Lintz & Lintz & Ors

[2016] FamCA 376

FAMILY COURT OF AUSTRALIA

LINTZ & LINTZ & ORS [2016] FamCA 376

FAMILY LAW – Financial proceedings - objection to subpoena issued at the behest of the husband to the parents of the wife – relevance of documents relating to the parents’ trusts – relevance of parents’ wills – objection not allowed.

APPLICANT: Ms Lintz

RESPONDENT: Mr Lintz

SECOND RESPONDENT: B Pty Ltd (ACN …)

THIRD RESPONDENT: C Pty Ltd (ACN …)

FOURTH RESPONDENT: D Pty Ltd (ACN …)

FIFTH RESPONDENT:	Mr Seitz
FILE NUMBER:	MLC	3273	of		2015

DATE DELIVERED: 31 March 2016

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Bennett J

HEARING DATE: 22 March 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr A Strum SC

SOLICITOR FOR THE APPLICANT: Mills Oakley Lawyers

COUNSEL FOR THE RESPONDENT: Mr M Bartfeld QC

SOLICITOR FOR THE RESPONDENT: Logie Smith Lanyon

COUNSEL FOR THE SECOND TO FIFTH RESPONDENTS: Mr Smith

SOLICITOR FOR THE SECOND TO FIFTH RESPONDENTS: Kalus Kenny Intelex

Orders

1. Subject to paragraph 2 of this Order, the documents produced by Mr and Ms E in compliance with the subpoena issued at the behest of the husband (“the subpoena”) be released for inspection by and on behalf of the parties to the proceedings.

2. Subject to further order of the court, the will and testament of each of the wife’s parents, Ms E and Mr E, not be released for inspection unless or until the Registry Manager is notified by Mr F in writing of the terms on which his clients and the husband and the wife have agreed and, upon such notification being received, inspection of those documents take place in accordance with the terms agreed.

3. Mr F send a copy of the aforementioned correspondence to my Administrative Associate and each other party to the proceeding contemporaneously with sending it to the Registry Manager,

4. IT IS DIRECTED that, in the event that the court is not notified of any agreed terms for inspection of the wills by close of business on 4 April, 2016, this matter be relisted before me for mention prior to 18 April 2016.  

5. Any person who wishes to make an application for costs of or associated with compliance with the subpoena and the objection to the subpoena, notify each other party to the proceeding by not later than 12:00 noon on 4 April 2016 of the precise orders sought by him/her and any person against whom costs are sought advise each other party to the proceeding or relevant person by Friday 8 April 2016 at 12:00 noon of whether the application is opposed in part or in toto and, if only in part, the quantum of costs which it is conceded ought be paid.  

6. Any applicant for costs send relevant correspondence to my administrative associate (…) by not later than Tuesday 12 April 2016 at 12:00 noon under cover of correspondence (copied to all other parties and relevant persons) requesting that the matter be listed before me for submissions as to costs and I DIRECT that, upon receiving such correspondence, the matter be listed before me prior to 19 April 2016.

7. Any party who seeks to be heard in relation to costs be in a position to provide:-

   (a)       a statement of costs calculated in accordance with the Family Law Scale as well as any other basis upon which he/she will submit that costs be calculated;

   (b)       details of costs of and incidental to the application for costs calculated in accordance with the Family Law Scale as well as any other basis upon which he/she will submit that costs be calculated.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Lintz & Lintz and Ors 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 MELBOURNE

FILE NUMBER: MLC 3273  of 2015

Ms Lintz

Applicant

And

Mr Lintz

Respondent

And

B Pty Ltd (ACN …)
Second Respondent

And

C Pty Ltd (ACN …)
Third Respondent

And

D Pty Ltd (ACN …)
Fourth Respondent
And

Mr Seitz
Fifth Respondent

REASONS FOR JUDGMENT

Introduction

1. On 22 March 2016 I sat late in the day to consider the objection of the wife’s parents, Ms and Mr E, to a subpoena to produce documents served on them at the behest of the husband. This is my reserved decision.

