SEAGER & CAGNON
[2020] FCCA 1479
•5 June 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SEAGER & CAGNON | [2020] FCCA 1479 |
| Catchwords: FAMILY LAW – Procedural – subpoena issued by the Applicant to the National Australia Bank for production of bank statements by the “housemate” / “partner” of the Respondent – objection to the subpoena on the grounds of relevance and fishing – Notice of Objection dismissed. |
| Cases cited: Anderson & Anderson & Ors [2014] FamCA 491 Martin & Martin and Anor (No 2) [2014] FamCA 232 Papadopoulos & Papadopoulos(No 2) [2007] FamCA 1683 Trade PracticesCommission v Arnotts Limited (No 2) [1989] FCA 248 White v Tulloch (1995) FLC 92-640 |
| Applicant: | MS SEAGER |
| Respondent: | MR CAGNON |
| File Number: | MLC 4936 of 2017 |
| Judgment of: | Judge Kari |
| Hearing date: | 29 May 2020 |
| Date of Last Submission: | 29 May 2020 |
| Delivered at: | Adelaide |
| Delivered on: | 5 June 2020 |
REPRESENTATION
| Counsel for the Applicant: | Mr Anderson |
| Solicitors for the Applicant: | Purdie Jordan |
| The Respondent appeared in person. |
ORDERS
That the Notice of Objection filed 17 February 2020 to the Subpoena to the National Australia Bank issued on 4 December 2019 be dismissed.
That the parties have leave to inspect and copy those documents produced pursuant to the Subpoena to the National Australia Bank issued on 4 December 2019 and returned on 18 December 2018.
IT IS NOTED that publication of this judgment under the pseudonym Seager & Cagnon is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
MLC 4936 of 2017
| MS SEAGER |
Applicant
And
| MR CAGNON |
Respondent
REASONS FOR JUDGMENT
Introduction
The substantive proceedings between parties relate to the question of property settlement.
The issue for determination at this juncture is of narrow focus and relates to a subpoena that the Applicant issued to the National Australia Bank on 4 December 2019 for the production of bank statements relating to bank accounts held by a person whom the Respondent has variously described as his “housemate” / “partner”, Ms A.
The subpoena itself sought production of documents in the following terms:
all statements from 21 December 2015 to the present for all accounts held in the names of, Mr Cagnon (also known as Mr Cagnon) date of birth 1989 and Ms A, either jointly or severally, including but not limited to, the Home Loan Account in the name Mr Cagnon BSB number ...1 Account number ...98.
Neither Ms A, nor the Respondent objected to the production of Mr Cagnon’s banking records with the National Australia Bank, nor did they object with respect to any records relating to accounts held jointly between the Respondent and Ms A.
Ms A’s objection related only to the inspection and copying of records that relate to her personal and separate accounts. The objection was based on two separate grounds:
a)Firstly, her Notice of Objection cited that “I have not been served with this subpoena and therefore object to any parties viewing it’s contents”; and
b)Secondly in her affidavit filed in support of the objection she asserted an objection on the basis of “relevance, confidentiality and fishing”.
During the hearing however, Ms A amended her position and she only pursued the latter objection.
Ms A is supported in her objection by the Respondent, although he has not himself filed any Notice of Objection or any affidavit setting out the grounds for his objection.
Background
The parties commenced a relationship in approximately 2010, were married in 2014 and separated on 21 December 2015.
The parties have two children namely X born in 2013 and Y born in 2015, who live primarily with the Applicant.
These proceedings were commenced by the Applicant on 30 August 2017, however they have not meaningfully progressed because for some time now the Applicant has made complaints about the Respondent’s lack of candour and discovery regarding his financial affairs and the arrangements with Ms A.
