Morris & Morris (No 2)
[2023] FedCFamC1F 835
•26 September 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Morris & Morris (No 2) [2023] FedCFamC1F 835
File number: SYC 4955 of 2021 Judgment of: CAMPTON J Date of judgment: 26 September 2023 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Where the wife has made an Application for orders for the husband to provide information contended to be relevant to an issue in the proceeding – Where the husband contends the information is irrelevant and the request is in reality an improper interrogatory – Where the wife seeks leave to issue subpoena in New Zealand – Where it is ordered that the husband is to supply the relevant information – Where the wife is granted leave to issue subpoena in New Zealand Legislation: Evidence Act 1995 (NSW) s 55
Family Law Act 1975 (Cth) ss 79, 106B
Trans-Tasman Proceedings Act 2010 (Cth) s 31
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 1.14, 2.48, 6.16
Division: Division 1 First Instance Number of paragraphs: 21 Date of hearing: 26 September 2023 Place: Sydney Counsel for the Applicant: Mr Roberts Solicitor for the Applicant: Barkus Dooling Winning Counsel for the Respondents: Mr Smallbone Solicitor for the Respondents: Prime Lawyers MW ORDERS
SYC 4955 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS MORRIS
Applicant
AND: MR MORRIS
First Respondent
D2 LIMITED
Second Respondent
F LIMITED ATF THE D TRUST (and another named in the Schedule)
Third Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
26 SEPTEMBER 2023
THE COURT ORDERS THAT:
1.Absent objection, the husband have liberty to adduce and rely on affidavits of himself and Mr W in the form as served on the solicitors for the wife on 25 September 2023 for the purposes of the trial listed to commence 30 October 2023 and such affidavits to be filed and served on or before 29 September 2023.
2.Not later than 10am on the first day of the trial, being 30 October 2023 counsel for the parties are to confer and are to prepare a trial plan. In this regard it is the husband’s contention that it may be necessary to allocate a further 3 days to the trial.
3.On or before 3 October 2023, the husband provide to the wife’s solicitors the name and contact details of any accountant, accounting firm, lawyer, law firm or barrister in Australia, or New Zealand or elsewhere who provided advice as to the transfer of 48 million shares held by the husband personally in B Limited in late 2021 to D2 Limited, the second respondent in the proceedings up to the date of the said transfer.
4.The pursuant to rr 1.14 and 2.48 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) and s 31(1) of the Trans-Tasman Proceedings Act 2010, the wife is granted leave to issue and serve in New Zealand subpoena for the production of documents as to:
(a)The provision of advice in respect of the transfer identified in Order 3; and
(b)To such persons or entities as disclosed by the husband pursuant to the said order.
5.Pursuant to s 31(4)(a) of the Trans-Tasman Proceedings Act 2010, the subpoena must not be served in New Zealand after ten days after the date upon which the information is provided in compliance with the above order.
6.In the event an objection is filed by the husband or the second through to fourth respondents in respect of the inspection of any documents produced pursuant to the said subpoena, the solicitor for the husband and/or the second through to fourth respondents are to, as soon as reasonably practicable, notify my chambers of the filing of such objection by way of email copied to the wife, in the anticipation of the said objection being expeditiously listed on 48 hours’ notice before a judge other than myself to determine the said objection.
7.These orders and reasons for judgment are not to be published except as follows:
(a)To any lawyer or any other person for the dominant purpose of a party being provided with professional legal services relating to these proceedings.
(b)Consistent with the requirements of s 121 of the Family Law Act 1975 (Cth) any other person to whom both parties consent in writing.
8.No person, other than the parties and their solicitors shall be permitted to search the court file in this matter without first obtaining leave of the Court.
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 Morris & Morris has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
CAMPTON J:
These are proceedings in the Major Complex Financial Proceedings list scheduled for final trial before me over seven days commencing 30 October 2023.
The parties to the proceedings are Ms Morris (“the wife”), Mr Morris (“the husband”), D2 Limited (“the second respondent”), F Limited, as trustee to the D Trust, (“the third respondent”) and E Limited, as trustee for the D Trust (“the fourth respondent”).
In late 2021 the husband transferred 48 million shares held by him personally in an ASX-listed corporation, B Limited, to D2 Limited. That transaction reduced the husband’s personally held shareholding in B Limited from 55 million shares (being approximately 33.5 per cent of the issued shares in that corporation) to 7 million shares (being approximately 5.78 per cent of the issued shares in the corporation). D2 Limited therefore holds approximately 27.6 per cent of B Limited subsequent to that transaction.
During the course of a hearing before me on 6 December 2022, the husband conceded that it is agreed for the purposes of litigation pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) that:
(a) The shareholders of [D2 Limited] are the proposed third and fourth respondents, [F Limited] and [E Limited];
(b)The husband is the only eligible beneficiary of the [D Trust] (for which [F Limited] and [E Limited] are the trustees); and
(c)[F Limited] and [E Limited] are the alter egos of the husband, and the husband controls [F Limited] and the husband’s accountant controls [E Limited].
The wife, by way of Exhibit 2, filed on 19 September 2023, seeks orders as to:
(a)The husband providing information in relation to the late 2021 share transfer as contained in a letter from her solicitors to the husband’s solicitors dated 14 September 2023;
(b)To issue subpoena, pursuant to the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) and the Trans-Tasman Proceedings Act 2010 (Cth) (“Trans-Tasman Proceedings Act”) to serve in New Zealand; and
(c)To otherwise provide for a process for the determination of any notice of objection filed, should the said subpoena issue be served and documents produced.
The husband opposes the relief sought by the wife.
Each party has helpfully provided for the purposes of the hearing today outline documents as prepared by their respective counsel.
