Holling & Holling

[2022] FedCFamC1F 61

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Holling & Holling [2022] FedCFamC1F 61

File number(s):

SYC 3796 of 2021

Judgment of:

AUSTIN J

Date of judgment:

11 February 2022

Catchwords:

FAMILY LAW – PRACTICE AND PROCEDURE – Review of Decision – Privilege – Where a registrar upheld the wife’s objection to the subpoena requiring production of her former lawyers’ file – Where the wife contends she was not exercising her will freely and voluntarily when she executed a financial agreement – Where the husband contends the legal advice she received is relevant to the voluntariness of her entry into the agreement and she had waived privilege over the entire file – Potential relevance – Where absent a legitimate forensic purpose to obtain access to the entire file, the subpoena is too wide – Where the wife enjoys legal professional privilege in the entirety of the file – Waiver of privilege – Where, by her pleadings in the litigation, the wife has waived her privilege in the parts of the file which could be considered potentially relevant – Where the access to the file will be limited – Access granted – No order as to costs.

Legislation:

Family Law Act 1975 (Cth) Pts VIII, VIIIA

Cases cited:

Alister v The Queen (1984) 154 CLR 404

Bailey v Department of Land and Water Conservation (2009) 74 NSWLR 333

Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341

Council of the NSW Bar Association v Archer (2008) 72 NSWLR 236

DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499

Mann v Carnell (1999) 201 CLR 1

Secretary to the Department of Justice v Osland (2007) 95 ALD 380

Vittera Malt Pty Ltd v Cargill Australia Ltd (2018) 58 VR 333

Division:

Division 1 First Instance

Number of paragraphs:

30

Date of hearing:

11 February 2022

Place:

Newcastle (via video link)

Counsel for the Applicant:

Mr May

Solicitor for the Applicant:

Family Law Matters

Counsel for the Respondent:

Dr Barnett

Solicitor for the Respondent:

Walter & Elliott Family Lawyers

ORDERS

SYC 3796 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MR HOLLING

Applicant

AND:

MS HOLLING

Respondent

ORDER MADE BY:	AUSTIN J
DATE OF ORDER:	11 FEBRUARY 2022

THE COURT ORDERS THAT:

1.Subject to Order 2, the parties are granted access to inspect and copy only the following documents produced by Gibson Howlin Lawyers (“the lawyers”) in response to the subpoena issued by the applicant husband on 21 October 2021:

(a)All written correspondence between the lawyers and the respondent wife in the period between the commencement of the lawyers’ retainer and 31 July 2017;

(b)All file notes prepared by the lawyers recording oral communication between the lawyers and the respondent wife in the period between the commencement of the lawyers’ retainer and 31 July 2017;

(c)All tax invoices issued by the lawyers to the respondent wife for work done in the period between the commencement of the lawyers’ retainer and 31 July 2017; and

(d)All costs agreements entered into by the lawyers and the respondent wife prior to 31 July 2017.

2.For the next 14 days, the respondent wife and her lawyers have the first right of access to the documents described in Order 1.

3.No order as to costs.

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 the pseudonym Holling & Holling has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

EX TEMPORE REASONS FOR JUDGMENT

AUSTIN J:

1. The parties to these proceedings, commenced in May 2021, are engaged in a dispute over the enforceability of a financial agreement and the consequent division of their property under Pts VIIIA and VIII of the Family Law Act 1975 (Cth). It is apparently their mutual intention to contest the enforceability of the financial agreement as a separate threshold issue.

2. The financial agreement is undated but was supposedly executed by the parties on 5 April 2017, with the parties later acknowledging the circumstances in which they each executed the agreement – the husband on 26 July 2017 and the wife on 31 July 2017.

3. The wife has pleaded the financial agreement, which purports to be binding upon them, is not so. In summary, she contends, though the husband disavows, she was not exercising her will freely and voluntarily when she executed the financial agreement.

4. The wife received legal advice in respect of the financial agreement and consulted with her lawyers from a time well in advance of the agreement’s execution.

