Venter & Venter (No 5)

[2023] FedCFamC1F 635

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
FIRST INSTANCE

Venter & Venter (No 5) [2023] FedCFamC1F 635  

File number(s):

BRC 10651 of 2021

Judgment of:

CAREW J

Date of judgment:

31 July 2023

Catchwords:

 FAMILY LAW – PROPERTY – Where the 8^th respondent seeks an order pursuant to r 6.17(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, dismissing the wife’s case against the 8^th respondent – Where the wife disclosed the existence of some 96,000 documents, sourced from a number of hard drives, approximately one week before the commencement of trial – Where additional documents were produced by the wife on the fourth day of trial – Where the wife failed to offer any explanation for the delay in disclosing an extraordinary number of documents – Where the sheer volume of the late disclosure demonstrates considerable prejudice to the 8^th respondent – Where the 8^th respondent has been subjected to a trial by ambush – Where dismissing the claim against the 8^th respondent would not bring an end to the wife’s case absolutely – Where the case against the 8^th respondent is dismissed

Legislation:

 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 6.17(b)

Cases cited:

Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175

Berrell & Berrell (No. 2) [2013] FamCA 900

Clifton v Kerry J Investments and Ors [2020] FCAFC 5

Patel & Noora [2019] FCWA 260

Zao & Lee [2019] FamCAFC 169

Number of paragraphs:

78

Date of hearing:

28 July 2023

Place:

Brisbane

Counsel for the applicant:

Dr Matta with Ms Matson and Ms Frederico

Solicitor for the applicant:

Coote Family Lawyers

Counsel for the first respondent:

Mr Richardson SC with Dr Smith

Solicitor for the first respondent:

Broun Abrahams Burreket

Counsel for the second, third, fifth and seventh respondents

Mr Stewart KC with Mr Barnett

Solicitor for the second, third, fifth and seventh respondents

Barkus Doolan Winning

For the fourth respondent

Litigant in person (did not participate)

Counsel for the eighth respondent

Mr Roche with Mr Rogan

Solicitor for the eighth respondent

Pearson Emerson

ORDER

BRC 10651 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS VENTER

Applicant

AND:

MR VENTER

First Respondent

MR B VENTER

Second Respondent

MR C VENTER (and others named in the Schedule)

Third Respondent

ORDER MADE BY:	CAREW J
DATE OF ORDER:	31 JULY 2023

THE COURT ORDERS THAT:

1.The relief sought against the 8^th respondent by the wife in her Initiating Application (as amended) filed 31 March 2023 is dismissed.

2.The costs of the 8^th respondent be reserved.

Note:   The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

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 by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

EX TEMPORE REASONS FOR JUDGMENT

CAREW J:

1. In 2007, Mr Venter, the first respondent in the proceedings, (whom I will refer to as the husband to assist in the anonymisation of these reasons) had an idea to set up a business that involved the provision of small loans to people who needed money in between pay days, the provision of which would involve the borrower paying fees. At the time, Ms Venter, the applicant in the proceedings, (whom I will refer to as the wife) was bankrupt and the husband had only recently been discharged from bankruptcy. Whether or not this was the reason, a company was set up in which their eldest child, Mr B Venter (the 2^nd respondent), was the sole director and shareholder. Initially, it was a homebased operation producing very modest returns. At the time, Mr B Venter was 19, Mr C Venter (the 3^rd respondent) was 17 and Ms Glynn (the 4^th respondent) was 13. There was also a family friend, Mr J, who became involved in the business in about 2008 when he was 19. Mr J is the sole director of the 8^th respondent.

2. Ms Glynn has taken no part in the proceedings, although she turned up on day five of the trial and sat in the body of the Court.

3. Sixteen years after the commencement of the small business, there exists a network of companies and trusts in which Mr B Venter, Mr C Venter and Ms Glynn are all involved, entirely to the exclusion of the wife, save that she remains a potential beneficiary of a family trust, D Group Holding Discretionary Trust (the 5^th respondent). Further, if the husband’s evidence is to be accepted, he has no interest in the network of companies and trusts, not even as a potential beneficiary of the family trust, and his property interests are in the negative. Far from being a small time business, the operations now involve a multimillion dollar enterprise. 

4. The substantive dispute arises as a result of the wife contending that what she refers to as the ‘D Group’ belongs, in reality, to her and the husband. The wife also contends, among other things, that entities owned and controlled by Mr J are a sham and are in fact owned by the husband or a company of his called S Pty Ltd. The wife’s claims are rejected by the respondents.

