Shvets & Shvets
[2025] FedCFamC1F 120
•28 February 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
FIRST INSTANCE
Shvets & Shvets [2025] FedCFamC1F 120
File number: BRC 9946 of 2023 Judgment of: CAREW J Date of judgment: 28 February 2025 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Subpoena – Where there is an objection to a subpoena – Where the subpoena sought production of documents over an eight year period – Where compliance would require review of 765,487 emails – Where documents needed to be reviewed against the scope of the subpoena and whether there was an entitlement to claim legal professional privilege – Where it is determined that the scope of the subpoena, as drafted, was burdensome and oppressive – Where the applicant has paid retrieval costs – Where the subpoena is set aside and the applicant ordered to pay further costs Legislation: Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 1.05, 6.33, 6.34, 6.35, Sch 3 Cases cited: Titan Enterprises (Qld) Pty Ltd v Cross [2016] FCA 1275 Number of paragraphs: 28 Date of last submission/s: 17 February 2025 Date of hearing: Determined in Chambers at the request of the parties Place: Brisbane Solicitor for the Applicant: Phillips Family Law Solicitor for the First and Third Respondents: McInnes Wilson Lawyers Solicitor for the Second, Fourth and Fifth Respondents: Mills Oakley Solicitor for the subpoenaed party E Pty Ltd: HWL Ebsworth Lawyers ORDER
BRC 9946 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR SHVETS
Applicant
AND: MS SHVETS
First Respondent
MR MOONEY
Second Respondent
MS SHVETS AND MR MOONEY ATF THE B TRUST (and others named in the Schedule)
Third Respondent
ORDER MADE BY:
CAREW J
DATE OF ORDER:
28 FEBRUARY 2025
THE COURT ORDERS THAT:
1.The subpoena to E Pty Ltd issued at the request of the applicant on 10 January 2024 is set aside.
2.The applicant is to pay E Pty Ltd the fixed sum of $15,000 within 21 days.
NOTATIONS:
A.There is no Court by the name “Federal Circuit and Family Court of Australia”. This Court was formerly known as the Family Court of Australia and is now known as the Federal Circuit and Family Court of Australia (Division 1).
B.The design of the seal affixed to this Order issued by the Federal Circuit and Family Court of Australia (Division 1) was determined by the Attorney-General pursuant to the undated Federal Circuit and Family Court of Australia (Seal) Determination 2021 signed by the Attorney-General.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Shvets & Shvets has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAREW J:
The substantive proceedings concern a property settlement dispute between a married couple, Mr Shvets (“the husband”) and Ms Shvets (“the wife”). The husband is the applicant in those proceedings.
On 11 January 2024, an unrelated party, E Pty Ltd (“E Pty Ltd”), was served with a subpoena, on behalf of the husband, to produce documents.
On 11 November 2024, E Pty Ltd was granted leave to file a notice of objection to the subpoena out of time. The objection contends, among other things, that the subpoena is overly burdensome and oppressive and that the husband should pay the reasonable costs incurred by E Pty Ltd in complying with the subpoena. In addition, procedural orders were consented to which provided for the interested parties to file written submissions and for the notice of objection to be determined in Chambers without the necessity for any appearance.
On 16 December 2024, the husband filed an Application in a Proceeding (“the Application”) seeking the following:
(a)That paragraph 3 of the subpoena be set aside; and
(b)That each party bear their own costs in relation to the subpoena.
It is common ground that the Application should also be determined in Chambers without the necessity for an appearance.
On 31 January 2025, the interested parties jointly sought, among other things, an extension of time from 3 February 2025 to 17 February 2025 to file any reply to written submissions and the request was granted.
The husband filed submissions on 17 February 2025.
For reasons which will be explained, the subpoena will be set aside, and the husband will be ordered to pay E Pty Ltd $15,000 within 21 days.
RELEVANT BACKGROUND
E Pty Ltd is a company previously owned by the wife and her father, Mr Mooney, as trustees for the B Trust, a discretionary trust established by the wife and her father in mid-2016. The wife was the principal of the Trust and sole beneficiary. The wife and her father were directors of E Pty Ltd. The shares in E Pty Ltd were sold in 2019 for over $59,000,000 with payment made in two tranches in 2019 and 2021. Any interest the wife and her father had in E Pty Ltd ceased in August 2019.
