FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
FIRST INSTANCE
Venter & Venter (No 6) [2024] FedCFamC1F 94
File number: BRC 10651 of 2021 Judgment of: CAREW J Date of judgment: 28 February 2024 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Application by the husband to restrain the wife from engaging or instructing her current and previous solicitors and counsel – Where there are deficiencies in compliance with the duty of disclosure by the wife and husband, but where the wife’s failures have been more monumental – Where the solicitors and counsel for the wife have or likely have reviewed material subject to the husband and/or other respondent’s legal professional privilege – Where there is a very real prospect that the wife obtained some forensic advantage from accessing privileged material – Court orders that the wife is restrained from engaging or instructing further her current and previous solicitors and counsel – Court orders that the wife destroy all copies of the privileged documents and be restrained from disseminating or using information derived therefrom.
FAMILY LAW – PRACTICE AND PROCEDURE – Application for summary dismissal of claims against the other respondents or, in the alternative, supporting the husband’s application for restraint of the wife’s current and previous solicitors and counsel – Where dismissing the wife’s case without a hearing on the merits must be an option of last resort – Where summary dismissal would effectively bring an end to proceedings in circumstances where the husband is impecunious – Application for summary dismissal is dismissed.
FAMILY LAW – PRACTICE AND PROCEDURE – Referral to the Australian Securities and Investment Commission – Where the referral is temporarily stayed.
Legislation: Evidence Act 1995 (Cth) s 125
Family Law Act 1975 (Cth) s 45A
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 6.01, 6.03, 6.04, 6.06, 6.09, 6.17, 10.09
Cases cited: Bahonko v Nurses Board of Victoria (No 3) [2007] FCA 491
Balabel v Air India [1988] Ch 317
Barnes and Another v Commissioner of Taxation (Cth) (2007) 242 ALR 601
Charisteas & Charisteas (2022) FLC 94-109
Commissioner of Taxation v PricewaterhouseCoopers [2022] FCA 278
Crittenden and Collins [2017] FamCA 716
Dyer v Chrysanthou (No 2) (Injunction) [2021] FCA 641
Equititrust v Equititrust (No 3) (2016) 341 ALR 301
Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49
Grant v Downs (1976) 135 CLR 674
Kadlunga Proprietors and Others v Electricity Trust of South Australia and Others (1985) 39 SASR 410
Kallinicos v Hunt (2005) 64 NSWLR 561
Kennedy v Wallace (2004) 142 FCR 185
Kenquist Nominees Pty Ltd v Campbell (No 5) [2018] FCA 853
Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (1994) 126 ALR 58
Li v Jin Lian Group Pty Ltd [2018] NSWSC 479
Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357
Malpass & Mayson (2000) FLC 93–061
Myers v Elman [1940] AC 282
Naczek v Dowler [2011] FamCAFC 179
Porter v Dyer (2022) 402 ALR 659
Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357
Sellers v Burns (2019) 59 FamLR 593
Swabb v Commissioner of NSWPolice [2005] NSWSC 901
Venter & Venter (No 5) [2023] FedCFam1F 635
Volker and Anor & Dunwell and Anor [2013] FamCAFC 169
Number of paragraphs: 198 Date of hearing: 15 December 2023 Place: Brisbane Counsel for the applicant: Mr O KC Solicitor for the applicant: GG 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) 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:
28 FEBRUARY 2024
THE COURT ORDERS THAT:
1.The application by the second, third, fifth and seventh respondents for summary dismissal of the claims against them is dismissed.
2.Ms Venter (“the wife”) is restrained from further engaging or instructing any of the following legal firms or legal practitioners in respect of the proceedings the subject of matter number BRC10651/2021:
(a)GG Lawyers;
(b)MM Lawyers;
(c)Each of the following barristers:
(i)Mr E;
(ii)Mr O;
(iii)Mr P;
(iv)Ms OO;
(v)Mr WW; and
(vi)Ms XX.
3.The wife is restrained from:
(a)Discussing or communicating to any other person the contents of:
(i)Any of the recordings identified at sub-paras 46(b) ‘[…]’ and 46(d) ‘[…]’ of the affidavit of Ms AL filed 27 July 2023 (“the recordings”);
(ii)The email chain identified in paragraph 23 of the affidavit of Ms AL filed 27 July 2023 and described as:
A.‘[Mr UU] of [VV Lawyers] to Husband, Second Respondent, [Mr J] and [Mr HH] dated 14 December 2012’;
B.‘The Husband to [Mr UU] of [VV Lawyers], Second Respondent and [Mr J] dated 21 December 2012’; and
C.‘[Mr UU] of [VV Lawyers] to the Husband, the Second Respondent and [Mr J] on 23 December 2012’;
(“the email chain”)
(iii)The additional emails identified in annexure “A” to the affidavit of Ms AL filed 27 July 2023 numbered 5, 57, 63, 68, 97, 103, 130 (already referred to in (ii) above) and 131 (“additional emails”);
(b)Making any use for the purpose of these proceedings of any information derived from the recordings or the email chain or the additional emails; and
(c)To the extent not already destroyed by the wife and her agents by or at the direction of the wife, the wife shall forthwith destroy all hard copies and electronic copies of the recordings and the email chain and additional emails within her possession or control and direct any of her agents or legal representatives (including previous legal representatives) to also do so and confirm in writing to the lawyers for all other parties when the same has been done.
4.The matter is listed for a further case management hearing before the Honourable Justice Carew on 28 March 2024 at 10.00am (Brisbane time) and all parties have leave to appear via Microsoft Teams.
5.The Principal Registrar of the Federal Circuit and Family Court of Australia (Division 1) is directed to forthwith provide the following documents to the appropriate officer of the Australian Securities and Investment Commission:
(a)The Statement of Agreed Facts in the matter heard by the Federal Court of Australia in Australian Securities and Investment Commission v V Pty Ltd [2015] FCA 648;
(b)The agreement dated 23 September 2010 between Mr HH, Mr B Venter, V Pty Ltd and F Company;
(c)The agreement dated 6 March 2013 between V Pty Ltd and F Company, Mr HH, Mr B Venter, Mr J, Mr Venter, YY Pty Ltd (in its own right and as trustee for Superannuation Fund 1) and ZZ Inc;
(d)The recording made on 6 March 2013 of a conversation between Mr Venter, Mr B Venter, Mr HH and Mr J;
(e)The agreement dated 16 April 2013 between Mr AB and Ms Venter in her capacity as the sole director of EE Pty Ltd as trustee for the EE Family Trust;
(f)The share transfer form signed by Mr AB dated “2013”;
(g)The emails between Mr J and Mr Venter dated 27 April 2013;
(h)The email from Mr J to Mr Venter dated 29 November 2013;
(i)The emails between Mr J and Mr Venter including attachments dated 20 May 2014;
(j)Paragraphs 33, 40, 43, 99.5.4 of the husband’s trial affidavit filed 20 June 2023.
6.The Principal Registrar of the Federal Circuit and Family Court of Australia (Division 1) is further directed to give notice of paragraph 5 of this Order to the following persons:
(a)Mr J by posting a copy of this Order (with all paragraphs save for paragraphs 5 and 6 redacted) to him at his address at AC Street, Town AD, Qld;
(b)Mr AB by posting a copy of this Order (with all paragraphs save for paragraphs 5 and 6 redacted) to him at his address at AE Street, Suburb AF, Qld; and
(c)F Company by posting a copy of this Order (with all paragraphs save for paragraphs 5 and 6 redacted) to the proper officer at its registered address at AH Property, Suburb AJ. Qld.
7.The operation of paragraphs 5 and 6 herein are stayed for seven days.
8.The first, second, third, fifth and/or seventh respondents have liberty to apply upon the giving of 48 hours written notice to each other party to request that the matter be listed before the Honourable Justice Carew as a matter of urgency.
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).
REASONS FOR JUDGMENT
CAREW J:
This is a long running financial dispute involving the Venter family and entities associated with them. The substantive proceedings for property settlement were commenced by Ms Venter (“the wife”) on 11 August 2021. The remaining respondents to the wife’s application are Mr Venter (“the husband”), the parties’ three adult children, Mr B Venter (the second respondent), Mr C Venter (the third respondent), and Ms Glynn (the fourth respondent, although Ms Glynn has taken no part in the proceedings), D Group Holdings Family Pty Ltd as trustee for the D Group Holdings Discretionary Trust (“the trust”), and R Pty Ltd. The respondents, other than the husband, will be referred to collectively in these reasons as “the other respondents”.
The resolution of a significant number of the issues in dispute, which was set down for hearing over ten days in July 2023, was thwarted by the disclosure of more than 96,000 documents by the wife effectively on the eve of the trial. It is my understanding that several thousand of the documents were ultimately contended to be relevant to the proceedings. It is contended by the husband and the other respondents that some of the documents accessed by the wife and/or her solicitors and/or her barristers are protected by legal professional privilege.
The matter returns to Court for determination of two applications.
The husband’s application seeks, among other things, to restrain the wife’s previous and current solicitors and barristers from acting for the wife in respect of these proceedings.[1]
[1] The precise terms of the order sought by the husband are set out in his application in a proceeding filed 2 August 2023 (although the document was lodged on 1 August 2023 it was not sealed and therefore not filed until 2 August 2023).
The other respondents seek, among other things, to have the claims against them dismissed or, in the alternative, to restrain the wife from further engaging or instructing her previous or current solicitors and barristers in respect of these proceedings.[2]
[2] The precise terms of the order sought by the other respondents are set out in their application in a proceeding filed 1 August 2023.
For the reasons which follow, injunctions will issue against the wife including restraining her from further engaging or instructing her previous and current solicitors and barristers in respect of these proceedings. The application to summarily dismiss the wife’s claims against the other respondents will be dismissed. Due to the possible commission of breaches/offences of the National Credit Code,[3] and/or the Corporations Act 2001 (Cth) there will be a referral of certain documents to the Australian Securities and Investment Commission (“ASIC”).
[3] National Consumer Credit Protection Act 2009 (Cth) Schedule 1.
Before embarking on a consideration of the applications, it will be helpful to first set out some background.
BACKGROUND
The wife and husband were married in 1985, separated in 2017, and divorced in 2020. The wife and husband have three adult children. Relevantly, Mr B Venter, the second respondent, is 35 years of age and Mr C Venter, the third respondent, is 33 years of age. As already mentioned, Ms Glynn has taken no part in the proceedings to date.
The family are originally from Country M but moved to Australia, via Country N, in 2001.
In about 2007, the husband set up a business which involved lending small sums of money to people short of cash between pay days. The family were in dire straits at the time. The wife was unwell. The husband was working full time for a company on a wage of $700 per week. Mr B Venter had to leave university, where he was only halfway through a degree, because the family could not afford the university fees. Mr C Venter was a talented sportsman and received a scholarship to continue at his private school. Ms Glynn had to leave her private school. All three children contributed what they could to the family finances from part-time jobs.
A family friend, Mr HH, initially provided some modest capital for the business, about $30,000. F Company was incorporated and Mr B Venter was the sole director, secretary, and shareholder. Neither the husband nor the wife could hold a credit licence or hold the position of a director in a company as they had both been bankrupt and indeed, the wife was not discharged from bankruptcy until 2010. The business traded as V Company and involved the sourcing of borrowers to whom F Company would lend money. Initially it was a very small family affair operating from the former matrimonial home.
In early 2010, the V Company business commenced to operate via V Pty Ltd, a company already in existence by another name and owned by Mr HH. Mr B Venter was appointed sole director and joined the business full time. Mr HH took over as director of V Pty Ltd until 2012, when another family friend, Mr J was appointed sole director until 2019. V Pty Ltd was deregistered in 2019.
