FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1) APPELLATE JURISDICTION
Morris & Morris [2023] FedCFamC1A 193
Appeal from: Morris & Morris (No 3) [2023] FedCFamC1F 927 Appeal number(s): NAA 295 of 2023 File number(s): SYC 4955 of 2021 Judgment of: ALDRIDGE, CAREW & CURRAN JJ Date of judgment: 10 November 2023 Catchwords: FAMILY LAW – LEAVE TO APPEAL – Where the order to which the appeal relates is interlocutory – Where the primary judge found that legal professional privilege had been waived in relation to documents produced pursuant to subpoena – Where the Full Court is not persuaded that the decision of the primary judge is attended by sufficient doubt to warrant it being reconsidered – Leave to appeal refused – Costs ordered in favour of the respondent in the fixed sum of $19,800. Legislation: Family Law Act 1975 (Cth) ss 79, 106B
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 28(3)(e)(i)
Trans-Tasman Proceedings Act 2010 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 6.01
Cases cited: Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303; [2013] HCA 46
Mann v Carnell (1999) 201 CLR 1; [1999] HCA 66
Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34
Porter v Byrne (2009) 40 Fam LR 644; [2009] FamCAFC 8
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
The Queensland Local Government Superannuation Board v Allen [2016] QCA 325
Number of paragraphs: 50 Date of hearing: 3 November 2023 Place: Sydney Counsel for the Appellant: Mr Smallbone Solicitor for the Appellant: Prime Lawyers Counsel for the Respondent: Mr Richardson SC with Mr Hollo Solicitor for the Respondent: Barkus Doolan Winning ORDER
NAA 295 of 2023
SYC 4955 of 2021FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR MORRIS
Appellant
AND: MS MORRIS
Respondent
ORDER MADE BY:
ALDRIDGE, CAREW & CURRAN JJ
DATE OF ORDER:
3 NOVEMBER 2023
ON 3 NOVEMBER 2023 THE COURT ORDERED THAT:
1.Leave to appeal is refused.
2.The appeal is dismissed.
3.The appellant will pay the costs of the respondent fixed in the sum of $19,800 within 28 days of today.
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).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Morris & Morris has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALDRIDGE, CAREW & CURRAN JJ
On 30 October 2023, a judge of the Federal Circuit and Family Court of Australia…
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CaseChat Overview and Summary
In the matter of Morris & Morris, the Full Court of the Family Court of Australia was asked to decide whether the husband had leave to appeal an interlocutory order from the primary judge. The appeal related to the primary judge's finding that legal professional privilege had been waived in relation to documents produced pursuant to subpoena. The husband argued that the primary judge had erred in finding that he had waived privilege and that, as a result, certain invoices were relevant to a fact in issue. The court was required to determine whether the primary judge's decision was attended by sufficient doubt to warrant reconsideration.
The Full Court held that it was not persuaded that the decision of the primary judge was attended by sufficient doubt to warrant it being reconsidered. The court found that the primary judge had correctly identified the applicable legal principles and had applied them to the facts of the case. The Full Court held that the husband's conduct was inconsistent with the maintenance of confidentiality, and that this inconsistency effectuated a waiver of privilege. The court held that the husband's affidavit, in which he stated that he had transferred shares to an associated entity for accounting and estate planning purposes, was inconsistent with the maintenance of confidentiality and effectuated a waiver of privilege. The Full Court held that the primary judge's decision was not attended by sufficient doubt to warrant reconsideration, and that the husband's application for leave to appeal should be refused.
The Full Court ordered that the husband pay the respondent's costs of the appeal in the fixed sum of $19,800. The court held that the respondent was entitled to costs as the appeal had no reasonable prospect of success and had been brought without merit. The Full Court held that the husband's appeal was frivolous and vexatious, and that costs should be awarded in the fixed sum of $19,800. The Full Court held that the respondent was entitled to costs of the appeal in the fixed sum of $19,800.
The Full Court held that it was not persuaded that the decision of the primary judge was attended by sufficient doubt to warrant it being reconsidered. The court found that the primary judge had correctly identified the applicable legal principles and had applied them to the facts of the case. The Full Court held that the husband's conduct was inconsistent with the maintenance of confidentiality, and that this inconsistency effectuated a waiver of privilege. The court held that the husband's affidavit, in which he stated that he had transferred shares to an associated entity for accounting and estate planning purposes, was inconsistent with the maintenance of confidentiality and effectuated a waiver of privilege. The Full Court held that the primary judge's decision was not attended by sufficient doubt to warrant reconsideration, and that the husband's application for leave to appeal should be refused.
The Full Court ordered that the husband pay the respondent's costs of the appeal in the fixed sum of $19,800. The court held that the respondent was entitled to costs as the appeal had no reasonable prospect of success and had been brought without merit. The Full Court held that the husband's appeal was frivolous and vexatious, and that costs should be awarded in the fixed sum of $19,800. The Full Court held that the respondent was entitled to costs of the appeal in the fixed sum of $19,800.
