Hadleigh & Hadleigh
[2023] FedCFamC1F 729
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Hadleigh & Hadleigh [2023] FedCFamC1F 729
File number(s): MLC 6798 of 2022 Judgment of: CARTER J Date of judgment: 25 August 2023 Catchwords: FAMILY LAW – CONTEMPT – where wife sought that respondents to subpoenas that had been set aside be held in contempt for non-production of documents – application dismissed
FAMILY LAW – COSTS – where the respondents sought indemnity costs – where indemnity costs not ordered – where costs fixed pursuant to rule 12.17 of the Federal Circuit and Family Court of Australia 2021 (Cth)
Legislation: Family Law Act 1975 (Cth) ss 45A, 112AB, 112AP
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 6.35, 12.17
Cases cited: Anton & Malitsa [2009] FamCA 70 Division: Division 1 First Instance Number of paragraphs: 31 Date of hearing: 10 August 2023 Place: Melbourne Applicant: Litigant in person Counsel for the Respondent: Mr Graeme Thompson Solicitor for the Respondent: KCL Law Solicitor for the Others: BlueRock ORDERS
MLC 6798 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS HADLEIGH
Applicant
AND: MR HADLEIGH
Respondent
MS DENG
Other
MR DEMARCO
Other
ORDER MADE BY:
CARTER J
DATE OF ORDER:
25 AUGUST 2023
THE COURT ORDERS THAT:
1.The Contempt Application filed 2 June 2023, naming Ms Deng as the respondent is dismissed.
2.The Contempt Application filed 2 June 2023, naming Mr Demarco as the respondent is dismissed.
3.The wife pay the following costs in relation to the subpoenas issued by her on 18 May 2023 to the respondents, and the contempt applications issued by her on 2 June 2023:
(a)to Ms Deng, fixed at $4,500;
(b)to Mr Demarco, fixed at $4,500; and
(c)to the husband, fixed at $6,000
with payment to be deferred until the determination of the substantive property proceedings between the husband and the wife.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUSTICE CARTER
CONTEMPT APPLICATIONS
The matter before me concerned two contempt applications filed by the wife on 2 June 2023 as follows:
(a)naming Ms Deng as the respondent, asserting she had not produced documents in accordance with a subpoena filed on 18 May 2023 and served on her on 19 May 2023; and
(b)naming Mr Demarco as the respondent, asserting he had not produced documents in accordance with a subpoena filed on 18 May 2023 and served on him on 19 May 2023.
According to the subpoenas issued to both Ms Deng and Mr Demarco on 18 May 2023, the production of the documents was required on or before 31 May 2023. It is common ground that no documents have been produced in response to the subpoenas.
On 29 May 2023 Mr Demarco advised the wife he required as much as $9,777 to produce the documents. That same day Ms Deng advised she required $51,200 to collate the documents. The wife did not respond to that advice.
I note that under the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth);
(i)if a subpoena is addressed to a non-party; and
(ii)before complying with the subpoena the person has given the issuing party notice that “substantial loss or expense would be incurred in properly complying with the subpoena” [r 6.35(1)(b)]; and
(iii)if the court was satisfied that those expenses would be incurred, then:
unless the court otherwise directs, the amount of the loss or expense estimated under paragraph (1)(b) is payable by the issuing party [r 6.35(2)].
That amount is payable in addition to any conduct money that has been paid – r 6.35(4).
The applicant has not paid the respondents any funds beyond the conduct money. Nor did the respondents make any application to the Court for the payment of their costs for compliance.
On 30 May 2023 the husband filed Notices of Objection to both the subpoena. The grounds of objection included that the costs of compliance would be substantial, and that the subpoenas were too wide and oppressive and were effectively ‘fishing’.
On the subpoena form, under the heading “Objection to production, inspection or copying of documents”, it is noted that a person named on a subpoena is required to provide documents to the registrar before the date of production even if the person required to comply lodges a notice of objection.
