Tomczak & Tomczak
[2025] FedCFamC1F 109
•24 February 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Tomczak & Tomczak [2025] FedCFamC1F 109
File number: WOC 1138 of 2022 Judgment of: CAMPTON J Date of judgment: 24 February 2025 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Where the wife seeks to amend her substantive relief to include the setting aside of the disposition of a real property by a corporation of the parties in the shadow of the trial that she contends was not bona fide or at arm’s length – Where the wife seeks the joinder of three additional respondents to the proceedings pursuant to r 3.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) – Where the joinder is resisted by one of the proposed respondents – Proposed additional respondent is a corporation whose interests are affected by the wife’s relief sought pursuant to s 106B of the Family Law Act 1975 (Cth) – Where two of the proposed three additional respondents are necessary parties for the purposes of r 3.01 of the Rules – Wife’s application for leave to amend granted – Application for joinder allowed in part.
FAMILY LAW – PRACTICE AND PROCEDURE – Notice of Objection to subpoena – Where the wife issued a subpoena to a corporation of the husband’s brother to produce documents relevant to her contention that the husband has sought to disguise the control and benefit of his property through his brother’s corporation, while maintaining de facto use and control of it – Where the wife contends that the husband’s brother’s corporation is the property of the husband and that his brother and the corporation are “a puppet” of the husband – Where the corporation filed a Notice of Objection to set aside the subpoena on the basis of an absence of apparent relevance, as to the scope of the subpoena being unduly onerous, as to the terms of the subpoena being vague, and as to privacy – Where the contentions as to absence of apparent relevance, the subpoena being unduly onerous, and as to privacy are not accepted – Where the terms of the subpoena may be varied such that its terms are not vague – Amendments to schedule of documents subpoena ordered.
Legislation: Family Law Act 1975 (Cth) Pt VIII, ss 79, 106B and 114
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 2.50, 3.01 and 6.04
Cases cited: National Employers’ Mutual General Insurance v Waind [1978] 1 NSWLR 372
Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corp Ltd [1984] 1 NSWLR 710
Tsiang & Wu and Ors (2019) FLC 93-911; [2019] FamCAFC 128
White & Tulloch & White (1995) FLC 92-640; [1995] FamCA 127
Division: Division 1 First Instance Number of paragraphs: 55 Date of hearing: 24 February 2025 Place: Sydney Counsel for the Applicant: Mr Mathews Solicitor for the Applicant: Lander & Rogers Counsel for the First Respondent: Mr Alexander Solicitor for the First Respondent: Rita Thakur & Associates Solicitor for the Second Respondent: Did not appear Solicitor for the Third Respondent: Ms Volk, Helen Volk Lawyers Counsel for Tomczak Constructions Pty Ltd: Mr Klooster Solicitor for Tomczak Constructions Pty Ltd: Wollongong Legal ORDERS
WOC 1138 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS TOMCZAK
Applicant
AND: MR TOMCZAK
First Respondent
B PTY LTD
Second Respondent
TOMCZAK PROPERTY HOLDINGS PTY LTD
Third Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
24 FEBRUARY 2025
THE COURT ORDERS THAT:
1.The wife be granted leave to file, on or before 4.00 pm on 25 February 2024, the Further Amended Response to an Initiating Application annexed to her Application in a Proceeding filed on 19 February 2025.
2.B Pty Ltd be joined as the second respondent to the proceeding.
3.Tomczak Property Holdings Pty Ltd be joined as the third respondent to the proceeding.
4.On or before 10 March 2025, the husband file any Amended Initiating Application in response to the wife’s Further Amended Response to Initiating Application filed pursuant to Order 1 and Tomczak Property Holdings Pty Ltd is to file and serve any Response thereto. It is anticipated Tomczak Property Holdings Pty Ltd will not file a Response pursuant to this order.
5.On or before 27 March 2025 B Pty Ltd, file any Response to the wife’s Further Amended to an Initiating Application filed pursuant to Order 1.
