Ramsey and Ramsey and Ors

[2019] FamCA 451

FAMILY COURT OF AUSTRALIA

RAMSEY & RAMSEY AND ORS [2019] FamCA 451

FAMILY LAW – PRACTICE AND PROCEDURE – Registrar – Review of decision – Where the Applicant and the Second and Third Respondents sought a review of the Orders of a Registrar of this Court – Where the Applicant did not press his application at the hearing – Where the subpoenas were issued to the Second Respondent and a bank relevant to the proceedings – Where issuing a subpoena to a party to the proceedings is not a proper means of dealing with the process of disclosure – Where the subpoena to the Second Respondent is set aside – Where the subpoena issued to the bank has relevance to issues in the case and objection to that subpoena is dismissed.

Evidence Act 1995 (Cth)
Family Law Act 1975 (Cth)
Family Law Rules 1984 (Cth)
Family Law Rules 2004 (Cth)

National Employers’ Mutual General Association Ltd v Waind [1978] 1 NSWLR 372
Scheibner-Grover & Ryan (1987) FLC 91-833; [1987] FamCA 15
Sharpe & Dalton & Twigg (1990) FLC 92-167; [1990] FamCA 63

APPLICANT: Mr Ramsey

FIRST RESPONDENT: Ms Ramsey

SECOND RESPONDENT:

B Pty Ltd

ACN …

THIRD RESPONDENT:

C Pty Ltd

ACN …

FILE NUMBER: BRC 9850 of 2018

DATE DELIVERED: 11 July 2019

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 8 July 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Waterman

SOLICITOR FOR THE APPLICANT: McCarthy Durie Lawyers

THE FIRST RESPONDENT: Appearance excused

COUNSEL FOR THE SECOND AND THIRD RESPONDENTS: Mr Jordan

SOLICITOR FOR THE SECOND AND THIRD RESPONDENTS: Cooper Grace Ward

Orders

1. That Order (2) of Registrar Coutts’ Orders of 6 June 2019 is discharged.

2. The subpoena issued out of the Court on 7 May 2019 addressed to “The Directors, B Pty Ltd ACN …” is set aside.

3. Each of the Applicant’s and the Second and Third Respondent’s costs of and incidental to the matters heard and/or disposed of on Monday, 8 July 2019, are reserved.

4. The documents produced to the Court by B Pty Ltd be returned to that company.

5. The costs of the Applicant and the Second and Third Respondents of and incidental to these applications are reserved.

It is noted that there remain no outstanding interim applications before the Court in this matter.

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 Ramsey & Ramsey and Ors 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 BRISBANE

FILE NUMBER: BRC 9850 of 2018

Mr Ramsey

Applicant

And

Ms Ramsey

First Respondent

And

B Pty Ltd ACN …

Second Respondent

And

C Pty Ltd ACN …

Third Respondent

REASONS FOR JUDGMENT

1. On Monday, 8 July 2019, I had the parties in this matter before me on the hearing of a number of interim applications in property adjustment proceedings commenced by the Applicant husband in the Federal Circuit Court last year. Each of the parties was represented by experienced counsel.

2. Many of the matters that brought the parties before the Court were resolved by negotiation between them outside of Court before the commencement of the hearing. A detailed minute of proposed Orders that the parties asked the Court to make with their consent was handed to the Court after a few hours. I made those Orders and quickly determined one point that remained in dispute. The Orders I made with the consent of the parties included an Order that the company, C Pty Ltd, be joined as the Third Respondent in the proceedings.

3. The Court was then informed that as between the Applicant and the Second and Third Respondents there remained dispute in respect of competing applications to review a Registrar’s determination of objections that had been raised to leave being granted to the Applicant for the inspection of documents produced under subpoena.

4. I read the material each relied upon. I received written submissions for the Applicant and I heard oral submissions from counsel for the Applicant and also from counsel who appeared for both the Second and Third Respondents.

The Orders being reviewed

1. On 6 June 2019, Registrar Coutts of the Brisbane Registry of this Court made Orders that included the following:

   1.      The legal representatives for the parties have leave to inspect and copy the documents produced under subpoena directed to National Australia Bank save and except for the Business Visa Account in the name of Mr F, account number …09 (cardholder limit $5,000).