5. On 21 October 2021, the husband issued a subpoena to the wife’s former lawyers requiring them to produce to the Court their entire file concerning the advice they provided her in relation to the financial agreement. The schedule to the subpoena particularises the husband’s interest in certain documents evidencing the lawyers’ advice to the wife, her instructions to them, their costs agreement, and the lawyers’ tax invoices.

6. On 3 November 2021, the wife lodged an objection to the subpoena, claiming the husband’s access to the documents was precluded by legal professional privilege.

7. The dispute over the subpoena was listed for hearing before a registrar on 17 November 2021. The decision was reserved and, on 10 December 2021, the registrar upheld the wife’s objection and struck out the subpoena (Order 1).

8. On 16 December 2021, the husband filed an Application for Review seeking the review of the registrar’s decision, which is the application presently listed for hearing.

9. The parties did not dispute the content of the legal principles which govern the operation of legal professional privilege (Mann v Carnell (1999) 201 CLR 1). Rather, the dispute was entirely focussed upon the application of those principles to the case at hand.

10. In this instance, the husband alleged the wife had not proven she enjoys any legal professional privilege in the file maintained by her former lawyers and, even if she had, it had been waived. However, those assertions assume the subject documents are potentially relevant to the issues at stake in the upcoming trial. The relevance of the documents is an anterior question since, if they are not at least potentially relevant, no occasion arises to compel their production and there is consequently no need to consider either the existence or waiver of legal professional privilege in the documents.

11. The wife’s “Points of Claim” filed on 15 September 2021 is voluminous and complicated, but in essence she pleads her entry into the financial agreement was not free and voluntary. She contends the financial agreement is vitiated by the husband’s “unconscionable conduct” and “undue influence”. By reason of those pleadings, the husband contends the wife’s former lawyer’s file must be relevant to the salient issues and the wife has waived privilege over the entire file. However, that conclusion does not inevitably follow.

    Potential relevance

12. Any subpoena which requires the production of documents is only valid to the extent it manifests a legitimate forensic purpose. There must be some concrete ground for an asserted belief that the documents specified in the subpoena contain information that will materially assist the issuing party’s litigious interests in order to take the process beyond a mere fishing expedition. There is no legitimate forensic purpose demonstrated when a party issues the subpoena merely to discover whether the documents might be relevant to the controversial issues (Alister v The Queen (1984) 154 CLR 404 at 414, 439 and 456).

13. When asked how the entire file of the lawyers could be relevant to the contentious pleadings of the husband’s unconscionable conduct and undue influence, the husband’s counsel could only say the file contents “may” be relevant, which submission tended to betray the demand for the entire file as a fishing expedition. Absent a legitimate forensic purpose to obtain access to the entire file, the subpoena is too wide.

14. The discussion then turned to the documents specifically nominated in the subpoena as categories of documents which could potentially be credibly relevant to the issues of the husband’s allegedly overbearing conduct – documents evincing the terms of the wife’s retainer of the lawyers, the instructions the wife gave, the advice she received from the lawyers, and the ambit of the legal work done for her.

    Existence of legal professional privilege

15. There is no dispute at all that the wife retained the lawyers for advice in relation to at least the terms of the financial agreement, the effect of the financial agreement upon her rights, and the advantages and disadvantages of her entry into the agreement.

16. Nonetheless, the husband submitted the wife had failed to establish any legal professional privilege in any part of her former lawyer’s file because:

    8.… The authorities emphasise the need for focused and specific evidence in order to ground a claim for privilege. The Respondent Wife has not filed and served any evidence in support of her claim for privilege much less focused and specific evidence.

    (Husband’s Outline of Submissions, dated 10 February 2022)

    (Footnote omitted)

17. The need for a claimant of legal professional privilege to adduce evidence to establish the existence of privilege is clearly necessary when, for example, there is an argument between the parties over whether or not the subject documents were prepared for the dominant purpose of litigation or legal advice.

18. But that is far removed from the current situation. It is common ground the only reason the wife consulted the lawyers was for the legal advice which was necessary to convert the financial agreement into a binding financial agreement. That she received such advice for that express purpose is certified by the lawyers, which fact neither party seeks to impugn.

