Jess & Jess (No 3)
[2022] FedCFamC1F 408
•7 June 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Jess & Jess (No 3) [2022] FedCFamC1F 408
File number(s): MLF 3444 of 2006 Judgment of: ALTOBELLI J Date of judgment: 7 June 2022 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Where the wife filed Notices of Objection in relation to subpoena and un-redacted affidavits – Waiver of privilege – Settlement negotiations – Relevance – Objections dismissed. Legislation: Evidence Act 1995 (Cth) s 131
Family Law Act 1975 (Cth) s 79A
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 5, 67
Cases cited: A & The A Group (2006) FLC 93-271; [2006] FamCA 463
Commissioner of Taxation v Rio Tinto Ltd [2006] 151 FCR 341; [2006] FCAFC 86
Kehoe & Seden (No 2) [2022] FedCFamC1F 346
Martin v Martin (No 3) (2014) 52 Fam LR 210; [2014] FamCA 402
Pearce & Pearce [2016] FamCAFC 14
Phe & Leng (2019) FLC 93–887
Wayne Lawrence Pty Ltd v Hunt [1999] NSWSC 1044
Woodcock & Woodcock [2021] FedCFamC1F 88
Division: Division 1 First Instance Number of paragraphs: 48 Date of hearing: 31 May 2022 Place: Sydney (via videoconference) Counsel for the Applicant: Mr Dickson QC with Ms Johnston Solicitor for the Applicant: Kenna Teasdale Lawyers The First Respondent: Litigant in Person Counsel for the Second to Twenty-ninth Respondents: Mr Myers QC with Mr Mereine Solicitor for the Second to Twenty-ninth Respondents: HWL Ebsworth Lawyers Counsel for the Intervener: Ms Papaleo Solicitor for the Intervener: Lander & Rogers ORDERS
MLF 3444 of 2006 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS JESS
Applicant
AND: MR J AS LEGAL PERSONAL REPRESENTATIVE FOR MR JESS SNR (DECEASED)
First Respondent
MR JESS JNR
Second Respondent
PPP INVESTMENTS PTY LTD (and others named in the Schedule)
Third Respondent
MR K AND MR L AS TRUSTEES OF THE BANKRUPT ESTATE OF MR JESS SNR
Intervener
ORDER MADE BY:
ALTOBELLI J
DATE OF ORDER:
7 JUNE 2022
THE COURT ORDERS THAT:
1.Leave is granted to the Applicant wife to file and rely on a Notice of Objection – Subpoena in relation to a subpoena to P Lawyers dated 26 April 2022.
2.The Notice of Objection – Subpoena referred to in Order 1 is dismissed.
3.The Applicant wife’s Notice of Objection – Subpoena in relation to a subpoena to Ms AB dated 27 April 2022 is dismissed.
4.The Applicant wife’s objection to the filing of un-redacted versions of the affidavits of Mr CC sworn 9 May 2022, and Mr Jess Jnr sworn 16 May 2022, is dismissed.
5.The costs of all parties are reserved.
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 Jess & Jess has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALTOBELLI J:
INTRODUCTION
These reasons for judgment briefly explain why the Court has dismissed a number of Notices of Objection – Subpoena filed by Ms Jess (“the wife”) as well as objections to the filing of un-redacted versions of two affidavits (together referred to as “the present application”).
BACKGROUND
This is a minor skirmish in complex long-running property proceedings. The wife is the Applicant. The First Respondent is Mr J, the legal personal representative of the deceased husband, Mr Jess Snr (“the husband”). The 2nd–29th Respondents (“the represented third parties”) are various third parties including the husband’s son from a previous relationship, Mr Jess Senior. The interveners are the trustees in bankruptcy of the husband’s estate (“the interveners”).
A brief summary of the previous proceedings provides important context to this case.
PREVIOUS PROCEEDINGS: 2006–2009
The husband and the wife married in early 1988 and separated in 2006.
The Jess Retail Unit Trust (“JRUT”) was established in 1983, being the trust that held various corporate and business interests known as the “[Jess] business”.
