Strahan and Strahan and Ors

[2013] FamCA 206

FAMILY COURT OF AUSTRALIA

STRAHAN & STRAHAN AND ORS [2013] FamCA 206

FAMILY LAW – PRACTICE AND PROCEDURE – stay of proceedings – where the applicant wife sought a stay of an order requiring the disclosure of certain documents pending an appeal against said order – where the applicant wife appears to have an arguable case – where the appeal would be rendered nugatory if the stay were not granted – stay granted.
FAMILY LAW – PRACTICE AND PROCEDURE – stay of proceedings – where the applicant husband sought a stay of an order requiring him to do all things necessary to resolve his indebtedness to the Australian Taxation Office – where the applicant husband appears to have an arguable case – where the appeal would be rendered nugatory if the stay were not granted – stay granted.
FAMILY LAW – PRACTICE AND PROCEDURE – stay of proceedings – where the applicant husband sought a stay of an order requiring the applicant husband to disclose certain documents to the wife’s solicitors concerning his indebtedness to the Australian Taxation Office – where the applicant husband claimed that the order requires him to disclose privileged documents – stay granted to the extent that the applicant husband is no longer required to disclose documents that are subject to a claims of legal professional privilege.
FAMILY LAW – PRACTICE AND PROCEDURE – stay of proceedings – where the applicant husband sought a stay of an order granting the Commissioner of Taxation leave to intervene in the proceedings – where the applicant husband does not appear to have an arguable case – where the appeal would not be rendered nugatory if the stay were not granted – stay refused.

Family Law Rules 2005 (Cth) r 22.11

Aldridge & Keaton [2009] FamCAFC 106
Commissioner of Taxation v Myer Emporium Pty Ltd (1986) 160 CLR 220
Friscioni & Friscioni [2009] FamCAFC 43
State Central Authority & Ustinov (No. 2) [2008] FamCA 368
The Annot Lyle (1886) 11 PD 114
Trahn & Long (No. 2) [2008] FamCAFC 194

APPLICANT: Ms Strahan

RESPONDENT: Mr Strahan

FIRST INTERVENER: Commissioner of Taxation, Australian Taxation Office

SECOND INTERVENER: PC Firm

INDEPENDENT CHILDREN’S LAWYER: Nelson & Co

FILE NUMBER: ADF 228 of 2005

DATE DELIVERED: 4 April 2013

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Dawe J

HEARING DATE: 26 November 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr McQuade

SOLICITOR FOR THE APPLICANT: Winter & Co

COUNSEL FOR THE APPLICANT

[PC FIRM ISSUE]:

Mr Crocker

SOLICITOR FOR THE APPLICANT

[PC FIRM ISSUE]:

Winter & Co

COUNSEL FOR THE RESPONDENT: Mr Berman SC

SOLICITOR FOR THE RESPONDENT: Kennedy Partners

COUNSEL FOR THE FIRST INTERVENER: Ms Gleeson

SOLICITOR FOR THE FIRST INTERVENER: Legal Services Branch, Australian Taxation Office

COUNSEL FOR THE SECOND INTERVENER: Mr PP

SOLICITOR FOR THE SECOND INTERVENER: PC Firm

COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: Mrs West

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: Nelson & Co

Orders

1. Pending determination upon appeal paragraph 1 of the Orders made 4 April 2012 and paragraph 2 of the Orders made 23 August 2012 are stayed.

2. Paragraph 3 of the Orders made on 23 August 2012 is stayed to the extent that the husband is no longer required to disclose documents that are the subject of claims for legal professional privilege.

3. The Court declines to grant a stay in relation to paragraph 4 of the Orders made on 23 August 2012.

4. The question of costs is reserved on the applications on a date to be fixed if no agreement is reached.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Strahan & Strahan and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADF 228 of 2005

Ms Strahan

Applicant

And

Mr Strahan

Respondent

And

Legal Services Branch, Australian Taxation Office

First Intervener

And

PC Firm

Second Intervener

REASONS FOR JUDGMENT

Introduction

1. On 26 November 2012, I heard, inter alia, submissions on an Application in a Case filed by the wife on 23 August 2012 and an Application in a Case filed by the husband on 9 November 2012. 