6.Pending further order, B Pty Ltd be restrained from transferring, selling, mortgaging, encumbering, or otherwise dealing with, the property at 3 C Street, Suburb D New South Wales, save and except as to leasing the property for a period of not greater than the current residential lease of the property.
7.The Amended Application in a Proceeding of the wife as filed 19 February 2025 otherwise be dismissed.
8.All parties’ costs to the wife’s Application in a Proceeding as amended 19 February 2025 be reserved to trial.
Subpoena objection:
9.The objection filed on 4 February 2025 to the subpoena issued at the request of the wife on 23 December 2024 directed to Tomczak Constructions Pty Ltd to produce documents be upheld in part, such that the schedule to the subpoena be amended as follows:
(a)In paragraph 2, the words “or other style of account whatsoever kind and whatsoever nature” are deleted;
(b)In paragraph 3, the words “including but not limited to” are deleted and the word “being” is inserted;
(c)In paragraph 4, the words “and any other documents” are deleted;
(d)In paragraph 5, the words “documents verifying any and all” are deleted;
(e)Paragraphs 6 and 7 are deleted;
(f)In paragraph 8, the words “any and all” are deleted;
(g)In paragraph 12, the word “verifying” is deleted and the word “recording” is inserted.
10.The time for Tomczak Constructions Pty Ltd to comply with the subpoena issued on 23 December 2024 as amended be extended to 6 March 2025.
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 the pseudonym Tomczak & Tomczak has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
CAMPTON J:
By way of an Initiating Application filed in the Federal Circuit and Family Court of Australia (Division 2) at Wollongong, Mr Tomczak (“the husband”) sought orders adjusting property between he and Ms Tomczak (“the wife”). The wife, by way of a Response to an Initiating Application filed on 18 November 2022, sought different orders as to the adjustment of property, orders as to spousal maintenance, and orders as to the parenting of the children of she and the husband, Ms X who was born in 2006 and is currently 18 years old, Y, who was born in 2007 and is currently 17 years old, and Z, who was born in 2009 and is currently 15 years old. Final parenting orders were made on 16 December 2025.
The parties married in 2000, separated on a final basis on 31 December 2021, and were divorced in 2023.
BACKGROUND
Giving context to the subject matter of the dispute pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) and to these reasons, over the period of their marriage the husband and the wife, by way of corporate and trust structures, engaged in real property development, including building residential properties, commercial premises, and a service business, and completing renovations, extensions, and other constructions.
On 21 March 2024 a senior judicial registrar, after a defended hearing, made orders pursuant to s 114 of the Act regulating the conduct of a corporation, Tomczak Developments Pty Ltd, of which the husband and the wife are the equal shareholders and directors. The orders provided for each of them to receive $2,307 per week from the corporation, and for the sale of a property at E Street, Suburb F NSW with $150,000 of the sale proceeds to be distributed to the wife and the balance to be paid to an NAB account in reduction of a corporate loan.
The wife filed an Application for Review on 8 April 2024. On 14 June 2024 the Review was consensually resolved, confirming the orders of the senior judicial registrar on 21 March 2024 and providing for the sale proceeds of a different property at G Street, Suburb H to be distributed such that the wife receive $150,000.
The joint balance sheet filed on 14 November 2024 by the husband and the wife records that they owned, at that time either personally or thorough corporations, six real properties and had recently sold three. Prior to the transfer of the proceeding to this Court on 14 November 2024, Judge Campbell recorded:
B. This matter involves complex evidence concerning:
i. The nature of the husband’s equitable interest in [Tomczak Constructions Pty Ltd];
ii. The value of [Tomczak Developments Pty Ltd], including whether the business holds goodwill;
iii. The value of the [Tomczak Investment Trust];
iv. The Wife’s argument in relation to the Husband’s wastage and whether any notional addbacks are required;
v. The characterisation of funds received by the Wife pursuant to interim orders;
vi. The quantum and accuracy of each party’s directors’ loan through [Tomczak Developments Pty Ltd]; and vii. The legitimacy of loans asserted by the Husband.
