Lawrie and Lawrie

[2011] FamCA 349

FAMILY COURT OF AUSTRALIA

LAWRIE & LAWRIE [2011] FamCA 349

FAMILY LAW – PRACTICE AND PROCEDURE – Liberty to inspect subpoena

Family Law Act 1975 (Cth)

Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd (1952) 72 WN (NSW) 250
Cosco Holdings Pty Limited v Commissioner of Taxation [1997] FCA 1504; (1997) 37 ATR 432
Hatton v Attorney-General (Cth) and Others (2000) 26 Fam LR 570
ICAP Pty Limited v Moebes [2009] NSWSC 306
National Employers' Mutual General Association Ltd v Waind and Hill [1978] 1 NSWLR 372
Portal Software v Bodsworth [2005] NSWSC 1115
Trade Practices Commission v Arnotts Ltd (1989) 88 ALR 90

APPLICANT: Ms Lawrie

RESPONDENT: Mr Lawrie

FILE NUMBER: MLC 332 of 2010

DATE DELIVERED: 17 May 2011

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 17 May 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR Sweeney

SOLICITOR FOR THE APPLICANT: Lander & Rogers

COUNSEL FOR THE RESPONDENT: Mr Dickson

SOLICITOR FOR THE RESPONDENT: Glezer Lanteri & Assoc

Orders

1. That the documents produced under subpoena by Law Firm 1 be released for inspection and copying by all parties.

IT IS NOTED that publication of this judgment under the pseudonym Lawrie & Lawrie is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 332 of 2010

Ms Lawrie

Applicant

And

Mr Lawrie

Respondent

REASONS FOR JUDGMENT

1. This is a dispute about whether the wife who has issued a subpoena to the husband’s former lawyers should be at liberty to inspect the documents. The husband objects on the grounds of relevance.

2. The substantive issue between the parties relates to whether there is a financial agreement between them such as would oust the jurisdiction of this Court to determine an application for property settlement under Part VIII of the Family Law Act 1975 (Cth) (“the Act”).

3. Rule 15.26 of the Family Law Rules 2004 provides that if a person having sufficient interest in a subpoena objects to the production of a document required by the subpoena they must attend court to apply for the order.

4. In this case, the recipient of the subpoena in question is a firm of solicitors who have not filed any objection. Indeed, they have complied.

5. I am satisfied having regard to the way the matter was argued, the husband has a sufficient interest in the production of the documents to entitle him to raise the objection. He has only raised objection to one part of the subpoena, having otherwise no objection to the release of the material. His objection is on the ground of relevance.

6. Thus the dispute is about whether or not permission should be given to the wife to inspect the documents so produced. That dispute is the second of the three distinct steps referred to in National Employers' Mutual General Association Ltd v Waind and Hill [1978] 1 NSWLR 372 at p 381. The process set out in that case for approaching a dispute about a subpoena was approved by the Full Court of this Court in Hatton v Attorney-General (Cth) and Others (2000) 26 Fam LR 570.

7. In Waind and Hill it was said amongst other things that it would be an improper use of the subpoena if it were not sought for the purpose of the litigation, but for some spurious purpose, such as to inspect the documents in connection with other proceedings, or for some private purpose. That does not seem to be the assertion here; the issue is relevance to the substantive dispute.

8. The wife’s argument is that before she signed the relevant financial agreement, the husband represented to her that there would be debts of about $13 million arising out of the sale of a hotel. It is argued that this gave rise to the wife accepting a settlement in the financial agreement. The wife’s counsel argued that the husband presumably had discussions with his then lawyers which gave rise to the information given to the wife. It is argued that this is the relevance of the file.

9. The substantive issue appears to be whether there was a valid and binding financial agreement which brings into focus the provisions of s 90K of the Act.

10. This case appears largely to focus on representations. The husband pointed to a letter that the wife received from her then lawyer confirming they knew of the proposition about the $13 mil but in which they said to her that they had not seen any documents to establish that. It was pointed out that the wife went ahead with the financial agreement in the face of that advice.

11. The husband’s argument is that the wife has now put her substantive position in her proposed orders and that nothing in her “particulars” relates to debts but rather, to tax liabilities which have crystallised. The documents relating to those issues are set out in the second and unopposed part of the subpoena. It was argued that the wife’s case was “morphing” and that documents relating to the tax debts would be made available but otherwise, there was nothing in the rest of the subpoena that had anything to do with the substantive orders she sought.

