Hann v Hann

[2025] NSWSC 80

Supreme Court

New South Wales

Medium Neutral Citation:

Hann v Hann [2025] NSWSC 80

Hearing dates:

14 February 2025

Date of orders:

14 February 2025

Decision date:

14 February 2025

Jurisdiction:

Equity - Applications List

Before:

Kunc J

Decision:

Subpoenas set aside and orders made for destruction of accessed documents

Catchwords:

CIVIL PROCEDURE – subpoena to produce documents or things – abuse of process – precipitous issue of subpoenas – subpoenas issued before pleadings filed and not justified by issues in interlocutory dispute

Cases Cited:

Neil Street Co Pty Ltd v Ibrahim [2024] NSWSC 1382

Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1

Category:

Procedural rulings

Parties:

Steven Frederick Hann (Plaintiff)
Paul Robert Hann (Defendant)

Representation:

Counsel: A Crossland (Plaintiff)
E Ball (Defendant)

Solicitors: Watson Law (Plaintiff)
Collins Clare Solicitors (Defendant)

File Number(s):

2023/263690

Publication restriction:

None

EX TEMPORE JUDGMENT (REVISED)

Summary

1. By further amended notice of motion dated 5 August 2023, the defendants seek to set aside two subpoenas issued at the request of the plaintiff to IMB Bank and Commonwealth Bank of Australia.

2. The parties are all the children of the late John Hann. The plaintiff (to whom I shall refer, without disrespect, as Steven) and the first defendant (to whom I shall refer, again without disrespect, as Paul) are the main protagonists, and all three defendants are executors of the estate of the late John Hann.

3. The underlying dispute is that Steven alleges that the defendants have, without his consent, sold or dealt with cattle said to have been jointly owned by Steven and Paul. The subpoenas were issued on 19 October 2023, while the parties were locked in intense interlocutory disputes. Under the Court’s rules, leave was not required for the issue of the subpoenas. The subpoenas sought copies of all bank statements in the name of Paul or John (in either their own name or with any other person) from 12 August 2021 to the date of the subpoenas. The essential question is whether, having regard to the state of the litigation at that time, there was a proper forensic purpose for the issue of the subpoenas.

4. For the reasons which follow, the Court has determined that the issue of the subpoenas lacked a proper forensic purpose and they will be set aside. The Court acknowledges the assistance it has received from the extensive written and oral submissions of Mr E Ball of Counsel for the defendant applicants and Mr A Crossland of Counsel for the plaintiff respondent.

Chronology

5. The proceedings were commenced by the filing of a summons on 18 August 2023 before Robb J sitting as Duty Judge. His Honour made ex parte orders. The matter returned to Court on 22 August 2023. On that occasion, his Honour made orders by consent providing for a regime which included the provision of information by the defendants to Steven, but was primarily directed towards the identification and sale of the cattle.

6. It is important for the purposes of this decision to understand that from the commencement of the litigation and through September and October 2023, the primary focus of the parties, including in further interlocutory skirmishes before the Duty Judge, was the mechanism for, and giving effect to the imminent need, to identify and sell the cattle. The orders made by his Honour included (emphasis added):

1.    Subject to orders 4 to 12, order 2 of the orders made by Robb J on 18 August 2023 be continued until 5pm on 3 October 2023.

2. That on or before 1 September 2023, the defendants provide to the plaintiff all documents and information in their possession or control in relation to cattle that are, or were at any time since 16 July 2021, located on Bolaro (including ‘Vendor Declarations’) where such information or documentation is, or was, or ought to have been lodged or kept pursuant to provisions of the Biosecurity (National Livestock Identification System) Regulation 2017.

3.    That on or before 1 September 2023, the defendants provide to the plaintiff all ‘Annual Land and Stock Returns’ in their possession or control for cattle on Bolaro (as defined in the summons) for the period on and from 16 July 2021.

4.    On 6 September 2023, the plaintiff and first defendant must in the company of up to two other person, selected by each, attend Bolaro in order to:

(a)    bring the stock to a yard to count them;

(b)    count the stock; and

(c)   prepare and sign a jointly-signed document of the number and identity of the herd located at Bolaro.

