Stelzer and Wallace

[2010] FamCA 25

FAMILY COURT OF AUSTRALIA

STELZER & WALLACE [2010] FamCA 25

FAMILY LAW - PROPERTY - set aside subpoena

Evidence Act 1995 (Cth)
Family Law Act 1975 (Cth)

Bulk Materials (Coal Handling) Services Pty Ltd v Coal and Allied Operations Pty Ltd (1988) 13 NSWLR 689
Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2006] NSWSC 234

APPLICANT: Ms Stelzer

RESPONDENT: Mr Wallace

FILE NUMBER: SYC 5433 of 2007

DATE DELIVERED: 21 January 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE: 30 March 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Richardson, senior counsel

SOLICITOR FOR THE APPLICANT: HWL Ebsworth

COUNSEL FOR THE RESPONDENT: Mr Lethbridge, senior counsel

SOLICITOR FOR THE RESPONDENT: Wood Marshall Williams

Orders

Order made 30 March 2009

1. The subpoena issued to LawCover on 11 March 2009 be set aside.

IT IS NOTED that publication of this judgment under the pseudonym Stelzer & Wallace is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 5433 of 2007

MS STELZER

Applicant

And

MR WALLACE

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. On 30 March 2009 I made an order that the subpoena filed by the husband on 11 March 2009 be set aside.  These are the reasons for that order. 

2. The wife, LawCover Insurance Pty Ltd (“LawCover”) and Mr Smith, made a joint application seeking that a subpoena issued against LawCover filed on 11 March 2009 be set aside.

3. This issue arose as a preliminary issue in relation to the substantive dispute between the husband and wife about a binding financial agreement (“the agreement”) entered into by the parties shortly before their marriage in October 2005. The husband sought orders that the agreement be declared to be not binding, or alternatively that it be set aside under s 90K of the Family Law Act 1975 (Cth) (“FLA”). The wife sought that the husband’s application be dismissed, contending that the agreement complied with s 90G FLA, and to the extent that it did not so comply, sought an order that the agreement should be rectified so as to effect such compliance.

4. The preliminary issue relating to the LawCover subpoena was a discrete matter about which I heard submissions from the parties and made a decision prior to the husband’s substantive application being heard. 

5. Subsequently, an application was made for me to disqualify myself from hearing the substantive issue due to my potential involvement in drafting parts of a precedent agreement while a partner at Watts McCray (prior to my appointment) which was used by Mr Smith as a template for the agreement under challenge.  For reasons previously given by me, I felt that it would be inappropriate for me to continue to decide the matter and I accordingly disqualified myself on the application of the husband, from hearing the substantive issues.

THE SUBPOENA

1. The subpoena was filed in the Sydney Registry of the Family Court on 11 March 2009.  The subpoena to LawCover sought the production of documents in the following terms:

   6.1.1.Your file from 28 September 2005 to date relating to any claim by the Respondent, [Ms Stelzer] against LawCover and/or [Mr Smith] also known as […] formerly trading as “[Smith], Solicitor & Attorney” (“Mr [Smith]”), including but not restricted to any claim or correspondence by or on behalf of [Ms Stelzer].

   6.1.2.Your file relating to any claim lodged against LawCover by Mr [Smith] including and [sic] correspondence about such claim from 27 December 2000 to date.

2. By a letter dated 23 March 2009, the wife’s solicitor sent a “Notice of objection to Subpoena” objecting to the production of the documents for the following reasons:

   (a)The terms of the subpoena are too wide and oppressive;

   (b)The documents requested in these proceedings are not directly relevant to the dispute between the parties; that is whether the Financial Agreement is binding;

   (c)The subpoena is a fishing expedition; and

   (d)The documents sought concern confidential consultation with LawCover Insurance Pty Ltd for the provision of legal advice to LawCover Insurance Pty Ltd and/or Mr Smith and therefore give rise to a claim for legal professional privilege.

3. At the hearing, the essential submission on the part of those opposing the subpoena is that the subpoena in its terms is too wide, and in fact any documents falling within the two categories set out in the subpoena, would be either irrelevant or privileged.  It was submitted that communications between the wife, LawCover and Mr Smith and advice any of them received, would attract legal professional privilege to them all, by virtue of the common interest the parties have in this litigation and in seeing the agreement upheld.

4. It was conceded by the applicants that given the affidavit evidence filed by the solicitor, Mr Smith, there had been an implied waiver of legal professional privilege in relation to Mr Smith’s file.  The husband has been given access to Mr Smith’s file. 

5. No document had yet been produced under this subpoena to LawCover. 

6. There was considerable discussion during submissions about the privilege that may attach to documents in the LawCover file.  No claim for legal professional privilege had yet been taken (given that no documents had been produced).  The applicants submitted that, at this stage, the relevance of privilege is not to say that the whole file is necessarily privileged (it may or may not be) but rather, that it was self evidence that a very large proportion of the file would be privileged and that those parts that were not, would have no relevance to substantive issues. 