   2.      The legal representatives for the parties have leave to inspect and copy documents produced under subpoena directed to B Pty Ltd.

   3.      The subpoena to produce documents directed to C Pty Ltd is set aside.

   4.      The Notices of Objection to subpoena filed 27 May 2019 are otherwise dismissed. …

2. The Second Respondent has applied for a review of Orders (1) and (2), save for the part of Order (1) that prevents inspection of the credit card statements of Mr F (who is a Director of the Second and Third Respondents). Counsel for the Applicant informed the Court that he objects to any different Orders being made to those two made by the Registrar, accepting the restriction of the right to inspect the credit card statements of Mr F.

3. The Applicant, though, was, at least at the commencement of the hearing, seeking to review Order 3. However, after some of the oral submissions of counsel for the Second and Third Respondents and, particularly, reference to the decision of Judicial Registrar Moore (as the former Justice Moore of this Court then was) in Sharpe & Dalton & Twigg (1990) FLC 92-167; [1990] FamCA 63 (“Sharpe”), counsel for the Applicant told the Court that the Applicant did not press the review of Order (3).

4. Accordingly, the Court was left required to determine the Second Respondent’s review application.

5. As the review of a Registrar’s decision is done by way of a hearing de novo (a fresh hearing on the merits), the Court’s task is to determine the Second Respondent’s objections to the subpoena that issued out of the Court on 7 May 2019 that were directed at the National Australia Bank (“the NAB”) and at the Second Respondent (“B Pty Ltd”).

6. The subpoena directed at B Pty Ltd required the following long and detailed list of documents to be produced:

   … All documents, records, reports and writings in your custody, possession or control in relation to B Pty Ltd ACN … (hereinafter referred to as “the company”) including but not limited to:

   a.Copies of the company's constitution.

   b.Financial accounts and income tax returns and any schedules prepared in relation thereto for the years ended 30 June 2014 to 30 June 2018.

   c.Details of the company franking account balances at 30 June 2018 and current.

   d.Copies of any management or financial accounts, including profit and loss statements and balance sheets prepared for the period 1 July 2014 to date.

   e.Copies of the computerised accounting data files, such as MYOB or Quickbooks, for years ended 30 June 2014 to 30 June 2018 and to date including details of the software version and any passwords required to access the data files, or if not available, the general ledger, journals, cash receipts and payments books for the same period.

   f.A copy of the fixed asset register or depreciation schedule for the years ended 30 June 2014 to 30 June 2018, and as at currently.

   g.A copy of the bank reconciliation for each bank account operated by the company as at 30 June 2018, and as at currently.

   h.Documents showing details as to whether at the most recent balance date, trade debtors or other assets loans were unrecoverable, and if so, the extent to which they are unrecoverable and the reasons why.

   i.Documents showing details of any payments, loans (including beneficiary loan accounts/unpaid present entitlements) or forgiven debt that is or likely to be subject to Division 7A.

   j.Documents showing details of the date purchased, cost price and number held of all shares owned.

   k.Documents showing details of the date purchase and cost price of all properties and other investments held to date.

   l.Current valuations of all property/investments held.

   m.Current valuations of all plant and equipment and motor vehicles held, if available.

   n.Documents showing details of any stock, including on hand, that is obsolete or is likely to become obsolete and the reasons why.

   o.A copy of the Memorandum and Articles of Association of the company and any amendments thereto.

   p.A copy of any shareholder agreements made between the shareholders of the company.

   q.A copy of the company secretarial records including the Minutes of Meetings of Directors, shareholders and management of the company, allotment and transfer journals, registers of directors and shareholders.

   r.A copy of Trust Deed of Ramsey Family Trust including any amendments thereto.

   s.Documents listing all aged debtors and aged creditors including the amounts payable and amounts owed for the years ended 30 June 2014 to 30 June 2018 and to date.

   t.Documents detailing any income received or expenditure incurred by the entity that does not relate to the activities of the business.