5. The trial commenced on 24 July 2023 but little of the actual trial has proceeded. One witness, Mr CC, who appeared pursuant to subpoena has partially provided his evidence in chief. The balance of the time has been take up with objections to evidence (on the first day) and various attempts to overcome any prejudice that may result from the wife’s very late discovery of documents, initially said to number 60,000 and later 96,000 documents. Some of the documents were sourced from a number of hard drives, first mentioned by the wife through her solicitors on 14 July 2023.

6. On 27 July 2023 additional documents, said to be contained in a “suitcase”, were produced by the wife to the respondents for the first time, accompanied by a 27 page list of documents prepared by her solicitors (which also refers to a “black box with handles” and “notebooks” which appear to be in addition to the suitcase). The list purports to identify documents that are relevant to the proceedings or over which one or other of the respondents might claim legal professional privilege.

7. Since the commencement of the trial, the wife has filed two further affidavits and her solicitor, Ms Clifford, has filed one affidavit, addressing various matters arising from the late disclosure of documents.

8. Day five of the trial was solely occupied by submissions made in relation to an application in a proceeding filed by the 8^th respondent on 28 July 2023, seeking to dismiss the wife’s claim against it pursuant to r 6.17(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”). Rule 6.17 is in the following terms:

   If a party does not disclose a document as required by these Rules:

   (a)       The party:

   (i)Must not offer the document, or present evidence of its contents, at a hearing or trial without the other party’s consent or the court’s permission; and

   (ii)       May be guilty of contempt for not disclosing the document; and

   (iii)      May be ordered to pay costs; and 

   (b)      The court may stay or dismiss all or part of the party’s case.

9. Before considering the merits of the 8^th respondent’s application it is perhaps helpful to set out the relevant chronology.

   RELEVANT CHRONOLOGY

10. In early 2021, the wife located what she contends were three hard drives; a blue one and two silver ones, in a box in the former matrimonial home at H Street, Suburb LL. The wife delivered the three hard drives to her former solicitors, MM Lawyers, shortly after locating them. The wife’s lawyers accessed the contents of the blue hard drive which the wife contends is “largely, if not wholly, an external back-up of the two silver hard drives”.

11. At some point between early 2021 and March 2023 (when the wife retained her current solicitors, Coote Family Lawyers), MM Lawyers extracted 146 emails from the blue hard drive and stored them in what is referred to as Folder 1. These are emails that by the descriptor accompanying them, indicate an assessment was made that they would be helpful to the wife’s case.

12. The wife commenced the substantive proceedings on 11 August 2021.

13. On 12 October 2021, the wife filed an application seeking to join the 8^th respondent and annexed points of claim.

14. On 3 February 2022, the 8^th respondent filed points of defence to the wife’s points of claim.

15. As a consequence of an application by the 8^th respondent to strike out points of claim and for summary dismissal, I found that the wife’s points of claim were embarrassing but gave the wife leave to re-plead her claim against the 8^th respondent.

16. On 22 June 2022, the wife filed amended points of claim and on 5 August 2022 the 8^th respondent filed amended points of defence.

17. In early 2023, the wife accessed the contents of a hard drive referred to by her as the “family computer”.

18. In February 2023, the wife retrieved the three hard drives from MM Lawyers.

19. On 20 February 2023, I ordered the wife to pay the 8^th respondent’s costs of responding to the wife’s initial points of claim and its application to strike out those points of claim but that payment of those costs be stayed until 28 days after finalisation of the substantive proceedings. At [38] of those reasons I found:

    … the respondents have been put to additional expense because of the deficiencies identified in the original Points of Claim. It is relevant to also observe that the wife had been put on notice as to the basis for the strike out application and notwithstanding the sound basis for the application to strike out, continued to resist it.

20. On 15 March 2023, the wife’s current solicitors, Coote Family Lawyers, received the contents of the wife’s file from MM Lawyers in electronic form, including Folder 1.

21. On 23 March 2023, the wife accessed “a small number of documents” from the blue hard drive with the assistance of Mr NN.

22. On 27 March 2023, the proceedings were listed for an initial ten day trial to commence in July in relation to all issues save as to any disputed value of any asset, liability or financial resource, and the determination by the Court of the terms of any property settlement order or spousal maintenance order. The reasons for a bifurcation of the trial issues related to the apparent inability of the wife or the husband to pay the valuation costs at first instance, in circumstances where, if the wife’s claims against the respondents fail, they would have no prospect of recovering the costs of valuations if they were required to pay for them.

