O'Hara & O'Hara & Ors
[2007] FamCA 1346
•16 November 2007
FAMILY COURT OF AUSTRALIA
| O'HARA & O'HARA & ORS | [2007] FamCA 1346 |
| FAMILY LAW – PRACTICE AND PROCEDURE - Subpoena – production of documents – objection – relevance |
| Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth) |
| Botany Bay Instrumentation & Control Pty Ltd v Stewart [1984] 3 NSWLR 98 Hatton v Attorney General (2000) FLC 93-038, 26 Fam LR 570 National Employers’ Mutual General Association Limited v Waind & Hill [1978] 1 NSWLR |
| APPLICANT: | Mrs O’Hara |
| 1st RESPONDENT: | Mr O’Hara |
| 2nd RESPONDENT: | Mr O’Hara (Snr) |
| 3rd RESPONDENT: | Mrs O’Hara (Snr) |
| 4th RESPONDENT: | Trustee in Bankruptcy |
| INTERVENOR: | O'Hara Investments Pty Ltd and A Pty Ltd (non-parties - recipients of subpoenae) |
| FILE NUMBER: | SYF | 305 | of | 2003 |
| DATE DELIVERED: | 16 November 2007 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Cronin J |
| HEARING DATE: | 22 October 2007 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Bridger |
| SOLICITOR FOR THE APPLICANT: | Kells the Lawyers |
| COUNSEL FOR THE INTERVENOR: | Mr Thomas |
| SOLICITOR FOR THE INTERVENOR: | Gregory Watkins Barrister |
Orders
(1)That the order made by Registrar Cameron on 3 August 2007 in relation to the subpoenae to A Pty Ltd and O’Hara Investments Pty Ltd concerning those parts that have been struck out, is discharged.
(2)That the proper officer of each of the said companies produce the documents required pursuant to the subpoenae to the Registrar of this Court no later than 4.00pm on 10 December 2007.
(3)That the wife serve a copy of these orders upon A Pty Ltd and O’Hara Investments Pty Ltd by pre-paid registered post to the registered offices of the said companies and a further copy be sent by facsimilie transmission to M & A Solicitors and that a copy of the reasons for judgment arising out of these orders accompany each of the said orders.
(4)That a sealed copy of these orders be forwarded in the usual way by the solicitors for the wife to all other parties in the proceedings together with a copy of the reasons for judgment arising out of those orders.
(5)That the application in a case filed by the wife on 9 August 2007 be otherwise dismissed and that application be removed from the list of cases awaiting a hearing.
(6)That the file be referred to the case management judge of the Sydney Registry for consideration of the appointment of a case manager for the proceedings if a trial judge has not already been allocated for the purposes of the determination of any objection by O’Hara Investments Pty Ltd and A Pty Ltd to the release, inspection and copying of any material produced under subpoenae pursuant to these orders
AND THE COURT NOTES it was agreed between counsel that the question of the relevance of some of the requested documents to the ultimate proceedings is a matter still to be determined and that it may be appropriate for the trial judge to take that issue as a matter for determination prior to the commencement of the final hearing.
IT IS NOTED that publication of this judgment under the pseudonym O’Hara & O’Hara is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYF 305 of 2003
| MRS O’HARA |
Applicant
And
| MR O’HARA and MR O’HARA (SNR) and MRS O’HARA (SNR) and TRUSTEE IN BANKRUPTCY |
Respondent
REASONS FOR JUDGMENT
This is a matter relating to the question of compliance with subpoenae.
The parties lived together from 1989 until the separation of their marriage in September 1999.
The substantive proceedings relate to a property dispute which involves a number of parties. The husband appears to have little involvement in these proceedings as he is currently bankrupt. There was no appearance on behalf of his Trustee in bankruptcy.
In simple terms, the wife has filed an amended application for final orders seeking a declaration that the husband’s parents hold a property at E upon trust for her as to 45 per cent or some other such interest as the Court determines. Counsel for the wife says that the wife proposes to seek that the Court exercise its accrued jurisdiction to seek equitable relief. She makes a claim for contribution from the husband’s parents for the monies that she paid to the National Australia Bank and that the interest of the husband’s parents should be subject to an equitable charge to support the contribution for which each of them is liable to the wife. Complex though that may sound, it arises from the pathway to which I shall refer in a moment.
