Unterbrink & Unterbrink
[2025] FedCFamC1F 280
•2 May 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Unterbrink & Unterbrink [2025] FedCFamC1F 280
File number MLC 12191 of 2022 Judgment of WILSON J Date of judgment 2 May 2025 Catchwords FAMILY LAW – MAJOR COMPLEX FINANCIAL PROCEEDINGS LIST – PRACTICE AND PROCEDURE – the husband seeking disclosure regarding the respondent’s interest in a partnership in India – the respondent contending that the documents are not in her possession, power or control, that litigation on foot in India prevents her from complying with her disclosure obligations and that by force of Indian law she is required to maintain confidentiality of the partnership documents – held, the respondent must give disclosure of the documents sought by the applicant. Legislation Evidence Act 1995 ss 79 and 138
Family Law Act 1975 ss 79, 95 and 96
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 rr 6.01 and 6.03
Indian Partnership Act 1932 ss 9 and 12(e)
Cases cited Bacall & Zagar [2020] FamCA 350
Coco v A.N. Clarke (Engineers) Ltd [1969] RPC 41
Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640
Honeysett v The Queen (2014) 253 CLR 122
In the Marriage of Black & Kellner (1992) 15 Fam LR 343
In the Marriage of Briese (1985) 10 Fam LR 642
In the Marriage of Giunti (1986) 11 Fam LR 160
In the Marriage of Weir (1992) 16 Fam LR 154
John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1
Joseph Street Pty Ltd v Tan [2012] VSCA 113
Lang v The Queen (2023) 278 CLR 323
Livesey (formerly Jenkins) v Jenkins [1985] 1 AC 424
Lonrho v Shell Petroleum Co Ltd [1980] 1 WLR 627
Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705
Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34
Palmdale Insurance Ltd (in liq) v L.Grollo & Co Ltd [1987] VR 113
Paviello & Paviello [2022] FedCFamC1F 592
Sheffield District Railway Company v Great Central Railway Company (1911) 27 TLR 451
Stanford v Stanford (2012) 247 CLR 108
Sun & Yeng No 5 [2024] FedCFamC1F 702
Wheeler v Le Marchant (1881) 17 Ch D 681
Woodcock v Woodcock (2021) 64 Fam LR 489
Division Division 1 First Instance Number of paragraphs 74 Date of hearing 14 April 2025 Place Melbourne Counsel for the applicant Mr M. Robins KC with Mr D. Mort Solicitor for the applicant VDG Lawyers Counsel for the respondent Mr J. Williams Solicitor for the respondent Accord Family Law ORDERS
MLC 12191 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN MR UNTERBRINK
Applicant
AND MS UNTERBRINK
Respondent
ORDER MADE BY
WILSON J
DATE OF ORDER
2 MAY 2025
THE COURT ORDERS THAT –
1.Within three days, the respondent wife must do all acts and things, sign all necessary documents, and take all steps necessary to enforce her legal rights –
(a)as a partner of the partnership business known as ‘B Partnership’ located at Property C, Region D, India (“B Partnership”), and
(b)pursuant to clause 10 of the partnership deed of B Partnership dated 1 June 2001 and clause 11 of the partnership deed of B Partnership dated 1 December 2021,
so as to enable E Pvt Ltd (“E Pvt Ltd”) to attend at the principal place of business of B Partnership (as representatives of the respondent wife) to examine, verify and take notes of the regular books of accounts of B Partnership, to enable E Pvt Ltd to proceed with the valuation of the respondent wife’s partnership interest in B Partnership and to provide the parties and this court with a sworn valuation of the respondent wife’s interest in B Partnership.
2.Within seven days, the applicant husband be at liberty to provide to E Pvt Ltd the documents of B Partnership as disclosed by him to the respondent wife in his solicitor’s correspondence of 18 October 2023, 20 October 2023 and in particular the documents listed below so as to enable E Pvt Ltd to carry out the valuation of the respondent wife’s interest in B Partnership.
(a)the annual report and balance sheets of B Partnership for the period 2011/2012 through to 2018/2019;
(b)the GST certificate (i.e Form GST REG-06) of B Partnership dated 9 November 2021;
(c)the audit reports of B Partnership dated 15 September 2018;
(d)the email from Mr F to the applicant enclosing the T2 Master/Tracker outlining Plant and Machinery details of B Partnership;
(e)the daily reports of B Partnership dated 14 October 2021, 27 October 2021, 3 November 2021, 18 November 2021, 30 November 2021, 6 December 2021 and 16 December 2021;
(f)the B Partnership revenue tracker for the period July 2021 to September 2021; and
(g)the B Partnership production chart for August 2021.
3.The documents disclosed to E Pvt Ltd pursuant to clause 2 above, shall be used by the parties for the purpose of obtaining the respondent wife’s interest in B Partnership and in these proceedings only and save for the parties being permitted to provide the said documents to their respective legal representatives, the parties shall not use the said documents for any other purpose.
4.E Pvt Ltd shall prepare a sworn valuation report as to the value of the wife’s interest in the B Partnership pursuant to –
(a)E Pvt Ltd’s attendance at the principal place of business of B Partnership as contemplated in clause 1 above; and/or
(b)the documents provide to E Pvt Ltd further to the order of 22 February 2024, and
(c)the receipt by E Pvt Ltd of the documents set out in clause 2 above.
5.Within seven days of E Pvt Ltd providing the sworn valuation report further to paragraph 4 above, the applicant’s solicitor to file the said report with the court.