Following their separation, the wife commenced property proceedings in the Family Court of Australia (as it was then known) in 2006 (“2006 proceedings”).
In the 2006 proceedings, the wife contended that the husband’s units in the JRUT formed part of the property interests to be divided between the husband and wife. The husband alleged that his units in the JRUT had passed beneficially to Mr Jess Jnr pursuant to the terms of a Deed of Declaration of Trust dated 28 February 2002 (“DODT”).
In 2007, Mr Jess Jnr commenced proceedings in the Supreme Court of Victoria seeking orders that his entitlement under the DODT had vested and that he was entitled to be registered as the holder of the husband’s units in the JRUT (“Supreme Court proceedings”).
The relevant parties reached agreement to resolve the 2006 proceedings and the Supreme Court proceedings in September 2009. Various documents gave effect to their agreement, including:
(a)Final property orders made by consent in the Family Court of Australia (as it was then known) on 24 September 2009 (“2009 Orders”), with the parties to those orders being the husband and the wife; and
(b)A Deed of Settlement dated 20 September 2009 between various parties including the husband, the wife, and Mr Jess Jnr (“Deed of Settlement”).
CURRENT PROCEEDINGS
The wife commenced these proceedings in 2013. By way of an Amended Initiating Application filed 16 April 2014, she seeks that the 2009 Orders be set aside pursuant to s 79A(1)(a) of the Family Law Act 1975 (Cth) (“FLA”) and that there be an order for property adjustment between the husband and the wife (“the substantive application”).
The crux of the substantive application is that the DODT was a fraud/sham, having been brought into existence in 2006 or 2007 rather than the date it bears of 28 February 2002.
The current proceedings were bifurcated and the issue of whether the DODT was a fraud/sham proceeded as a threshold issue before Bennett J. In the course of the proceedings:
(a)The husband became bankrupt and the interveners intervened in the proceedings on 22 August 2016; and
(b)The husband died in 2018. Thereafter, the wife’s Amended Initiating Application was continued against the husband’s legal personal representative.
The trial ran for 87 days. On 15 November 2019, her Honour declared that the DODT was not executed on the date that it bears. That declaration was upheld on appeal by Mr Jess Jnr and various other parties by the Full Court of the Family Court of Australia (as it was then known). Mr Jess Jnr and the other parties unsuccessfully sought special leave to appeal to the High Court of Australia.
On 3 March 2022, the wife, the First Respondent, and the husband’s Trustee in Bankruptcy signed a proposed minute of consent order agreeing to set aside the 2009 Orders pursuant to s 79A(1)(a) of the FLA (“proposed minute”).
CURRENT INTERIM APPLICATIONS
The determination of the various objections made by the wife arise in the context of her Application in a Proceeding filed 1 April 2022, which is to be determined by Wilson J on 16 and 17 June 2022. The wife seeks orders to the effect that the 2009 Orders be set aside pursuant to the proposed minute, the DODT be declared void ab initio, the units in JRUT held by Mr Jess Jnr be transferred to the husband’s Trustee in Bankruptcy with retrospective effect from 24 September 2009, and costs on an indemnity basis. A Response to the Application in a Proceeding was filed on 19 May 2022 by the interveners. They agree with the first three orders sought by the wife and seek further orders to the effect that the represented third parties (with the exception of the Third Respondent) make full and frank disclosure in various respects, that they file and serve a Financial Statement and affidavit, and costs.
In the present application, the wife raises objections in relation to various documents, being:
(a)Subpoena issued to P Lawyers on 26 April 2022 (“CC Subpoena”);
(b)Subpoena issued to Ms AB on 27 April 2022 (“[Ms AB] Subpoena”);
(c)The un-redacted version of an affidavit of Mr Jess Jnr dated 16 May 2022 (“[Jess] Affidavit”); and
(d)The un-redacted version of an affidavit of Mr CC dated 9 May 2022 (“[Mr CC] Affidavit”).
Matters of background specific to the present application are set out at paragraphs 1–12 of the written submissions of the represented third parties dated 23 May 2022. This is reproduced below.