In his Amended Financial Statement filed 12 February 2019:
a)The Respondent described his occupation as “unemployed/pension”;
b)The Respondent deposed that his income was $1,120 (gross) per week from a Military Invalidity Pension;
c)Ms A is described by the Respondent under “Part E: Other income earners in your household”, as his “House Mate” earning $1,000 per week.
d)The Respondent deposed that he and Ms A were both residing at B Street, Suburb C in the State of Victoria, being a property which he also said he owned equally with Ms A and was subject to a mortgage to the National Australia Bank.
e)In relation to that mortgage, the Respondent deposed that he was paying $400 per week towards the mortgage and that his “50% share” of the principal mortgage liability was $295,000.
As a result of the complaints variously made by the Applicant with respect to the Respondent’s inadequate discovery, specific orders directed to discovery by the Respondent have been made in these proceedings as follows:
a)On 23 May 2018, orders were made requiring the Respondent to provide to the Applicant’s solicitor by way of discovery before 29 June 2018 the following documents:
i)Any documentation that identifies the class of pension under the MSBS received by the respondent;
ii)All or any correspondence between the MSBS officers or agents and the respondent from December 2015 to the current date;
iii)Any documentation identifying leave or retention benefits received by or due to the respondent since the date of separation; and
iv)All bank statements relating to bank accounts held by the respondent since separation.
b)On 8 November 2018, orders were made for both parties to file an Affidavit of documents by way of formal discovery by 31 January 2019.
c)On 29 April 2019, with the matter already listed for trial commencing 21 August 2019, orders were made as follows:
1.That within 21 days the Father do instruct his solicitors to respond in writing (with such Response to include any further discovery) to the matters raised in the Mother’s Affidavit filed 23 April 2019 and specifically Annexure “A” thereto.
2.That paragraph 4 of the Order made 18 February 2019 be varied such that the Father file and serve his 2018 tax return on or before 8 May 2019.
5.The Father file and serve any Affidavit on which he intends to rely upon at Trial together with any Amended Response for Final Orders and an updated Financial Statement on or before close of business on 2 August 2019.
d)Those same orders contained notations in the following terms:
B. The mother’s Affidavit filed on 23 April 2019 in which significant complaints are made about lack of discovery by the Father and significantly those set out in Annexure “A” to that Affidavit.
E. That in the event that the Father does not comply with these orders and/or his obligations to discovery generally then the Mother may choose to file either an Application in a Case and/or issue any relevant subpoena and the Father is on notice as to an application as to cost.
e)Of significance, the Father did not comply with paragraph 2 of the Order made on 29 April 2019 for the filing of his 2018 tax return. He did however file an updated Financial Statement on 9 August 2019 and a Trial Affidavit on 14 August 2019 pursuant to paragraph 5 of the Order, albeit late.
f)On 21 August 2019 notations were made to the orders made that day that “That the Applicant maintains her complaint with respect to the Respondent’s incomplete disclosure, including but not limited to matters relation to superannuation.”
In her affidavit filed 28 April 2020, Ms A deposes that:
My financial commitment with the Respondent commenced February 2018 with the purchase of B Street, Suburb C and associated NAB home loan account, with no other joint financial interest.
Ms A does not otherwise in her affidavit address her relationship status with the Respondent.
During the hearing I was provided with copy of the Notice of Decision from the Child Support Agency dated 22 November 2019. In that decision, the following is recorded:
I have already discussed Mr Cagnon’s income, so far as known. Unfortunately I have little other information other than that he is living in a property that he has purchased with his partner and they each pay $1,250.00 per month on the home loan.[1]
[1] Exhibit 1 - Notice of Decision under Child Support Assessment Act dated 22 November 2019, p 294.
As best as I can ascertain from the documents filed in this proceedings, other than the Amended Financial Statement previously referred to, Mr Cagnon has described Ms A as:
a)His partner during appointments relating to the preparation of a Family Assessment Report across November 2019 – January 2020; and
b)His “partner” and “support person” in his affidavit filed 28 May 2020 with respect to parenting matters.
In addition, the Applicant asserts in her affidavit filed on 4 May 2020 with respect to a parenting dispute that arose during the COVID-19 pandemic when the father is said to have travelled from Victoria to South Australia with Ms A in breach of travel restrictions, she was told by Chief Commissioner Rice that Ms A had been permitted to enter the state of South Australia on the basis that she was Mr Cagnon’s “carer”.