2. At this time, I adjourned the hearing of paragraphs 1 and 2 of the wife’s Application in a Case to 21 February 2013.  I reserved judgment of paragraph 3 of the wife’s Application in a Case.  I also reserved judgment on the entirety of the husband’s Application in a Case.

The Wife’s Application in a Case

1. I reserved judgment solely on paragraph 3 of the wife’s Application in a Case filed on 23 August 2012.  Paragraph 3 of this Application in a Case provides:

   3.          That compliance by the wife with paragraph 1 [of] the order of this Court made on the 4^th day of April 2012 be stayed until the finalisation of the wife’s Application for leave to Appeal and/ or Appeal against the said Order are finalised.

1. The order I made on 4 April 2012 to which paragraph 3 of the wife’s application relates states:

   1.          Within fourteen [14] days from today the wife produce the following documents for inspection by the husband’s solicitors and provide such copies as are requested by the husband’s solicitors at the cost of the husband being the following documents described in ”ES2” of the annexure to the wife’s affidavit filed on 18 November 2010:

   (a)          Item245 on page 43, being

   (i) ID STE.001.0002.0103 Dated 17/09/2005 from [Mr GL] to [Ms T] of ATO/[Mr SG] of ATO’;

   (b)         Items 3, 4 and 6 of Schedule B on page 52, being:

   (i)     ID STE.005.0150.0205 dated 15/09/2005 from [Mr SG] (ATO) to [Mr GL]/[Ms JJ] (ATO)/[Mr AP];

   (ii)    ID STE.001.0002.0103 dated 17/09/2005 from [Mr GL] to [Ms JJ] and [Mr SG] (ATO);

   (iii)   ID STE.001.0173.0205 dated 18/05/2006 from [Mr AB] to [Ms LL] the Director of Citizenship Policies, Department of Immigration & Multi Cultural Affairs. 

   (c)         Items 7, 8, 10, 11, 12, 15 and 17 on page 53 being:

   (i) ID STE.004.0097.0143 dated 24/02/2005 from [IM & Co] to Australian Federal Police;

   (ii)          ID STE.004.0097.0128 dated 03/03/2005 from [IM & Co] to Australian Federal Police;

   (iii)         ID STE.004.0097.0019 dated 15/04/2005 from [IM & Co] to Australian Federal Police;

   (iv)         ID STE.004.0096.0077 dated 19/05/2005 [IM & Co] to Australian Federal Police;

   (v)          ID STE.001.0310.227 dated 13/09/2005 from [Ms MA] to Australian Federal Police (Criminal Records);

   (vi)         ID STE.001.0171.0201 dated 16/05/2006 from [Mr RE] ([DM Firm]) to Australian Federal Police;

   (vii)         ID STE.001.0188.0033 dated 28/06/2006 from [Mr AB] to Australian Federal Police.

   (d)      Items 2, 3, 4, 5, 6 7, and 8 on page 54 being:

   (i) ID STE.001.0166.0206 dated 16/09/2005 from [Mr GL] to Consular General of Italy, Hong Kong;

   (ii)          ID STE.001.0171.0333 dated 01/11/2005 from [Mr GL] to Consulate General of Italy, Hong Kong;

   (iii)         ID STE.001.0043.0063 dated 21/11/2005 from [Mr AB] to Italian Ambassador in Australia;

   (iv)         ID STE.001.0043.0068 dated 21/11/2005 from [Ms MA] to Italian Consulate Adelaide;

   (v)          ID STE.001.0043.0062 dated 21/11/2005 from [Ms MA] to Italian Consulate Adelaide;

   (vi)         ID STE.001.0206.0357 dated 13/12/2005 from [Ms MA] to Italian Consulate Adelaide;

   (vii)         ID STE.001.0228.0203 dated 21/04/2006 from [P Law Firm], Italy (wife’s Italian lawyers).