A.Background
1.Since 18 December 2006 [Ms AB] has acted, and continues to act, for [Ms Jess] in this proceeding. [Ms AB] also acted for [Ms Jess] in the proceeding commenced on or about 24 July 2007 by [Mr Jess Jnr] in the Supreme Court of Victoria (Supreme Court Proceeding) in relation to the units in the [Jess Retail Unit Trust (JRUT)], which were the subject of the Deed of Declaration of Trust.
2.Between 19 December 2006 and 20 September 2009, [P Lawyers] acted for [Mr Jess Snr] in this proceeding.
3.Relevantly, [P Lawyers] and [Ms AB] acted for [Mr Jess Snr] and [Ms Jess] respectively in August and September 2009 when the disputes (in this Court and in the Supreme Court Proceeding) the subject of the Deed of Settlement were mediated and settled.
4.On 26 April 2022, at the request of the Represented Third Parties, the Court issued a subpoena directed to [P Lawyers] (CC Subpoena).
5.On 27 April 2022, at the request of the Represented Third Parties, the Court issued a subpoena directed to [Ms AB] ([Ms AB] Subpoena).
6.On 11 May 2022:
6.1[Mr J], as the appointed legal personal representative of [Mr Jess Snr], objected to inspection of the documents to be produced in response to the CC Subpoena; and
6.2[Ms Jess] objected to inspection of the documents to be produced in response to the [Ms AB] Subpoena.
7.The objections made by [Ms Jess] and [Mr J] were in identical terms, namely, that the documents:
7.1sought in categories 1 – 2 and 4 – 6 are subject to privilege in accordance with section 131 of the Evidence Act 1995 (Cth) (Evidence Act); and
7.2have no apparent relevance to the issues immediately before the Court.
8.On 16 May 2022, the Represented Third Parties:
8.1filed redacted copies of the [Jess] Affidavit and [Mr CC] Affidavit;
8.2served unredacted copies on [Ms Jess] and [Mr CC]; and
8.3served redacted copies on the Trustees in Bankruptcy.
9.On 17 May 2022 [Ms Jess] objected to the Represented Third Parties’ unredacted copies of the [Jess] Affidavit and [Mr CC] Affidavit. [Mr J] has not objected.
10.On 20 May 2022:
10.1[Ms Jess] belatedly served an objection to inspection of the documents produced in response to the CC Subpoena; and
10.2almost simultaneously, [Mr J] withdrew his objection to inspection of those documents.
11.The objections made by [Ms Jess] in respect of the CC Subpoena are that:
11.1insofar as the documents “record offers made by [Ms Jess]”, they are subject to privilege in accordance with section 131 of the Evidence Act; and
11.2have no apparent relevance to the issues immediately before the Court.
12.The Represented Third Parties accept that the documents and communications which are the subject of the unredacted [Jess] Affidavit and [Mr CC] Affidavit as well as the CC Subpoena and [Ms AB] Subpoena were made in the context of settlement negotiations which culminated in the execution of a Deed of Settlement on 20 September 2009 (Deed of Settlement), the execution of a Binding Financial Agreement on 20 September 2009 (BFA) and Orders being made by this Court on 24 September 2009 (2009 Orders).
(Emphasis in original)(Footnotes omitted)
In short, the wife contends that the documents sought by the subpoena are irrelevant and have no legitimate forensic purpose. Moreover, she submits that the material sought in the subpoena, and the paragraphs in the affidavits sought to be excluded, are privileged and protected under s 131 of the Evidence Act 1995 (Cth) (“Evidence Act”).
By contrast, the represented third parties submit that:
13.1any settlement privilege in respect of the documents and communications which are the subject of the unredacted [Jess] Affidavit and [Mr CC] Affidavit as well as the CC Subpoena and [Ms AB] Subpoena has been waived, further or alternatively section 131(1) of the Evidence Act does not apply by reason of sections 131(2)(e) and/or 131(2)(g) of the Evidence Act; and
13.2the documents which are the subject of the CC Subpoena and [MS AB] Subpoena are plainly relevant to the facts in issue which will be the subject of the hearing on 16 June 2022 and 17 June 2022.
The First Respondent and the interveners appeared at the interim hearing, but otherwise did not wish to participate.