   u.Documents detailing any arrangements with both suppliers and customers for the provision of stock and services.

   v.A copy of any budgets and forecasts prepared for the company.

   w.Schedule of current lease commitments including any description of the leased goods, current lease payout amount, date of commencement of lease, initial principle value, lease payment amounts, lease term, and residual as at 30 June 2018 and currently.

   x.A copy of the current lease, if any, relating to the business premises of the company.

   y.Bank statements for debit and credit accounts for the last 12 months and statements for bank accounts that are affiliated to the company for the last 12 months.

   z.A list of employees and subcontractors of the company for the period 1 July 2014 to present.

   aa.End of Financial Year Employee Payment (Group Certificate) Summaries and Employee Superannuation Summary statements for the period 1 July 2014 to present.

   bb.Integrated client accounts with the Australian Taxation Office for the period 1 July 2014 to present.

   cc.Documents detailing the value of Work in Progress including a list of all customers at 30 June 2018, as at currently and at the date of the last financial statements.

   dd.Copies of all individual quotes as received by customers for the period 1 July 2014 to present.

   ee.Copies of all invoices as received by customers for the period 1 July 2014 to present.

   ff.Documents detailing remuneration, including all drawings, wages, superannuation, motor vehicles, fuel, phone, any other fringe benefits and personal expenditure paid from the company account of Ms Ramsey and Mr Ramsey for the period 1 January 2014 to date.

   gg.Copies of any applications made to banks or lenders for loans, advances or refinance held in relation to the company.

   hh.Copy of the Title Deed Certificate and original documents from the set up of the company.

   ii.A copy of the sale contract and settlement statement for the Boat and bank accounts and other documents detailing how the sale proceeds were disbursed

   jj.Business activity statements for the period 1 July 2016 to September 2017 inclusive.

   kk.Documents detailing dividend payment arrangements including:

   i.    Detail of formal dividend payment policy;

   ii.     Details of dividends declared and paid detail report from 1 Feb 2014 to present; and

   iii.   Expected levels of future dividends.

   ll.Any records relating to the recording of the financial information in the balance sheet of the company as at 30 June 2018 under the headings of 'Loan - The Ramsey Family Trust and Loan', 'Loan - The Mr Ramsey Family Trust' and 'Loan - J Family Trust', including an explanation as to how these entries were calculated.

   mm.A USS containing copies of emails sent and received by Mr Ramsey in email accounts operated by Mr Ramsey whilst working in the company for the period 1 January 2014 to date.

   nn.Copies of the telephone records for the phone number Mr Ramsey used whilst working in the company including phone number ….

   oo.Copies of all documents relating to the issue of shares and change of share structure lodged with ASIC dated 2 November 2018 in the company.

   pp.Copies of any applications made to banks or lenders for loans, advances or refinance. held in relation to the company.

7. The subpoena directed at the NAB required the following documents to be produced:

   … All documents, records, reports and writings from your custody or control including but not limited to:

   a.Originals and/or copies of bankers' diary notes, memoranda, correspondence and loan applications in respect of any cheque account, savings account, investment account, deposit account, loan account or any other account in the names of:

   i.B Pty Ltd ACN …;

   ii.D Pty Ltd ACN …;

   iii.E Pty Ltd ACN …;

   iv.C Pty Ltd ACN …; and

   v.Mr Ramsey born in 1970 and Ms Ramsey born in 1971

   (hereinafter referred to as "the said persons and entities") including but not limited to:

   i.    NAB Business Markets Loan account number …22;

   ii.      Business Overdraft account number …73;

   iii.      Equipment Loan account number …25;

   iv.     Equipment Loan account number ending …88;

   v.      Revolving Lease Limit account;

   vi.     Business Card account number …86;

   vii.NAB Choice Package Home Loan account number   …70;

   viii.    NAB Home Loan account number …25;

   ix.     NAB account number …85;

   x.      NAB account number …07;

   xi.NAB Business Everyday  account number …73; for the period 1 January 2014 to the date of this subpoena;