23. On 31 March 2023 the wife filed a further further amended initiating application and on 10 May 2023, the wife filed her trial affidavit.

24. On 19 June 2023, an affidavit by Mr J was filed as a witness relied upon by Mr B Venter, Mr C Venter, the family trust and R Pty Ltd (the 7^th respondent).

25. On 20 June 2023, an affidavit by Mr J was filed on behalf of the 8^th respondent.

26. In the first week of July 2023, the wife accessed the contents of the blue hard drive “for approximately five minutes”, reviewing “about 10 documents”.

27. In July 2023, the wife gave the “two silver hard drives” to Mr NN, who in turn took them to a “computer shop called ‘[PP Shop]’”. Mr NN informed the wife that “the technician extracted what he could which he saved on [an] external hard drive”. The wife contends that she supplied the previously unused hard drive to the technician.

28. Four days later, Mr NN returned the “two silver” hard drives and the external hard drive, also referred to as the “restored” hard drive, to the wife.

29. On the following day, the wife downloaded the files from the “restored” hard drive to her personal laptop “which took place overnight”. 

30. On 12 July 2023, the wife “browsed” the contents of the “restored” hard drive from her personal laptop for about “10 minutes” and contends that the documents she can “recall” browsing were “recipes, personal photos and other general documents … a folder with [Mr C Venter’s] name on it which had photos of him and documents relating to his [sporting] days”. Clearly such documents would not be relevant to an issue in the proceedings. The wife nevertheless provided the contents of the restored hard drive to her solicitors on 12 July 2023 by uploading it to a “share point link to Folder 3”, between 6.40pm on 12 July 2023 and 12.48am on 13 July 2023. Ms Clifford deposes to Folder 3 containing five “outlook data files (.pst)” named “[Mr CC]”, “[Mr J]”, “[Ms QQ]”, “[Ms RR]” and “Old [Mr B Venter] mail” and an empty folder named “[Mr CC]” which Ms Clifford says she was instructed by the wife was “created at the time the information was uploaded” by the wife.

31. On 14 July 2023, the wife’s solicitors informed the respondents, for the first time, that the wife “has access to hard drives at [H Street]”.

32. On 17 July 2023, the husband’s solicitors requested the hard drives be produced to them.

33. On 18 July 2023, the wife filed an affidavit in reply purporting to contradict evidence given by Mr J relying upon documents from the hard drives. (I note that objections have been taken to the wife’s reply affidavit with the respondents reserving their position pending clarification of the wife’s late disclosure).

34. On 19 July 2023, the wife’s solicitors provided to the respondents a link to three folders: Folder 1; Folder 2; and Folder 3.

35. On 20 July 2023, the husband’s solicitors sent a letter to the wife’s solicitors including the following:

    …

    Based on the limited review of the documents we have been able to undertake in the short period in which your client has elected to make them available, we anticipate that there are no less than 60,000 emails in Folder 3 and several hundred emails and documents contained in folders, and subfolders in Folder 1 and Folder 2.

    We require the production of the hard drives in your client’s possession referred to in your correspondence of 14 July 2023. Please ensure that your client makes those hard drives available prior to the commencement of Trial on 24 July 2023.

    We further request that your client provide the following particulars in relation to the documents disclosed by your client on 19 July 2023 by no later than 4:00pm on Friday, 21 July 2023:

    1. When did your client first access the hard drives? Where were they located when she first found them? What other devices, if any, were they connected to at the time? How many hard drives were there?

    2. When did your client provide the documents on the hard drives to her legal representatives in these proceedings (whether [MM Lawyers], [SS Lawyers] or Coote Family Lawyers)? In the event they were provided to your office by your client’s prior legal representatives, please confirm.

    3. In what format did your client provide the documents? Did your client provide the hard drives or a copy of the hard drives? If the hard drives, or any of them, are copies, please confirm how many copies your client possess and the identity of any person that has been provided with or presently retains a copy.

    4. Please identify all of the people that have had access to the documents on the hard drives. Those persons should include any person other than your client, including but not limited to:

    4.1 The name and position of any person at your firm;

    4.2 The name and position of any person at any other or previous law firm;

    4.3 The name of any Counsel or Senior Counsel to whom these documents have been provided during the course of these proceedings; and

    4.4 The name of any person or other entity to whom these documents have been provided (i.e. any software/ IT/ Legal Transcription or Consultancy firm).

