasonable expenses of complying with the subpoena; and
(b) at least equal to the minimum amount mentioned in Part 1 of Schedule 4.
(2) A named person served with a subpoena to give evidence and a subpoena to give evidence and produce documents is entitled to be paid a witness fee by the issuing party in accordance with Part 2 of Schedule 4, immediately after attending Court in compliance with the subpoena.
(3) A named person may apply to be reimbursed if the named person incurs a substantial loss or expense that is greater than the amount of the conduct money or witness fee payable under this rule.
34.Rule 15.24 also specifies the consequence of failure to tender conduct money and that rule provides as follows:
When compliance is not required
(1) A named person does not have to comply with the subpoena if:
(a) the named person was not served in accordance with these Rules (see rule 15.22 and subrule 15.28 (1)); or
(b) conduct money was not tendered to the person at the time of service or within a reasonable time before the Court date.
(2) If a named person is not to be called to give evidence or produce a document to the Court in compliance with the subpoena, the issuing party may excuse the named person from complying with the subpoena.
35.There being no evidence that conduct money was tendered and there being a positive assertion that it was not, the Rules, prima facie, excuse any further attendance before the Court by either of the named recipients.
36.Rule 1.12 provides that the Court may dispense with compliance with the Rules. Such a move is a discretionary one. In the circumstances of this case I would not exercise the Court’s discretion to waive compliance with the Rule.
Conclusion
37.Given what I have found in relation to the form of the subpoena issued and the failure to provide conduct money at the time of service I would not require any further compliance with the subject subpoena by the named persons.
38.The applicant and respondent will no doubt need to consider whether to issue a further subpoena requiring attendance at Court by Mr U and/or Mr T. The applicant may also need to consider if it is possible to re-word the subpoena to Mr T in such a way which avoids further objection by him.
39.Conclusions in relation to the power of the Court to conduct the type of enquiry sought by the husband in this case are necessary to provide. I have made a determination in relation to that matter.
40.In this case the applicant filed subpoena documents without the leave of the Court. This was clearly done through an oversight as the Rules clearly prevent such a course unless it is pursuant to Rule 15.21. That Rule is as follows:
FAMILY LAW RULES 2004 - Rule 15.21
Subpoenas to produce documents
A party or an independent children's lawyer may seek the issue of a subpoena to produce documents for the hearing of an application seeking interim, procedural, ancillary or other incidental orders without permission from the Court.
41.There was no application fitting the description in Rule 15.21 relevant to the single experts report before the Court at the time the subpoena was issued.
42.In order to avoid further inconvenience to third parties I propose to order in this case that neither party is to issue any subpoena unless it is approved by me. I will give leave to each party to apply to me in chambers to issue any subpoena from this point forward.
43.I also propose to have the matter re-listed for the purpose of considering further directions in relation to the preparation of the single expert’s valuation of relevant entities of the parties.
I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench
Associate:
Date: 24November 2011
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