The subpoena issued on 10 January 2024 at the request of the husband sought the production of documents over an eight year period from 1 January 2016. The operative paragraphs of the subpoena require the production of documents described as follows:
(2)For the period from 1 January 2016, all email (including copies of any attachments to any email) sent to, received by or forwarded by or to, any email account (whether such account was individually named; named on the basis of a role within the organisation; and/or a shared/group account) in the name of, or held by:-
(a) [Mr Shvets];
(b) [Ms Shvets];
(c) [Mr Mooney]; and
(d) [Ms Mooney];
in relation to the sale of the shares in [E Pty Ltd], the sale of the Series A Units in [E] Bidco LP, the receipt of money from those sales and the trust distributions to and from [the B Trust] and [D Trust] from those sale proceeds (where those sale proceeds were paid in or around August 2019 and August/September 2021).
(3) For the period from 1 January 2016, all email (including copies of any attachments to any email) sent to, received by or forwarded by or to, any email account (whether such account was individually named; named on the basis of a role within the organisation; and/or a shared/group account) in the name of, or held by [Mr Shvets].
E Pty Ltd informed the husband that compliance with the subpoena would require, among other things, the review of some 765,487 emails at an estimated cost of $2,557,683 (that is, approximately $3.34 per document) and invited the husband to reduce the scope of his subpoena by limiting the date period and identifying key search terms. E Pty Ltd contended that a review would not only be necessary to identify if each document came within the scope of the subpoena but also to check whether E Pty Ltd was entitled to claim legal professional privilege over any of the documents.
Over a period of some nine months, the husband and E Pty Ltd (through their respective lawyers), communicated in an attempt to reduce the scope of the subpoena.
As agreement could not be reached to reduce the scope of the subpoena and E Pty Ltd was not provided with sufficient conduct money to comply with the subpoena in either its original form or in any reduced scope, E Pty Ltd sought and were granted an extension of time to file a notice of objection to the subpoena.
Notwithstanding the absence of an agreement to reduce the scope of the subpoena, E Pty Ltd produced documents based on limitations to the scope of paragraph 2 of the subpoena previously discussed in correspondence.
Whilst both E Pty Ltd and the husband agree that 395 documents have been produced, the Court has only received 253 documents. It seems the documents were provided digitally and that there may have been an issue with E Pty Ltd uploading the documents or the documents not produced may have been subject to a claim for legal professional privilege (as suggested at paragraph 3 of the notice of objection).
APPLICABLE RULES
The Court may, on application, make an order setting aside all or part of a subpoena (see r 6.33 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”)).
Rule 6.34 empowers the Court to make an order for the payment of any loss or expense incurred in complying with a subpoena.
Rule 6.35 provides that unless the Court otherwise directs, the issuing party (in this case the husband) is liable for the costs of complying with a subpoena where:
…
(a)a subpoena is addressed to a person who is not a party to the proceedings; and
(b)before complying with the subpoena, the person subpoenaed has given the issuing party notice that substantial loss or expense would be incurred in properly complying with the subpoena, including a particularised estimate of the loss or expense; and
(c)the Court is satisfied that substantial loss or expense is incurred in properly complying with the subpoena.
Where the subpoenaed party is required to attend Court, the Court may fix the amount payable having regard to the scale of fees and allowances payable to witnesses in the Supreme Court of the State where the person is required to attend (see r 6.35(3) of the Rules).
If satisfied that substantial loss or expense is incurred, the amount payable by order is in addition to any conduct money paid (see r 6.35(4) of the Rules). The definition of ‘conduct money’ in r 1.05 includes, in the case of a subpoena for the production of documents, the reasonable costs of complying with the subpoena.
DISCUSSION
I accept the submissions made on behalf of E Pty Ltd, citing Logan J in Titan Enterprises (Qld) Pty Ltd v Cross,[1] that the costs and expenses of complying with a subpoena extend to advice as to the lawfulness of the subpoena and as to whether any legal professional privilege claim is open. I further accept the submission that a non-party should be compensated for what it has in fact cost that party to comply with the subpoena subject to a test of reasonableness.[2]
[1] [2016] FCA 1275 at [12].