THE EVIDENCE
The following documents were relied upon and referred to throughout the course of the interim hearing:
(a)The un-redacted and redacted versions of the Jess Affidavit;
(b)The un-redacted and redacted versions of the Mr CC Affidavit;
(c)The CC Subpoena;
(d)The Ms AB Subpoena;
(e)The wife’s Application in a Proceeding filed 1 April 2022;
(f)The wife’s affidavit filed 1 April 2022;
(g)The wife’s notice of Objection – Subpoena filed 11 May 2022 in relation to the Ms AB Subpoena;
(h)The wife’s Notice of Objection – Subpoena filed 31 May 2022 in relation to the CC Subpoena;
(i)The wife’s written submissions dated 23 May 2022;
(j)The wife’s written submissions in reply dated 25 May 2022;
(k)The represented third parties’ written submissions dated 23 May 2022;
(l)The represented third parties’ written submissions in reply dated 25 May 2022; and
(m)Transcript of proceedings before Cronin J on 24 September 2009.
THE APPLICABLE LAW
On the issue of privilege and whether this was waived implicitly, or as regards the issue, the parties agreed that the following was a correct statement of the applicable law, as set out in the represented third parties’ written submissions.
21.A communication or document protected by “without prejudice” privilege can lose its protection through an act of waiver.
22.In Western Australia v Southern Equities Corporation Ltd (in liq) French J said that the concept of implied waiver, as a result of pleading into relevance material protected by legal professional privilege, applies by analogical argument to material the subject of “without prejudice” negotiations. In that case, the State of Western Australia sued a number of parties involved in the attempted financial rescue of Rothwells Ltd. There had been negotiations to settle disputes between the State of Western Australia, National Australia Bank and the liquidators of Rothwells Ltd. The State of Western Australia objected to the production of communications which took place during those negotiations on the basis that they were protected by “without prejudice” privilege.
23. In ordering the production of the documents, French J said:
In my opinion the State has, on its pleadings, raised the issue of the reasonableness of its settlement. The documents generated in the lead up to that settlement may have some relevance to that question. There is no suggestion that the National Australia Bank would be affected or prejudiced in any way by the production of these documents for inspection. It is not a party to the proceedings. Nor is there any basis upon which it has been suggested that the production of the documents would affect the rights of the State and the National Australia Bank inter se. The documents may support a line of inquiry concerning the causal connection between the alleged conduct of which the State complains and the ultimate formation of the settlement agreement which is the basis of its loss.
24.Southern Equities was referred to with approval by the Full Court of the Supreme Court of South Australia in Yokogawa Australia Pty Ltd v Alstom Power Ltd. In that case, Duggan J said:
I have expressed the view that a party can impliedly waive without prejudice privilege in subsequent proceedings involving a third party. There are cases in which a waiver has been implied by pleading which put in issue the reasonableness of a settlement. The question arises whether there has been such a waiver in the present case.
I can see no reason why most of the general considerations relating to waiver of legal professional privilege should not apply also to without prejudice privilege. The ultimate question is whether there is an inconsistency in raising an issue but attempting at the same time to prevent a proper examination of the issue by maintaining the privilege. An assessment has to be made as to whether there is unfairness as a result of the inconsistency and, if so, the extent of that unfairness.
(ii) Section 131 of the Evidence Act
25.Section 131(1) of the Evidence Act provides that evidence is not to be adduced of:
(a)a communication that is made between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute; or
(b)a document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute.
26.The prohibition is subject to a number of exceptions in section 131(2) of the Evidence Act.
27.Relevantly, section 131(2)(e) provides that section 131(1) does not apply if:
the evidence tends to contradict or to qualify evidence that has already been admitted about the course of an attempt to settle the dispute.
28. Further, section 131(2)(g) provides that section 131(1) does not apply if:
evidence that has been adduced in the proceeding, or an inference from evidence that has been adduced in the proceeding, is likely to mislead the court unless evidence of the communication or document is adduced to contradict or to qualify that evidence.
