Pratten and Ors and McPherson and Anor
[2020] FamCA 66
•11 February 2020
FAMILY COURT OF AUSTRALIA
| PRATTEN AND ORS & MCPHERSON AND ANOR | [2020] FamCA 66 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Review of Registrar decision - Subpoena Objection – Where documents relating to the objector’s financial affairs have already been provided to the husband – Where “on the cards”, further subpoenaed documents would not assist the husband’s case – Objection upheld. |
| Darley & Darley [2020] FamCAFC 4 |
| APPLICANT: | Ms Pratten |
| SECOND APPLICANT: | Ms A Pratten |
| THIRD APPLICANT: | Ms A Pratten as Executor of the Estate of the Late Mr Pratten |
| RESPONDENT: | Mr McPherson |
| SECOND RESPONDENT: | Ms McPherson |
| FILE NUMBER: | SYC | 3588 | of | 2016 |
| DATE DELIVERED: | 11 February 2020 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Rees J |
| IN CHAMBERS: | 29 January 2020 |
REPRESENTATION
| SOLICITOR FOR THE 1ST, 2ND & 3RD APPLICANTS: | Ms Meredith |
| SOLICITOR FOR THE RESPONDENT: | Ms Nixon |
| SOLICITOR FOR THE 2ND RESPONDENT: | Fritchley Solicitors |
Orders
IT IS ORDERED
That the Notice of Objection filed 4 June 2019 is upheld.
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 Pratten & McPherson 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 SYDNEY |
FILE NUMBER: SYC 3588 of 2016
| Ms Pratten |
| Applicant |
| And |
| Ms A Pratten |
| Second Applicant |
| And |
| Ms A Pratten as Executor of the Estate of the Late Mr Pratten |
| Third Applicant |
| And |
| Mr McPherson |
| Respondent |
| And |
| Ms McPherson |
| Second Respondent |
REASONS FOR JUDGMENT
On 22 May 2019 a subpoena was issued by the husband in financial proceedings to the wife’s mother (“the objector”) who is also an applicant in the proceedings, both in her own right and in her capacity as executor of the estate of the wife’s late father.
The parties to the proceedings are:
· The applicant wife (“the wife”);
· The first respondent husband (“the husband”);
· The wife’s mother (“the objector”);
· The wife’s mother as Executor of the Estate of the Late Mr Pratten; and
· The husband’s mother, Ms McFarlane.
An objection was lodged to production on 4 June 2019. On 3 December 2019, after considering written submissions, a registrar upheld the objection. No reasons were given.
The husband now seeks to review the decision of the registrar. That application proceeds by way of hearing de novo. The fact that no reasons were given by the registrar is irrelevant.
Directions were made for the parties to file written submissions and it was agreed that the review would be dealt with in Chambers without the need for any further appearance in Court.
No submissions were filed on behalf of the husband pursuant to the directions but I have assumed that he relies on the submissions made to the registrar.
Submissions have been received from the objector and an affidavit from the wife.
The subpoena, relevantly, sought production by the objector of:
2 Copies of bank account and credit card statements from 2005 to date.
3 Tax returns and notices of assessment from 2005 to 2018.
4 Copies of tax refund statements from 2005 to date.
5 Copies of instalment activity statements for the objector and a company, B Pty Ltd, from 2005 to date.
6 Copies of documents relating to two specified bank accounts “for the period”.
7 Copies of documents relating to payments to the objector by B Pty Ltd from 1 January 2010 to date.
8 Copies of member statements for any superannuation fund of which the objector is a member from 30 June 2010 to date.
9 Copies of bank account and credit card statements held by B Pty Ltd from 1 July 2005 to date.
THE PROCEEDINGS
In order to place the objection in context it is necessary to have some understanding of the ambit of the dispute.
The husband and the wife married in 1988 and separated in 2013.
They lived in a property owned by the wife’s father until 1995 and then moved to a property at Suburb X owned by Mr C, the husband’s uncle and the husband’s mother, Ms McPherson.
In late 1995, Mr C sold his interest in the Suburb X property to B Pty Ltd. Mr Pratten was the wife’s late father and the late husband of the objector. He died in October 2000 and left his shares in B Pty Ltd to the objector.
In 2005, B Pty Ltd transferred its half share of the Suburb X property to the wife.
The wife and the objector assert that Ms McPherson holds her half share of Suburb X on trust for the husband. Both the husband and Ms McPherson dispute that assertion.
The wife asserts that her parents provided the husband and the wife with significant loans during her father’s lifetime and that, after her father’s death, the objector has continued to lend her, or the husband and the wife, money. The objector says that a total of $517,968 was provided to the wife or to the husband and the wife, commencing in 2007 and that a further amount of $529,573 was paid by the objector and her late husband for school fees for the children of the marriage, commencing in 2000.
THE COMPETING APPLICATIONS
The wife, relevantly, seeks a declaration that the husband is the beneficial owner of half of Suburb X and that he be required to discharge the mortgage and transfer half of Suburb X to the wife unencumbered.
The objector seeks a declaration that Ms McPherson holds her interest in Suburb X on trust for the husband.
The husband and Ms McPherson seek orders dismissing the wife’s and the objector’s applications.