There is, in my view, an inconsistency between r 6.35 and the statement on the subpoena form where the objection is taken on the grounds that the costs of compliance are excessive, and the person lodging the subpoena has not paid the expenses estimated. It would – in my view – be unreasonable for the wife to insist on production of the documents, notwithstanding the filing of the notice of objection, in circumstances where she has been informed the costs of compliance will be excessive and she has made no offer to meet the costs, or any part of the costs of compliance. In my view, it is implicit in r 6.35(1) that there can be no obligation to produce documents until the any dispute regarding the costs of doing so has been resolved.
On 2 June 2023 the wife filed the Contempt Applications.
The matter was listed on 10 July 2023. On that day, the notices of objection filed on 30 May 2023 were upheld and the subpoenas to Mr Demarco and Ms Deng were set aside. The orders further provided that any documents that had been produced were to be returned to the person named in the subpoena or destroyed.
Accordingly, and doing the best I can to follow the wife’s logic:
(a)the respondents should have – at their expense, and with no contribution from the wife – produced to the Court all the documents she listed in her subpoenas to them on or before 31 May 2023. This is despite them advising her of the anticipated costs of compliance in accordance with the Rules, and no offer being made by her to meet those costs or any part of those costs;
(b)the respondents did not comply with the subpoenas that the Court has now determined were deficient, and set aside. Yet, the wife insists the respondents should be found guilty of contempt for not complying with those deficient subpoenas; and
(c)had the respondents complied with production, at their expense, any documents that they had produced would now be returned to them or destroyed pursuant to the orders made 10 July 2023 without the wife being able to inspect those documents.
Section 112AP of the Family Law Act deals with contempt of court applications. For a contempt to be made out, the wife must establish beyond reasonable doubt that:
(a)the order (or subpoena) has been contravened, and
(b)this involved a flagrant challenge to the authority of the court.
Section 112AB of the Family Law Act provides that a person will only be taken to have contravened an order if they intentionally failed to comply with the order or made no reasonable attempt to do so. A respondent may be able to establish they have a reasonable excuse for the non-compliance, and if so, the Court may be satisfied that the respondent ought be excused in respect of the contravention.
Given the history as I have outlined, the wife cannot establish that there had been a contravention without a reasonable excuse. Nor can she establish to the requisite degree that the respondents’ conduct amounted to a flagrant challenge to the Court’s authority.
Section 45A of the Family Law Act deals with matters in which the court is satisfied that one party has no reasonable prospect of successfully prosecuting the proceedings or part of the proceedings; s 45A(2). The court may also dismiss all or part of the proceedings at any stage if it is satisfied that the proceedings or part of the proceedings is frivolous, vexatious or an abuse of process; s 45A(4).
If the court dismisses all or part of the proceedings, the court may make such order as to costs as the court considers just; s 45A(6).
I am satisfied that there are no reasonable prospects of the wife successfully prosecuting the Contempt Applications. The flaws and inconsistencies in the wife’s application include:
(a)the applicant has not established the documents sought were all within the power, possession or control of the respondents;
(b)the application should have used the process of discovery to obtain many of the documents sought;
(c)the respondents advised the applicant there would be significant costs involved if they were to produce the documents to her. Ms Deng advised the wife she required about $51,200 to collate the documents and Mr Demarco said it would cost him up to $9,777. There is no evidence the wife agreed to pay those funds, or indeed any funds to the respondents beyond the minimum conduct monies. In circumstances where the objection taken included that the documents sought were voluminous and the costs of compliance substantial, it would be illogical to require the third party respondents to comply with the subpoena where the applicant had not put them in funds to do so;
(d)the subpoenas were set aside on 10 July 2023 as they were deemed deficient;
(e)I accept there is a general obligation on parties named on subpoena to produce documents notwithstanding an objection being filed. However, it would be illogical – and a waste of Court time and resources – for the Court to embark on a hearing in which it is attempted to establish that the respondents were in contempt of Court for failing to produce a very large number of documents, at their expense, in answer to a subpoena that the Court has subsequently determined was deficient or defective;
(f)I note further the decision of Cronin J in Anton & Malitsa [2009] FamCA 70 in which his Honour said it would be pointless to expect a respondent to a subpoena who claimed the subpoena was too wide, fishing or oppressive to have to produce the documents first. The notices of objection included such claims; and
(g)I have also already indicated my view that there could not be an obligation to produce documents when the costs of that production are excessive and there has been no resolution as to how those excessive costs will be met.
