Vang & Chung
[2021] FCCA 1673
•9 July 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Vang & Chung [2021] FCCA 1673
File number(s): SYC 1433 of 2020 Judgment of: JUDGE MORLEY Date of judgment: 9 July 2021 Catchwords: FAMILY LAW – where the husband seeks an order for security of costs – where a security of costs order would stifle the litigation – where there is a high degree of obfuscation in the husband’s evidence – full and frank disclosure – objections to subpoenas – where the husband’s father objects to a subpoena issued by the wife – where the husband’s father is a third party who is not unrelated to the proceedings – where the wife’s Objection to subpoena is really an application for conditions on inspection – where the husband’s objections to subpoenas are without merit – applicable law on objection to subpoena – applicable law on security for costs application Legislation: Family Law Act 1975 (Cth), ss 75, 79, 117, 121
Evidence Act 1995 (Cth), ss 131
Federal Circuit Court of Australia Act 1999 (Cth), ss 45
Federal Circuit Court Rules 2001 (Cth), rr 1.05, 4.05, 15A.02, 15A.03, 21.01, 24.02, 24.03
Family Law Rules 2004 (Cth), rr 15.18, 19.05
J.D. Heydon and M.J Leeming, Jacobs’ Law of Trusts, (8th ed, LexisNexis, 2016)
Cases cited: Merribee Pastoral Industries Pty Ltd v Australia& New Zealand Banking Group Ltd (1998) 193 CLR 502
Luadaka & Luadaka (1998) FLC 92-830
J and J [1998] FLC 91-940
Adult Guardian and Mother’s Parents v B and Child’s Representative (2002) FLC 93-116
Hickey & Hickey and theAttorney General of the Commonwealth of Australia (2003) FLC 93-143
Evans & Rochford [2003] FamCA 314
JRS & KM (2005) FLC 93-223
MIL & EL (2005) FLC 32-244
A & Z (2006) FLC 93-257
Hearne v Street (2008) 235 CLR 125
Stanford & Stanford (2011) FLC 93-483
Bevan & Bevan (2013) FLC 93-545
Atkins & Hunt (Security for Costs) (2015) FLC 93-646
Sullivan & Tyler and Anor [2015] FamCAFC 167
Weng & Wah and Ors [2019] FamCAFC 242
Wai & Gwok [2019] FamCA 407
Lauer & Linn [2019] FCCA 1565
Vissell & Vissell [2021] FamCAFC 76
Newett & Newett [2021] FamCAFC 55
Baumann and Ors & Rushbrooke and Anor [2016] FamCA 905;
Number of paragraphs: 285 Date of last submission/s: 16 June 2021 Date of hearing: 29 April 2021 and 16 June 2021 Place: Sydney Counsel for the Applicant: Mr Cameron of Counsel Counsel for the Respondent: Ms Spain of Counsel Counsel for the Objector: Ms Kennedy of Counsel Solicitor for the Applicant: Diamond Conway Lawyers Solicitor for the Respondent: Barkus Doolan ORDERS
SYC 1433 of 2020 BETWEEN: MS VANG
Applicant
AND: MR CHUNG
Respondent
ORDER MADE BY:
JUDGE MORLEY
DATE OF ORDER:
9 JULY 2021
THE COURT ORDERS THAT:
Husband’s Application for Security for Costs
1.I dismiss the Husband’s Amended Application in a Case filed on 19 March 2021, that the Wife provide security for costs and consequential orders.
Subpoenas to Commonwealth Bank of Australia and Westpac Banking Corporation
2.In relation to:
(a)The Applicant Wife’s Notice of Objection filed on 24 April 2021 to a subpoena to produce issued by the Court at the request of the Husband to the Proper Officer of Commonwealth Bank of Australia filed on 14 April 202 1; and
(b)The Applicant Wife’s Notice of Objection filed on 24 April 2021 to a subpoena to produce issued by the Court at the request of the Husband to the Proper Officer of Westpac Banking Corporation filed on 14 April 2021,
I dismiss those objections.
3.I grant first access for a period of 21 days from the date of this order until 4:00PM on 30 June 2021 to view material produced pursuant to subpoenas issued to the Proper Officer of Commonwealth Bank of Australia and the Proper Officer of Westpac Banking Corporation to the Wife for the purpose of redacting any information so produced that identifies her place of employment or place of residence.
3A. After 4:00PM on 30 June 2021 being a period of 21 days from the date of this order, grant leave to the Husband to inspect and copy material produced pursuant to subpoenas issued to the Proper Officer of Commonwealth Bank of Australia and the Proper Officer of Westpac Banking Corporation.
Subpoenas to Company B and Mr C
4.In relation to:
(a)The Respondent Husband’s Notice of Objection filed on 9 June 2020 to a subpoena issued by the Court at the request of the Wife to Company B on 27 May 2020; and
(b)The Respondent husband’s Notice of Objection filed on 9 June 2020 to a subpoena issued by the Court at the request of the Wife to Mr C,
I dismiss those Notices of Objection.
5.In relation to the subpoena issued by the Court at the request of the Wife to Mr C, and the subpoena issued by the Court at the request of the Wife to Company B, grant leave to the Wife’s solicitors to photocopy and inspect the documents produced under those subpoenas, provided that:
(a)No physical or digital copies of those documents are provided to the Wife; and
(b)The Wife only inspects those documents in the presence of a solicitor of the firm of her legal representatives.
Subpoena to National Australia Bank
6.The Notice of Objection filed by the Husband to a subpoena issued by the Court at the request of the Wife to National Australia Bank on 25 May 2020 is dismissed.
7.The Notice of Objection filed by Mr D to a subpoena issued by the Court at the request of the Wife to National Australia Bank on 14 May 2021 is dismissed.
8.In relation to the subpoena issued by the Court at the request of the Wife to National Australia Bank, grant leave to the solicitors for the Husband to have first access to any documents produced in answer to that subpoena for the purpose of removing therefrom any documents that relate to any periods other than:
(a)1 October 2011 to 11 October 2012; and
(b)1 December 2014 to 22 December 2019; AND I DIRECT THAT
the Husband’s solicitors are directed to place such removed documents in a separate envelope and to provide that envelope with documents to the Clerk of the Exhibits Office, and that envelope is not to be opened by any legal representative or party pending further order of the Court.
9.Further in relation to the subpoena issued by the Court to National Australia Bank at the request of the Wife on 27 May 2020, grant leave to the Wife’s solicitors, after 4:00PM on 30 July 2021 being a period of 21 days from the date of this order, to inspect and photocopy material produced in answer to that subpoena other than such material placed in a sealed envelope by the solicitors for the Husband in accordance with order 8 herein, provided that:
(a)No physical or digital copies of those documents are provided to the Wife; and
(b)The Wife only inspects those documents in the presence of a solicitor of the firm of her legal representatives.
10.Direct that the legal representatives for the Husband have first access to the documents produced in answer to a subpoena issued by the Court at the request of the Wife to National Australia Bank for a period of 21 days from the date of these orders being until 4:00PM on 30 July 2021.
Wife’s Response to Application in a Case
11.In relation to the Response to Application in a Case filed by the Wife on 10 September 2020, and in relation to the orders as set out by the Wife in the Minute of Order attached to her solicitor-advocate’s Case Outline as Annexure ‘A’ dated 28 April 2021, the Court orders that in accordance with order 2 of the orders sought in that Minute of Order, including as to subparagraphs (a) through to (m) inclusive, herein annexed to these orders as Annexure ‘A’.
12.In relation to the balance of the Wife’s Response to Application in a Case and the orders sought in the Minute of Order attached as Annexure ‘A’ to the Wife’s Case Outline document dated 28 April 2021, I dismiss the balance of that application.
Further Orders of the Court
13.In the event that the Husband intends to either engage in a sale of or seek to further encumber the property at E Street, Suburb F NSW, and in that regard to “further encumber” includes taking further security over that property for any borrowing or seeking to increase the amount already secured on that property by the registered mortgage by further borrowing, the husband must give 21 days notice to the Wife and to any legal representative acting for the Wife in these proceedings before taking any such action toward sale or further encumbrance.
14.The proceedings are listed for further mention and directions at 10:30AM on 15 October 2021.
THE COURT NOTES THAT:
15.These orders are to be read in conjunction with the orders made in Chambers today.
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment under the pseudonym Vang & Chung is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE MORLEY:
These are the Reasons for Judgment that were delivered verbally and ex tempore on 9 July 2021. They have been settled herein in written form. Grammatical errors and accidental errors in reference have been amended for ease of comprehension. Legal citations have been included in full and incorporated into these Reasons.
These Reasons for Judgment relate to an interim hearing that took place on 29 April 2021 and 16 June 2021 in property settlement proceedings under section 79 of the Family Law Act 1975 (Cth) (‘the Act’) between Ms Vang as the applicant wife (‘the wife’) and Mr Chung as the respondent husband (‘the husband’).
The interim hearing on 29 April 2021 concerned an Application in a Case filed by the husband in response to an Application in a Case filed by the wife and concerned the issues of an application by the husband that the wife provide security for costs in relation to the proceedings and the husband’s, in essence, objection to a subpoena. In reality, the orders sought by the husband as they finally developed, were not purely an objection, but rather an application in relation to conditions around inspection of documents produced on subpoenas issued by the Court at his request.
In relation to the wife, it related to her application for orders for further disclosure to be made by the husband and her application for an order restraining the husband from disposing of certain assets. By the time the matter reached the interim hearing on 29 April 2021, the matter also included the issue of objections to subpoena filed by the wife in relation to two subpoenas issued by the Court at the request of the husband; one to Westpac Banking Corporation and the other to the Commonwealth Bank of Australia.
The continuation of the interim hearing on 16 June 2021 was in consequence of an objection being filed about a year after the filing of the subpoena (but, nevertheless, whilst the issue of the subpoena to National Australia Bank was still a matter before the Court) by the husband’s father, Mr D, to the subpoena issued by the Court at the request of the wife to National Australia Bank, being one of the subpoenas to which the husband had also originally objected and, as I said, eventually sought that inspection to be on certain conditions.
The parties commenced their cohabitation on either 2015, as contended by the wife in her evidence, or sometime in 2015, as contended by the husband in his evidence. They agree that they married in 2017 in Australia. They separated either on 31 August 2018, as the wife contends in her evidence, or on 29 September 2017, as the husband contends in his evidence. The parties were divorced on an application filed by the husband and that divorce order was made on 22 October 2019; becoming a final on 23 November 2019.