    5. A number of the lead folders in Folder 2 contain subfolders in which there are no documents provided. Please confirm that your client has provided all of the documents and all of the folders available on the hard drives in her possession.

    6.        In relation to the documents in Folder 1:

    6.1 [Ms TT] is the person identified as having last modified the Documents. Each of these documents were modified between 30 August 2021 and 10 October 2021, prior to your client retaining your firm and, in some instances, prior to [Ms TT’s] employment appears to have commenced at Coote Family Law. Please confirm the basis upon which [Ms TT] is identified as having modified the documents in Folder 1 given date of modification in respect of each document.

    6.2 A number of the documents in Folder 1 have been named or identified by a description as to the purported contents of the email (with respect to which no concession is made by our client as to the accuracy or otherwise) including for instance “GOOD EMAIL – [Mr CC] tells [Mr B Venter] to pay attention to the business”. Where emails in Folder 1 have been named or given a description, please identify the person or persons that gave the description in each instance, and when that occurred.

    7. In relation to the documents generally, there are a number of clearly privileged documents and email communications contained within the hard drives produced by your client. Some of those communications are relied upon by your client in the proceedings; others have been identified in Folder 1 by the person or persons who named the document as being an email communication to or from Lawyers.

    It ought to have been obvious to your client and her advisors that the documents, or some of them, may be subject to a potential claim of legal professional privilege. Please identify what notice, if any, was given by your client to any interested person or entity prior to your inspection of the documents contained on the hard drives. In the event that prior notice was given, we request that you produce a copy of that correspondence with your reply to the preceding requests for particulars.

36. On 21 July 2023, the solicitors for Mr B Venter, Mr C Venter, the family trust and R Pty Ltd requested that the information sought by the husband’s solicitors be provided by way of affidavit, failing which an application would be brought seeking an order to that effect. The letter included the following:

    …

    It is only when there is a full understanding of the extent of the privileged material (and who that privilege may belong to), identification of each person who had access to the material and from when, who provided instructions to lawyers that may have been based on access to privileged material (even if the privileged material itself was not provided to lawyers), when each of those steps occurred, and what documents they may have flowed into, will our clients then be able to form a concluded view as to the further application/s that may then necessarily follow including but not limited to vacating the trial, injunctions and costs.

37. On 21 July 2023, the wife’s solicitors responded to the requests including as follows:

    …

    We will not be serving any affidavits as requested by your clients.

    …

    Any attempt by any of the respondents to make an application on the first day of the trial will be vigorously opposed … 

38. On 23 July 2023, the wife filed an undertaking as to disclosure in the following terms:

    1) I have read, or had read to me, Parts 6.01 and 6.02 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021;

    2) I am aware of my duty to the Court and to each other party … to give full and frank disclosure of all information relevant to the issues in the case in a timely manner;

    3) I undertake to the Court that to the best of my knowledge and ability, I have carried out and complied with my duty of disclosure;

    4) I undertake to continue to comply with my duty of disclosure until the conclusion of the case;

    5) I understand the nature and terms of this undertaking and that if I breach the undertaking I may be guilty of contempt of court.

1. The undertaking is accompanied by a certificate from the wife’s solicitor, Ms Coote, in the following terms:

   I am the lawyer for the person giving the undertaking and I certify that I have explained to the person giving the undertaking:

   (a)       The nature and terms of the undertaking; and

   (b)       That the undertaking is a promise to the court to comply with its terms; and

   (c)       That the undertaking has the same effect as an order of the court; and

   (d) That a breach of the undertaking may be a contempt of the court punishable by a fine or imprisonment.

2. On 24 July 2023 (the first day of trial), the wife was directed to respond, by affidavit, to items 1 through to 6 of the letter from the husband’s solicitor dated 20 July 2023 and to produce the hard drives. The wife filed an affidavit at 2.20pm on 24 July 2023. The affidavit was unsatisfactory in a number of respects. The hard drives were produced by the wife on 25 July 2023.

3. On 25 July 2023, the solicitors for the 2^nd, 3^rd, 5^th and 7^th respondents wrote to the wife’s solicitors requesting further clarification about a number of matters arising from the wife’s affidavit filed on 24 July 2023. The letter noted, in particular, that the link to the three folders provided by the wife’s solicitors on 19 July 2023 included communications that were subject to legal professional privilege by a number of the respondents (and I would add, including the 8^th respondent).