2. In summary, I have not allowed the objection and have directed that the majority of the documents which have been produced by Mr and Ms E be available for inspection. The exception is their wills in respect of which some information is to be provided only indirectly and without prejudice to the husband’s entitlement to press subsequently for the wills to be produced in compliance with the subpoena.

3. It is my intention that the controversy about this subpoena be concluded so that it does not distract the parties at the mediation of this matter which will be convened by the Hon. Mr P. Young QC on 18 April 2016 (“the mediation”) and/or the final hearing of the proceedings which is currently fixed to commence before me on 10 May 2016 (estimated to take four to six days). In the meantime, the wife is to file her trial material by tomorrow, 1 April 2016, the husband is to file his by 8 April 2016 and the third parties by 14 April 2016.

4. Perhaps it is a trite observation but I remind the parties nonetheless that, if they engage in a series of time consuming interlocutory proceedings, they may put at risk the priority accorded to them for final hearing. If they are not ready to proceed on 10 May 2016, they run the risk that their case will not be disposed of in this calendar year.

5. I will determine any outstanding costs issues on a date convenient to any applicant for costs and Mr and Ms E up to and including the date of the mediation.

The subpoena

1. On 4 March 2016 the husband’s lawyer filed a subpoena directed to each of the wife’s parents[1]. The subpoenas were in identical terms and require production of:-

   [1] The subpoena to Mr E is folio [35] and the subpoena to Ms E is folio [34].

   1.A copy of this subpoena.

   2.In relation to each company, partnership, business or trust in which you have any interest, howsoever held, or any shareholding in other than a publicly listed company, including but not limited to shareholding in [G PTY LTD]; [H PTY LTD] and/or interest in any other family trusts, the following:

   a.Trust Deed/s including any Deed/s of Variation and Deed/s relating to same; and

   b.Financial Statements including but not limited to detailed profit and loss accounts, details of each separate  liability, details of individual investment assets or other asset balances and fringe benefit tax returns for the last 3 years to date.

   3.Your most recent will.

2. The subpoenas state that “Documents must be produced to registry by 18 March 2016” and that the documents must be produced to the Court notwithstanding any objection.

3. The subpoenas were served personally on 8 March 2016[2].

   [2] Two affidavits of service sworn by Mr I, process server, on 18 March 2016 at folios [46] and [47]

4. It is common ground that the documents have been produced in compliance with the subpoenas although they have not been inspected by anyone including myself.

The objection

1. On 17 March 2016, F Pty Ltd acting on instructions from Mr and Ms E filed notices of objection to the subpoenas [3]. The notices specify that Mr and Ms E object to the production of some or all of the documents to the court for the following reasons:-

   [3] Folios [42] and [43]

   1.Paragraph 2 of the Subpoena on the following grounds:

   a.the production sought is oppressive, onerous and amounts to a fishing expedition;

   b.relevance;

   c.the documents are personal records of a third party.

   2.Paragraph 3 of the Subpoena on the following grounds:

   a.      relevance;

   b.the documents are personal records of a third party.

2. It was with regard to the objection to production that I enquired whether the documents had been produced and was advised that they had, in fact, been produced. The hearing was conducted on the basis that Mr and Ms E object to production, inspection and copying of the documents which are now in the custody of the court.

3. Reasonably, Mr Smith, of counsel, who appeared for Mr and Ms E did not maintain the ground of objection in 1(c) or 2(b) of the notice of objection. Nor did he develop the “oppressive, onerous” ground in 1(a) of the notice.

4. The objection in relation to all trust records maintained by Mr Smith is that the subpoena amounts to a fishing expedition and that the documents sought are not relevant.

5. The objection in relation to the Wills of Mr and Ms E maintained by Mr Smith is that those documents are not relevant.

The parties

1. The parties to the substantive proceedings are the wife, the husband and various entities and managers of entities associated with the husband’s parents.

2. The husband is 63 years old. He is Deputy Chairman and Director of J Pty Ltd (formerly known as K Pty Ltd). The husband deposes to an income of $220,000 per annum which comprises a salary of $3,846 per week, a car and superannuation. The husband’s father, Mr L Lintz, died in 2015. The husband’s mother, Ms M Lintz, is a resident of N Aged Care. Ms M Lintz is about 90 years old. The husband is an only child.

