Peters and Giannopoulos & Ors (No. 2) - [2017] FamCA 965

FAMILY COURT OF AUSTRALIA

PETERS & GIANNOPOULOS AND ORS (NO. 2)

[2017] FamCA 965

FAMILY LAW – PROPERTY – Interim orders – Production of documents – Where an order for production of documents was made – Where the documents were subsequently provided in redacted form – Where the wife seeks production of documents in an unredacted form – Question of relevance of the documents – Consideration of the documents as a whole –Where it is appropriate for a single expert valuer to be appointed to assist the Court in determining the question of relevance.

Family Law Act 1975 (Cth) s 78

Egglishaw v Australian Crime Commission (No 2) 2009 FCA 12 GE Capital Corporate Finance Group Limited v Bankers Trust Co [1995] 1 WLR 172 Gray v Associated Book Publishers (Aust) Pty Ltd [2002] FCA 1045 Guns Limited v Marr [2008] VSC 464 Harris Scarfe (receivers and managers appointed) (in Liq) v Ernst & Young (No 10) [2006] SASC 389 MG Corrosion Consultants Pty Ltd v Gilmore [2011] FCA 1514 Oroa Limited & Asahi Holdings (Australia) Pty Ltd [2015] VSC 749 Telstra Corporation v Australis Media Holdings (Unreported, NSWSC, 10 February 1997)
APPLICANT:	Ms Peters

RESPONDENT:

Mr Giannopoulos

INTERVENOR:

S Pty Ltd - Trustee of the R Trust & H Pty Ltd - Trustee of the Giannopoulos Family Trust

FILE NUMBER:

ADC

3056

2014

DATE DELIVERED:

29 November 2017

PLACE DELIVERED:

Adelaide

PLACE HEARD:

Adelaide

JUDGMENT OF:

Berman J

HEARING DATE:

17 November 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Mellows

SOLICITOR FOR THE APPLICANT:

Tolis & Co Lawyers

COUNSEL FOR THE RESPONDENT:

Mr Richards

SOLICITOR FOR THE RESPONDENT:

Lempriere Abbott McLeod

COUNSEL FOR THE INTERVENOR:

Ms Kari

SOLICITOR FOR THE INTERVENOR:

Richards & Evans Commercial Lawyers

Orders

That the second and third respondents provide the documents marked as “Exhibit 1” in the proceedings in their unredacted form to the Court.
That the wife and the second and third respondents do agree the identity of a suitably qualified accountant who shall be appointed by the Court on its own initiative as a single expert witness to consider the “Exhibit 1” documents in their unredacted form and to advise the Court (but not the parties) of what part or portion of the documents are necessary and relevant to the ready comprehensibility and intelligibility of the status of the husband’s loan account as set out in the financial statements and tax returns for R Trust and Giannopoulos Family Trust.
Cost of the single expert witness to be borne by the second and third respondents.
That the time within which the wife is to comply with paragraph 5 of orders made 30 August 2017 be extended by a further thirty (30) days from the date of this order nunc pro tunc.

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 Peters & Giannopoulos and Ors (No. 2) 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).