The business operation came to the attention of the regulatory authorities, namely, the Australian Consumer and Media Authority (“ACMA”) and ASIC in about 2010 and was the subject of several investigations into potential breaches of the National Credit Code and the Spam Act 2003 (Cth). Consequently, there have been several proceedings in the Federal Court of Australia over several years.
It is common ground that the husband, at least, knew by about 2009 or 2010 that the lender of the funds (F Company) had to be at arms-length from the facilitator of the loans (V Pty Ltd), or as explained by the husband in his affidavit filed 2 November 2023 – “it was necessary that there be a strict legal separation between the entity that performed the role of lender ([F Company]) and the entity that performed the role of an associate or agent for the consumer ([V Pty Ltd])”.
In late 2010, Mr HH, Mr B Venter, V Pty Ltd and F Company signed a Deed of Agreement (“the 2010 agreement”) in which they agreed (contrary to the ASIC register recording that Mr HH beneficially held 100% of the shares in V Pty Ltd and Mr B Venter beneficially held 100% of the shares in F Company), that Mr HH would hold 50% of his shareholding in V Pty Ltd on trust for Mr B Venter and Mr B Venter would hold 50% of his shareholding in F Company on trust for Mr HH. The wife obtained a copy of this deed in 2023 from Mr HH’s daughter after Mr HH’s death.
By early 2013, the husband “understood from discussions with [Mr J], [Mr HH] and [Mr B Venter] … that there was a very real possibility that [V Pty Ltd] could incur a fine of several million dollars depending on the outcome of the ACMA investigation”.
A written agreement dated March 2013 between V Pty Ltd, F Company, Mr HH, Mr B Venter, Mr J, the husband, YY Pty Ltd (in its own right and as trustee for Superannuation Fund 1) and ZZ Inc (Mr HH’s company) (“the 2013 agreement”) recorded the following:
(a)Confirmed that the husband was retained as a consultant for V Pty Ltd;
(b)Confirmed that Mr HH held 50% of his shares in V Pty Ltd on trust for Mr B Venter and Mr B Venter held 50% of his shares in F Company for Mr HH as per the 2010 agreement;
(c)Mr B Venter agreed to sell to the husband or his nominee 50 of his shares (half the issued shares) in F Company so that the husband or his nominee would become the sole legal and beneficial owner of those shares;
(d)Mr HH and Mr B Venter would each sell their one share in V Pty Ltd to Mr AB for $20,000 per share so that Mr AB would become the legal and beneficial owner of all shares in V Pty Ltd following their sale to him;
(e)Mr B Venter would remain the sole director and secretary of F Company; and
(f)Mr J would remain the sole director and secretary of V Pty Ltd.
The husband contends in his affidavit filed 20 June 2023:
30. … [Mr B Venter] and [Mr HH] sold 100% of the shareholding in [V Pty Ltd] to [Mr AB] in 2013, as stated at clause 5 of “[MV-1]”. [Mr J] became the director of [V Pty Ltd]. When [Mr C Venter] came into the [V Pty Ltd] office in 2014 when his [sporting] career finished, that company was fully owned by [Mr AB] and he was the sole shareholder.
The content of a recording made in March 2013 of a meeting between the husband, Mr B Venter, Mr J, and Mr HH, which the husband disclosed for the first time on the eve of trial, casts doubt about the true nature of Mr AB’s interest. The recording provides the following information:
(a)Given the risk posed by the regulatory authorities to the business model, it was necessary to find someone who could hold the V Pty Ltd shares;
(b)The husband knew that he could not legally hold the shares in V Pty Ltd and F Company and that they needed to ensure that it was not “one of us” who owned the shares;
(c)Mr AB was “simply a name or nominee”, “like a placeholder”, “nothing”, “a name on a document”; and
(d)The husband did not want anyone outside the conversation to know about the plan.
In March 2013, the husband caused EE Pty Ltd to be incorporated to act as trustee of a new trust, namely, the EE Family Trust. The husband was the appointor of the trust. The wife was the sole director, secretary, and shareholder of EE Pty Ltd. The trust became a 50% shareholder in F Company.
Additionally, a written agreement dated April 2013 (“the side agreement”) was signed by the wife, in her capacity as the sole director of EE Pty Ltd as trustee for the EE Family Trust, and Mr AB. Their signatures were purportedly witnessed by the husband and Mr J. The agreement records the following:
…
In a restructure of companies owned by [Mr B Venter] and [Mr HH], [Mr HH] decided to sell his shares of the company [V Pty Ltd].
The issues related to [V Pty Ltd] as well as the regulatory environment presented obstacles for the sale.
[EE Family Trust] decided to purchase all the shares of [V Pty Ltd] from [Mr HH] for the total price of $40,000.00 (Forty thousand dollars).
[EE Family Trust] purchased the shares through a third party, [Mr AB].
Although the shares are indicated as beneficially held by [Mr AB] as per ASIC records, it is hereby acknowledged and confirmed by the parties that the shares are owned solely by [EE Family Trust] and are held by [Mr AB] on a non - beneficial basis.
Thus, notwithstanding the official records of ASIC, the shares are held non - beneficially by [Mr AB] on behalf of [EE Family Trust] as from the date of share transfer, […] 2013.
Immediately upon request, [Mr AB] will relinquish and transfer the shares to the rightful owner without reservation of any kind.
…
The side agreement presents a very different picture about the ownership of V Pty Ltd i.e. that the shares were not beneficially owned by Mr AB but rather on trust for the EE Family Trust being a trust established by the husband and which he controlled as the appointor.
The side agreement was disclosed by the wife for the first time on an evening in August 2023, after the husband had filed an application in a proceeding seeking to restrain the wife’s lawyers from continuing to act for her.
It seems that a share transfer form was also disclosed by the wife at the same time as the side agreement. The share transfer form is purportedly signed by Mr AB reflecting the transfer of his two shares (i.e. 100% of the shares) in V Pty Ltd for $2.00. The document is undated save for the year, 2013, and there is no name inserted as transferee.
In the husband’s affidavit filed 2 November 2023, the husband says the following about the side agreement:
(a)He prepared the side agreement but had forgotten it existed until receiving a copy of it from the wife in August 2023;
(b)He did not have the original or any copies of the document;
(c)He did not intend it to be a legally binding document and did not believe the signatories to the document intended it to be a legally binding document;
(d)He had discussed the purpose of the side agreement with the wife and she said she “trust[ed] his judgment”;
(e)He became concerned that a potential purchaser of the business operated by F Company and V Pty Ltd may have questions in relation to the separate ownership of V Pty Ltd, whereby a sale had occurred just a short while before, compared with F Company, which although sold, was sold to a trust of Mr HH and the EE Family Trust;
(f)If a potential purchaser wanted to meet Mr AB, the husband was concerned he would not make a very good impression because he sounds “rough and uneducated” and would not inspire confidence;
(g)If something happened to Mr AB or he was away at the time of a sale, it could compromise the sale;
(h)“[T]here may be a need for some credibility regarding our authority to conduct negotiations and sell the businesses”;
(e)He did not seek legal advice or any assistance in the preparation of the document;
(f)He does not recall when it was signed but believes it would have been signed within a week of it being scanned and emailed to him by Mr J in May 2014;
(g)He believes he (the husband) backdated the agreement to early 2013 (I note that under Mr AB’s signature is the date “[…] 2013” and under the wife’s signature is the date “[…] 2013” and that the wife confirms the legitimacy of her signature and that the date under her signature is in her handwriting); and
(i)Mr J signed the document as a witness (although there is no suggestion Mr J was present when Mr AB or the wife signed the document).
The husband says the following about the share transfer form:
(a)He prepared the share transfer;
(b)He thought it could be used when a sale occurred, if for some reason Mr AB was unable to be present or complete the form;
(c)Mr AB signed the share transfer form, “the entire rest of which was left blank” (which is not accurate as it includes a sale price of $2.00 in circumstances where Mr AB purportedly paid $40,000 for his shares and it includes the year “2013”); and
(d)The form was never used or sent or shown to any other person.
In an email exchange between the husband and Mr J in April 2013, the husband told Mr J that the ASIC register was wrong because it still showed Mr HH as the owner of the shares in V Pty Ltd rather than Mr AB “as nominee”. Mr J replied that one of “[Mr UU’s] girls is changing it for us but we needed the company key … All the information needed has been sent now so it should be changed early next week if it hasn’t already been done”. The reference to “[Mr UU]” is a reference to Mr UU, a solicitor with VV Lawyers.
The husband contends that the reference to Mr AB “as nominee” was only to indicate that the vehicle by which Mr AB was to own the shares may not be him personally, but an entity owned by him and not that Mr AB was holding his shares on trust for anyone else.
In November 2013, Mr J emailed the husband. The subject heading is:
Do you want me to have [Mr UU] put an amendment through Re [Mr AB’s] beneficial holding of the [V Company Shares]
The husband does not recall receiving this email or whether he responded to it. Further, he says that no instructions were given by him “to amend the ASIC records, which accurately reflected that [Mr AB] was the sole registered and beneficial shareholder in respect of the shares issued in [V Pty Ltd in] or after [late] 2013”. Mr J’s affidavit filed 23 October 2023 does not refer to his email to the husband in November 2013. It is unclear whether it was provided to him to refresh his memory.
By 2015, all three children were very much involved in the business, and it is not in contention that the business is a now multi-million-dollar operation.
Mr C Venter contends that in 2015 he was granted an option to purchase the V Pty Ltd business from Mr AB who ostensibly acquired 100% of the shares in 2013 for $40,000. Mr C Venter contends that he assigned the option to D Group Holdings Pty Ltd which exercised the option to purchase the V Pty Ltd business in mid-2016 for $1,677,555. D Group Holdings Pty Ltd is a wholly owned subsidiary of the trust, as is R Pty Ltd (Mr C Venter is the sole director of R Pty Ltd).
The trust was established in 2016 and Mr C Venter is the sole director of the trustee, D Group Holdings Family Pty Ltd and Mr B Venter, Mr C Venter and Ms Glynn are the shareholders. Mr B Venter, Mr C Venter and Ms Glynn are also eligible beneficiaries of the trust. The husband and wife are no longer eligible beneficiaries of the trust although the wife is seeking to set aside certain instruments which would reinstate the husband as the appointor of the trust and the husband and wife as eligible beneficiaries. The husband and wife were removed as potential beneficiaries on or about early 2017. The husband was removed as appointor on or about mid-2020.
The husband and the other respondents contend that the appointment of the husband as appointor of the trust was an error and that it was always the intention that the control of the trust would rest with the three adult children and that they would be the beneficiaries to the exclusion of the husband and wife.
The corporate operation is now operated through R Pty Ltd which took over from V Pty Ltd, and G Pty Ltd (a company owned by Mr J which was released as the eighth respondent in the proceedings in July 2023) which took over from F Company.
The wife contends that the husband and wife or either of them are the true owners of the assets of the trust. The wife further contends that the home in which she is living at H Street is not owned by the children but by S Pty Ltd or the husband. The husband is the sole director and shareholder of S Pty Ltd. Among other things, the wife relies on recordings she surreptitiously made of conversations with various members of the family which she contends support her contention about the true ownership of assets. Whether they do or not may depend upon credit findings after the participating persons are cross-examined.
The wife is seeking an equal division of the assets of the trust between her and the husband and a transfer to her of the home in which she lives at H Street.
The husband and the other respondents resist the relief sought by the wife, rejecting her contentions about the ownership of the assets.
