SELDON & SELDON
[2020] FamCA 762
•14 September 2020
FAMILY COURT OF AUSTRALIA
| SELDON & SELDON | [2020] FamCA 762 |
| FAMILY LAW – ARBITRATION – proceeding in National Arbitration List – philosophy of the list to provide speedy, cost efficient determinations of applications in the list. FAMILY LAW – SUBPOENA – challenge to the width of documents sought – challenge based also on whether a “fishing expedition” was being engaged in – held, documents sought were relevant and none of the grounds of objection were made out. |
| Family Law Act 1975 (Cth) s 79, 117(1) Family Law Rules 2004 (Cth) ch 13 |
| Air Canada v Secretary of State for Trade [1983] 2 AC 394 Alister v R (1984) 154 CLR 404 Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd [1998] FCA 1599 Australian Competition and Consumer Commission v Shell Co of Australia Ltd [1999] FCA 212 Beckert & Beckert [2018] FCCA 3847 Botany Bay Instrumentation & Control Pty Ltd v Stewart [1984] 3 NSWLR 98 Burmah Oil Co Ltd v Bank of England [1980] AC 1090 Cahill & Cahill [2013] FamCA 176 Chen & Chen & Ors (No. 3) [2020] FamCA 744 Commissioner for Railways v Small (1938) 38 SR (NSW) 564 Dupont v Chief Commissioner of Police (2015) 53 Fam LR 278 Hatton v Attorney-General (Cth) (2000) 26 Fam LR 570 In the Marriage of Epstein (1993) 16 Fam LR 588 In the Marriage of Wilson (1989) 13 Fam LR 205 National Employers' Mutual General Insurance Association Ltd v Waind (1979) 141 CLR 648 Purnell Bros Pty Ltd v Transport Engineers Pty Ltd (1984) 73 FLR 160 R v Saleam (1989) 16 NSWLR 14 Ragg v Magistrates’ Court of Victoria (2008) 18 VR 300 Santos Ltd v Pipelines Authority of South Australia (1996) 66 SASR 38 Trade Practices Commission v Arnotts Ltd (No. 2) (1989) 21 FCR 306 Waind v Hill and National Employers’ Mutual General Association Ltd [1978] 1 NSWLR 372 Wingecarribee Shire Council v Lehman Brothers Australia Ltd (No. 4) [2010] FCA 1128 Wong v Sklavos [2014] FCAFC 120 |
| Harold H. Glass, Seminars on Evidence (Law Book Co of Australasia, 1970) |
| APPLICANT: | Mr Seldon |
| RESPONDENT: | Ms Seldon |
| FILE NUMBER: | PAC | 230 | of | 2018 |
| DATE DELIVERED: | 14 September 2020 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Wilson J |
| HEARING DATE: | 9 September 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms R. Druitt |
| SOLICITOR FOR THE APPLICANT: | Frank Law |
| COUNSEL FOR THE RESPONDENT: | Mr J. D. Shaw |
| SOLICITOR FOR THE RESPONDENT: | Langenberg Law |
Orders
I dismiss the notice of objection dated 24 August 2020 to the subpoena addressed to D Pty Ltd.
Costs of this subpoena challenge must be absorbed by the parties under s 117(1) of the Family Law Act.
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 Seldon & Seldon 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 MELBOURNE |
FILE NUMBER: PAC 230 of 2018
| Mr Seldon |
Applicant
And
| Ms Seldon |
Respondent
REASONS FOR JUDGMENT
Introduction
Three business days ago I heard debate in this proceeding about the subpoena dated 4 August 2020 issued by the wife and directed to D Pty Ltd. The husband objected to the production of documents in response to the subpoena, mainly on the grounds of the width of the subpoena and that the subpoena will require the recipient to undertake a fishing expedition.
This proceeding is presently before an arbitrator who has adjourned the hearing of the arbitration pending the receipt of updated valuations. Counsel informed me the parties anticipate the arbitration to resume in November this year.