FAMILY COURT OF AUSTRALIA AT

FILE NUMBER: ADC 3056 of 2014

Ms Peters

Applicant

And

Mr Giannopoulos

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

Ms Peters is the wife in the proceedings and Mr Giannopoulos is the husband. The parties are engaged in complex litigation wherein each of them seeks orders for settlement of property.
The wife contends that S Pty Ltd (“SPL”) as trustee of the R Trust (“RT”) and H Pty Ltd (”HPL”) as trustee of the Giannopoulos Family Trust (“GFT”) hold their separate trust assets for the husband arising out of a resulting and/or a constructive trust.
The wife seeks a declaration pursuant to s 78(1) of the Family Law Act 1975 (Cth) (“the Act”) as to the legal and equitable interests of the parties in the assets of the RT and the GFT.
The RT and the GFT have been joined to the proceedings as second and third respondents.
It is generally conceded that the husband’s parents control each of the trusts via their directorship of the corporate trustee.
Ms D Giannopoulos (“the husband’s mother”) is and has always been the appointor of the trusts.
The husband is the specified beneficiary of the trusts and it is conceded that the value of the trust property for each of the trusts is substantial.
The wife has sought the financial statements and taxation returns for each of the entities that generally comprise the Giannopoulos Group, but in particular the RT and the GFT.
The extent to which the second and third respondents are obliged to provide discovery to the wife was the subject of my judgment delivered 30 August 2017. There has been compliance with the orders made save for an issue that arises in respect of:-
1(c)All documents, notes, memoranda or minutes relating to any distribution to the husband, the wife or their children including any debits or credits to their loan account from 23 September 2003 to the date hereof in the [R Trust]; and
2(c):All documents, notes, memoranda or minutes relating to any distribution to the husband, the wife or their children including any debit or credit in their loan accounts from 23 September 2003 to the present in the [Giannopoulos] Family Trust.
The history of the husband’s loan accounts with the trusts is summarised at paragraphs 28, 29 and 30 of the judgment.
The relevance to the proceedings is underpinned by the history of the husband having a credit loan account with the RT in 2002 in the sum of $1,253,464 which is now in debit in the amount of $185,520. Similarly, in 2007 the husband had a credit loan account with the GFT in the amount of $803,868, but at present the husband is in debit in the sum of $287,876.
The distribution s to the husband from the trusts are few in number and generally modest in amount.
In purported compliance with the order, the second and third respondents provided the following documents:-
(1)RT Trust Deed;
(2)Financial Statements and Income Tax Returns for the RT for the period 2002 to 2016;
(3)GFT Trust Deed;
(4)Financial Statements and Income Tax Returns for the GFT for the period 2008 to 2016;
The documents provided have been heavily redacted with the only financial information remaining being the amount distributed by the trusts to the husband and the status of his loan account in each of the trusts.
The wife complains that the documents should have been provided in an unredacted form. She filed an Application on 23 October 2017 and seeks the following orders:-
1.That within 14 days of the date of these Orders, the Second and Third Respondents produce to the Wife for her inspection, unredacted copies of the documents produced by them through their solicitors, to the wife through her solicitors, on 18 September 2017.
She seeks consequential procedural orders, but in particular that time be extended by 46 days after the production of the unredacted documents for her compliance with paragraph 5 of orders made on 30 August 2017 which was in the following terms:-
(5)That within sixty (60) days the wife is to file and serve a statement of contention of fact and law containing the following:-
(a)Confirm or otherwise specify the relief sought by final orders;
(b)Specify the material facts relied upon:
(c)Identify the statutory law and/or legal principles upon which she contends, justifies and entitles her to the relief she seeks.
The basis of that order is contained in the previous judgment.

THE WIFE’S CLAIM

By reference to paragraphs 33(b) and (e) of the wife’s Affidavit filed 25 November 2016, I did not consider that even at the most basic level the matters relied upon by the wife could support the documents that were the subject of the previous application. I found that even adopting a “less strict approach” of what is relevant, as currently pleaded, the financial statements and tax returns for the trusts as sought by the wife could not be considered relevant documents given her claim as presently pleaded.
The wife has not complied with the order requiring the provision of particulars of her claim and counsel for the wife now contends that without the documents in unredacted form, the formulation of the wife’s claim cannot proceed.

THE ARGUMENT AGAINST REDACTION

In its most basic form the wife contends that orders 1(c) and 2(c) refer to “all documents, notes, memoranda or minutes relating to any distribution to the husband…”. It is argued that there is nothing in the orders that permitted the documents to be redacted.
The emphasis promoted by the wife’s counsel is that the words “any distribution to the husband…” was merely a descriptor necessary to identify the category of documents rather than an acknowledgment that the focus of the documents was limited to the narrow purpose of identifying the status of the husband’s loan account from time to time.
The second and third respondents argue that the documents were redacted on the basis of relevance and for the wife to be successful in respect of this application would be to achieve a backdoor result in circumstances where she was unsuccessful in the earlier determination and did not seek to challenge on appeal the previous orders made.