The husband and the wife, by way of corporations, either directly or indirectly have common interests with Mr J (described by the wife as the husband’s business partner) held by four adjoining real properties, being:
(a)1 C Street, Suburb D, New South Wales owned by K Pty Ltd;
(b)2 C Street, Suburb D, New South Wales owned by L Pty Ltd;
(c)3 C Street, Suburb D, New South Wales (“the 3 C Street property”) previously owned by Tomczak Property Holdings Pty Ltd, and was sold to B Pty Ltd for the sum of $875,000 pursuant to a contract exchanged on 23 October 2024 and which was completed on 13 December 2024; and
(d)4 C Street, Suburb D, New South Wales owned by K Pty Ltd.
The shareholders and directors of each relevant corporation are:
(a)K Pty Ltd. Each of the husband and Mr J hold 50 per cent of the issued shares and are directors.
(b)The evidence appears to promote that Mr J is the sole shareholder and director of L Pty Ltd. The solicitor for B Pty Ltd said in submissions today that Mr J’s wife is also a shareholder of the corporation.
(c)Tomczak Property Holdings was incorporated in 2021. The husband in his affidavit said that he is the sole director and shareholder. The wife in her affidavit said that the husband is the sole director, and that the shareholder is Tomczak Investment Holdings Pty Ltd. The ASIC search records that Tomczak Investment Holdings Pty Ltd is the sole shareholder. The wife is the sole director and shareholder of Tomczak Investment Holdings. It appears to be the trustee of a discretionary family trust.
(d)Tomczak Developments Pty Ltd was incorporated in 2016. The husband and the wife are equal shareholders and are both directors. The corporation owns other real properties.
(e)Mr J is the sole director and shareholder of B Pty Ltd.
(f)Tomczak Constructions was incorporated on 21 April 2023. The husband’s brother, Mr N is the sole director, and Mr N’s company, M Pty Ltd, is the sole shareholder.
The husband and Mr J, through their respective entities, own those four adjoining real properties that sit in a row, at 1, 2, 3 and 4 C Street, Suburb D. The wife in her affidavit says that the husband and Mr J proposed to redevelop the consolidated C Street, Suburb D site to demolish the buildings on those properties and construct a complex containing residential units and a boarding house. The wife exhibited to her affidavit developmental plans for the site, drawn by O Company.
On 3 April 2024 the 3 C Street property was valued by a single expert at $900,000. The use of the property for the purposes of that opinion, whether it be as a standalone residential property or as part of a proposed development, may be unclear.
By way of his Initiating Application filed 27 September 2022 the husband sought for the wife to transfer to him her interests in Tomczak Developments Pty Ltd and Tomczak Investment Holdings Pty Ltd. The latter would in turn appear to provide him with the ultimate control and ownership of the 3 C Street property by way of either Tomczak Investment Holdings Pty Ltd or, potentially, the discretionary trust.
On 23 October 2024 the husband, as the sole director of Tomczak Property Holdings, without notice to the wife, entered a contract for sale of the 3 C Street property to Mr J’s corporation, B Pty Ltd for $875,000 as recorded earlier in these reasons.
On 25 October 2024, some two days later, the husband disclosed the exchange of contracts to the wife.
On 29 October 2024 the solicitors for the wife confirmed in a letter to the husband that she did not consent to the sale.
On 12 November 2024 the wife filed an Application in a Proceeding seeking orders for the contract for the sale of the 3 C Street property to be set aside pursuant to s 106B of the Act, and for the husband, in his capacity as the sole director of Tomczak Property Holdings, to be restrained by injunction from disposing of, of further encumbering, the 3 C Street property without the written consent of the wife.
Mr Noveski was the solicitor instructed by the husband as the sole director of Tomczak Property Holdings, to act on its behalf, on the sale of the 3 C Street property. The contract for sale has not been adduced into evidence. The disposal occurred without the intervention of an agent after negotiations between the husband and Mr J. It is unknown if B Pty Ltd retained its own solicitor or conveyancer on the sale.
