O and J (No.1)
[2003] FMCAfam 217
•17 June 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| O & J (No. 1) | [2003] FMCAfam 217 |
| PRACTICE AND PROCEDURE – CHILD SUPPORT – SUBPOENA –Application to set aside many subpoena issued – no subpoenaed party applied to set aside subpoena – whether party may apply to set aside subpoena – whether abuse of process – whether subpoena used for discovery. Federal Magistrates Court Rules 2001, r 15.15,15.16(2),15.18 Hatton v. Attorney General for the Commonwealth of Australia (2000) FLC 93-038 |
| Applicant: | R T O |
| Respondent: | A S J |
| File No: | (P) MLM 369 of 2003 |
| Delivered on: | 17 June 2003 |
| Delivered at: | Melbourne |
| Hearing date: | 16 May 2003 |
| Judgment of: | Phipps FM |
REPRESENTATION
| Counsel for the Applicant: | Ms Shiff |
| Solicitors for the Applicant: | Harwood Andrews Lawyers |
| Counsel for the Respondent: | Ms Wheeler |
| Solicitors for the Respondent: | Carew Counsel Pty Ltd, Solicitors |
ORDERS
That the oral Application made on behalf of the Respondent to set aside all subpoena issued at the request of the Applicant is dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
(P)MLM 369 of 2002
| R T O |
Applicant
And
| A S J |
Respondent
REASONS FOR JUDGMENT
This is a Child Support proceeding in which Counsel for the Respondent has made oral Application to strike out each of the subpoena issued at the request of the Applicant.
On the 22 January 2003 the Applicant filed an Enforcement Summons and an Application under the Child Support Assessment Act in respect of the child of the parties. The Enforcement Summons alleges that the Respondent had not paid the amount of $19,044.69 pursuant to an Order of the Magistrate’s Court of Victoria on 22 November 2000 which fixed the amount owed by the Respondent to the Applicant pursuant to a Child Support Agreement dated 3 December 1997 in that amount. A further $1,500 is sought for costs.
By the other Application, the Applicant seeks to have a Child Support Agreement dated 3 December 1997 discharged and in substitution for it an Order for payment of a lump sum of $246,244.
On 12 February 2003, seven (7) subpoena were issued on the Application of the Applicant.
On 4 March 2003 on the Applicant’s Application, an Order was made:
That there be leave to the Applicant to issue any number of further subpoena in this matter and such subpoena are returnable on the 25th of March 2003 at 9.45am.
The Affidavit in Support of the Application was sworn by the Applicant’s solicitor. The solicitor deposed to having undertaken corporate affairs and titles office researchers in relation to the Respondent’s affairs and had reviewed newspaper articles describing the Respondent’s media and professional and board activities. The solicitor asserted that from these researchers it was apparent that the Respondent had a complicated financial situation. On the basis of this affidavit the Order for issuing further subpoena was made.
The Order was necessary because the Federal Magistrates Court Rules 2001 limit the number of subpoena that may be obtained without leave. Rule 15.15 provides:
(1)Unless the court directs otherwise, a party must not request the issue of more than 5 subpoena in the proceeding.
On 4 March 2003, in addition to leave to issue further subpoena, leave was given to examine documents produced to the court under subpoena up to that time. Both solicitors participated in the inspection. On
25 March 2003, with both the solicitors appearing, leave was granted to the parties to inspect documents produced under subpoena as follows:
Leave to the parties to inspect all subpoenaed documents produced in the registry between this day and 13 May 2003.
Both solicitors participated in inspection on the day. In an affidavit sworn 15 May 2003 and filed on 20 May 2003, the Applicant’s solicitor deposes to the result of those inspections and to forming the opinion that to properly investigate the Respondent’s financial affairs it was necessary to obtain further subpoena.
At that point, the Applicant’s solicitor wished to obtain a further 23 subpoena. An Application and affidavit to apply for leave to request further subpoena was prepared by the Applicant’s solicitors and their Agent attended the Court Registry on 4 March 2003 with the proposed Application and affidavit and the subpoena. It was intended to file the further Application if the registry took the view that the Orders on
4 March 2003 did not permit the further subpoena to be requested. The registry did not take this view and issued further subpoena.
The Applicant’s solicitor sent a letter dated 10 April 2003 to the Respondent’s solicitors enclosing an unsealed copy of the Application and supporting affidavit which it was proposed to file if the registry took the view that leave for further subpoena was necessary.
Rule 15.16 ( 2) provides:
The party for whom the subpoena was issued must give a copy of the subpoena to each other party and the child representative in the proceeding within a reasonable time before attendance or production under the subpoena is required.