   b.Originals and/or copies of all mortgages, guarantees or other security currently held by your bank and given as security by the said persons and entities, whether solely or jointly with any other persons and/or any other entities for the period 1 January 2014 to the date of this subpoena;

   c.Originals and/or copies of all investment notices, receipts and interest bearing deposit slips evidencing any investment made by the said persons and entities, whether solely or jointly with any other persons and/or any other entities for the period 1 January 2014 to the date of this subpoena;

   d.Originals and/or copies of all applications for loans, advances or finance executed by the said persons and entities, whether solely or jointly with any other persons and entities in relation to any advance of any moneys made by your bank to the said persons and entities, whether solely or jointly with any other persons and/or any other entities for the period 1 January 2014 to the date of this subpoena;

   e.Originals and/or copies of all correspondence, documents, deeds including trust deeds and any amendments thereto including but not limited to the Ramsey Family Trust, paper writing or instruments supplied, deposited with and/or received by your bank from the said persons and entities, whether solely or jointly with any other persons and/or any other entities for the period 1 January 2014 to the date of this subpoena;

   f.Originals and/or copies for all bank statements for the accounts referred to in paragraph 2 herein for the period 1 January 2014 to the date of this subpoena.

8. The Second Respondent filed a “Notice of Objection” to the subpoena addressed to it on 27 May 2019. It contains nine pages of detailed objections, addressing each document or class of documents required to be produced by the subpoena. The detailed objections include claims that B Pty Ltd has already produced some of the documents through the disclosure process, as well as claims that “the request is oppressively wide”, “the [d]ocuments contain or may contain confidential and/or commercially sensitive information” and/or the documents lack “apparent relevance to the proceedings”.

9. At the hearing on Monday, 8 July 2019, counsel for the Second Respondent did not take the course of addressing and trying to support each objection, one by one. Instead, he took a more general course. He argued the objection to this subpoena on two principal general grounds.

10. Firstly, he argued that the subpoena to B Pty Ltd should be struck out as an abuse of process because B Pty Ltd is a party to the proceedings and that, as such, the discovery or disclosure processes are the appropriate processes to use. He relied upon the decision of Moore JR in Sharpe, and, more precisely, the authorities that Moore JR cited and followed in that decision as authority for that principle. Secondly, he argued that the documents had to be shown by the Applicant to be relevant to the issues in dispute. In this respect, he argued that as the Applicant is seeking relief pursuant to s 106B of the Family Law Act 1975 (Cth) in that he seeks to have the November 2018 issue by B Pty Ltd of further shares to C Pty Ltd (the corporate trustee of Mr F’s discretionary family trust) set aside, the Applicant needs to be able to persuade the Court that the documents are relevant to that issue. I understood counsel’s submission to be that until the Applicant establishes (by pleading or deposition of the asserted fact) the basis upon which he asserts the issue of the additional shares should be set aside, the relevance of particular documents is not able to be determined.

11. As for the subpoena to NAB, with respect to counsel for the Second Respondent, I did not understand him to be arguing the first limb of the twin submissions that I have just outlined in respect of the objection to the subpoena to B Pty Ltd. In fairness, though, I do consider the relevance submission was being made in respect of that subpoena and the documents produced pursuant to it.

What of Moore JR’s decision in Sharpe?

1. Counsel for the Second Respondent referred to the decision of Sharpe. It is a judgment of Moore JR in a case determined in 1990. Moore JR referred to the Full Court authority of Scheibner-Grover & Ryan (1987) FLC 91-833; [1987] FamCA 15 (“Scheibner-Grover”) as supportive of the principle that the provisions of the rules that govern the practice and procedure for pre-trial discovery and inspection are distinct from the provisions of the rules that are to be used to ensure the production of appropriate documents at the hearing of any application. Order 20 of the Family Law Rules 1984 (Cth) governed the discovery process and O 28 governed the production of documents through the use of Court issued subpoena. The Full Court had said, effectively, that the subpoena process should not be used as an aid to discovery.