12. In her “particulars” however, the wife asserted:

    (T)he agreement be held to be not binding…on the basis of misrepresentations made by the husband…in respect to the value of property and the level of debt for which he was then liable including but not limited to debts to [Business 1] and the Deputy Commissioner of Taxation.

13. The husband’s position is that there are no other debts.

14. Thus, the issue is about relevance. Is this a legitimate forensic exercise or is it “fishing”?

15. Beaumont J in Trade Practices Commission v Arnotts Ltd (1989) 88 ALR 90 stated that the determination of whether a subpoena was issued for a legitimate forensic purpose depends on, amongst other things, an analysis of the motive of the issuing party. His Honour asked whether the material sought had an apparent relevance to the issues in the principal proceedings. That is another way of asking whether the subpoena has a legitimate forensic purpose? The determination of that question depends upon the position taken by the wife. In other words, why is she doing it?

16. In Portal Software v Bodsworth [2005] NSWSC 1115 a case involving an application to set aside a notice to produce, Brereton J described the test in seeking to set aside a notice to produce (which in my view is similar to that of a subpoena) as being whether the documents sought by the notice to produce had a sufficient apparent connection to justify their production or inspection. His Honour went further and said that the test was satisfied if the documents called for could possibly throw light on the issues in the main case. This is the “on the cards” test but it is one which has not been broadly embraced in civil cases (see ICAP Pty Limited v Moebes [2009] NSWSC 306)

17. Where an objection is raised by the party to the proceedings as distinct from the recipient of the subpoena, the pursuing party has the onus of showing that it is likely the documentation will materially assist in respect of the orders pursued in the substantive proceedings. Unlike civil cases, this Court does not have pleadings so the applicant needs to show how the material may influence the Court to make the orders sought. On the balance of probabilities, I think she has done that by pointing to the fact that she asserts that there may have been other debts. I do not think she needs to do more than that. In this case, the material provided under the subpoena may very well show one way or the other that the husband was dealing with his advisers about what the financial position was such as to give rise to the statement that there was about $13 mil in debts.

18. Whilst the litigation particularly in this case, is essentially a civil dispute, it is important to recognise a distinction:

    (a)In this Court, there is a disclosure obligation on the parties about all of their financial circumstances which is probably greater than that which applies in civil cases;

    (b)often as here, there is little trust between the parties; and ultimately,

    (c)the court’s jurisdiction concerning the substantive orders to be made is discretionary which must mean that the Court needs to ensure that the parties have every opportunity to put comprehensive evidence before it.

19. The possibility of the material showing what is asserted however must be reasonable having regard to the requirement in the Family Law Rules 2004 that the Court actively manage cases by considering whether the likely benefits of taking a step justify the cost of that step. (see Rule 1.06(g))

20. Reasonable possibility means that the documents sought will assist in resolving a matter in dispute in the proceedings. There is an argument that the word “possibly” was not and should not be used in any speculative sense. (see Cosco Holdings Pty Limited v Commissioner of Taxation [1997] FCA 1504; (1997) 37 ATR 432). There must be more than mere speculation that the documentation will assist in resolving or clarifying an issue in dispute. I am satisfied that this is not mere speculation because there was clearly discussion about debts albeit they seemed to relate to the issues of tax and Business 1. The wife’s substantive case alleges debts not limited to those.

21. There is a fine line between “fishing” and a genuine forensic purpose. In this Court, “fishing” tends to arise and is recognised where a party is endeavouring to find out whether there is evidence which would support a case at all. In a “fishing” case, a subpoena cannot be used as a “substitute for discovery” (see Owen J in Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd (1952) 72 WN (NSW) 250. That should not arise in this Court because of the strict disclosure obligations on each party. But, a “fishing” case is different from one in which the party is seeking to clarify an issue already in contention and about which the evidence is uncertain or clouded.

22. The fine line here entitles me to err on the side of caution and find that there is an apparent relevance in the subpoenaed documents and that it is more than mere speculation that they may materially assist the wife to isolate and confine her case.

23. The documents should be released for inspection and copying.

I certify that the preceding Twenty Three (23) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 17 May 2011.

Associate: 

Date:  17 May 2011