If the husband and the other respondents are successful in their contentions, the wife may receive nothing by way of property settlement.
There are certainly concerning features about the evidence as it currently stands, and the parties were given the opportunity to make submissions about whether a referral to appropriate authorities is justified at this stage of the proceedings. The purpose of any such referral would be for the appropriate authorities to consider whether any investigation should be conducted of potential breaches of Commonwealth legislation. The wife supports such a referral. The husband submits that any consideration of referral is premature. The other respondents submit there is presently no basis for Mr B Venter or Mr C Venter to be the subject of any referral, in circumstances where they are neither parties nor witnesses to the 2013 agreement.
The wife has incurred legal fees to date of $2,717,183 of which $672,379 remains owing to her previous solicitors and counsel, and $1,949,885 remains owning to her current solicitors and counsel. The husband has paid legal fees to date of $1,362,000 sourced substantially from Mr C Venter. The other respondents have paid legal fees to date of $2,432,182.
Before turning to consider the applications before me, I consider it important, and ultimately relevant to the applications for my determination, to make some observations about what has become a very vexed issue in this case, namely, the obligations of parties to proceedings to make disclosure.
THE DUTY OF DISCLOSURE
Although the basis for the application that the wife’s lawyers be restrained from acting arises substantially because of their review of material subject to alleged legal professional privilege, the shambolic process of disclosure engaged in by the wife is submitted by the husband and the other respondents to be relevant to their applications. Accordingly, it is worth reviewing the obligations of parties and their lawyers in carrying out the process of disclosure, or discovery as it used to be called.
Historically, it was a requirement for each party to litigation in this Court to file an affidavit of documents in which all documents in the possession or control of a party that were relevant to an issue in the proceedings were listed including those no longer in that person’s possession and control and documents over which a claim for legal professional privilege was made.
The requirement to file or exchange an affidavit or list of documents faded away as the costs associated therewith at times became prohibitive particularly when insufficient attention was given to identifying documents that were relevant to an issue in the proceedings.
However, despite parties no longer being required, unless requested, to provide a list of documents, onerous obligations remain on parties to give full and frank disclosure of all information relevant to the proceedings in a timely manner (r 6.01 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”)).
The duty of disclosure applies to each document that is or has been in the possession or under the control of the party disclosing the document and relevant to an issue in the proceedings (r 6.03). Documents disclosed can only be used for the purposes of the proceedings (r 6.04). In addition to the general duty of disclosure, in financial proceedings a party who is a party to the marriage or de facto relationship to which the application relates must make full and frank disclosure of their financial circumstances, although a party who is not a party to the marriage or de facto relationship is relieved of the obligation to disclose their own financial circumstances except to the extent that the party’s financial circumstances are relevant to the issues in dispute (r 6.06).
A party may request another party to provide a list of documents to which the duty of disclosure applies and in that circumstance the party must provide a list of documents identifying:
(a)The documents to which the duty of disclosure applies;
(b)The documents, if any, no longer in the party’s possession or control to which the duty would otherwise apply and a brief statement about when the documents ceased to be in the party's possession or control; and
(c)The documents, if any, for which privilege from production is claimed (r 6.09).
If making a claim that a relevant document is exempt from disclosure because it is protected by legal professional privilege, “it is necessary and desirable that the description of a particular document for which protection is claimed should be sufficient to disclose quite readily (without disclosing its contents) whether or not it is in fact a document to which the head of privilege relied upon can extend”.[4] While a sufficient description will vary from case to case, the date on which a document was created may be very relevant to the claim.[5]
[4] Kadlunga Proprietors and Others v Electricity Trust of South Australia and Others (1985) 39 SASR 410 at 414 (“Kadlunga”); Barnes and Another v Commissioner of Taxation (Cth) (2007) 242 ALR 601 at 604 - 605.
[5] Kadlunga (fn 4) at 415, 416.
In undertaking the process of disclosure, it is worth emphasising that solicitors have duties to the Court and to their clients to ensure that their clients understand their obligations and that the process of disclosure is undertaken in a way that meets the requirements of disclosure. In Myers v Elman,[6] the duty of solicitors was discussed in the context of an order for discovery, but the observations are equally applicable more generally to the duty of disclosure:
… as a client cannot be expected to realize the whole scope of that obligation without the aid and advice of his solicitor, the latter has a peculiar duty as an officer of the Court carefully to investigate the position, and, as far as possible, see that the order is complied with. The solicitor cannot simply allow the client to make whatever affidavit of document he thinks fit, nor can he escape the responsibility of careful investigation or supervision. If the client will not give him the information which he is entitled to require, or if the client insists on swearing an affidavit which the solicitor knows to be imperfect, the solicitor's duty is to withdraw from the case. A solicitor who has innocently put upon the file an affidavit by his client which he subsequently discovers to be false, owes a duty to the Court to put the matter right at the earliest moment if he continues to act as solicitor on the record.
[6] [1940] AC 282 at 282.
Obviously, the duty of the solicitor is not fulfilled by literally dumping thousands of documents on another party without any attempt to identify what is relevant and without any attempt to identify the owner of the documents. Quite apart from the duties owed to the Court and to the other parties, there may be documents provided by the client over which they have a right to claim privilege or there may be a previously unknown document that has the potential to be of great assistance to one party. In this case, the wife or her solicitors located the side agreement only after the trial had started in July 2023 and only after an initial assurance that the wife only intended to rely upon documents already identified in her trial material (which did not include the side agreement). The wife considers the side agreement to be of significance to her case. While the process of disclosure can be a time consuming and costly process it cannot be shirked. It is fundamental to the operation of our justice system.
In ex tempore reasons delivered on 31 July 2023,[7] I set out in detail the chronology relevant to the wife’s late disclosure at [10]-[54] and those paragraphs should be read in conjunction with these reasons.
[7] Venter & Venter (No 5) [2023] FedCFam1F 635 (“Venter”).
In short, the wife located several hard drives in 2020 in the former matrimonial home which she gave to her former solicitors, MM Lawyers. A Mr AK, solicitor, had carriage of the matter for the wife at MM Lawyers. At least some of the hard drives were accessed by the wife, MM Lawyers, and at least some counsel retained on her behalf. Some of the documents were given descriptors by MM Lawyers identifying that certain documents would be of assistance to the wife’s case.
GG Lawyers commenced to act for the wife in March 2023 with the file transfer from MM Lawyers occurring on or about 15 March 2023.
Astonishingly, it was not until 14 July 2023 when the husband and the other respondents were informed, for the first time, about the existence of the hard drives.
The first ten days of the trial were due to commence on 24 July 2023.
Additional documents contained in a suitcase and a black plastic tub were disclosed by the wife for the first time on 27 July 2023 and not physically provided to the husband and other respondents until 31 July 2023.
The process by which these deficiencies have sought to be addressed has been somewhat tortuous.
SHOULD THE WIFE’S LAWYERS BE RESTRAINED FROM ACTING?
Specific contentions by the husband and other respondents
Turning then to the specific contentions of the husband and the other respondents that the wife’s lawyers should be prevented from acting for the wife, particularly having regard to their access to privileged material.
Applicable principles
It is not in contention that “legal professional privilege is a rule of substantive law which may be availed of by a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings”.[8] The rationale for that protection is to enable a person to seek legal advice without the apprehension of those communications being disclosed at a later date.[9] It is also not in contention that the protection extends to an agent of the client,[10] although there is a dispute about whether the husband was acting as an agent at relevant times.
[8] Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at 552, [9].
[10] Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357.
Nor is it in contention that this Court has the power to prevent a lawyer from acting or continuing to act for a party, although the test submitted by all parties to be applicable was whether a fair-minded, reasonably informed member of the public might conclude that the proper administration of justice requires that the wife’s lawyers be prevented from acting in the interests of the protection of the integrity of the judicial process and the appearance of justice. Reliance was placed on Charisteas & Charisteas (“Charisteas”)[11] where the Full Court said:
[11] (2022) FLC 94-109.
37.The correct test that should have been applied by the primary judge, in determining whether a legal practitioner should be restrained from acting on behalf of a party, is that which is adumbrated by the Full Court of the Federal Court of Australia (Besanko, Lee and Abraham JJ) in Porter v Dyer who applied, with approval, the following statement of principle by Griffiths J in Mumbin v Northern Territory of Australia (No 1):
39.The relevant principles which guide the exercise of the Court’s separate discretion are broadly as follows:
(a)The Court has an inherent jurisdiction to ensure the due administration of justice, to protect the integrity of the judicial process and to restrain legal practitioners from acting in a particular case as part of its supervisory jurisdiction (see, for example, Grimwade v Meagher per Mandie J and Dealer Support Services Pty Ltd v Motor Trades Association of Australia Ltd per Beach J).
(b) The test to be applied is whether a fair-minded, reasonably informed member of the public might conclude that the proper administration of justice requires that a solicitor be prevented from acting in the interests of the protection of the integrity of the judicial process and the appearance of justice (I prefer this formulation of the principle, as opposed to the use of the term “would”: see Timbercorp at [62] per Anderson J and the cases cited therein, as opposed to the different formulation adopted by Beach J in Dealer Support Services at [94], upon which the Jawoyn Claim applicant relied, but I would regard even that higher standard to have been met in the circumstances here).
(emphasis added in Full Court judgment) (citations omitted)
It would seem with respect to their Honours, that they misapprehended the test adopted by the Full Court of the Federal Court of Australia in Porter v Dyer.[12]
[12] (2022) 402 ALR 659 (“Porter v Dyer”).
In Porter v Dyer, Lee J (with whom Besanko and Abraham JJ agreed) said:
113. The primary judge correctly identified the relevant principles. They have been comprehensively summarised by Brereton J in Kallinicos v Hunt and Griffiths J in Mumbin v Northern Territory of Australia (No 1) . Justice Griffiths’ summary was as follows:
The relevant principles which guide the exercise of the Court’s separate discretion are broadly as follows:
(a)The Court has an inherent jurisdiction to ensure the due administration of justice, to protect the integrity of the judicial process and to restrain legal practitioners from acting in a particular case as part of its supervisory jurisdiction (see, for example, Grimwade v Meagher per Mandie J and Dealer Support Services Pty Ltd v Motor Trades Association of Australia Ltd per Beach J).
(b)The test to be applied is whether a fair-minded, reasonably informed member of the public might conclude that the proper administration of justice requires that a solicitor be prevented from acting in the interests of the protection of the integrity of the judicial process and the appearance of justice (I prefer this formulation of the principle, as opposed to the use of the term “would”: see Timbercorp at [62] per Anderson J and the cases cited therein, as opposed to the different formulation adopted by Beach J in Dealer Support Services at [94], upon which the Jawoyn Claim applicant relied, but I would regard even that higher standard to have been met in the circumstances here).
(c)Due weight must be given to the public interest in a client not being deprived of the legal practitioner of its choice, however, this important value can be over-ridden in an appropriate case (Dealer Support Services).
(d)This basis for disqualification is not discharged by it simply being demonstrated that there is no risk of the misuse of confidential information (Dealer Support Services).
(e)This basis for disqualification is an “exceptional one” and is “to be exercised with appropriate caution” (Geelong School Supplies Pty Ltd v Dean).
(f)A legal practitioner may be restrained from acting in a matter not only where the practitioner has a conflict of interest viz a viz a former client, but also viz a viz a person who is “as good as” a client (Macquarie Bank Ltd v Myer).
(Emphasis in original).