   (e)         Items 18 and 19 in Schedule B and Items 1 and 10 in Schedule C on page 60 being:

   (i) STE.001.0183.0029 dated 05/07/2006 from [Mr MC] to South Australian Police;
   (ii) STE.001.0183.0234 dated 05/07/2006 from [Mr MC] to South Australian Police;

   (iii)         STE.004.0099.0046 dated 24/08/2005 from Italian Ministry of Internal Affairs to “blank”;

   (iv)         STE.001.0168.0287 dated 26/04/2006 from [P Law Firm], Italy to Consul. 

   (f)         Items 4 of Schedule A on page 61 being:

   (i) STE.001.0002.0103 dated 17/09/2005 from [Mr GL] to [Ms JJ] and [Mr SG] (ATO). 

1. The Notice of Appeal to which the wife refers in this Application in a Case was filed on 02 May 2012 (SOA 37 of 2012).  My understanding is that this appeal will be listed sometime in October 2013, though this had not been confirmed at the time of writing this judgment.  For ease of reference, the grounds of appeal provided for by the wife in the Notice of Appeal are:

1.          The learned trial Judge erred in finding that each of the documents identified in paragraph 1 (a)-(f) were not properly the subject of legal professional privilege. 

2.          The learned trial Judge erred in holding that the Court was only ruling on the email communication and letters that were the subject of the application and not specific documents that were referred to in the communication.

3.          The learned trial Judge erred in not availing herself of the opportunity of viewing the challenged documents, this would have enabled her to identify “other parties” referred to in the documents.

4.          The learned trial Judge erred in finding that information provided by the wife or her solicitors to government agencies (ATO and AFP) would not adequately describe [sic].

5.          The learned trial Judge erred in finding that information provided by the wife or her solicitors to government agencies (ATO and AFP) were correspondence for which privilege had been impliedly waived.

1. The husband filed a response to this Application in a Case on 24 October 2012 seeking:

   1.        That the Application in a Case filed by the wife on 23 August 2012 be dismissed.

   2.        That the wife pay the husband’s costs of and incidental to this application.

   3.        Such further or other orders as this Honourable Court deems appropriate.

1. The wife filed a response to the affidavit of the husband filed on 24 October 2012 on 26 November 2012. 

2. The husband filed a response to the affidavit of the wife filed on 26 November 2012 on 07 February 2013. 

The Husband’s Application in a Case

1. I reserved judgment on the entirety of the husband’s Application in a Case filed on 09 November 2012.  The husband phrases the orders he is seeking as:

   1.        That the operation of orders numbered 2, 3, and 4 of the orders made by the Family Court of Australia at Adelaide on 23 August 2012 be stayed pending the determination of the husband’s Application for Leave to Appeal and Appeal.

   2.        Such further or other orders as this Honourable Court deems appropriate.

1. The relevant orders I made on 23 August 2012 to which the husband’s Application in a Case relate state:

   2.  The Husband do all things necessary to promptly proceed with the objection and any necessary proceedings to resolve the indebtedness to the Australian Taxation office and endeavour to expedite the conclusion of that matter. 

   3.        By the end of each month the husband provide to the wife’s solicitors copies of communications and documents created in relation to the husband’s indebtedness to the Australian Taxation Office including any court proceeding.

   4.        The Commissioner of Taxation be granted leave to intervene in the proceedings.  The rules relating to documents to be provided to the intervener be varied to provide that until further order the husband and wife only be required to serve upon the Commissioner the copies of the current version of applications for final orders and any outstanding application for interim orders together with the current statements of financial circumstances of each party and thereafter to provide to the Commissioner any further application, amendments or affidavits which relate to financial matters.

1. The Notice of Appeal to which the husband refers in this case was filed on 19 September 2012 (SOA 71 of 2012).  My understanding is that this appeal will be listed sometime in October 2013, though this had not been confirmed at the time of writing this judgment.  The grounds of appeal listed by the husband in the Notice of Appeal are:

   1.        The husband seeks leave to appeal orders numbered 2, 3 and 4 of the orders of the Honourable Justice Dawe made on 23 August 2012 (“the orders”). 

   2.        Her Honour failed to properly consider the law and to apply the law in making the orders.

   3.        Her Honour erred in the exercise of her discretion in making the orders.

   4.        Her Honour failed to properly consider the effect of the orders upon the husband’s conduct of the objection to the notices of assessment issued by the           Commissioner of Taxation and any litigation that might arise as a consequence of that objection. 