This proceeding has come before me in my capacity as Judge-in-Charge of the National Arbitration List. His Honour Judge Dunkley of the Federal Circuit Court of Australia transferred this proceeding to my docket by order dated 27 August 2020.
Before me I had the inestimable benefit of submissions from Ms Robyn Druitt of counsel and from Mr John Shaw of counsel.
By way of overview, the wife applied for spousal maintenance by application in a case sealed on 1 September 2020. She filed an affidavit in support made 31 August 2020.
In support of her spousal maintenance claim and more generally in relation to s 79, the wife is endeavouring to show that the husband has applied discretionary spending at a motorcycle vendor either on making purchases for himself or for his son and son-in-law. On behalf of the husband, Ms Druitt objected to the subpoena on the basis that the range of documentation sought was too wide or on the basis that in order to respond to the subpoena, the recipient must undertake what the cases call “a fishing expedition”.
Synopsis
For the reasons that follow I take the view that none of the grounds of objection have been established.
Relevant factual setting
Certain elementary factual matters were given by the wife in her affidavit made 31 August 2020. They were as follows –
a)the applicant and respondent married in 2010, separated in March 2017 and divorced in 2020;
b)she suffered two work-place injuries, the first in 2006 and the second in 2013, relevantly, the latter during the course of the marriage;
c)the wife underwent major neck surgery in 2013 and major shoulder surgery in 2014;
d)she became incapacitated for work purposes from July 2015;
e)she commenced a compensation claim soon after ceasing work;
f)on 21 March 2017 she left the former matrimonial home;
g)from May 2017 she was on sickness benefits;
h)in December 2019 her compensation claim was resolved pursuant to which she received $181,762.50;
i)she has exhausted the amount of the compensation award;
j)she has unsuccessfully sought work over the last two years; and
k)her brother, who once provided financial support to her, is now unable to do so following his redundancy.
The relevance of D Pty Ltd was addressed in submissions prepared on behalf of the wife dated 28 August 2020. Expressed most simply, on behalf of the wife the factual premise on which the subpoena was based amounted to the following –
a)disclosure in relation to the husband’s bank accounts revealed a payment on 3 February 2018 to D Pty Ltd of $1,000, a payment on 15 November to D Pty Ltd of $1,185.75 and a payment on the same day to the same payee of $232.61;
b)those three amounts totalled $2,418.36;
c)according to the wife the three transactions mentioned above constituted a diversion of funds by the husband or his company;
d)the sum of $1,000 paid to D Pty Ltd on 3 February 2018 was the deposit towards the husband’s purchase of a Motorcycle 1, according to the wife;
e)between 6 February 2018 and 9 February 2018 the husband paid cash to payees described as “WDL” or “Mr Seldon” in amounts totalling $30,500;
f)the aggregate sum of $30,500 with the deposit of $1,000 was the purchase price for the motorcycle acquired by the husband; and
g)the wife suspects that the motorcycle is in the name of the husband’s son or son-in-law and was transferred to one or the other by the husband to reduce the pool of assets held by the husband, so she contended.
No affidavit was filed by the husband to support his objection to the subpoena addressed to D Pty Ltd. However, on his behalf Ms Druitt of counsel provided succinct and helpful written submissions that she developed in her verbal submissions before me on 9 September 2020. Before addressing those submissions it is utile to record the terms of the subpoena. To better understand the schedule that appears below, it was common cause that Mr B is the husband’s son and Mr C is the husband’s son-in-law.
The schedule to the subpoena addressed to D Pty Ltd was as follows –
Books, documents and things you must produce from your possession, custody or control
1. a copy of this subpoena
2.All documents whatsoever held by you in relation to Mr B or Mr C for the last 5 years.
3.All documents in relation to, but not limited to, a transaction that occurred on or about the 2 February 2018 in the amount of $1,000 by Mr B or Mr C.
4.Any records of accessories, motorcycles or vehicles purchased, hired or traded from or about 2 February 2018 until 31 May 2020 by Mr B or Mr C.
