Hall & Hall & Ors
[2016] FamCA 143
•10 March 2016
FAMILY COURT OF AUSTRALIA
| HALL & HALL AND ORS | [2016] FamCA 143 |
| FAMILY LAW – PRACTICE AND PROCEDURE – objection to subpoenas – where the husband has filed subpoenas seeking numerous and detailed documents relating to the will of the wife’s later father and a number of entities – where consideration is given to whether the subpoena request is a “fishing expedition”, oppressive, burdensome and irrelevant – where the subpoenaed persons seek an order that the subpoenas be set aside on the basis that the material contains confidential and sensitive information – where orders are made for compliance with select items – where time is given for the solicitor to file and serve an amended Notice of Objection in order for further consideration to be given to the issue of legal professional privilege. |
| Family Law Act 1975 (Cth) s 75, 79, 121 Family Law Rules 2004 (Cth) r 13.07A |
| Bevan & Bevan (2013) FLC 93-545 Harris Scarfe Limited (Receivers and Managers Appointed) (in liq) v Ernst & Young (No 10) (2006) 204 FLR 165 Hall & Hall and Anor (2014) FamCA 407 Hatton v Attorney-General of Commonwealth of Australia & Ors (2000) FLC 93-038 Lauritz & Lauritz and Ors [2015] FamCA 635 National Employers’ Mutual General Association Ltd v Waind and Hill [1978] 1 NSWLR 372 Sadek and Ors & Hall and Anor (2015) FLC 93-634 Stanford v Stanford (2012) 247 CLR 108 Strahan & Strahan & Commissioner of Taxation (2013) FLC 93-570 | ||||||
| APPLICANT: | Ms Hall | |||||
| RESPONDENT: | Mr Hall | |||||
| OTHER PARTIES: | Mr C S | |||||
| Mr F S | ||||||
| Ms D S | ||||||
| Mr E S Mr Simons | ||||||
| FILE NUMBER: | ADC | 3671 | of | 2013 | ||
| DATE DELIVERED: | 10 March 2016 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Dawe J |
| HEARING DATE: | 10 December 2015 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | N/A |
| SOLICITOR FOR THE APPLICANT: | N/A |
| COUNSEL FOR THE RESPONDENT: | Mr Lindsay |
| SOLICITOR FOR THE RESPONDENT: | Jordan & Fowler |
| COUNSEL FOR THE OTHER PARTIES: | Mr Abbott, QC (with Mr Doyle) |
| SOLICITORS FOR THE OTHER PARTIES: | Simons Lawyers |
Orders
Within twenty-one [21] days from today Mr C S shall comply with items numbered 3, 4, 5, 6, 7, 8, 9, 10, 11, 17, 18 and 20 of the amended subpoena filed on 17 September 2015.
Compliance with items 1, 2, 12, 13, 14, 15, 16, 19 and 21 of the said amended subpoena to Mr C S is not required.
Within twenty-one [21] days from today Ms D S, Mr F S and Mr E S shall comply with items 3 and 7 in the subpoenas to them filed on 9 September 2015.
Compliance with items 1, 2, 4, 5, 6 and 8 in the said subpoenas to Ms D S, Mr F S and Mr E S is not required.
Within twenty-one [21] days from today Mr Simons comply with items numbered 11, 12 and 13 in the subpoena filed on 9 September 2015.
Compliance with items numbered 1 to 6 in the said subpoena to Mr Simons is not required.
Within twenty-one [21] days from today Mr Simons file and serve amended Notice of Objection to items numbered 7, 8, 9 and 10 identifying the documents to which legal professional privilege is claimed and providing such documents in those categories for which such privilege is not claimed.
Further consideration of any issues arising from the claim of legal professional privilege is adjourned to a date to be advised following any written request to the Docket Registrar PROVIDED THAT such request is made within fourteen [14] days of service of the amended Notice of Objection.
The question of costs of any parties in relation to the subpoenas and objections is adjourned to a date to be fixed upon application by either husband or the interveners.
Leave is granted to the parties and their legal representatives to inspect and if necessary copy documents produced pursuant to the subpoenas.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Hall & Hall & Ors (Objection Subpoenas) 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 ADELAIDE |
FILE NUMBER: ADC 3671 of 2013
Ms Hall
Applicant
And
| Mr Hall |
Respondent
And
| Mr C S Mr F S |
Other Parties
REASONS FOR JUDGMENT
Introduction
On 9 September 2015 the solicitors for the husband filed subpoenas directed to Mr Simons (solicitor), Ms D S (mother of the wife in these proceedings) and Mr C S, Mr E S and Mr F S (brothers of the wife in these proceedings). On 17 September 2015 the solicitors for the husband filed an amended subpoena to Mr C S, one of the brothers of the wife in these proceedings.
The subpoenas to the wife’s family sought numerous and detailed documents relating to the will of the wife’s late father and numerous entities (companies and trusts).
The subpoena to Mr Simons, the solicitor, sought documents in relation to the estate and the wills of the wife’s late father.
The above is only a summary of the very large material in the subpoenas.
Following the service of these subpoenas Notices of Objection were filed by all five of the recipients.
Hearings
When the matter came on before Registrar Paxton on 29 September 2015 orders were made which listed the subpoenas and objections for hearing before me on 10 December 2015 for half a day. The orders also provided that any evidence of the objectors be filed and served by 9 November 2015, evidence of the husband and wife be filed and served by 27 November 2015 and written submissions with list of authorities to be filed and served by 2 December 2015.