4. On 25 July 2023, the wife was required to file a list of documents identifying from Folder 1 those documents that are relevant to an issue in the proceeding and those documents to which a claim for professional legal privilege from the respondents might attach.

5. A witness appearing pursuant to subpoena, Mr CC, commenced his evidence in chief on 25 July 2023. Leave was granted to adduce the evidence orally. Part of the evidence adduced related to a topic on which the wife’s reply affidavit sought to contradict the evidence of Mr J in his witness affidavit.

6. On 26 July 2023, the 8^th respondent objected to Mr CC continuing his evidence until the wife had satisfactorily addressed the issue of late disclosure. The matter was stood down to enable the wife to file a further affidavit and for her current and previous solicitors to file affidavits.

7. On 27 July 2023, the wife’s solicitors produced a 27 page list relating to documents contained in a “suitcase” and documents contained in a “black plastic tub with handles” (many of which are identified in the list as relevant to the proceeding) and “notebooks”. One of the notebooks is described in the list as an “orange exercise book labelled [Mr J]”, and identified to potentially attract a claim for legal professional privilege. There are another six notebooks listed without any indication of their relevance or otherwise to the proceeding. None had previously been disclosed, although the wife referred in her reply affidavit to having “found some notebooks that belong to [Mr CC], [Mr B Venter] and [Mr J] that were left in the [H Street] property. These notebooks contain handwritten notes”. The wife does not state which of the notebooks she read but exhibits to her affidavit pages from some of the notebooks. Unfortunately, the description of the notebooks in the wife’s reply affidavit is different to the description of the notebooks in exhibit 2, being the list prepared by the wife’s solicitor.

8. On 27 July 2023 at 2.21 pm the wife filed a second affidavit which sought to expand upon and clarify her affidavit filed 24 July 2023 and included the following:

   17. At paragraph 2(a) and (b) of my Previous Affidavit, I deposed that I did not personally access the Blue HD or Silver hard drives. This is not correct. My previous Affidavit was prepared at short notice and I did not have sufficient time to retrace how I extracted the data from the hard drives. This was not intended to mislead this Honourable Court.

9. On 27 July 2023, at 2.41 pm the wife’s solicitor, Ms Clifford, filed her affidavit. Ms Clifford annexed three “tables” to her affidavit. The first table relates to Folder 1 and lists 146 emails which Ms Clifford says were provided to her firm by the wife’s previous solicitors. Ms Clifford identifies some documents in that table to which privilege might be claimed by the respondents and identifies some other documents as “read”. A significant number of the listed documents have no entry next to them. I am unclear whether these are the “balance of the documents in Folder 1” to which Ms Clifford refers in her affidavit, that have not been accessed or viewed by anyone in Ms Clifford’s firm or by counsel, although that seems unlikely.

10. Ms Clifford deposes that the second table annexed to her affidavit relates to Folder 2 and contains 2,562 “items” of which 18 are documents “in the first folder and 8 sub-folders”. The eight sub-folders are variously labelled. Ms Clifford says that only one document from the first folder of Folder 2 has been exhibited to the wife’s affidavit in reply and is the only document that has been provided to counsel. Only a portion of the documents in Folder 2 have been reviewed and accessed by Ms Clifford’s firm. In Table 2, the description of a number of the documents would appear to be irrelevant to the proceeding but of the ones highlighted (i.e. indicating they have been accessed by Ms Clifford’s firm), the description of the documents does little to identify whether or not the documents are relevant e.g. “68 word documents, 1 audio file, 3 PDF documents, 8 Excel documents”.

11. Table 3 annexed to Ms Clifford’s affidavit relates to Folder 3 and contains outlook data files including for “[Mr J]”. Ms Clifford contends that on a “preliminary review” undertaken on 13 July 2023 (when Folder 3 was provided by the wife) it was identified that the emails covered a period of approximately 2009 to 2014 and that the volume of emails was “substantial”. By undertaking certain word searches, (although how the words used were determined is not explained), Ms Clifford says Table 3 was created and it identifies 71 emails, two of which have been relied upon by the wife in her challenge to the witness evidence provided by the 8^th respondent. Those emails are dated 6 June 2013 and 28 November 2013.