3. The wife is 61 years old and not employed outside the home. She previously worked in an administrative capacity and support position in the family  business, O Pty Ltd until mid-2012. Since then she has had some employment in retail and in administration. It is uncontroversial that her father, Mr E, is aged 92 years and her mother, Ms E, in aged 86 years. Mr and Ms E reside together in their family home and administer their own affairs. There is no evidence to suggest that the testamentary capacity of either is impaired. They have one child other than the wife. I do not know how many grandchildren they have. They are not parties to the proceedings and their involvement is confined to their objection to the subpoena.

4. As best I understand the situation, the second to fifth named respondents are parties to the proceedings to protect the interests of B Pty Ltd in its own right and/or as trustee of the L Lintz and Others Trust and the husband’s mother. A commercial firm, Kalus Kenny Intelex, represent the second to fifth named respondents. I will refer to what little more I know about the second to fifth respondents when I come to some of the history. I was informed that the second to fifth named respondents were not given notice by the court of the arrangement for this hearing contemporaneously with the lawyers for the husband and the wife. However, I was informed by court staff that Mr Kenny of Kalus Kenny Intelex was subsequently given notice and stated that he “would consider today’s listing and decide whether to appear or not”. There is no appearance this afternoon by or on behalf of the second to fifth named respondents, I proceed on the basis that they have notice of the hearing about the Mr and Ms E’s objection to the subpoena but do not wish to be heard.

The proceedings

1. The substantive proceedings were initiated by the wife by application filed 17 April 2015 seeking a final alteration of property interests which includes a transfer to the wife of the property at P Street, Suburb Q free of encumbrance but which is otherwise unspecified. The encumbrance specified in the application as requiring to be discharged by the husband is a mortgage registered in favour of B Pty Ltd which is the second named respondent.

2. The husband’s response was filed on 19 June 2015 and seeks an unspecified alteration of property interests.

3. In an affidavit affirmed by the husband on 19 June 2015, he stated “this matter is not a complex one, and my understanding that this matter should not take longer than two days in the event that a judicial determination of the case is required”[4]. The wife did not agree with that assessment and I am inclined to think that she was correct on that point.

   [4] [12]

4. When the proceedings came before me in February 2016, I formed the view that the parties were shaping up to spend as much money on an interim hearing, which was estimated to require five days, as they should have to spend on a final determination and could well dispense with the former if they were able to have the latter. Furthermore, it was put to me by the husband and the second respondent that the ability of the husband’s mother to remain at N Aged Care was in jeopardy because of unpaid fees referrable to her and to her late husband. It was difficult to countenance that the husband’s mother should be concerned about being put out of her aged care accommodation when the wife concedes that she and the husband received significant financial benefits from her parents in law during the marriage.  It appeared that a consequence of not making a final determination available to the parties with some priority might result in the husband’s mother being required to leave N Aged Care where she has resided since 2011. In February 2016 the husband deposed[5] that he suffers from “depression, anxiety and sleeplessness, and [he has] found it at times impossible to contemplate dealing with work or my personal family law issues”. In short, the case has some complexity about it and I predict that it will only become more complex with time. Accordingly, I granted the proceedings priority and will commence the final hearing of the matter, if it is ready, on 10 May 2016.

   [5] Affidavit of Mr Lintz affirmed 1 February 2016 [7]

5. As I understand the respective positions of the husband and wife, the husband says that his parents made very significant financial contributions during the marriage which should be recognised as contributions made on his behalf. He also says that the loan of $1.5 million, secured by mortgage over the former matrimonial home, must be repaid to his mother.  On the other hand, the wife seeks to keep the former matrimonial home if she can. Mr Strum SC, for the wife, informs the court that the ability of the wife to keep the former matrimonial home as part of her entitlement to an alteration of property interests is not predicated on her ability to pay out the husband’s share or to obtain assistance from her parents but “upon [the wife] hoping to be able to establish that the pool is larger than the husband asserts it is.” At [14] of the husband’s affidavit affirmed on 19 June 2015, he describes the “current assets and liabilities capable of division between me and [Ms T Linz]”. They can be summarised as net non-superannuation assets of $1,206,534 and superannuation of $66,078. He attributes a current value to the former matrimonial home of $2 million. The wife seeks the home unencumbered by the current mortgage which the husband says secures $1.5 million. At the first hearing before me, discussion about the wife’s costs left me with the impression that she is on track to have some hundreds of thousands of dollars to pay in legal costs attributable to these proceedings.   The wife will have to identify a considerably more property than the husband assets if she is to succeed.