On 16 December 2024, on condition that the husband and the wife undertake a private mediation between 28 February 2025 and 19 May 2025, the proceeding was listed for trial over five days commencing on 19 May 2025.
In his affidavit filed on 23 January 2025, the husband said:
21.I ensured that the entirety of the sale proceeds [of the [3 C Street] property] were paid in reduction of the BML 1 account with NAB.
The BML 1 account is a “Business Market Loan” facility made available by the bank to Tomczak Developments Pty Ltd. In his affidavit the husband produced a table of the BML 1 Tomczak Developments Pty Ltd loan facility and reductions in the principal due under that loan facility. He said the application of sale proceeds of the 3 C Street property on 12 December 2024 reduced the loan balance from $1,346,510 to $475,267 and that same day he applied the $60,000 from the sale proceeds of a vehicle to bring the value due by way of the loan account to $415,267. He further contends that:
(a)On 20 January 2025 he applied $270,000 to further reduce the loan facility, but does not disclose the source of these funds;
(b)On 20 January 2025 he applied $5,000 from “rent money accumulated in [Tomczak Property Holdings Pty Ltd] account”; and
(c)On 21 January 2025 he applied $140,267 sourced from the balance of the proceeds of sale of a property at Q Street, Suburb R;
thereby reducing the value of the loan account to a nil balance.
The balance sheets of the discretionary family trust, Tomczak Investment Holdings (in the event it trades on its own account in addition to being the trustee of the discretionary trust), and Tomczak Property Holdings were not adduced into evidence. The impact of the provisions of the benefits flowing from the payment of funds of the sale of the 3 C Street property as between the various entities by way of loan account movements remains uncertain.
The wife contends that B Pty Ltd is not a bona fide purchaser for value of the 3 C Street property, that the sale was not an arms-length dealing, and that the sale was an attempt to reduce the value of property amenable to adjustment between she and the husband pursuant to s 79 of the Act. In her Case Outline filed on 19 February 2024, the wife contended:
20.It is the Wife's position in these proceedings that the sale of the [C Street] property was a disposition at the direction of the Husband which was made to defeat an anticipated order in these proceedings or which, irrespective of intention, is likely to defeat any such order.
20.1Accordingly, the Wife seeks relief on a final basis to set aside the transaction pursuant to Section 106B of the Act. Necessary to prosecute that relief:
(a)[B Pty Ltd] is required to be joined to these proceedings as it is the purchaser of the [C Street] property; and
(b)[Mr J] is required to be joined to the proceedings in his capacity as director of [B Pty Ltd].
21.[Tomczak Property Holdings Pty Ltd] is sought to be added as a party in circumstances where it held [3 C Street] prior to the sale to [B Pty Ltd].
It emerged during the hearing that:
(a)Implicit in the wife’s case is that the value of the interest of she and the husband by way of the relevant corporations in the C Street, Suburb D properties ought to be approached "in one line" as one property, rather than as individual properties, to achieve their highest and best use as a development site, as intended, supported by her evidence and the documents for the development of the site as prepared by the husband and Mr J. She asserts that each of the properties of the parties will have a lower value if independently and separately valued for sale; and
(b)As identified by the solicitor for the proposed respondent, B Pty Ltd, the application for which the wife seeks leave to amend on a substantive basis, as annexed to her Amended Application in a Proceeding filed on 19 February 2025, seeks that her interests in Tomczak Investments Holdings, either on its own account or in its capacity as trustee for the discretionary family trust, be transferred to the husband such that she seeks, at least apparently, to divest herself of any interest in the trustee, but not necessarily the trust itself.
THE RELEF SOUGHT BY EACH OF THE HUSBAND AND THE WIFE
These reasons determine:
(a)The Second Further Amended Application in a Proceeding of the wife filed on 19 February 2025, as part of financial proceedings pursuant to s 79 of the Act, seeking:
1.That this Application in a Proceeding be listed on an urgent basis.2.That the proceedings be listed for an expedited final hearing.3.That [B Pty Ltd] be joined as the Second Respondent to this Application in these proceedings.