[2] Ibid.
There can be no doubt that the scope of the subpoena, as drafted, is burdensome and oppressive. There was an estimated 250 gigabytes of data and between 125,000 and 5,000,000 emails/documents to review. Various estimates for the costs of compliance with the original subpoena or on a reduced scope were provided to the husband over the nine months of communication between his lawyers and the lawyers representing E Pty Ltd.
The husband submits that as he has already paid $21,705 to F Company (the third party data retrieval service engaged by E Pty Ltd), there should be no further payment made. I reject that submission. It is apparent from the exchange of correspondence that E Pty Ltd were attempting to come to some agreement about the scope of the subpoena so as to limit the time and cost associated with full compliance. It is true that E Pty Ltd could have filed a notice of objection immediately and, had it done so, there is little doubt the subpoena would have been set aside. However, I do not regard the attempts made by E Pty Ltd to identify with greater precision what the husband wanted to be unreasonable. The husband could have refused to engage. The fact that he did engage, and that he no longer presses compliance with the subpoena, is not a reason for an unrelated third party not to have their reasonable costs of attempting to comply with the subpoena met.
The affidavit filed by the husband in support of the Application contends that E Pty Ltd have complied with paragraph 2 of the subpoena. E Pty Ltd note the concession made by the husband but submit that paragraph 2, as drafted, seeks the production of significantly more documentation and note that the husband’s concession was only belatedly made in his affidavit.
The husband submits that E Pty Ltd are not entitled to claim for the costs of reviewing documents to assess whether a claim for legal professional privilege is properly made as they have failed to identify the basis upon which such a claim might be made in relation to any document. That argument is misplaced. In order to identify whether a document is subject to legal professional privilege, E Pty Ltd would have to review each document. That is where the time and effort would be incurred. E Pty Ltd do not suggest they have done so, other than perhaps in relation to some of the documents produced but no claim for legal professional privilege has been made in relation to those documents, as far as I am aware. As the husband concedes that paragraph 2 of the subpoena has been complied with and no longer presses paragraph 3, the issue does not further arise.
The loss or expense claimed in the written submissions filed by E Pty Ltd on 23 January 2025 at paragraph 14 is $41,461.77 with reference at footnote 16 to a second affidavit of Mr G (E Pty Ltd’s lawyer). There is only one affidavit filed by Mr G, namely, the one filed on 11 November 2024. At that time, it was asserted that E Pty Ltd had incurred approximately $24,000 in legal costs since being served with the subpoena. Further, despite E Pty Ltd giving notice in their written submissions at paragraph 15 of an intention to provide an updated summary of its costs in its submissions in reply, no such submissions were filed. The difficulty with assessing the reasonableness of the claim for loss or expense of $41,461.77 (or even $24,000) is that no particulars are provided.
Doing the best I can in the circumstances, I am satisfied that E Pty Ltd has incurred a substantial loss or expense in complying with the subpoena and I consider it reasonable to fix the sum to be paid by the husband at $15,000. In fixing this sum, I have taken into account the following:
(a)That it was reasonable for E Pty Ltd to obtain legal advice relating to the subpoena;
(b)Mr G’s affidavit and the extensive correspondence passing between the lawyers annexed thereto;
(c)Extrapolating the estimated costs of compliance more generally to the documents produced;
(d)Schedule 3 – scale of costs of the Rules for producing letters, affidavits, reading documents, giving advice, perusing the documents produced, and preparation of written submissions; and
(e)The scale of fees and allowances payable to witnesses in the Supreme Court of Queensland for the appearance at Court on 11 November 2024.
DISPOSITION
The subpoena issued at the request of the husband on 10 January 2024 will be set aside, and the husband will be ordered to pay E Pty Ltd the fixed sum of $15,000 in addition to the sum already paid to F Company. The husband will have 21 days to pay.
I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Carew. Associate:
Dated: 28 February 2025
SCHEDULE OF PARTIES
BRC 9946 of 2023 Respondents
Fourth Respondent:
C PTY LTD ATF THE D TRUST
Fifth Respondent:
MS MOONEY
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