I cannot understand why the wife would pursue her Contempt Applications in these circumstances. In my view it was unreasonable for her to do so. Indeed, it appears to me that to permit the Contempt Applications to be ventilated in full would be an abuse of process.
For these reasons I dismiss the Contempt Applications.
COSTS
The respondents and the husband sought their costs in relation to the subpoenas and the contempt applications. The wife opposed the costs applications.
Both the respondents and the husband sought costs on a solicitor/client basis.
(a)the husband sought costs of $9,874,72 (plus his fee for the day before me with his instructor). Those costs were calculated on scale.
(b)The respondent sought indemnity costs of $19,186 plus an additional amount of $2,925 for the appearance by Mr Carroll and another instructing solicitor at the hearing on 10 August 2023. No costs agreements were provided. If calculated at scale, I was advised the respondents’ costs came to $6,383.72 plus that further $2,925.
Under the Family Law Act, the general rule is that each party will bear his or her own costs, unless there are circumstances that justify a departure from that rule; s 117.
I agree that it is appropriate in this matter to make an order for costs against the wife, taking into account the matters as follow:
(a)the wife said she does not have the funds to meet a costs order. Impecuniosity is, of course, not a bar to the making of an order for costs;
(b)the respondents are strangers to the proceedings;
(c)the wife has been wholly unsuccessful in the proceedings – both in relation to the subpoenas which were set aside and in relation to the contempt applications which have been dismissed;
(d)the wife was put on notice that the costs of compliance with the subpoena were significant. She did not offer to contribute to those costs. The wife was then put on notice that the subpoena were objected to;
(e)the subpoenas were determined to be defective;
(f)the respondents sought that the wife withdraw the Contempt Applications on 29 June 2023, 30 June 2023 and 19 July 2023. The requests she do so were all rejected. This caused the respondents and the husband to incur further costs;
(g)the respondents provided the wife with an offer of settlement on 19 July 2023, after the subpoenas were set aside. In that correspondence the respondents advised they would accept $7,500 by way of costs if the wife withdrew the Contempt Applications. That offer was rejected. I am not aware of any counter offer being made by the wife.
I do not agree that there are exceptional circumstances that would justify imposing indemnity costs as sought by the respondents. However, I am also of the view that the scale costs on a party/party basis would not be sufficient, particularly in relation to the respondents who are not parties to the proceedings.
Rule 12.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) allows me to fix an amount for costs. In making an order under r 12.17(1), as I am, I may consider:
(a) the importance, complexity or difficulty of the issues;
(b) the reasonableness of each party’s behaviour in the proceeding including by having regard to the matters set out in subrule 12.08(2);
(c) the rates ordinarily payable to lawyers in comparable proceedings;
(d) whether a lawyer’s conduct has been improper, unfair, unreasonable or disproportionate;
(e) the time properly spent on the proceeding, or in complying with pre-action procedures;
(f) whether expenses (paid or payable) are fair, reasonable and proportionate.
The respondents have engaged solicitors to draft submissions and appear on their behalf at a mention on 5 July 2023 and at the interim defended hearings 10 July 2023 and 10 August 2023. The husband, as a party to the proceedings, instructed solicitors to file notices of objection, which were upheld, and to attend Court on his behalf on those dates. I note the matter was also listed on 24 July 2023 but it appears that that listing was not solely in relation to the subpoena objections and/or Contempt Applications.
The subpoenas drafted by the wife were set aside on 10 July 2023 for being deficient. The wife ought to have withdrawn her Contempt Applications at that stage. It is perplexing that she pursued the applications after the subpoenas, upon which those Contempt Applications, were founded was set aside. I do not regard her behaviour in continuing the Contempt Applications as reasonable.
Conversely, the husband and his lawyers and the respondents and their representatives, have, in my view, acted fairly and reasonably in relation to this discrete aspect of the proceedings.
Taking all these matters into account, and in the exercise of my very broad discretion, I have determined it is appropriate to make a costs order against the wife in the sum of:
(a)$9,000 to be divided equally between the respondents; and
(b)$6,000 to the husband.
For all the foregoing reasons, I make the orders as are set out.
I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Carter. Associate:
Dated: 25 August 2023
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