Orders
Orders of the court
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Background
Background to the litigation
It will be helpful to firstly set out some background. BACKGROUND The substantive proceedings are between the applicant (“the husband”) and the respondent (“the wife”) and others and concern a property settlement application pursuant to s 79 of the Family Law Act 1975 (Cth). The husband is 70 years of age, and the wife is 66 years of age. The husband and wife commenced cohabitation in 1997 and married in 1999. They separated in March 2021. There are no children of the relationship, but the wife has three adult children from a prior marriage. The wife suffered a stroke in mid 2021. The wife commenced the proceedings in July 2021. It is uncontroversial that in late 2021, the husband transferred a large number of shares held by him personally in a publicly listed company, B Limited, to D2 Limited, a company incorporated in New Zealand some two weeks earlier (“the share transfer”). The shares were transferred for no consideration in an off-market trade. The shares had a significant value at the time of transfer. B Limited is a well-established Australian owned and operated, Australian Securities Exchange (“ASX”) listed company. The husband is the chairman and Chief Executive Officer of B Limited. D2 Limited is the second respondent in the substantive proceedings and admitted by the husband to be his alter ego. The directors of D2 Limited are the husband and Mr X, the husband’s accountant. The shareholders of D2 Limited are F Limited and E Limited with each holding 100 of the 200 issued shares. F Limited and E Limited hold their shares on trust for the D Trust. F Limited and E Limited are the joint trustees of the D Trust. F Limited was incorporated in New Zealand in 1999 and the sole director and sole shareholder is Mr X. The husband denies that he controls and directs Mr X and denies that F Limited is his alter ego. F Limited as trustee for the D Trust is the third respondent. E Limited was incorporated in New Zealand in 1999 and the sole director and sole shareholder is the husband. E Limited is the husband’s alter ego. E Limited as trustee for the D Trust is the fourth respondent. The D Trust was established in 1999 and is a discretionary trust. The husband is the only living discretionary beneficiary. The husband is the appointor of the trust. The current trustees of the trust have the power to apply and pay all or any of the net income of the trust, and to pay, apply or transfer the whole or any part of the capital of the trust for the benefit of the husband. In late 2021, the husband represented to the ASX and the public that the share transfer was an internal transfer by him to an associated entity for commercial, estate and charitable purposes. In an affidavit filed in this Court on 29 January 2022 (“the affidavit”) the husband stated:17.I presently control […] [B Limited] shares with a book value of […] at today’s list price […]. [In late] 2021 I transferred [a large number of] shares held in my personal name to a company I control ‘[D2] Limited’, which is a company incorporated in New Zealand. My solicitors notified my wife’s solicitors of the transfer of shares. The transfer was made for accounting and estate planning purposes.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
If granted leave, the husband’s proposed grounds of appeal are as follows:(1)The learned primary judge erred in finding that the appellant by paragraph 17 of his affidavit affirmed 29 January 2022 waived privilege in the otherwise privileged documents. (2)Consequentially on that finding, the learned primary judge erred in finding that certain invoices were relevant to a fact in issue. THE DECISION OF THE PRIMARY JUDGE The primary judge delivered ex tempore reasons shortly after the hearing. In such circumstances, it can be appropriate to make certain assumptions in favour of the judgment e.g., that evidence not specifically referred to or analysed is unlikely to have been overlooked given the freshness of the reasons.[6] [6] Porter v Byrne (2009) 40 Fam LR 644 at 653 per Warnick J quoting a paper entitled “Practical Impediments to the Fulfilment of Judicial Duties” published in The Judicial Review Vol 6 number 4, Heydon J. The primary judge identified, correctly with respect, the applicable legal principles by reference to the authorities, including the two leading High Court authorities of Mann v Carnell,[7] and Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd[8] (“Expense Reduction”). [7] (1999) 201 CLR 1. [8] (2013) 250 CLR 303. The High Court described the applicable principles in Mann v Carnell as follows: 28.... It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege. …29.Waiver may be express or implied. … What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large. In Expense Reduction, the High Court described the applicable principles as follows:30.According to its strict legal connotation, waiver is an intentional act done with knowledge whereby a person abandons a right (or privilege) by acting in a manner inconsistent with that right (or privilege). It may be express or implied. In most cases concerning waiver, the area of dispute is whether it is to be implied. In some cases waiver will be imputed by the law with the consequence that a privilege is lost, even though that consequence was not intended by the party losing the privilege. The courts will impute an intention where the actions of a party are plainly inconsistent with the maintenance of the confidentiality which the privilege is intended to protect.31.In Craine v Colonial Mutual Fire Insurance Co Ltd, it was explained that “‘[w]aiver’ is a doctrine of some arbitrariness introduced by the law to prevent a man in certain circumstances from taking up two inconsistent positions … It is a conclusion of law when the necessary facts are established. It looks, however, chiefly to the conduct and position of the person who is said to have waived, in order to see whether he has ‘approbated’ so as to prevent him from ‘reprobating’”. In Mann v Carnell, it was said that it is considerations of fairness which inform the court’s view about an inconsistency which may be seen between the conduct of a party and the maintenance of confidentiality, though “not some overriding principle of fairness operating at large”.
Ratio Decidendi
Legal Principle Established
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