On the wife’s telling in the evidence, the cohabitive relationship between the parties lasted for a period of about three and a half years. On the husband’s telling in his evidence, the cohabitive relationship between the parties lasted for a period of about two years and four months. It is common in the evidence between the parties that there was a fairly substantial period of time following either November 2016, in the wife’s evidence, or December 2016, in the husband’s evidence, when the husband was residing principally in China and the wife was residing principally in Australia, though each visited the other on various occasions.
Both parties were born in China and came to Australia to live, though it would appear that the husband has subsequently made a decision to return to live principally in China. There are no children of the relationship between the parties.
At the interim hearing on 29 April 2021, the wife was represented by her solicitor advocate Mr Cameron and Mr Cameron also represented her on 16 June 2021.
On 29 April 2021, the husband was represented by Ms Spain of Counsel and on 16 June 2021, the husband was represented by his solicitor advocate, Ms Middleton.
On 16 June 2021, the objector, the husband’s father Mr D, was represented by Ms Kennedy of Counsel.
MATERIAL RELIED UPON
In the interim hearing (and when I say interim hearing, I am referring to both 29 April and 16 June 2021) the wife relied upon:
(1)A Case Outline document prepared on her behalf by her solicitor advocate Mr Cameron, and attached to that Case Outline as attachment A and attachment B were two Minutes of Orders. The orders sought by the wife in Minute of Order A addressed matters going to further disclosure and restraint on the husband disposing of assets, and in Minute of Order B related to the subject subpoenas that I will name shortly.
(2)The wife also relied upon her response to Application in a Case filed 10 September 2020;
(3)Her affidavit sworn 9 April 2021 and filed that day;
(4)The affidavit of G, an interpreter and translator giving expert evidence sworn 13 April 2021 and filed 14 April 2021; and
(5)The wife’s Financial Statement affirmed by her on 9 April 2021 and filed that day.
The affidavit of the wife of 9 April 2021 referred to a number of annexures; all of which were supplied to the Court in a separate folder.
On the interim hearing, the husband relied on the following documents:
(1)A Case Outline document prepared by his counsel, Ms Spain, and attached to that Case Outline document was a Minute of the Orders sought by the husband going to both the security for costs matter and the issues relating to inspection of documents produced on subpoenas that I will describe shortly;
(2)His Application in a Case filed 10 August 2020 and his Amended Application in a Case filed 19 March 2021. The orders sought by the husband evolved through his Application in a Case to his Amended Application in a Case and thereafter to the Minute of Order I have referred to attached to his Case Outline document. It was the last of those that I regard as the orders sought on the interim hearing.
(3)He relied upon his affidavit signed but not sworn or affirmed and dated 18 March 2021, but accepted by the Court as evidence pursuant to Practice Direction No. 2 of 2020 ‘Special Measures in Response to COVID-19’ issued by the Chief Judge relating to affidavits in the circumstances caused by the SARS-CoV-2/COVID-19 pandemic. In relation to that affidavit, he relied only upon the annexures G, I, J and K thereto;
(4)He relied upon his affidavit of 26 April 2021 (once again being a document signed but not sworn or affirmed, and once again accepted by the Court pursuant to the Practice Direction) having been signed by the husband in City P, China, and;
(5)He relied upon his Financial Statement sworn or affirmed 12 November 2020; and
(6)He also relied upon a document tendered on his behalf, admitted into evidence and marked as exhibit A1, being a Balance Sheet.
In the interim hearing on 16 June 2021 the objector, Mr D, in making an objection in relation to the subpoena issued to National Australia Bank by the Court at the wife’s request relied upon:
(1)A Case Outline document prepared on his behalf by his counsel, Ms Kennedy.
(2)He relied upon his Notice of Objection to the subpoena issued to National Australia Bank by the Court on 27 May 2020;
(3)He relied upon a Notice of Address for Service filed on his behalf by the solicitors representing him, Lander & Rogers;
(4)He relied upon a document tendered into evidence and marked as exhibit A1 on 16 June 2021 being a letter dated 9 June 2021 from his solicitors, Lander & Rogers, to the solicitors for the wife.
THE SUBPOENAS
In relation to the subject subpoenas, I will detail them separately.
First, one of the subpoenas to produce documents issued by the Court at the wife’s request on 27 May 2020 was issued to Mr C. That subpoena sought that the person subpoenaed produce:
all documents including but not limited to contracts, correspondence, file notes, cheques, receipts, payment records of purchaser and vendor, payment records, trust account authority, trust account record remittance, payment directions, settlement directions, file notes, reports, recordings and memos for the sale of the property situated at H Street, Suburb F, NSW.
That was objected to by the husband, filing a Notice of Objection dated 9 June 2020, and therein he objected to production, inspection, and copying of documents. Annexure A to his Notice of Objection set out the basis of his objection. The first objection related to the wife, in seeking issue of the subpoena, not having complied with rule 15.18 of the Family Law Rules 2004 (Cth). His further objections thereafter in annexure B were objections on the basis of:
(1)A lack of relevance;
(2)It being oppressive;
(3)It being, in effect, a fishing expedition; and
(4)It being an abuse of process.
Next was the subpoena issued by the Court at the request of the wife to the National Australia Bank. That subpoena sought:
copies of all documents including but not limited to statements, lists of transactions, file notes, correspondence, reports, recordings and memos associated with the account number BSB … and account number being …002, for the period of 1 January 2011 to date, and also sought copies of all documents including but not limited to statements listed, transactions, file notes, correspondence, reports, recordings and memos for all accounts, including but not limited to savings accounts, mortgage accounts, offsetting accounts, chequing accounts, trust accounts, credit card accounts, operating accounts and loan accounts in the name of Mr D (date of birth 1962) including accounts solely in the name of this individual and joint accounts on which the individual is named for the period of 1 January 2011 to date.
It is plain in relation to all of the evidence and the submissions put before the Court that the whole of the material sought to be produced by that subpoena relates to matters between the objector, Mr D, the husband’s father, and the National Australia Bank.
The third subpoena was issued by the Court at the wife’s request to Company B Pty Ltd, , and sought production of:
copies of all documents including but limited to contracts, correspondence, file notes, cheques, payment records of tenant, payment records to property owner, trust account authority, trust account records, remittance file notes, records, recordings, and memos for the lease of the property situated at E Street, Suburb F.
The subpoena to Company B Pty Ltd and the subpoena to National Australia Bank Limited were objected to by the husband on 9 June 2020 on the same basis as the objections he made to the subpoena issued to Mr C. That was firstly on the basis of non-compliance with rule 15.18 of the Family Law Rules 2004, and thereafter on the basis of a lack of relevance, it being oppressive, it being a fishing expedition, and the abuse of process.
The subpoenas objected to by the wife were issued by the Court at the request of the husband on 14 April 2021, one to Westpac Banking Corporation and the other to Commonwealth Bank of Australia. The subpoena to the Westpac Banking Corporation sought production of:
Originals or copies of all applications for and records of term deposits, interest bearing deposits, loans, savings accounts, bank statements, loan account statements, manager’s diary and notice reports, application forms, statements of financial circumstances, and other documents and writings from respect deed to dealings with the bank by Ms Vang born in 1989 (“Ms Vang”) and its various branches as at from 1 January 2017 to the date of the subpoena (“the period”).
Also sought were production of “original or copy of all correspondence passing between the bank and Ms Vang, and or any person on behalf of Ms Vang for the period”. It also sought production of “original or copy of all documents, statements, records, and writings in respect of loans made by the bank to Ms Vang, together with particulars of all repayments made in respect of the said loans during the period, including all bank statements and applications relating to such loans”.
The subpoena issued to Commonwealth Bank of Australia sought production of documents in the same terms as that to Westpac Banking Corporation relating to the first two tranches of documents, but varied in relation to the last in that it sought production of:
original or copy of all documents, statements, records and writings in respect of loans made by the bank to Ms Vang, together with particulars of all repayments made in respect of the said loans during the period, including all bank statements and applications to such loans, including but not limited to the mortgage over the property at J Street, Suburb K, being registered mortgage number …70.
The basis upon which the wife objected to each of those subpoenas, and her objection went to inspection or copying of the documents, not to production, was stated as being firstly the wife’s privacy, and secondly, the wife’s safety.
In relation to access, the wife seeks that the her solicitors should be granted first access to the documents for the purpose of redacting any information in the bank statements provided that identifies the wife’s employer and the identity of retail outlets where transactions have been conducted in respect of the period of 1 January 2020 up until the present time. The reasons for the objection were the same in relation to each of the subpoenas.
I turn now to the objection by the objector, to the subpoena issued by the Court at the wife’s request to National Australia Bank on 27 May 2020. That objection was filed 14 May 2021 and was in relation to both production and inspection, and the objection was based in relation to production pursuant to the subpoena being oppressive, constituting a fishing expedition, lacking relevance, and constituting an abuse of process. The objections in relation to inspection and copying of material that may be produced was also on the basis of the subpoena being oppressive, being a fishing expedition, lacking relevance, and being an abuse of process, but also included that the subpoena was not served on the objector and accordingly procedural fairness had not been provided. Finally, the objection was made on the basis that the wife had threatened to use documents obtained in these proceedings for an impermissible purpose.
THE ISSUES
The issues in the matter, as I have already indicated, boil down to:
(1)The husband’s application for security for costs (which in deciding the matter is the matter I should decide first);
(2)The orders sought by the husband in relation to restrictions on the wife’s inspection and copying of material produced on subpoena by the three entities subpoenaed by the wife, being Mr C, the National Australia Bank, and Company B Pty Ltd.
(3)The objections by the wife to the subpoenas issued by the Court at the husband’s request to Commonwealth Bank of Australia and Westpac Banking Corporation. As I have said, that objection related to the manner in which inspection and copying is to be carried out, under what conditions;
(4)In relation to the objection by the objector to the subpoena issued by the Court at the wife’s request to National Australia Bank, being an objection to production and an objection to inspection or copying;
(5)The wife’s application for an order for specific further disclosure by the husband; and
(6)The wife’s application for orders restraining the husband from disposing of certain assets.
PROCEDURAL HISTORY
In relation to the proceedings, they were commenced on 3 March 2020 by the wife filing her Initiating Application with supporting Financial Statement and affidavit. A day later the wife filed an Application in a Case that sought to restrain the husband from dealing with the property at E Street, Suburb F. The matter came before the Court on an urgent basis on 6 March 2020. There was an appearance on behalf of both parties and the matter was adjourned to 26 March 2020.