12. While Ms Clifford describes in her affidavit the process adopted by her firm in ensuring potentially privileged material is not inspected, namely, a document sent or received by a solicitor is not accessed or reviewed and all such documents are returned to the privilege holder and permanently deleted from her firm’s system, it is clear that Ms Clifford’s firm’s process was not adopted in this case, at least on all occasions e.g. one recording marked “[Mr UU] and Barrister” was listened to for an undisclosed period, and a letter from “[Mr UU] of [VV Lawyers], [Mr CC], [Mr B Venter]… and [Mr J], subject RE: Asset Protection and Restructuring” is relied upon by the wife in her case, it being argued that privilege does not attach to the letter. That conclusion is disputed by the respondents.

13. I note that the husband’s solicitors informed the wife’s solicitors in a letter dated 25 July 2023 that they had identified 861 documents in Folder 3 that may be subject to legal professional privilege by one or more of the respondents. I reiterate that the documents contained in Folder 3 were also contained on the blue hard drive.

14. Finally, Ms Clifford explains in her affidavit that 6 recordings had been received from the wife’s previous solicitors in March 2023. The recordings were saved under descriptors. Ms Clifford says that three of the recordings were reviewed “prior to or around the time that [the wife] uploaded Folders 2 and 3 to our office”. That is a rather large window of opportunity. In another paragraph of her affidavit, Ms Clifford says the three recordings marked d, e, and f were reviewed between 3 and 12 July 2023, by playing a sample of each recording to see if they had been labelled correctly. In relation to recording ‘d’ which was labelled as “[Mr UU] and Barrister”, Ms Clifford says she stopped the recording once she heard a barrister’s voice that she recognised. Ms Clifford thought that the recordings had been provided to the respondents on 19 July 2023 but none of the six recordings were disclosed until 27 July 2023. I assume the recordings were disclosed either because they were relevant to an issue in the proceedings or that at least one of them may be subject to privilege. 

15. Counsel for the wife informed the Court that of the 96,000 documents disclosed by the wife in the various forms, since 19 July 2023, only about 17,000 had been reviewed by his instructing solicitor over the few days preceding 28 July 2023 and about ten percent of the 17,000 had been identified to be relevant to the proceedings.   

16. To say that this state of affairs is most unsatisfactory is an understatement. The Court has allocated ten days (in fact now 12 days) to hearing this trial which has been held up because of these disclosure issues.

17. Turning then to consider the 8^th respondent’s application to dismiss the wife’s claim against it.

    DISCUSSION

18. The Explanatory Statement to the 2004 Family Law Rules refers to the “major reform in the concept of discovery” introduced by those rules. Rule 13.14 (which is in the same terms as r 6.17 of the current rules) was introduced to “send a clear message that the Court will take a serious view of non-compliance with the duty of disclosure and the Rules”. It is apparent from the Explanatory Statement to the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 that the current Rules are intended to continue the clear message introduced by the previous Rules.

19. While counsel for the 8^th respondent was unable to identify any authority in which a party’s case has been dismissed as a result of a party not disclosing a document as required by the Rules, counsel for the 8^th respondent referred to four authorities from which assistance might be obtained in exercising the discretion to dismiss a case or part of a case pursuant to r 6.17(b).

20. In Berrell & Berrell (No. 2),[1] Kent J dismissed an application, brought pursuant to the equivalent rule to r 6.17(a), by a party seeking permission to rely upon documents that had not been disclosed. His Honour said at [6]:

    Whilst rule 13.14(a)(i) [now r 6.17(a)(i)] is silent as to what the Court must or should take into account in terms of exercising its discretion to grant permission, it seems to me that in the usual course, the Court would need to consider any reasonable explanation for the delay for the non-disclosure and importantly, any prejudice said to be suffered by the other party due to the late disclosure.

    [1] [2013] FamCA 900.

21. In that case, as in the present, the party at fault had filed an undertaking as to disclosure prior to then producing documents that had not been disclosed, and upon which he sought to rely. It was found by Kent J that the innocent party would suffer prejudice if the defaulting party was able to rely upon the documents as the innocent party would have no reasonable opportunity to cross-reference or check the material provided.

22. The Full Court of the Federal Court in Clifton v Kerry J Investments and Ors[2] discussed the importance of discovery in ensuring a fair trial and said:

    [2] [2020] FCAFC 5.

    [137]The importance of parties providing proper discovery in accordance with orders made by the Court is well recognised in the authorities. In Brookfield v Yevad Products Pty Ltd [2004] FCA 1164 (Brookfield) Lander J referred to the origins of discovery and at [366]–[368] explained that:

    The process enables the parties to obtain documents from their opponents which support their own case, and which destroy their opponent’s case. It enables the parties to assess their own prospects of success before trial and to ensure that they are not ambushed at trial.

