Luna & Luna
[2021] FedCFamC1F 343
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
Luna & Luna [2021] FedCFamC1F 343
File number(s): BRC 11516 of 2019 Judgment of: HOGAN J Date of judgment: 23 December 2021 Catchwords: FAMILY LAW – PRACTICE & PROCEDURE – REVIEW OF REGISTRAR’S DECISION – Where the husband applies to review an order made upholding objections to subpoenas taken by the wife – Whether the documents sought to be produced are relevant to the proceedings – Whether production of the documents would identify clients of the legal practice operated by the wife – Whether redaction of the names of the clients of the legal practice is appropriate. Legislation: Evidence Act 1995 (Cth)
Family Law Act 1975 (Cth)
Australian Solicitors’ Conduct Rules 2012
Family Law Rules 2004 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Dutnall & Rallin (No. 2) [2020] FamCAFC 295
Esselbrugge & Esselbrugge [2020] FamCA 155
Martin & Martin and Anor (No. 2) [2014] FamCA 232
White and Tulloch v White (1995) FLC 92-640
Number of paragraphs: 27 Date of hearing: 10 December 2021 Place: Brisbane Counsel for the Applicant: Dr Brasch QC Solicitor for the Applicant: Best Wilson Buckley Family Law Counsel for the Respondent: Mr Brown Solicitor for the Respondent: Alroe Somers & O’Sullivan Solicitors ORDERS
BRC 11516 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS LUNA
ApplicantAND: MR LUNA
Respondent
ORDER MADE BY:
HOGAN J
DATE OF ORDER:
23 DECEMBER 2021
IT IS ORDERED THAT:
1.The Respondent has leave to apply for a review of the orders made by a Registrar on 16 July 2021.
2.The orders made by a Registrar on 16 July 2021 are discharged.
3.The subpoena issued to B Pty Ltd on 4 June 2021 is set aside insofar as it requires the production of documents for the period from 1 July 2017 onwards.
4.The subpoena issued to C Bank on 4 June 2021 is set aside.
5.The subpoena issued to National Australia Bank on 14 June 2021 is set aside.
6.The Respondent has leave to issue a subpoena directed to C Bank which seeks for the period 1 July 2015 to 30 June 2017 copies of each document, email, record or notes that meets the following description:
(a)loan variation document delivered to Suncorp in September 2016 for account …88; and
(b)records of all phone calls, emails and notes made in reference to the account …88; and
(c)all statements of transactions for the period of 1 July 2015 through 30 June 2017 of all accounts held in the name of Ms Luna with Date of Birth …/…/1967; and
(d)all statements of transactions for any accounts held in the name of B Pty Ltd and IRIQ Law Pty Ltd; and
(e)all statements of transaction for the period of 1 July 2015 through 30 June 2017 for account numbers …98, …90 and …28.
7.The Respondent has leave to issue a subpoena directed to National Australia Bank which seeks for the period 1 July 2016 to 30 June 2017 copies of each document, email, records or notes that meets the following:
(a)all statements of transactions for account number …61 for the period 1 July 2016 through to 30 June 2017; and
(b)all statements of transactions for account number …14 for the period 1 July 2016 through to 30 June 2017; and
(c)all statements of transactions in the name of B Pty Ltd; and
(d)all statements of transaction in the name of IRIQ Law Pty Ltd.
8.By 4.00 pm on 10 January 2022, the Applicant, in her capacity as director of B Pty Ltd, produce the documents sought, by the subpoena issued to B Pty Ltd on 4 June 2021, for the period up to and including 30 June 2017 if such documents have not already been produced.
9.For the purpose of complying with Order 8, the Applicant, in her capacity as director of B Pty Ltd, is permitted to:
(a)redact only the names of clients from the documents to be produced; and then
(b)produce a redacted copy of the documents.
10.Upon production of the documents in compliance with Orders 8 and 9, the Respondent’s legal representatives have leave to inspect the documents produced by B Pty Ltd.
IT IS DIRECTED THAT:
11.Upon production of the documents sought by the subpoena, if issued, to C Bank and the subpoena, if issued, to National Australia Bank, the Subpoenaed Documents and Exhibits Office:
(a)photocopy the documents produced; and
(b)place the original copy of the documents produced into a sealed envelope to be marked with the words “Not to be opened except by order of a Judge”; and
(c)upon either party’s legal representatives being granted leave to either inspect and/or photocopy the documents, provide only the photocopy of the documents for inspection.
IT IS FURTHER ORDERED THAT:
12.Upon the Subpoenaed Documents and Exhibits Office photocopying the documents as directed by Order 11, the Applicant and/or her legal representatives have leave to:
(a)inspect the photocopy of the documents produced by C Bank and National Australia Bank; and, thereafter
(b)redact only the names of clients that appear in those documents.
13.Upon the wife and/or her legal representatives redacting the documents produced by C Bank and National Australia Bank in the manner permitted by Order 12, the Respondent’s legal representatives have leave to inspect the redacted documents.
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 Luna & Luna has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HOGAN J:
On 24 August 2021, Mr Luna, the husband, filed an Application in a Case seeking to review orders made by a Registrar on 16 July 2021 which upheld objections that Ms Luna, the wife, had taken to various subpoenas filed by him. The Application for Review, albeit made not in the correct form, was made in the substantive proceedings between these parties, an aspect of which includes the husband’s application for an order setting aside the Financial Agreement and Superannuation Agreement entered into by the parties on 23 February 2017.
It should first be noted that the Application for Review of the orders made by a Registrar on 16 July 2021 was filed out of time.[1] While the husband did not formally seek that he be granted leave to apply for a review of the 16 July 2021 orders, it is clear that, pursuant to r 1.04 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, the “overarching purpose of the Rules is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible”.
[1] Family Law Rules 2004 (Cth) r 18.08, which applied at the time the husband’s Application was filed and which required that the same be filed within 28 days of the Registrar’s order.
At the hearing of the Application for Review of the July 2021 orders, Dr Brasch QC who appeared for the wife took issue, initially at least, with the late filing of the same. Dr Brasch did not ultimately press the objection, given the discourse between the Court and Counsel which included reference to the fact that the intention of the husband to apply for a review of the July 2021 orders had been foreshadowed by his then legal representatives at a Case Management Hearing which occurred before me on 30 July 2021.
In the interests of the parties not unnecessarily incurring further costs and so as to ensure that the matter is ready to proceed to trial currently listed to commence on 7 February 2021, I considered it appropriate to continue to hear the Application for Review of the July 2021 orders.
In the circumstances, the orders made include an order giving to the husband leave to apply for a review of the orders made by the Registrar on 16 July 2021.
Broad Overview
As already noted briefly, the husband seeks that the Financial Agreement entered into by the parties is set aside.[2] He does so on the basis that he alleges, at least in part, that the wife failed to disclose relevant documents prior to the parties signing the Financial Agreement, and that this asserted failure resulted in him accepting that, at that time, the entity through which a legal practice is operated by the wife and the Luna Family Trust (both of which are retained by her as a consequence of the terms of the Financial Agreement) had a value that was “nominal”.
[2] See: Amended Response filed 27 April 2020.
It is also part of the husband’s case that, in late 2016, shortly before the Financial Agreement was signed, the wife caused transfers from various accounts to occur, and that these transfers affected, to his detriment, the balances of:
(a)the mortgage secured over the formal matrimonial home which the wife was to retain as a consequence of the terms of the Financial Agreement, and in respect of which she was to indemnify him in relation to any liability in relation to the same; and
(b)an account in the name of the parties as trustees for the trust which the wife was also to retain; and
(c)accounts in the name of the entity which were to be retained by the wife as a consequence of her retaining that entity.
On 4 June 2021, the husband filed subpoenas directed to the entity and to C Bank. On 14 June 2021, he filed a further subpoena directed to the National Australia Bank. It was submitted on behalf of the husband that the documents sought by the subpoenas issued by him will assist him to show that either the entity and/or the trust did not have a value that was “nominal” at the time the Financial Agreement was signed.
On 18 June 2021, the wife filed Notices of Objection in relation to the subpoenas directed toward the entity and Suncorp. On 25 June 2021, she filed a Notice of Objection in relation to the subpoena directed to the National Australia Bank. Her objection to each subpoena was largely in the same terms, and consequently, can be summarised generally as follows:
(a)the subpoenas are “superfluous” because she had already disclosed some of the documents covered by them, and in circumstances where she asserts that the husband has admitted to having received, prior to signing the Financial Agreement, the same; and;
(b)the breadth of the subpoenas are too wide and the documents sought by them are sought in terms which lack precision and the documents sought are not relevant to the issue to be determined; and
(c)the documents relate to a period of time after the parties signed the Financial Agreement (which was on 23 February 2017) and are consequently irrelevant to the proceedings in which the husband seeks only to establish that the wife failed to disclose relevant information before the Financial Agreement was signed; and
(d)the production of documents sought by the subpoenas would reveal the identity of clients of the legal practice she operates and would constitute a breach of the contract/s entered into between the entity and the respective clients, s 118 of the Evidence Act 1995 (Cth) and r 9 of the Australian Solicitors’ Conduct Rules 2012.
I turn now to consider each of the objections made in relation to the subpoena. In doing so, I have taken into account the submissions made orally by the legal representatives on behalf of each of the Applicant and the Respondent. I have also taken into account the written documents prepared and relied upon by them in advancing the cases on behalf of their respective clients.
I note, in relation to the assertion that the subpoena are superfluous, that Dr Brasch, for the wife, submitted, amongst other things, that the subpoena concerned documents already produced and consequently, are superfluous because:
(a)the wife has already disclosed certain documents, as outlined in Annexure “A” to each of the Notices of Objection filed in the Court, that have been sought by the husband, although it is accepted that such disclosure proceeded only to 23 February 2017; and
(b)by virtue of deemed admissions from the husband, he had accepted that he had received certain documents by way of disclosure from the wife.
After some initial confusion, it was submitted that, as the husband had failed to respond to a Notice to Dispute Facts served on him on 17 August 2021 and a Response Notice to Admit Facts served on him on 27 August 2021, he was, by virtue of application of the Rules, deemed to have admitted the contents of the same.
I note the reference in the wife’s affidavit to the admissions[3] which it is asserted that, as a consequence of his failures, the husband has been and is deemed, by application of the Rules, to have made.
[3] Affidavit of the wife filed 8 December 2021, paragraphs 15 to 19; paragraphs 29 to 89.
I am not persuaded by the submissions that the documents sought by the subpoena are superfluous. It is the husband’s assertion in the substantive proceedings that the wife failed to disclose relevant documents to him prior to the signing of the Financial Agreement. Given this is the substantive – or at least one of the substantive issues – in the proceedings between the parties, I am not persuaded that the husband has failed to establish that there is a legitimate forensic purpose in obtaining the documents sought via the subpoena.
There is, I consider, a legitimate forensic purpose, given his case. I am not persuaded that there is a lack of apparent relevance in the documents sought. Whether they, in fact, of course, assist the husband to establish the contentions he makes in the substantive proceedings is a matter for the trial. I also note that there was nothing, really, in the submissions advanced on behalf of the wife to suggest that production of documents sought from the entity would cause it hardship or cause the wife hardship – beyond, I accept, the hardship accorded to any party engaged in litigation.
In so far as the documents sought from each of the commercial lenders are concerned, there is no evidence to suggest that answering the subpoena would cause those entities any particular hardship. And it is a matter, it seems to me, for the husband, in terms of costs as to whether he seeks, in essence, to double check that the wife has, in fact, produced documents that are relevant, in so far as those documents are held by those entities.
Whilst it was submitted on behalf of the wife that the terms of the subpoena were too wide and that there was an absence of precision in the drafting, in so far as the documents sought are concerned, I did not consider this argument to be advanced with any particular substance or strength by Dr Brasch on behalf of the wife.
Rather, Dr Brasch’s submissions focused upon the assertion that, given the contents of the Financial Agreement, the husband agreed that he had the opportunity to seek disclosure; he had a three-month period of time within which he could negotiate; that the obtaining of valuations and the assertion of value is “not a science”; and that he had agreed the value of the entity and the trust was “nominal”. In essence, Dr Brasch’s submissions emphasised that, having regard to these terms recorded in the Financial Agreement itself, the husband ought not be entitled, having had what was described as “buyer’s remorse”, to now seek the production of further documents.
As already noted, at least in passing, it is clearly established by authority that documents sought in a subpoena must have some relevance to the issues in the proceedings in which the subpoena have issued, and that a lack of apparent relevance will be a sufficient ground to set aside a subpoena. It has also been said, and I think well-established by authority, that as long as a subpoena have a legitimate forensic purpose, they will not be set aside. Whilst various authority have outlined a variety of formulations in an attempt to try to more clearly articulate the meaning of “legitimate forensic purpose”, that terminology seems to me to be sufficient: see, by way of authority, the following, for example: White and Tulloch v White[4]; Martin & Martin and Anor (No. 2)[5]; the decision of Tree J in Esselbrugge & Esselbrugge[6]; and the decision of Aldridge J in Dutnall & Rallin (No. 2)[7] for useful and concise summaries by their Honours of the applicable principles.
[4] (1995) FLC 92-640.
[5] [2014] FamCA 232.
[6] [2020] FamCA 155.
[7] [2020] FamCAFC 295.
I am not persuaded by the submissions that the documents sought by the husband via the subpoena that had issued, which relate to or post-date the signing of the Financial Agreement, are, by virtue of the fact alone, irrelevant to the proceedings. I consider that, given at least one of the substantive grounds asserted by the husband in support of an order to set aside the Financial Agreement – being that the wife has allegedly engaged in fraud – and that he has allegedly entered into the agreement in circumstances which render the same unconscionable, a legitimate forensic purpose exists in relation to him being able to explore the possibility of transactions which occurred shortly after the Financial Agreement was signed.
In saying that, though, I am not persuaded that there is a legitimate forensic purpose in the husband seeking documents that extend, in a temporal sense, far after the Financial Agreement was executed. Rather, it seems to me that the legitimate forensic purpose could be satisfied if the husband were able to seek the production of documents for the period that ends on 30 June 2017; that is, the conclusion of the financial year in which the parties entered into the Financial Agreement.
Dr Brasch made additional submissions in relation to the wife’s concern that, if documents are to be produced, they be produced in a manner that does not reveal the identity of clients of the legal practice: that is, it was submitted, in essence, that the requirement to produce the documents sought by the subpoena should be ameliorated to the extent that the wife or her legal representatives should be permitted to redact, from the documents produced, the identity of clients of the practice. It was submitted that such order was appropriate given the terms of s 118 of the Evidence Act 1995 (Cth), and r 9 of the Australian Solicitors’ Conduct Rules 2012, and the terms of the contractual relationship between the practice, the entity, and the clients.
In pressing for the production of documents, absent the redaction of the identity of clients of the practice, the husband’s legal representative made submissions to the effect that their identity would be relevant to any value that may be ascribed to the practice. In the absence of any expert evidence to support such a contention, I do not accept it.
I consider that it is appropriate in the circumstances, at least at this stage, that the wife be permitted, either personally or via the actions of her legal representatives, to redact from the documents produced by the entity and also from the documents produced by each of the banks, in answer to subpoena if they are subsequently issued, the names of the clients of the practice.
I intend, also, in order to give effect to that determination, to make orders directed to the relevant section of the Court to facilitate the wife being able to, first, inspect the documents produced by non-parties; to redact the same; and then for those documents (the redacted version) to be made available to the husband’s legal representatives for inspection only at this stage.
Whilst I have not accepted many of the submissions made on behalf of the wife, in so far as they contend that the subpoena was superfluous, lacked precision and sought documents irrelevant to the proceedings, I do accept the submission, generally, that there should be a temporal limitation imposed upon the documents that the husband is able to seek. As already noted, I consider the appropriate temporal limitation to be one that is the conclusion of the financial year in which the parties entered into the Financial Agreement.
Consequently, this is the reason that the orders will issue in the terms that they do, which:
(a)set aside the subpoena already issued to C Bank and National Australia Bank –because the time period during which documents were sought is later than 30 June 2017; and
(b)accord to the husband leave to issue a subpoena directed to C Bank and National Australia Bank to seek the production of documents from the period from 1 July 2016 to 30 June 2017.
I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the settled Reasons for Judgment of the Honourable Justice Hogan delivered orally on 23 December 2021. Associate:
Dated: 18 January 2022
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