THE LAW
In Darley & Darley [2020] FamCAFC 4, Kent J, siting as a judge of appeal, summarised the law in relation to this issue:
It is well settled by the authority that a subpoena must be issued for a genuine forensic purpose and must identify what appear to be relevant documents. In Gloucester Shire Council v Fitch Ratings, Inc [2016] FCA 587 Wigney J observed the following at [22]:
22.The law concerning subpoenas is one of those areas of law where metaphors abound. The test for whether a subpoena has a legitimate forensic purpose has been put in terms of whether the material caught by the subpoena appears to have relevance in the sense of “throw[ing] light” on at least some of the issues in the principal proceedings: Cosco Holdings Pty Ltd v Commissioner of Taxation [1997] FCA 1504; (1997) 37 ATR 432 at 439-440. It has also been said that it must be “on the cards” that the documents sought will materially assist the party at whose request the subpoena has been issued: Alister v The Queen (1984) 154 CLR 404 at 414; Tamwood Limited (ACN 010 954 499) v Habitare Developments Pty Ltd (ACN 122 935 497) [2009] FCA 364 at [13], [35]-[38]. Slightly more prosaic statements of the test include that the documents must have some “apparent” or “adjectival” relevance, or would be reasonably likely to add, in the end, in some way or another, to the relevant evidence in the case: Spencer Motors Pty Ltd v. LNC Industries Ltd [1982] 2 NSWLR 921 at 927-928 G-A; National Employers’ Mutual General Association Ltd v Waind [1978] 1 NSWLR 372 at 385 D-F; Trade Practices Commission v Arnotts Ltd (No 2) (1989) 88 ALR 90 at 103; Dorajay Pty Limited v Aristocrat Leisure Limited [2005] FCA 588 at [17].
Wigney J continued at [24]:
24.A subpoena also cannot be used for the purposes of “fishing” or conducting a “fishing expedition”. A finding of “fishing” amounts to a finding that the subpoena has no legitimate forensic purpose because the documents are sought to discover if the issuing party has a case, not to support a case that has already been articulated: Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 575. A finding of “fishing” also appears to involve a question of oppression. A subpoena will be more readily set aside if great numbers of documents are required to be produced in circumstances where it cannot be demonstrated that they are likely to be sufficiently relevant: Dorajay at [34].
THE BASIS OF THE OBJECTION
The Notice of Objection sets out the basis on which objection is taken to each paragraph of the subpoena.
In relation to the whole of the subpoena, the objector claims that the subpoena is oppressive and an abuse of process in that it seeks documents from 2005 onwards.
I do not accept that contention. It is asserted by the objector that the interest of B Pty Ltd in the Suburb X property was transferred to the wife in 2005. Requiring the production of documents from that time onwards is not, of itself, oppressive if there is some legitimate purpose for the documents.
The next objection relates to Paragraphs 2, 3, 4, 5, 6, 7 and 8 and is in two parts. The first is that the subpoena calls for documents which are sensitive and contain confidential information in relation to the objector’s personal finances.
That is not a proper basis for objection. If it is “on the cards” that the documents could assist the husband’s case, the fact that they might relate to confidential financial information is not a basis for objection although it may be a basis for orders relating to disclosure or restricting the class of people who may inspect them.
The second part of that objection is that the documents sought are not relevant to the proceedings.
It is difficult to see how the objector’s financial affairs are relevant to the dispute between the husband and the wife. On behalf of the objector it is submitted that the husband has conceded that the wife’s parents paid the school fees for the children. If it is the case that the documents are said to be relevant to the assertion of other financial assistance to the husband and the wife from 2007 onwards, then it is submitted that the objector has already provided, in the form of documents exhibited to her affidavit sworn 12 December 2018, bank statements and bank cheques evidencing the money advanced. The objector makes reference to some 408 pages of documents which have been provided.
Some of those documents have been redacted so that transactions referable to matters other than money advanced to the husband and the wife are not able to be read.
Nothing in the submissions on behalf of the husband explains why the financial affairs of the objector, other than those transactions which relate to money advanced to the husband and the wife, could assist his case.
I do not accept, on the material currently available, the submission that the objector’s finances constitute a financial resource of the wife.
If, at some future time, the husband is able to provide evidence relevant to that submission, then he can seek to issue a subpoena for relevant documents. In those circumstances, it would be appropriate, firstly, to require that the objector file a financial statement before any consideration is given to the issue of a further subpoena to her.
In so far as Paragraphs 5, 7 and 8 relate to the financial records of B Pty Ltd, the same reasoning applies, on the assumption that B Pty Ltd is the alter ego of the objector.
In relation to Paragraphs 5, 7 and 9, the objector claims that the request is an abuse of process because B Pty Ltd is not a party to the proceedings and the wife is not a shareholder or director of B Pty Ltd. She further claims that the request is oppressive in that it seeks records from 2005 onwards.
The fact that B Pty Ltd is not a party to the proceedings is not a relevant consideration, neither is the fact that the wife is not a shareholder or office bearer of B Pty Ltd.
However, again on the assumption that B Pty Ltd is the alter ego of the objector, I am not satisfied that it is “on the cards” that the bank statements and credit card statements of B Pty Ltd will materially assist the husband’s case.
The objection is upheld.
I certify that the preceding thirty five (35) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 11 February 2020.
Associate:
Date: 11/02/2020
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