Insofar as the additional 23 subpoena were concerned, this rule was not complied with. The Applicant’s solicitor deposes to having overlooked the need to do this. The Respondent’s solicitors sent a letter to the Applicant’s solicitors enquiring as to the return date of the Application referred to in that letter of 10 April 2003. The Applicant’s solicitor replied advising that the court had permitted the issue of the further subpoena.
Because of the earlier Order concerning inspection, the Applicant and her Solicitors were by that stage inspecting documents including those sent in response to the additional subpoena.
On 25 March 2003, the Applications had been adjourned until 13 May 2003. On that date, an Application was made on behalf of the Respondent to strike out all subpoena obtained by the Applicant on the basis that they were an abuse of process.
By that stage, according to the Respondent’s submission, 51 subpoena had been issued. The Applicant’s solicitor’s affidavit says 44. For the purposes of the argument the difference is immaterial.
The first issue is whether the Respondent can apply to set aside the subpoena or whether only a subpoenaed person can apply.
Rule 15.18 provides
On Application, the court may make an order setting aside all or part of a subpoena.
In Hatton v. Attorney General for the Commonwealth of Australia (2000) FLC 93-038, the Full Court of the Family Court refused an Application for leave to appeal against a decision setting aside subpoena issued at the request of the solicitors acting for the husband. Only the husband and the subpoenaed parties were represented before the court. At first instance, the Applications had come on before Rose J. at the same time as a directions hearing. When the Applications to set aside the subpoena were heard counsel for the wife was excused. In Epstein v Epstein (1993) FLC 93-384, Treyvaud J. set-aside 20 subpoena issued at the request of the wife. The wife appeared in person; the husband and the subpoenaed parties were represented by counsel. In neither case is there any reference to who is entitled to apply to set aside a subpoena.
In Fried v National Australia Bank Ltd (2000) 175 ALR 194, the question whether a party to a proceeding can apply to set aside subpoena was considered in detail by Weinberg J. The relevant Federal Court rule was order 27 rule 9, which provides:
(1)The court may, of its own motion or on the motion of any person having a sufficient interest, set-aside a subpoena wholly or in part.
(2)Notice of motion under sub rule (1) must be filed and served on the party on whose request the subpoena was issued.
Weinberg J. considered the various cases where different views had been expressed. At paragraph 18 he said:
“Whether or not the Applicants have standing pursuant to 0 27 9 to challenge the subpoena, it is at least clear that the court has power of its own motion under that rule to set aside the subpoena if satisfied that its issue involves an abuse of process. The court will not countenance such an abuse, Kizon v Palmer (No. 2) (1998) 82 FCR 310. If a subpoena is issued which ought to be set-aside, it matters little, at the end of the day, whether it is set-aside at the instigation of the party to the proceeding, or because the court itself has come to the conclusion that this should occur.”
Rule 15.18 of the Federal Magistrate's Court Rules does not contain the power for the court to act of its own motion to set-aside a subpoena. In Friend v National Australia Bank, Weinberg J. referred to Trade Practices Commission v Kimberley Homes Pty. Ltd (Fed C of A,
19 July 1989, unreported). Hill J. dealt with an Application on the part of the Respondents to set-aside a subpoena issued by the Applicant addressed to the Building Services Corporation. 0 27 rule 9 then read:
(1)The court may, on motion by the person named in the subpoena, set-aside the subpoena wholly or in part.
(2)Notice of the motion under sub rule (1) must be filed and must be served on the party at whose request the subpoena was issued.
Hill J. took the view that a party could apply to set-aside a subpoena which was alleged to be an abuse of process. He noted that there could be no dispute that the Federal Court, as a superior court of record, had inherent jurisdiction to prevent its process being abused. He said at page 8:
“In my view, once it is accepted that the court has inherent jurisdiction to prevent an abuse of its process it must follow that a party to proceedings before the court is entitled to move the court in respect of some action that has been taken by another party where it is alleged that that action constitutes an abuse of the process of the court. In my view, a party to proceedings in this court has standing to move to set-aside a subpoena where it is alleged that the subpoena, in some way, constitutes an abuse of the court process and it is accordingly appropriate that the court be moved by way of the motion, notice of which is to be given to those affected by it.”
In Fried v National Australia Bank, Weinberg J. said, after the passage quoted above, at paragraph 19:
“It is unnecessary, therefore, for me to express a firm conclusion as to the interpretation to be accorded to the expression ‘sufficient interest’ in 0 27 r 9. I should say, however, that I find the reasoning of Hill J. in Trade Practices Commission v Kimberley Homes Pty Ltd to be particularly persuasive. If pressed, I would follow his Honour’s views, and the views of Power J. in Botany Bay Instrumentation and Control Pty Ltd in preference to the views of Hunt J. in Wran by Beach J. in Re ACI International.”