LEGAL PRINCIPLES

The historic position as discussed in GE Capital Corporate Finance Group Limited v Bankers Trust Co [1995] 1 WLR 172 is that a party providing discovery has a right to cover up irrelevant information as long as it does not destroy or mislead the remaining information.
The contemporary position is that as set out in Telstra Corporation v Australis Media Holdings (Unreported) Supreme Court of NSW McLelland CJ 10 February 1997) which provides that documents may be specified by “class or classification” and not by reference to relevance to a fact in issue. This was extended in Gray v Associated Book Publishers (Aust) Pty Ltd [2002] FCA 1045 to consider the decision of GE Capital (supra) in which it was held that a party seeking to redact portions of a document bears the onus of either obtaining consent from the other party or the authority of the Court.
In Egglishaw v Australian Crime Commission (No 2) 2009 FCA 12 Besanko J drew a distinction between an order for “general discovery” and a more limited order.
The current view is that where a document has been redacted without the consent of the other party or the authority of the Court, the Court may inspect documents and assess whether the redaction is appropriate. See Harris Scarfe (receivers and managers appointed) (in Liq) v Ernst & Young (No 10) [2006] SASC 389. Consideration was also given to an affidavit that had been prepared by a solicitor who redacted the documents as not being conclusive evidence of the appropriateness of redaction.
The Court in considering the relevance of documents may also have regard to matters of public interest in determining whether redaction is an appropriate course of conduct.
In Egglishaw (supra) the ACCC redacted parts of discovered documents over the objection of the applicant. Whilst Besanko J dismissed the application, he did so on the basis that the order for discovery was a general order as opposed to a limited order. The question of relevance was not determined by the order but rather by the party giving discovery.
The ACCC referred to the principles in GE Capital Corporate Finance v Bankers Trust Co and Ors 1994 CA 993 where Hoffman LJ said at 174:-
…it has long been the practice that a party is entitled to seal up or cover up parts of a document which he claims to be irrelevant…
…
The oath of the party giving discovery is conclusive “unless the court can be satisfied...from the documents produced or from anything in the affidavit made by the defendant, or by any admission by him in the pleadings, or necessarily from the circumstances of the case – that the affidavit does not truly state that which it ought to state”.
Besanko J accepted the position that where there was a limited order for discovery as was the case in Telstra (supra) and Gray (supra) that the documents sought are limited to class or categories of documents, the rule of practice as set out by Hoffman LJ in GE Capital does not apply.
The summary is that where limited discovery of a class or classification of documents is sought, the discovering party does not have to consider the question of relevance.
In MG Corrosion Consultants Pty Ltd v Gilmore [2011] FCA 1514 the Court was required to consider the redaction of information in discovered documents were there was an admission as to relevance. Barker J said at (1):-
It seems to me that, over a number of years, particularly in complex commercial litigation (although not limited to that) a practice has developed whereby, in the course of giving standard or general discovery, the party giving discovery has taken the liberty of redacting parts of the information in an otherwise relevant document. The parties may make a unilateral decision concerning the relevance or confidentiality of the redacted material, but without having first obtained that the agreement of the other party or an order of the court to make the redaction.
In Oroa Limited & Asahi Holdings (Australia) Pty Ltd [2015] VSC 749 the following principles are set out at paragraph 32:-
(e)If there is a dispute about the right of a party to mask or redact part of the discovered document, the court may inspect the document in its unmarked form in appropriate cases. The court may then assess whether the redacted parts of the document are irrelevant to the issues in the case and “are part which, by their nature, attract a valid basis for exclusion from the inspection processes. In assessing the claim of a party to be entitled to mask up part of a discovered document, it is important to ensure that the redaction of the irrelevant parts of the document does not created gaps which affect the intelligibility or meaning of the remaining portions of the document which are produced on inspection: Gunn S Limited v Marr 2008 VSR 464 at [30];
(f)Redaction should not “create gaps affecting the intelligibility or meaning of the unredacted portions of the document”. Put another way, if “masking on the grounds of irrelevance could detract from a proper understanding of the meaning and significance of the admittedly relevant parts of the document, then such masking is not justified; Telstra Corp v Australia Media Holdings 2004 ATPR 41-996 at 3;
(g)In determining an entitlement of a party to mask or redact a part of a discovered document, the court has emphasised that the test is what is necessary to ensure the attainment of justice between the parties. It has been recognised that the rule must not be permitted to become an instrument of oppression, or to cause unnecessary unfairness to one or other party in litigation; Guns Limited v Marr [2008] VSC 464 at [34]. See also Octagon [2011] VSC 373 at [32] which makes reference to the Civil Procedure Act 2010 the Rules of the Court being designed to enhance justice and to facilitate the resolution and determination of issues;
(h)The question is “whether it is apparent that there are, or may be, substantial privacy or confidentiality interests which ought to be given protection”; Telstra Corp v Australis Media Holdings 2004 ATPR 41-996 at 3;
(i)The Court will not permit the coercive nature of the discovery process to infringe the genuine interests of privacy and confidentiality for no legitimate purpose; Octogon [2011] VSC 373 at [33]. The retention of secrecy of commercially sensitive information is a legitimate concern;
(j)Ultimately the onus to establish an appropriate basis for redaction rests with the party resisting production of the whole of the document; Octogon [2011] VSC 373 at [32].