   5.        The orders created an injustice in that they impose onerous and compromising obligations of discovery on the husband.

2. The wife did not file any written submissions in response to this Application in a Case. 

The law relating to stay of orders pending appeal

1. Rule 22.11 of the Family Law Rules 2005 (Cth) (“the rules”) provides the following:

   (1)      The filing of a Notice of Appeal does not stay the operation or enforcement of the order appealed from, unless otherwise provided by a legislative provision.

   (2)      If an appeal has been started, or a party has applied for leave to appeal against an order, any party may apply for an order staying the operation or enforcement of all, or part, of the order to which the appeal or application relates.

   (3)      An application for a stay must be filed in the Registry in which the order under appeal was made and be heard by the Judge, Federal Magistrate or Magistrate who made the order under appeal.

1. The making of an order for a stay is “wholly discretionary” and as such is dependent upon “the circumstances of each case” (Friscioni & Friscioni [2009] FamCAFC 43 at [54] per Boland, O’Ryan and Le Poer Trench JJ).

2. The judgment of the Full Court in Trahn & Long (No.  2) [2008] FamCAFC 194 conveniently summarises the law on stays at [37]-[38] (per Warnick, Boland and Dessau JJ):

   These principles, both in the general law and in respect of parenting proceedings, are well settled (see The Commissioner of Taxation of the Commonwealth of Australia v Myer Emporium Limited (1986) 160 CLR 220 at 230; Alexander v Cambridge Credit Corporation (1985) 2 NSWLR 685. Jennings Constructions Limited v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681; Clemett and Clemett (1981) FLC 91-013; JRN & KEN v IEG & BLG (1998) 72 ALJR 1329 at 1332). The authorities stress the discretionary nature of the application which should be determined on its merits. Principles relevant to this matter included the following:

   ·          the onus to establish a proper basis for the  stay is on the applicant for the stay however it is not necessary for the applicant to demonstrate “special” or “exceptional” circumstances;

   ·          a  person who has obtained a judgment is entitled to the benefit of that judgment;

   ·          the person who has obtained a judgment is entitled to presume the judgment is correct;

   ·          the mere filing of an appeal is insufficient to ground a stay;

   ·          the bona fides of the applicant;

   ·          a stay may be granted on terms that are fair to all parties – this may involve a court weighing the balance of convenience and the competing rights of the parties;

   ·          a weighing of the risk that an appeal may be rendered nugatory if a stay is not granted – this will be a substantial factor in determining whether  it will be appropriate to grant the stay;

   ·          some preliminary assessment of the strength of the proposed appeal - whether the  appellant has an arguable case;

   ·          the desirability of limiting the frequency of any change in a child’s living arrangements;

   ·          the period of time in which the appeal can be heard and whether existing satisfactory arrangements may support the granting of a stay for a short period of time; and

   ·          the best interests of the child the subject of the proceedings.

1. These principles were similarly outlined by a differently composed Full Court in Aldridge & Keaton [2009] FamCAFC 106 at [18] per Bryant CJ, Boland and Crisford JJ.

2. A further factor highlighted by myself in State Central Authority & Ustinov (No 2) [2008] FamCA 368 at [10] is “whether the appeal raises serious issues and that the grounds appear to be substantiated rather than merely a delaying tactic.”

Submissions by the parties concerning the stay sought by the Wife

1. In her affidavit filed in support of this Application in a Case on 23 August 2012, the wife provides the following arguments for the requested stay:

   3.        As Mr Winter does not have the file held by [PC Firm] I will be embarrassed with respect to complying with the order in any event.

   4.        I do not have any of the documents ordered to be produced or any copies and I am advised by Mr Winter and my Counsel that they do not have them either.

   …

   7.        I seek a stay of the order.  I say that the nature of the application being the disclosure of documents for which I have claimed legal professional privilege would make an application for leave to appeal and any appeal nugatory if the control of the documents were disclosed before the applications are dealt with.

1. It appears that the second intervener, who previously acted for the wife, is unwilling to release the wife’s file until certain payment issues are resolved.  This issue forms the substance of an Application in a Case that I will be hearing on 4 April 2013. 