When the matter came on before me on 10 December 2015 not all of those orders had been obeyed within the appropriate times. Nonetheless, the time was extended to allow the parties to rely upon the material which had been filed and served late.
The attendance of the wife, her solicitors and counsel was not required for that hearing.
Mr Lindsay appeared for the husband. Mr Abbott, QC with Mr Doyle appeared for the subpoenaed persons.
At the hearing it was noted that the subpoenaed persons were to provide the Court with documents to which no objection had been taken and leave was given to inspect and, if necessary, copy such documents upon conditions.
On 7 December 2015 the Court received the submissions of the subpoenaed persons (other parties) together with a list of authorities. The Court also received on that day submissions on behalf of the husband and a list of authorities.
Background
The proceedings between the husband and the wife commenced when the wife issued proceedings in October 2013. Proceedings are still outstanding in relation to both children’s matters and financial matters. Numerous interim orders have been made. These proceedings have been referred to the list of matters awaiting trial allocation and have been adjourned for trial directions on a date to be advised. A conciliation conference is fixed for 27 April 2016.
The parties were married in 2001 and separated in 2013. There have been previous interim hearings in relation to disclosure, discovery, the assets, income and financial resources of the parties.
Prior to the separation of the parties, the wife’s father, Mr G S, died in 2009. The wife’s late father is survived by his wife and four children (the wife and her three brothers). Mr C S, one of the wife’s brothers is named as the executor and trustee of the late father’s estate.
The late Mr G S and the wife’s brothers, Mr C, Mr E and Mr F, were involved in the V Group of companies and trusts, which it is alleged have significant value.
The wife in these proceedings has disclosed limited shareholding in the group. The will of the wife’s late father (which has now been disclosed following earlier interim proceedings and appeal) refers to the wife. The interpretation of the will and the rights of the wife to a share of the estate of her late father is a significant issue in dispute in these family law proceedings.
The Law
Section 79 of the Family Law Act 1975 (Cth) (“the Act”) refers to the Court having the discretion to make such order as it considers appropriate with respect to the property of the parties to the marriage or either of them including an order requiring either or both of the parties to the marriage to make such settlement or transfer of property as the Court determines for the benefit of either or both of the parties.
Section 79(4) sets out the matters which the Court is required to take into account which include the matters referred to in s 75(2).
Section 75(2) includes “(b) The income property and financial resources of each of the parties …”. The definition of “property” in s 4 includes:
(a)in relation to the parties to a marriage or either of them--means property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion;
The Full Court of the Family Court of Australia decision of Bevan & Bevan (2013) FLC 93-545 considered the High Court of Australia decision of Stanford v Stanford (2012) 247 CLR 108 and then said at paragraphs 71 to 78:
71.Stanford will also serve as a reminder that the four step process “merely illuminates the path to the ultimate result”. Any future restatement of that process should incorporate acceptance of the fact that the power to make any order adjusting property interests is conditioned upon the court finding that it is just and equitable to make an order.
72.It follows that judges would be well advised to avoid what we consider to be arid discussion of the “stage in the process” at which “adjustments” are permissible. Such discussion tends to elevate the four step process to the status of a statutory edict, when in fact it is no more than a shorthand distillation of the words of a statute which has but one ultimate requirement, namely not to make an order unless it is just and equitable to do so.
73.The High Court in Stanford has laid down three “fundamental propositions” which will provide useful guidance to trial judges in approaching the task under s 79. These were recited above, and could be summarised thus:
1. Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);
2. The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity;
3. A determination that a party has a right to a division of property fixed by reference only to the matters in s 79(4), and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.
74.The first “fundamental proposition”, which requires identification of existing legal and equitable interests in property, is nothing new, since “property” has always been understood as incorporating equitable, as well as legal, interests.
75.Thus, in Duff & Duff (1977) FLC 90-217 at 76,133, the Full Court agreed with Langdale MR in Jones v Skinner (1836) 5 LJ Ch 85 that:
Property is the most comprehensive of all terms which can be used inasmuch as it is indicative and descriptive of every possible interest which the party can have.
76.In Mullane v Mullane (1983) 158 CLR 436 at 445, Mason A.C.J., Wilson, Brennan, Deane and Dawson JJ said (emphasis added, references omitted):
In our opinion, therefore, s. 79 on its proper construction refers only to orders which work an alteration of the legal or equitable interests in the property of the parties or either of them. An interest in property is a right of a proprietary nature, not a mere personal right … It does not exclude every interest which is not assignable or transferable …
77.Once it is recognised a court has power to alter both legal and equitable interests, it follows that it is necessary first to identify all property in which the parties have either a legal or equitable interest. Since the issue does not arise here, we will not express a concluded view about the post-Stanford controversy concerning the extent to which it is necessary to decide whether – as between the parties – the legal title accurately reflects their respective interests. However, where it is accepted that justice and equity require the making of an order, it would seem unnecessary to complicate proceedings by deciding whether one party has an equitable interest in property held by the other, since the ultimate outcome will not be determined by application of equitable principles but rather by reference to ss 79(4) and 75(2).
78.Nevertheless, there will be cases, of which Stanford may have been one, where the assertion (or lack thereof) of an existing equitable interest in property held by the other party may be of critical importance in deciding whether it would be just and equitable to interfere with the existing legal ownership. And of course it will always be important to determine whether one party has an equitable interest in property owned by a third party.