    …

    The integrity of the discovery process must be maintained. The discovery process in many ways depends upon the honesty of the parties and their legal advisers.

    [138]At [392]–[394] his Honour said:

    … A trial has not been regularly conducted where a party to the litigation has not discovered documents which are relevant to the issues in the trial. That party has not complied with its obligations in the interlocutory processes and by failing to make full discovery that party has withheld evidence from its opponent.

    Moreover, another aspect of the administration of justice must be considered. Because it serves the administration of justice, it is also in the public interest that the integrity of the court’s processes are preserved.

    For the reasons already given the discovery process is very important in ensuring that the parties are accorded a fair trial. Litigants will lose confidence in the court’s processes and decisions if they think that a party might avoid giving proper discovery and not be later held to account.

23. In Patel & Noora,[3] O’Brien J in the Family Court of Western Australia considered what matters need to be established prior to dismissing a claim where there has been non-compliance with the Rules or a failure to disclose a document as required by the Rules. O’Brien J said:

    34. In considering such an application, the Court must first consider whether the alleged non-compliance has been established. …

    35. … The exercise of a discretion to dismiss must self-evidently be informed by a consideration of the prejudice to the defaulting party; the dismissal of a meritorious substantive application might be thought to occasion greater prejudice than the dismissal of an unmeritorious application.

    [3] [2019] FCWA 260.

24. The Full Court of this Court in Zao & Lee[4] said that the dismissal of proceedings because of a failure to disclose a document is a last resort.

    [4] [2019] FamCAFC 169.

25. In the present case, the wife offers no explanation for the delay in disclosing such an extraordinary number of documents other than to initially suggest that the silver hard drives were not able to be accessed until she obtained assistance from an IT specialist in July 2023. Contrary to that assertion, is her subsequent evidence that the blue hard drive contained a back‑up of the silver hard drives, and the blue hard drive was located by the wife in early 2021 and given to her previous solicitors shortly thereafter. The blue hard drive was accessed by the wife’s previous solicitors, and documents said to support the wife’s case were extracted.

26. The blue hard drive and the two silver hard drives were not made available to the respondents until 25 July 2023 (the second day of the trial). There is no mention of the suitcase or black tub or the notebooks in either of the wife’s recent affidavits or in her solicitor’s affidavit, let alone any explanation for the failure to disclose them earlier than the 27 July 2023. This is despite the fact that select parts of the notebooks were reproduced in exhibits to the wife’s affidavit in reply. There is also the ‘restored’ hard drive, yet to be disclosed, as I understand it.

27. The wife may have been under a misapprehension about what her duty of disclosure required, when regard is had to paragraph 10 of her affidavit filed on 24 July 2023 in which she said:

    On 3 July 2023, my solicitors received a letter from [the husband’s solicitors] enclosing financial disclosure. This letter also states “Our client [the husband] does not retain historical (including email) communications.” Prior to this communication, I understood that [the husband] retained and had access to his historical records and communications …

28. This might explain, although not justify, why the wife did not disclose some of the documents in her possession i.e. she thought the respondents would already have them.  How that misapprehension could have remained up to and including the time of providing her undertaking as to disclosure remains unexplained. Of course, the obligation to disclose documents relates to all documents that are or have been in the possession or control of a party and relevant to an issue in the proceeding, whether or not they are documents or copies of documents thought to be in the possession of the other party.

29. The blue hard drive was accessed by the wife’s previous solicitors and by the wife, at least to some extent. There are said to be 60,000 documents on the blue hard drive. To meet her disclosure obligations the wife was required to disclose all documents assessed to be relevant to the proceedings, and, importantly in this case, identifying any documents that may be subject to a claim for legal professional privilege by the respondents. A party does not meet their disclosure obligations by in effect, dumping, a large number of documents on another party and leaving it up to them to snorkel through them.

30. On 11 July 2023, the wife’s counsel informed the registrar that the wife had complied with her duty of disclosure, and on 23 July 2023, the wife filed an undertaking as to disclosure, which will be noted includes a statement that the wife has read the relevant parts of the Rules that require her to disclose each document that is or has been in her possession and relevant to an issue in the proceedings. The wife’s undertaking to the Court, that she had complied with her disclosure obligations, was patently wrong.