During the hearing, which was conducted remotely by Microsoft Teams due to the COVID-19 Pandemic, the Respondent and Ms A were present together and attending using the same computer and hardware setup.
The Law
Relevance
With respect to the question of the relevance, in simple terms, the Applicant must establish that the bank statements that she has sought in relation to Ms A have a connection to the main issues in dispute in the property settlement proceedings between the Applicant and the Respondent; in this instance that the documents will assist the court to understand the Respondent’s financial circumstances.
The relevance test has variously been described in the following terms:
a)In Trade PracticesCommission v Arnotts Limited (No 2) (1989) FCA 248; (1989) 21 FCR 306 Beaumont J identified that documents were relevant if they “could possibly throw light on the issues in the main case”.
b)In White v Tulloch (1995) FLC 92-640 the Full Court of the Family Court referred to the test in terms of documents having “a sufficient apparent connection to justify their production or inspection”.
c)In Papadopoulos & Papadopoulos(No.2) [2007] FamCA 1683 Cronin J commented at paragraphs 49 to 51:
The question of what is relevant takes on significance. The objective must be to assist the parties and the court in the determination of the issues in dispute. How does one determine that at an early stage? This issue was considered in the Victorian Supreme Court in Killorgan Investments Pty Ltd v Baycorp Advantage Business Information Services Limited and Ors where Byrne J said:
The degree of relevance for this purpose is not high: the inspecting party need only show a legitimate forensic purpose in the inspection. A party is entitled to inspect documents not only to see if they contain relevant facts, but also to see if they contain information which may be proved otherwise than through that document.
Accordingly, the bar is not set very high in respect to the question of relevance in a civil proceeding as between strangers. It should be less so in family law proceedings provided the pursuit of information is genuinely designed to assist in determining the issue and not for some illicit or harassing type of reason.
The onus in establishing the relevance lies on the person seeking the production of the documents either by way of subpoena or through discovery (citation omitted).
In Anderson & Anderson [2014] FamCA 491, Justice Cronin commented at paragraph 12:
Relevance is a difficult ground for an ‘arms-length’ objector because as an outsider to the parties and the proceedings, normally one would not expect that the subpoenaed person would have any understanding of the litigation such as to be able to say what documents have any relevance.
Fishing
Fishing has been described by Cronin J in Martin & Martin and Anor (No 2) [2014] FamCA 232 at paragraph 28:
… the focus of the Court should be whether it was ‘on the cards’ that the documents would materially assist. ‘Fishing’ can be argued where the pursuit of information is random, unguided and the pursuer has no case but seeks to build one…
In Anderson & Anderson [2014] FamCA 491 at paragraph 34, Justice Cronin considered whether a subpoena directed to a law firm of which the husband was a partner, and commented:
I observe that ‘fishing’ occurs where, somewhat like ‘cross-checking’, a party issues the subpoena not to obtain evidence to support a case but to decide whether there is a case at all. In circumstances where the wife knows of, and the husband disclosed, an income stream that seems to be largely governed by trust structures, I consider that it may be on the cards that the information could lead to a confirmation that the income is or is not, as the husband declares in his financial statement. However, it is conceivable that those same structures may also point to income splitting devices, tax minimisation potentials and the like, all of which are relevant to the matters that the Court has to consider in s79(4)(e) of the Act. The Court is obliged to consider financial resources.
Discussion
The Applicant argues that the documents that she has sought from the National Australia Bank have direct relevance.
What Ms A would not know, because she is not a party to the proceedings, is that the Applicant has been seeking quite specific discovery from the Respondent for over a year now.
Those requests for discovery have been traversed by the Applicant’s solicitors in correspondence and in affidavit material filed in this court, as identified in the Notations and the Orders made on 29 April 2020 set out earlier in these reasons.