In the decision of the Full Court of Australia in Sadek and Ors & Hall and Anor (2015) FLC 93-634 the Full Court dismissed the application for leave to appeal from a judgment in this matter concerning the subpoena of the wife’s late father’s will and other related documents.
In that judgment the Full Court referred to the well-known decision of National Employers’ Mutual General Association Ltd v Waind and Hill [1978] 1 NSWLR 372 and the more recent decision of the Full Court of the Family Court in Hatton v Attorney-General (Cth) & Ors (2000) FLC 93-038 and Harris Scarfe Limited (Receivers and Managers Appointed) (in liq)v Ernst & Young (No 10) (2006) 204 FLR 165.
The law clearly provides that a subpoena may be set aside if it is oppressive or seriously an unfair burden or merely a “fishing expedition”.
It is accepted that the person issuing the subpoena and seeking production of the documents bears the onus of proof in establishing apparent relevance.
In the matter of Lauritz & Lauritz and Ors [2015] FamCA 635 his Honour Justice Le Poer Trench said at paragraphs 71 and 72:
71.It is well established law that the issuing party, in this case the wife, bears the onus of proving that the documents sought have an apparent relevance to the issues in the matter. In the decision of Andrew Garrett Wine Resorts & Anor v National Australia Bank Limited (No. 6) (2005) 92 SASR 419 at paragraph 37, the Honorable Justice Gray stated 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 case. It must be more than an outside chance that something useful might turn up in the documents.
72.Moore JR in Sharpe and Dalton at 78,147, citing the comments of Cantor J in R. v. Barton & Ors (1981) 2 N.S.W.L.R. 414 at 419, stated that, in relation to documents where the relevance is unclear:
…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 than [sic] 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.
It will be noted I do not postulate that the issue must arise in the litigation nor do I postulate that the documents must relate to an issue.
It seems to me, on this first step in relation to the subpoenaing of documents from a stranger the Court will consider possible issues. This does not include fanciful issues. The Court should take a realistic attitude. Similarly in considering the type of documents and how they may bear upon an issue in the litigation the Court will act realistically and not require the production of documents which only would have a bearing upon an issue on an unreal, fanciful or speculative basis.
The question of relevance so far as it relates to the production of documents pursuant to subpoena is distinguished from the question of whether the evidence is admissible in the proceedings.
The subpoena directed to Mr Simons, the solicitor for the wife’s late father raises issues concerning legal professional privilege. As was conceded the claim of privilege does not prevent the documents from being identified, rather it protects them from inspection.
Relevant documents relied upon
On behalf of the husband five subpoenas were issued (being the four issued on 9 September 2015 and the amended subpoena issued on 17 September 2015). A Notice of Objection was filed on 24 September 2015 by each of the subpoenaed parties.
The reasons for objection to the subpoenas by the wife’s mother and brothers are very similar. There is a separate Notice of Objection with different reasons for objection by Mr Simons, the solicitor.
The husband relied upon the detailed submissions filed on 7 December 2015 to which is annexed a copy of the will of the wife’s late father dated 30 January 2009.
The Court received the submission of the subpoenaed persons (other parties) dated 7 December 2015.
The Court was also provided with lists of authorities by both parties.
On behalf of the subpoenaed persons the Court was referred to the affidavit of Mr Simons filed on 20 February 2014 and the affidavit of Mr F S filed on 12 November 2015.
The affidavit of Mr Simons filed on 20 February 2014 set out the solicitor’s evidence in relation to the will of the late Mr G S and his estate. It included lists of the freehold properties held by the deceased and the valuer general’s values upon which was based the deceased’s value of the real estate at $1.422 million. He gave a brief summary of the shares held by the deceased and the deceased’s direction in relation to them. At the time of this affidavit there had been no application for probate, but there had been an application for a limited grant of administration for the specific purpose of transmitting the estate’s interest in five real estate properties.
Following an appeal to the Full Court of Australia, a copy of the will has been provided.
Paragraphs 40, 41, 42 and 43 of the affidavit of Mr Simons provides as follows:
40.Annexure B of the Will provides that [Ms Hall] should hold shares in the following companies only:
Company
Acquisition Date
Class
Ms Hall’s Share
Total Shares
[MM] Pty Ltd
25 November 1999
Ordinary
1
8
[LL] Pty Ltd
18 February 1999
Ordinary
1
8
[S] Brothers Pty Ltd
13 October 1993
Ordinary
1
13
[S] Corporation Pty Ltd
8 September 1993
Ordinary
1
14
[S] Holdings Pty Ltd
6 March 1991
C-class
10
209
[NN] Pty Ltd
13 April 1999
Ordinary
1
8
[OO] Pty Ltd
13 April 1999
Ordinary
1
8
41.At the time the deceased made his Will, [Ms Hall] was already the registered holder of the shares described in paragraph 40 above.
42.In other words, the Will records that [Ms Hall] should hold shares that were already registered in her name at the time the deceased made his Will. [Ms Hall] has owned those shares continuously since the acquisition dates specified in paragraph 40 above. I note that those dates pre-date her marriage to [Mr Hall] in 2001.
43.The deceased did not, under his Will, give to [Ms Hall] any additional shares owned by him. This is entirely consistent with the statement of the deceased recorded in paragraph 14.1 of his Will that [Ms Hall] is not involved in management and control of the [V Group] and its business operations, and that he indicated that his sons should manage and control the [V Group].