29.In Phe v Leng the Full Court of the Family Court of Australia preferred the broader construction of section 131(2)(g) of the Evidence Act instead of the narrow construction. The Full Court said:
The broader view, which, in our view, accords with the ordinary meaning of the provision, is that s 131(2)(g) of the Evidence Act applies where the existence or the contents of otherwise privileged communication contradicts or qualifies existing evidence or an inference from that evidence and the court is otherwise likely to be misled unless the communication is adduced.
30.Further, the Full Court said that the broader view is consistent with an emphasis in matters arising in courts exercising jurisdiction under the FLA on the second policy objective of “genuine negotiations”.
31. Notably, the Full Court said:
If, as it is here, the issue is of importance, it is not sound public policy to permit a party to assert something is “white” when attempting to negotiate a settlement and then give sworn evidence that it is “black”, without the court knowing the witness had previously said that it was “white” and the witness being exposed to being tested upon the assertion made during settlement negotiations. We accept that despite the obligation to negotiate genuinely, sometimes care may need to be taken by the court when placing weight upon statements made in settlement negotiations. It may be as a result of testing that the court might conclude that the statement made in settlement negotiations was false but, as in this case, it may not.
32.In Jess v McNiven McKerracher J said that the broad view is simply to rely upon the text of the provision so as to allow “without prejudice” communications to be adduced where other evidence in the proceeding is likely to mislead the Court, unless evidence of the communication is adduced to contradict or qualify the evidence whereas the narrow view requires “a causal connection between a party’s reliance upon the privilege and the Court being misled”. Ultimately, his Honour was unable to discern any real distinction between the “so-called narrow and broad constructions” of section 131(2)(g) and simply sought to apply the words of the statute.
(Emphasis in original)(As per the original)
In relation to relevance, it was common ground that documents sought by a subpoena must be “apparently relevant” in order to have a legitimate forensic purpose. The “apparently relevant” test was recently considered in Woodcock & Woodcock [2021] FedCFamC1F 88. At [48], with reference to authorities, it was stated that:
[The] document sought must be “apparently relevant”, in that 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.
(Footnotes omitted)
See also the very useful discussion of legal principles by Harper J in Kehoe & Seden (No 2) [2022] FedCFamC1F 346.
HAS THE WIFE WAIVED PRIVILEGE?
In Martin v Martin (No 3) (2014) 52 Fam LR 210 Cronin J stated:
[14]In Archer Capital 4A Pty Ltd (as trustee for the Archer Capital Trust 4A (ACN 123 463 749)) and Others v Sage Group PLC (No 3) [2013] FCA 1160, Wigney J said:
[12] The governing principle of implied waiver requires a “fact-based inquiry”: Rio Tinto at [61]. Each case will turn on its own facts and circumstances: Rio Tinto at [45], [47]. The court is required to “analyse the acts or omissions of the privilege holder that are said to be inconsistent with the maintenance of the privilege”: Rio Tinto at [45]. Other cases in which implied waiver has been considered provide limited guidance unless they arise out of similar facts: Rio Tinto at [45].
Thus, the Court must analyse the acts or omissions of the privilege holder (the wife) that are said to be inconsistent with the maintenance of the privilege. The starting point is the wife’s affidavit filed 1 April 2022. This is not the ending point, however, as regard must also be given to the submissions made in her case to the Court.
The represented third parties contend that the wife waived privilege in that affidavit. In effect, they argue that she did this by contending that in the negotiations for property settlement that resulted in the making of consent orders and the entering into of ancillary documents, the value of the units in the JRUT had not been included, an assertion with which the represented third parties disagree.
At paragraph 11 of the affidavit the wife contends that as a result of the husband transferring to Mr Jess Jnr the husband’s units in the JRUT, this significantly decreased the assets available for division in the 2006 proceedings.
At paragraph 16 the wife deposes that her substantive application seeks to set aside the orders pursuant to s 79A(1)(a) of the FLA. This provision alleges that there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence, the giving of false evidence, or any other circumstance.
At paragraph 17 she clarifies the basis of her claim by referring to the transfer of the husband’s units in the JRUT to Mr Jess Jnr as constituting “a fraud and a sham”.