6.The applicant must file and serve a statement of claim to a standard commensurate with a proceeding in the Federal Court of Australia by noon on 2 June 2025.
7.The respondent must file a defence to a standard commensurate with a proceeding in the Federal Court of Australia to the applicant's statement of claim by noon on 2 July 2025.
8.Any reply by the applicant to the respondent’s defence must be filed and served by noon on 16 July 2025.
9.Submissions and affidavits on which the applicant wishes to rely in relation to costs must be filed and served by noon on 2 June 2025.
10.Submissions and affidavits on which the respondent wishes to rely in opposition to the applicant's submissions and affidavits must be filed and served by noon on 2 July 2025.
11.The further hearing of this proceeding is fixed for mention at 10.00am on 17 July 2025.
12.This proceeding is fixed for a hearing to determine the issue of costs for a duration of 1 hour commencing at 10.00am on 17 July 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 a pseudonym Unterbrink & Unterbrink has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILSON J
INTRODUCTION
On 14 April 2025 the husband’s contested amended application in a proceeding dated 20 March 2024 was heard by me. In essence, in the s 79 component of this litigation the husband has sought orders for disclosure in respect of a variety of documents pertaining to the wife’s interest in a partnership in India, the name of which is B Partnership. The wife contends that she is unable to produce the documents requested, relying on a collection of reasons including –
(a)the documents are not in her possession, power or control;
(b)litigation currently on foot in India prevents her from complying with existing disclosure orders made in this litigation; and
(c)by force of Indian law, she is required to maintain confidentiality of the partnership documents thereby precluding her from complying with her disclosure obligations under the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the court rules”).
These are my reasons for ordering the wife to give disclosure of the documents sought by the husband. I refuse to make orders sought by the wife.
RELEVANT BACKGROUND
The parenting aspect of this litigation concerns a child born 2013 and another child born 2018. The parents married in 2010 and separated in late 2021 or mid-2022.
The major asset in the property aspect of this litigation is the wife’s interest in a partnership of which her mother, father and sister are co-partners, constituted by partnership deed dated 1 June 2001. The partnership deed provided that each of the four partners has an equal quarter partnership share in the firm. A dispute exists between the husband and wife about the validity and legal efficacy of a document called “supplementary deed” dated 1 December 2021 in which the wife’s share in the partnership allegedly diminished from 25% to 5%.
On 14 April 2025 I made orders –
(a)entering this proceeding in the Major Complex Financial Proceedings List; and
(b)ordering the case to go forward by pleadings.
The case involves complicated issues of Indian partnership law. It also calls for precision in the formulation of the wife’s legal and equitable interests in the partnership for the purposes of Stanford v Stanford.[1] The proceeding was for a time been managed in Division 2 of this court. It was later transferred to Division 1 and pursuant to the orders made by the Chief Justice, the contested interlocutory dispute about disclosure was referred to me for determination. One of the issues on this contested application was the wife’s compliance with her duty of disclosure under the court rules, as surveyed by me in Paviello & Paviello.[2] Another was the consequences of any failure to make full and frank disclosure, whether for the asserted reasons or at all, in the manner canvassed by the authorities surveyed by me in Bacall & Zagar[3] and in other authorities.[4]
[1] (2012) 247 CLR 108.
[2] [2022] FedCFamC1F 592.
[3] [2020] FamCA 350.
[4] Livesey (formerly Jenkins) v Jenkins [1985] 1 AC 424, In the Marriage of Briese (1985) 10 Fam LR 642, In the Marriage of Giunti (1986) 11 Fam LR 160, In the Marriage of Black & Kellner (1992) 15 Fam LR 343 and In the Marriage of Weir (1992) 16 Fam LR 154.
THE B PARTNERSHIP DEED
The nature and extent to which Indian partnership law applied to this s 79 application will be a contested factual matter at trial. For the purposes of Australian law, evidence of foreign law is a factual issue not a legal issue, as I examined in detail in Sun & Yeng (No 5).[5] In this case a single expert has purported to adduce evidence of Indian partnership law. The issues raised by that expert in part address matters bearing upon the legal and equitable interests of the wife in the partnership asset.
[5] [2024] FedCFamC1F 702.
For present purposes, it is desirable to point up the more significant matters in the partnership deed made 1 June 2001. Those include –
(a)the partners are the wife’s parents and her sister each of whom has a one quarter 25% interest in the partnership (clause 4);
(b)the nature of the partnership business is “export of [products]” and “any other variety of business as may be agreed upon between the partners from time to time” (clause 3);
(c)the partnership created was a partnership at will (clause 5);
(d)the partnership account ran between 1 April and 31 March;
(e)a regular profit and loss account and balance sheet was to be drawn up on 31 March every year and the profits or losses as the case may be was to be divided and adjusted in the accounts of the partners as provided for in clause 4 (clause 6);
(f)the contribution of capital and funds as may be required for the partnership was to be agreed from time to time (clause 7.1);
(g)the wife’s parents were to work as working partners at a prescribed monthly remuneration (clause 8.1);
(h)no partners were to engage in “any speculative business” (clause 9);
(i)“regular books of account of the partnership business shall be maintained at the principal place of business and each partner or his nominee shall be entitled to examine them and take notes therefrom” at all times (clause 10); and
(j)the partners would be faithful to one another (clause 12).
It will be immediately apparent that aspects of the wording of the partnership deed in this case mirror provisions of standard partnership deeds for the purposes of the laws of Australian states and territories, partnership law in Australia being a non-federal issue for the purposes of federal constitutional law.
Between 1 June 2001 and 1 December 2021 the partnership business of the B Partnership was conducted in accordance with the partnership deed dated 1 June 2001. A supplementary deed of partnership was given in evidence, said to have been made on 1 December 2021 by the four partners of the firm. One of the recitals to the supplementary deed provided as follows –
“WHEREAS the Party of Fourth Part is relocating to Australia and has decided to no longer be an active partner in the partnership of the firm and has instead decided to be a dormant partner of the partnership firm out of her own free WILL on and with effect from today i.e., 01st day of December 2021”
The husband deposed in paragraph 20 of his 24 January 2025 affidavit in this proceeding that the supplementary deed was only revealed after this litigation was commenced in 2022. Without developing the proposition in detail, Mr Robins KC for the husband submitted that his client will be seeking to impugn the validity of the supplementary deed. He will need to plead that, especially if any nefarious complexion is alleged about any aspect of the supplementary deed, its creation, its execution and its purport.
The supplementary deed is more expansive than are the provisions of the deed dated 1 June 2001 by which the partnership was constituted. Whether the provisions of the supplementary deed wholly replaced the provisions of the 1 June 2001 deed may become a matter of construction at the trial of this proceeding.
Be that as it may, one of the important issues arising from the supplementary deed is the diminution in the wife's 25% percentage share to 5% and the increase in the share of the wife’s mother, father and sister. In clause 5 of the supplementary deed, the partners allegedly agreed to reduce the wife’s 25% partnership share to 5% “out of love and affection”. This was a deed so the adequacy of consideration was not in issue, at least for the purposes of Australian law, yet counsel for the wife invited me to have regard to the second recital to the deed as founding the rationale for the diminution of the wife’s partnership share. He had no responding submission when I pointed out that as a matter of contract law, recitals are not operative terms and very considerable restraints exist on the use of recitals to contractual instruments as a means of construing the terms of the instrument.[6]
[6] Lewison, The Interpretation of Contracts (8th edn) (2024) Sweet & Maxwell.
The husband has asserted that the wife transferred matrimonial funds to the wife’s mother. That will need to be pleaded. If the husband asserts that the wife’s mother (that is to say, his former mother-in-law) asserts some legal or equitable interest in property of the parties, that must be pleaded[7] and the wife’s mother may very well need to be joined as a party if relief is to be sought against her.[8]
[7] Sun & Yeng (No 5) (op cit).
[8] John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1.
The husband made a collection of serious allegations in his 24 January 2025 affidavit. Among them were the following –
(a)notwithstanding the breadth and precision of orders for disclosure made on 8 December 2022, 16 December 2022 and 8 May 2023, the wife continues to be non-compliant in her disclosure obligations;
(b)the wife has methodically diminished the value of her partnership assets by depleting the matrimonial pool of assets;
(c)the wife has created substantial delays in the legitimate forward progress of this case by requiring the husband, his legal advisors and an expert valuer in this case to execute a non-disclosure agreement before certain allegedly confidential documents are produced;[9] and
(d)the wife has endeavoured to apply illegitimate pressure to the husband by contending that she is unable to provide instructions or documents to the valuer E Pvt Ltd without risking being sued by the other B Partnership partners, that is to say, the wife’s mother, father and sister.
[9] In Woodcock v Woodcock (2021) 64 Fam LR 489 I examined the observations of the Court of Appeal of the Supreme Court of Victoria about assertions of confidentiality on a party’s duty to give disclosure in Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34.
EVIDENCE ABOUT INDIAN LAW
One of the issues in this case is whether the partnership financial records are discoverable at all. Evidence of Indian law has been put on affidavit. A single expert has been appointed. He is Mr G, a retired judicial officer of the P Court. He prepared a report dated 23 September 2024 described as a “single expert witness report”. Nowhere was the correspondence produced recording to the assumptions he was invited to make or the questions on which his opinion was sought. That rendered the task of interpreting his opinion very difficult. It was all the more difficult to measure Mr G’s opinion against the requirements of s 79 of the Evidence Act and the key cases that have construed the metes and bounds of opinion evidence.[10] Mr G’s background (or, for the purposes of s 79 of the Evidence Act, his “specialised knowledge based on the person’s training, study or experience”) was not explicitly recorded. That said, he holds a law degree from H University and has history working in the Indian legal profession including various judicial roles.
[10] Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705, Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588, Honeysett v The Queen (2014) 253 CLR 122 and Lang v The Queen (2023) 278 CLR 323.
He said he has “vast knowledge” (his words) on procedural and substantive laws including those of the Indian Partnership Act 1932. In paragraph 28 of his report he stated the following –
“Thus, the wife was a partner in the firm having 25% share. The wife was entitled to get the profit, after due calculations thereof on the closure of the financial year. The wife was also to bear the loss, as per her share. The wife was not to get any extra amount or any remuneration. So long the partnership firm was in existence, the wife was entitled to the profits. She was also to bear the loss as per share. This right and interest of the wife had continued till 01.12.2021. Her marriage [in] 2010 did not change or alter her interest in the partnership firm “[B Partnership]”. She continued to get profit, as per her share. She had all those rights which were available to her under the Act. She was also to bear the proportionate loss in the firm.”
Mr G offered the opinion, based on various provisions of the Indian Partnership Act, the partnership deed of 2001 and the supplementary deed of 2021 that the wife is not entitled to sell, transfer or otherwise dispose of her interest in the partnership without the consent of the other partners.
On the separate question of the wife’s entitlement to access to firm books, Mr G stated that the original partnership deed as well as the supplementary deed permit the wife to examine partnership accounts, to take notes and to copy any of the firm books. Mr G cited s 12(e) of the Partnership Act. That provision applied in the event of a partner’s death in which case the deceased partner’s heirs or legal representatives or duly authorised agents have a right of access to and to inspect and copy any of the firm books. No partner died in this case so s 12(e) seemed to be of no relevance.
Mr G focused on the obligation of partners under s 9 in relation to fidelity to one another. He said the wife was required to be faithful to one another. He said the wife was required to be faithful to other partners and that she was “bound to safeguard the common interests of the other partners” and “she has to maintain confidentiality”. He then said the following –
“Disclosure the information of the account books to third party, even if a third party is the close relation of the partner, as in this case, it would seriously affect the interest of the remaining partners. Therefore the wife is not entitled to copy the account books for giving the details thereof to her husband or third party.”
Mr G did not rely on any Indian authority for the assertions set out immediately above.
It is not appropriate, nor is it necessary to pass upon those observations. However, it must be said that Mr G did not consider the impact upon the operation of the partnership deeds or the Partnership Act on orders of this court compelling the wife to give disclosure of documents that she can obtain. Mr G said the partner’s right to examine and take notes of books of accounts is a “personal right”. He did not explain why that so-called personal right could not be deployed to advance a personal right in litigation between one only of the partners, whether matrimonial or in the advancement of some other right personal to the relevant partner. Nor did Mr G explain why partnership documents were confidential requiring the wife to “maintain confidentiality” and what the parameters of the obligation to maintain confidentiality involved.
It may well be that under Indian law, partners are under an obligation to keep confidential all partnership matters. However, nowhere in the evidence was it said how the compulsory process of disclosure abrogated or qualified in any way that confidentiality obligation. Under Australian law, confidentiality cannot be asserted as a reason for not complying with disclosure obligations.[11]
[11] Woodcock v Woodcock (2021) 64 Fam LR 489 and Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34.
In debate on 14 April 2025 I was informed that three other partners of B Partnership had sued or threatened to sue the wife. The affidavit material filed in this proceeding did not reveal any such process, however.
THE WIFE’S APPROACH TO DISCLOSURE IN THIS LITIGATION
The wife made an affidavit on 2 December 2022. In that affidavit she made no reference to difficulties in complying with orders already made in relation to disclosure. She also made an affidavit on 24 January 2025 in which she gave substantial information about why she asserted she was unable to comply with disclosure obligations. The following is a synthesis of her assertions –
(a)on 19 December 2022 she said an Indian law firm wrote to her telling her to stop interfering in B Partnership’s business, a copy of which letter she offered to produce on request yet she did not exhibit it so I was unable to assess the accuracy of her statement;
(b)on 22 February 2023 the wife said she telephoned her sister and parents asking them to produce documents sought by the valuer E Pvt Ltd which they agreed to do (so the wife said) on condition that the wife execute a non disclosure agreement which she said the husband refused to sign;[12]
[12] Again, and inappropriately, the wife stated that she could produce the non-disclosure agreement if required. Her obligation is to exhibit documents on which she relied. She failed to exhibit the non-disclosure agreement so I was unable to assess the veracity her statements in that regard.
(c)she said she disclosed to the husband the partnership deed and the supplementary deed, “the last four years of tax returns” (of whom or of what she did not say) and an unidentified valuation report but of what land she did not say;
(d)on 8 May 2023 a senior registrar ordered the husband to sign the non-disclosure agreement which the husband refused to do and applied to review the order of the senior registrar;
(e)on 16 July 2023 the husband filed subpoenae to various federal government agencies to which the wife objected yet she did not exhibit her notice of objection setting out the reason for her objection;
(f)on 20 July 2023 a judge of Division 2 of this court by consent discharged the order requiring the husband to sign the non-disclosure agreement;
(g)on 7 August 2023 the wife’s objections to subpoenae were upheld;
(h)on 6 September 2023 she obtained advice from a legal practitioner in India concerning her right to inspect documents of the firm as was advised that any such right was “for business purposes and not for the purposes of this proceeding” and that she risked legal action by B Partnership against her “to protect [B Partnership’s] confidentiality”;
(i)on 9 November 2023 the wife said she received a letter from B Partnership’s legal representative (this letter she did exhibit) asserting that she breached confidentiality provisions of the partnership deed and of the Indian Partnership Act and demanded her resignation;
(j)on 19 December 2023 the wife said she instructed the solicitors she then retained to obtain advice about the non-disclosure agreement (she exhibited that letter);
(k)the husband’s solicitors refused; and
(l)she agreed that orders were made on 16 December 2022 and on 8 May 2023 for her to produce documents relating to B Partnership in her possession, power or control although she said no documents not already disclosed by her are in her possession, power or control concerning B Partnership.
The concept of documents being in the “possession, power or control” of a party is addressed below.
The wife deposed to having been served with a writ or its equivalent issued out of the District J Court in which the wife is named as the defendant. The document she exhibited has the hallmarks of what might be regarded as a statement of claim.
The wife deposed to another piece of litigation, this one in the District K Court , being proceeding … commenced in mid 2024. The wife deposed to an application for an interim injunction in that proceeding returnable in late February 2025. No mention was made of an order being made in late February 2025 when this proceeding was before me on 14 April 2025.
The wife quoted at length from the Mr G report. That did not add to the nature and quality of the Mr G report.
THE E PVT LTD VALUATION
In 2023 and 2024 the parties were ordered to procure the valuation of the wife’s interest in B Partnership. On 22 February 2024 consent orders were made by a judge of Division 2 of this court in the following terms, relevant to a valuation by E Pvt Ltd –
“3.The parties do all acts and things and sign all documents necessary to produce to [E Pvt Ltd]:
(a)all documents sought by [E Pvt Ltd] which have been produced by [B Partnership] to the parties and have not yet been produced to [E Pvt Ltd] including but not limited to:
i.[M Company] account ledger details for financial year 2018-2019 to Financial year 2022-2023, as set out and attached in email correspondence from [Ms N] to the Respondent, dated 28th November 2023 (12:28 PM Indian Standard time).
ii.Income Tax Return Acknowledgment (Form ITR-5) of [B Partnership] FY 18 – 19(AY 19-20), FY 19 – 20 (AY 20 -21), FY 20 – 21 (AY 21 -22), FY 21 – 22(AY 22 -23).
iii.[B Partnership] Deed 1 June 2001 and supplementary Partnership Deed 1 December 2021.
iv.Land & Building valuation report prepared by an independent auditor appointed by [O Bank] dated 29 September 2021.
v.Copy of the Respondent’s Computation of Total Income Tax documents for the periods 2020/2021, 2021/2022, 2022/2023 and all other Indian tax documents.
(b)instruct [E Pvt Ltd] as single expert to prepare a limited valuation report as to the value of the wife’s interest in the [B Partnership] partnership based upon the limited information then available to [E Pvt Ltd].”
On 1 March 2024 the parties requested E Pvt Ltd to conduct the valuation ordered on 22 February 2022. E Pvt Ltd produced a report dated 18 June 2024. The wife has complained that E Pvt Ltd has valued her interest at 25% in B Partnership whereas she asserts that it should be 5%. The correct percentage is a disputed fact which will need to be determined at trial. A valuation based on both percentages will be needed to reflect the possibility that I will make a factual finding on one or other of the percentages.
She deposed to the husband physically possessing certain B Partnership original documents. She asked for orders compelling the husband to physically destroy those documents. No application in a proceeding is on foot for such an order. No precision of the documents to be destroyed was attempted. I decline to make the destruction order sought.
THE HUSBAND’S AMENDED APPLICATION IN A PROCEEDING DATED 20 MARCH 2024
Lengthy as it is, it is as well to set out, in terms, the precise provisions of the husband’s amended application on which he moves. It was as follows –
1.That within 3 days, the Respondent Wife do all acts and things, sign all necessary documents, and take all steps necessary to enforce her legal rights:
a)As a partner of the […] partnership business known as [‘B PARTNERSHIP’] located at [Property C, Region D], India ([“B Partnership”]), and
b)Pursuant to Clause 10 of the Partnership Deed of [B Partnership] dated 1 June 2001 and Clause 11 of the Partnership Deed of [B Partnership] dated 1 December 2021,
so as to enable [E Pvt Ltd] (“[E Pvt Ltd]”) to attend at the principal place of business of [B Partnership] (as representatives of the Respondent Wife) to examine, verify and take notes of the regular books of accounts of [B Partnership], to enable [E Pvt Ltd] to proceed with the valuation of the Respondent Wife’s partnership interest in [B Partnership] and to provide the parties and this Court with a sworn valuation of the Respondent Wife’s interest in [B Partnership].
2.That within 7 days, the Applicant Husband be at liberty to provide to [E Pvt Ltd] the documents of [B Partnership] as disclosed by him to the Respondent Wife in his solicitor’s correspondence of 18 October 2023, 20 October 2023 and in particular the documents listed below so as to enable [E Pvt Ltd] to carry out the valuation of the Respondent Wife’s interest in [B Partnership].
a)The Annual Report and Balane Sheets of [B Partnership] for the period 2011/2012 through to 2018/2019.
b)The GST Certificate (i.e Form GST REG-06) of [B Partnership] dated 9 November 2021.
c) The Audit Reports of [B Partnership] dated 15 September 2018.
d)Email from [Mr F] to our client enclosing the T2 Master/Tracker outlining Plant and Machinery details of [B Partnership].
e)Daily Reports of [B Partnership] dated 14 October 2021, 27 October 2021, 3 November 2021, 18 November 2021, 30 November 2021, 6 December 2021 and16 December 2021.
f) [B Partnership] Revenue Tracker - July 2021 to September 2021
g) [B Partnership] Production Chart – August 2021.
3.That the documents disclosed to [E Pvt Ltd] pursuant to Clause 2 above, shall be used by the parties for the purpose of obtaining the Respondent Wife’s interest in [B Partnership] and in these proceedings only and save for the parties being permitted to provide the said documents to their respective legal representatives, the parties shall not use the said documents for any other purpose.
4.That [E Pvt Ltd] shall prepare a sworn valuation report as to the value of the wife’s interest in the [B Partnership] pursuant to:-
a)[E Pvt Ltd]’s attendance at the principal place of business of [B Partnership] as contemplated in Clause 1 above; and/or
b)The documents provide to [E Pvt Ltd] further to the Order of 22 February 2024, and
c) The receipt by [E Pvt Ltd] of the documents set out in Clause 2 above.
5.That within 7 days of [E Pvt Ltd] providing the sworn valuation report further to Clause 4 above, the Applicant’s solicitor to file the said report with the Court.
6.By no later than 6 June 2024, the parties and any lawyers on the record attend a Mediation with [Ms Q].
7. That the Respondent pay the Applicant’s costs of this Application.
8. Such further order that this Honourable Court deems fit.
Paragraph 1 was an attempt to enliven the provisions of clauses 10 and 11 of the two partnership deeds. In its current form, paragraph 1 is an endeavour to procure the wife’s cooperation in her exercising her own rights (or those of her representatives) to enter upon B Partnership’s premises for the relevant documentation. Such a proposal is far from usual. Yet in the circumstances of this case where the wife has made it demonstrably clear that she –
(a)has no documents in her possession, power or control in respect of B Partnership; and
(b)she is fearful of remaining involved in litigation currently on foot in India
then little in the way of options presents itself as a viable alternative.
Whatever may be said about the actuality and validity of the litigation commenced by the wife’s mother, her father and her sister in India to prevent the wife having access to B Partnership records for fear of what they will do to the husband (on which I express no view) the fact remains that by reason of the attitude adopted by the B Partnership partners, the disclosure process is being thwarted in this litigation. If that continues, the largest asset in issue in this case is at risk of not being valued which jeopardises a just and equitable determination under s 79 of the Family Law Act. In those circumstances, I make the order in paragraph 1 of the husband’s amended application in a proceeding.
Paragraphs 2, 3 and 4 of the husband’s proposed orders in his amended application in a proceeding are reflective of documents needed to value the wife’s interest in B Partnership. Having regard to the extraordinary time that has elapsed in this disclosure process, this case needs to be brought into sharp focus immediately. Sanctions exist in cases in the Major Complex Financial Proceedings List for parties who do not cooperate. The time has come for the wife to more diligently comply with her disclosure obligations.
THE WIFE’S PROPOSALS
After the application had been called on for hearing on 14 April 2025, the wife’s counsel asked for the case to be stood down. The case was recalled at 11.23am at which time the wife’s counsel produced a minute of proposed orders. The husband’s amended application in a proceeding was filed in April last year. On 14 April 2025 – one year later – the wife provided her proposed minute of the way forward. It was as follows –
“1.That within 30 days the wife through herself or her agents, use her best endeavours to procure from [B Partnership] the following documents:
1.1 For each trading year, from 31 March 2010 until 31 March 2024
1.1.1 Tax returns
1.1.2 Balance sheets
1.1.3 Profit and loss statements.
(“the Documents”)
2.Upon receipt of the Documents, the wife will use her best endeavours to procure from [B Partnership] permission to provide copies of the Documents to the following:
2.1Her solicitors and Counsel in Australian Family Law litigation proceedings MLC12191 of 2022;
2.2The Husband’s solicitors and Counsel in litigation proceedings MLC12191 of 2022;
2.3 [E Pvt Ltd] Valuers
Such permission to be sought on the basis that there will be a Non Disclosure Agreement preventing all parties from disseminating the contents of the documents to any third party without written permission first obtained.
3.That pursuant to part 7 of the Federal Circuit and Family Court Rules the parties instruct [E Pvt Ltd]:
3.1To provide a valuation report as to the wife’s interest in [B Partnership] at 31 March 2010;
3.2To provide an updated report as to the wife’s present interest in [B Partnership] considering the Documents at joint equal expense.
4.The parties be at liberty to provide to [E Pvt Ltd] the opinion of [Mr G], the questions put by the solicitors for the Husband to [Mr G] and [Mr G’s]answers.
5.Within 45 days of receipt of the updated report from [E Pvt Ltd], the parties attend upon [Ms Q] for a mediation.
6.Each party serve upon the other a list of all documents which they seek within 14 days and each party comply with any request for further documents within a further 14 days.
7. The parties be at liberty to issue 10 subpoena.
8. There be liberty to apply at short notice.
9. That all costs be reserved.
It is necessary to descend to the detail of each proposal recorded in that minute.
Paragraphs 1 and 2 of the wife’s proposal introduced the notion of the wife using her “best endeavours” to achieve a particular result. When I asked the wife’s counsel whether the wife was in fact willing to subjugate herself to an obligation to use her best endeavours, it was obvious that the author of the wife’s proposed minute was not familiar with the line of authority originating in the 1911 decision of Lawrence J in Sheffield District Railway Company v Great Central Railway Company[13] about a best endeavours clause requiring the obligor, broadly, “to leave no stone unturned to achieve the object in view”.[14] In an article I wrote in 2014,[15] I examined the learning from the 1911 decision in Sheffield to the decision in Electricity Generation Corporation v Woodside Energy Ltd.[16] It seemed to me that the inclusion in an order for a party to use his or her best endeavours invited rather than reduced argument about compliance with the provision, a matter antithetical to the need for proscription in the orders to be made on this application. I was not in the least attracted to the wording of the proposed paragraphs 1 and 2 of the wife’s proposal. Mr Robins KC submitted similarly.
[13] (1911) 27 TLR 451.
[14] Joseph Street Pty Ltd v Tan [2012] VSCA 113.
[15] Dr Josh Wilson QC, Best Endeavours Clauses – No Longer a Bridge Too Far (2014) The Arbitrator and Mediator 13.
[16] (2014) 251 CLR 640.
The terms of paragraph 3 had the valuer’s task being undertaken as at 31 March 2010. The year 2010 was referrable to the parties’ marriage. The task of ascertaining the value of parties’ legal and equitable interests in property was the date of the trial. Precisely why 31 March 2010 was selected went unexplained. The partnership was constituted on 1 June 2001. The alleged supplementary deed was said to be operative from 1 December 2021. Again, the relevance of the date 31 March 2010 was unexplained. Counsel for the wife advanced a submission that seemed unconnected to this application to the effect that the wife will contend that the husband made no contributions of any description to the wife’s interest in the B Partnership. Self-evidently, that is a factual matter to be found at trial. The wife may or may not succeed in proving that issue. But it has nothing whatsoever to do with the proposition that the ascertainment of assets making up the legal and equitable interests of the parties to the marriage must be arrived at on the date when the case is tried.
As for proposed paragraph 3.2 of the wife’s minute, E Pvt Ltd is not presently in possession of documents to enable it to prepare a proper valuation of the wife’s interest in B Partnership. Questions of preparing an updated report are beside the point. The valuer E Pvt Ltd must prepare a valuation based on proper source financial documentation, which has not yet been done.
I am unable to see how the provision of the Mr G report (erroneously described as “the opinion of [Mr G]”) will assist in the task set of E Pvt Ltd. A valuation of an asset and the expression of a legal opinion on the operation of aspects of the Indian Partnership Act are wholly discrete activities. I will not make the order sought in paragraph 4 of the wife’s minute. While this case must be mediated, the time is not now. Pleadings must be prepared, filed and served. Disclosure must be completed. Expert evidence must be filed and served. When those tasks are done the case can be ordered to go to mediation, but not before.
Paragraph 6 inverts the disclosure obligation. Once pleadings are closed the issues to which disclosure is relevant will become known. Further, once the issues for disclosure are defined by the pleadings, disclosure in the Major Complex Financial Proceedings List is not usually given in response to a list as proposed order 6 has it.
Why an ambit claim of the sort in paragraph 7 for leave to issue 10 subpoenae was made was not stated. I refuse that application. Parties in proceedings in the Major Complex Financial Proceedings List always have leave to ask for a matter to be listed on short notice – often at 9am the following day, subject to adequate notice being first given.
DISCLOSURE PRINCIPLES GENERALLY
The legal principles governing a party’s disclosure obligations in litigation under s 79 of the Family Law Act are found variously in –
(a)the obligations set out in ss 95 and 96 of the Family Law Act;
(b)the duty set out in rules 6.01 and 6.03 of the court rules; and
(c)general equitable principles and principles of practice and procedure.
Section 95 of the Family Law Act provides that the overarching purpose of the applicable court rules and sections of the Family Law Act must be applied in such manner as to achieve a just determination, the efficient use of court resources, a decision according to law and a decision obtained as quickly, inexpensively and efficiently as possible. Parties and their legal representatives are required by s 96 of the Family Law Act to conduct litigation in Division 1 of this court in accordance with the overarching purpose. A party taking points not reasonably maintainable or who engages in wasteful, time consuming and purposeless activities fails to comply with his, her or its obligations under s 95 of the Family Law Act. Deliberately obstructing the provision of disclosure similarly represents a failure to comply with the overarching purpose set out in s 95.
Under rule 6.01 of the court rules, each party has a duty to the court and to each other party to give full and frank disclosure of all information relevant to the proceeding in a timely manner.
Under rule 6.03 of the court rules the duty of disclosure applies to each document that is relevant to an issue in the proceeding an “is or has been in the possession or under the control of the party disclosing the document”.
In this case the wife has said that she does not personally have possession of the documents and so she has none to produce. That contention is fallacious. A party need not physically hold the relevant document for the document to be discoverable. If the document is under the control of the party concerned, it is discoverable. The court rules do not provide for disclosure of documents that are in the possession, power or control” as was once the relevant test.[17] A document is generally regarded as being under the control of a party if a party’s agent holds the document.[18] In this case, clause 10 of the partnership deed of 2001 permits a partner to attend the firm to inspect books and to copy them. That right is unqualified. While the physical books are in the office of the firm, any one of the four partners is entitled to attend the office of the firm with a view to inspecting those books and copying them. The partnership deeds make no provision for a party being refused entry, inspection of copying. To my way of thinking, the partnership records including financial books and records are in the control of the wife.
[17] The House of Lords decision in Lonrho v Shell Petroleum Co Ltd [1980] 1 WLR 627 is regarded as the locus classicus on point. See also Palmdale Insurance Ltd (in liq) v L.Grollo & Co Ltd [1987] VR 113.
[18] Wheeler v Le Marchant (1881) 17 Ch D 681.
Once the relevant document is or has been in the possession of or under the control of the party, the duty of disclosure applies. The wife must therefore comply with her disclosure obligations.
The wife has asserted that she does not have physical possession so as to disclose the documents. I reject that contention.
I also reject the contention that the wife is relieved of her duty to give disclosure merely because the other partners assert that by disclosing the documents, somehow confidentiality is compromised. It was not said how the alleged confidentiality arose. It is beyond argument that in Anglo Australian jurisprudence confidentiality will arise –
(a)where the information said to be confidential possesses the requisite character of confidentiality, that is to say, it is not in the public domain; and
(b)the information was imparted in circumstances showing that the recipient of the information was to hold it without publically disseminating it.[19]
[19] Coco v A.N. Clarke (Engineers) Ltd [1969] RPC 41 (Megarry J).
In this case the other partners assert the existence of confidentiality in the records sought. None has been proven. But even if confidentiality had been established, according to Mobil Oil Australia Ltd v Guinea Developments Pty Ltd[20] the phenomenon of confidentiality existing is not sufficient to deny the discoverability of documents.
[20] [1996] 2 VR 34.
To my way of thinking, that is the outcome required in this case.
The documents ordered on 6 December 2022 to be provided were not so provided.
Mr Robins KC contended that three categories of documents remain undiscovered which the husband needs, according to Mr Robins. They are the documents set out in paragraphs 38(d), 38(e) and 38(i). The description of the documents ordered to be produced pursuant to the 6 December 2022 orders were as follows –
(a)financial reports and balance sheets of B Partnership for the period 30 June 2018 to 30 June 2022;
(b)profit and loss statements of B Partnership for the period 30 June 2018 to 30 June 2022; and
(c)statements for all bank accounts, credit card accounts, mortgage accounts, personal loan accounts and savings accounts in her name, in her business name/company name (if any), whether solely or jointly with others, including any accounts held on trust for others, or by others for her benefit in Australia, United States of America and/or India for the period 1 January 2017 to date.
Those documents must be produced forthwith.
In paragraph 2 of his amended application the husband seeks permission to provide to E Pvt Ltd documents revealed by him to the wife by correspondence from the husband’s solicitors dated 18 October 2023 and 20 October 2023. The specific documents are –
(a)the annual report and balance sheets of B Partnership for the period 2011/2012 through to 2018/2019;
(b)the GST certificate (i.e Form GST REG-06) of B Partnership dated 9 November 2021;
(c)the audit reports of B Partnership dated 15 September 2018;
(d)email from Mr F to the husband enclosing the T2 Master/Tracker outlining Plant and Machinery details of B Partnership;
(e)daily reports of B Partnership dated 14 October 2021, 27 October 2021, 3 November 2021, 18 November 2021, 30 November 2021, 6 December 2021 and 16 December 2021;
(f)the B Partnership revenue tracker for the period of July 2021 to September 2021; and
(g)the B Partnership production chart from August 2021.
To my mind, at least by the provision of those documents which the wife was duty bound to disclose in any event, some progress can be made advancing disclosure and corresponding progress can be made advancing the valuation task. That is to the benefit of all parties to this s 79 application. I make an order in terms of paragraph 2.
Paragraphs 3, 4 and 5 are orders consequential upon the orders in paragraph 2 being made.
Paragraph 6 is a referral to mediation. That activity must wait.
THE POINT ABOUT S 138 OF THE EVIDENCE ACT
Counsel for the wife argued that this court should not order certain documents to be produced because by doing so, the court was sanctioning the use of documents illegally obtained. The relevant documents were obtained, so it was said, when the husband was CEO with the firm, although the wife disputed that the husband ever occupied that role. It was said that the husband came into possession of certain financial records of the firm which he kept for a time, eventually leaving them at his own mother’s residence. Those documents were said to have been abandoned and the husband argued that they were not in his possession, power or control. On behalf of the wife it was argued that the documents in the husband’s mother’s possession had been illegally or improperly obtained with the consequence that those documents should be excluded from the documents in this case.
The argument seemed tenuous, in my view. The precise circumstances in which the husband came into possession of the impugned documents was not easily ascertained from the affidavits filed in support of and in opposition to this application. A disputed fact existed about whether the husband was the CEO at any stage of the subsistence of the partnership from its creation in 2001 to date. Another disputed fact was the husband’s entitlement to be in possession of any firm records. If he was an employee of the firm, a consultant or contractor engaged for a limited purpose he may well have possessed the authority of the firm (derived from the express or implied authority of a partner of whom the wife was one) to hold firm documents so as to perform the task he was engaged to perform. In other words, even though the partners of the firm were required by the partnership deed to keep information of the firm confidential, persons lawfully commissioned by or on behalf of the firm or a partner thereof to perform a task for the firm may well have been clothed with the express or implied authority to hold and use the firm information to enable some person to perform a particular engagement. In that eventuality, it is unlikely that the husband obtained firm documents illegally or improperly.
The relevant documents were discovered by the husband’s mother once the husband had taken up accommodation elsewhere.
Mr Robins KC submitted that upon its proper characterisation, that revealed that the husband had abandoned the documents and was not in possession or control of them.
A very significant factual imbroglio attended this issue. I was not prepared to conclude that the documents asserted by the wife were illegally or improperly obtained. Even if I were so persuaded, it is competent for me to admit documents found to have been illegally or improperly obtained. This is an interlocutory application so admitting documents into evidence as if at trial is not relevant.
I reject the wife’s argument about s 138 of the Evidence Act.
ORDERS
I make orders in accordance with paragraphs 1 to 5 of the husband’s amended application in a proceeding. I also make an order for pleadings. The applicant must file and serve a statement of claim in a standard and of the detail commensurate to a proceeding commenced in the Federal Court of Australia, such statement of claim to be filed and served by noon 2 June 2025.
The respondent must file her defence to the applicant’s statement of claim by noon on 2 July 2025.
Any reply by the applicant must be filed and served by 16 July 2025.
COSTS
The applicant has been largely successful. He has sought an order for costs. I make the following orders in that regard.
Submissions and affidavits on which the applicant wishes to rely must be filed and served by noon on 2 June 2025.
Submissions and affidavits on which the respondent wishes to rely in opposition to the applicant’s submissions and affidavits must be filed and served by noon on 2 July 2025.
This proceeding is fixed for a hearing to determine the issue of costs for a duration of 1 hour on 17 July 2025.
I certify that the preceding seventy-four (74) numbered paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson. Associate:
Dated: 2 May 2025
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