2. The husband’s affidavit of 24 October 2012 provides the following with regards to the wife’s request for a stay:

   4.        The order made on 4 April 2012 requires the wife to produce 23 documents in total.  Some of these documents appear to comprise written communications between the wife and/or her agents and officers at the Australian Taxation Office (“the ATO”). 

   5.        On or about 23 July 2012, I received notices of assessment from the ATO for the financial years ended 30 June 2005 to 2011 inclusive.  I have been assessed to pay income tax totalling almost $65.5 million inclusive of penalties.  Interest continues to accrue.  As at 6 September 2012, my total assessed taxation liability, inclusive of the general interest charge, is $71,907,547.

   6.        I am in the process of objecting to the assessment.  This involves the preparation and submission of a formal response, following by negotiations and/or litigation with the ATO.  It is imperative that all of the wife’s communications with the ATO are made known to me, as these may be critical in how my objection is prepared and conducted.  If the operation of the order made on 4 April 2012 is stayed, my negotiations with the ATO, and the conduct of my objection, may be compromised or delayed, as I will not be aware of the information previously provided by the wife to the ATO.”

   7.        I refer to paragraphs [2] to [6] of the wife’s affidavit filed on 23 August 2012 (“the wife’s affidavit”).  I note the wife has now filed, on 12 September 2012, an application seeking her former solicitors produce their file, which application is returnable at 9.15am on 24 October 2012.  This will, presumably, enable the wife to comply with the order made on 4 April 2012.

1. The wife’s affidavit responding to the husband’s affidavit of 24 October 2012 filed on 26 November 2012 is predominantly concerned with other paragraphs of the wife’s Application in a Case.  Relevant to the stay sought, it asserts generally that “the documents in question are subject to legal professional privilege and are the subject of an Appeal.”

2. At the hearing, Mr McQuade for the wife asserted that the appeal would be rendered nugatory if the stay was not granted.  Mr McQuade conceded that the wife had not complied with the orders in any way since they were made in April despite the wife only applying for the stay in August.  Mr McQuade was unable to comment on the likelihood that the appeal will be successful as he was not involved with the preparation of the appeal.

1. Neither counsel for the husband nor the counsel for either intervener made any submissions at the hearing with regards to the stay sought by the wife. 

Consideration of the issues concerning the stay sought by the Wife

1. I will now consider the principles outlined above as they are relevant to the stay sought by the wife.

Does the wife have an arguable case?

1. As I noted previously (State Central Authority & Ustinov (No. 2) [2008] FamCA 368 at [12]), and as the Full Court has agreed (Brennan & Shaw (Stay Appeal) [2008] FamCAFC 138 at [64] per Bryant CJ, Boland and Stevenson JJ), it is difficult for a Judge at first instance to review their own decision when determining the potential for success of any appeal from that decision. Nevertheless, it is a task which I must perform.

2. Counsel for the wife, Mr McQuade, was unable to comment on the likelihood of the appeal’s success at the hearing of this application for a stay.  Neither counsel for the husband nor counsel for either intervener made any submissions on this point. 

3. I have read the Notice of Appeal filed by the wife on 19 September 2012 (SOA 71 of 2012).  The grounds of appeal stated do not appear, on their face, to be doomed from the outset.  The law on legal professional privilege is complex and nuanced.  As such, I find that the appeal has at least an arguable case. 

The husband is entitled to the benefit of the judgment

1. It has long been a settled principle of the law that a litigant is entitled to the “fruits of his litigation pending the determination of any appeal” (Commissioner of Taxation v Myer Emporium Ltd (1986) 160 CLR 220 at 222 citing The Annot Lyle (1886) 11 PD 114 at 116).

2. Indeed, I note here that the husband has identified (see paragraph [6] of his affidavit filed 24 October 2012) a clearly defined use of the documents that form the substance of the order that the wife seeks to have stayed pending appeal.  He submits that he requires them to allow him to fully engage with his dispute with the Australian Taxation Office.  This factor does not support the ordering of a stay.

Would the wife’s appeal be rendered nugatory if the stay were not granted?