At paragraph 21 the wife refers to the decision of Bennett J delivered 4 December 2018 in which her Honour found that the DODT that caused the units to be transferred from the husband to Mr Jess Jnr was not executed on the date that it bears, namely 28 February 2002. Queen’s counsel for the wife and Queen’s counsel for the represented third parties informed the Court that her Honour’s reasons suggest the DODT was signed sometime in 2006 or 2007.
At paragraph 28 the wife contends that, in essence, Bennett J found the DODT to be a fraudulent document, a matter which Queen’s counsel for the represented third parties appeared to have conceded on 3 March 2022 before Wilson J.
From this material, the Court discerns that the wife at the very least strongly implies that the value of the units in the JRUT which the husband had transferred to Mr Jess Jnr had not been taken into account in the settlement that she made with the husband. Of course, this oversimplifies the matter as the settlement between the husband and the wife consisted of more than the consent orders made by Cronin J on 24 September 2009, and included other complex documentation involving third parties. Nonetheless, the clear inference is that she did not know the value of these units.
The wife’s affidavit annexes copies of the complex documentation referred to above. What is noticeably absent is any form of balance sheet, or statement of assets and liabilities. The existence of the units in the JRUT, and the fact that they were owned and/or controlled by Mr Jess Jnr was self-evident. It becomes apparent from the evidence adduced in the case of the represented third parties that certainly Mr Jess Jnr, and probably the husband, did have some form of balance sheet, or statement of assets and liabilities, the values of which were informed by expert advice they had received. None of this evidence suggests, however, that this information was shared with the wife in any way, or that she was otherwise aware of the same. Indeed, to the extent that the case of the represented third parties sought to suggest that the wife was aware of, for example, the values of the units in the JRUT, the evidence led goes nowhere near that conclusion. Whether, and if so to what extent, the wife should have made those enquiries but failed reasonably to do so, is a separate matter.
In evidence was the transcript of the proceedings before Cronin J on 24 September 2009, when his Honour was asked by all parties to make the consent orders now sought to be set aside. It is clear from this evidence that the wife, who was capably represented by Queen’s counsel, adopted a pragmatic approach to the conclusion of the litigation and, prima facie, seems to have willingly settled on the basis of no formal balance sheet, or statement of assets and liabilities.
For the time being, and focusing solely on the wife’s affidavit, the question to be answered is whether the wife has waived her privilege. Inherent in the wife’s case are two propositions:
(1)She did not know the value of the units in the JRUT; and
(2)She was a victim of the husband’s fraudulent act.
The first proposition is the only relevant one in the present context. The wife is contending that her state of mind was of absence of knowledge. The represented third parties contend that she knew, or possibly should have known, but they are unable to prove this without access to the privileged documents, namely her solicitors’ file which is the subject of the Ms AB Subpoena. Thus, they contend, the wife’s state of mind is in issue in this case. By asserting that she did not know certain things, whilst at the same time seeking to maintain privilege, this creates both inconsistency and unfairness to the represented third parties in circumstances where the privileged documents are likely to have affected that state of mind.
The test is perhaps better stated in the following terms: has the wife, being the privilege holder, made an assertion in the litigation that lays open the privileged documents to scrutiny, with the consequence that an inconsistency arises between the making of the assertion and the maintenance of the privilege (Commissioner of Taxation v Rio Tinto Ltd [2006] 151 FCR 341 at [65])?
In Wayne Lawrence Pty Ltd v Hunt [1999] NSWSC 1044 Hodgson CJ in Eq said at [12]:
[It] seems to me still that the question of whether the advancing of a person's state of mind is to be taken as consenting to the giving of evidence of confidential communication, or as waiving privilege, is a matter of degree in each case. It does not seem to me that the assertion of a belief must, in all circumstances, be taken as consenting to evidence being led of any legal advice or confidential communication that could be relevant to whether such a belief was held or the reasonableness of such belief. It seems to me that factors relevant to whether that consent is to be considered as having been given, or whether privilege is taken to have been waived, would include the significance of the belief to the case as a whole; the relevance of the reasonableness of the belief to the case as a whole; the probability or otherwise of the legal advice being relevant to the holding of that belief, or being relevant to its reasonableness; and in circumstances where the Court inspects the legal advice in question in order to make a decision, the extent to which the legal advice does in fact bear upon the holding of the belief or its reasonableness, and the extent to which the legal advice relevant to those matters is inextricably bound up with legal advice going to other questions as to which there has been no consent or waiver. It seems to me that, on the basis of all those matters at least, the Court has to make a judgment as to what is reasonable, and what is fair in the particular case.