2. The Full Court in Scheibner-Grover had referred to the decision of the New South Wales Court of Appeal in National Employers’ Mutual General Association Ltd v Waind [1978] 1 NSWLR 372 at 382 and Moore JR quoted extensively from that judgment. The President of the New South Wales Court of Appeal, Moffit P, in that judgment, had acknowledged that a subpoena can be set aside as an abuse of power where it is used for the purpose of discovery.

3. Moore JR followed those authoritative pronouncements of principle and said (at 78,145) “the issue of the subpoena in the absence of discovery ought to be regarded as an abuse of process of the Court and set aside on that ground alone”.

1. That is what counsel for the Second Respondent submitted should happen in this case. He submitted that as the Second Respondent is a party to the proceedings the proper process of obtaining documents from the Second Respondent is through use of the rules relating to disclosure not the use of subpoena.

The rules

1. The rules that govern disclosure and subpoenas are different now from what were in place in 1990. The rules governing disclosure between parties are contained in Part 13.1 of the Family Law Rules 2004 (Cth) (“the Family Law Rules”). Pursuant to r 13.01(1), “each party to a case has a duty to the court and to each other party to give full and frank disclosure of all information relevant to the case, in a timely manner” (my emphasis).

2. The Applicant husband joined B Pty Ltd as the Second Respondent to the proceedings from the very commencement of the property adjustment and spousal maintenance proceedings that he started. Right from the start of the proceedings he sought injunctions against the Second Respondent. Relevantly, the husband, the First Respondent wife and Mr F had all been directors and employees of B Pty Ltd and the discretionary family trust of the husband and wife had owned 67 shares of 100 issued shares and the discretionary family trust of Mr F had owned the other 33 shares. In mid-2018, sometime after the breakdown of the de facto relationship between the husband and the wife, the husband was removed from his directorship of the company by the wife and Mr F. Regular payments he was receiving from the company, however they be characterised, also ceased without his approval.

3. The injunctive relief the husband sought against B Pty Ltd, particularly on an interim basis, was, prima facie, about preserving the value of his family trust’s shareholding in B Pty Ltd. He sought injunctive restraint against the company preventing it from disposing of assets and doing other things that might reduce the value of the shareholders’ interests in the company. Furthermore, one of the injunctions that the husband sought on an interim basis was to restrain the wife as a director of B Pty Ltd from doing any act or thing, including passing resolutions, that would dilute any of their family trust’s shares in B Pty Ltd or that would cause any further shares in B Pty Ltd to be issued.

4. The husband’s applications for, inter alia, that injunctive relief were heard by Judge Coates in the Federal Circuit Court at Brisbane on 3 October 2018 and his Honour reserved his judgment. He delivered judgment on 12 November 2018. Interestingly, because of the poor state of the Applicant’s evidentiary material, his Honour dismissed most of the applications made by the Applicant husband, including the applications for injunctive relief. His Honour also ordered the Applicant husband to file an Amended Initiating Application. The husband did that. It did not include the same interim applications for injunctive relief, seeking the restraint of the wife from doing anything to dilute the couple’s shareholding or that would cause any further shares in B Pty Ltd to issue.

5. However, just before the matter was next to be heard by Judge Coates, the Applicant husband discovered something quite startling to him. In early November 2018, whilst Judge Coates’ judgment on the interim application that included application for injunctive restraint of the wife was reserved, she and the other director of B Pty Ltd, Mr F, apparently met with legal and accounting advisers and caused B Pty Ltd to issue more shares to Mr F’s family trust, thus diluting the value of the husband and wife’s family trust’s shareholding in the company and giving Mr F’s family trust a controlling, larger interest in the company.

6. The husband learned of this some months later and then filed another Amended Initiating Application in which he seeks the s 106B relief I have already referred to and in which he also made application to join the corporate trustee (C Pty Ltd) of Mr F’s family trust as a further respondent.

7. Now, reverting back to discussion of the Family Law Rules, I note that Division 13.1.2 sets out the duty of disclosure required by parties to a financial case. Rule 13.02(2) says that the “Division does not apply to a party to a property case who is not a party to the marriage or de facto relationship to which the application relates, except to the extent that the party’s financial circumstances are relevant to the issues in dispute” (my emphasis).