7. The applicants relied upon this argument as one of the basis upon which they said the subpoena was too wide.

8. The second complaint about the width of the subpoena related to the second category of documents sought by the subpoena, being all LawCover files relating to claims made against the solicitor since 27 December 2000.

LEGAL PROFESSIONAL PRIVILEGE

1. The applicants claimed that I should infer that in respect of the vast majority of documents sought, common law legal professional privilege would arise based upon the common interests of the wife, Mr Smith, and LawCover. I note the effect of common law privilege is replicated, so far as it applies to the adducing of evidence, by s 122(5)(b) Evidence Act 1995 (Cth) (EA).

2. The effect of the existence of legal professional privilege based upon common interest is twofold: first, to establish that there is not a waiver when documents are passed between each other, and second, to make the privilege of one the privilege of all. 

3. In Bulk Materials (Coal Handling) Services Pty Ltd v Coal and Allied Operations Pty Ltd ((1988) 13 NSWLR 689), a common interest was held to exist between an underwriter and a plaintiff insured, in circumstances where an underwriter had not yet extended but was likely to extend indemnity to the plaintiff insured and otherwise had interests in the litigation identical with those of the plaintiff insured. The result of that common interest was that each of those with the common interest can avail himself of the legal professional privilege enjoyed by the other and the provision of the copy documents by the underwriters for the purposes of insurance could not be regarded as a wavier of privilege.

4. In Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd ([2006] NSWSC 234), Bergin J upheld the claim for privilege on the basis that the party and its litigation funder had a common interest, which Her Honour described at paragraph 51 as “‘a common interest in relation to’ proceedings is an identity between genuine interests, and should be distinguished from the contingent intersection of selfish interests”. Her Honour found that the litigation funder had an interest in the most advantageous conduct of the proceedings by the plaintiff; that interest being identical with that of the plaintiff.

5. In relation to the issue of common interest, counsel for the husband submitted that where an adverse communication is made between parties in a position of conflict, the fact that later events conspire to make some of their interests coincide cannot retrospectively alter the nature of that communication.  In other words, if the wife wrote to either LawCover or Mr Smith and used words to the effect that she wanted to sue them or wanted a refund due to the non-compliance of the agreement, then the fact that in subsequent proceedings they each wished to see the agreement upheld does not change the essence of that original communication, which was not one of common interest.  Counsel for the husband referred to paragraph 51 of Rickard Constructions (quoted above) and submitted that this case falls into the latter category (the contingent intersection of selfish interests), and that an actual conflict exists between the position of the wife on the one hand and that of LawCover and Mr Smith on the other, in the sense that the bringing of an application by the wife to rectify the certificate that her solicitor signed implies an acceptance on her part that there is a real prospect that absent rectification, the certificate will fail. 

6. I am not attracted by that argument.  LawCover and Mr Smith, along with the wife, have at all times had an interest in asserting the binding nature of the agreement between the wife and the husband.  It is not a contingent intersection of selfish interests but rather a genuine common interest. 

7. I also infer that the dominant purpose of the creation of documents and communications on the files, that are sought by the husband were for Mr Smith and/or LawCover to be provided with professional legal services relating to anticipated proceedings. 

THE FIRST PART OF THE SUBPOENA

1. The first part of the subpoena asks for any file that LawCover had from 28 September 2005 to date relating to any claim by the wife against LawCover and/or Mr Smith “including but not restricted to any claim or correspondence by or on behalf of” the wife.  The fundamental objection to this part of the subpoena was its width.  It was submitted, and I accept, that any such file or files would contain, firstly, material that was privileged, and secondly, material that was of no relevance to these proceedings.

2. It was suggested that there may be some narrow category of documents that might be relevant.  For example, some type of letter or claim made directly to LawCover by the wife.  The possibility of the existence of some material of that nature does not in my view save the first part of the subpoena.  The first part of the subpoena is too wide.

THE SECOND PART OF THE SUBPOENA

1. That part of the subpoena is, in my view, far too wide to survive.  It potentially covers by its nature a wide ranging amount of material which would have no relevance at all to the current application.  So much was conceded by counsel for the husband during submissions.  He sought to limit the paragraph purely to claims made in relation to binding financial agreements.  Even writing down the subpoena in that way, should I be minded to do so, would not in my view save the second paragraph.  The fact that Mr Smith may have had a claim made against him arising out of a binding financial agreement in the year 2000 by some other client does not have sufficient relevance or connection to the current proceedings to make it relevant.  Consequently this part of the subpoena is too wide and is fishing.

2. In addition, I can infer the overwhelming part of these files would attract legal professional privilege. 

CONCLUSION

1. The onus is on the person issuing the subpoena to specify with sufficient particularity what documents are sought and to be able to justify the request for those documents on the basis of relevance.

2. The documents sought by the husband have been specified with sufficient particularity.  However, the husband has not justified, upon the basis of relevance, the width of the documents which have been sought. 

3. The subpoena cannot be sustained and it should be set aside.

I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts.

Associate: 

Date:  21 January 2010