In this case, the wife’s representation about not knowing certain things is significant in the context of a case where even if the Court accepts there has been fraud, it might not amount to a miscarriage of justice for the purposes of s 79A of the FLA, and in any event the Court might not exercise its discretion in her favour. The reasonableness of the wife’s belief is relevant or potentially relevant. There is a high probability that legal advice relates to the holding of that belief, or to the reasonableness of the same. In all the circumstances, therefore, the Court finds that the wife has waived her privilege in relation to this issue.
It is also appropriate to have regard to the manner in which the wife’s case was conducted before the Court. At paragraph 7 of the wife’s written submissions in reply dated 25 May 2022, her counsel state:
7.The wife’s case as to the miscarriage of justice is not premised on what asset pool was adopted as part of the settlement. The wife’s case is far broader, being that there has been a fraud that has resulted in a miscarriage of justice within the true meaning of that term. The fraud has vitiated the settlement irrespective of whether an asset pool was adopted by the parties as part of their negotiations (which, under cover of objection, is denied). The fraud vitiated the wife’s free and informed consent, precluded the wife from obtaining proper valuation evidence as to the value of the units and impugned the integrity of the judicial process.
In submissions, Queen’s counsel for the wife referred the Court to a number of paragraphs from the Full Court’s decision in Pearce & Pearce [2016] FamCAFC 14:
[21]The impugning of “the integrity of the judicial process” which, as her Honour recognised, lies at the heart of s 79A’s requisite miscarriage of justice occurred here not because the property may or may not have had a particular value, but because the wife’s consent was not a fully-informed consent. The integrity of the judicial process in respect of orders by consent demands full and frank disclosure in and about the orders and their antecedent negotiations because the integrity of that process depends upon each party giving a free and fully-informed consent to the orders.
…
[33]We consider that senior counsel for the wife put it correctly when he submitted that the process contended for by the husband may be relevant but is not essential to the finding. The maintenance of the integrity of the judicial process through the measure of miscarriage of justice is not necessarily connected with a comparison of what the orders provide compared with what a party might have received from a court, had consent not been given. As will be seen, we do not consider that they are connected in this case.
…
[35]In the case of consent orders, the related propositions just discussed intersect at a point where the requisite miscarriage of justice derives from a party’s consent not being a “free and informed consent”; where there is a failure to disclose matters relevant to the decision to enter the consent orders that are “… peculiarly within [the] knowledge” of that party or omissions which knowingly engendered, or permitted, a mistaken understanding on the part of the other party.
It becomes patently clear that part of the wife’s case was that the wife’s consent to the orders was not fully informed consent, thus once again focusing on the wife’s state of mind in the sense of what she knew at the time. This raises the same issues identified above in relation to waiver of privilege. By in effect asserting that she did not know certain things it becomes inconsistent for the wife to maintain the claim for privilege in relation to documents that are likely to provide some scrutiny of her assertion. The wife’s claim for privilege therefore fails.
Even if the Court is wrong, however, the Court is satisfied that the provisions of s 131(2)(e) and s 131(2)(g) of the Evidence Act lead to the same result. The wife cannot maintain that she did not know certain things whilst at the same time asserting that she should not be exposed to being tested upon that assertion by reference to privileged documents.
There is merit in stepping back and considering the consequences of depriving the wife of her common law and statutory rights to privilege. It is a serious thing to deprive her of these rights. It would be equally serious, however, if the scrutiny of these documents revealed that the wife was misrepresenting matters before the Court. It must be remembered that production and access to documents do not ipso facto lead to admissibility, and even if documents were admissible, the Court would be entitled to place such weight on the documents as it considers appropriate having regard to all of the evidence before the Court at that time. The Full Court in Phe & Leng (2019) FLC 93–887 recognised the care that must be taken by the Court in placing weight on statements made in settlement negotiations. Arguably, the same care would need to be applied in relation to statements not made in settlement negotiations.