5.Any records of cash monies paid to D Pty Ltd or any of its subsidiaries for accessories, vehicles or motorcycles purchased by Mr B or Mr C.
6.All documents in relation to, but not limited to, a transaction that occurred on or about the 15 November 2018 in the amount of $232.61 from Mr B or Mr C.
The husband contended the subpoena was defective on the grounds of relevance, abuse of process and fishing. In developing each, Ms Druitt contended in her written submissions as follows –
a)citing Waind v Hill and National Employers’ Mutual General Association Ltd,[1] the husband said the court must determine the relevance of the documents sought;
b)citing the decision of Cronin J in Cahill & Cahill,[2] the focus in a subpoena dispute will be determined by reference to relevance and the obligation to make full and frank disclosure under Chapter 13 of the Family Law Rules;
c)citing In the Marriage of Epstein,[3] the husband said the wife needed to demonstrate how “generic and irrelevant documents as subpoenaed will assist her in substantiating a claim that the applicant husband is using company funds for personal family expenses”;
d)it was an abuse of process for the wife to seek documents “in such extensive terms”;
e)citing R v Saleam,[4] Alister v R[5] and Wingecarribee Shire Council v Lehman Brothers Australia Ltd (No. 4),[6] the husband said the subpoena directed to D Pty Ltd was fishing as it was directed to a third party and it was not “on the cards” (as that phrase was used by Rares J) that the documents would materially assist the wife in the proceeding; and
f)even if the objection is disallowed, only paragraphs 3 and 6 were of any importance.
[1] [1978] 1 NSWLR 372.
[2] [2013] FamCA 176.
[3] (1993) 16 Fam LR 588.
[4] (1989) 16 NSWLR 14.
[5] (1984) 154 CLR 404.
[6] [2010] FCA 1128.
In reply, Mr Shaw, for the wife prepared written submissions dated 9 September 2020. In them the wife argued that the documents sought were relevant, she was not fishing and the subpoena process was not an abuse of the court’s process. In yet further written submissions Mr Shaw pointed up that the High Court’s decision in Alister v R[7] related to public interest immunity as did the House of Lords decisions in Burmah Oil Co Ltd v Bank of England[8] and Air Canada v Secretary of State for Trade.[9] Mr Shaw said this case was “a simple family law case”.
[7] (1984) 154 CLR 404.
[8] [1980] AC 1090.
[9] [1983] 2 AC 394.
Somewhat akin to a surrejoinder, Ms Druitt provided a reply to Mr Shaw’s reply. Disregarding repetitive submissions about relevance and fishing, the gravamen of her final reply submissions was as follows –
a)the issue is whether the wife should be permitted to seek documents from a third party to establish a connection between the third party and the husband; and
b)the company valuer can be cross-examined on the issue.
Before descending to the main issues, I regret to say I disagree with each of Ms Druitt’s final reply points. True it is that the company valuer can be cross-examined, but he or she is unlikely to be able to give evidence about a collection of transactions, if proved, between the husband and a motorcycle vendor. Nor is the valuer likely to be able to speak about the husband’s purpose in those transactions.
So far as the proposition was concerned that documents should not be sought from a third person to establish a connection between the husband and another, it seemed to me that the compulsion of the subpoena process is very frequently adopted for that very purpose.
Let me now go to the main points urged by Ms Druitt.
Relevance
Ms Druitt contended that the relevance of the documents sought by the subpoena was tenuous at best. She mainly argued that the documents if produced were irrelevant to any issue in the property proceeding between the applicant and the respondent.
I disagree. In my view any documents produced in response to the subpoena are likely to be relevant. They go, or may go, to the issue of the husband’s application of funds. If the wife’s suspicions are proved, namely, that the husband used joint funds to acquire assets that became registered in the name of his son or son-in-law, then, subject to tracing, the wife may have a claim pursuant to a resulting trust, about which I recently wrote in Chen & Chen & Ors (No. 3).[10]
[10] [2020] FamCA 744.