Were the Second and Third Respondents entitled to redact without consent or order?

It is conceded that the second and third respondents caused the documents to be redacted without consent or order. There is little doubt that the proper course to be adopted by the second and third respondents was to seek an order of the Court when it became apparent or was obvious that redaction was not likely to be the subject of agreement.
Whilst counsel for the second and third respondents argue that ultimately it makes little difference, that presupposes that no potential existed for a compromised position to be arrived at. The conduct of the second and third respondents was unlikely to be seen as a conciliatory approach and consequently the application filed by the wife may well have been inevitable.
In circumstances where the discovery is limited, the unilateral redaction of documents would most likely be considered as the very antithesis of a proper basis for redaction.
The circumstances in this case are however unusual. It cannot be said that the order of 30 August 2017 for limited discovery necessarily defines a particular category of documents. The previous proceedings and the judgment delivered on 30 August 2017 cannot be ignored.
The gravamen of the judgment was to consider whether the financial statements in respect of the RT and the GFT were relevant to the proceedings. I determined that as at the current state of the wife’s claim and in particular as pleaded to support equitable relief relevance could not be established.
As such, I do not accept that the reference to the husband’s loan account was merely intended to identify the relevant class of documents. The clear intention and focus of the order are for documents to be provided that refer to the husband’s loan account (and potentially any loan account pertaining to the wife and the children of the parties) in order to verify the information that had already been provided by the husband in earlier affidavit material as to the various entities that comprised the Giannopoulos Group of Companies and the extent, if any, of the husband’s interest and involvement.

Should the Court view the documents?

Counsel for the wife did not strongly suggest that the unredacted loan account balances were at risk of inaccuracy. There appears to be a high level of consistency in the figures provided by the husband in various spreadsheets attached to his affidavit material. The documents have been the subject of heavy redaction and the wife’s counsel argue that there may be portions of the redacted documents which should be provided in an unredacted form in order to provide background and foundation for the husband’s loan account balance from time to time. There may be some information which is required to make the unredacted material intelligible.
The Victorian case of Guns Limited v Marr [2008] VSC 464 supports the position that where there is a dispute as to the right of a party to redact a document, it was for the Court to determine, on the material before it whether the party had a right to do so. The view adopted by Kaye J was similar to that in Harris Scarfe (supra) namely at paragraph [28]:-
The criterion to be applied by the court was identifying the course which would best serve and enhance the attainment of justice between the parties.

CONCLUSION

It is likely that the loan account balances are accurate. There could however be some information which directly relates to the husband’s loan account and in particular the movement from credit to debit.
Whilst I consider it is a matter for the Court to consider the extent to which documents should be redacted, given that this involves accounting considerations which may not be immediately apparent on the face of the document, I propose that a single expert be appointed to view the unredacted documents and to provide assistance to the Court as to what part or portion of the redacted documents should be unredacted.

Given that the current application arises because of the unilateral redaction by the second and third respondents and as the onus clearly falls upon them to make a case for redaction, it is appropriate that they bear the costs of the single expert to be appointed by the Court.
The process of determining whether any part of the redacted document is relevant may take some time.
I have given careful consideration to the wife’s application to be relieved of the obligation under paragraph 5 of the orders of 30 August 2017. I am not persuaded that there is any connection with the process of determining whether the documents should or should not remain in their redacted form and the obligation on the wife to provide particulars of her claim.
Given that the wife is now in breach of the order, I propose to provide her with an extension of time to comply.
I make orders as appear at the commencement of these reasons.

I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 29 November 2017.

Associate:

Date: 29 November 2017