31. Counsel for the wife argued that the 8^th respondent had also failed to disclose a number of documents before exhibiting them to the affidavit filed by Mr J. While that is conceded on behalf of the 8^th respondent, and is to be condemned, there is no suggestion that the recalcitrance by the 8^th respondent reached anywhere near that of the wife’s. Mr J’s undertaking as to disclosure was also filed after and not before he had disclosed the documents about which complaint is now made on behalf of the wife.  Further, counsel for the wife argued that the reference in Mr J’s affidavit to emails from 2010 tends to suggest that he had access to old emails, the suggestion being that Mr J may have been able to access the very emails about which he now claims prejudice him. It is impossible to know and in any event that does not relieve the wife of her obligation to disclose all documents in her possession that are relevant to an issue in the proceedings. These matters are submitted by counsel for the wife to inform the exercise of discretion, and I accept that they are factors to be taken into account.

32. Turning then to consider any prejudice to the 8^th respondent. The sheer volume of the late disclosure demonstrates very clearly, in my view, the very considerable prejudice to the 8^th respondent. It has taken the wife’s legal team several days to review only 17,000 of the documents. The 8^th respondent is entitled to a fair trial. What the 8^th respondent has been subjected to so far is trial by ambush.

33. Then there are the 8^th respondent’s legal fees and disbursements, which for just the week passed are over $100,000. Its legal fees to date are over $500,000. If the matter were adjourned, (although this is not sought by the 8^th respondent while acknowledging it is an option available to the Court) the affidavit relied upon by the 8^th respondent would need to be reviewed with the benefit of the wife’s proper disclosure and that will incur yet further costs, as will the resumption of the trial.

34. Even if the wife were refused permission to rely upon the undisclosed documents that she says assist her case, that does not overcome the prejudice to the 8^th respondent, because it is simply an unknown at this stage whether the balance of the undisclosed documents would help or harm the 8^th respondent’s case. The 8^th respondent was entitled to review all relevant documents in the wife’s possession prior to an affidavit by Mr J being filed. The 8^th respondent was entitled to receive advice on any document that may have harmed or assisted its case.

35. The wife’s case against the 8^th respondent alleges, among other things, that the ownership of its business and assets by other than the husband is a sham. Mr J’s credit would be an important factor in any assessment of the wife’s claim. While counsel for the wife submits that the wife’s attack on Mr J’s credit relates to his witness affidavit in the claim against the other respondents, any adverse credit finding against Mr J would have to have an impact on the claim made by the wife against the 8^th respondent.

1. It might be thought that the most just outcome would be an adjournment to enable the 8^th respondent to review all relevant documents and for the wife to pay the costs thrown away. Unfortunately, the wife is impecunious and her capacity to meet the existing costs order made in favour of the 8^th respondent is already dependent upon her succeeding in her claim against the 8^th respondent and/or against the 2^nd to 7^th respondents and it is very difficult to assess the likelihood of success of those claims at this stage. The credibility of the parties will be an important factor in determining the outcome.

2. Counsel for the 8^th respondent submits the wife’s claim against the 8^th respondent was “ambitious” and also “weak and unmeritorious”. Counsel for the wife submits that the merits of the wife’s case are not a factor that should inform the exercise of discretion. While I disagree with that submission, I consider the more important point to be that it could not be said that the wife’s case has no prospects of success.

3. Another factor I take into account is the impact on the Court and other litigants.[5] The listing of this matter for trial for ten days occurred in March 2023. Litigants are entitled to expect that the Court will adopt fair and efficient court management practices.

   [5] Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 at 217, [114].

4. To dismiss the wife’s claim against the 8^th respondent is an option of last resort but, in the end, I place some significance on the fact that an order dismissing the wife’s claim against the 8^th respondent would not bring an end to the wife’s claims absolutely. The wife has remaining claims against other respondents.     

   DISPOSITION

5. I have come to the conclusion, for the reasons discussed, that the 8^th respondent’s application to dismiss the wife’s claims against it should succeed. The order will be that the relief sought against the 8^th respondent in her initiating application (as amended) filed 31 March 2023 be dismissed.

I certify that the preceding seventy-eight (78) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Carew.

Associate:

Dated: 31 July 2023

SCHEDULE OF PARTIES

BRC 10651 of 2021
Respondents
Fourth Respondent:	MS GLYNN
Fifth Respondent:	D GROUP HOLDINGS FAMILY PTY LTD ATF THE D GROUP HOLDINGS DISCRETIONARY TRUST
Sixth Respondent:	REMOVED
Seventh Respondent:	R PTY LTD
Eighth Respondent:	G PTY LTD