114. The primary judge also correctly identified that there was a difference between the expression of the test by Brereton J as being whether the hypothetical referee would conclude that the proper administration of justice required that lawyer be prevented from acting, and the above formulation of the test by Griffiths J as whether the referee might so conclude. The primary judge observed that the latter might formulation conforms or coheres more closely with the test for apprehended bias, but as Ward CJ in Eq noted in Michael Smith Real Estate Pty Ltd t/as Raine & Horne Marrickville v Chmait, the weight of authority favours the former would formulation adopted not only by Brereton J but also by Nettle J in Sent v John Fairfax Publication Pty Ltd, McDougall J in El-Cheikh v Miraki, and Beach J in Dealer Support Services Pty Ltd v Motor Trades Association of Australia Ltd.
(Emphasis added) (citations omitted)
The Full Court of the Federal Court in Porter v Dyer upheld the primary judge’s application of the would conclude test. In the primary judgment, Thawley J said:[13]
139. … Asking what a fair minded reasonably informed member of the public would say of the requirements of the administration of justice in this case, if told of the events that I have described earlier including that confidential information had been disclosed, my conclusion is that a fair minded member of the public would say that Ms Chrysanthou should not act for Mr Porter in Mr Porter’s defamation proceedings.
[13] Dyer v Chrysanthou (No 2) (Injunction) [2021] FCA 641.
The Full Court of this Court has on several previous occasions adopted the would conclude test as the appropriate test when determining whether the administration of justice requires a lawyer to be prevented from acting in a matter. In Sellers v Burns,[14] the Full Court quoted with approval the relevant principles identified by Brereton J in Kallinicos v Hunt (“Kallinicos”).[15] Kallinicos was also quoted with approval by the Full Court in Volker and Anor & Dunwell and Anor,[16] and Naczek v Dowler.[17]
[14] (2019) 59 FamLR 593 at 612, [97].
[15] (2005) 64 NSWLR 561 at 582, [76].
[16] [2013] FamCAFC 169 at [45].
[17] [2011] FamCAFC 179 at [60], [62].
The Full Court in Charisteas ultimately re-exercised the discretion to prevent lawyers from acting on the basis (at [52]) that “a fair-minded, reasonably informed member of the public, … would conclude that the proper administration of justice requires that the restraints sought by the husband against Firm Y and Mr P be established” (emphasis added).
In the absence of any expressed intention in Charisteas to overturn the would conclude test adopted by previous Full Courts and, given what I respectfully conclude was a misapprehension of the test applied in Porter v Dyer, I consider it appropriate to adopt the previously applied would conclude test.
The test I intend to apply accords in my view with overwhelming authority in this and other courts, as discussed above, and is expressed as - whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a lawyer be prevented from acting in the interests of the protection of the integrity of the judicial process and the appearance of justice.
The Court’s power to prevent a lawyer from acting is nevertheless an exceptional one and discretionary. The power must be exercised with appropriate caution and due weight given to the public interest in a party being able to choose their legal representation.[18] The Court must also be alert to the possibility that such an application may be inappropriately pursued by a party to proceedings.[19]
[19] Ibid at [8]; Bahonko v Nurses Board of Victoria (No 3) [2007] FCA 491 at [2].
Documents said to be protected by privilege
The husband identifies three documents accessed by the wife’s lawyers[20] that he and the other respondents contend are protected by legal professional privilege, namely:
(a)The recording labelled ‘[…]’ (“recording (b)”);
(b)A chain of emails dated 14, 21 and 23 December 2012 (“the email chain”) – (item 130 in annexure “A” to an affidavit of Ms AL filed 27 July 2023 with the descriptor RE_Asset Protection & Restructuring and marked “read” and item 255 in a list of documents provided by the wife’s solicitors under cover of a letter dated 31 July 2023 titled “Privileged Documents Index” and under the subheading “[Mr UU]”); and
(c)The recording labelled ‘[…]’ (“recording (d)”).
[20] As identified in the affidavit of the wife’s solicitor, Ms AL filed 27 July 2023.
The descriptors for the documents are sourced from a document or documents prepared by the wife’s solicitors in compliance with directions by the Court consequent upon the wife’s late disclosure (or as sourced from documents prepared by DGL).
The other respondents, in addition to the documents relied upon by the husband, identify an additional three emails to or from Mr UU of VV Lawyers contended to be communications between F Company and its solicitor for the dominant purpose of giving or receiving legal advice (Mr B Venter is the director of F Company but F Company is not a party to the proceedings) and an additional four emails, contended to be between the husband or another person and a lawyer, all of which are contended to be subject to legal professional privilege.
It is not in contention that these additional emails were attached or forwarded as part of a bundle of 29 emails sent by email to Mr P of counsel by MM Lawyers on 11 October 2021 and shared by Mr P with Ms OO of counsel and Ms XX of counsel in 2023 (all of whom acted as counsel for the wife at the time). The email dated 11 October 2021 was headed “[Ms Venter] – more good email evidence regarding [Mr Venter’s] control” and stated in the body of the email “Hi [Mr P] Please find attached further evidence for your review”. The emails are included in folder 1 prepared by GG Lawyers.
The additional emails are identified by reference to annexure “A” to Ms AL’s affidavit filed 27 July 2023 using the descriptors in that document (italics added by me). Annexure “A” has three columns. The first column allocates a number for the document, the second is the descriptor and the third column indicates whether some documents have been read, or that some “may be subject to LPP” (a reference to legal professional privilege) or on many occasions the column is blank. The additional emails are as follows:
(d)03.05.10 – Lawyers requesting [Mr Venter’s] instructions - item 5 in annexure “A” and marked “may be subject to LPP” although not included in a list of documents provided by the wife’s solicitors under cover of a letter dated 31 July 2023 titled “Privileged Documents Index”;
(e)20.04.10 – [Mr Venter] provides instructions to solicitors (advertising issues) - item 57 in annexure “A” and marked “may be subject to LPP” although not included in a list of documents provided by the wife’s solicitors under cover of a letter dated 31 July 2023 titled “Privileged Documents Index”;
(f)23.06.10 – email to lawyers containing offer and saying [Mr B Venter] does not own [F Company] nor is he director[21] – item 68 in annexure “A” and marked “may be subject to LPP” although not included in a list of documents provided by the wife’s solicitors under cover of a letter dated 31 July 2023 titled “Privileged Documents Index”;
(g)22.09.21 – email to lawyers containing instructions (offer to the other side) – item 63 in annexure “A” and marked “may be subject to LPP” although not included in a list of documents provided by the wife’s solicitors under cover of a letter dated 31 July 2023 titled “Privileged Documents Index”;
(h)Fw_COSL – item 97 in annexure “A” and also item 117 in a list of documents provided by the wife’s solicitors under cover of a letter dated 31 July 2023 titled “Privileged Documents Index” and under the subheading “[Mr UU]”;
(i)FW_Restructure – item 103 in annexure “A” and also item 170 in a list of documents provided by the wife’s solicitors under cover of a letter dated 31 July 2023 titled “Privileged Documents Index” and under the subheading “[Mr UU]”;
(j)Re Consumer Credit Legislation Amendment (Enhancements) Bill 2012.msg - item 131 in annexure “A” and item 266 in a list of documents provided by the wife’s solicitors under cover of a letter dated 31 July 2023 titled “Privileged Documents Index” and under the subheading “[Mr UU]”.
[21] See note about the descriptor that appears at page 10 of the other respondents’ submissions filed 10 November 2023 which explains that in Annexure A the word “director” is missing but the full descriptor for the email in folder 1 includes the word “director”.
Ms AL’s affidavits
Ms AL is a solicitor and partner with the wife’s current solicitors, GG Lawyers. Ms AL has filed four affidavits and the wife has filed two affidavits, addressing various matters arising from the appallingly late disclosure of documents by the wife in the proceedings.
In Ms AL’s first affidavit filed 27 July 2023, she relevantly explains when and how various documents came into her firm’s possession and identifies the various documents by reference to folders 1, 2 and 3. Ms AL says that it is her “belief” that all solicitors and counsel named in paragraph 10 of her affidavit “have had access to documents on the hard drives”. In relation to folder 1, Ms AL says that “no modification of the name of the documents has been undertaken by our firm” and explains the firm’s protocol by which privileged material is identified and appropriately dealt with. In paragraph 14 of her affidavit, Ms AL says as follows:
14. The practice of this firm to identify privilege material is as follows:
a. Any solicitor reviewing documents which identify communications sent or received by a solicitor is not accessed or reviewed.
b.The documents are then returned to the privilege holder and permanently deleted from our system or if received in hard copy, placed in the secure document destruction bin.
Ms AL explains that folder 1 contains 146 emails and that in compliance with a direction made by this Honourable Court on 26 July 2023, Ms AL caused an index to be prepared of folder 1 “which includes the subject lines of the material received from [MM Lawyers] and which may have been altered by them”. Ms AL says that “we have identified documents to which a claim for privilege may attach. These documents have not been read and are marked in Annexure A”. In paragraph 22 of her affidavit, Ms AL says:
22.The documents marked as read in Annexure A, are not documents sent by or received from a solicitor. As such, when the documents were read, the practice identified in the preceding paragraph was not triggered. I confirm that the balance of the documents in Folder 1 have not been accessed or reviewed by anyone of this firm including counsel retained to appear.
(Emphasis added)
Contrary to the protocol explained in paragraph 14 of her affidavit, Ms AL identifies a series of emails that were clearly communications between a client and a solicitor and, notwithstanding that, were read. In paragraph 23 of Ms AL’s affidavit, she says:
23. The only email containing a communication from a solicitor that has been read by the people identified in paragraph 1 hereof, was an email chain from:
a. [Mr UU] of [VV Lawyers] to Husband, Second Respondent, [Mr J] and [Mr HH] dated 14 December 2012;
b. The Husband to [Mr UU] of [VV Lawyers], Second Respondent and [Mr J] dated 21 December 2012; and
c. [Mr UU] of [VV Lawyers] to the Husband, the Second Respondent and [Mr J] on 23 December 2012.
No explanation for the failure to follow the firm’s protocol has been provided. A justification for the lawyers reading the emails is provided as follows:
(a)The documents are not privileged as against the wife;
(b)The content of the emails had already been disclosed by the 2010 and 2013 agreements; and
(c)If privilege attached to the documents, it was lost because the documents evidence the furtherance of a fraud.
Ms AL confirms that “[a]ll Counsel briefed by our firm has had access to and received this email”. Ms AL goes on to explain that of the 146 emails in folder 1, the documents that have been reviewed and determined to be relevant were annexed to the wife’s trial and reply affidavits and included in an “examination bundle” (a reference to documents that were intended to be used by counsel during cross-examination).
As a consequence of deficiencies noted in her first affidavit and the additional disclosure of a further suitcase of documents, Ms AL filed a second affidavit on 31 July 2023.
In a third affidavit filed 2 August 2023, Ms AL, among other things, clarified parts of her evidence contained in her first affidavit. In particular, she confirmed that “in sampling the recordings to ensure their content was consistent with their description, neither I nor [Ms AM] heard any instructions nor legal advice provided by any person”.
In a fourth affidavit filed 6 December 2023, Ms AL, among other things, further clarified parts of her evidence contained in her first affidavit. In particular, Ms AL sought to clarify paragraph 22 of her first affidavit (set out above) by stating the following:
8. …In that passage, I was referring to counsel instructed by [GG Lawyers] and information provided to counsel by [GG Lawyers] during the period in which [GG Lawyers] were acting in this matter.