On that date, orders were made by consent dismissing the wife’s Application in a Case of 4 March 2020, reserving the husband’s costs thereof, and directing the husband to file and serve his Response and supporting documents by 30 April 2020. The husband did not comply with that direction, but he did file his Response on 6 May 2020.
The matter was again before the Court on 20 May 2020, at which time an order was made for the parties to comply with rule 24.03 of the Federal Circuit Court Rules 2001 (Cth) in the proper manner. An order was made under section 45 of the Federal Circuit Court of Australia Act 1999 (Cth) giving the wife leave to ask the husband specific questions requiring answers, in effect, to present any interrogatories to the husband. Orders were also made in relation to preparation, agreement on, and filing of a Balance Sheet, and the matter was adjourned to 13 August 2020.
On that date, the matter came before Registrar Hayward, and the Registrar noted that the husband had filed his Application in a Case on 10 August 2020. The good Registrar referred the matter to myself in Chambers to consider whether that Application in a Case would be listed before the Court, and directed the wife to file and serve a Response to the Application in a Case by 10 September 2020. The wife complied with that direction.
The Application in a Case before the Registrar was that which gave rise to the interim hearing that took place on 29 April 2021. By orders made in Chambers on 8 September 2021, I listed the matter for mention and further directions on 29 September 2020 in relation to that Application in a Case, and any Response to be filed by the wife, which she did two days later.
On 29 September, when the matter came before the Court, an order was made that both parties file and serve an amended Financial Statement complying with the Federal Circuit Court Rules 2001 (Cth) by 4:00PM on 14 October 2020. Neither party saw fit to comply with that direction.
An order was made restraining the wife from disclosing matters that had been revealed to her in inspection of documents produced on the subpoena. It is probably important in this matter that I read that order fully onto the record. The relevant order of 3 May is in these terms:
That the applicant wife is restrained from disclosing in any manner other than in the normal course of these proceedings and in the normal course of her seeking and obtaining legal advice relating to these proceedings, any or all of the contents of any document produced to the court in response to a subpoena and any document produced by the husband to the wife as disclosed in these proceedings.
That order was made by me in consequence of something that had been said by Ms Vang to the Court on 29 September 2020, when she was self-represented. That comment was to the effect that she expressed an intention to reveal material disclosed to her in this matter to the media.
The matter was set down for the interim hearing on 29 April 2021 of the husband’s Application in a Case filed 10 August 2020, and the wife’s Response to Application in a Case filed on 10 September 2020.
I made a notation that the wife’s attention was directed to a decision of the High Court of Australia in Hearne v Street (2008) 235 CLR 125 and was also directed to rule 24.02 of the Federal Circuit Court Rules 2001 (Cth) and was also directed to section 121 of the Act. That notation was in relation to matters advised to the wife by the Court in consequence of the statement she had made when appearing on her own behalf about disseminating information to media.
The matter was listed for a compliance check on 30 March 2021, prior to the interim hearing. The compliance check in fact took place on 31 March 2021, and the matter went forward to the interim hearing.
After the interim hearing on 29 April 2021, judgment was reserved in relation to the question of security for costs, the wife’s objections to the subpoenas issued by the husband, the husband’s objections to the wife’s subpoenas, the orders sought by him in relation to inspection, and the orders sought by the wife in her Response in relation to disclosure and injunctive relief.
Delivery of Judgment was set down for 20 May 2021, but was vacated from that date in consequence of the filing of the Notice of Objection by the objector on 14 May 2021. The matter was set down for consideration of that, as a continuation of the interim hearing, on 16 June 2021. That hearing took place with all parties being represented.
THE EVIDENCE IN THE MATTER TO DATE
In considering the issue of security for costs, it is necessary for me to traverse the matter in a little bit of detail. In giving proper consideration to the relevant matters that a court is to consider when exercising a discretion in relation to the security for costs, the court perusing the matter becomes an essential part in order to sufficiently inform the court to enable the court to make those considerations before exercising its discretion.
I will go to the applications and evidence of the parties in the matter before I look briefly at the relevant law and then the issues before the court before making findings. The wife’s Initiating Application filed on 3 March 2020 sought “a split”, in her terms, or an adjustment between the parties, in terms of section 79 of the Act, of the net asset pool, 20 per cent to the wife and 80 per cent to the husband.
In her supporting affidavit, filed with the Initiating Application, she gave evidence that the parties met in late 2014 when the wife was a student and working part-time as an employee at Employer L and the husband was employed as a director of numerous companies inside and outside of Australia, (bearing in mind that this is the wife’s evidence in her original affidavit).
The wife says that in 2015, the parties’ commenced cohabitation at the wife’s rented home at J Street, Suburb K. She says that they married in 2017 and separated on 31 August 2018 after a cohabitation period of three years and six months, though with some periods during that time of living in separate countries.
She refers to the divorce proceedings between the parties on 22 October 2019, though she refers to that divorce being on 22 November 2019. The records show that the divorce order was made on 22 October 2019 and became final on 23 November of that year.
The wife further says that in April 2016 the parties ceased residing at her J Street, Suburb K rented home and began living at a home owned by the husband at H Street, Suburb F and she and the husband remained residing there until November 2016.
She says that in November 2016, the husband advised her that he wished to return to live and work in China to look after his business interests there. When he did return to China, (she says in November 2016; he says in December 2016), she remained in Australia, moving from the H Street, Suburb F, home in early November 2016 to a rental apartment at Suburb M in Sydney. She says that in March 2017, the husband sold H Street, Suburb F, for $22,450,000. The wife, in her first affidavit, asserted that the proceeds of sale were paid into the husband’s bank account.
Importantly, the wife deposes that in early 2015, that is, towards the agreed start time of the parties’ cohabitation, (the wife says in 2015 and the husband says in 2015), the wife’s parents gave her $350,000 to help her buy a property. She says that she did not apply the funds for that purpose, but the parties spent the whole of that sum on living expenses between them over the period of their cohabitation. She gives evidence in her first affidavit of her contributions as homemaker on behalf of herself and the husband.
She says that between November 2016 and the sale of the H Street, Suburb F home in March 2017 she was involved with the selling process, liaising with the selling agent and taking active steps in assisting with inspections and the selling of the property. She also refers to the parties’ wedding in 2017, and she says that she made all of the arrangements for the wedding because in the lead up to it the husband was in China. She says that the husband visited her in Sydney in 2017 for two weeks, in 2017 for six weeks, in 2017 and 2017 for two weeks for their wedding and she visited the husband in China in 2017 for one week and in 2017 for one week.
She says that in June 2017, the husband purchased real property at E Street, Suburb F. She says that due to the husband having moved to live and work in China in November 2016, she also moved to China with the intent of living and working there in 2017. She joined the husband and they resumed living together, on her evidence, their marital relationship not having ceased at any time prior to that time. She says that in 2018, she started employment with Employer N, but resigned in 2018 due to the effects of frequent travel for work on her health. She says in 2018 she was employed by Employer O in City P in China.
She says that the parties separated not too long thereafter on 31 August 2018. She says that on 17 April 2019, she placed a caveat on the home at E Street, Suburb F, on the basis that that property was in the husband’s sole name and was purchased by him, she says, during the currency of their cohabitation and marriage. She received a lapsing notice on about 11 February 2020, and that caveat lapsed on 4 March 2020. Of course, it is trite law that a person’s right to bring a claim for adjustment of property under section 79 of the Act, does not give rise to a caveatable interest.
On 3 March, the wife commenced these proceedings and, on 4 March, she filed her first Application in a Case seeking to restrain the husband from selling or otherwise disposing of or further encumbering E Street, Suburb F, presumably in consequence of her caveat lapsing on that day. That Application in a Case was dismissed by consent on 26 March 2020. The wife says that on 12 November 2019, she caused a search to be made on the Chinese equivalent of what we will refer to as the ASIC (Australian Securities and Investment Corporation) database, and she says that search revealed that the husband was a shareholder in seven companies, that he “held officer roles in four companies” and “has control over 75 companies in China”.
She annexed a copy of that report to her affidavit of 3 March 2020 with a translation thereof by a NAATI translator. She says that on 13 February 2020, she caused a further search to be made in relation to the husband on the China database, the equivalent of our ASIC database, and that that report, she says, indicated that the husband was:
…no longer a shareholder of one of the seven companies, no longer officer of one of the four companies and no longer holds control over nine of the 75 companies.
She annexed a copy of the report to her affidavit of 3 March 2020 with a translation.
Now, going to the next step in the proceedings. The husband filed a Notice of Address for Service on 19 March 2020, whereby Q Law Firm came on record as his legal representatives in the matter.
On 25 March 2020, the wife’s solicitors, who had acted for her in commencing the proceedings and in the first two appearances before the Court, filed a notice of withdrawal of solicitor, and on that same day, the wife filed a Notice of Address for Service acting on her own behalf.
On 6 May, as I have said, the husband filed his Response, affidavit and Financial Statement. In his affidavit, the husband said that at the start of the relationship the wife was working full-time, and he was working full-time in a company, which he did not name. He says that he:
…can’t recall working as a director in numerous companies, but I agree I was nominated as a director of an Australian registered company. I had no authorisation.
What that last sentence means, I have no idea. It being, on his evidence, an Australian company, there is, of course, under Australian law, no such thing as a silent director.
The husband denied that the parties commenced their cohabitation in 2015 and asserted that they commenced cohabitation “in the second half of 2015”. That is a wide, and inaccurate start date for the cohabitation. The husband agrees that the parties married in Sydney in 2017, but denies that they separated on 31 August 2018, saying that separation occurred with an irretrievable breakdown of the marital relationship on 24 September 2017 while both parties were in China, on that day the parties arguing and the wife returning, as she had been scheduled to do, to Australia. He refers to the divorce order on 22 October 2019 becoming final on 23 November of that year.
The husband goes on in his evidence to indicate that he agrees that the parties started spending nights together at the wife’s J Street, Suburb K rented home in about March 2015. He then gives evidence about having purchased the property at H Street, Suburb F, in his sole name on 9 January 2012 by exchange of contracts, settling on 10 April 2012. He says, “I did not pay the purchase price”, that purchase price being $20 million. In his affidavit at paragraph 10(d), the husband affirms that the stamp duty on the purchase was $1,340,510 and he attaches a copy of the bank cheque applied to the payment of that stamp duty to the New South Wales Office of State Revenue. He says that added all up, taking into account purchase price and stamp duty, and without other costs of purchase, $21,236,759.30 was paid. He says in relation to fees and charges from the solicitors in respect of them acting on the purchase “I did not pay these taxes, fees and charges.’”