The proceedings before me however relate to the review of a decision of Registrar Cameron made on 3 August 2007. Before the Registrar on that day was the return of various subpoenae some of which were not contentious. However, two subpoenae addressed to O’Hara Investments Pty Ltd and A Pty Ltd were sufficiently contentious to have the recipients represented before the Registrar. There is no official record on the file of the outcome of the proceedings that day however a hand written note which I accept was written by the Registrar says as follows:
I note that the subpoenas issued to O’Hara Investment [sic] P/L and A P/L are listed before me today.
I note that I am of the view that the subpoena to A P/L is too wide and I strike out paragraphs 1- 6 an [sic] 10 – 11 of that subpoena.
I note that it is my view that the subpoena to O’Hara Inv P/L does not relate to the relevant issues in this matter and I order that that subpoena be struck out.
The wife by an application in a case filed 9 August 2007, sought to review that decision. She seeks the following orders;
1.That the order made by Registrar Cameron of the Family Court on 3 August 2007 be discharged.
2.The wife be granted leave to serve a copy of these Orders on the solicitors for A Pty Ltd and O’Hara Investments Pty Ltd (“the companies”), M & A Solicitors by facsimile transmission.
3.That the proper officer of the companies be ordered to produce the documents to the Court no later than 4:00pm on Wednesday, 15 August 2007.
4.That the companies be ordered to pay the costs of the wife.
The wife says that the facts show a pathway to an inevitable conclusion that she is entitled to equitable relief. That pathway is as follows. In September 1999, in other words at the time of separation, the husband and his brother were the share holders and directors of a company called R Pty Ltd. Not long prior to that, the husband had received some compensation for an injury and the money went into the company. It is asserted by the wife that the company was involved in construction services. In 2002, the brothers appeared to have determined that R Pty Ltd would sell its business to A Holdings Pty Ltd and that thereafter, they would trade under the new company name. At the end of 2002, R Pty Ltd transferred its assets to A Holdings Pty Ltd the consideration for which was shares in A Holdings Pty Ltd. Thereafter, there was a variety of transactions involving the transfer of leases.
In March 2003, R Pty Ltd went into liquidation upon an action by one of its creditors. The evidence appears to show, and it was asserted by Counsel for the wife, that the liquidator had looked at the transfer by R Pty Ltd to A Holdings Pty Ltd but no action has been taken on it.
When A Holdings Pty Ltd was incorporated, the husband was a director and shareholder.
Also in November 2002, a company called P Pty Ltd was incorporated and its sole director and shareholder was a Mr P. Counsel for the wife tendered ASIC searches. R Pty Ltd was shown as having its principal place of business as the E property. The directors included the husband whose address is shown as the E property. A Holdings Pty Ltd is shown as having the husband as a shareholder at the E property address.
P Pty Ltd does not show the husband at all but interestingly, Mr P shows his address as the E property.
On 17 April 2004, a company called AP Pty Ltd was incorporated. Eighteen months later, the company changed its name to A Pty Ltd. It is asserted by the wife that there were various office holders including the brother of the husband’s girlfriend. More recently in 2006, the husband’s cousin became the sole director. The search of A Pty Ltd shows the only connection with the husband in any way is the fact that his cousin is the director.
In August 2004, another company O’Hara and Co. Pty Ltd was incorporated. The sole director of this company according to the ASIC extract, is the husband’s mother. Interestingly, the search shows the address of the husband’s mother as the E property. It is to be noted that this company was incorporated about one year prior to the husband being made bankrupt.
In February 2006, another company O’Hara Investments Pty Ltd as Trustee for the O’Hara Unit Trust was formed. The husband’s mother was the sole director and secretary and again the E property is shown as her address.
There can be little dispute about the history but the fundamental question is whether any of this is relevant to the proceedings before this Court.
Counsel for the wife tendered a document over the objection by the recipients of the subpoena. It is headed A Holdings Pty Ltd and purports to be minutes of a meeting dated 21 November 2002. Whoever typed the minute recorded that the husband was present. At that point in time according to the historical ASIC search, the transfer of the assets of R Pty Ltd had not occurred, none of the entities was in liquidation and the husband had not been made bankrupt. The document purports to show that the agenda included the corporate acquisition of R Pty Ltd and its assets. The photocopy tendered shows a variety of notes written in an unknown hand purporting to set up a plan for a variety of entities.