Ms AL discloses that it was not until 1 August 2023 that a direction was given to her firm’s Information Technology provider to “restrict all access to the files that were transferred to our firm and that were stored on our server” but that prior to 1 August 2023 the files were accessible to all members of the firm. Between 1 August and 4 December 2023, the files were “not accessible to us without a process of unlocking the file first being undertaken by our IT providers”. Ms AL says that “to ensure the accuracy of this Affidavit, on 4 December 2023, [Ms AM] and I conducted a search of the files in relation to this matter which were transferred from [MM Lawyers] to [GG Lawyers]”. Ms AL gives the following assurances:
12.… I confirm that the files transferred from [MM Lawyers] to [GG Lawyers] include a folder with sub-folders that appear to be the same as the folder shown in "Screenshot B" of the Affidavit filed by [Mr C Venter] on 22 November 2023. That folder and the sub-folders were not reviewed to prepare Annexure A to my Affidavit filed 27 July 2023. Annexure A was prepared from Folder 1. Folder 1 was a complete list of the emails which were provided to our firm by [MM Lawyers] in the file transfer. This complete list was utilised to prepare Annexure A.
13. The Privilege Claim documents have not been read by anyone at [GG Lawyers]. The contents of them have not been disclosed to anyone at [GG Lawyers] and no-one at [GG Lawyers] has discussed the contents of any of the Privilege Claim Documents with Counsel. [GG Lawyers] does not know what is contained in the Privilege Claim documents.
14. Upon receipt of the Third Respondent's Affidavit dated 22 November 2023, which refers to 29 emails ("the 29 emails"), [GG Lawyers] undertook steps to determine which of those 29 documents had been seen by [GG Lawyers].
15. From a review of the subject line of each of the 29 emails it was identified that they are all emails that are contained in “Folder 1” and Annexure A to my Affidavit affirmed 27 July 2023. Having reviewed Annexure A and compared it with the subject line of the 29 emails, I identified that Annexure A records that prior to the Hard Drive Review, as defined below, [GG Lawyers] had read 8 of the emails and had not read 21 of the emails. The Privilege Claim documents were not read and were not recorded as read in Annexure A.
…
16. … of the 29 emails:
(a)7 emails were identified as being potentially subject to professional legal privilege from the application of the defined search parameters of the Hard Drive Review.
(b) 1 of the above 7 emails was identified to be the December 2012 email.
(c)The remaining 6 emails have not been read by [GG Lawyers]. In accordance with the Hard Drive Review process, those emails were returned to the person named in the email address of the outlook data file.
(d) The Privilege Claim documents are 3 of these unread 6 emails.
(e)The Privilege Claim documents were returned to the person named in the email address of the outlook data file as follows:
(i) "Fw_ COSL" was returned to [Mr J] and Barkus Doolan Winning on behalf of [Mr B Venter];
(ii) "FW Restructure" was returned to Barkus Doolan Winning on behalf of [Mr B Venter]; and
(iii) "Re Consumer Credit Legislation Amendment (Enhancements) Bill 2012" was returned to Barkus Doolan Winning on behalf of [Mr B Venter].
Ms AL discloses that on 1 December 2023, her firm was copied into a letter from AN Lawyers (Mr P’s solicitors) to Barkus Doolan Winning (the other respondents’ solicitors) comprising 81 pages including an email received by Mr P dated 11 October 2021 with attachments. Ms AL says that only the first eight pages of the letter were read by the members of her firm and the balance deleted given “those enclosures are the subject of contention between the parties to the family law proceedings”. AN Lawyers were informed of this on 2 December 2023. Ms AL further discloses that she “received confirmation that [Mr O], [Ms OO] and [Ms XX] of Counsel have each deleted the copy of the letter from [AN Lawyers] received by them on 1 December 2023”. The affidavit is silent as to why three counsel had received the letter from AN Lawyers or whether any enquiry was made if they had read the contents of the letter prior to it being deleted.
The wife’s affidavits re disclosure
On 24 July 2023, after commencement of the trial, the wife filed an affidavit addressing her late disclosure. In part, the affidavit seeks to address her late disclosure by stating that she mistakenly thought the husband would have access to his historical email communications, overlooking the requirement to make disclosure of ALL documents in her possession or control relevant to an issue in the proceedings, whether they are copies, or documents thought to already be in the possession of another party. It is understandable for a lay person to misunderstand their obligation if it has not been adequately explained to them. Of course, I have no knowledge of what advice was or was not given to the wife.
In the wife’s second affidavit filed 2 August 2023, the wife addresses her late disclosure of the 2010 agreement by referring to the affidavits filed by the husband and the other respondents on 20 June 2023, to which they exhibited the 2013 agreement. The 2013 agreement referred to the 2010 agreement. The 2010 agreement had not been disclosed by them and it seems no effort made to explain when it was last in their possession, until the wife called for the 2010 agreement and was told they did not have it. As earlier noted, the wife obtained a copy from a third party on 30 June 2023. The wife further addresses the disclosure for the first time of the side agreement on 1 August 2023 which was found by her solicitors I believe on one of the hard drives, which the wife had first located in 2020. The wife observes that the side agreement gave effect to the intention discussed during the 6 March 2013 recording disclosed for the first time by the husband on 21 July 2023. It will be recalled that the 6 March 2013 recording refers to Mr AB as being ‘simply a name’ with the inference being invited that it was never intended that he would be beneficially entitled to the shares in V Pty Ltd.
Exhibit 1 – letter from MM Lawyers dated 1 August 2023
Pursuant to a direction by the Court, a letter was obtained from MM Lawyers dated 1 August 2023 and provides the following information:
(a)Mr AK and Ms AO had the day-to-day management of the file;
(b)Both Mr AK and Ms AO were away on long leave as at that date;
(c)The wife provided the hard drives to MM Lawyers on or about 12 August 2020;
(d)The hard drives were returned to the wife on 22 March 2023;
(e)An IT specialist employed by MM Lawyers assisted Ms AO to access “the emails” between 26 August 2021 and 1 September 2021;
(f)The documents retrieved from one hard drive were uploaded to MM Lawyers’ system for viewing;
(g)Two hard drives were “dead”;
(h)Upon review of the file “we have not identified any document that includes a legal practitioner other than the email dated 14 December 2012”;
(i)Documents thought to be relevant were subsequently viewed by Mr AK;
(j)The principal of the firm will have reviewed selected emails identified as relevant to the proceedings;
(k)The “uploaded emails” remain on MM Lawyers’ system but are “locked”; and
(l)The six recordings were accessed by a support staff member of MM Lawyers but were not provided to counsel or discussed with counsel.
Mr P of counsel
Mr P made representations to this Court on 25 July 2023 that neither he nor any counsel retained in the matter for the wife, nor the wife or her current solicitors had viewed any document over which a claim for privilege may be made other than the “2012 document” (the email chain). It is not in contention that this representation was inaccurate.
In a letter dated 21 November 2023, the other respondents identified the possibility of other privileged emails having been sent to “[Mr P]” on 11 October 2021 and requested urgent advice on the following matters:
(a)Who is the “[Mr P]” referred to in the folder “New emails [Vente]r sent to [Mr P]11.10.21” …?
(b)On what date were the emails contained in the folder titled "New emails [Venter] sent to [Mr P] 11.10.21” provide to [Mr P] (and provide a copy of those communications) and by whom?
(c)Were the emails contained in the folder titled "New emails [Venter] sent to [Mr P] 11.10.21” provided to anyone else, and if so to whom?
The wife’s lawyers’ response on 22 November 2023 was brief and stated as follows:
…
We are instructed that:
1.The reference to “[Mr P]” is [Mr P] of Counsel.
2.[Mr P] received an email from [Mr AK] of [MM Lawyers] dated 11 October 2021.
3.There was no other person copied into the email dated 11 October 2021.
The specific query by the other respondents’ solicitors – “Were the emails … provided to anyone else, and if so when and by whom?” – went unanswered.
Further, the request by the other respondents on 21 November 2023, for a copy of the email dated 11 October 2021 from Mr AK to Mr P, went unanswered until 1 December 2023.
Mr P deposes in an affidavit prepared by his solicitors, AN Lawyers, and filed on 13 December 2023 that the “2012 document” (the email chain) was a reference to the one document referred to in a letter dated 25 July 2023 from the others respondents’ solicitors to the wife’s solicitors with the descriptor “RE: Asset Protection & Restructuring” between Mr UU (lawyer) and the husband, Mr B Venter, and Mr J and dated 23 December 2012. Mr P deposes that he was responding to the letter (25 July 2023) in circumstances where it had been received an hour before the hearing commenced. Despite the letter being between a solicitor and various parties or other persons, Mr P informed the Court - “[w]e have formed the view it is not privileged”.
Mr P deposes that at the time he made the submission referred to above, i.e. that the only document read was the “2012 document” (the email chain), he had no recollection of having received the email from the wife’s previous solicitors dated 11 October 2021 with 29 attachments and that it was not until he was specifically asked on 22 November 2023 about a reference in folder 1 to “New emails [Venter] sent to [Mr P] 11.10.21” that he had cause to check his laptop on 22 November 2023, whereupon he discovered that he had received the email and attachments. After informing his instructing solicitors of the email dated 11 October 2021 and confirming that “no other person was copied to it”, he undertook a further search on 4 December 2023 and discovered that he had forwarded the email of 11 October 2021 to Ms OO of counsel on 27 February 2023 and forwarded the same email to Ms OO and Ms XX of counsel on 4 April 2023. Mr P says that he has no recollection of sending those emails.
Mr P did not indicate until 1 December 2023 that he had no recollection of having received the email dated 11 October 2021 or reviewing the attachments when he addressed the Court on 25 July 2023.
Annexure P-13 to Mr P’s affidavit (being a letter from AN Lawyers to the other respondents’ solicitors dated 6 December 2023) reveals that in addition to Mr P having been provided with the documents from what is now described as folder 1 on 11 October 2021, documents from folder 1 were also provided to him by email on 5 October 2021. Mr P does not address the earlier email in his affidavit. That is unfortunate given the content of the letter dated 5 December 2023 from the other respondents’ solicitors to Mr P’s solicitors specifically drew attention to the body of the email to Mr P on 11 October 2021, which stated – “Please find attached further evidence for your review”. A request was made by the other respondents to advise whether the “previous evidence” provided to Mr P prior to 11 October 2021 included any of the emails or documents also located in the wife’s solicitors’ folders 1, 2 or 3, and if so, on what date/s and whether Mr P recalled reviewing any of the documents. Annexure P-13 contends that Mr P has no recollection of receiving or reviewing the 5 October 2021 email or attachments.
Mr P concedes that his submissions to the Court on 25 July 2023 were inaccurate but contends the inaccuracy was wholly inadvertent. Mr P has nevertheless indicated his intention to cease acting in the matter.
Submissions in support of the wife’s lawyers being prevented from acting
In summary, it is submitted by the husband and the other respondents that the wife’s lawyers have misused material subject to legal professional privilege, ignoring, in the process, the wife’s solicitors’ own protocols when dealing with material that is potentially privileged. There was, it is argued, an obligation to return all material reasonably suspected to be subject to legal professional privilege.[22] The evidence relating to the solicitors’ access to privileged material is, it is argued, woefully inadequate and unsatisfactory and there is a real risk that if the lawyers remain in the matter, they will misuse the information contained therein.
The husband and the other respondents further submit that the wife, through her lawyers, has still not fully complied with the clear directions made by this Court on 26 July 2023 which obliged the wife and her current solicitor to address by affidavit the following matters:
(a)the date upon which hard drives were received and by whom;
(b)the dates upon which the hard drives were accessed and by whom;
(c)which documents have been reviewed and by whom;
(d)the process undertaken to identify any privileged material;
(e)which documents have been reviewed and determined to be relevant; and
(f)which documents have not been reviewed.