In Waind v Hill and National Employers’ Mutual General Association Ltd,[11] the Court of Appeal of the Supreme Court of New South Wales made observations about the steps involved in responding to a subpoena. The decision in that case went on further appeal to the High Court of Australia[12] yet the three steps described by the Court of Appeal were not overturned by the High Court.
[11] [1978] 1 NSWLR 372.
[12]National Employers' Mutual General Insurance Association Ltd v Waind (1979) 141 CLR 648.
The “on the cards” test to the legitimate forensic purpose of a subpoena was coined by Gibbs CJ in Alister v R.[13] In other words, for the documents the subject of the subpoena to possess a legitimate forensic purpose, it must be “on the cards” that the document the subject of the subpoena would materially assist the party who has sought the document. Here, the wife says she wishes production of the documents so as to show that the husband has diverted matrimonial funds into assets owned by others thereby removing those assets from any consideration of property the interests in which are to be altered under s 79 of the Family Law Act.
[13] (1984) 154 CLR 404, 414.
In my view, that is squarely legitimate.
The legitimate forensic purpose requirement was restated, admittedly in the context of a criminal appeal, in R v Saleam.[14] The fact that the test was restated in that context does not diminish its importance for the purposes of litigation in this court or in an arbitration conducted under the Family Law Act. Rares J applied the test propounded in Alister v R in civil litigation in the Federal Court in Wingecarribee Shire Council v Lehman Brothers Australia Ltd (No 4).[15] I propose to apply that test in this case.
[14] (1989) 16 NSWLR 14.
[15] [2010] FCA 1128.
It is worth recording that in Beckert & Beckert[16] the test prescribed in Alister v R was adopted in the specific context of family law litigation in the Federal Circuit Court of Australia. Of course, decisions from that court do not bind a Justice of this court. However, from the reasoning in that case it can be distilled that the test in Alister v R was applied by the Full Court of this court in Dupont v Chief Commissioner of Police.[17] Whether the metaphor “on the cards” presently enjoys currency may be a moot point having regard to the observations of Rares J in Lehman Brothers who held it does when compared with the observations of Bell J in Ragg v Magistrates’ Court of Victoria[18] who held that the metaphor had outlived its usefulness.
[16] [2018] FCCA 3847.
[17] (2015) 53 Fam LR 278.
[18] (2008) 18 VR 300.
The need for the document sought by subpoena to display apparent relevance was nomenclature favoured by the Court of Appeal in Waind. It was also favoured by the Full Court of the Federal Court in Wong v Sklavos[19] and also in Trade Practices Commission v Arnotts Ltd (No 2).[20] In that case, the court quoted from Sir Athol Moffitt’s contribution in H. H. Glass’s 1970 Seminars on Evidence,[21] supportive of the holdings in Waind’s case in the Court of Appeal.
[19] [2014] FCAFC 120.
[20] (1989) 21 FCR 306.
[21] Harold H. Glass, Seminars on Evidence (Law Book Co of Australasia, 1970).
In my view the documents recorded in the subpoena addressed to D Pty Ltd meet the “apparent relevance” test. In Hatton v Attorney-General (Cth)[22] the Full Court of this court supported its conclusion about the application of the apparent relevance test in reliance upon the decisions in Waind, Botany Bay Instrumentation & Control Pty Ltd v Stewart,[23] Purnell Bros Pty Ltd v Transport Engineers Pty Ltd,[24] Trade Practices Commission v Arnotts Ltd (No. 2),[25] Australian Competition and Consumer Commission v Shell Co of Australia Ltd,[26] Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd[27] and Santos Ltd v Pipelines Authority of South Australia.[28]
[22] (2000) 26 Fam LR 570.
[23] [1984] 3 NSWLR 98.
[24] (1984) 73 FLR 160.
[25] (1989) 21 FCR 306.
[26] [1999] FCA 212.
[27] [1998] FCA 1599.
[28] (1996) 66 SASR 38.