8. I am satisfied that although B Pty Ltd is not a party to the de facto relationship of the Applicant husband and First Respondent wife, the company’s financial circumstances are clearly relevant to the issues in dispute. One of the significant issues in this case is the value of the shareholdings of the discretionary family trust of the Ramsey family, as well as the circumstances under which the B family’s family trust came to be issued with more shares that increased its interest in the company to a level greater than the interest of the Ramsey family’s trust. Another of the issues, relevant to the determination of the value of the shareholdings in the company, is whether or not a very expensive motor boat was actually an asset of the company or an asset of the Ramsey family. There is a related issue as to whether or not, when that boat was sold by Mr F and the First Respondent, it was sold in an arms’ length transaction for its true value. The Applicant and Mr F appear to adopt contrary positions in respect of this matter.

9. As such, it is plainly clear that B Pty Ltd must therefore make full and frank disclosure of its financial circumstances including all of the matters set out in r 13.04(1). The duty of disclosure applies to each document that is or has been in the possession, or under the control of the party disclosing the document and is relevant to an issue in the case. Relevance to an issue in the case is best considered by reference to the definition of “relevant evidence” in s 55(1) of the Evidence Act 1995 (Cth). It provides:

   The evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding.

10. Prima facie, the authoritative principles applied by Moore JR in Sharpe therefore seem applicable in this case.

The submissions for the Applicant

1. Counsel for the Applicant effectively submitted that the Applicant should not have his desire to inspect the documents produced by B Pty Ltd thwarted by the application of these principles relied on by the company. He submitted that disclosure of documents had been requested of B Pty Ltd repeatedly by the solicitors for the Applicant husband and that after it had not been forthcoming, the subpoena was caused to be issued. He submitted that in these circumstances, given that documents had been produced by B Pty Ltd pursuant to the subpoena and were in the Court’s custody now, that leave should be given to inspect the documents. (The Court was informed that the Applicant’s legal representatives had voluntarily refrained from inspecting the documents following the Registrar’s decision because of their knowledge that the Second Respondent was seeking to review the decision.) Counsel effectively submitted that the Applicant ought not have to be put to further costs of bringing an application for specific orders pertaining to disclosure in the circumstances.

My determination in respect of B Pty Ltd’s objection to the subpoena issued addressed to it

1. With respect to counsel for the Applicant, I am persuaded by the submissions of counsel for the Second Respondent that the issue of subpoena to a party to the proceedings who is duty bound to fully and frankly comply with disclosure obligations is not a proper means of dealing with the process of disclosure and is more appropriately considered as an abuse of the Court’s process. Just as Moore JR recognised, that the principles may have been “more honoured in the breach (in practice) than in the observance” is not reason to disregard them. I accept that the proper course for the Applicant to take if he considers that the Second Respondent is not honouring its disclosure obligations is to file an Application in a Case to the Court for particular orders pursuant to r 13.22. Accordingly, I uphold the Second Respondent’s general objection to the subpoena served on B Pty Ltd despite the fact that B Pty Ltd produced documents to the Court in answer to the subpoena. I will discharge Order (2) of the Registrar’s Orders of 6 June 2019 and set aside the subpoena addressed to B Pty Ltd.

2. That said, I repeat what I said in oral exchange between bench and bar at the hearing: if the Applicant now considers it has to bring an application for orders for further and better disclosure and that application is successful, it is likely that those circumstances might very well justify a costs order being made. Similarly, if the Applicant brings such an application and fails, those circumstances might also justify a costs order being made. In this regard, I note the provisions of r 1.08(1) and the responsibilities it imposes on each party to proceedings and also the provisions of r 1.08(2) and the express obligation it imposes on a lawyer for a party. I also note the provisions of r 19.10 that empower the Court to make Orders against lawyers for costs thrown away. The Court reasonably expects of parties and, more particularly, their legal representatives, compliance with and honouring of obligations imposed by the Family Law Rules. As such, the question of compliance by B Pty Ltd with its disclosure obligations should not come back before the Court without an expectation that there will be costs consequences against any party who transgresses the Family Law Rules and, potentially, that party’s lawyers.