In those circumstances, it is contended that the Court can have no confidence “as to what potentially privileged material has been read by the wife or her legal team, how those documents have been used or misused, the breadth of their distribution throughout the various lawyers and counsel involved, or how the material may have informed the wife’s strategy at trial and during the interlocutory stages of the proceedings”. It is further submitted by the husband and other respondents that the “risk and prejudice … is that the content of those communications has formed part of, and continues to form part of, current counsel’s stock of knowledge and has informed and will continue to inform forensic decisions made by counsel in the case”.
Finally, it is argued by the husband and the other respondents that the egregious failures by the wife and her lawyers in relation to meeting the wife’s obligations of disclosure exacerbate the prejudice suffered by them, and lend weight to the submission that the lawyers should be prevented from continuing to act for the wife because “a fair-minded, reasonably informed member of the public might conclude that the proper administration of justice requires that a solicitor be prevented from acting in the interests of the protection of the integrity of the judicial process and the appearance of justice”.
Turning then to consider the specific documents about which issue is taken by the husband and other respondents.
Recording (b)
Notwithstanding the rather uninformative description of the recording as – “Recording (b) - “[…]” – in Ms AL’s first affidavit, it seems to be conceded that recording (b) is protected by legal professional privilege. The wife’s solicitors no longer have recording (b), it was deleted from their server after being provided to the husband’s and other respondents’ lawyers. Ms AL says that the wife instructed her that the recording was made by the husband using the wife’s phone. It is not in contention that Ms AL and another solicitor in the same firm listened to part of the recording.
The husband and the other respondents contend that recording (b) is a recording of a meeting that occurred in or about 2012 between the husband, Mr AP, a solicitor and director of AQ Lawyers, and Mr AR, a director of AS Pty Ltd. The purpose of the meeting was for the husband, on behalf of V Pty Ltd, to receive legal advice and give instructions with respect to the ongoing investigation by ASIC into the business operation conducted by V Pty Ltd and F Company. The husband and other respondents contend that the husband was a consultant with V Pty Ltd at the relevant time and was at the meeting in that capacity. The 2013 agreement (referred to earlier in these reasons) records the husband’s ongoing role as a consultant to V Pty Ltd and the records exhibited to Mr B Venter’s affidavit filed 1 August 2023 purport to corroborate that the husband was paid a consultancy fee during the period 4 July 2012 to 1 May 2013.
The husband and the other respondents contend that V Pty Ltd and F Company were clients in whom the privilege belongs and that the privilege has not been waived. F Company is not a party to the proceedings. It is further submitted that legal professional privilege in respect of documents is not extinguished despite V Pty Ltd being deregistered in 2019.[23]
[23] Corporations Act 2001 (Cth) s 601AD; Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (1994) 126 ALR 58 at 65 (“Lake Cumbeline”); Farrow Mortgage Services Pty Ltd (in liquidation) v Webb (1996) 39 NSWLR 601 at 608 (“Farrow”); Swaab v Commissioner of the NSW Police Service [2005] NSWSC 901 at [16] (“Swabb”); Kellert v Foate [2015] NSWSC 954 at [73].
As the husband was acting as an agent of V Pty Ltd at all relevant times, it is argued that the right to claim legal professional privilege is not lost even though the confidential communications passed through the husband as agent because the husband as agent is in the same position as the person for whom he was acting as agent.[24]
[24] Trade Practices Commission v Sterling (1979) FCA 33 at [4]; Wheeler v Le Marchant (1881) 17 Ch D 675 at 682; Meteyard v Love (2005) 65 NSWLR 36 at [90]; TransGrid v Members of Lloyds Syndicate 3210 [2011] NSWSC 301.
The husband and the other respondents further submit that the wife’s solicitors’ own protocol on how to manage potentially privileged material is inadequate but, in any event, not followed in this case. Upon being instructed that the recording had been made by the husband on the wife’s phone, it is argued that the solicitors should not have accessed the recording but rather it should have been returned to the husband, there being at least the potential for the recording to be privileged. If the husband had a duty to disclose the recording, he would be duty bound to do so, subject to the right to claim privilege. If the privilege claim was properly made by some other person, then it could have been provided to that other person.
A chain of emails dated 14, 21 and 23 December 2012
It is not in contention that the wife’s solicitors and barristers have all read the chain of emails dated 14, 21 and 23 December 2012. This email chain was also part of a group of 29 emails attached or forwarded to Mr P by MM Lawyers on 11 October 2021.
Ms AL deposes as follows:
23.The only email containing a communication from a solicitor that has been read by the people identified in paragraph 1 hereof, was an email chain from:
a. [Mr UU] of [VV Lawyers] to Husband, Second Respondent, [Mr J] and [Mr HH] dated 14 December 2012;
b. The Husband to [Mr UU] of [VV Lawyers], Second Respondent and [Mr J] dated 21 December 2012; and
c. [Mr UU] of [VV Lawyers] to the Husband, the Second Respondent and [Mr J] on 23 December 2012.
24. All Counsel briefed by our firm has access to and received this email.
VV Lawyers is a firm of solicitors retained by F Company, V Pty Ltd, Mr B Venter, the husband, Mr HH and Mr J. At the relevant time, Mr UU was an Australian legal practitioner holding a practising certificate and employed by VV Lawyers. On 14 December 2012, advice was sought in relation to the restructure of V Pty Ltd and F Company.
The husband and the other respondents contend that: email (a) in the chain confirms instructions that were given by each of them (and others) and seeks confirmation of instructed matters; email (b) is an email from the husband adding comments to that original email. The purpose of that email was for the husband to propose further instructions to Mr UU; and email (c) is a further email from Mr UU, providing further advice.
The husband and the other respondents submit that the emails are confidential communications between clients and their lawyers for the dominant purpose of obtaining legal advice or obtaining legal services and as such are subject to legal professional privilege which has not been waived.
The husband and the other respondents submit that whether privilege has been lost, is a matter for determination by the Court not by the wife’s lawyers. The protocol said to be in place by the wife’s solicitors to identify and deal with potentially privileged material was not followed in this case and no explanation has been forthcoming.
To the extent that the wife claims that privilege is lost because there is nothing in the email chain that is not already disclosed by the 2010 and 2013 agreement, the husband and the other respondents firstly reject that categorisation of the emails. Secondly, there is no principle that where parties execute an agreement, privilege is lost to documents that are otherwise confidential as between a solicitor and client for the purposes of obtaining advice and giving instructions. Thirdly, the wife did not have access to the 2010 or 2013 agreements until mid‑2023 and as such the agreements could not have provided a legitimate basis for the wife and her lawyer to read the documents prior to that date, if at all.
The husband and the other respondents submit that it is not open to the wife to argue that privilege cannot be claimed as against her in reliance on her sole directorship and shareholding of EE Pty Ltd in its capacity as trustee for the EE Family Trust. The trust did not acquire a half interest in F Company until early 2013 and, to the extent the wife also argues that the trust acquired the beneficial interest in the V Pty Ltd shares pursuant to the side agreement, that could not have occurred until at the earliest one week later in early 2013. Even if both of the wife’s contentions are accepted, it is submitted by the husband and the other respondents that the wife does not thereby have an as of right access to company documents nor the power or ability to waive the company’s privilege.[25] At best, it is submitted, the wife may have had a right, as a member (if she could satisfy the definition under s 231 of the Corporations Act 2001 (Cth)) to apply to a court under s 247A of the Corporations Act 2001 (Cth) to inspect documents upon satisfying a court that she was acting in good faith in connection with proceedings. No such application has been made. However, even such an application would not give the wife access to privileged material.[26]
[25] Edman v Ross (1922) 22 SR (NSW) 351 at 358.
[26] Hanks v Admiralty Resources NL (No 2) [2011] FCA 1464 at [20].
In any event, it is submitted by the husband and the other respondents that as the privilege is jointly held, even if the wife had a joint interest, the privilege could not be waived unless all holders of the privilege waived it.
The husband and the other respondents reject the contention that privilege is lost because of the documents allegedly evidencing the furtherance of a fraud and cite Carrafa v Asfar (No 3)[27] where Slattery J said (by reference to s 125 of the Evidence Act 1995 (Cth)):
[5] To attract s 125, an allegation of fraud must be made in clear and definite terms and there must be some prima facie evidence that the allegation has some foundation in fact to ground it: … And some particulars of the alleged conduct should be given to the party claiming the privilege: … Although in this case that obligation is satisfied by the particulars in the pleading, as the fraud and abuse of power relied upon by the plaintiffs to ground the loss of client privilege are also final issues in the proceedings.
…
[9] The communication must be made, or the document prepared with the intention of facilitating the fraud. It is insufficient that the document is evidence of fraud, but the documents must help advance or assist the fraud: …
(citations omitted)
[27] [2023] NSWSC 24.
In Kennedy v Wallace,[41] Allsop J said:
158If there is one conversation or one body of writing incapable of being broken up into which there is intermingled privileged material and non-privileged material the communication as one or as a whole will only be protected if the dominant purpose of the communication or the creation of the writing was to give or receive or record legal advice.
159If a conversation or a note can be divided up such that privileged and nonprivileged material can be segregated, the communications or writing made for the dominant purpose of obtaining legal advice will be privileged, even if the balance of the communications, perhaps even if most of the communications go to other matters. One does not lose privilege on a note made as an aide-memoire for the asking of legal advice by putting 10 other notes on the same page to remind one to ask about 10 other topics. It depends on the nature of the communication or writing and the circumstances of the creation of the document.
[41] (fn 34).
In relation to the additional emails, I find as follows:
(a)As to (d), the documents comprise a chain of emails. The first email is from the husband to Mr AT of AG Lawyers dated 19 April 2010 stating an intention by the husband to check information and provide instructions about an identified matter. The second email is from Mr AT to the husband dated 28 April 2010 and simply informs the husband that he had not received a reply from the other solicitor. The third email is from the husband to Mr AT dated 28 April 2010 simply acknowledging the previous email. The fourth email is from Mr AT to the husband dated 30 April 2010 referencing an attached letter (not included) from another lawyer and requesting instructions. The fifth email dated 3 May 2010 is from the husband to Mr AT providing instructions about a legal matter. I find that the lead email, i.e., 3 May 2010, was created for the dominant purpose of providing instructions to a lawyer and as the preceding emails form part of that chain, all emails are privileged.
(b)As to (e), the documents comprise a chain of emails. The first email is a copy of the first email referred to in (a) above. The second email is from Mr AT to the husband dated 19 April 2010 attaching a draft letter (not included) and requesting instructions. The third email is from the husband to Mr AT dated 20 April 2010 providing instructions. I find that the lead email was created for the dominant purpose of providing instructions to a lawyer and as the preceding emails form part of that chain, all emails are privileged.
(c)As to (f), the documents comprise a chain of two emails. The first email is from Mr AT to the husband dated 21 June 2010 providing advice. The second email is from the husband to Mr AT providing instructions and seeking advice. I find that the emails were created for the dominant purpose of providing instructions and receiving advice and are privileged.
(d)As to (g), the document is in fact an email dated 27 May 2010 (not 22 September 2021) from the husband to Mr AT providing instructions. I find that the email was created for the dominant purpose of providing instructions and is privileged.
(e)As to (h), the documents comprise a chain of emails. The first email is from Mr UU to the husband dated 16 July 2013 seeking instructions in relation to a draft letter. The second email is from the husband to Mr UU dated 16 July 2013 providing instructions. The third email is from Mr UU to the husband dated 19 July 2013 attaching a further draft letter and seeking instructions. The fourth email is from the husband to Mr B Venter and Mr J dated 19 July 2013 forwarding the series of emails and attaching the draft letter. I find that the emails were created for the dominant purpose of providing instructions and receiving advice and are privileged.