1. The wife is bringing the appeal because she does not want the husband’s lawyers to see the documents that the order requires her to disclose.  Once the documents have been produced for inspection to the husband’s solicitors, the appeal will thus be rendered nugatory.  The Full Court will be unable to undo the effect of this order.  This factor promotes the ordering of a stay. 

Has the application for the stay been bought promptly?

1. The impugned order was delivered on 4 April 2012.  The Notice of Appeal was filed on 02 May 2012.  The Application in a Case seeking that the order be stayed pending the determination of the appeal was not filed until 23 August 2012. 

2. There has been no explanation from the wife, either via written or oral submissions, as to why there was over a three month period between the Notice of Appeal being filed and the stay being sought.  This factor does not support the granting of the stay. 

What are the bona fides of the applicant?

1. Neither the husband nor either of the interveners has called into question the bona fides of the wife in filing this Notice of Appeal. 

The possibility of granting a stay on terms that is fair to all parties

1. It would appear that there is no way to achieve a happy median between the interests of the parties in this application for a stay.  The stay will either be granted in full or it will not be. 

Conclusion concerning the stay sought by the wife

1. I make a comment on the practicalities of these proceedings before concluding.  The wife asserts that she does not have the files.  She states that they are in the possession of her former lawyers, with whom she is currently engaged in a dispute concerning the payments of legal fees.  This dispute forms the substance of an application that I will hear on 4 April 2013.  The wife will be physically unable to comply with this order until this time.  Indeed, judgment on this point will likely be delivered some time after 4 April 2013 given the fact that written submissions have been filed by both the applicant and her former lawyers in regards to this issue of non-payment of legal fees.  This shortens the time frame between the wife being physically able to comply with the impugned order and the date at which the appeal will be heard (which appears to be sometime in October.) This reduces the prejudice that will be suffered by the husband if the order were to be stayed.

2. The factors for and against the ordering of the stay appear to be fairly evenly balanced.  As such, and erring on the side of caution, I grant the stay sought by the wife.

Submissions by the parties concerning the stay sought by the Husband

1. In his affidavit filed in support of this Application in a Case on 23 August 2012, the husband provides the following arguments for his requested stay:

   a)Concerning paragraph 2 of Order made 23 August 2012: “I am concerned that Order 2 of the 23 August 2012 Orders might unnecessarily restrict the way in which the tax objections should be dealt with, and prejudice my position to the ultimate disadvantage of both me and the wife.”

   b)Concerning paragraph 3 of Order made 23 August 2012: “The order is extremely broad and includes documents created by my tax advisers over which I claim legal professional privilege.”

   c)Concerning paragraph 4 of Order made 23 August 2012: “I am concerned the provision of such documentation is likely to further complicate and compromise negotiations with the ATO with respect to the tax assessments, to my disadvantage.” 

   d)Concerning the stay application generally: “My Application for Leave to appeal and my Appeal will be rendered nugatory if operation of paragraphs 2, 3 and 4 of the Orders made on 23 August 2012 is not stayed.”

2. At the hearing Mr Berman SC for the husband expanded upon the husband’s affidavit material.  Namely:

   a)Concerning paragraph 2 of Order made 23 August 2012: The breadth of the order renders it, in effect, an injunction which requires the husband which “would be difficult to enforce, would be problematic in terms of compliance with it, and it would be almost impossible to interpret, by my client, what manner he ought to proceed with the objections consistent with [my] order; namely, to promptly proceed with the objection processes.” The husband claims that he may have to make a concession that may not be in accord with the advice he receives from his tax professionals in order to comply with this order. 

   b)Concerning paragraph 3 of Order made 23 August 2012: The order goes beyond what counsel for the wife sought on the 23 August 2012 hearing.  The wife initially sought to be “kept in the loop” as to how the proceedings were going in relation to the husband’s indebtedness to the Australian Taxation Office.  The order now requires communication and documentation that is created between the husband and his solicitors in respect of the matter generally with the Australian Taxation Office that is likely to be privileged material. 

   c)Concerning paragraph 4 of Order made 23 August 2012: The husband can see no purpose in respect of the intervention of the Commissioner of Taxation in these proceedings.  The intervention adds “another level and layer of complexity” to the proceedings without adding any advantages to the proceedings. 

   d)Concerning the stay application generally: the stay will not cause prejudice to any party to the proceedings as the proceedings are already adjourned pending the outcome of various appeals.  The husband is aware of his obligations for continuing and ongoing discovery and will continue to fulfil his duties to that end. 