4.That [Mr J] in his capacity as director of [B Pty Ltd] be joined as the Third Respondent in these proceeding.
5.That [Tomczak Property Holdings Pty Ltd] be joined as the Fourth Respondent in these proceedings.
6.That the wife be granted leave to rely on a Further Amended Response to Initiating Application in the form identified at Annexure “A”
7.That pursuant to sections 90AF and 114 of the Family Law Act 1975 (Cth), [Mr J] and [B Pty Ltd] are hereby and shall be restrained by injunction from dealing with the property situate at and known as [3 C Street, Suburb D] being the whole of land in folio identifier […] (the [C Street] Property) in the state of New South Wales pending further Order.
(Emphasis removed)
(b)The Notice of Objection filed on 4 February 2025 by the recipient to a subpoena issued at the request of the wife to Tomczak Constructions Pty Ltd on 23 December 2024.
In his Response to an Application in a Proceeding filed on 23 January 2025, the husband said he did not wish to be heard in relation to the relief sought in paragraphs 3, 4, and 7 as sought by the wife. He sought for paragraph 5 as sought to be dismissed, and for the wife to pay his costs associated with responding to the Application in a Proceeding.
The orders made on 16 December 2024 required the wife to serve the proposed additional respondents with her amended relief, and any other relief sought, on or before 23 December 2024. B Pty Ltd and Mr J, by way of the solicitor appearing on their behalf today, conceded that they were served with the wife’s Application in a Proceeding as initially filed seeking to challenge the disposal of the 3 C Street property on 25 November 2024, and were served with the wife’s then Amended Application in a Proceeding on 20 December 2024.
The orders made on 16 December 2024 directed the additional proposed respondents to file a Response to the Application in a Proceeding by 25 January 2025 and material in support thereof, to file and serve a Case Outline document by 19 February 2025. No proposed additional respondent did so.
B Pty Ltd and Mr J appeared by way of legal representation today. The solicitor appearing for B Pty Ltd confirmed receiving instructions from that entity, or at least from Mr J, in November 2024. It appears Mr J elected to pursue an overseas trip rather than filing any material in the proceeding. Both Mr J and B Pty Ltd oppose the joinder and the injunctive relief sought by the wife. Tomczak Property Holdings Pty Ltd did not formally appear.
JOINDER
Rule 2.50 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) mandates that the wife must obtain leave to amend her response for substantive relief in circumstances where the matter has been listed for trial. The husband implicitly did not oppose the wife obtaining leave to amend.
The wife contends that the proposed additional respondents are necessary parties to the proceedings, in that the relief she seeks on amendment pursuant to s 106B of the Act directly affects their interests. She contends they are necessary for the purposes of r 3.01 of the Rules.
The husband accepts that the proposed additional respondents, B Pty Ltd and Tomczak Property Holdings, are necessary parties to the proceedings, however said that “[i]t is unclear why [Mr J] is a necessary party”. It is his proposal that Tomczak Property Holdings “take no active role in the proceedings”, and for such a position to be “either noted in orders, or [Tomczak Property Holdings] can be directed to file a submitting appearance, should the need arise.” There is merit in his position.
The solicitor for B Pty Ltd and Mr J also submitted that there appears to be no necessity for Mr J to be joined to the proceedings in his personal capacity.
I accept that submission as made by both the husband and the solicitor for Mr J. The application for the joinder of Mr J personally will be refused.
The gravamen of the submissions opposing the joinder made by B Pty Ltd was directed to:
(a)The wife does not seek by way of her proposed amended substantive relief to retain her shareholding in Tomczak Investment Holdings or remaining as the director of that entity, being the corporation ultimately controlling the 3 C Street property; and
(b)In the event there was any mischief in the husband’s disposal of the 3 C Street property to B Pty Ltd, the husband and wife appear to have more than adequate property to occasion justice and equity for the purposes of the s 79 determination without recourse to challenging the disposal by Tomczak Property Holdings of its interest in the 3 C Street property.
While each of these submissions could not be said to be devoid of merit, to refuse the wife the opportunity to progress her relief pursuant to s 106B of the Act would be, in reality, to summarily determine it.
In the circumstances, having regard to the matters that are said will be agitated by the wife at trial, and the mandates contained in r 3.01, the wife will obtain the indulgence of leave to amend her substantive response as sought. B Pty Ltd will be joined to the proceeding as the second respondent, and Tomczak Property Holdings will be joined as the third respondent. Directions will be made for each joined respondent, and for the husband, to file any Response or an Amended Initiating Application in response to the wife’s Amended Response to an Initiating Application.
INJUNCTIONS
The wife contends the injunctive relief she seeks is necessary to preserve the status quo in relation to the 3 C Street property, being the subject matter of the litigation pending final determination. She contends that there is a risk of dissipation of that property interest.
The principles applicable to determine an application for an order for injunctions of the nature as sought by the wife are well known. The wife must establish both an arguable case with sufficient likelihood of success to justify the preservation of the status quo, and that the balance of convenience favours the grant of the injunction, in that there is a danger or risk of dissipation of, or dealings with, assets which will frustrate any judgment in her favour; see Tsiang & Wu and Ors (2019) FLC 93-911:
20. The grant of an injunction is discretionary and the basis on which such an order is made is well established. A purpose, as in this case, is to preserve the status quo pending resolution of the controversy. An applicant must demonstrate first that there is a serious issue to be tried. While that statement has been the subject of various iterations, in essence it requires the demonstration of an arguable case or as was said in Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [65], the applicant must “show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo”.
21. Next the applicant must demonstrate that the balance of convenience favours making the order sought. As part of this, the applicant must show that there is a “danger” or risk of dissipation of or dealings with assets which will frustrate any judgment in favour of the applicant.
(Footnotes omitted)
The relevant subject matter of the litigation is the wife’s right to claim orders for property adjustment under Pt VIII of the Act, particularly s 79, and the pool of assets that are subject of that claim, of which the interests in the 3 C Street property would form part. The dispute between the husband and the wife concerns the specie and the quantum of a final property adjustment between them including the value of the property and the form it should take.
There was no evidence filed by B Pty Ltd, as to the knowledge of Mr J as to the fact and content of the s 79 dispute between the husband and the wife, or as to his version of the circumstances giving context to the disposal of the real property in the shadow of the trial or why it was so urgent, or as to him identifying any prejudice if the injunctive orders sought are achieved.
The danger or risk of dissipation of the property is anchored in the unilateral dealings with the property by the husband and Mr J immediately preceding the trial. The balance of convenience slightly favours the wife.
The wife has filed an undertaking as to damages in the usual form today. The order she seeks is interlocutory in character and can always be subject to an application to vary it. The trial is less than three months away. It is uncontroversial that the 3 C Street property is currently tenanted by way of a residential lease. The terms of the injunctive order as sought by the wife will be varied and refined to permit the continued leasing of the property to maintain the status quo pending the trial.
NOTICE OF OBJECTION
On 23 December 2024 the wife caused a subpoena to issue to Tomczak Constructions Pty Ltd seeking production of:
2. Copies of all statements of account in relation to any cheque, savings, trading, loan, investment, deposit, credit card or other style of account whatsoever kind and whatsoever nature operated by [Tomczak Constructions Pty Ltd] during the period from 21 April 2023 to the present date.
3. Copies of all financial accounts including but not limited to:
(a) Tax returns;
(b) Financial statements; and
(c) Management accounts, including but not limited to profit and loss statements, business sheets, loan accounts, loan account ledgers and general ledgers, salaries and allowances, budgets and forecasts for the period 21 April 2023 to the present date.
4. Copies of all letters, correspondence, emails, written correspondence, accounts, statements, ledgers, invoices, photographs, contracts, quotes, iCare HBCF documents (including but not limited to applications and certificates of currency), construction certificate applications and any other documents relating to the following:
[Thirteen properties listed]
5. Documents verifying any and all home building compensation insurance policies (current or expired) held by [Tomczak Construction Pty Ltd] from 21 April 2023 to present.
6. Contracts relating to any and all work (including but not limited to any and all third party work and project development) undertaken by [Tomczak Construction Pty Ltd] from 21 April 2023 to present (to the extent these documents are not otherwise captured in items 4 and 5 above);
7. Any and all communications and documents relating to any prospective and/or upcoming work (including but not limited to any and all third party work, building work and project development);
8. Copies of any and all hire purchase agreements entered into by [Tomczak Constructions Pty Ltd] from 21 April 2023;
9. Any and all telephone records and telephone bills for all devices operated by employees of [Tomczak Construction Pty Ltd] in the course of their employment including but not limited to the following mobile numbers:
(a) 04[…]; and
(b) 04[…].
10. Documents verifying all persons employed by [Tomczak Constructions Pty Ltd] from 21 April 2023 to present including but not limited to:
(a) Employment contracts;
(b) PAYG summaries;
(c) Payslips; and
(d) Any list of employees.
11. Copies of all claims for reimbursements of expenses related to the employment of [Mr Tomczak] from 21 April 2023 to present;
12. Documents verifying all contractors and subcontractors retained by [Tomczak Constructions Pty Ltd] from 21 April 2023 to present including but not limited to contracts;
13. Invoices rendered by [Tomczak Constructions Pty Ltd] from 21 April 2023 to present; and
14. Invoices for:
(a) IT support received by [Tomczak Constructions Pty Ltd] from 21 April 2023 to present; and
(b) Accounting received by [Tomczak Constructions Pty Ltd] from 21 April 2023 to present.
Mr N is the husband’s brother. In his capacity as the director of Tomczak Constructions Pty Ltd, Mr N instructed Mr Noveski as the solicitor to act for Tomczak Constructions on the subpoena objection. Mr Noveski is the solicitor who acted on the husband’s instructions as the director of Tomczak Property Holdings for the sale of the 3 C Street property.
The gravamen of the objections to the subpoena were as to:
(a)An absence of apparent relevance of the documents sought;
(b)The production of documents being unduly onerous or improper as some parts of the schedule were vague and did not describe the documents sought with sufficient particularity, and
(c)Privacy.
The objection as to being unduly onerous has no merit in circumstances where Tomczak Constructions Pty Ltd elected not to file an affidavit adducing evidence as to any challenges that would be encountered in identifying and producing the material sought.
The objection as to privacy as no merit having regard to the provisions of r 6.04 of the Rules.
The objection as to the description of the documents being vague and lacking sufficient particularity, in the circumstances of the relationship between the husband and his brother as set out later in these reasons, has little merit, and is not accepted. A subpoena that does not adequately describe the documents required, or describes them only in general terms, is not necessarily improper (National Employers’ Mutual General Insurance v Waind [1978] 1 NSWLR 372). It is important to consider how the schedule is likely to be interpreted by the recipient (Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corp Ltd [1984] 1 NSWLR 710) acting as a reasonable person with knowledge of the surrounding circumstances.
By way of her amended points of claim filed 18 February 2025, the wife asserts:
(a)Tomczak Developments Pty Ltd was incorporated in 2016. The husband and wife were equal shareholders and both directors and remain so. The entity was a vehicle that acquired real estate for construction and property development purposes during the marriage.
(b)The husband’s brother, Mr N, was employed as an apprentice by Tomczak Developments Pty Ltd. He was later engaged as a site manager of Tomczak Developments, working on sites on a day-to day-basis.
(c)Prior to 24 February 2024, Tomczak Developments Pty Ltd was undertaking and developing nine different real properties in the City P area. The husband gave the wife notice on 16 January 2024 that he no longer considered it “viable” for Tomczak Developments Pty Ltd to continue trading, and that it should cease trading by 23 February 2024.
(d)The wife pleaded in her points of claim, and it appears uncontroversial, that the financial statements of Tomczak Developments Pty Ltd from 2019 to 2023 establish it making a reasonable profit, and at October 2023, it held assets in surplus of liabilities at $3.6 million. A forensic valuation report of the corporation was produced on 9 May 2024.
(e)Tomczak Constructions Pty Ltd was incorporated on 21 April 2023. It was incorporated about six months prior to Tomczak Developments having a surplus of assets and liabilities in excess of $3.6 million.
(f)The circumstances of the necessity, in the shadow of the litigation, as to Tomczak Developments Pty Ltd no longer being “viable”, whatever that may mean, remains somewhat unclear.
(g)It is uncontroversial that the legal shareholding and directorship of that Tomczak Construction Pty Ltd would promote that it is a corporation of the husband’s brother, Mr N. Tomczak Construction Pty Ltd has completed, or is completing, the development of 12 properties in the City P area.
(h)The wife contends that the husband has attempted to shift the benefit of his property from that controlled by he and the wife through Tomczak Developments, to his brother, by way of Tomczak Constructions, and that Tomczak Constructions is the alter ego of the husband, or that his brother Mr N is his puppet. In her points of claim the wife pleads:
6.1.3. In appointing [Mr N] as the sole director of [Tomczak Constructions] and [M Pty Ltd] as the sole shareholder of [Tomczak Constructions], the husband:
…
d. sought to disguise the true ownership and control of his assets, [Tomczak Constructions], and the assets held in the name of [Tomczak Constructions], while maintaining de facto use and control of the same.
6.2. In the premises pleaded above, the court would find that [Tomczak Constructions], [Mr N] and or [M Pty Ltd] is the alter ego of the husband, being assets of a third party as the property of a party to the marriage (Ashton and Ashton [1986] FamCA 20; (1986) FLC 91-777).
6.3. In the premises pleased above, the Court would find that [Tomczak Constructions], [Mr N] and or [M Pty Ltd] is the alter ego and
/or[Mr N] would be the mere puppet of the husband and the reality of the situation is that it is not open to the husband to assert that [Tomczak Constructions] are not his assets but at the same time deal with them as if they are (Stein and Stein (1986) FLC 91–779 75,674).The pleaded particulars are put into issue by the husband and Tomczak Constructions Pty Ltd. The issues as to the control of Tomczak Constructions Pty Ltd and benefits it produces will be a matter for trial.
A subpoena is an ex parte order of the Court requiring the production of documents from a stranger to the proceedings. A legitimate forensic purpose of a subpoena includes a sufficient apparent connection to justify the documents sought on production or inspection (White & Tulloch & White (1995) FLC 92-640). The issue for the purposes of this objection is whether the documents sought would be “on the cards” bearing upon, or having some relevance to, the issues in the substantive proceedings. If they do, then the subpoena process ought to be completed.
Whilst a document may appear irrelevant or absent apparent relevance in isolation, its relevance may only become clear in the context of all the evidence.
The wife properly conceded that some paragraphs in the schedule to the subpoena contained vague and unrestrained descriptions and agreed to the deletion of some words from particular paragraphs. The contents of paragraphs 6 and 7 in the schedule of the subpoena are too wide to encompass, with any specificity, the documents that would fall within them.
Subject to some variations as identified herein, the wife’s case that the documents sought in the schedule to the subpoena are relevant becomes compelling as to the de facto control of Tomczak Constructions Pty Ltd, having regard to the familial relationship between the husband and his brother, the history of the husband’s brother in the operations of Tomczak Developments Pty Ltd, the identity of the person who is managing or authorising the work of Tomczak Constructions (said to be the husband), and the origins of works undertaken by it, including the foundations of the income Tomczak Constructions currently produces.
The approach taken by Tomczak Constructions Pty Ltd to the subpoena is, in part, misconceived. During the hearing it withdrew objections to some parts of the schedule to the subpoena, being paragraph 2 (in so far as bank statements), paragraphs 3 (a) and (b), paragraph 9, and paragraph 10 (a) and (c).
The amendments to the schedule to the subpoena, as recorded in the orders to be made, are directed to the production of documents that have apparent relevance to the subsidiary factual disputes in the proceedings.
For all of the above reasons, I make the orders as set out herein.
I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 24 February 2025
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