5.    By 30 August 2023, the plaintiff nominate 3 stock agents experienced in cattle sales.

5A.    That on or before 29 August 2023, the first defendant (Paul) swear and serve on the plaintiff an affidavit deposing to, in respect of any cattle jointly purchased or owned by the parties, or any progeny of such cattle, the number, identity and sale details of any cattle that were jointly purchased or owned by the parties and of any progeny of such cattle for the period on and from 16 July 2021 and to include details of any transfer, transport, or dealing in any way with such cattle and progeny and in case any cattle have been removed from Bolaro the whereabouts of any removed cattle.

7. On 29 August 2023, Paul filed and served an affidavit in purported compliance with order 5A. During most of September, the correspondence between the parties' solicitors, as I have already said, was devoted to the identification and sale of the cattle. It was not until 20 September 2023 that a letter was sent by Steven's solicitors to the defendants' solicitors referring to the orders and making a number of complaints alleging non-compliance by the defendants with those orders.

8. A critical matter for present purposes is the nature of the complaint made on behalf of Steven in relation to the purported compliance with order 5A. The letter of 20 September 2023 said on that topic:

Order 5A

The affidavit of Paul Hann dated 29 August 2023, in breach of Order 5A:

1.   Does not include "details of any transfer, transport or dealing in any way with [the] cattle and progeny [and the]... whereabouts of any removed cattle."

2.   Inter alia:

(a)   your client does not give evidence of when the two bulls referred to in paragraph 26 were moved onto Bolaro.

(b)   Your client does not give details of the alleged dealing at paragraph 13 of the affidavit;

(c)   your client has not deposed to the year in paragraph 23;

(d)   Paragraph 30 does not specify which two bulls are being referred to, nor where they were removed to.

9. The letter concluded by giving the defendants two business days to rectify the alleged deficiencies. Several days passed.

10. On 28 September 2023, Steven's solicitor wrote to the defendants' solicitor:

We note that there has been no response to our letter dated 20 September 2023 (copy attached). Your silence suggests that your clients cannot address our client's concerns that your clients are in breach of the orders.

If your clients do not comply with the orders by close of business tomorrow, or give a clear explanation for why our client should accept that the orders have been complied with, our client will file a notice of motion for contempt. Our client also reserves the right to approach the Duty Judge if necessary.

11. I should add, in passing, that the threat of filing a notice of motion for contempt was completely inappropriate and inimical to fulfilling the overriding purpose under the Court's rules. In the first instance, any alleged failure to comply with orders of the Court should be dealt with by relisting the matter, in this case before the Duty Judge because it was that judge who had the carriage of the interlocutory issues then occupying the parties.

12. In any event, the letter of 28 September 2023 drew a very prompt reply later that day. It is not necessary for me to set out the terms of that reply. It suffices to say that the letter sought to respond to the issues that had been raised in Steven's solicitor's letter of 20 September 2023.

13. On the same day - 28 September 2023 - orders were made by consent in the online registry that the matter proceed by way of pleadings. An order was made that Steven was to file and serve his statement of claim by 20 October 2023.

14. On 19 October 2023, being the day before Steven's statement of claim was due to be filed (it not having yet been filed), the subpoenas were issued.

15. On Friday, 20 October 2023 at 4.14pm, Steven's solicitor wrote to the defendants' solicitor:

1.   Subpoena filed 20 October 2023 issued on NLIS;

2.   Subpoena filed 19 October 2023 issued on Local Land Services;

3.   Subpoena filed 19 October 2023 issued of CBA;

4.   Subpoena filed 19 October 2023 issued on IMB.

We note that pursuant to Orders made on 28 September 2023 our client is required to file and serve a Statement of Claim today. Due to the lack of NLIS information provided by your client pursuant to orders made on 22 August 2023 our client is not in a position to finalise its pleadings. We have therefore issued a Subpoena on NLIS directly to obtain the documentation/information required to complete the pleadings.

We therefore request your client's consent to approach the Court to vary the timetable for the parties to file and serve pleadings and attached proposed short minutes of orders seeking same.

If your client consents, please execute and return the attached consent orders and we will email the court seeking the extension to the timetable.

We further note that we are yet to receive the proceeds of the sale of the Cattle from Elders, we will email Elders today to request advice on when the payment can be expected.

16. There is no dispute that the letter was the first notice that the defendants had of the issue of the subpoenas. On the next business day, being Monday, 23 October 2023, the defendants' solicitor wrote to Steven's solicitor (23 October letter):

I refer to your email below and the accompanying subpoenas.