(f)As to (i), the documents comprise a chain of emails. The first email is from Mr UU to the husband dated 24 January 2013 attaching a draft deed of agreement. The second email is from the husband to Mr B Venter and Mr J dated 29 January 2013 forwarding the email and attachment. I find that the emails were created for the dominant purpose of providing instructions and receiving advice and are privileged.
(g)As to (j), the documents comprise a chain of emails. The first email is from Mr UU to Mr J copied to the husband and Mr B Venter dated 5 November 2012 providing advice and seeking instructions. The second email is from the husband to Mr UU and Mr J dated 5 November 2012 seeking clarification of the advice. The third email is from Mr UU to “[Venters]”, Mr J and is copied to Mr B Venter dated 6 November 2012 providing advice and seeking further instructions. I find that the emails were created for the dominant purpose of providing instructions and receiving advice and are privileged.
DISPOSITION
The wife’s submission that even if privileged material has been read by her lawyers it is of little consequence to the current litigation must be rejected. MM Lawyers were sufficiently excited about the email chain and additional emails to identify them as helpful to the wife’s case and forwarded them to Mr P who later forwarded them to his two juniors. The email chain dated 14, 21 and 23 December 2012 is on the one hand submitted by the wife to be evidence of the furtherance of a fraud, yet on the other to be of no consequence. The email chain was seemingly so important to the wife’s case that all her lawyers read it despite it being contrary to GG Lawyers’ own protocol. The evidence relating to GG Lawyers’ access to recording (b) and (d) is entirely unsatisfactory, and it is impossible to rule out impermissible access.
In Crittenden and Collins,[42] I made an order preventing solicitors from continuing to act for a party in circumstances where they had retained possession of privileged material for some six months before informing the solicitors for the other party and returning the documents to them. Certain members of the firm had reviewed the privileged material. I identified that the solicitors should have taken the following steps immediately upon becoming aware of the privileged material in their possession at [54]:
(a)Informed the solicitors acting on behalf of the party holding the privilege;
(b)Provided the documents to the solicitors acting on behalf of the party holding the privilege requesting whether privilege was claimed;
(c)Advised the client to destroy the documents in their possession and ensure all copies were destroyed;
(d)Ensured that any practitioner who had seen the document ceased acting; and
(e)Set up an information barrier and undertakings to ensure that the confidential information is not provided to the practitioners continuing to act.
[42] [2017] FamCA 716.
I also found at [55] that it was only if such steps had been taken that the solicitors might have resisted the order subsequently made.
Given the wide-ranging factual matters in dispute in the current case, there is a very real prospect that the wife has obtained some forensic advantage from accessing privileged material. Firstly, there appears to have been careful consideration given to the documents contained in folder 1 (some of which were privileged) with various privileged documents identified as helpful to the wife’s case. Secondly, the language used in paragraph 106 of the wife’s trial affidavit would appear to have been informed by recording (b). Thirdly, the timing of the emails to Mr P with a request that he review the 29 emails occurred the day before the wife’s amended Points of Claim was filed on 12 October 2021. The amended Points of Claim were settled by Mr E and Mr P. There is also a real prospect that the wife has been assisted by access to the privileged material in the formulation of the documents sought pursuant to the subpoena issued to VV Lawyers.
While I can readily accept that Mr P has no recollection of reading the email and documents attached to the email dated 11 October 2021, it is inconceivable in the circumstances that Mr P would not have read the documents. Likewise, it is inconceivable that Ms OO and Ms XX would not have read the 11 October 2021 email forwarded to them by Mr P in February and April 2023, notwithstanding their inability to recall whether they did so.
As Ipp J said in Mallesons Stephen Jaques v KPMG Peat Marwick[43]:
… There is, in my view, the real prospect that, even with the best will in the world, that information would colour, at least subconsciously, the approach of the solicitors and influence them in the performance of the tasks I have mentioned….
[43] (1990) 4 WAR 357 at 371.
The duty to disclose all documents in a party’s possession or control relevant to an issue in the proceedings and a legal practitioner’s obligation to advise a client adequately and accurately about what that duty encompasses is fundamental to the operation of our justice system and to ensure that each party receives a fair trial. A client should be left in no doubt that their obligation requires the disclosure of material even if it is adverse to their own case. A client must also be left in no doubt that documents which on their face may be protected from legal professional privilege are required to be returned without having been read. It is then for the potential holder of that privilege to claim it or waive it. Lawyers must have in place appropriate protocols to deal with the protection of documents that may be subject to legal professional privilege. Failure to do so will be at their and their client’s peril.
I conclude that there is no way to overcome the deficiencies in this case. All lawyers involved have viewed the email chain dated 14, 21 and 23 December 2012, which I have ruled to be privileged. Mr P, Ms OO, and Ms XX have likely read the 29 emails, some of which I have ruled were privileged. It is not possible to reasonably rule out the prospect that Ms AL and Ms AM listened to recording (b) and recording (d), both of which it is accepted are privileged. It is simply too late to put in place any information barriers.
I am satisfied that a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that the wife’s current and former solicitors and all barristers retained or formerly retained should be prevented from acting in the interests of the protection of the integrity of the judicial process and the appearance of justice.
It seems to me that in cases such as this it should be the norm rather than the exception for lists of documents to be prepared and exchanged so that it is clear at an early stage not only what documents are in the possession or control of a party but also any relevant documents that are no longer in the possession or control of a party and any documents over which privilege is claimed. The husband and the wife have both, at times, failed to meet their obligations of disclosure in a timely manner, although it must be observed that the wife’s failures have been rather more monumental.
SHOULD THE WIFE’S CASE AGAINST THE OTHER RESPONDENTS BE DISMISSED SUMMARILY?
The other respondents’ submissions
The other respondents seek an order that the wife’s claims against them be dismissed in their entirety or alternatively that the wife’s claims against Mr B Venter and Mr C Venter (and consequently also Ms Glynn) be dismissed.
The other respondents rely upon the principles and authorities discussed at [56]-[62] in my earlier reasons in this matter when the claim by the wife against the eighth respondent was summarily dismissed on 31 July 2023 pursuant to r 6.17 of the Rules.[44] Accordingly, those paragraphs should be read with these reasons. Additionally, the other respondents rely upon the facts relevant to the operation of r 6.17 as set out at [1]-[54] of the earlier reasons and likewise they should be read with these reasons.
[44] Venter (fn 7).
The other respondents submit that they have suffered irremediable prejudice by the wife’s late disclosure and use of those documents to her forensic advantage. The other respondents filed their evidence in chief without access to documents which, had they been disclosed, could have refreshed their memory. While it is conceded that the “general tenor of the supplementary evidence addressing the new documents is to confirm their existing understandings, it cannot be doubted that the way in which this has unfolded raises lines of attack on credit that would not have been available had the wife complied with her disclosure obligations”.
It is further submitted by the other respondents that the second aspect of the irremediable prejudice concerns costs. The wife has no assets and will have no assets unless she succeeds in her case.
Thirdly, it is argued by the other respondents that wife’s case against the other respondents is “so weak” that the Court should summarily dismiss it. The facts that underpin that submission are as follows:
(a)Neither the wife nor the husband has any asset of significance in their name;
(b)In the absence of a conclusion that the trust may be treated as property of the husband and wife, that will remain so;
(c)The assets held by the trust had as their seed the profits made by R Pty Ltd using V Pty Ltd’s assets;
(d)Those assets were purchased for approximately $1.6 million in 2016;
(e)There was a formal contract to that effect and the purchase price was paid by the purchaser, D Group Holdings Pty Ltd, according to Mr C Venter;
(f)The profits produced by the “lending business” dramatically increased after R Pty Ltd commenced to conduct the business formerly run by V Pty Ltd;
(g)The side agreement was signed prior to Mr C Venter’s return to Queensland and neither he nor Mr B Venter knew anything about it;
(h)The exponential increase in profits are a product of Mr C Venter’s diligence and innovation and, accordingly, the assets are owned by the trust and are not property of the marriage;
(i)The supposed strong case contended for by the wife might provide a basis for someone, presumably EE Family Trust, to advance a claim that the proceeds of sale of the V Pty Ltd business, because of the side agreement, was something that EE Pty Ltd was entitled to enjoy the entirety of, but such a claim has nothing to do with the trust, R Pty Ltd or Mr C Venter.
The other respondents highlight the significant difference between the allegations made by the wife against the eighth respondent, i.e., it was the puppet of the husband, compared to the allegation against Mr C Venter being only that he “is accustomed to act in accordance with the wishes of the husband” (Points of Claim [60]).
Mr B Venter and Mr C Venter are only parties because they are co-owners (with Ms Glynn) of the H Street property in circumstances where they are obliged to continue to meet the mortgage repayments on the property without being able to enjoy their rights as owners because of the wife’s occupation of it.
Lastly, the other respondents submit that the claim involving the H Street property is weak. The wife contends that Mr B Venter, Mr C Venter, and Ms Glynn hold their interests on a resulting trust in favour of S Pty Ltd in circumstances where the only allegation capable of providing a basis for such an inference is that S Pty Ltd paid $595,000 out of a purchase price of $2,195,000 (Points of Claim [86]-[87]) and that the balance was borrowed by Mr B Venter, Mr C Venter, and Ms Glynn from Westpac Bank (Points of Claim [88]). The wife alleges without any evidence that the repayments on the mortgage were made by S Pty Ltd (Points of Claim [90]). The other respondents submit that the only allegation that could possibly support a resulting trust is that S Pty Ltd paid $595,000 of the purchase price (an allegation denied by the other respondents), but there is simply no evidence to support that allegation and one is entitled to expect that if the wife had evidence she would have put it before the Court for the trial last year.
If the claim involving H Street is dismissed, the other respondents submit that the claim against Ms Glynn should also be dismissed despite her taking no part in the proceedings, and that an order should be made returning their property to them.
The wife’s submissions
The wife resists the application to dismiss all or part of her claim against the other respondents on the following grounds:
(a)Contrary to the submissions of the other respondents, the wife’s claim is a strong one, noting in particular:
(i)The side agreement, which establishes that if D Group Holdings Pty Ltd did in fact acquire the V Pty Ltd business, the owner at that time was not Mr AB as contended by the other respondents but the EE Family Trust of which the husband is the appointor and the husband and wife beneficiaries;
(ii)Contrary to the husband’s evidence that the side agreement was not intended to be binding, it is entirely consistent with the 6 March 2013 recording to which Mr B Venter was a party;
(iii)The recordings in which the husband threatens the wife that she will never get a property settlement, his statement that he created the family wealth, his concession that the wife helped him to do so, and that Mr C Venter receives a salary for running “our businesses”;
(b)The other respondents elected not to bring this claim at the same time as the eighth respondent and are bound by that election;
(c)Despite the wife’s late disclosure, the other respondents have made no changes to their evidence;
(d)The adjournment of the matter since mid-last year has necessarily overcome any prejudice to the other respondents caused by the late disclosure.
The consequences for the wife of summary dismissal would be devastating without her ever having a determination on the merits of her case.
DISCUSSION
For the sake of convenience, I set out r 6.17 which provides as follows:
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.
Additionally, s 45A of the Family Law Act 1975 (Cth)[45] relevantly provides:
[45] See also r 10.09.
…
(2)The court may make a decree for one party against another in relation to the whole or any part of a proceedings if:
(a)the first party is defending the proceedings or that part of the proceedings; and
(b)the court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceedings or that part of the proceedings.