He said there was no mortgage or loan in relation to the purchase. Pointedly, the husband gives no evidence in his first affidavit filed with his Response in May 2020 as to who did pay the purchase price, the stamp duty and the fees and charges on the purchase of H Street, Suburb F. He alludes to that in later affidavits. He says that he sold the H Street, Suburb F property by exchange of contracts on 22 March 2017 with a settlement date of 5 June 2017, with those dates being inside the period the husband asserts is the cohabitation period and marriage of the parties. He says that Mr C, Solicitors acted for him on the sale. He says the sale price was $22,450,000 and that on settlement he received a bank cheque drawn to Mr D, his father, for $21,229,090.92. In his first affidavit, the husband does not give any evidence as to what happened to that bank cheque. He does in later affidavits.
Nor does the husband give any evidence as to what happened to the deposit paid on exchange of $1,222,500. Subject to agent’s fees, the vendor
received, between the bank cheque of the net proceeds on settlement and the deposit, $22,451,590.92. Having purchased the property for a purchase price and stamp duty of $21,340,510, the profit on the sale, not taking into account agent’s commission, fees and charges, was $1,111,080.92.
In paragraph 10(g) of his first affidavit of 4 May 2020 the husband says:
I agree that the applicant wife and I ceased to live together, intermittently, at the premises located at R Street, Suburb K in the state of New South Wales.
What he meant by saying that the parties ceased to live together, intermittently, is not clear. He says in paragraph 10(i) that the parties also resided together from time to time at H Street, Suburb F. Whereas the wife’s evidence is that from a date in April 2016, the parties left the J Street, Suburb K property and took up residence at the H Street, Suburb F property until November 2016.
The husband agrees that between April 2016 and November or December 2016, the parties lived at H Street, Suburb F and he says that during that time he paid all of the utility bills and other outgoings on that property. It is important to note that that was his evidence in his first affidavit. He says that in approximately December 2016, he returned to China and the wife stayed in Sydney and moved into an apartment at Suburb M in Sydney. At paragraph 16 of his first affidavit the husband agrees that the wife assisted in relation to the sale of H Street, Suburb F.
At Paragraph 17(b) of his affidavit, he says:
On completion of the sale of the premises located at H Street, Suburb F, proceeds of sale after deducting agent’s commission and other costs included in respect of the sale and the costs of holding the property for example, council rates, approximated the purchase price less stamp duty payable on purchase and solicitors cost incurs upon purchase.
In applying the husband’s own mathematics that would only be the case if those other costs related to sale including agent’s commission totalled about $1,111,000. Nowhere are we told what the agent’s commission on the sale, if any, was.
At paragraph 18 of his affidavit, he says “I deny that the sale proceeds were paid or directed to my bank account…” Noting that the bank cheque, of which he attaches a copy to his affidavit, was made in favour of his father for the proceeds received on settlement of the sale and there is no evidence in that affidavit as to what happened to the deposit on exchange.
He then says in his affidavit that during, “our relationship” the wife’s mother transferred $100,000 to his account for the wife. He then denies that the wife spent $350,000 in paying for the joint living expenses during their cohabitation, referring inferentially to the wife’s evidence that she received the $350,000 from her parents, which she applied to the living expenses of the parties during their cohabitation and marriage. He then reasserts that the period of the parties’ cohabitation was between 2015 and 2017. He says that after he returned to China in December 2016, having previously said “approximately in December 2016”, he visited the wife in Sydney on occasions during 2017 and stayed with her at her apartment at Suburb M. He attaches a copy of his passport. Apparently, he is expecting the Court to work out from the stamps thereof when he arrived in and left Australia in 2017.
The husband gives evidence that he purchased the property at E Street, Suburb F by an exchange on 2 June 2017 for a purchase price of $10,500,000, the deposit on exchange being $1,050,000. The stamp duty on purchase was $675,490 and the purchase settled on 3 October 2017 with him paying a $9,978,238.61 on settlement.
He gives evidence that he borrowed the entire purchase price, stamp duty, fees and legal costs from his father and entered into a memorandum of mortgage registered on title to E Street, Suburb F in favour of his father. The husband attaches a title search of the property, indicating that he is the sole registered proprietor, and that the property is subject to a registered mortgage, being the mortgage in favour of his father. The husband concedes that the wife organised and paid for their wedding, but that he “reimbursed her for the expense”, although, he does not attach any documents or give any details in relation to that. He asserts that when the wife came to China in about 2017 “she did not live with me” and that the parties had separated on 24 September 2017, the day the wife travelled back to Australia.
The husband refers to an annexure AA to his affidavit, relating to the Company S, but he does not attach any such document to his final affidavit.
He agrees that the wife suffered from ill health during 2017.
In his Financial Statement that he filed with his Response and affidavit, he asserts that he had at that time a debt owed by him to Ms T for $521,634. He gives no explanation in his affidavit. He does not indicate who Ms T is, but in later evidence, we find that that is his mother.
In the husband’s next affidavit of 14 July 2020, it becomes apparent that the interrogatories administered to the husband by the wife pursuant to the orders made on 20 May 2020 under section 45 of the Federal Circuit Court of Australia Act 1999 (Cth) were, in some fair degree, not specific questions seeking answers in the nature of interrogatories, but rather were requests for specific disclosure of documents.
However, in setting out the interrogatories and his answers, there is indication that question five, as submitted, sought details, in slightly obscure language, of, “…any stocks or shares” that the husband “…has ever bought, traded for bringing him or his related companies, counterparties’ interests.”
That gave rise to the husband’s answer in the following terms:
Response to Question 5: Assume this question is intended to read: “Have you ever bought or traded stocks or share either personally or through related parties or counterparties. If so, please provide a complete particulars?”
The husband then goes on with his answer:
i.Over my lifetime, shares and stocks may have been bought or traded in my name by other people. Given this circumstance, I cannot identify such transactions.
ii.I have caused a search to be made of the Australian Securities Commission concerning shares held in private companies in the Commonwealth of Australia. A copy of that search is annexed into and marked with the letter “C”.
iii.I have not traded or bough shares issued by a private company registered in the Commonwealth of Australia through a related party. I do not know what a counter party is.
iv.I am not able to travel to the People’s Republic of China and, hence, I’m not able to search the individual share capital registries maintained in each province so as to identify any shares purchased or trading conducted in my name in the People’s Republic of China.
v.I have not bought or traded shares or share capital issue by publicity listed companies personally or through a related company. I do not know what a counter party is.
vi.All the above mentioned answers are provided by me to the best of my knowledge. I may have, in the course of my lifetime, signed authorities granting authority to third parties to buy or sell shares, but I have no recollection of the same.
I note in particular the answer at point number ii.
Question nine, as set out in his affidavit of 14 July 2020 sought answers in relation to purchase and disposal of real estate by the husband. In relation to the husband’s answer thereto, I will read that out also.
The premises located H Street, Suburb F (“H Street, Suburb F”) was purchased in my name pursuant to contract dated 9 January 2012 for $20,000,000. I did not provide the price. There was no mortgage registered on title of the property. I understand, although I am not completely sure the funds required for purchase and payment of all costs and taxes were provided by or through my family.
I note his words, “I understand, although I am not completely sure”. This is a person who engaged in his sole name in a purchase of a property for 20 million dollars. Then, in his answer at part 2.
H Street, Suburb F was sold under contract dated on or about 22 March 2017 for a sum of $22,450,000. The sale proceeds receivable at settlement after costs and charges in the sum of $21,229,090.92 were provided as a bank cheque drawn to my father. This cheque was not banked to my account. A copy of this bank cheque is annexed hereto and marked with “E”. The balance of a deposit paid on exchange of contracts, after deducting agent’s commission, was paid to my father.
Contracts were exchanged on the purchase of premises located E Street, Suburb F for the purchase price of $10,500,000 on 2 June 2017, being a date before I completed the sale of H Street, Suburb F. I borrowed the entire purchase price. This loan was secured by registered mortgage granted to my father.
I have not bought or sold any other interest in real property [sic], to my understanding.
I note that, therein, the husband now gives evidence in relation to how the balance of the deposit on the sale of H Street, Suburb F was, “paid to my father”. In relation to the real property, the husband still holds E Street, Suburb F, purchased on 2 June 2017 for $10,500,000. He specifies therein that he borrowed the entire purchase price from his father and granted his father a mortgage over the property as security. In other words, he asserts that he is the legal and beneficial owner of E Street, Suburb F and that it is subject to a registered mortgage securing a debt owed by him to his father.
In his first Financial Statement of 4 May 2020, the husband asserted that he pays $2,790 per week to his father as a mortgage payment, that payment being made from an income of $800 per week whilst also paying a sum of, estimated, $520 a week to an Ms U on either mortgage payment or rent. That payment also being made on his total income of $800 a week. While not disclosing his place of residence, the husband gives his solicitor’s address on his documents. That is not a criticism; many people do that for many reasons. The husband also said in that Financial Statement that he also pays $385 a week loan repayment to V, that payment also being made from his income of $800.
The husband does not state any rental income from E Street, Suburb F, and he asserts that that property is valued at $9,000,000, having been purchased by him for $10,500,000, that purchase being made in June 2017. He also asserts in his first Financial Statement that he has $118,570 in an account in the Bank W China and $18,000 in an account with National Australia Bank Limited. He then states that he has either $29,000 or $290,000 in superannuation, depending on whether the fourth zero is an error or the comma is misplaced.
Having asserted in his weekly expenses section that he pays $385 a week as loan repayments to V, he does not assert any debt owed to V under liabilities, but does refer to a debt of $521,634 owed to his mother, and a credit or charge card debt at item 51 described under heading ‘specify card provider and type’ as a “personal loan V” of $20,000. That document leaves open the question as to whether V and V are the same person or two different persons.
At the end of that Financial Statement under “Note 2: Property” it states:
Investment Funds (fund ID … and …)
Approximately two million yuan is held in this account for the deponent’s mother. Value is $ E 284,850.
There is no reference to note 2 in the body of the Financial Statement. There is no indication in the husband’s affidavit or the Financial Statement of the basis upon which he asserts he holds those funds for his mother, no indication of until when they are held or who pays tax on any income generated from those investment funds, if any. In part D of the document relating to the husband’s income, under the section entitled ‘Investment Income’, the husband marks as “Not applicable.”
In part I of his first Financial Statement, which is headed ‘Property Owned by You’ at item 38, entitled ‘Investments’ it reads:
Various investments in shares issued by companies registered in the People’s Republic of China and Country X.