This is an issue which is disputed by the husband’s advisors who maintain that this was a further allocation of shares by the deceased to the wife.
The affidavit of Mr F S filed on 12 November 2015 was filed in relation to the objections. Paragraph 1 says:
I make the affidavit in respect of objections dated 24 September 2015 by my mother, my brothers [Mr C] and [Mr E] and me to subpoenas filed by the husband on 9 September 2015.
The affidavit summarises the involvement of the family in the V Group business. It asserts that the wife has never been a director of any V company, nor has she held any position of control or responsibility in the V business. It asserts that the wife owns shares in seven V companies and sets them out. These were all acquired prior to the marriage to the husband in 2001.
The affidavit also refers to the V Trusts. Paragraph 29 states:
By Deeds dated 27 February 2015 the trustees of all [V] Trusts exercise their powers under their respective Trust Deeds to exclude [Ms Hall] (the wife) her former husband [Mr Hall] and their children from being beneficiaries of any [V] Trust.”(One of the Deeds is annexed to the affidavit).
At paragraph 34 he says:
From my examination of the financial records of the [V] Group I say that there has been no distribution or payment of any profit, income or capital of any [V] Trust to [Ms Hall] in the period since the 1 July 2002.”
Paragraph 35 then lists dividends paid to the wife which appear to conclude on 14 February 2008, being a distribution from S Brothers Pty Ltd of a full franked dividend.
The affidavit also asserts that “From my examination of financial records of [V] Group, I say that no [V] company or [V] Trust is indebted to [Ms Hall] for any amount, whether by way of loan account, unpaid dividend, unpaid beneficiary account or other form of entitlement”.
The affidavit then deals with objections to the items in the subpoenas.
The objections
For convenience I refer to the subpoena to and Notice of Objection filed by Mr C S as they contain items similar to those in the subpoenas to and objections by the other family members.
Item number 1 of the subpoena seeks:
All notes, memoranda, correspondence (including emails), deeds, draft deeds, or other documents relating to any trust in which Ms Hall or any child of Ms Hall is beneficiary and which is related to, or associated with in any way any gift, devise, bequest, legacy or direction by your late father [Mr G S] in his last will and testament dated 30 January 2009 to [Ms D S], [Mr C S], [Mr F S] or [Mr E S] or to any of them jointly or severally and in which those persons or any of them or any one or more of them are trustee of such trust.
It is submitted on behalf of the subpoenaed parties that this “category is confusing, vague and ambiguous”. It is maintained that it does not identify the documents and is therefore oppressive and impermissible.
In response it was argued that because the wife does not receive any substantive inheritance from the will of her late father, but the will does provide for other family members generously, there is “a reasonable assumption” that the deceased wished to make provision for his daughter and therefore there may be “a secret trust”.
This “assumption” is not established on the evidence provided and as such the objection is substantiated because it could be categorised as a “fishing expedition” and in any event is oppressive and burdensome. Compliance with item number 1 is therefore not required.
Item number 2 seeks:
Copies of any deed of trust or other document which provided to your late father [Mr G S] any of the powers referred to in clause 7.1 of his last will and testament dated 30 January 2009 being those powers which such clause provides are powers that are to be held and exercised by you and your brothers [Mr E] and [Mr F] jointly and which your late father was able to deal with by his will.”
It was maintained that this item seeks trust deeds for the V Group referred to in clause 7 of the wife’s late father’s will. Clause 7 of the deceased’s will refers to trustee’s powers. It was submitted that some of these powers have been exercised to exclude the wife, her children and the husband as beneficiaries. It was maintained that such deeds would be relevant to the estate assets and the construction issues relating to the wife’s interest under the will. However the very wide range of documents which may exist in this category may not relate to any possible relevant issue in these family law proceedings. As such the objections are substantiated. Compliance with item 2 is therefore not required.
Item number 3 seeks:
Copies of the Certificate of Incorporation and Constitution of each company that acts as trustee of a [V] Group Trust, as referred to in paragraph 7.3 (and referred to therein as a [V] Group Trustee Company) of the last will and testament of your late father [Mr G S] dated 30 January 2009.
It was argued that the “gifts” to the wife in clause 14 of the late father’s will showed that he was exercising his power under the trusts. It was also argued that these documents are relevant in order to determine the power of the other persons to exclude the wife and her sons as beneficiaries of the trusts and the power to “re-include” the wife and her sons as beneficiaries after the conclusion of the property settlement proceedings.
As the financial resources of the wife are relevant to the determination of the s 79 proceedings, the companies which act as trustees of the [V] Group Trusts, their certificates of incorporation and constitutions are relevant. Production of these documents was opposed by the subpoenaed parties on the basis that the wife was not a director of any company that acts as trustee of the [V] Trust and that the constitutions and certificates were therefore irrelevant. The subpoenaed parties indicated that the constitution of the seven companies in which the wife owns shares were produced to the husband’s solicitors in August 2014, but not others. It was maintained that in any event because of the steps taken to remove the wife, her children and the husband as potential beneficiaries, this was no longer relevant.
The financial resources of the wife and the previous inclusion of the wife as a possible beneficiary mean that these documents have sufficient relevance and are not a “fishing exercise” or “oppressive”.
This objection is not successful.