Significantly, in purported compliance with paragraph 1 of those Orders and on 23 May 2019, the Respondent responded via his then solicitor to those specific requests for discovery. In that correspondence, the Respondent gave an explanation with respect to four specific transactions that the Applicant had queried from the limited discovery and bank statements that the Applicant had sighted. In that correspondence, the Respondent identified that between 11 May 2017 and 5 October 2017 he had transferred the total sum of $53,450 to accounts held by Ms A in four separate transactions as follows:
D. Transfers to Ms A
- 11 May 2017 - $13,450 – Credit Card Repayment
- 19 Sep 2017 - $15,000 – Loan Repayment (this was to Loan of $43,844)
- 20 September 2017 - $15,000 - Repayment (this was to Loan of $43,844)
- 5 October 2017 - $10,000 – Repayments to family friend – They needed help after a breakdown of a relationship. Ms A transferred the amount because it was her long-term friend. They are in the process of trying to pay our client back when possible.
The Applicant submits that as a result of this information from the Respondent, Ms A’s bank accounts are directly relevant to the issues in dispute because the bank statements will either prove or disprove the Respondent’s assertions as to the financial arrangements that he has in place with Ms A. This is a submission that I agree with. The Respondent himself has made the personal bank accounts of Ms A directly relevant. It is not a case of the Applicant going off on her own frolic fuelled by suspicion and innuendo hoping to turn up information in Ms A’s bank accounts.
Having heard this submission, Ms A sought to amend her objection such that she only objected to bank statements for accounts in her sole name being produced earlier than May 2017, save and except that she otherwise maintained her objection in relation to the production of any statements relating to her credit cards.
The Applicant’s position is that the breadth of the subpoena is appropriate given the conflicting information that the Respondent has given with respect to his financial affairs generally and that which he and Ms A have given with respect to the financial arrangements that exist between them. Specifically attention was drawn to:
a)The various explanations given and the information available for documents as to how the mortgage for the B Street, Suburb C property is being paid, and in particular:
i)The Respondent having deposed in his Financial Statement filed 12 February 2019 that he was paying $400 per week towards the mortgage for the B Street, Suburb C property.
ii)The Respondent advising the Child Support Agency in November 2019 that each and Ms A were personally paying $1,250 per month towards the mortgage for the B Street, Suburb C property (making combined total payments of $2,500 per month).
iii)The statements for the mortgage over the B Street, Suburb C property for the period 8 August 2018 – 7 February 2019 evidencing that Ms A has been paying approximately $2,500 each month into the mortgage.
b)Ms A deposing in her affidavit that the financial arrangements between her and the Respondent did not commence until February 2018, which stands in stark contrast to the information provided in the correspondence from the Respondent’s solicitor dated 23 May 2019.
c)The Respondent having advised the Child Support Agency in November 2019 that he has received income from employment with “G45” in the amount of $13,000, which the Applicant asserts is not identified by way of any deposits into accounts held by the Respondent.
Having heard these submissions on behalf of the Applicant, and in response to questions from the bench:
a)Ms A submitted that she and the Respondent began living together in approximately July 2016.
b)The Respondent submitted that the statements for the mortgage over the B Street, Suburb C property do not show deposits from him as he has typically withdrawn cash from his accounts and given those funds to Ms A to deposit into her accounts to make the mortgage payments.
In light of the conflicting evidence that the Respondent has given throughout these proceedings, and the responses that he and Ms A gave during the course of the hearing, I am satisfied that the breadth of the subpoena is of specific and appropriate focus. In my view, at this juncture it would appear that the only way the court is able to begin to have any understanding as to the financial arrangements that exist between the Respondent and Ms A is for the statements for all of the accounts operated by Ms A to be the subject of inspection from the time that the parties separated.
For all of these reasons, I will make orders dismissing Ms A’s objection and otherwise make orders for inspection and copying of the documents produced by the National Australia Bank as appear at the commencement of these reasons.
I certify that the preceding thirty three (33) paragraphs are a true copy of the reasons for judgment of Judge Kari
Associate:
Date: 5 June 2020
0
5
0