Under the direction to give the full names of all owners, he recites his own name, being Mr Chung and then, in brackets, he writes “as nominee”. Whose nominee he is or what he means by nominee is unclear in the evidence at that point. Whether he means he is a trustee when he says he is a nominee is unknown. Where are the details of these shareholdings in the People’s Republic of China and in Country X? I do not believe that Country X is mentioned again in the evidence in the case. Further, the husband does not give any number of shares held in these “various” corporations and under the heading ‘Your Percentage Share’, the husband details it as “less than 50 per cent”. Is that 49 per cent or nil per cent? Is it a reference to any beneficial ownership he may hold, rather than as nominee? The answers to these questions are not known.
In the document sworn or affirmed by the husband as his affidavit of 6 May 2020, which he filed with his Response, is required by rule 4.05 of the Federal Circuit Court Rules 2001 (Cth) to ‘state the facts relied on.’ There is not a word in that affidavit about:
(a) his employment with Employer Y.
(b) in what manner he is a student, as stated in item 3 in his Financial Statement;
(c)how he pays $2,790 a week to his father, $385 a week to V out of an income of $800 a week, let alone having money for rent and food;
(d)where the $118,570 in the Bank W China came from, or when, in the context of the parties’ cohabitation.
(e) anything about the asserted debt to his mother;
(f)anything about the asserted debt to V or anything about the asserted debt to V, if V and V are different persons;
(h)anything about the so-called investment funds of an estimated $284,850 referred to under Note 2 in part O of the Financial Statement.
To round off the obfuscation and failure of disclosure in that document, Note 4 refers to property disposed of by the husband or on the husband’s behalf since separation, and it says:
Note 4: Since separation, any interest or interests previously registered within the deponent’s name or someone having the same name have been transferred. No payment has been made to the deponent consequential upon the transfer(s).
Then we go back to the husband’s affidavit of 14 July 2020 in which he sets out his answers to specific questions or interrogatories. Question 10, as rendered by the wife, seeks detail of the husband’s involvement in any corporations, trusts or partnerships. The husband purports to answer that at his answer 10(b). Once again, for the importance of it, I will read that answer:
Response to question 10:
i.I do not have any understanding as to my having or had an interest in any trust or partnership. I have or may have a nominal interest in various shares or shared capital issued by companies registered in the People’s Republic of China. I do not know the identity of all these corporations or the number of shares or shared capital, nor do I know the beneficial values of these shares or the shared capital. Particularly, as the registered capital of these corporations does not necessarily reflect the beneficial value of the company in shares or shared capital. I do not believe I have an interest of any value in corporations registered in the People’s Republic of China.
ii.I may have a nominated role in relation to these corporations, but I do not have an understanding of any nomination role. I do not have possession of any company documents. I do not have any knowledge as to the company registration details, save for the knowledge I have gained from the assertions by my former wife. I may have signed or otherwise executed documents that concern corporations registered in the People’s Republic of China.
iii.I have no knowledge of any corporations holding an interest in a company for me, save for the assertions by my former wife which I do not know whether they are true or not.
iv.I was formerly a director of a company known as Employer Y. Annexed hereto and marked with the letter “C” is a copy of research published by the Australian Securities Investment Commission concerning Employer Y. I have no understand of any other corporation registered in the Commonwealth of Australia, other than Employer Y, being related to me or any changes to my name, save as disclosed in annexure “C”. I do not have any understanding as to my having or had any interest in any trust or partnership…
The husband then repeats what he put in previous parts of the answer about corporations in China. The annexure “C” referred to is not attached. Annexure “C” that is there is an email dated 19 December 2019 from … .com.au to Reception and addressed to Mr Q, the husband’s then solicitor, and which is obviously the email that has attached to it the report that the husband refers to, but the report itself is not annexed to the document at all. The only comment that one can make in relation to the husband’s answer in relation to his shareholdings, beneficial ownerships and so forth of any corporations in Australia or in China is that it is not so much to say that it is as clear as mud, as to say that it is muddier than mud.
In answer to question 13, which asks:
Any superannuation your client has in interest since 2015, not limited to Australia
The husband answers:
This question is unintelligible and as such cannot be answered. Refer however, to my disclosure concerning superannuation comprised within my Financial Statement filed in these proceedings.
That question, which I have read out, is not, by any stretch of the imagination or language, unintelligible. It seeks detail of all superannuation interest the husband has had since 2015, anywhere in the world. The husband referring to his Financial Statement does not help much, as I have already said. It is either $29,000 or $290,000 in that Financial Statement. It later becomes clear that he would have meant $29,000. By just looking at the documents, to date, it is notable that neither the husband nor the wife complied with rule 24.02(2) of the Federal Circuit Court Rules 2001 (Cth) by attaching ‘a completed superannuation information form’ to their Financial Statement. I am not sure, actually, that I have ever seen that rule complied with since it came into operation in 3 November 2003, so that is not really a criticism of these parties.
Then, in the husband’s affidavit of 14 July 2020 that I have been dealing with, without setting out any question related hereto, the husband says at paragraphs 17 and 18 of that affidavit:
(17) Generally, I make the following observations. I may have nominated a role in relation to these corporations registered in the People’s Republic of China.
(18)
(a) My former wife asserts that I have an interest as to the corporations identified as exhibits “A” and “B” to her affidavit affirmed 3 March 2020. If I had an interest in these corporations or their share capital, then I would do so as a nominee. This would be of no value to me.
(b) I do not know if I have an interest in the corporations identified by the applicant in exhibits “A” and “B”.
(c) I have signed documents at the request of family members that may have pertained to corporations. I do not have possession of these records, nor do I know who has, where they are or their identity in any detail.
(d) As I have signed documents, I do believe I have an interest in corporations registered in the People’s Republic of China, only as nominee. The interest has no value.
The husband then goes on to give some evidence that express his opinion, which was not objected to, that “Mr Chung” is a common name in the People’s Republic of China, as common as “John Smith” in the Commonwealth of Australia, the United Kingdom and the United States.
The husband then filed another affidavit in the proceedings on 8 August that was sworn or affirmed on 7 August 2020. That was in support of his Application in a Case that came forward as the original moving documents at the interim hearing. The husband describes himself as a “former student”, but then again, aren’t we all?
I note that paragraph 22 reads as follows:
I refer to my Financial Statement filed on 6 May 2020. I apologise for omitting a direct reference to accounts that may be or may have been in my name with the Bank of China. I may have a nominal interest of no value in corporations, businesses, accounts, a share of the capital of corporations and associated financial interests of which I may have signed documents concerning in the past. My interest in these is nominal and of no value to me as I have no beneficial interest in the same.
Paragraph 24:
(a) I have called more than 75 of the corporations identified within annexures A and B of the Affidavit affirmed by the Applicant on 3 March 2020. Typically, in the course of each enquiry, I have not been able to obtain an answer to my telephone call. When I have had a response, I have had the following conversation in the Mandarin language, translated to English in words to the following effect: I said: ‘Hi, I am Mr Chung. I’m enquiring as to my association with your company. Do you know of any association I have as a director, shareholder or other officer of your company?’ In reply, the Company Officer said: ‘Hello, we have no knowledge of a Mr Chung.’
(b) On 25 June 202, I wrote a letter to 75 companies comprised within exhibits A and B to the affidavit of the applicant affirmed 3 March 2020. A sample copy of a letter sent to 75 companies identified with annexures A and B of the affidavit of the applicant affirmed 3 March 2020 as annexed to and marked with the “J”. I have not received any response.
Paragraph 25:
Should these proceedings continue and in order that I might fulfill my obligations as to disclosure, I will have to conduct searches with my advisors personally in attendance at banks, registries and business premises in the People’s Republic of China, Hong Kong and Country X. I will have to attend at each of these destinations because:
i.The Applicant has asserted I have an interest in corporations, businesses and/or bank accounts in these destinations,
ii.These banks and registries will not permit me access to the records that I am required to disclose, for example statements of account, income statements and balance sheets in corporate interests, corporate records and agreements deeds unless I personally attend or identify myself and inspect the documents.
Paragraph 26:
As I have little legal experience or no qualification, I will require my lawyer’s presence to interpret with me the records I am shown. I do not know if I can obtain copies of my records inspected.
Paragraph 27:
I cannot undertake these investigations until travel is freely permitted, which I estimate to be in June 2021, although I will attempt to return September 2020 to City P only. I will commence enquiries then, but my solicitors will not be able to travel until travel is generally permitted under general world health restrictions in June 2021.
In relation to the husband’s application that the wife provide security for costs in the sum of $160,000, in his affidavit of 7 August 2020, the husband says at paragraph 28:
The applicant filed a Financial Statement of 4 March 2020, a copy of which I have read. I am not able to identify within that Financial Statement any assets located or income earnt within the Commonwealth of Australia or otherwise available to the power and jurisdiction of this Court.
Paragraph 29:
On 26 March 2020 the Court made an order that the Applicant file a further Financial Statement by 30 April 2020. The Applicant has not filed a Financial Statement subsequent to 26 March 2020.
Then at paragraph 30:
On 22 July 2020, the Applicant provided an unsigned balance sheet, a copy of which with the covering email from the applicant addressed to my solicitors annexed hereto and marked with the letter “F”. This draft unsigned balance sheet discloses the sum of $43,000 held on deposit in a bank account for the benefit of the applicant. I do not know the location of these funds nor how they were derived, given the applicant has not disclosed any income, the receipt of any gifts or the accumulation of any borrowing from which that sum might be sourced. The Bank account is not, to my understanding, disclosed in the Applicant’s Financial Statement.
That paragraph is a ‘bit rich’, given the contents of the husband’s first Financial Statement that I have already gone through.
Paragraphs 32 and 33 are also relevant:
(32) I am informed by my solicitors and I verily believe that they wrote the applicant under cover of a letter dated 21 July 2020, a copy of which is annexed and marked the letter “G”, requesting that the Applicant provide information and documents as to assets and other financial resources available to the applicant in order to meet any order for costs that might be made against her in respect of these proceedings.
(33) I am informed by my solicitors and I very believe the response to my solicitors, the letter dated 23 July 2020 has not been received.
Finally, in paragraph 38, the husband gives a little pen portrait of his circumstances and says:
I am 31 years of age. I have worked between the age of 21 and 31 and earned generally $60,000 per annum, although I earned $100,000 approximately when I had two jobs in 2015 and the first half of 2016. During 2013 and 2014, for 18 months approximately, and in 2019 and 2020, for 18 months approximately I studied at university and completed two masters degrees.