First, I note that your email attached two copies of the subpoena issued to IMB Bank Limited. The file named "Subpoena filed 19 October 2023 LLS" is in fact a duplicate of the subpoena issued to IMB. Please provide a copy of the subpoena issued to LLS without any further delay.

Secondly, your client has yet to file and serve a statement of claim - and so the pleadings have not yet even opened, let alone closed. Your email below was sent on the day by which your client had agreed to file its statement of claim and was the first indication given whatsoever that your client would not be able to meet that agreed timetable. Is your client’s position that, without the material now sought by the subpoenas (to which objection is taken below) it cannot plead its case against my clients?

Thirdly, and in light of the matters identified above and below in this email, my client is not in a position to consider consenting to an extension of the timetable (at the very least, absent the further information sought). In any event, I note that the orders you have proposed are objectionable in that: (a) they provide for an extension of time for your client to serve the statement of claim, but no extension for my clients to file a defence in response and any cross-claim; (b) they provide that the defence and any cross-claim should be filed on the same day that the statement of claim is filed (which cannot be correct); and (c) they provide for an extension of time for your client to serve any defence to cross-claim, but no extension for my clients to serve a reply.   

Fourthly, the issue of subpoenas in these circumstances is objectionable having regard to Practice Note SC Eq 11 (see, eg, MyPet Brands Pty Ltd v Beanie Technologies Pty Ltd [2016j NSWSC 1628 at [31]-[42] per Stevenson J). The objection is a fortiori where your client has not served any pleading (and so the issues in the proceedings are not yet identified or defined) or otherwise proffered any explanation as to why it should be entitled see bank statements belonging to my client, Mr Paul Hann, or the late Mr John Hann (of whose estate my clients are the executors) at all, let alone at such an early stage of the proceedings. Nor has your client given any explanation of the subpoena to Local Land Services, or the breadth of the subpoena to be issued to NLIS. On what basis and for what purpose does your client justify the issue of each of the subpoenas in these circumstances?

The subpoenas appear to be a fishing expedition and should be withdrawn. If your client does not withdraw them, or provide an adequate justification for their issue, by 4PM on Thursday 26 October 2023 then I expect to receive instruction to file an application that they be set aside.

17. This letter was in terms that were properly compliant with both professional courtesy and procedure. It clearly explained the nature of the defendants' difficulty with the subpoenas and gave Steven's solicitor a reasonable time, being three business days, to respond and justify the subpoenas or agree to their withdrawal.

18. As I will develop further below, in my respectful view it is of signal importance to the determination of the present application that, first, there was no dispute that the 23 October letter was received by Steven's solicitors; and, second, that there was no response within the time limited by the letter or at all.

19. There having been no reply, on 30 October 2023, the initial iteration of the present motion was filed and served. The first return date for the subpoenas was the next day, 31 October 2023. There was no appearance by either party on that occasion in the Subpoena List and it appears that in accordance with the practice of that list, access orders were made in the absence of the parties.

20. As I will refer to later in these reasons, it was accepted that before orders restricting access were subsequently made having regard to the filing of the present motion, there was access by Steven's lawyers and Steven himself to some of the documents produced in answer to one of the subpoenas.

21. I have already noted that there was no reply to the 23 October letter. In fact, there was no reply from Steven's solicitor to anything from the defendants' solicitors until 13 November 2023. This period of some six weeks of silence is a matter relied upon by the defendants, in particular on the question of costs, to which I will come at the end of these reasons.

Proper forensic purpose - submissions

22. Mr Ball submitted that the present case was relevantly on all fours with my decision in Neil Street Co Pty Ltd v Ibrahim [2024] NSWSC 1382. It was submitted that, as in that case, the subpoenas had been issued prematurely, that is to say, before the issues had been properly crystallised in the pleadings, such that there was no proper forensic purpose discernible for their issue, and as a secondary complaint, that the subpoenas issued in those circumstances had the effect of subverting the operation of Practice Note SC Eq 11.

23. I summarised the relevant principles in Neil Street:

42   The second basis is that the Court finds the subpoenas were issued without a proper forensic purpose. So much becomes apparent when the conclusion of Bell P (as the Chief Justice then was) in Blacktown is considered (emphases in original):

65    It is sufficient, in my view, to justify a subpoena as having been issued for a legitimate forensic purpose if the documents sought are “apparently relevant” or, to use the words of Nicholas J in ICAP at first instance, it can be seen that the documents sought to be produced by way of subpoena will materially assist on an identified issue or there is a reasonable basis beyond speculation that it is likely the documents subpoenaed will so assist. Of course, if it can be shown that the material assistance will be to the party that issued the subpoena, the prospect of the forensic purpose of the issuing party being impugned as illegitimate will be virtually non-existent.