Some relevant history

1. I am not apprised of a comprehensive history. I am acutely aware that I am not possessed of all or even most of the relevant facts or assertions. The parties have not yet provided the evidence upon which they will rely at the final hearing although I had the benefit of briefly perusing some early affidavits of the husband and the wife, I have not read that evidence in its entirety or thoroughly. I have been referred to affidavits by counsel in a piecemeal fashion. I have stated the facts as I understand them to be merely to explain the context within which I reach this decision.

2. In these reasons, a statement of fact is not a finding of fact.

3. The husband and wife separated in 2014 after a marriage relationship of 35 years. The husband deposes to the separation having occurred in June 2014 whereas the wife deposes to the parties having separated in May 2014. This is the smallest matter about which the husband and wife do not agree. Upon separation the husband left the property at P Street, Suburb Q (“the former matrimonial home”). He now rents privately.

4. There are three adult children of the marriage, all daughters. The youngest daughter, aged 27 years, resides in the former matrimonial home with the wife.

5. The husband was a dealer in stamps when he met the wife and had been able to establish himself with financial assistance from his parents. He alleges that at the commencement of the cohabitation he had $750,000 of stock. The wife says that she has seen no proof of the husband’s assertion but describes her own pre-cohabitation contributions as modest savings. During the marriage, the husband and wife received financial assistance and benefits from their respective families. This ranged from payment of private school fees to general living expenses and capital. The husband alleges that his parents gave him money for living expenses when he was in financial difficulty, extended loans, including interest free loans to himself and the wife, forgave a debt of $150,000 and provided capital injections when the husband and wife needed them. The wife does not deny that the husband’s parents provided funds to the husband and herself but does not admit the extent alleged by the husband. The husband deposes that there were no similar contributions from the wife’s parents. It seems that the wife’s assertions are confined contributions by Mr and Ms E to payment of private schools fees and a capital payment of $12,000 to the construction of a residence in Suburb R which was the couple’s second home (in respect of which the husband’s parents provided $150,000 by loan and then by gift). The wife deposes[6] “I have not felt it appropriate to expect financial support from my parents”.

   [6] Affidavit of Ms Lintz affirmed 29 July 2015 [69]

6. In 2008 the husband and wife sold their family home in Suburb R. The husband deposes that the net proceeds of sale of $500,000 were invested. The wife agrees that the husband mentioned the investment of $500,000 to her at the time but says that she has no idea what became of the investment or the proceeds thereof.  It appears to be accepted that the price of the former matrimonial home was $2,100,000 when the couple purchased it in 2010. The husband says that $400,000 of the purchase price was provided from the remaining funds from the sale of their previous home. The wife says that she cannot comment on the husband’s version “in the absence of disclosure by the husband”. No doubt tracing the invested proceeds of sale can be a feature in this proceeding and the wife may or may not be satisfied as to how the proceeds of any investment were applied. The case will be decided on evidence rather than on the personal satisfaction of a party. It can be a costly exercise to run a case based on what you don’t know.

7. The husband gives evidence that in 2010 and 2011, his parents advanced $1.5 million to himself and the wife towards the acquisition of and redemption of mortgage interests affecting the former matrimonial home. The wife acknowledges that since 2012 the second named respondent has held mortgage security over the former matrimonial home for $1.5 million and that she may well have signed the relevant security documentation.