On 11 August 2020, the wife swore an affidavit filed on 12 August 2020. In that, she deposed that on 1 June 2020 the husband, through his solicitors, sought that she sign “a non-disclosure agreement”, which was actually referred to in the relevant correspondence as “a written undertaking”. She did not sign that document. The wife seems to have re-filed exactly the same affidavit again on 10 September 2020.
Next, we go to the husband’s next affidavit, sworn or affirmed on 16 December 2020, filed on 12 January 2021, which replies to the Affidavit of the wife filed on 12 August 2020. The husband’s affidavit refers to “the agent acting on the rental of the premises located at E Street, Suburb F, NSW”, presumably in relation to the leasing of those premises after 4 May 2020 when he made his other affirmation in his first Financial Statement, giving no detail of any rental income being received.
In paragraph 4 of that Affidavit, the husband refers to a course of correspondence between the wife and his solicitors as to whether the wife “sought permission of the Registrar to issue subpoenas directed to Mr C, the National Australia Bank Limited and Company B Pty Ltd”.
The husband attaches a copy of a letter of 9 June 2020 from Q Law Firm to the wife, making that enquiry of her and referring to “Part 15.18 of the Family Law Rules 2000 and Part 1.05 of the Federal Circuit Court Rules 2001”. No doubt that is actually supposed to be a reference to rule 15.18 of the Family Law Rules 2004 (Cth), not 2000, and rule 1.05 of the Federal Circuit Court Rules 2001 (Cth). Rule 1.05 - (and this is germane to the first part of the husband’s objections to the subpoenas issued at the request of the wife to Mr C, the National Australia Bank and Company B Pty Ltd) - Rule 1.05 of the Federal Circuit Court Rules 2001 provides that in a particular case, if those rules are insufficient or inappropriate, the Court may apply the Family Law Rules in whole or in part and modified or dispensed with as is necessary. The rule does not mean that if there is something in the Family Law Rules that is not found in the Federal Circuit Court Rules, then that part of the Family Law Rules applies. It refers only to circumstances of the Federal Circuit Court rules being “insufficient or inappropriate”, meaning a lacuna in the Federal Circuit Court Rules relating to the proceedings before the Court. There is no rule in the Federal Circuit Court Rules 2001 akin to rule 51.18 of the Family Law Rules 2004.
Rules 15A.02 and 15A.03 of the Federal Circuit Court Rules cover the field without requiring a self-represented litigant to obtain the Registrar’s permission to request the issue of subpoenas, which is the meaning of rule 15.18 of the Family Law Rules 2004. Accordingly, we can say at this point, not having to deal with anything further, that the first part of the objections made by the husband to the subpoenas issued at the request of the wife to National Australia Bank, Mr C and Company B Pty Ltd, that is, her non-compliance with rule 15.18 of the Family Law Rules, is not a valid objection. The wife is not required to obtain the Registrar’s leave as she would be if in the Family Court of Australia.
At paragraph 12(b) of his affidavit of 16 December 2020, the husband says:
I have made an enquiry of more than fifty companies trading in the People’s Republic of China, concerning my relationship or involvement in, if any, of those companies. I have written more than fifty letters to those companies identified by my former wife as corporations owned, controlled or related to me and made numerous telephone calls to the companies’ places of business. Exhibited to this, my affidavit at the item of swearing this affidavit and marked with the letters “1” is a copy of the correspondence sent by me to corporations about which my former wife has made enquiry of and identified within affidavits filed in these proceedings. In spite of making all these enquiries, I have not received any substantive response identifying any involvement or any relationship between myself and any named Chinese company at all.
In paragraph 14(a) of that affidavit, the husband refers to annexure F, being the Rental Ledger/journal maintained by Company B Pty Ltd, who he asserts in his evidence manage E Street, Suburb F, and copies of the residential lease agreements and a bank statement received by Company B Pty Ltd. The documents attached, are the one-page copy of the rental ledger/journal and copies of two residential lease agreements and the bank statements referred to are not attached.
Those documents show that that property was tenanted from 17 June 2019 to 16 June 2020 and rented for $16,077.40 per month and again from 17 June 2020 to 16 October 2020 at the same rent to the same tenants. The bank statements referred to by the husband in paragraph 14(a) are not attached as an annexure. He attaches to that affidavit a copy of his statement from Super Fund Z to 30 June 2020 showing a value at that date of $35,255.43, having been $29,496.25 at 30 June 2019, clearing up the mystery inherent in the extra nought in his original Financial Statement.
Since I have made some pretty extensive criticism of the Financial Statement of the husband of 4 May, filed 6 May, I note that on 29 September 2020, as I said, I made an order that both parties file an amended Financial Statement complying with rule 24.02 and, in particular, rule 24.02(2) of the Federal Circuit Rules by 4 pm on 14 October 2020, and neither party complied.
The husband did, in fact, finally file his amended Financial Statement on 7 December 2020. The wife did not file her amended Financial Statement until 9 April 2021. Those two Financial Statements were the Financial Statements relied upon by the parties on the interim hearing. As I just said, many of the criticisms I made of the husband’s first Financial Statement and his non-compliance with the rules apply also to the wife’s first Financial Statement which she filed on 3 March 2020, with her Initiating Application. It is a document, as I already said, that was either sworn or affirmed that day by her.
In the wife’s first Financial Statement, she asserts weekly expenditure of $13,498.58, including $1000 a week for food and household supplies; $150 a week for home repairs; $769 a week for clothing and shoes; $250 a week for medical, dental and optical costs (not including any health fund payments); $300 a week for entertainment and hobbies; $480 a week for holidays; $1009 a week for educational expenses, whilst not asserting in that Financial Statement or her affidavit that she is a student of any kind but, rather, an unemployed professional; $120 a week for cleaning of house and/or pool; $200 a week for books and magazines; and $1000 a week for gifts. She then refers to $6000 a week for unspecified “other necessary commitments” and despite the form saying “specify” she does not do so.
All of those expenses totalling $13,498.58 referred to in their Financial Statement are for the wife alone, not including any other person, and it is reflected in that Financial Statement that her total income per week is nil. In that Financial Statement from March 2020, the wife asserts ownership of a property in China valued at an estimated $250,000 with a mortgage securing a debt to the Bank AA on which she owed $85,000. There is nothing about that property or the debt in her affidavit filed with the Financial Statement. The wife’s Financial Statement asserts that she has nil in any bank, building society, credit union or other financial institution, no investments and a sum of $13,877.92 superannuation entitlements with Super Fund BB. As I already said, there was no compliance with rule 24.02(2) of the Federal Circuit Court Rules, but, then again, hardly anyone ever does.
In the husband preparing for the hearing of his application that the wife provide security for costs in the sum of $160,000, he, necessarily, was basing his initial preparation on the wife’s original Financial Statement filed in March 2020. The wife did not file her updated Financial Statement until 9 April 2020, 15 days before that hearing. There is nothing in her affidavit, filed contemporaneous with her Financial Statement, indicating how she sustains a weekly expenditure of $13,498.58 with no income, no savings and no debts other than the loan secured on her Chinese property, in the sum of $85,000.
Having traversed the early part of the proceedings in pursuance of having to decide the security for costs aspect of the matter, I come to the documents relied on by the parties at the interim hearing and the documents relied on by the objector on 16 June 2021.
Initially, the husband’s Application in a Case filed on 8 August 2020 sought that the wife provide security for costs in the sum of $160,000 or such sum as the Court determines and an order staying Mr Chung the proceedings pending the provision by the wife of that security for costs. The husband sought an order that the subpoenas to National Australia Bank, to Company B and to Mr C issued by the Court at the request of the wife be set aside and struck out. The husband also sought an order restraining the wife from disclosing or referring to, disseminating or otherwise causing to be revealed some or all of the contents of any document produced in response to a subpoena for production issued by the Court in the proceedings or produced by the husband to the wife by way of disclosure by the husband in the proceedings or otherwise. He also sought an order that the wife deliver up to the husband his mobile telephone and correspondence and attachments to correspondence addressed to the husband through the mail, and he sought costs.
The husband filed an Amended Application in a Case on 19 March 2021 in which he, once again, sought that security for costs be provided by the wife in the sum of $160,000, but he now sought that, if the wife failed to provide that security for costs, her application “stands dismissed”. If the Court declined to dismiss the application, he sought an order that her application be “permanently stayed”. He also sought orders that the wife have leave to inspect only, that is, not copy, documents produced under subpoena by Company B and Mr C, to take place in the presence of a solicitor nominated by the husband and the wife and at no time, to be left unattended while inspecting those documents.
The husband sought an order that his solicitors have first right to inspect documents produced by National Australia Bank for the purpose of identifying if there was a deposit of $21,229,090.92 on or about 6 June 2017 into his father’s bank account, (his father being the objector, of course), and if they identify such a relevant document, that the solicitors for the husband be permitted to place all other documents, other than that document, into a sealed envelope not to be opened without further order of the Court. He also sought an order that his solicitor be authorised to redact the account number and all other transactions from the relevant document. He says that after his solicitor has attended to the documents from NAB in that manner, the wife has leave to inspect the relevant document.
Then on hearing, as I said, the husband, again, amended the orders he sought. He still sought that the wife provide security for costs in the sum of $160,000 or such sum as the Court determines is appropriate, that if she does not comply with that order within 14 days of being made, her application stand dismissed or, in the alternative, that her application is permanently stayed. He then sought an order that he be granted first access to the documents produced by Company B Pty Ltd and by Mr C for a period of 21 days from the date of orders for the purpose of identifying whether any objection is raised to the inspection only of those documents by the wife, placing documents objected to in a sealed envelope marked “subject to objections” with that envelope not to be opened without further order of the Court and redacting any references made within those documents to the bank account, BSB and account numbers of the objector, his father.
He sought an order that, for the purpose of that process, he be permitted to redact any references made in any document produced on subpoena to his father’s bank account. He sought an order that, within 21 days of the date of orders, if he holds any objection to the wife inspecting documents produced by Company B Pty Ltd and Mr C, he file and serve a schedule setting out the documents subject to that objection and identify the basis of that objection. He sought an order that, following the 21 days from the making of orders, the wife have leave to inspect only, that is, not copy, documents produced on subpoena by Company B Pty Ltd, and Mr C that are not subject to objection, such inspection to take place in the presence of a solicitor nominated by the husband and the wife at no time be left unattended while inspecting such documents.