Item number 4 seeks:
Copies of any Minutes of meetings of the directors of any [V] Group Company (as referred to in paragraph 3.1 of the last will and testament of your late father [Mr G S] dated 30 January 2009) or of any company which is a member of the [S] Group of Companies (as referred to in paragraph 2.2 of the said will) which records or notes or evidences any discussion of [Ms Hall’s] entitlement pursuant to clause 14.4 of the said will or the annual distribution to [Ms Hall] as referred to in clause 14.7 of the said will or the manner of payment of [Ms Hall’s] entitlement or [Ms Hall’s] annual distribution as referred to in clause 14.9 of the said will.
No objection was taken to this item. However, it was asserted that no such minutes existed.
The submissions filed on behalf of the other parties said in paragraph 6 that no objections was pressed in relation to items in paragraphs, 4, 5, 6, 7, 8, 9, 10, 11 and 20 of the subpoena directed to Mr C S.
Item number 12 seeks:
Copies of all financial statements (including profit and loss statements and balance sheets and notes explanatory thereof) for any of those trusts described as a “[V] Group Trust” in clause 7.1 of the last will and testament of your late [Mr G S] dated 30 January 2009 being any trust in which your late [Mr G S] held directly or indirectly any power as appointor or guardian or otherwise to make, effect, affect, or veto any decision of any trust, estate or settlement that he was able to deal with under his will which powers are now exercised by his three sons for the financial years ended:
(a) 30 June 2009;
(b) 30 June 2010;
(c) 30 June 2011;
(d) 30 June 2012;
(e) 30 June 2013;
(f) 30 June 2014;(g) 30 June 2015 (if any)
It was maintained that the financial statements were not relevant “in any way to the wife”, that the V Group was controlled by the wife’s brothers and that the affidavit of Mr F S indicated that the wife did not receive any distribution of profits of any V trusts over the relevant period. It was maintained that the wife had an obligation to disclose any distribution of profits which she had received during that period. The affidavit then said “which she did not”.
It was maintained that the V Group comprised “over 140 different companies and 50 discretionary trusts” and that the documents sought in items 12 to 18 of the subpoena would require the production of thousands of pages. It was sought that the subpoenas be set aside also on the basis that the material contained confidential and sensitive information.
In answer to these claims it was maintained that the documents would:
1. Provide information as to the existence of credit beneficiary accounts of the deceased which would form part of his estate.
2. The existence of and transaction history of beneficiary accounts of the wife.
3. The assets of those trusts.
However, the subpoenas were not specific, did not refer to any interest of the wife, covered a very large group of documents which were not shown to be relevant and are otherwise oppressive.
Compliance with item 12 is not required.
Item no 13 seeks:
Copies of the minutes of any meeting of directors of any company that acts as trustee of any [V] Group Trust (as that Trust is defined in clause 7.1 of the last will and testament of your late father [Mr G S] dated 30 January 2009) at which a determination was made to distribute the net yearly income or the capital of any [V] Group Trust in the financial years ended:
(a) 30 June 2009;
(b) 30 June 2010;
(c) 30 June 2011;
(d) 30 June 2012;
(e) 30 June 2013;
(f) 30 June 2014;(g) 30 June 2015 (if any)
Similar, to item 12 the minutes and directors’ meetings of trustee companies for the financial years are sought on the basis that the occasions when the distribution has been made to the wife or her children as beneficiaries “is unknown”. It also refers to distributions which may or may not have been drawn and of which the trusts remains indebted.
Whilst the wife’s interest in specific trusts as beneficiary, the distributions she has received or amounts she is still owed would be relevant, the drafting of item 13 is too wide, does not identify the relevant documents sufficiently and is therefore oppressive.
Compliance with item 13 is not required.
Item 14 seeks:
Copies of the minutes of meeting of directors of [S] Enterprises Pty Ltd at which a determination was made to distribute the net yearly income or the capital of the [S] Family Trust in the financial years ended:
(a) 30 June 2009;
(b) 30 June 2010;
(c) 30 June 2011;
(d) 30 June 2012;
(e) 30 June 2013;
(f) 30 June 2014;(g) 30 June 2015 (if any)
The same principles apply to item 14 as referred to above concerning items 12 and 13.
Compliance with item 14 is not required.
Item 15 seeks:
Copies of all taxation returns for any trust referred to in the preceding paragraphs for all of the financial years referred to therein.
It is maintained that the tax returns for the various V trusts would be relevant in establishing the capacity of the V Group to pay to the wife the sums the deceased wished her to receive. I accept the submissions that again the reference to taxation returns for any trust is too wide and it is not specifically related to any possible interest of the wife or her children in any of those entities. The relevance for all of those documents is not established and as such the need to provide all of those taxation returns for all of those trusts would be oppressive.
Compliance with item 15 is not required.
Item 16 seeks:
Copies of any Deed of Trust or Deed of Variation of such Trust relating to any of the [V] Trusts as referred to in paragraph 13 hereof.
It is maintained that these are irrelevant as they do not deal with the interest of the wife or possible interest of the wife. It is maintained on behalf of the subpoenaed persons that the wife is not a beneficiary of, and has no interest in, any V Trust or the assets or income of any V Trust for the reasons previously set out.
In answer to those objections it was maintained that the production of these documents may be relevant to ascertain whether there exist any “secret trusts” and that it may also be relevant to ascertaining whether probate in relation to the will of the deceased father is necessary. These submissions do not sufficiently establish the basis upon which all of these items are relevant to the proceedings between the husband and wife. (The deeds of trust and deeds of variation of the trusts which remove the wife and her children as possible beneficiaries are relevant and have been produced).
Compliance with item 16 is not required.