8. In 2013 the husband merged the family business with J Pty Ltd (“J”). The wife’s contention is that the husband did so without her knowledge and that the effect was dispose of “a significant asset of our relationship”. The consideration for the transfer of O Pty Ltd was 800,000 shares in J which are held by the second named respondent, B Pty Ltd 800,000 shares were said to be worth $800,000.  The wife asserts that B Pty Ltd was an entity controlled by the husband’s parents from its incorporation in 1972 until October or November 2011 and that the husband became the sole director and secretary of that entity on 30 November 2011. Further, that the company is the trustee of the L Lintz and Others Trust. She deposes to an ASCIC search disclosing that the third and fourth named respondents, D Pty Ltd Pty Ltd and C Pty Ltd each hold one of two issued shares in B Pty Ltd and that neither share is beneficially held. The husband appears to agree that consideration for the amalgamation of the family business with J was vested in B Pty Ltd as trustee of the L Lintz and Others Trust. He says that transaction was partial repayment of funds advanced by the Trust to himself and the wife in 2010 and applied to the acquisition of the former matrimonial home and the subsequent redemption of a mortgage over the former matrimonial home registered in favour of a business associate, Mr S.

1. The husband deposes to the loan from his parents, of $1.5 million, being provided from the sale of their home and a liquidation of their remaining assets in 2011 contemporaneously with them entering N Aged Care. He deposes[7] “My parents now require the loan to be repaid in order to fund their retirement, aged care and living costs. They also wish to benefit their grandchildren with the remaining funds.” The wife’s response[8] is

   I cannot comment about the husband’s parents. The Husband’s Father was diagnosed with dementia prior to entering [N Aged Care]. The Husband’s father’s mental and physical health was the first to deteriorate. The husband’s mother is now 90 years of age and I am unsure of her mental capacity. Due to the likely lack of mental capacity of the Husband’s parents, I do question the Husband’s assertions. Also, I have not been provided with a copy of the Husband’s parents’ Wills, despite previous requests.  

   [7] Affidavit of Mr Lintz affirmed 19 June 2016 [36]

   [8] Affidavit of Ms Lintz affirmed 29 July 2015 [83]

2. It is not clear on what basis the wife questions her parents-in law’ need to pay for accommodation and the maintain themselves. Perhaps she questions their wish to benefit their grandchildren which, absent the husband starting a new family, is closed class comprising the four daughters of the marriage.

3. The wife asserted early in the proceedings that the husband had effective control of his parents’ assets. It was conceded by the husband that he had control of the corporate trustee of the L Lintz and Others Trust, namely B Pty Ltd but that he acted as a bare trustee. The husband exercised control because he was, until 13 November 2015 the sole director and secretary of B Pty Ltd

4. On 13 November 2015 the husband was removed as the director and secretary of B Pty Ltd by a vote of the two shareholders being the third and fourth named respondents. Those respondents are corporations of which Mr Seitz, the fifth named respondent, is a director and secretary. Upon the husband being removed from his positions in B Pty Ltd, Mr Seitz became and remains the sole director and secretary of B Pty Ltd

5. My impression is that Mr Seitz’s interests are purely professional and that there is no family relationship or friendship underpinning his involvement in the Lintz family. He deposes to having been a chartered accountant since 1985 and that he is a partner of the accounting firm D Accountants (which is not a party to the proceedings). He says that he has acted as the accountant for B Pty Ltd since 1988.

6. Shortly after the removal of the husband from control of B Pty Ltd, the husband’s father passed away (on 18 November 2015). It appears to be common ground that the Mr Lintz Snr bequeathed a life interest in his estate to the husband’s mother and the residual estate to the husband.  This is somewhat at variance with an earlier description by the husband that the residue of his parents’ estates would be left to the four granddaughters and, effectively, bypass him. The will appointed Ms Lintz Snr the executrix of her husband’s estate and, in the event that she predeceased him, the husband was to be executor. I understand that it is uncontroversial that the husband’s mother lacks testamentary capacity in her own right and cannot take up the role of executrix. At the moment, there is no executor.   