THE RELEVANCE OBJECTION
Queen’s counsel for the wife conceded that if the Court found that privilege was waived, or that s 131(2) of the Evidence Act applied, it must follow that the documents are relevant. Whilst the Court agrees, even if that were not the case the documents remain relevant for much the same reasons as set out above.
The Court would like to address the submission made by Queen’s counsel for the wife that the documents in question need to relate to the interim application, namely the wife’s Application in a Proceeding listed for hearing before Wilson J, as opposed to, for example, the substantive application. The Court is not convinced that the authority cited by Queen’s counsel, the single judge decision of Bryant CJ sitting as the Full Court in A & The A Group (2006) FLC 93-271 informs the present decision. At most, the comments of the learned former Chief Justice at [55] were obiter dictum. One consequence of accepting the submission made by Queen’s counsel would be that if the objections were upheld and the subpoena struck out in the limited context of the interim application, there would be nothing to prevent the same subpoena being issued again at a later time. This would be directly inconsistent with the provisions of s 5 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“FCFCOA Act”) wherein the first stated object of the FCFCOA Act is to “ensure that justice is delivered by federal courts effectively and efficiently”. It would also be inconsistent with s 67, which states that the overarching purpose of the family law practice and procedure provisions in the FCFCOA Act is to facilitate the just resolution of disputes “according to law” and “as quickly, inexpensively and efficiently as possible”.
CONCLUSION
It follows from the reasons above that the objections to the CC Subpoena and the Ms AB Subpoena are dismissed. The objections in relation to the un-redacted Jess Affidavit and Mr CC Affidavit were made on the same grounds as the objection to the Ms AB Subpoena. As the Court finds that the wife has waived her privilege and that s 131(2) of the Evidence Act applies, these objections are also dismissed.
I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Altobelli. Associate:
Dated: 7 June 2022
SCHEDULE OF PARTIES
MLF 3444 of 2006 Respondents
Fourth Respondent:
MR BAN
Fifth Respondent:
AAA PTY LTD AS TRUSTEE OF THE BBB TRUST
Sixth Respondent:
CCC PTY LTD AS TRUSTEE OF THE DDD UNIT TRUST)
Seventh Respondent:
GGG PTY LTD
Eighth Respondent:
EEE PTY LTD
Ninth Respondent:
HHH PTY LTD
Tenth Respondent:
JJJ PTY LTD
Eleventh Respondent:
LLL PTY LTD
Twelfth Respondent:
MMM PTY LTD
Thirteenth Respondent:
X CORPORATION PTY LTD
Fourteenth Respondent:
X HOLDINGS PTY LTD
Fifteenth Respondent:
X INTERNATIONAL PTY LTD
Sixteenth Respondent:
X PROPERTIES PTY LTD
Seventeenth Respondent:
X PTY LTD AS TRUSTEE FOR THE JESS RETAIL UNIT TRUST
Eighteenth Respondent:
X-1 PROPERTIES PTY LTD
Nineteenth Respondent:
NNN PTY LTD
Twentieth Respondent:
OOO PTY LTD
Twenty-first Respondent
QQQ PTY LTD AS TRUSTEE OF THE RRR FAMILY TRUST
Twenty-second Respondent
X-1 PTY LTD
Twenty-third Respondent
Y (NZ) LIMITED
Twenty-fourth Respondent
Y (WA) PTY LTD
Twenty-fifth Respondent
Y INTERNATIONAL PTY LTD
Twenty-sixth Respondent
X-2 PTY LTD
Twenty-seventh Respondent
SSS PTY LTD AS TRUSTEE OF THE TTT INVESTMENT TRUST
Twenty-eighth Respondent
VVV PTY LTD
Twenty-ninth Respondent
MS C JESS (also known as MS C1 JESS, also known as MS C2 JESS)
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