Item 17 seeks:
A copy of the Deed of Trust of the [S] Family Trust and of any Deed of Variation of such Trust.
The S Family Trust is specifically referred to in paragraph 14.5 of the deceased father’s will which deals with a “direction” of the payment to the wife of $16.5 million. Such a deed of trust and any deed of variation are therefore relevant to the possible entitlement of the wife. The assets and financial resources of the wife are relevant in the property settlement proceedings.
The objections to this item are dismissed. Compliance with this item is required.
Item 18 seeks:
A copy of the Constitution of [S] Enterprises Pty Ltd
The company S Enterprises Pty Ltd is the trustee of the S Family Trust. Therefore for reasons referred to in the preceding item the constitution of the company may be relevant in determining the assets and financial resources of the wife in these proceedings.
The objection to this item is dismissed. Compliance with this item is required.
Item 19 seeks:
Copies of any valuation of the land and buildings owned by:
(a) [LL] Pty Ltd
(b) [S] Brothers Pty Ltd
(c) [S] Corporation Pty Ltd
(d) [NN] Pty Ltd
(e) [OO] Pty Ltd
(f) [MM] Pty Ltd(g) [S] Holdings Pty Ltd”
On behalf of the subpoenaed persons it is submitted that the other parties are cooperating with the current valuations of land and buildings owned by the seven companies in which the wife holds shares. It is submitted that prior valuations of the land and buildings owned by those companies are “irrelevant and unnecessary”. It is also submitted that it would be onerous to require the seven companies, or persons concerned with the same, to trace back the history of valuations over 20 years and therefore would be oppressive.
As item 19 is not specific as to date and time it is on the face of it oppressive. Copies of any recent valuations of land and buildings in the period since the deceased father’s will (2009) could be considered relevant. That will require a more specific subpoena.
Compliance with this item is not required.
Item 20 is agreed.
Item 21 seeks:
All notes, memoranda, correspondence (including emails), deeds, draft deeds or other documents constitutive of or including or evidencing directions to the executor of the last will and testament of your late father [Mr G S] signed on 30 January 2009 as to the way in which the said executor (whether in his capacity as his executor or as trustee of the said [Mr G S]) should carry out any of his duties of executor or trustee relating to the said last will and testament or exercise any power to administer the estate of your late father [Mr G S] including any power in relation to any trust created by the said will.
The objection submits that this is “impermissibly wide, vague and oppressive”. It also maintains that the documents go “well beyond those that would have any relevance to the wife”. Again, the phrasing of the item calls into question the relevance of the large number of such documents to issues in the proceedings between the husband and the wife. I accept the submission that the range of documents is extremely wide and vague and therefore oppressive.
Compliance with this item is not required.
Notice of Objection by Mr Simons
The subpoena filed on 9 September 2015 directed to Mr Simons was to produce documents in relation to the wife’s late father Mr G S (primarily in relation to his previous wills in 2004, 2007 and 2009) and any application for probate in relation to the estate of the late Mr G S.
Mr Simons objected to production of any documents.
Items number 1 to 6 are as follows:
Item 1 - Any correspondence, notes, memoranda or other documents (including emails) received by you from the late [Mr G S] which provided instructions to you relating to the (superseded) last will and testament signed by him on 16 November 2004 (“the 2004 will”) or in relation to any codicil or proposed codicil to the 2004 will;
Item 2 - All notes, memoranda, draft wills, correspondence (including emails), deeds, draft deeds, or other documents prepared or drawn or drafted by you relating to any instructions given to you by the late [Mr G S] with respect to the 2004 will or in relation to any codicil or proposed codicil to the 2004 will;
Item 3 - The 2004 will or any copy thereof;
Item 4 - Any correspondence, notes, memoranda or other documents (including emails) received by you from the late [Mr G S] which provided instructions to you relating to the (superseded) last will and testament signed by him on 16 October 2007 (“the 2007 will”) or in relation to any codicil or proposed codicil to the 2007 will;
Item 5 - All notes, memoranda, draft wills, correspondence (including emails), deeds, draft deeds, or other documents prepared or drawn or drafted by you relating to any instructions given to you by the late [Mr G S] with respect to the 2007 will or in relation to any codicil or proposed codicil to the 2007 will;
Item 6 – The 2007 will or any copy thereof;”
Mr Simons objects to the production of the documents on the basis that both wills for 2004 and 2007 have been revoked by subsequent wills and are therefore “of no effect and irrelevant to these proceedings”. He also claims that the documents are protected from disclosure by legal professional privilege.
The Wills Act 1936 (SA) provides that the phrasing of the 2009 will of the wife’s late father revoked the previous wills and codicils. It was maintained therefore that the documents in items 1 to 6 are no longer relevant.
In reply it was submitted as follows:
Items 1-6
The 2004 and 2007 wills and the instructions and documents given by the deceased to [Mr Simons] and the documents produced by [Mr Simons] in relation thereto are relevant to:-
1. The construction issues relating to clause 14 of the 2009 will;
2. If the gifts in clause 14 are (as contended by the executor) precatory in nature, to the issue as to whether those wishes will be complied with by the executor and other [V] Group company directors (either before or after the conclusion of the property settlement proceedings);
3. The existence of any secret trust pertaining to the gifts made to the sons under the 2009 will;
4. The existence of any document pertaining to the issue referred to in subparagraph 3 hereof;
5. The existence of any estate assets in 2009 and following in the form of credit loan account balances in [V] Group Companies or credit beneficiary account balances in any [V] Group Trust.
I do not accept the submission that the previous wills will necessarily assist in the construction of the 2009 will, nor that those earlier wills will assist in determining the “precatory” nature of the wishes of the executor in the 2009 will, nor the existence of any “secret trust”.
It is difficult to see how the earlier wills will assist in establishing any estate assets in 2009 (whether by way of credit loan account balances or beneficiary accounts in various trusts). I therefore find that the relevance of such material has not been sufficiently established.
Compliance with items 1 to 6 inclusive is not required.
Items 7 and 8 seek:
Any correspondence, notes, memoranda or other documents (including emails) received by you from the late [Mr G S] which provided instructions to you relating to the last will and testament signed by him on 16 November 2009 (“the 2009 will”) or in relation to any codicil or proposed codicil to the 2009 will;
All notes, memoranda, draft wills, correspondence (including emails), deeds, draft deeds, or other documents prepared or drawn or drafted by you relating to any instructions given to you by the late [Mr G S] with respect to the 2009 will or in relation to any codicil or proposed codicil to the 2009 will;
On behalf of the husband it is maintained that these are relevant for the same reasons as related to items 1 to 6 above. I accept that there could be relevant documents concerning the interpretation to be given to the wife’s late father’s will, however, there remain questions about any legal professional privilege applying to the communications between the deceased and Mr Simons in relation to the preparation of the 2009 will. (The 2009 will has now been produced following the decision of the Full Court of the Family Court of Australia).
The common law principles determine the legal professional privilege in relation to production of documents and inspection of the same pursuant to subpoena.
In the matter of Hall & Hall and Anor (2014) FamCA 407 at 51 it states:
Documents which are the subject of legal professional privilege should be disclosed and the appropriate claim made to seek exception for production on the ground of legal professional privilege. This ground does not prevent the documents being identified, rather it prevents them having to be provided for inspection if the legal professional privilege is appropriately claimed.
The Full Court of the Family Court of Australia decision of Strahan & Strahan& Commissioner of Taxation (2013) FLC 93-570 dealt in detail with the claim for privilege. In particular at paragraphs 29 and 31 his Honour Justice Murphy said:
29. This issue will be canvassed in greater detail below in respect of Ground 3. For present purposes, the important point is that a party cannot rely on the potential examination of documents by the court to cure deficiencies in the description of documents alleged to be subject to privilege. That point is underscored by the summary of the current state of the authorities as to what is required when describing documents said to be covered by privilege in Heydon, D, Cross on Evidence, 9th ed, LexisNexis, Chatswood, 2012 as follows (at 25240):
Given the personal nature of this privilege it must be claimed by the person entitled to it. Where the claim is made with respect to subpoena[ed] documents the witness may assert a claim to privilege when attending the court in response to the subpoena or when application is made for inspection of the documents produced. No particular form of words is necessary provided language is used which is capable of being reasonably understood to invoke the privilege. It is for the party claiming privilege to justify the claim, either by pointing to the nature of the documents or (in the absence of agreement) by evidence describing the circumstances in which they were brought into existence. Resort to verbal formulae or ritual is inadequate. Focused and specific evidence demonstrating the dominant purpose is needed. But in most cases the factual basis for the claim to privilege must be placed before the court by admissible evidence or by agreement. This requirement is not satisfied by the traditional, but reprehensible, practice of parties making an affidavit of documents baldly asserting that the privileged purpose was the dominant purpose for which the document was brought into existence. The assessment of the disputed claim to privilege will then be undertaken upon the facts deposed to, including the circumstances attending the creation of the document including such statutory provisions as are relevant.
…
31. Consistent with those statements, Kirby J said in Daniels Corp v ACCC (2002) 213 CLR 543 (at 585):
The foregoing conclusion does not mean that a mere claim of legal professional privilege will be sufficient to attract the privilege. In the case of each communication alleged to be privileged the party making the claim [2013] FamCAFC 203 Reasons Page 12 must bring it within the applicable principles [Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49]. Legal professional privilege will not be available where a conclusion is reached that particular communications were not prepared for the dominant purpose of giving or receiving legal advice.
(… Footnotes omitted).”
It is necessary for the person claiming the protection of legal professional privilege to list the documents which are the subject of legal professional privilege and thereafter make the appropriate claim to establish the basis upon which they seek the exception from production.
Mr Simons relies upon his affidavit sworn on 12 November 2015 which asserts that “all of his communications with [Mr G S] around his 2009 will were confidential and privileged …” This however does not identify the documents. It is therefore not possible to discern which documents were provided (if any) to the solicitor by the late Mr S or which documents were brought into existence for the dominant purpose of seeking or giving legal advice.
The objections provided by Mr Simons to the production of documents sought in items 7 and 8 have therefore not been established. The solicitor should be given an opportunity to provide specific response to the subpoena, identifying the documents to which legal professional privilege is claimed. This should be done within an appropriate time. The solicitor is aware that these documents are being sought. A period of 21 days would therefore be appropriate.
If there remain issues concerning the objections, they can then be listed for determination.
Item 9 seeks:
All notes, memoranda, correspondence (including emails), deeds, draft deeds, or other documents prepared or authored or drawn or drafted by you relating to any trust in which [Ms Hall] or any child of [Ms Hall] is a beneficiary, being a trust related to or associated with any gift, devise, bequest or legacy or direction made by the late [Mr G S] in his last will and testament dated 30 January 2009 to [Ms E S], [Mr C S], [Mr F S] or [Mr E S] or to any of them jointly or severally and in which those persons or any of them or one or more of them re trustee of such trust.