7. The husband is his mother’s attorney under power.

8. When the matter was before me earlier this year, my impression was that the father and the second to fifth named respondents say that there is no asset, save for the mortgage interest over the former matrimonial home, with which to  clear an outstanding liability for the accommodation of the husband’s late father at N Aged Care and to provide for the past and future liabilities associated with the husband’s mother residence at N Aged Care. It was in the context of the second named respondent seeking to sale of the former matrimonial home that I considered that the matter should proceed to a final hearing in accordance with the timetable to which the parties agreed.

The law

1. Mr Bartfeld QC for the husband accepts that his client, on whose behalf the subpoenas were issued, bears the onus of showing the relevance of the documents sought to issues in the proceedings.

2. Section 55(1) of the Evidence Act 1995 (Cth) which provides that evidence is relevant is it “could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding.” However, in assessing the relevance of documents sought on subpoena the bar is set lower than it would be for the admissibility of those documents into evidence.

3. In Portal Software International Proprietary Limited & Bodsworth (2005) NSWSC 1115, Brereton J reviewed a various authorities including of this court and said the following, with all of which I agree:-

   19 The power of the Court to set aside a subpoena or notice to produce (in whole or in part) is but an instance of its power to regulate its processes and in particular to intervene in the case of an abuse of its process: see Botany Bay Instrumentation and Control Limited v Stewart[1984] 3 NSWLR 98, 100 (Powell J). In the categories of cases described by Powell J, no reference is made to mere irrelevance as a ground for setting aside a subpoena or notice. The closest that the various categories listed by his Honour approaches relevance in his Honour's third category, namely, where the subpoena had not been issued bona fide for the purpose of obtaining relevant evidence.
   
   20 However, relevance - or more accurately, lack thereof - is now a sufficient ground for setting aside a subpoena. In Trade Practices Commissioner v Arnotts Ltd [1989] FCA 248; (1989) 21 FCR 306; 88 ALR 90, Beaumont J approached the setting aside of subpoenas as oppressive on a basis which reveals that absence of apparent relevance is one of two separate bases for doing so: his Honour identified that on an application to set aside a subpoena as oppressive, two questions arose: first, whether the material sought had an apparent relevance to the issues in the principal proceedings - which his Honour called "adjectival" as distinct from "substantive" relevance - and thus the subpoena had a legitimate forensic purpose to that extent; and secondly, whether the subpoena was seriously and unfairly burdensome or prejudicial. Failure to satisfy either requirement resulted in the subpoena being set aside.
   
   21 In Hatton v Attorney-General of the Commonwealth of Australia& Ors [2000] FamCA 892; (2000) 158 FLR 31; (2000) 26 Fam LR 520; (2000) FLC 93-038, Finn, Kay and Dessau JJ, after an extensive review of the authorities, including Arnotts, said:-
   
   “As to the proposition that lack of relevance cannot of itself be a ground for setting aside a subpoena but rather must constitute oppression or abuse of process, we would consider that whatever may have been the position at the time that Waind and Hill was decided, the present state of authorities is such that lack of apparent relevance will be a sufficient ground in itself to set aside a subpoena.”
   
   22 I proceed on the basis, therefore, that absence of apparent relevance is a sufficient ground to set aside a subpoena or a part of a subpoena.
   
   23 It is necessary, then, to appreciate what is the test of "relevance" in the context of a subpoena. In many of the cases, it had been described as "apparent relevance", in the sense that the documents, production of which is sought, must bear some apparent relevance to an issue in the proceedings. In Waind and Hill, Moffitt P described the concept in these terms:
   
   “Production of a document on subpoena by a stranger is only required if the document is sufficiently relevant to the action in the sense that it is likely to add in the end, in some way or other, to the relevant evidence in the case.”
   
   24 In White v Tulloch(1995) 127 FLR 105, (1995) 19 Fam LR 696, (1995) FLC 92-640, the Full Court of the Family Court referred to the test in terms of documents having "a sufficient apparent connection to justify their production or inspection". But perhaps the most instructive description is that of Beaumont J in Arnotts, in which his Honour said that the test of adjectival relevance was satisfied if the material had apparent relevance and was established if the documentation called for "could possibly throw light on the issues in the main case". In a slightly different but related context, the test has been put in terms that a subpoena has a legitimate forensic purpose if it appears to be "on the cards" that the documents sought will materially assist the defence in a criminal proceeding [Alister v The Queen (1984) 154 CLR 404, 414 (Gibbs CJ), R v Saleam (1989) 16 NSWLR 14, 18].
   
   25 Thus it is plainly not the question at this (first) stage whether the documents, production of which is sought, will definitely advance the case of the parties issuing the subpoena, nor whether they will be admissible in evidence at the trial. It is sufficient that they could "possibly throw light" on the issues in the substantive proceedings, or that it appears to be "on the cards" that they will do so. What are the issues in the proceedings will appear from the pleadings (where there are pleadings), the affidavits, and the legal principles which govern the claims for relief in the substantive proceedings.

1. In relation to the relevance of the trust documents sought under the subpoena, Mr Bartfeld referred me to the wife’s affidavit affirmed 29 July 2015 in which she deposes “[..] I hold no roles within the entities controlled by my parents [Ms and Mr E].  I have never been a beneficiary of any entities associated with my parents, nor have I ever received a distribution from any entities associated with my parents. Annexed hereto and marked (“ARL-4”) is a true and correct copy of letter my parents’ accountant, [Mr U] of [Mr U & Co Pty Ltd] dated 28 July 2015.”  Mr Bartfeld contends that the wife’s entitlement to any income or capital from her parents or through their entities is an issue in this proceeding.  I accept that is the case.

2. The annexure to which the wife refers states (omitting formal and irrelevant parts) as follows:-

   TO WHOM IT MAY CONCERN

   We act as Accountants for [Ms E] and [Mr E].

   We confirm that their daughter [Ms T Linz] has never been a beneficiary of any entity associated with [Ms and Mr E], has never received a distribution of profits from any entity associated with [Ms and Mr E], nor are any monies owing to [Ms T Linz] from any entity associated with [Ms and Mr E].

3. Mr Bartfeld’s submitted that, whilst the author (Mr U) may honestly hold the opinion expressed in the above correspondence, as a matter of law a different construction may emerge from the inspection of the documents including, but not limited to, the trust deeds.

4. Mr Smith, counsel for Mr and Ms E, then informed me that there was a subsequent letter provided by the wife’s solicitor, which is also from Mr U & Co, and that correspondence clarifies the wife’s position vis a vis her parents’ trust(s).  That correspondence was dated 8 December 2015. Very significantly, it states that Mr U & Co do not have, and nor have they ever sighted, the deed of trust.

5. The first letter from the E’s accountants dated 28 July 2015 was not addressed to any person and it is, therefore, not certain that the author of the correspondence necessarily knew to whom his comments were being addressed or for what purpose they were being published. It is also unspecific as to what entities constitute “any entity”. At that point, I considered it to be vague. However, given the admission in the subsequent communication dated 8 December , 2015, that the author has never seen the trust deed, it is difficult to place any weight at all upon the statements of Mr U. I cannot see how Mr U can purport to exclude the wife as a beneficiary of the trust(s) if he has never seen the instrument which establishes the trust. The position of Mr and Ms E was not assisted by Mr Strum’s presumption that Mr U was “acting on instructions” when he wrote the letter “To Whom It May Concern”.

6. I do not regard the subpoena as a fishing exercise. I am satisfied that the documents could "possibly throw light" on the issues in the substantive proceedings. It follows that I do not uphold the objection of Mr and Ms E to production and inspection of the trust documents.

7. I will now turn to the testamentary wishes of Mr and Ms E.

8. In relation to the wills of the wife’s parents, Mr Bartfeld relies on section 75(2)(o) of the Act pursuant to which the court is required to take into account  “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”. He accepts that whilst the prospect of the wife receiving an inheritance is not a financial resource, her potential entitlement under her parents’ wills is a matter that would advance the justice of the case and that the husband is entitled to explore that evidence to see, firstly, whether it is evidence and, secondly, whether it advances his case.   

9. It is conceded that the parties to the marriage benefitted from monies and financial accommodation from the husband’s parents to a significant degree. It appears to be the husband’s contention that his entitlement to further funds from his parents, via his mother, is at an end and that during the marriage he shared with the wife all or most of what he may get. On the other hand, whatever benefits the wife will receive from her parents in the future and upon their passing will be retained solely by her. This would be a difficult proposition for Mr Bartfeld to make out at trial but I accept that if it is sustainable at all it would be sustainable by reference to s.75(2)(o).  I accept Mr Bartfeld’s submission that this is not a tit for tat exercise. It is on the cards that the wife, as one of only two children, is provided for in her parents’ wills. Of course how much the husband can make of that evidence or of a concession in those terms may involve an assessment of the ability of the wife’s parents to alter their wills let alone when the testamentary dispositions may take effect. Mr Bartfeld submitted that even if the husband cannot ultimately rely on the testamentary wishes of the wife’s parents, the wife would have rights under testators’ family maintenance law.

10. To say that there is a ghoulish side to this case might be misconstrued as an indication that only one party to the marriage is grasping for information about what the other may inherit. Obviously they are both doing so and it might be that the wife led the charge. There are significant differences between the husband’s position vis a vis his entitlement to any share of his parents estate. Because the husband’s father is deceased and his mother lacks the capacity to alter her will, the husband’s entitlement is capable of being described but not quantified. The wife’s position is at the other end of the spectrum. She is fortunate to have both parents in good health. However, on the facts of this case, what the future holds for the wife is a matter that the husband is entitled to consider making an element of his case. Whether ultimately he does so or succeeds are different issues.

11. I am satisfied that the wills of the wife’s parents are prima facie relevant for the purpose of the subpoena and that Mr and Ms E’s objection thereto should not be sustained.

12. To the husband’s credit, Mr Bartfeld conceded that it was a distasteful and intrusive exercise for Mr and Ms E to reveal their current wills to the husband and to the wife where wife maintains that she has not seen her parents’ wills and is not aware of the content. During submissions, there was discussion about a staged process whereby a respected and independent intermediary could, at the expense of the wife’s parents, look at the wills and indicate in general terms what terms pertain to the wife. There are a number of practitioners whom the parties could consider as intermediaries. However, the procedure was not fully explored because the E’s position was emphatically put that should be no disclosure of the wills. By the time Mr Smith of counsel could get instructions on a fallback position, we had run out of time. Now that I have decided that their wills should be produced it would seem appropriate for the wife’s parents to reconsider whether they want any of the protective measures or privacy measures put in place.

13. Mr Bartfeld suggested that inspection of the wills could be limited to solicitors and counsel and all persons concerned could endeavour to reach a position of common ground or a statement of agreed facts. That is a commendable suggestion. Mr Bartfeld referred to Sadek and Ors & Hall and Anor (2015) FamCAFC 23. If a statement of agreed facts cannot be reached or is not sufficient, the husband can apply for outright inspection.

14. I do not think that it would do justice to the parties or to Mr and Ms E for me to prescribe who should see their wills at this point in time in the proceedings. Submissions on this point were not fully developed. I have confidence that the practitioners concerned can work something out and, when they do, it would be appropriate for Mr F, who acts on behalf of Mr and Ms E, to confirm the terms in writing to the Registry Manager of this Registry of the Court. When Mr F writes that letter it must be on the basis that all relevant parties agree to its terms.  That is, the one letter will speak for everyone.  However, if Mr F is unable to do so by the end of the day on 4 April 2016, I will assume that I will have to make orders in that regard and will relist the matter for that purpose. Unfortunately, I am also confident that the parties will be back in court for some purpose or another so I expect that any unresolved issue can be resolved when the husband and wife will be in court in any event.

Costs

1. Costs were currently reserved but should be determined before the parties go to mediation on 18 April 2016. Mr and Ms E’s objection has not been successful but I am unaware of other relevant factors such as offers of compromise. I will put in place a timetable for notification of costs orders sought and, if necessary convene to take submissions and/or evidence prior to 18 April 2016.

Conclusion

1. I make the orders set out at the commencement of these reasons.

I certify that the preceding fifty eight (58) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bennett delivered on 31 March 2016.

Associate: 

Date:  31 March 2016