19. Unless waived, the wife enjoys legal professional privilege in the entirety of the lawyers’ file.

    Waiver of privilege

20. The husband contends the wife’s legal professional privilege is necessarily waived by the terms of her pleadings, which allege that his unconscionable conduct and undue influence unfairly induced her entry into the financial agreement notwithstanding the independent legal advice she received.

21. In support of that submission, the husband referred to the judgment of Allsop J in DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499, where his Honour said at [46]:

    … The claim of undue influence has at its heart the influence of the donee. Highly relevant, indeed likely central, to the assessment of the operation of that influence will be whether the donor may have been freed of that influence by independent advice…

    …If there has been legal advice given to the donor about the transaction, the suit will almost certainly involve an assessment of the effect of that advice, along with all other relevant matters, upon the existence, degree and operation of the ascendancy or influence on the mind, decision-making processes and capacity of the donor. If the plaintiff brings such a suit in circumstances where such advice has been given, it is difficult to see how he or she can avoid the conclusion that he or she is, by the claim in the suit, opening up that legal advice for scrutiny…

22. More recent authority endorses that approach (Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341 at [48]–[49]; Secretary to the Department of Justice v Osland (2007) 95 ALD 380 at [23]; Vittera Malt Pty Ltd v Cargill Australia Ltd (2018) 58 VR 333 at [49]).

23. Although the wife submitted contrary authority of the NSW Court of Appeal was to be found within Council of the NSW Bar Association v Archer (2008) 72 NSWLR 236 at [48], Allsop P found it could be readily reconciled (Bailey v Department of Land and Water Conservation (2009) 74 NSWLR 333 at [4]).

24. Relevantly here, while the wife does not contend the legal advice she received about the financial agreement was anything other than entirely independent and reliable, she simultaneously maintains the assertion that, regardless of such competent advice, she was still overborne by the husband when she entered into the financial agreement.

25. Some documents on the lawyers’ file will feasibly bear upon the probative weight which will ultimately be reposed in the wife’s allegations. For example: documents attesting to the nature and quality of the legal advice she received about the agreement, the number of consultations she had with the lawyers, and the duration of those consultations (particularly if they tend to contradict the wife’s pleadings in the Points of Claim at [19.1.5], [19.1.7] and [23.2.5]); and documents containing her instructions about her motivation or disinclination to enter into the financial agreement. Such documents are liable to throw light on whether or not the alleged overbearing effect of the husband’s behaviour upon the wife’s state of mind was alleviated by the legal advice she received.

26. By her pleadings in the litigation, the wife has waived her legal professional privilege in those parts of her former lawyers’ file which could be considered potentially relevant.

    Limitation of access

27. As already noted, the financial agreement was supposedly executed by the parties on 5 April 2017, but has annexed to it the parties’ signed acknowledgements about the circumstances in which they each executed the agreement. The wife’s acknowledgement was signed on 31 July 2017. It is difficult, if not impossible, to imagine how any communication between the wife and her lawyers after that date could be relevant to the question of whether the financial agreement is binding and enforceable or instead vitiated by her state of mind. The parties’ access to the documents produced by the lawyers will therefore be confined by that cut-off date.

28. As for the classes of documents to which access should be granted, they will be broadly those which were the subject of particularisation in the schedule to the subpoena: terms of retainer, instructions, advice, and tax invoices.

29. The documents have apparently already been produced to the Court by the lawyers, though it may be assumed the entire file was produced, as the subpoena demanded, and its contents have not yet been sorted into some form of order. For that reason, the orders will give first right of access to the documents to the wife and her lawyers so the documents may be assembled into the categories to which access has been granted to the husband.

    Costs

30. Neither party sought costs in relation to this interim dispute, so the orders should specify that no costs order is made so as to avoid the costs of this dispute later forming part of a broader application for costs in the cause.

I certify that the preceding thirty (30) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice Austin.

Associate:

Dated:       15 February 2022