3. Mr McQuade for the wife submitted the following at the hearing:

   a)Concerning paragraph 2 of Order made 23 August 2012: “It is outrageous to come here and seek … to be released from an order that compels the husband to deal with these matters expeditiously” and that furthermore, there is “scant material which would suggest that that application has any chance of success at all.”

   b)Concerning paragraph 3 of Order made 23 August 2012: The claim for legal professional privilege was not pressed at the hearing of this matter at which the orders were made.  As such, this in itself makes it unlikely that the appeal will be successful.

   c)Concerning paragraph 4 of Order made 23 August 2012: There is no prejudice to the husband in the Commissioner of Taxation continuing to be a party pending his appeal. 

4. Ms Gleeson for the Commissioner of Taxation (the first intervener) made submissions at the hearing solely in relation to paragraph 4 of the Orders dated 23 August 2012.  Paragraphs 2 and 3 concern the husband’s delivery of material to the wife and as such are of no concern to the Commissioner of Taxation. 

5. Concerning paragraph 4, Ms Gleeson asserted:

   a)That there was no basis in evidence or that had been articulated in submission concerning the husband’s assertion that the appeal would be rendered nugatory if paragraph 4 was not stayed. 

   b)That the husband’s submission that the provision of documentation to the Australian Taxation Office would compromise negotiations between himself and the Australian Taxation Office was a “completely inadequate basis for a claim of prejudice.” As a creditor, Ms Gleeson submitted, the Australian Taxation Office was entitled to intervene pursuant to s 79(10) of the Family Law Act 1975 (Cth) (“the Act”).

   c)That there was nothing in the husband’s Notice of Appeal that suggests that the orders to be appealed were made in error, and that the grounds of appeal are “close to risible” and do not particularise any alleged error.

6. Counsel for the second intervener did not make any submissions at the hearing with regards to the stay sought by the husband. 

7. Mr Berman SC for the husband stated, in response to the submissions of Mr McQuade for the wife regarding privilege not being an issue raised at the hearing of the matter that produced the 23 August 2012 orders:

   a)The issue of privilege was not raised as the wife was seeking a much narrower category of documents than that which was ordered.  In addition, there was no suggestion on behalf of counsel for the wife that the wife would be seeking documents that may be privileged. 

Consideration of the parties issues the stay sought by the Husband

1. I will now consider the principles outlined above as they are relevant to the stay sought by the husband.

Does the husband have an arguable case?

1. I refer again to my comments at paragraph [27] concerning the difficulty of Judges at first instance critically assessing their own orders.  Mr Berman SC advanced cogent submissions as to why paragraphs 2 and 3 of my orders made 23 August 2012 are being appealed. 

2. His submissions concerning paragraph 4 were less compelling.  The Commissioner for Taxation was granted leave to intervene in the proceedings, but the only documents that the husband and wife are required to provide are very limited in scope.  It could hardly be said, as the husband has alleged as a ground in his Notice of Appeal, that the order “creates an injustice in that [it] impose[s] onerous and compromising obligations of discovery on the husband.”

3. As such, I find that the husband has an arguable case with regards to paragraphs 2 and 3 of 23 August 2012 but not paragraph 4 of the same date. 

The wife is entitled to the benefit of the judgment

1. The wife is entitled to the benefit of the orders made 23 August 2012.  In particular, she is entitled to the documentation provided for in paragraph 3 as “copies of communications and documents created in relation to the husband’s indebtedness to the Australian Taxation Office including any court proceeding”.  This factor does not support the granting of the stay.

Would the husband’s appeal be rendered nugatory if the stay were not granted?

1. This consideration requires each paragraph to be considered in turn.

2. As paragraph 2, the husband’s primary concern with the order appeared to be that complying with this order may require him to act against the advice of his tax professionals in his dealing with the Australian Taxation Office.  To the extent that is true, the appeal may be rendered nugatory if the stay is not granted. 