43   For pleaded cases, “apparent relevance” and the “identified issue” will be identified from the matters put in issue in the pleadings. In a case commenced by summons, the issues may be identified from the affidavit evidence and the relevant legal issues. In the present case, there could be no “apparent relevance” because there were no relevantly identified issues given that pleadings had not closed. For example, at the time the Registrar was considering the access application it was at least theoretically possible that Mr Ibrahim would, on the last available day, file a submitting appearance.

44   The third basis is that the subpoenas had the effect of subverting the operation of Practice Note SC Eq 11: Mempoll at [11] – [12]. In my respectful opinion, it is sufficient to constitute an abuse of process if the conduct has the relevant delinquent effect, even if that effect was not the subjective intent of the person or party responsible for it.

24. Mr Ball placed heavy emphasis on the fact that Steven's solicitor had never responded to the 23 October letter or otherwise attempted to explain the proper forensic purpose of the subpoenas.

25. The high point of Mr Crossland's response to what was said to be the lack proper forensic purpose was to point to two affidavits. The first was an affidavit of Steven's of 15 September 2023, in which he deposed to a telephone conversation on 12 September 2023 with the owner of a neighbouring property, Mr Maik Griefahn:

34   Maik also told me that two sales of cattle at Bolaro had taken place in 2022 which I was not aware of and that there had been a sale or removal of cattle in 2023 which had taken place after the sale of cattle in March 2023. I am not aware of any sale of co-owned cattle having taken place in 2022 nor am I aware of any sale or removal of co-owned cattle having taken place in 2023 other than a sale which took place in March 2023 as referred to in paragraph 31 of Paul's affidavit of 29 August 2023.

26. There was no dispute that Paul had paid the proceeds of cattle sales into his bank account, but this conversation was said to put Steven on notice of cattle sales (and, it was inferred, payments) of which Steven was unaware.

27. Mr Crossland then drew to attention that the defendants had themselves then filed an affidavit of Mr Griefahn on 17 September 2023 in which Mr Griefahn sought to respond to that part of Steven's affidavit:

Telephone conversation with Steven Hann

9   On or about 12 September 2023, I received two missed calls and a text message from Steven Hann. I haven't heard from Steve since the funeral of his father, and I thought it was strange that he rang me as I have not spoken to him for some time.

10   During our conversation, we talked about the flood gates between the two properties and he asked me about the state of the fences. I said that it is not really my business to talk about the state of the boundary fences, but that I seek to fix the flood gates between the properties. The two properties adjoin sections of the river where floodgates need to be maintained. When the river floods, the flood gates are swept away and so my cattle can wander on their farm and vice versa.

11   Steve and I spoke about the Bolaro herd. I recall telling Steven (and also his agents a couple of days earlier) "there could be a couple of my cows up on Bolaro and yours on my place also".

12   I then said to the effect:

"I am not worried about that Steve because I'll soon get them back if I'm told they are in the yards".

28. Much was sought to be made of the fact that Mr Griefahn did not take issue with Steven's version of the conversation, including the reference to the cattle sales about which Steven said he knew nothing. Mr Crossland submitted that demonstrated that there was clearly an issue between the parties about money that had gone into Paul's bank account from sales that were unknown to Steven.

Proper forensic purpose - consideration

29. Insofar as the subpoenas were issued before the statement of claim had been filed, I accept that the present case is indistinguishable from Neil Street. However, as I said in that judgment, in interlocutory disputes being fought out before the Duty Judge before pleadings are filed, the joinder of issue which would provide a basis for determining the legitimate forensic purpose of subpoenas can and often does occur through the exchange of affidavits between the parties. That exchange will generally highlight the factual disputes that inform the particular interlocutory dispute.

29. Looking at the state of play of the interlocutory dispute at the time the subpoenas were issued, the correspondence between the parties made clear that they were in dispute about the adequacy of the information provided about the cattle sales. This is why there was ultimately no complaint concerning a subpoena to the cattle registry (NLIS) as a means of trying to determine what sales had in fact taken place.

30. However, there was no discernible dispute or matter in issue warranting access to the bank statements. That type of information was not a subject matter of complaint by Steven's solicitors in relation to the defendants' compliance with Order 5A (see [8] above). I accept Mr Ball's submission that the failure to respond to the 23 October letter is the first and best indication that there was no proper forensic purpose for the issue of the subpoenas.

31. I do not accept Mr Crossland's reliance on the two affidavits to which I have referred (see [25] and [27] above). Mr Griefahn's silence does not make an issue of the question concerning unknown (to Steven) cattle sales and the consequent payment of money into Paul's bank account. The silence is obviously explained by the fact that it was not an issue to which Mr Griefahn's affidavit was directed. The live issue between the parties at that time concerned the identification and sale of the cattle, and it is the identification question which Mr Griefahn's affidavit clearly sought to address.

32. For these reasons, the Court concludes that there was no proper forensic purpose for the issue of the subpoenas, and they will be set aside.

Costs

34. There is no real dispute that costs should follow the event. The real issue between the parties was whether those costs should be paid on the indemnity basis and whether they should be assessed and payable forthwith. Mr Crossland resisted both of these outcomes.

35. I accept Mr Ball's submission that the costs should be payable forthwith. I will apply what was said by Barrett J (as his Honour then was) in Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1; [2002] NSWSC 432 and find that:

(1)   The dispute about the subpoenas is a discrete issue, which will never be revisited and will be unaffected by the ultimate outcome of the litigation.

(2)   The issue of the subpoenas was unreasonable for want of proper forensic purpose.

(3)   This litigation has a long way to go. It is still in its interlocutory stages. On any view, a final hearing is at least 12 months away and probably more.

36. Taking those three circumstances into account, the justice of the case warrants an order that the defendants' costs of their motion in relation to the subpoenas be assessed and payable forthwith.

37. Turning to the question of indemnity costs, Mr Ball submitted that it was unreasonable to issue the subpoenas and that the six week silence to which I have referred (see [21] above) was itself a further indication of the unreasonable way in which the litigation had been conducted. He submitted that the issue of the subpoenas was itself an abuse of process and plainly such, and that Steven had conducted himself in an unreasonable fashion.

38. The 23 October letter did not foreshadow an application for indemnity costs. However, it is clear from the authorities that the failure to do so in a letter of that kind is not determinative of the question. For present purposes, what is more relevant is that every iteration of the motion sought orders on the indemnity basis payable forthwith. In those circumstances, it seems to me that Steven could not be in any doubt as to what was being sought and to what he had to respond.

39. The six week delay is unexplained in the evidence and is undoubtedly unsatisfactory. However, it is not serious enough in my view in the context of the litigation in and of itself to warrant an order for indemnity costs.

40. Turning to the broader question of the issue of the subpoenas as examples of an abuse of process and unreasonable conduct, I accept that there is a strong case to be made for indemnity costs. However, looking at the matter as a whole and taking into account the issue of the subpoenas in the much larger context of the intense interlocutory disputes then extant between the parties, the Court is not satisfied that Steven's conduct in obtaining the subpoenas was of the requisite character to attract an order for indemnity costs. The application for indemnity costs is therefore refused.

Orders

41. The orders of the Court are:

1. Set aside the following subpoenas issued at the request of the plaintiff:

(1)    subpoena filed 19 October 2023 to IMB Bank; and

(2)    subpoena filed 19 October 2023 issued to Commonwealth Bank of Australia.

2. The plaintiff is to pay the defendants’ costs of the motion to set aside those subpoenas, such costs to be assessed and payable forthwith.

3. Insofar as the plaintiff's legal advisers or the plaintiff himself have had access to any documents produced pursuant to either of the subpoenas referred to in order 1, the plaintiff and his solicitors are to destroy all copies of any such documents in their custody, possession and control, and any notes of the contents of those documents in their possession, custody and control, no later than 21 February 2025.

4. The plaintiff's solicitor is to file and serve an affidavit on or before 7 March 2025 deposing to the steps taken by the plaintiff's legal representatives and the plaintiff himself to comply with the order in the preceding paragraph.

5. The defendants are to file and serve their evidence on or before 21 March 2025.

6. Proceedings are listed before the Registrar for directions on 25 March 2025.

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Decision last updated: 20 February 2025