When there is no reasonable prospect of success
(3)For the purposes of this section, a defence or proceedings or part of proceedings need not be:
(a) hopeless; or
(b) bound to fail;
to have no reasonable prospect of success.
It is apparent from the submissions made by the other respondents that they intend to rely not only on the failure to provide disclosure in a timely manner compounded by the misleading statements made by the wife’s counsel on 25 July 2023, but also a submission that the wife’s case against them has no reasonable prospects of success either at all or in part.
While the wife’s case as pleaded against the other respondents may be weak for the reasons submitted, in my view, the determination of many of the factual disputes in this matter will ultimately depend on findings of credit. The wife also has additional claims including to set aside the instruments that removed the husband as the appointor of the trust and removed the husband and wife as potential beneficiaries. I am unable to conclude that the wife has no reasonable prospects of success.
While it is certainly true that unless the wife succeeds in her pleaded claims against the other respondents, she will have no capacity to meet any costs order, I must take into account that dismissing the wife’s case without a hearing on the merits including the opportunity to cross-examine all witnesses must be an option of last resort.
Unlike the situation when the claims against the eighth respondent were dismissed, if such an order were made now it would effectively bring the proceedings to an end as the husband is impecunious.
DISPOSITION
For the reasons discussed the other respondents’ application to have all or part of the wife’s case against them dismissed will be dismissed.
MISCELLANEOUS
The injunctions sought against the wife by the other respondents are far wider than those sought by the husband. In the absence of submissions as to why I would enjoin the wife to the extent sought by the other respondents, I propose to restrain the wife from discussing or communicating to any other person the content of recording (b), recording (d), the email chain dated 14, 21 and 23 December 2012, and the additional emails identified in these reasons. The wife will further be restrained from making any use of any information derived from the recordings or emails for any purpose in these proceedings.
To the extent that the wife may have in her possession or control other documents which on their face may be subject to legal professional privilege by a person other than the wife, these reasons should not be taken to permit the wife, or any future lawyer acting on her behalf, access to such documents.
The other respondents also seek the return of the property of the second, third, fifth and seventh respondents. In the absence of any submission identifying what property, I do not propose to make that order.
REFERRAL OF DOCUMENTS TO AUTHORITIES
Each party was forewarned of the possibility that material may be referred to appropriate authorities even at this interim stage and were given the opportunity to be heard.
There is no doubt this Court has the power and in some cases the obligation to refer material to appropriate authorities if satisfied of the possible commission of offences.[46]
[46] Malpass & Mayson (2000) FLC 93–061.
In my view, referral at this stage of the proceedings is warranted despite the husband contending any such consideration is premature in such a complex matter and imprudent. The wife supports the referral. The other respondents submit there is presently no basis to refer the second and third respondents, being the only natural persons of the other respondents to ASIC or any other authority.
It is of course not for this Court to determine whether offences have in fact occurred but rather whether material supports that possibility. Whether any investigation or prosecution follows the referral of documents is entirely a matter for the authorities.
I consider it of some significance that an agreed statement of facts signed by Mr J on behalf of V Pty Ltd and Mr B Venter on behalf of F Company on 16 June 2014 was relied upon in the proceedings heard by the Federal Court of Australia in Australian Securities and Investment Commission v V Pty Ltd [2015] FCA 648. That document made the following representations:
(a)At all material times V Pty Ltd had one shareholder, Mr AB;
(b)At all material times F Company had two shareholders, EE Pty Ltd and Mr HH;
(c)V Pty Ltd does not pay to F Company, and nor does it receive from F Company, any referral fees or commissions relating to the provision of credit to consumers;
(d)Around March 2010, a decision was made to incorporate V Pty Ltd. Mr HH remained the sole shareholder of V Pty Ltd;
(e)Between April 2010 and July 2010, Mr B Venter became the director and sole shareholder of V Pty Ltd and Mr HH became the sole shareholder of F Company;
(f)On 22 July 2010, Mr B Venter was reign as the sole shareholder of F Company;
(g)Mr HH was reinstated as sole shareholder of V Pty Ltd from July 2010 until June 2012;
(h)In early 2013, Mr HH sold and transferred all of his shares in V Pty Ltd to Mr AB.
As noted earlier in these reasons, the 2010 agreement between Mr HH, Mr B Venter, V Pty Ltd and F Company provided that Mr HH would hold 50% of his shareholding in V Pty Ltd on trust for Mr B Venter and Mr B Venter would hold 50% of his shareholding in F Company on trust for Mr HH.
The 2013 agreement between V Pty Ltd, FLD, Mr HH, Mr B Venter, Mr J, the husband, Superannuation Fund 1 and ZZ Inc confirmed that Mr HH held 50% of his shares in V Pty Ltd on trust for Mr B Venter and Mr B Venter held 50% of his shares in FLD for Mr HH as per the 2010 agreement; Mr B Venter agreed to sell to the husband or his nominee 50 of his shares (half the issued shares) in F Company so that the husband or his nominee would become the sole legal and beneficial owner of those shares; and Mr HH and Mr B Venter would each sell their one share in V Pty Ltd to Mr AB for $20,000 per share so that Mr AB would become the legal and beneficial owner of all shares in V Pty Ltd following their sale to him
The husband contends in his affidavit filed 20 June 2023:
30.… [Mr B Venter] and [Mr HH] sold 100% of the shareholding in [V Pty Ltd] to [Mr AB] in 2013, as stated at clause 5 of “[MV]-1”. [Mr J] became the director of [V Pty Ltd]. When [Mr C Venter] came into the [V Pty Ltd] office in 2014 when his [sporting] career finished, that company was fully owned by [Mr AB] and he was the sole shareholder.
The recording made on 6 March 2013 of a meeting between the husband, Mr B Venter, Mr J and Mr HH, discloses the following:
(a)Given the risk posed by the regulatory authorities to the business model, it was necessary to find someone who could hold the V Pty Ltd shares;
(b)The husband knew that he could not legally hold the shares in V Pty Ltd and F Company and that they needed to ensure that it was not “one of us” who owned the shares;
(c)Mr AB was “simply a name or nominee”, “like a placeholder”, “nothing”, “a name on a document”;
(d)The husband did not want anyone outside the conversation to know about the plan.
The side agreement records that Mr AB holds his shares in V Pty Ltd on trust for EE Family Trust as from the date of the share transfer, 9 April 2013.
I propose to direct the Principal Registrar of this Court to provide the following documents to ASIC:
(a)The Statement of Agreed Facts in the matter heard by the Federal Court of Australia in Australian Securities and Investment Commission v V Pty Ltd [2015] FCA 648;
(b)The agreement dated 23 September 2010 between Mr HH, Mr B Venter, V Pty Ltd and F Company;
(c)The agreement dated 6 March 2013 between V Pty Ltd and F Company, Mr HH, Mr B Venter, Mr J, Mr Venter, YY Pty Ltd (in its own right and as trustee for Superannuation Fund 1) and ZZ Inc;
(d)The recording made on 6 March 2013 of a conversation between Mr Venter, Mr B Venter, Mr HH and Mr J;
(e)The agreement dated 16 April 2013 between Mr AB and Ms Venter in her capacity as the sole director of EE Pty Ltd as trustee for the EE Family Trust;
(f)The share transfer form signed by Mr AB dated “2013”;
(g)The emails between Mr J and Mr Venter dated 27 April 2013;
(h)The email from Mr J to Mr Venter dated 29 November 2013;
(i)The emails between Mr J and Mr Venter including attachments dated 20 May 2014;
(j)Paragraphs 33, 40, 43, 99.5.4 of the husband’s trial affidavit filed 20 June 2023.
Mr J, Mr AB and F Company should be given notice of the referral by providing them with a copy of that part of the Order.
I certify that the preceding one hundred and ninety-eight (198) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Carew. Associate:
Dated: 28 February 2024
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:
REMOVED
- AGLC
- Venter & Venter (No 6) [2024] FedCFamC1F 94
- Case
- [2024] FedCFamC1F 94
- Decision Date
CaseChat Overview and Summary
The court found that there were deficiencies in compliance with the duty of disclosure by both parties, but the wife's failures were more significant. The wife's legal representatives had or likely had reviewed material subject to the husband's legal professional privilege. There was a real prospect that the wife had obtained some forensic advantage from accessing privileged material. The court ordered that the wife is restrained from engaging or instructing her current and previous solicitors and counsel and that she destroy all copies of the privileged documents and be restrained from disseminating or using information derived therefrom. The application for summary dismissal of claims against other respondents was dismissed as dismissing the wife's case without a hearing on the merits must be an option of last resort, especially given the husband's impecunious status.
The court also dismissed the referral to the Australian Securities and Investment Commission as temporarily stayed. The matter is listed for a further case management hearing on 28 March 2024 at 10.00am (Brisbane time) and all parties have leave to appear via Microsoft Teams. The Principal Registrar of the Federal Circuit and Family Court of Australia (Division 1) is directed to provide specific documents to the Australian Securities and Investment Commission, with the operation of this direction temporarily stayed for seven days. The first, second, third, fifth and/or seventh respondents have liberty to apply for an urgent listing.
Orders
Orders of the court
1. The application by the second, third, fifth and seventh respondents for summary dismissal of the claims against them is dismissed.
2. Ms Venter (“the wife”) is restrained from further engaging or instructing any of the following legal firms or legal practitioners in respect of the proceedings the subject of matter number BRC10651/2021:
(a) GG Lawyers;
(b) MM Lawyers;
(c) Each of the following barristers:
(i) Mr E;
(ii) Mr O;
(iii) Mr P;
(iv) Ms OO;
(v) Mr WW; and
(vi) Ms XX.
3. The wife is restrained from:
(a) Discussing or communicating to any other person the contents of:
(i) Any of the recordings identified at sub-paras 46(b) ‘[…]’ and 46(d) ‘[…]’ of the affidavit of Ms AL filed 27 July 2023 (“the recordings”);
(ii) The email chain identified in paragraph 23 of the affidavit of Ms AL filed 27 July 2023 and described as:
A. ‘[Mr UU] of [VV Lawyers] to Husband, Second Respondent, [Mr J] and [Mr HH] dated 14 December 2012’;
B. ‘The Husband to [Mr UU] of [VV Lawyers], Second Respondent and [Mr J] dated 21 December 2012’; and
C. ‘[Mr UU] of [VV Lawyers] to the Husband, the Second Respondent and [Mr J] on 23 December 2012’;
(“the email chain”)
(iii) The additional emails identified in annexure “A” to the affidavit of Ms AL filed 27 July 2023 numbered 5, 57, 63, 68, 97, 103, 130 (already referred to in (ii) above) and 131 (“additional emails”);
(b) Making any use for the purpose of these proceedings of any information derived from the recordings or the email chain or the additional emails; and
(c) To the extent not already destroyed by the wife and her agents by or at the direction of the wife, the wife shall forthwith destroy all hard copies and electronic copies of the recordings and the email chain and additional emails within her possession or control and direct any of her agents or legal representatives (including previous legal representatives) to also do so and confirm in writing to the lawyers for all other parties when the same has been done.
4. The matter is listed for a further case management hearing before the Honourable Justice Carew on 28 March 2024 at 10.00am (Brisbane time) and all parties have leave to appear via Microsoft Teams.
5. The Principal Registrar of the Federal Circuit and Family Court of Australia (Division 1) is directed to forthwith provide the following documents to the appropriate officer of the Australian Securities and Investment Commission:
(a) The Statement of Agreed Facts in the matter heard by the Federal Court of Australia in Australian Securities and Investment Commission v V Pty Ltd [2015] FCA 648;
(b) The agreement dated 23 September 2010 between Mr HH, