Malloy & Anor and Stopford Malloy
[2017] FamCAFC 205
•5 October 2017
FAMILY COURT OF AUSTRALIA
| MALLOY AND ANOR & STOPFORD MALLOY | [2017] FamCAFC 205 |
| FAMILY LAW – APPEAL – LEAVE TO APPEAL – SUBPOENAS – Where the decision pertains to practice and procedure – Where an adjournment of the hearing was unnecessary – Where the task of the primary judge at the interlocutory stage was not to determine whether the documents sought would be admissible as relevant at trial – Where the task of the primary judge was to consider whether the wife had a legitimate forensic purpose in seeking production of the documents, and that is usually established by demonstrating that they have an apparent relevance to the issues in the substantive proceedings – Where the decision of the primary judge discloses no error of principle and its correctness is not attended with sufficient doubt to be overturned – Where no substantial injustice can result from the refusal of leave supposing the decision to be wrong – Application dismissed. FAMILY LAW – APPEAL – FURTHER EVIDENCE – Where the further evidence sought to be adduced is in dispute which renders it practically impossible to allow its admission – Where the application misconceives the subpoena process and the requirements placed on the recipient of the subpoena – Where the task of the primary judge is to consider the “apparent relevance of the documents, not determine once and for all their relevance” – Where the further evidence fails to demonstrate error by the primary judge – Application dismissed. FAMILY LAW – APPEAL – COSTS – Where no application for costs was made in the written submissions of either party – Rules as to costs apply. |
| Family Law Act 1975 (Cth) s 93A |
| Family Law Rules 2004 (Cth) rr 22.39, 15.51 Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc and Anor (1981) 148 CLR 170 |
| APPLICANTS: | Mr Q Malloy and The Malloy Group |
| RESPONDENT: | Ms Stopford Malloy |
| FILE NUMBER: | ADC | 2595 | of | 2015 |
| APPEAL NUMBER: | SOA | 15 | of | 2017 |
| DATE DELIVERED: | 5 October 2017 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | In Chambers |
| DATE HEARD: | Written submissions |
| JUDGMENT OF: | Thackray, Strickland and Murphy JJ |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 7 February 2017 |
| LOWER COURT MNC: | [2017] FamCA 116 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANTS: | PP Lawyers |
| SOLICITOR FOR THE RESPONDENT: | Piper Alderman Lawyers |
Orders
The application in an appeal filed by the applicants on 11 July 2017 be dismissed.
The application for leave to appeal made in the Amended Notice of Appeal filed on 9 March 2017 be dismissed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Malloy and Anor & Stopford has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT ADELAIDE |
Appeal Number: SOA 15 of 2017
File Number: ADC 2595 of 2015
| Mr Q Malloy and The Malloy Group |
Applicants
And
| Ms Stopford Malloy |
Respondent
REASONS FOR JUDGMENT
Thackray J
I have had the benefit of reading the judgment of Strickland and Murphy JJ. I agree with their reasons and the orders they propose.
Strickland & Murphy JJ
Introduction
By Amended Notice of Appeal filed on 9 March 2017, Mr Q Malloy and The Malloy Group (“the applicants”) apply for leave to appeal, and if leave is granted, to appeal against orders made by Austin J on 7 February 2017. The application is opposed by Ms Stopford Malloy (“the wife”), with Mr Malloy (“the husband”) taking no part in the application.
By order made on 26 May 2017, the application is being dealt with on written submissions without an oral hearing, and prior to the fixing of a date for the hearing of any appeal, if leave is granted.
Pursuant to orders made by the Southern Appeals Registrar on 6 June 2017, written submissions were filed by the applicants on 10 July 2017, and by the wife on 21 July 2017.
On 11 July 2017 the applicants filed an application in an appeal seeking an order permitting them to rely on two affidavits annexed to the affidavit of their solicitor, Mr PP, also filed on 11 July 2017.
Background
On 14 July 2015 the wife filed an Initiating Application in the Family Court of Australia seeking parenting orders and orders by way of property settlement.
On 4 August 2015 the husband filed a Response.
On 13 May 2016 the wife filed an application in a case seeking orders not only against the husband, but against the applicants, and thereby joining the applicants to the substantive proceedings between the wife and the husband as the second and third respondents.
On 21 October 2016 the primary judge made an order, inter alia, granting leave to the wife to issue a subpoena to DD Pty Ltd to produce to the court certain documents in relation to that company and the Q Malloy Family Trust, of which it is the corporate trustee.
On 14 November 2016 the wife issued a subpoena to DD Pty Ltd to produce the following documents to the court:
1. a copy of this subpoena
2. Trust deed of The Q Malloy Family Trust
3. Financial statements for The Q Malloy Family Trust
4.Records of when the statements referred to in paragraph 3 above were prepared
5.Financial statements for DD Pty Ltd from 30 June 2010 to present
6.Records of when the statements referred to in paragraph 5 above were prepared
On 29 November 2016 the wife issued a subpoena to OO Pty Ltd to produce the following documents to the court:
1. a copy of this subpoena
2.financial statements of OO Pty Ltd from 30 June 2012 to the date of this subpoena
3.quarterly and monthly management accounts for OO Pty Ltd 1 July 2015 to the date of this subpoena
4.register of current securities of OO Pty Ltd as at 30 June in each year commencing 30 June 2010 and each year thereafter to the date of this subpoena
5.notices of demand received by OO Pty Ltd from any creditor from 1 July 2016 to the date of this subpoena
OO Pty Ltd is now part of the Malloy Group of Companies. It was a company within the group of companies controlled by the husband, but in or about April 2012 control of that company and others in that group was passed to the Malloy Group of Companies under the control of Mr Q Malloy, the husband’s father. The shares in OO Pty Ltd are owned by LE Pty Ltd of which company Mr Q Malloy is now the director and sole shareholder. The control of that company also passed from the husband to his father in April 2012. That company owned Property LL.
On 14 December 2016 a Notice of Objection was filed on behalf of DD Pty Ltd alleging that in relation to the documents in items 4 and 6 of the subpoena, the subpoena was oppressive and sought irrelevant documents. Further, as to the documents in items 3 and 5, they are said to be the subject of client confidentiality, and they are irrelevant.
On 20 December 2016 a Notice of Objection was filed on behalf of OO Pty Ltd alleging that the documents sought were “[n]ot relevant to the issues in dispute” in the proceedings between the husband and the wife, that they were confidential, that the subpoena was “[o]ppressive/unfairly burdensome in the documents it seeks, is ‘fishing’,” and it was an “abuse of process”.
On 20 December 2016 Registrar Paxton made orders providing that the issues in relation to the subpoenas be listed for argument before the primary judge on 6 February 2017, and for the filing of written submissions.
On 2 February 2017 the applicants filed an application in a case seeking an adjournment of the hearing in relation to the subpoena to OO Pty Ltd, and leave to file affidavit material in support of their objection to that subpoena. That application was also listed to be heard by his Honour on 6 February 2017.
On 6 February 2017 and 7 February 2017 his Honour heard submissions and then made the following orders:
1.The Notice of Objection filed by DD Pty Ltd on 14 December 2016 is partly dismissed and DD Pty Ltd is ordered to forthwith produce to the Court all documents in answer to Classes 2, 3 and 5 within the schedule to the subpoena issued to it on 14 November 2016.
2.Leave is granted to the husband and wife to inspect the documents produced by DD Pty Ltd pursuant to that subpoena.
3.The Notice of Objection filed by OO Pty Ltd on 20 December 2016 is dismissed and OO Pty Ltd is ordered to forthwith produce to the Court all documents in answer to Classes 2 to 5 inclusive within the schedule to the subpoena issued to it on 29 November 2016.
4.Leave is granted to the husband and wife to inspect the documents produced by OO Pty Ltd in answer to that subpoena.
BY CONSENT, IT IS FURTHER ORDERED THAT
5.No order as to costs as between the wife and DD Pty Ltd in respect of the Notice of Objection filed by DD Pty Ltd on 14 December 2016.
IT IS FURTHER ORDERED THAT
6.OO Pty Ltd shall pay the wife’s costs of and incidental to the determination of the Notice of Objection filed by OO Pty Ltd on 20 December 2016 (including the failed adjournment application) on a party/party basis in the sum agreed or assessed.
7.For the purposes of implementation of Order 6 hereof, pursuant to Rule 19.50 of the Family Law Rules, junior counsel, but not senior counsel are certified
NOTATION
A.The parties do not require the publication of Reasons for Orders 6 and 7 hereof.
Leave to appeal is sought, and if leave is granted, the appeal is against all orders made. However we cannot see why there would be a challenge to orders 5 and 7, and we note that the parties did not require the publication of reasons for orders 6 and 7. Thus, we will put aside the challenge to orders 5 and 7, and plainly it can only be if leave to appeal is granted against orders 3 and 4 that leave should be granted to appeal against order 6.
Leave to appeal
The parties suggest in their written submissions that there is uncertainty as to the test to be applied in determining whether to grant leave to appeal. However, it would be an unnecessary diversion to discuss that issue given that in our view whichever test is applied, leave to appeal is not warranted. To perhaps cover all bases though, we agree with the submission of the wife that the decision of his Honour discloses no error of principle, and its correctness is not attended with sufficient doubt to be overturned. Further, no substantial injustice can result from the refusal of leave, supposing the decision to be wrong.
We also observe that the “facts” pleaded in the Amended Notice of Appeal in support of the application do nothing more than identify the relevant background, repeat the contents of the subpoenas, and suggest that his Honour erred in dismissing the applicant’s objections, and refusing the application for an adjournment and for leave to file affidavit material.
In short, no error of principle is identified, nothing is put to demonstrate the decision is attended by sufficient doubt, or that a substantial injustice will result. Thus, to find the basis of the application we need to go to the applicants’ written submissions.
Initially at least the applicants suggest that the decision in relation to the subpoenas is not a decision that pertains to practice and procedure, but affects the substantive rights of the applicants.
The basis of that submission is two-pronged, namely:
4.1That where the subpoena is issued to a stranger to the marriage, the effect of an adverse ruling is both summary in nature and the substantive rights of a third party to maintain their privacy are finally determined; and
4.2This Court has routinely granted leave to appeal decisions relating to subpoena issued to third parties because of the invasive and summary nature of an adverse determination.
We do not accept either basis.
First, subpoenas are for the most part issued to strangers to the marriage, the effect of a ruling is plainly summary, and often the issue of “privacy” is raised, but usually in the context of a requirement to protect the commercial sensitivity of the documents. We observe that here the issue of confidentiality is not raised on that basis; it is nothing more than a request to keep the documents private. In that regard it is entirely unclear to us on what basis it is suggested that the applicant has a “substantive right … to maintain their privacy”.
In these circumstances we are not persuaded that the decision is anything other than a decision pertaining to practice and procedure. The importance of that is well known, and conceded by the applicants. We need do no more than reiterate the oft-cited statement of Sir Frederick Jordan in In re the Will of F B Gilbert (dec.) (1946) 46 SR (NSW) 318, at 323:
… I am of the opinion that … there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges at first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.
(See also Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc and Anor (1981) 148 CLR 170, at 177 and 180)
We also agree with the submission of the wife that this admonishment applies in particular where, as here, what is before the court is an objection to the production of subpoenaed documents, and there is no application to set aside the subpoena.
Secondly, we do not accept the assertion made in 4.2. Decisions relating to subpoenas are an acknowledged prime example of where restraint in the form of the requirement for a grant of leave is essential.
The subpoena to OO Pty Ltd
Error of principle/decision attended by sufficient doubt
The submissions of the applicants relate the issue of the relevance of the documents sought to the issue of the refusal of the adjournment. It is said that if the adjournment had been granted, and the applicants were able to file further evidence, they would have been able to demonstrate that the wife’s allegation that the restructuring of the assets of the husband in 2012 was not done to limit the assets available for division with his then de facto partner.
However, that was not the basis of the formal application for an adjournment to allow the filing of further evidence. As is plain from paragraphs 6 – 16 of the affidavit of Mr PP, the solicitor for the applicants, filed on 2 February 2017, that basis was for an adjournment to file evidence responding to the contents of the report of a Mr NN, forensic accountant, a report that was not before the court because it was an expert report for which leave to file had previously been refused, and in respect of which leave had not been sought again.
Then, to further muddy the waters, during the hearing before the primary judge, the applicants sought to expand the basis of the adjournment to be able to put before the court
…evidence of the external accountant … referencing and explaining the holdings of the husband, the holdings and inter-related relationships of the two companies the subject of the subpoena, and then a further affidavit from – the CFO of the Malloy Group … – dealing with the current position in relation to – which would then inform issues of valuation …
(Transcript 6 February 2017, page 20, lines 16 – 20)
His Honour refused the application for an adjournment on four bases, namely:
a)The wife was not seeking to rely on the expert report of Mr NN as proof of anything other than the existence of a dispute between the husband and the wife.
b)The wife had not sought and had not been granted leave to rely upon the opinion evidence contained in the report of Mr NN.
c)The further evidence that the applicants sought to adduce comprised their own adversarial expert evidence, but without having leave to adduce that evidence.
d)The interlocutory stage was no occasion to consider the appointment of a single expert witness. There was also no need to reach concluded findings about factual issues at that time. That should await the trial between the husband and the wife.
We are not persuaded that there is any error of principle here, nor is the decision attended by any doubt, let alone sufficient doubt. In that regard we particularly focus on the fourth point made by his Honour in refusing the application.
In effect the further evidence ultimately sought to be adduced went to the merits of the very issue in respect of which the subpoena had been issued. Indeed, it was no part of the primary judge’s function at the interlocutory stage to determine whether the documents sought would be admissible as relevant at trial. As we will elaborate on shortly, the task of the primary judge was to consider whether the wife had a legitimate forensic purpose in seeking production of the documents, and that is usually established by demonstrating that they have an apparent relevance to the issues in the substantive proceedings (Hatton v Attorney-General of Commonwealth of Australia and Ors (2000) FLC 93-038).
For completeness, we are also satisfied that no substantial injustice would result if leave was refused, supposing the decision to refuse the application for an adjournment to be wrong.
What we have said above is relevant to that issue as well, but we note that there was already on file an affidavit of Mr GG, the previous CEO of the Malloy Group of Companies, which contained a good deal of the further evidence that was contemplated in any event, as well as directly engaging with (and rebutting) the assertions of the wife as to the 2012 restructuring of the husband’s assets.
Further, given that the wife’s assertions had been known for some time, there had been ample time to produce any documents relevant to those assertions, and even to bring them to the hearing before the primary judge.
Turning then to the apparent relevance of the documents sought in the subpoena to OO Pty Ltd, the wife relied primarily on what was revealed in documents discovered by the husband. His Honour set that out as follows (at [31]):
…
(a)the husband claimed to have surplus assets of about $195 million in 2009;
(b)by 2012, the husband was effectively insolvent, because his liabilities allegedly exceeded his assets by nearly $3 million;
(c)in April 2012, the husband was sole director of and shareholder in QQ Investments Pty Ltd, which corporation held all shares in OO, but for consideration of only $1 he transferred his interest in QQ Investments Pty Ltd to another corporation controlled by his father, Mr Q Malloy, and resigned his directorship. At that stage, OO had declared net assets of nearly $7 million and a net operating profit of nearly $1.5 million;
(d)contemporaneously, the husband also transferred other property interests for nominal consideration to his father, or alternatively, other entities under his effective control;
(e)in February 2013, the husband settled his property settlement dispute with a former domestic partner in that financial context; and
(f)while all that was occurring, the husband and wife were cohabiting and were engaged to marry.
His Honour then concluded at [32]:
… the husband’s historical interest in OO is understandably important to the spouse’s property settlement. That is particularly so when OO is apparently indebted to various other corporations and trusts, which are themselves indebted to the husband. Those asserted debts underpin the “unpaid present entitlements” due to the husband by members of the Malloy Group. On instructions, OO’s solicitor deposed that it is “unlikely” the unpaid present entitlements will ever be paid to the husband, but axiomatically, such evidence of his belief admits of the “possibility” they might be, which makes the wife’s pursuit of the issue understandable and reasonable.
This is in the context of the husband claiming to have no realisable assets, income or occupation, and being dependent on the “largesse” of his father (the first applicant) for his living expenses (husband’s affidavit filed 4 August 2015, paragraph 23.7).
The argument of the applicants is that “there can be no legitimate forensic purpose to the provision of any documents from OO Pty Ltd that post-date the 2012 transfer of ownership and control to Q Malloy, as the same cannot be said to comprise the property or financial resources of the Husband.”
Again, that submission exposes the applicants’ misconception of what needs to be established to compel the production of documents. To repeat, there need not be a concluded view formed as to relevance; it is apparent relevance that is necessary and there need only be a legitimate forensic purpose established. As put by the wife in paragraph 11 of her written submissions filed on 14 August 2017:
The Applicants’ role: It is not for a non-party recipient of a subpoena to embark upon the proof or disproof of any substantive issue in the proceedings – especially in the absence of a party to those proceedings (the Husband). Indeed, it is not appropriate for a non-party to attempt to assess what may or may not be relevant to proceedings to which they are not a party. The duty of the recipient of a subpoena, provided with proper conduct money, is to obey it and bring to the Court the documents mentioned in the subpoena if they have them, unless he procures the subpoena to be set aside, or obtains an order relieving them from production, as an abuse of process: they must produce to the Court the documents brought unless he satisfies the Court that some good reason exists why they should not be produced.
(Footnotes omitted)
Thus, in relation to the objection to the subpoena to OO Pty Ltd, no error of principle by his Honour has been established, and his Honour’s decision is not attended by any doubt, let alone sufficient doubt.
Substantive injustice
Again, for completeness, we are satisfied that no substantial injustice would result if leave were refused, supposing the decision to compel production to be wrong.
The applicants suggested that substantial injustice arose as a result of the following circumstances:
6.1That it is a significant imposition upon a stranger to the marriage to require production of documents which are confidential to them and have no relevance to the matters in issue between the parties to the litigation; and
6.2That the Court has “jealously guarded” the invasion of the rights of a third party unless there is a valid reason not to do so.
(Footnote omitted)
As to the first submission, that presupposes that the documents sought have “no relevance” to the matters in issue between the husband and the wife. However, again, all that needs to be demonstrated is apparent relevance, and that was achieved here.
As to the second submission, that is said to come from the decision of Waind v Hill and National Employers’ Mutual General Association Ltd [1978] 1 NSWLR 372 at 383. However, that is not the case. For a start, the quoted phrase is inaccurate and the page reference is incorrect. Secondly, the context is quite different to the circumstances here. Moffat P said this at 382:
The issue of a subpoena may involve an abuse of the power in other ways and, as stated in Small’s case objection to production to the court may be on other grounds. Thus, 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, or in collusive proceedings to give them publicity. A witness might argue the documents must be sought for some undefined spurious reason, as they have no conceivable relation to the proceedings. The court would jealously consider any of such submissions having regard to the invasion of the private rights of the stranger occasioned by the operation of the subpoena.
(Footnotes omitted)
Plainly, that is not the situation here.
The subpoena to DD Pty Ltd
Error of principle/decision attended by sufficient doubt
The objection of the applicants was based on the premise that the evidence before the court indicated that the husband was in no position of control with respect to the Q Malloy Family Trust, that he does not receive any distributions from that Trust, and the financial accommodation provided to him by that Trust was by way of a loan, and was secured by mortgages against the husband’s real property.
It was submitted that in those circumstances it could not be said that the husband has “any interest in property” in the Trust to justify the relevance of the documents sought. Accordingly, the documents had been redacted so the only visible entries were those that related to the husband and his three siblings.
Those assertions of the applicants were seriously in dispute, but the applicants submitted that the wife’s suspicions about the husband’s integrity regarding his financial interest in DD Pty Ltd were not enough to demonstrate the apparent relevance of the documents.
His Honour found (at [16]), correctly in our view, that “[t]he wife has demonstrated an objectively reasonable basis for doubting the integrity of the deterioration in the husband’s financial circumstances over recent years. If he is to be believed his personal fortune plummeted from about $195 million in 2009 to his present penury”.
Moreover, and again correctly, his Honour observed that as a beneficiary of the Family Trust the husband has the right to due administration of it, and that right amounts to “property” (see Kennon v Spry (2008) 238 CLR 366).
His Honour then concluded (at [18]) that
… quantification of the husband’s property rights in the Family Trust is liable to be inaccurate unless all relevant financial records are released, without redaction. I am satisfied the financial statements for the Family Trust (held by DD) are relevant to the property settlement proceedings between the spouses and should be fully disclosed. Production of the redacted copies is not sufficient compliance with the subpoena.
It also must not be forgotten that his Honour had previously given leave to the wife to issue this subpoena, presumably on the basis that the documents sought to be produced were apparently relevant.
Finally, we note the submission of the applicants that if his Honour was in doubt as to the relevance of the documents, he should have taken up the suggestion of the applicants to inspect the documents. However, the simple answer to this submission is that his Honour was not in doubt as to the apparent relevance of the documents, and thus there was no need to inspect them.
Accordingly, in relation to the objection to the subpoena to DD Pty Ltd, no error of principle has been demonstrated, and his Honour’s decision is not attended by any doubt, let alone sufficient doubt.
Substantial injustice
The applicants rely on the same submission they made in relation to the subpoena to OO Pty Ltd, and we find that that submission has no greater force here than it did in relation to that subpoena.
Application to adduce further evidence
As referred to above, on 11 July 2017 the applicants filed an application in an appeal seeking an order as follows:
2.That pursuant to Section 93A(2) with respect to both the question of leave to appeal, and the appeal if leave is granted, the Applicant be permitted to rely on the following Affidavits, which are annexed to the Affidavit of Mr PP filed contemporaneously herein:
2.1 The Affidavit of Mr GG sworn 10 July 2017; and
2.2 The Affidavit of Mr KN sworn 11 July 2017.
Immediately, three points arise.
First, we assume that the expression “permitted to rely on” should in fact be read as “permitted to adduce as further evidence”.
Secondly, the application does not seek to adduce as further evidence the contents of the affidavit of Mr PP, and that is confirmed in paragraph 2 of the written submissions filed by the applicants on 7August 2017 in support of this application. Apart from how paragraph 2 is expressed, there are also no submissions directed to the contents of Mr PP’s affidavit. Thus, we will put aside the contents of that affidavit, save and except insofar as it refers to the two affidavits annexed thereto, and which are the subject of the application. However, out of abundant caution, and in any event, we cannot see any basis for the contents of the affidavit of Mr PP to be adduced as further evidence. All that it does is set out the procedural timeline for the actions taken by Mr PP following service upon him of the two subpoenas. It is not apparent how that demonstrates “that the order under appeal is erroneous” (CDJ v VAJ (1998) 197 CLR 172 at [109]).
We do note though that in paragraphs 3.9 – 3.14, of Mr PP’s affidavit, reference is made to the perceived need to respond to the expert report of Mr NN, and how that was the primary basis for seeking an adjournment of the hearing of the application before the primary judge. However, neither of the two affidavits now sought to be adduced as fresh evidence address or respond to the contents of the report of Mr NN.
Thirdly, and most importantly, as highlighted by the wife in her written submissions, neither s 93A(2) of the Family Law Act 1975 (Cth) (“the Act”) nor r 22.39 of the Family Law Rules 2004 (Cth) (“the Rules”), provide for the adducing of further evidence in an application for leave to appeal; further evidence can only be adduced in an appeal. Thus, the application, and the repeating of the orders sought in the applicant’s written submission, is misconceived.
However, as is also correctly pointed out by the wife, that is not to say that in considering the application for leave to appeal, this Court cannot have regard to the application to adduce further evidence in the appeal, if leave is granted.
Fourthly, the affidavit of Mr KN is inadmissible, and thus cannot be received as further evidence. As also highlighted by the wife, it is beyond doubt that that affidavit purports to be an expert opinion, but no leave has been sought and obtained pursuant to r 15.51 of the Rules.
Turning then to the application limited to the affidavit of Mr GG, we are not persuaded that the contents thereof, putting aside the question of its admissibility being riddled as it is with evidence that is opinion, and clearly containing hearsay, demonstrates that the orders under appeal are erroneous.
The principles relating to the adducing of further evidence on appeal are well settled. For example, in the High Court decision of CDJ v VAJ, McHugh, Gummow and Callinan JJ said this:
109.One consideration in construing s 93A(2) is its remedial nature. Its principal purpose is to give to the Full Court a discretionary power to admit further evidence where that evidence, if accepted, would demonstrate that the order under appeal is erroneous. The power exists to facilitate the avoidance of errors which cannot be otherwise remedied by the application of the conventional appellate procedures. A further, but in practice subsidiary, purpose is to give the Full Court a discretion to admit further evidence to buttress the findings already made.
…
111.Still another consideration is that the discretion is given to an appellate court hearing an appeal against an order made in the exercise of original jurisdiction. … it is highly unlikely that Parliament in conferring jurisdiction on the Full Court to hear appeals intended that s 93A(2) should be construed in a way that would have the practical effect of obliterating the distinction between original and appellate jurisdiction. Nor can the availability of further evidence relevant to the issues in the appeal be treated as equivalent to a ground of appeal, proof of which prima facie entitles the appellant to a new trial. The power to admit the further evidence exists to serve the demands of justice. Ordinarily, where it is alleged that the admission of new evidence requires a new trial, justice will not be served unless the Full Court is satisfied that the further evidence would have produced a different result if it had been available at the trial. Without that condition being satisfied, it could seldom, if ever, be in the interests of justice to deprive the respondent of the benefit of the orders made by the trial judge and put that person to the expense, inconvenience and worry of a new trial.
…
114.No doubt the Full Court will readily admit further evidence which is not in dispute and which the Court is able to evaluate and take into account in considering the appeal without the necessity to have the proceedings re-heard. Further evidence of this kind is particularly likely to be admitted where the evidence relates to events occurring after trial. In the case of undisputed evidence which the Full Court can evaluate as part of the evidence in the appeal, the discretion to admit the evidence may even be properly exercised without the Full Court considering what effect it would have had on the trial judge's decision. In that context, the likely effect of the further evidence on the Full Court's view of the evidence before the trial judge is the important consideration. Where there is no need for a new trial or extensive taking of evidence, other discretionary factors such as the availability of the evidence at the trial and the need for finality of litigation are likely to be more relevant in the exercise of the discretion than the effect that the evidence would have had at the trial.
…
116.The failure to have adduced the evidence before the primary judge will be a variable factor, the weight of which will depend upon all the other factors pertinent to the case. Where the evidence has been deliberately withheld, the failure to call it will ordinarily weigh heavily in the exercise of the discretion. In other cases, the failure to call the evidence even if it could have been discovered by the exercise of reasonable diligence may be of little significance. No invariable rule concerning the failure to call the evidence can or should be laid down in view of the wide discretion conferred on the court by the section.
(Our emphasis, footnotes omitted)
Immediately it can be seen that there is a difficulty with the admission of the further evidence here. It is apparent that the further evidence is in dispute, and as has been said on many occasions by this Court, that renders it practically impossible to allow the admission of such evidence. The other party would have to have the opportunity to present responding evidence, and there would inevitably be a need for a hearing at which cross-examination would be required, a process which this court is not set up for.
In any event, we are satisfied that the application should fail. It misconceives both the subpoena process, and the requirements placed on the recipient of the subpoena.
The use sought to be made of the affidavit of Mr GG is to:
… establish without question that there is no basis whatsoever for the Wife to:
5.1Call into question the legitimacy of the “white knight” commercial rescue of the Husband’s group of companies by Q Malloy and the Malloy Group of Companies; and/or;
5.2 Impugn the applicants’ conduct in relation to the same.
(Applicant’s written submissions filed 7 August 2017, paragraph 5)
and as such determine conclusively that the documents subpoenaed do not “serve a legitimate forensic purpose”.
Apart from the fact that the further evidence is in dispute, as submitted by the wife:
… the expressed purpose is to establish, adversely to the wife, what the Applicants regard as the merits of the issues to which the subpoenas are directed; in short, to deny access by the wife to the subpoenaed documents, by seeking to prove facts – that is, by persuading the court to make findings of fact – in the absence of those documents, in order to foreclose the issue to which the subpoena is thought to be directed. …
(Wife’s written submissions filed 14 August 2017, paragraph 8)
As to the process, it is beyond doubt that the role of a court is not to determine any issue in the substantive proceedings to which the subpoena is directed. There is a three stage exercise inherent in the issuing of a subpoena, namely, the production of documents, the inspection and copying of the documents produced, and the admission of those documents into evidence in the substantive proceedings (Waind v Hill and National Employers’ Mutual General Association Ltd at 381). This matter is only at the first and second stages.
As to the requirements placed on the recipient of a subpoena, they are to obey the subpoena and bring to the court the documents mentioned in the subpoena unless they satisfy the court that some good reason exists why they should not be produced (The Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 573 – 574).
Here, the applicants not only failed to comply with the subpoenas, but made no application to set them aside. They merely objected to the production of the documents (and to the inspection and copying thereof), variously alleging abuse of process, that the subpoenas were oppressive, that they sought irrelevant documents, and they infringed client confidentiality.
It is noteworthy that the further evidence sought to be adduced only goes to the relevance of the documents sought. As already identified, in relation to that aspect of the matter, the task of the primary judge is to consider the “apparent relevance of the documents, not determine once and for all their relevance”. That is an issue certainly for the third stage of the process, but not the first and usually not the second stages (Waind v Hill and National Employers’ Mutual General Association Ltd at 385).
To repeat then, the further evidence fails to demonstrate error by the primary judge, and we propose to dismiss the application.
Conclusion
In the circumstances the application for leave to appeal must be dismissed.
Costs
We observe that no application for costs was made in the written submissions filed by either party. However, pursuant to the Rules either party, and we presume here, the wife, is able to make such an application within 28 days of the date hereof, if so advised.
I certify that the preceding seventy-nine (79) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Thackray, Strickland & Murphy JJ) delivered on 5 October 2017.
Associate:
Date: 5 October 2017
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