The Notice of Objection filed by Mr Simons does not give specific objections in relation to these items. However, in relation to the submissions provided at the hearing, item 9 was included as a reference to documents protected from disclosure by legal professional privilege.
Again, the specific documents have not been identified. There is clear possibility that some of these documents may be relevant to the proceedings between the husband and wife in this Court. For reasons referred to in relation to items 7 and 8 the solicitor should be required to identify the documents to enable the determination of any privilege to be properly considered.
Items 10, 11 and 12 seek the following:
10. All notes, memoranda, correspondence (including emails), deeds, draft deeds, or other documents prepared or authored or drawn or drafted by any other person in your possession relating to any trust in which [Ms Hall] or any child of [Ms Hall] is a beneficiary, being a trust related to or associated in any way with any gift, devise, bequest or legacy or direction made by the late [Mr G S] in his last will and testament dated 30 January 2009 to [Ms D S], [Mr C S], [Mr F S] or [Mr E S] or to any of them jointly or severally in which those persons or any of them or one or more of them are trustee of such trust.
11. All notes, memoranda, correspondence (including emails), deeds, draft deeds, or other documents constitutive of or including or evidencing directions to the executor of his last will and testament of the late [Mr G S] signed on 30 January 2009 as to the way in which the said executor (whether in his capacity as his executor or trustee of the estate of the said [Mr G S]) should carry out any of his duties of executor or trustee relating to the said last will and testament or exercise any power to administer the estate of the late [Mr G S] including any power in relation to any trust created by the said will whether such document was prepared or authored, or drawn, or drafted by you or by any other person and whether such document is an original or a copy of an original.
12. All notes, memoranda, correspondence (including emails), deeds, draft deeds, or other documents constitutive of or including or evidencing directions to the directors of any [V] Group Company (as referred to in clause 2.1 of the last will and testament of the late [Mr G S] signed on 30 January 2009) or any [V] Group Trust (as referred to in clause 7.1 of the said will) as to the payment of the gift to [Ms Hall] referred to in clause 14.4 of the said will or the annual distribution to the said [Ms Hall] referred to in clause 14.7 of the said will or the manner of payment of [Ms Hall’s] entitlement or [Ms Hall’s] annual distribution as referred to in clause 14.9 of the said will.”
In relation to item 10 the solicitor claimed that the documents were protected from disclosure by legal professional privilege. Again, the documents are not identified. It is possible that there are some documents which are relevant to the proceedings between the husband and wife which are not protected by legal professional privilege. This cannot be ascertained until the documents are identified. Similar orders will be made providing for the documents to be identified.
In relation to items 11 and 12 it is asserted that the descriptions are extremely wide “and extends well beyond matters bearing upon any asserted rights or expectations of the wife”. It was maintained that categories 11 and 12 were oppressive, lacked relevance and not “necessary to the proper conduct of the proceedings”.
Whilst the description in items 11 and 12 are detailed, they clearly relate to documents dealing with the deceased’s directions to his executors or the impact his will may have upon the trusts already in existence and the rights to distributions from trusts and companies. As such they are relevant to these Court proceedings which need to identify the assets and financial resources of the wife. I accept that a possible claim by the wife against the estate of her late father is a relevant factor and therefore the documents referred to in items 11 and 12 (for which legal professional privilege does not attach) should be disclosed. Therefore I reject the objection to items 11 and 12.
Item 13 seeks:
Application for Probate in relation to the estate of the said [Mr G S].
It was claimed that item 13 was irrelevant. Previously it was indicated in affidavit material from the solicitor that probate of the will had not been sought. If there is an application for probate in relation to the estate of the wife’s late father, such documents are relevant as they may directly relate to significant factors in determining the wife’s assets and financial resources.
The grant of probate clearly relates to the possibility of any claim by the wife against her late father’s estate.
Privacy and confidentiality
The other parties raise the issue of privacy and confidentiality. This issue was also dealt with in the previous proceedings in this matter concerning the subpoena relating to the will of the wife’s late father.
Section 121 (1) of the Act provides:
Section 121
Restriction on publication of court proceedings(1) A person who publishes in a newspaper or periodical publication, by radio broadcast or television or by other electronic means, or otherwise disseminates to the public or to a section of the public by any means, any account of any proceedings, or of any part of any proceedings, under this Act that identifies:
(a) party to the proceedings;
(b) a person who is related to, or associated with, a party to the proceedings or is, or is alleged to be, in any other way concerned in the matter to which the proceedings relate; or
(c) a witness in the proceedings;
is guilty of an offence punishable, upon conviction by imprisonment for a period not exceeding one year.Rule 13.07A of the Family Law Rules 2004 (Cth) provides that:
Rule 13.07A
Use of documents
A person who inspects or copies a document, in relation to a case, under these Rules or an order:
(a)must use the document for the purpose of the case only; and
(b) must not otherwise disclose the contents of the document, or give a copy of it, to any other person without the court's permission.
The Act and rules clearly provide protection for confidentiality and privacy. The parties in these proceedings are well aware of the provisions. The issues of privacy and confidentiality are not sufficient in this matter to limit the production of relevant documents.
For the above reasons I make the orders which are set out at the commencement of these reasons.
I certify that the preceding one hundred and twenty-six (126) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 10 March 2016
Associate:
Date: 10 March 2016
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