Notwithstanding the objection of Counsel, I have admitted the document into evidence on the basis that it is a record of a meeting agenda of a company but its probative value must be of limited value because it is no more than an agenda with some handwriting upon it. There is no identifiable evidence to say that the hand writing is that of the husband.
The significance of the document is that some days later, the transfer of assets from R Pty Ltd to A Holdings Pty Ltd occurred. That was certainly on the agenda for discussion but whether that decision was ever made, one can only presume that it was by virtue of the fact that the transfer actually occurred.
Of some significance also, is the fact that L Firm created an insurance policy for O’Hara & Co. Pty Ltd, P Pty Ltd and A Pty Ltd. In the schedule, it is shown that the insured business description was civil works. It is asserted by the wife that that was the business that R Pty Ltd was also involved in. The insurance policy is still current.
In a Financial Statement filed by the husband on 6 November 2006, he described his occupation as “Supervisor” and his employer as A Pty Ltd. The curious thing about that is that Counsel for the wife produced a letter dated 2 August 2007 from the legal practitioners for A Pty Ltd indicating that the husband was a construction supervisor until only 31 December 2005. It now appears that the husband asserts that his position was actually some form of subcontractor rather than an employee.
All of these facts according to the wife give rise to an inference that the husband was very much involved in all of these entities particularly having regard to the address at the E property. Counsel for the recipients of the subpoena pointed out that the history belied that inference because both R Pty Ltd and A Holdings Pty Ltd were in liquidation and the husband was bankrupt.
What the wife sought to do before the Registrar and now seeks to do by way of a review of the Registrar’s decision is to pursue O’Hara Investments Pty Ltd and A Pty Ltd to have them produce company records as to share and director registers, minute books, financial statements and a variety of correspondence in particular, in relation to the building of the “Headquarters” of A Pty Ltd. The Commercial Manager of O’Hara Investments Pty Ltd wrote to the Registrar on 29 August 2007 pointing out that the task of complying and copying the records was a significant one. The Commercial Manager complained that she would not be able to complete her work obligations if she complied with the subpoena.
The subpoena for A Pty Ltd was much wider. The Registrar permitted the subpoena to stand in relation to documents specifically naming and associated with the husband but otherwise struck out the wife’s pursuit of the company in respect of the same sort of correspondence and records to which I have just referred in relation to the other company. The subpoena also sought a variety of commercial documents which one would expect from a company of the description to which I have earlier referred. The same commercial manager of O’Hara Investments Pty Ltd is the commercial manager of A Pty Ltd. In the letter also addressed to the Court dated 29 August 2007, the commercial manager pointed out the significant amount of work involved in complying with the subpoena describing the task as “massive” and that it was to be noted that there were 175 project files that would be caught by the subpoena. These contracts would have some significance because they were tenders which were prepared on a confidential basis.
Counsel for the wife said that there was no burden on the recipient because the details in the subpoena were clear and it was simply a matter of producing the documents. She said oppression was not an argument.
Most importantly, the question that is immediately obvious is whether or not having regard to the history to which I have referred, there is any apparent relevance in these documents such as would justify the Court requiring the recipients of the subpoenae to comply with them. That does not overcome the additional problem of whether or not the documents ought to be examined. There was common ground between the parties that the first issue needed to be decided about compliance and the question of relevance was ultimately a matter for the trial judge. It was suggested by Counsel for the recipients of the subpoenae that that was a matter that should be addressed in some case management role of the trial judge.
The Family Law Rules provide that in order to obtain information from a non-party, the requesting party is only entitled to obtain a specified document or class of documents relevant to an issue in the proceedings. The approach that in my view is appropriate is that set out by Moffit P in National Employers’ Mutual General Association Limited v Waind & Hill [1978] 1 NSWLR 372 at 381. Moffit P recognised three distinct steps in the procedure for production of documents and said:
The first is obeying the subpoena, by the witness bringing the documents to the court and handing them to the judge. This step involves the determination of any objections of the witness to the subpoena, or to the production of the documents to the court pursuant to the subpoena. The second step is the decision of the judge concerning the preliminary use of the documents, which includes whether or not permission should be given to a party or parties to inspect the documents. The third step is the admission into evidence of the document in whole or in part; or the use of it in the process of evidence being put before the court by cross-examination or otherwise. It is the third step which alone provides material upon which ultimate decision in the case rests. In these three steps the stranger and the parties have different rights, and the function of the judge differs.