At the interim hearing, the husband relied upon the evidence in his affidavit of 18 March 2021, which is not a sworn document, only a signed document, signed by the husband in City P, China on 18 March 2021, but admitted into evidence pursuant to the practice direction. He relied only upon annexures G, I, J and K to the affidavit for the purposes of the interim hearing on 29 April and 16 June. In that affidavit, the husband expands on his earlier evidence about where the funds that enabled him to purchase H Street, Suburb F came from by asserting that they came from an advance not only from his father but also from his mother. He says that while he owned the property “My father paid all expenses associated with the property.” That is in paragraph 5 of his affidavit. That conflicts with his evidence in his affidavit of 4 May 2020 where he affirmed “All rates, fees and charges incurred in respect of the ownership of the properties located at H Street, Suburb F were paid by me.”
In paragraph 8 of his affidavit dated 8 March 2021, he says, “I met all costs associated with that property, with the assistance of my father.”
In a third version of events, he says that his father’s “business partner” collected the cheque representing the net proceeds of sale, that is the cheque for around $21 million (less deposit money) from the lawyer who “acted on the sale”. That was the practice of Mr C. He confirms in that affidavit that E Street, Suburb F was leased at $16,077.40 per month and that rent paid into an account of the real estate agent he engaged, Real Estate CC, a business conducted under the name by Company B Pty Ltd.
I refer also to decision of the Full Court of the Family Court of Australia at a very recent time in Vissell & Vissell [2021] FamCAFC 76 and incorporate into these reasons, paragraphs [46] to [52]:
46. There can be no doubt that subpoenas to produce documents may be addressed to strangers to the litigation, however their interests are subject to protections which have long been established in the law and the touchstone of which is the relevance of the documents sought to the issues in the cause.
47. As long ago as 1938 in Commissioner for Railways v Small (1938) 38 SR (NSW) 564 (“Small’s case”), Jordan CJ said at 573:
A writ of subpoena duces tecum may be addressed to a stranger to the cause or to a party. If it be addressed to a stranger, it must specify with reasonable particularity the documents which are require to be produced… It is not legitimate to use a subpoena for the purpose of endeavouring to obtain what would be in effect discovery of documents against a person who, being a stranger, is not liable to make discovery…
48.His Honour continued and, albeit in the context of discussing subpoenas directed to the parties to the cause, said at 575:
… a party is no more entitled to use a subpoena duces tecum than he is a summons for interrogatories, for the purpose of “fishing”, i.e., endeavouring, not to obtain evidence to support his case, but to discover whether he has a case at all… Even if the documents are specified, a subpoena to a party will be set aside as abusive if great numbers of documents are called for and it appears that they are not sufficiently relevant.
49. Many years later in National Employers’ Mutual General Association Ltd v Waind and Hill [1978] 1 NSWLR 372 (“Waind”), Moffitt P considered the use of subpoenas to third parties as “discovery” and after referring to Small’s case, said at 382:
… Of course it may be that the terms of a subpoena are so wide that it is oppressive, but this is not because it is used for “discovery” in the sense used in Small’s case and Burchard’s case, but because it imposes an onerous task on a stranger to collect and produce documents many of which can have no relevance to the litigation…
(Footnotes omitted)
50. In the following paragraphs, Moffitt P sets out the “steps” involved in the process of production and inspection of documents produced under a subpoena and in considering the role of the judge in releasing documents to the parties said at 384:
… It is true that, in the exercise of the power in relation to the subpoena, the invasion of the rights of a third party have been jealously guarded. It is accepted that the documents should not go beyond the judge against objection of the owner, unless there is a valid reason to do so. It is clear that it can only be legitimate to do so, so far as is necessary in the proper conduct of the litigation…
51. And his Honour further said:
… So far as factual matters are concerned, the proper conduct of the litigation can only be that which fairly leads to the introduction of all such evidence as is material to the issues to be tried, and the testing of that evidence by the accepted procedures of the court. The only legitimate purpose of requiring the production, and permitting the inspection, of a stranger’s documents can be to add, in the end to the relevant evidence in the case…
52. So too in Hatton v Attorney-General of Commonwealth of Australia & Ors (2000) FLC 93-038, the Full Court there rejected the submission that relevance, per se, did not form a basis for challenging a subpoena but rather recourse must be had to concepts of oppression or abuse of process. The Full Court at [49] concluded that “lack of apparent relevance will be a sufficient ground in itself to set aside a subpoena”.
I also refer to a very helpful judgment of McClelland J, as his Honour then was, now McClelland DCJ of the Family Court of Australia in Baumann and Ors & Rushbrooke and Anor [2016] FamCA 905, and incorporate paragraphs [25] to [42] inclusive, together with the relevant footnotes to those paragraphs into these reasons.
25. The following summary of the relevant legal principles largely draws upon that which I have previously articulated in X Pty Ltd and Ors & Merhi [2015] FamCA 622.
26. The power of the Court to issue a subpoena is set out in Part 15.3 of the Family Law Rules 2004 (Cth) (“the Rules”). Equally, the Court has power to set aside a subpoena so issued: Hatton v Attorney General of the Commonwealth of Australia & Ors (2000) FLC 93-038 (“Hatton”).
27. The relevant stages of subpoenaing a third party to produce documents to the Court were described in Hatton at [38], by reference to National Employers’ Mutual General Association v Waind and Hill [1978] 1 NSWLR 372,as being a three step process:
The first [step] is obeying the subpoena, by the witness bringing the documents to the court and handing them to the judge. This step involves the determination of any objections of the witness to the subpoena, or to the production of the documents to the court pursuant to the subpoena. The second step is the decision of the judge concerning the preliminary use of the documents, which includes whether or not permission should be given to a party or parties to inspect the documents. The third step is the admission into evidence of the document in whole or in part; or the use of it in the process of evidence being put before the court by cross-examination or otherwise…This application by the applicant companies concerns the first step referred to in Hatton (supra)….
28. Rule 15.26 relevantly enables a person or entity named in the subpoena to apply for an order that the subpoena be set aside in whole or in part (r 15.26(1)(a)).
29. Further, r 15.26(1)(c) enables a person or entity to which a subpoena is addressed to seek “to be paid for any loss or expense relating to …the production of a document in compliance with the subpoena”.
30. A subpoena must only be used for a legitimate forensic purpose. In considering this issue, it is unnecessary for the party issuing the subpoena to establish actual relevance. However, the party issuing the subpoena must “demonstrate [that] the documents have an apparent relevance to the issue or issues before the Court and in respect of which the subpoena was filed”.2
2 A & The A Group (2006) FLC 93-271 at 80,596.
31. In that context, it is not enough for a party seeking to uphold a subpoena to show that the documents might lead to “a train of inquiry” which might assist his or her case.3 This is to be distinguished from the process of discovery where such a motive may be permissible.4
3 McMillan Incorporated v Bishopgate Investment Trust (1993) 4 All ER 998 at 1005.
4 [4] See Mulley v Manifold (1959) 103 CLR 341 per Menzies J at 345 referred to in T & D [2006] FamCA 1560 at [6].
32. While it is the case that the bar for establishing relevance is not high,5 the party seeking to rely upon the subpoena must nonetheless establish that it is “on the cards” that the documents would bear upon and have relevance to the issues in the substantive proceedings.6
5 Martin & Martin and Anor (No. 2) [2014] FamCA 232 at [29] referring to Killorgan Investments Pty Ltd v Baycorp Advantage Business Services Limited and Ors [2002] VSC 270 at [7].
6 Martin & Martin and Anor (No. 2) [2014] FamCA 232 at [28] referring to Alister v R (1984) 154 CLR 404 per Gibbs CJ.
33. Expressed in the reverse, it is not legitimate to issue a subpoena on the basis of “an outside chance” that something useful might turn up in the documents.7
7 R v Ridgeway (1998) 72 SASR 73 at 101.
34. A subpoena may also be at risk of being set aside if its terms are so wide that “…it imposes an onerous task on a stranger [to the litigation] to collect and produce documents many of which have no relevance to the litigation”.8
8 National Employers Mutual General Association Limited v Waind & Hill [1978] 1 NSWLR 372 at 382.
35. In terms of “fishing”, it is not legitimate for a party to issue a subpoena with a view to determining whether the issuing party has a case at all.9
9 See Unitingcare – Unifam Counselling & Mediation & Harkiss and Anor (2011) FLC 93-476 at 85,856 referring to Commissioner for Railways v Small (1938) 38 SR(NSW) 564 at 574-5 per Jordan CJ.
36. In Unitingcare – Unifam Counselling & Mediation & Harkiss and Anor (2011) FLC 93-476, Coleman J undertook a useful analysis of the relevant authorities and noted at 85,857:
There is a material distinction between seeking production of documents which, if they exist, can be readily identified and produced in circumstances where such documents may be admissible in evidence, and seeking the production of unspecified documents in the hope that, when produced, they may reveal something capable of being admissible in evidence. The former course is permissible according to general law, and… the Act. The latter offends both.
37. In that same context, in Ryder & Lee [2009] FamCA 531, Burr J adopted the following passage from the decision of Gray J in Andrew Garrett Wine Resorts v National Australia Bank Ltd (No. 6) (2005) 92 SASR 419 wherein his Honour said at 428:
It is not enough for the party issuing the subpoena to raise a speculative possibility that the documents sought would assist the resolution of the dispute. The party supporting the subpoena must demonstrate that the documents sought in the subpoena are of real relevance to the issues in the case. It must be more than an outside chance that something useful might turn up in the documents.
38. In summary, it is not enough for a party issuing the subpoena to raise a “speculative possibility” that the documents sought would assist the resolution of the dispute. While the bar is not high, the party supporting the subpoena must demonstrate that the document(s) sought in the subpoena are of an “apparent relevance” to the issues in the proceedings. It must be more than “an outside chance” that something useful might turn up in the documents.
39. To avoid being set aside as merely “fishing”, or as being oppressive, a subpoena must specify with reasonable particularity the documents which are required to be produced.10
10 See Hatton v Attorney General of the Commonwealth of Australia & Ors (2000) FLC 93-038 at 87,603.
40. As has been noted, a subpoena that is tantamount to discovery is likely to be set aside as an abuse of process. As an extension of that principle, it is impermissible for a subpoena to be used to rectify inadequate discovery by a party to the proceeding. In Macks v Tuck & Ors & QBE Insurance (Australia) Ltd (No.4) [2007] SASC 255 at [49], Bleby J said that in such a case:
It seems to me that the more appropriate course for the defendants to follow is to seek an order for further and better discovery from the plaintiffs, if they have a genuine concern about the adequacy of the plaintiff’s discovery and if they can point to reasons why that appears to be inadequate.11
11 See also Ryder & Lee [2009] FamCA 531 at [42].
41.In considering subpoenas addressed to strangers to the litigation, the Court must balance the third parties’ right to privacy against the public interest in ensuring that litigants are able to properly present their case. In R v Barton and Ors [1981] 2 NSWLR 414 at 419, Cantor J pointed out that this requires a court to evaluate competing interests. His Honour said:
It seems to me that there is involved within this field the resolution by the Court of competing interests. To require a witness to produce to the court his documents in proceedings in which he is not a party and in which he has no interest must involve an invasion of his private rights including his right to privacy and his right not to be required to busy himself seeking, identifying, bringing together and producing his documents to the court.