The cases His Honour refers to are Re ACI International (1986) ACLR 240 and Wran v Australian Broadcasting Commission [1984] 3 NSWLR 241 in which it was held that a subpoena can only be set-aside upon the Application of the person to whom it is addressed and Botany Bay Instrumentation and Control Pty Ltd v Stewart [1984] 3 NSLRW 98 in which it was held that an Application to set-aside a subpoena which is an abuse of the process of the court may be made not only by the person to whom the subpoena is addressed, but also by a party to the litigation and by any other person who might be shown to have a legitimate interest in having the subpoena set-aside.
I consider that I should follow the two Federal Court decisions. Strictly speaking, neither might be binding on me as precedents, but they are decisions of superior court judges in the hierarchy above this court. For that reason they should be followed. Hill J refers to the inherent power of a superior court of record to prevent an abuse of its process. The Federal Magistrates Court is a court of record, but not a superior court. So far as the power to set aside a subpoena is concerned, I see no reason why the different nature of the Federal Magistrates Court should make a difference.
The basis of the Application is abuse of process in that it is submitted that the Applicant is attempting to use subpoena instead of discovery. The abuse submission is that the subpoena are for the purpose of obtaining documents containing financial information about the Respondent. It is contended that the same financial documents will be in the possession of the Respondent and so discovery should have been used.
There are three steps in the procedure of having a third party bring documents into court pursuant to a subpoena for production and the use of the documents after that. The first is the witness responding to the subpoena and bringing or delivering the documents to court. The second is the decision of a judge concerning the preliminary use of the documents, including whether or not permission should be given to a party or parties to inspect documents. The third step is the admission into evidence of the document in whole or in part. Hatton v Attorney General of the Commonwealth of Australia [2000] FamCA 892, Waind v Hill [1978] 1 NSWLR 372.
An issue between the parties is the Respondent’s income and financial resources. The Applicant alleges that both are substantial. The Respondent says they are not. He has entered into a Part X arrangement under the Bankruptcy Act, and he says that companies with which he is associated or in which he has an interest are insolvent.
The subpoena are addressed to banks and financial institutions which it is alleged have lent money to the Respondent or to companies with which he is associated in business ventures: to solicitors and accountants which it is alleged have acted for the Respondent or companies with which he is associated or in which he has an interest: to companies and organisations which it is alleged have employed the Respondent or with which he is alleged to have had contracts: to golf clubs to which it is alleged the husband and his wife belong.
Some issue was taken about the relevance of some of the subpoena. Given the necessarily limited understanding of the facts that a court hearing a setting aside Application must have, I do not consider that it is apparent that any of the subpoena is irrelevant. The Respondent’s income and financial resources are relevant. The Applicant alleges that he has substantial financial resources. She alleges that his lifestyle is such that he has income and financial resources that far exceed that which he says he has. In those circumstances, the documents from sources such as golf clubs to which the Respondent and his Wife belongs may be relevant. Documents from banks and financial resources with which he has had dealings with are relevant. Documents from people or organisations with which he has had contracts, including contracts for personal services, are relevant.
Next it is argued that the Applicant is using the subpoena for discovery and that is not a legitimate purpose. There are two aspects to this. First, it is said that normal discovery processes could be used, and I take that to apply to discovery by the Respondent and third party discovery. Some of the cases say that when subpoena are used where pre-trial discovery, or third party discovery would be more appropriate, there is abusive process.
Treyvaud J. in Epstein said that he considered use of subpoena to obtain inspection of third parties documents prior to the trial a legitimate practice. I accept that as a correct statement of the practice.
I accept that an affidavit of discovery by the Respondent might have revealed many of the same documents is not an indication that there has been abuse of process. There may be documents in the possession of the parties subpoenaed not in the possession of the Respondent which are relevant to issues in the Application. As well, the Respondent says he has nothing or little in assets. The Applicant alleges that he has access to financial resources not in his name. Various of the subpoena require production of company documents which the Applicant alleges are associated with or are controlled by the Respondent.