3. As paragraph 3, I agree that the order as it stands appears to require the husband to disclose privileged documents to the wife.  In my ex tempore reasons delivered with the orders on 23 August 2012, I noted in regards to order 3 that the documents “would be discoverable in any event”.  Evidently, I did not conceive that the order would require the disclosure of privileged documents. 

4. To the extent that this order does require the disclosure of privileged documents that would not, in the absence of the order, have been required to be produced in accordance with ordinary discovery procedures, I find that the husband’s appeal would be rendered nugatory if the stay were not granted. 

5. As paragraph 4, I am not satisfied that the appeal would be rendered nugatory if a stay were not granted.  The Commissioner for Taxation has been given leave to intervene and receive documents in very limited circumstances.  Their role in the proceedings is to ensure that I do not make an order that reduces the capacity of the Commissioner to collect what sums are owed (or may be owed) to the Commissioner.  It is not to create some sort of strategic advantage in their dealings with him with regards to the tax dispute.  Furthermore, the documentation that I have ordered be provided to them should not create any advantages or disadvantages for any party. 

Has the application for the stay been brought promptly?

1. The impugned orders were made on 23 August 2012.  The Notice of Appeal was filed on 12 September 2012.  The Application in a Case seeking the stay was filed on 09 November 2012.  It is unclear why a gap of two months elapsed between the filing of the appeal and the filing of the Application in a Case seeking the stay.  This factor does not support the granting of the stay. 

What are the bona fides of the applicant?

1. Both counsel for the wife and counsel for the first intervener attacked the merit of the grounds of appeal provided for by the husband in the Notice of Appeal.  Mr McQuade thought they were “outrageous” and that there was “scant material which would suggest that that application has any chance of success at all.” Ms Gleeson thought they were “close to risible.”

2. Disparaging the chances of success that the husband’s appeal faces is different to accusing the husband of acting with mal fides when filing his appeal. 

The possibility of granting a stay on terms that is fair to all parties

1. I refer to paragraph 3.  Specifically, I have considered whether it would be possible to partially stay paragraph 3 to the extent that the husband would not be required to disclose documents that are subject to a claim of legal professional privilege.  I find that such a stay would be an appropriate median between the desired outcomes of the husband and the wife. 

Conclusions concerning the stay sought by the husband

1. The factors for and against the ordering of the stay concerning paragraph 2 and of my orders of 23 August 2012 appear to be fairly evenly balanced.  As such, and erring on the side of caution, I grant the stay sought by the husband with regard to this order pending resolution of the appeal.

2. As a sensible median between the wishes of the husband and the wife, I order a limited stay of paragraph 3 of my orders of 23 August 2012, to the extent that the husband is not obligated to disclose documents that are the subject of claims for legal professional privilege pending the resolution of the appeal. 

3. I decline to grant a stay of paragraph 4 of my orders of 23 August 2012 as I do not believe the appeal in regard to this order has a reasonable prospect of success.  Furthermore, I do not believe that the appeal would be rendered nugatory if this stay is not granted. 

Conclusion

1. There is some circularity to the stays sought by the husband and wife in these Applications in a Case.  The husband claims that he needs the documents that are required to be disclosed by the wife to allow him to expedite the conclusion of his dispute with the Australian Taxation Office. 

2. Nevertheless, and as already stated, I make orders that paragraph 1 of my Orders made 4 April 2012 (for the purposes of the wife’s Application in a Case) and paragraph 2 of the my Orders made 23 August 2012 (for the purposes of the husband’s Application in a Case) are stayed pending determination upon appeal.  Paragraph 3 of my Orders made on 23 August 2012 is stayed to the extent that the husband is no longer required to disclose documents that are the subject of claims for legal professional privilege.  I decline to grant a stay in relation to Paragraph 4 of my orders made on 23 August 2012. 

3. I reserve the question of costs of the application to a date to be fixed if the parties are unable to reach agreement on such an order.

I certify that the preceding sixty-three (63) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 4 April 2013.

Associate: 

Date:  4 April 2013