If nothing else, the weight of authority seems to indicate that the prevailing test is the “apparent relevance” of the document sought by subpoena. In my view, the D Pty Ltd documents meet that test. The test prescribed by Treyvaud J in In the Marriage of Epstein[29] of whether a document is “sufficiently relevant” seems to have been overtaken by other later authority so as to render it of questionable accuracy.
Is the subpoena “fishing”?
[29] (1993) 16 Fam LR 588.
The decision of Sir Frederick Jordan in Commissioner for Railways v Small[30] continues to enjoy currency despite its vintage. The law in this country has proceeded since that case on the basis that a subpoena that is drawn too widely will generally be construed as having no forensic purpose. Further, from Small’s case it has been the routine practice that courts will not require the recipient of a subpoena that is widely cast to fossick among his, her or its documents to “fish” for documents that may answer the description in the subpoena.
[30] (1938) 38 SR (NSW) 564.
In order to assess the width or breadth of the subpoena, it is necessary to examine its terms. Here, the husband asserts that the documents in the numbered paragraphs in the schedule are all too wide. As a fall-back, he says that if any are not too wide, only those in paragraph 3 and 6 may warrant consideration.
In paragraph 2, the wife seeks production from the motorcycle vendor of “all documents whatsoever held by (it) in relation to” the son and the son-in-law for the last five years. The incorporation of the word “whatsoever” does not change the character of the request. It is limited in a temporal sense to the last five years, meaning the date range is 2015 to 2020. The subject matter is two persons. That is not onerous in my view. If the records of the motorcycle vendor are electronic, a search over the date field and name field will most likely produce the documents with exquisite simplicity. The objection in relation to this paragraph is dismissed.
In paragraph 3 of the schedule, the enquiry is extremely precise. It is not too wide. The husband seems to acknowledge as much. The objection in relation to this paragraph is dismissed.
Unlike in paragraph 2 where the period enquired after spanned five years, in paragraph 4 the enquiry related to a precise time frame, precise persons and a precise category of documents. That renders the objection to width unsupportable. But in any event, documents produced in pursuance of paragraph 2 will catch documents sought in paragraph 4. There is no substance in the complaint about paragraph 4.
The same result obtains in relation to paragraphs 5 and 6 as do the observations about paragraph 4. The objection about the width of paragraphs 5 and 6 are dismissed.
Conclusion
In my view none of the objections in relation to the subpoena addressed to D Pty Ltd have been made out. I dismiss the notice of objection dated 24 August 2020. The recipient of the subpoena must comply with its terms.
Costs
A costs application was made. No material has been put before me to enable an informed decision about costs to be made, at least, not one based on evidence, as was held in In the Marriage of Wilson.[31] Costs of this subpoena challenge must be absorbed by the parties under s 117(1) of the Family Law Act.
[31] (1989) 13 Fam LR 205.
A final word
This case is in the National Arbitration List. The philosophy applied towards issues of case management in cases in the National Arbitration List is for their speedy determination. That is for the simple reason that the parties have selected arbitration as their chosen method of dispute resolution and the court should therefore give effect to that wish, subject always to the supervisory role performed by this court to ensure that the arbitration is conducted in accordance with principles of procedural fairness and that the arbitral award is maintainable in law, especially under the provisions of the Family Law Act. Questions for decisions of the sort canvassed in this application need speedy turnaround. Three business days is just that. It is to the manifest advantage to parties to litigation in this court that their cases are decided quickly, as inexpensively as the circumstances permit and with as little procedural obstacles as may be encountered. In inaugurating the National Arbitration List a few months ago, the Chief Justice conceived of a method by which lamentable delays endemic in this court could be stemmed. As Judge-in-Charge of the National Arbitration List I regard it as the court’s obligation to litigants to ensure that their arbitrations proceed smoothly, time efficiently, cost effectively and legally impeccably. This application is a good illustration of the legal profession and the court working cooperatively to assist litigants in their arbitration.
I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 14 September 2020.
Associate:
Date: 14 September 2020
3
13
2