As to the second aspect, whether any individual subpoena is an abuse of process, the Full Court of the Family Court in Hatton quoted with approval the judgment of Moffitt P. (with whom Hutley and Glass J.J.A. agreed) in National Employers’ Mutual General Association v Waind and Hill [1978] 1 NSWLR 372 at 381-382:
“Upon the first step the person to whom the subpoena is addressed may seek to, and have, the subpoena set aside on the ground that it was improperly issued and an abuse of the power to compel the production of documents in any one of a number of ways. Such a case is where the subpoena is used for the purpose of discovery. The essential feature of discovery in this connection, as appears from Burchard’s case(...) and Smalls case(...) is that the person to whom the subpoena is addressed will have to make a judgment as to which of his documents relate to issues between the parties. It is oppressive to place upon a stranger the obligation to form judgments as to what is relevant to the issue joined in the proceeding, to which he is not a party. Hence it is an abuse of the use of subpoena to impose this obligation. It follows that it is an abuse to use any subpoena, i.e. even to a party to obtain discovery. This was the reasoning in Smalls case(...) Of course, discovery as such is otherwise available to a party. It follows that the subpoena can only properly be used for the production of documents described in particular or general terms which does not involve the making of such a judgment. It does not follow, however, that because the party who wishes to issue a subpoena is unaware of the precise description of a particular document, or whether a particular document or documents is in the possession of the witness, or even whether it exists, or is unaware of its contents, that the subpoena, or even a subpoena in general terms, amounts to the use of the subpoena for the purpose of ‘discovery’. To state it does involve a misconception of the different functions of discovery and of a subpoena for production. Of course, it may be that the terms of a subpoena are so wide that it is oppressive, but this is not because it is used for ‘discovery’ in the sense used in Smalls case(...) and Burchard’s case(...), but because it imposes an onerous task on a stranger to collect and produce documents many of which can have no relevance to the litigation. To require the branch of a bank to produce all cheques received by it in a particular year in order to find, if it exists, the cheque of the opponent in a false name would be oppressive, whereas, to require a hospital to produce its file in respect of the medical treatment of the opposing party would not. It is a misuse of terms to say the person who inspects the latter is using it for the purposes of discovery, because he is unaware of the contents of the documents or some of them. It is not in point to seek to define excessive use of the subpoena. The documents in this case are not such, and the witness itself does not so claim.
The issue of a subpoena may involve an abuse of the power in other ways and, as stated in Smalls 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 subpoenaed.”
Many of the subpoena require production of substantial numbers of documents. I do not consider that any of them are worded in such a way that they impose on the person subpoenaed the requirements of discovery. Typical is a subpoena to an accountant. It requires production of “all documentation relating to or relevant to” and then names the Respondent, his wife and a company. While the words “relating to or relevant” are used, it does not require the accountant to make a judgment about what documents are to be produced. Anything in the accountant's possession relevant to the two people and the company named are the documents to which the subpoena refers.
Another example is a subpoena to a bank. It requires production of “all financial records of accounts including loan and credit card accounts and/or financial arrangements or arrangements with” the Respondent his wife and a company “during the period from 1 July 2000 to
31 January 2003”. Many documents may be involved, but the bank officer or bank officers with the task of responding to the subpoena do not have to make decisions about what documents to produce. They are described with sufficient particularity.
So far as the possibility of any subpoena being an abuse of process because it imposes too onerous a task, none of those subpoenaed have made that claim and there is no affidavit material before the court which suggests that. A firm of solicitors who appeared for the purpose of making a claim of privilege have sought costs because of the amount of work involved in retrieving the documents from archives. That is a separate issue which is yet to be dealt with. Those solicitors do not seek to have the subpoena set aside because it imposes too onerous a task to retrieve and assemble the documents.
A complaint was made on behalf of the Respondent that the Applicant and her husband had been seen inspecting and photocopying documents. There may be an issue whether photocopying of some of the documents was authorised by order of the court and there may be an issue whether inspection of some of the documents had been authorised. They are different issues. The submission seems to be that the documents were being inspected for a collateral purpose. That is separate from the issue of whether the subpoena should be set aside.
The submission which was made was based around the large number of subpoena, and the fact that the same information could have been obtained by discovery. As I said at the outset, there is a difference between Applicant and Respondent about the number of subpoena which have been issued. I believe I have examined most if not all of the subpoena. It may be that for some reason some are not contained in the file which I have. None of those I have examined, I consider, is itself an abuse of process. Each seeks documents relating to the Respondent, his wife and a named company. It is unlikely that any subpoena which I might not have seen is in a form substantially different from those I have seen. Given that leave was obtained to issue an unlimited number of subpoena, and given that none of the individual persons or organisations subpoenaed has objected, I see no basis for setting aside all of the subpoena or any individual one.
The failure of the respondent to give a copy of each subpoena to the respondent as required by Rule 15.16(2) was a breach of that rule, but it does not affect the question of whether the subpoena should have been requested and issued.
The oral Application made on behalf of the Respondent to set aside all of the subpoena is dismissed.
I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of Phipps FM
Associate:
Date: 17 June 2003
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