It is the wife’s contention that a document now disclosed by the husband in the proceedings, known as a bloc deed, is part of a transaction touching upon the transfer of the B Limited shares. It is her case that the husband has represented in the proceedings that the transfer of the B Limited shares was for “accounting and estate-planning purposes.” Part of the wife’s substantive relief in the alternative, as an adjunct to the s 79 claim, is to set aside the late 2021 transfer of the B Limited shares pursuant to s 106B of the Act.
It appears uncontroversial the wife has requested the husband provide disclosure as to the identity of any accountant, law firm, lawyer or barrister who have advised him or the other respondents, or any of them, in respect of the said transfer of the B Limited Shares in late 2021, and that the husband has refused to provide the identity of those persons and/or firms, contending that the information sought is both irrelevant and privileged.
It is the husband’s case that the relief sought by the wife by way of Exhibit 2, while couched as a request for discovery, is in reality a request to administer an interrogatory or put a specific question. He observes that the wife identifies in her submissions the concession made by the husband, as to the second through to fourth respondents in the proceedings being his alter egos, and contends that the wife, in reality, is attempting to circumvent a long-held contest as to privilege contended to be attached to the documents sought to be produced on subpoena. It is his case that the request made by the wife, as contained in Exhibit 2, is late, and that his claim for legal professional privilege in respect of the documents sought to be produced on subpoena has been maintained since February 2023. He submits that the request for the issue of subpoena, and the claims as to waiver of legal professional privilege, are a distraction and are likely to disrupt the orderly preparation of the matter for trial. He raises practical concerns as to these issues being the subject of a determination within the remaining five-week period before the trial is scheduled to commence.
The wife identifies as relevant the husband’s state of mind as to the reason he transferred the B Limited shares in late 2021.
It is uncontroversial that a party to proceedings for property adjustment is required to make a full and frank disclosure of all relevant matters to their financial position. This is reinforced by way of chapter 6 of the Rules. It is unequivocal that the duty of disclosure is absolute, and that it continues throughout the litigation process. It is also significant that the obligation, in respect of disclosure, is of “information relevant to the dispute,” and not simply one that attaches to the production of documents. Disclosure extends to all relevant and material facts.
Section 55 of the Evidence Act 1995 (NSW) identifies relevant evidence as being evidence that is relevant in a proceeding, such that if it were accepted, it could rationally affect, directly or indirectly, the assessment of the probability of an existence of a fact in issue in the proceedings. Reference to the effect that the evidence “could” have on proof of a fact is a reference to the capability of that evidence to do so. The reference to its rational effect does not invite consideration, to my mind at this point, as to its veracity or weight to which it might be accorded when findings of fact are to be made. Hence, evidence that only has slight probative value cannot be said to be irrelevant. For it to be irrelevant, it must lack any probative value.
At this point in the proceedings, the husband in reality seeks a summary determination in relation to this potential evidence going to an issue in the proceeding. It is important to consider, at this time in the proceeding, that the probative value of a particular piece of evidence ought not be considered in isolation from the rest of the evidence, including proposed evidence. It is, of course, readily available that one piece of evidence might affect the probative value of another, and a number of pieces of evidence, when considered together, may have probative value greater than if each is considered individually. Hence, relevance is an issue that is subject to context. At this point, the evidence is not yet complete, nor has it been tested.
To my mind, at this point in the proceeding it is not appropriate to make a summary determination as to what is contended by the wife, and appears to be, a relevant line of inquiry for the purposes of the trial. In those circumstances, I am satisfied, at this point, as to the relevance of the subject matter of the documents sought to be produced not only by way of subpoena, but by way of provision by way of disclosure of the identity of the persons providing the relevant advice. As I understand the husband’s case, he does not claim any privilege in relation to the identity of the accountant, law firm, lawyer, or barrister who provided advice to him and the other respondents in respect of the late 2021 transaction, but objects as to the disclosure of the contents of any advice as provided.
I am satisfied that it is appropriate for the husband to disclose the information at this time as to the persons or firms that provided advice for the purposes of the late 2021 share transfer.
The husband has properly conceded, in the course of the hearing today, that any document he has in his possession containing that advice has not been identified to the wife by way of the author, the date, or the category of the document. Implicitly, he has such documents in his possession. He firmly claims legal professional privilege in relation to the production of the said documents.
The husband quite properly identifies clearly that an objection to the production of documents would be properly considered pursuant to r 6.16 of the Rules.
It is always available to the husband to disclose to the wife information as to the author of the document in which he claims privilege, the date of the document and the category of the document without disclosing the contents of it, so as to maintain properly claimed privilege. In the circumstances, I have not been advised in the course of this hearing that he will do so. Cast against that circumstance, I am satisfied at this time that the wife ought to receive the benefit of leave to issue subpoena to the persons or firms disclosed by the husband by way of an order to be made to that effect.
Subsequent to the receipt by the wife of the disclosure of the identity of the persons or entities providing the advice referred to in these reasons, and the issue by the wife of subpoena for the production of documents pursuant to the Rules and the Trans-Tasman Proceedings Act, the husband and/or the second through to fourth respondents will have an opportunity to file an objection to the inspection of the documents produced on subpoena, including by way of a claim for legal professional privilege.
I am mindful of the powerful submissions made on behalf of the husband as to, first of all, the necessity to ensure that such objection, if filed, is determined expeditiously prior to the trial and then further as to the benefits of such objection being determined by a judge other than myself - that is, not by the trial judge - should it be necessary for the judge determining any objection grounded from legal professional privilege to consider the contents of the documents.
I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 4 October 2023
SCHEDULE OF PARTIES
SYC 4955 of 2021 Respondents
Fourth Respondent:
E LIMITED ATF THE D TRUST
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