In relation to the first step of production and/or objection to production, Moffitt P. went on to say at pp 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 Small’s 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 a judgment as to what is relevant to the issue joined in 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 Small’s case. Of course, discovery as such is otherwise available to a party. It follows that a 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 issues 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 Small’s 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, a 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 the 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 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.
Rule 15.26 of the Family Law Rules 2004 provides:
If a named person or a person having sufficient interest in a subpoena:
(a)seeks an order that the subpoena be set aside in whole or in part;
(b)objects to the production of a document required by the subpoena;
(c)…
(d)…;
the person must attend court on the court date to apply for the order.
The recipients of the subpoena have objected to the very production of the documents.
In Botany Bay Instrumentation & Control Pty Ltd v Stewart [1984] 3 NSWLR 98 at pp 100-101 (which was referred to in Hatton v Attorney General (2000) FLC 93-038, 26 Fam LR 570) Powell J set out a number of examples in which a court should exercise its jurisdiction to set aside a subpoena. Those examples included:
· where the subpoena has been used for the purpose of obtaining discovery against a third party ...
· where to require a party to comply with a subpoena to produce documents would be oppressive ...
· where the subpoena has been issued for a purpose which is impermissible, as, for example, "fishing" ...
Powell J went on to say that :
The authorities do not make clear whether such classes of case to which I have referred above are to be regarded as the only cases in which the court will intervene, or, whether such cases are to be regarded as merely particular examples of a broad class of case in which the court will intervene to exercise its jurisdiction to set aside a subpoena, or, indeed, whether the jurisdiction to set aside a subpoena is but one part of a wider jurisdiction of the court. It seems to me, however, that when, as one does, one finds assertions that the court's jurisdiction to set aside a subpoena is but part of the inherent jurisdiction of the court ... coupled with assertions that a subpoena will be set aside if it be issued for an impermissible, or illegitimate, purpose, or if to require compliance with it would be oppressive ... it is difficult to avoid the conclusion that, in reality, the court's jurisdiction to set aside a subpoena is but one aspect of the court's jurisdiction to act to prevent an abuse of process, and that particular classes of case which I have recorded above are to be regarded as no more than examples of situations which the courts, in the past, have held, and, in the future, would hold, to be cases of an abuse of process.
The Full Court in Hatton v Attorney General, added lack of relevance as a ground for setting aside a subpoena.
The first step for me is to determine the question of relevance. The issue is whether there is an apparent relevance to the issues in the substantive proceedings. Will or could the documents sought possibly throw some light on those issues?
I asked Ms. Bridger whether this would happen and she said that she hoped and anticipated that it would. It must be borne in mind that this is not only apparently a large and expensive task for the non-party but also one which is an invasion of their privacy. However, if that invasion will assist in the pursuit of justice, then subject to the amelioration of the costs and expenses problem, it is one which the community must accept as necessary.
The invasion of privacy of a purely unrelated party is something which must be considered carefully but equally, careful scrutiny of the situation must occur where there is an allegation that the non-party has links with or is in league with a party to the substantive proceedings. Where the evidence points to that closeness of relationship, the court should be more cautious about excluding a party to the substantive proceedings from pursuing this information.
In this case, counsel for the wife pointed to a whole host of factual matters that are strikingly odd in a case in which the husband has had no arms-length interest. Counsel for the recipients of the subpoena referred to this exercise as one of raising something akin to a conspiracy. It is not my task today to determine whether there is any basis for such a theory. I am asked to determine the objection to the very production of the documents; that is, the very first step referred to by Moffit P.
Having regard to what I have set out in paragraphs 10-14, 16 and 19-20 above, I find that there is apparent relevance.
If there was an ultimate finding that the husband has the connection imputed by the wife, then it must be seen that he would have had the obligation to discover the documents now sought. Again, the closeness of the relationship here overcomes the argument that the subpoena is simply being used as a form of third party discovery. Similarly, it overcomes the argument about “fishing” because the inference is suggested and the “target” is clear. Counsel for the wife referred to her client’s anticipated outcome albeit she initially said “hoped”.
Finally, I agree with counsel for the wife that the subpoena although large is not oppressive because the documents are all readily identified as indicated by the commercial manager. The use to which these documents can be put however, is a matter for the trial judge and that includes dealing with arguments about commercial confidentiality.
Accordingly, I propose to exercise my discretion, disagreeing with the registrar, and ordering the production of the documents.
I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin
Associate
Date: 16 November 2007
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