My determination in respect of B Pty Ltd’s objection to the subpoena issued addressed to the NAB

1. The NAB is not a party to the proceedings. It is the banker for the husband and the wife and also for B Pty Ltd. It produced hard copies of hundreds of documents to the Court in answer to the subpoena. There was no objection by the bank. There was no objection by the wife. There is objection by B Pty Ltd through one of its directors, Mr F. I have outlined the basis of the objection.

2. In the course of determining the objection, I perused the bundles of documents produced by the bank in answer to the subpoena. Apart from the bundle of credit card statements pertaining to a credit card account of Mr F that were in a sealed envelope following Registrar Coutts’ Order (1) of 6 June 2019, I was not satisfied that the general objection that the documents are not relevant to an issue in the case is sustainable.

3. My general impression of the documents produced was that they have relevance to the issues I have already identified including those going to the determination of the value of the shareholdings in the company, including issues surrounding the identification of assets and liabilities of the company.

4. I am not persuaded that B Pty Ltd’s objection to the other parties’ being given leave to inspect and copy those documents should be sustained. I dismiss the objection. Order (1) of the Registrar’s Orders of 6 June 2019 remains extant. Any concerns arising from the asserted commercial sensitivity of the documents are met by the obligation on parties not to use documents or information obtained pursuant to the disclosure or subpoena processes for any purpose other than in the proceedings. Breach of that obligation is a contempt of court.

Costs

1. At the conclusion of the hearing I invited submissions in respect of costs from each of the parties, whatever the outcome. As for the costs of and incidental to the review of Orders (1) and (2) of the Registrar’s June 6 Orders, each party submitted that I should simply reserve those costs. I will do that.

2. Counsel for the Third Respondent submitted that the Applicant should pay the costs of the Third Respondent of and incidental to the application to review Order (3) of the Registrar’s 6 June Orders because he simply did not press the application after counsel for the Second and Third Respondents had made his general submissions referring to the decision in Sharpe. There is some merit in that submission.

3. Counsel for the Applicant submitted that the costs of and incidental to that review application should also be reserved as questions surrounding the merits or otherwise of the matters being litigated to which C Pty Ltd has been joined to the proceedings are yet to be determined.

4. I expect the decision of the Applicant not to prosecute the application for review of the Registrar’s Order (3) was made on the spur of the moment after the principles discussed in Sharpe were referred to by counsel for the Third Respondent. Counsel probably accepted the validity of the submission that the proper process for obtaining relevant documents from a party was by use of the disclosure processes in the Rules.

5. The last occasion the matter was before me, Mr F informed the Court that C Pty Ltd was opposing the application to be joined as a party. In those circumstances, and without knowing whether or not C Pty Ltd would ultimately be joined as a party, the pursuit of documents of that company by subpoena could not be seen to be completely inappropriate.

6. The evidence establishes that several days prior to the hearing on 8 July, new solicitors for C Pty Ltd informed the Applicant’s solicitors that the application to join C Pty Ltd would be consented to and not opposed. Realistically, perhaps, after that, the Applicant could have desisted with the review application and accepted that the usual disclosure processes were the appropriate course. It is unclear to me exactly how much of the costs incurred in instructing solicitors and counsel to appear on Monday, 8 July could be said to relate to the Applicant’s review application that was not pressed on the day. Accordingly, it is probably not appropriate to simply arbitrarily determine a figure at this point. Furthermore, on the evidence I have seen, prima facie, the decision to seek to join C Pty Ltd to the proceedings and to seek orders pursuant to s 106B of the Family Law Act 1975 (Cth) setting aside the issue of further shares in B Pty Ltd to C Pty Ltd appears to be very soundly based, with reasonably good prospects of success in the future. Initial opposition to the joinder, though subsequently withdrawn, appears itself to have been unsound. That initial opposition may itself have been productive of unnecessary costs on the Applicant’s part.

7. In the circumstances, I will reserve each party’s costs of and incidental to the applications heard and disposed of on 8 July 2019.

I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 11 July 2019.

Associate: 

Date:  11 July 2019