The other right which seems to me to be involved is the right of a party to litigation to obtain access to documents, even where they are in the possession of a stranger, in order to further the ends of justice in those proceedings so that he may advance his case on all issues in the case. These respective rights of the stranger and the litigant will generally conflict.
In many instances a mere consideration of the nature of perusal of documents in such a subpoena will disclose that they have or may well have relevance to the issues in the litigation. On the other hand consideration of the nature of the documents sought in such a subpoena may indicate with equal clarity that on the face of the subpoena the documents do not and cannot bear any relevance to the issues in the litigation.
There is a significant area between these two extremes which is the area in which, it would appear, there is no simple guideline to follow. What is required, as I have stated, is a balancing of the competing and generally conflicting interests of the party to the proceedings and the stranger to the proceedings.
The Court will consider the nature of the documents specified and will determine as best it can the issues likely to arise.If it appears an issue may arise in litigation to which the documents may relate then I believe the right of the litigant should prevail over the right of the witness. Unless it appears that an issue may arise to which the documents may relate then the right of the witness will prevail.12
(Emphasis added)
42. Finally, as an alternative to setting aside a subpoena, the Court may instead choose to vary its terms.
12 See also In the marriage of Blannand Blann (1983) FLC 91-322.
On the basis of the settled law relating to subpoenas and objections to subpoenas in this matter, I would have been prepared to find that documents should indeed be produced under the subpoena produced to Mr C and the subpoena to Company B Pty Ltd. Further, that even bearing in mind any involvement of a third party, being the objector, the husband’s father, in relation to those records, that the wife and her legal practitioners should be allowed normal inspection and photocopying, that photocopying being allowed under the rules, and they are not exempt materials.
I find in the context of this matter that it is appropriate to make the order as sought by the wife in her application relating to the Company B Pty Ltd subpoena and the subpoena to Mr C, that is order 1 in minute of order B attached to her solicitor advocate’s Case Outline document.
In relation to the National Australia Bank, all of the material referred to in the schedule to the National Australia Bank subpoena relates to accounts in the name of either the husband’s father, the objector, Mr D, or in his name, coupled with other persons or legal entities not named.
The breadth of that schedule is sought to be from 1 January 2011 up to date. The evidence of the husband, of course, is that he purchased the H Street, Suburb F, property prior to entering into the relationship with the wife, a purchase commencing with the exchange of contracts on 9 January 2012. It is the husband’s evidence that all of the funds for that purchase and the payment of stamp duty and otherwise were provided by his father. The wife, in relation to this subpoena, is seeking, in effect, to test that. Implied in that must be that the wife is seeking to assert that some or all of those funds were available to the husband from some other source.
I find that in the context of these proceedings and given that the H Street, Suburb F, property was sold during the currency of the parties’ cohabitative relationship, the documents sought in the schedule to the National Australia Bank subpoena, when considering the husband’s objection, are relevant or have apparent relevance in the proceedings. The order sought by the husband in relation to that particular subpoena is that his solicitors have first right to inspect the documents produced by National Australia Bank for the purpose of identifying if there was a deposit of the bank cheque of $21,229,090.92 on or about 6 June into the father’s bank account. If they find that, to pluck that out as what he calls the “relevant document” and then confine the wife’s inspection to that document after redacting the account numbers and all other transactions from the relevant document.
The wife for her part, seeks that that subpoena be dealt with by the husband’s solicitors having first access and removing any documents produced in answer that do not relate to the periods from 11 October 2011 to 11 October 2012 and 1 December 2014 to 22 November 2019. Then, that the wife’s solicitors have leave to photocopy that material, but that the wife have leave to inspect the photocopies on the basis that neither hard nor electronic copies are provided to the wife, and the wife inspects them only in the presence of her solicitors.
On the basis of the husband’s objection, I say that the order as sought by the wife are appropriate. It would seem that following the purchase of the property and until the period of the sale of the property and continuing thereafter in relation to rent received from the E Street, Suburb F property and so forth, payments were by the husband to the father in relation to the mortgage registered thereon securing the loan between father and son. The periods referred to by the wife’s solicitors in her order sought number 2 in the minute of order B are appropriate as between the wife and the husband.
Finally, in relation to the objector, the objector seeks an order that the subpoena to the National Australia Bank be dismissed. The objector, of course, is a third party to the proceedings. He is, however, by no means, an unrelated third party in that on the evidence of the husband, he provided all of the moneys for purchase of the H Street, Suburb F property and all of the moneys for purchase of the E Street, Suburb F property.
Ms Kennedy in her submissions on behalf of the objector referred to J and J [1998] FLC 91-940 at page 76, 792 where the Full Court set out full pre-requisites that she asserts the wife must establish to access the documents produced by the objector, being that they exist, that they are in the possession, custody or control of the Respondent of the application, that the documents relate to matters in question in the proceedings, and that the Respondent is required to produce in the proceedings and it is just that the applicant should inspect the documents.
The objector is neither an Applicant nor a Respondent in these proceedings. The documents presumably exist given that the subpoena refers to a specific BSB and account number in relation to the general description in the subpoena document. The wife cannot know what the dealings between the husband’s father and the bank have been in full and it is by no means irrelevant, oppressive, a fishing expedition or an abuse of process to seek production by a bank with whom the evidence establishes the objector has relations, and into which there is good grounds on the husband’s evidence to assume that a substantial sum of money from the sale of the H Street, Suburb F property has been deposited. The documents to be produced in accordance with the schedule are relevant to these proceedings in relation to the dealings between the husband and his father.
Along the trail of the wife establishing what is the net matrimonial asset pool or the gross matrimonial asset pool in these proceedings, and the ownerships thereof, to date, the wife only has the husband’s evidence. After my examination of his affidavit evidence that the whole of the moneys for the purchase of the H Street, Suburb F property were provided by the husband’s father, no documents have been provided by the husband to establish that. The wife is entitled to test that. Documents are not in the custody or possession, custody or control of the Respondent or, in this case, the objector, but they are in the possession, custody or control of the bank.
The documents do relate to questions in the proceedings, questions that affect both the H Street, Suburb F property and the E Street, Suburb F property.
Is it just that the wife should be able to inspect the documents on the conditions that she proposes and in the terms of what I have found to be the apparent relevance of those documents or prospective relevance of these proceedings? It is just that she have the opportunity to inspect the objector’s dealings through his bank in Australia and ascertain what those dealings relate to and the dealings of the husband in the two Suburb F properties.
I find specifically that the document sought in the subpoena have apparent relevance in the proceedings. Ms Kennedy pointedly submits that the unlimited nature of the schedule in the subpoena with an extremely broad time period constitutes a fishing expedition in terms of what has been found by the court in the various decided cases. But I find that the schedule to the document does not represent a fishing expedition. It represents not the wife looking for the establishment of her case to be presented to the court, but rather represents the wife testing the evidence such as it is so far from the husband in the proceedings, as she is entitled to do. It is not a fishing expedition.
The subpoena is not oppressive, and here I am paying attention to whether or not it is oppressive to the objector rather than to the third-party, the bank. They are not objecting. The subpoena does not open it to the objector to make decisions as to what documents fall within it and do not. It is for the bank to do and given the terms of the schedule, it represents no difficulties in that regard. Nothing else is advanced by way of oppression to the objector other than the inference that it is a delving into his personal affairs that do not have sufficient relevance to the proceedings. I have already found that that is not a valid objection.
It is submitted by Ms Kennedy that the subpoena, as regards the objector, is an abuse of process. In that regard she refers to the risk of the wife using the documents obtained from it for impermissible purposes, such as providing documents to Chinese authorities and/or public media over the objection of the objector’s family. In that she refers to the statement made to the wife by the court when she was self-represented on 29 September 2020. Of course, as I have said, and read fully onto the record today, a specific injunctive order was made by the court restraining the wife from misusing information that has come to her in documents under compulsion of Court such as through subpoenas and through disclosure by the husband (which is by compulsion of the Court) and the same extends to any documents filed in the proceedings by the husband in compliance with rules or orders of the Court. They are all under compulsion.
That all falls within what was found by the High Court of Australia in Hearne v Street (2008) 235 CLR 125, to be a legal principle, not just an implied undertaking. The wife was referred to that legal principle when she was self-represented. The wife was referred to section 121 of the Act which takes over, in effect, in relation to that material once it has been admitted into evidence in open Court and falls out of what we might still refer to as the Harman Principle. The wife was also referred to the specific rule in the Federal Circuit Court Rules 2001, that, in effect, revoices the Harman Principle as a rule of Court.
The injunctive order was made and it remains in place. There is no evidence whatsoever before the Court that the wife has, or has attempted to, disseminate any of that information in an improper way. The wife expressed a wish or intention to make matters revealed to her in these proceedings known to the media, the public media and to certain authorities, including Chinese authorities. However, after having expressed that on that day, the order was made, the information was given directing her attention to those matters making it a serious contempt of Court, and later on, a breach of section 121 and a breach of the rules of Court with consequent penalty consequences.
I find on that basis that there is no abuse of process in that subpoena in relation to the objector and I am not satisfied that it will lead to the wife breaching the obligations found in Hearne v Street (2008) 235 CLR 125, known as the Harman Principe, or breaching the rules or that injunctive order of the Court. The wife, now of course, has the guidance of her solicitors. That was spoken to by Mr Cameron as her solicitor advocate. The order proposed by her in Mr Cameron’s minute of order addressing the National Australia Bank subpoena, which I have already gone into in detail in relation to the husband’s objection, is also appropriate in relation to the objector’s objection. Left to myself. I may have cast it a bit wider, but I confine myself to that objection. I note the terms of the letter that forms exhibit A1 that I have read onto the record.
Accordingly, finally, I make the orders set out above.
I certify that the preceding two hundred and eighty-five (285) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Morley. Associate:
Dated: 9 July 2021
40 cf Hall v Snowdon, Hubbard & Co [1899] 1 QB 593 at 594.
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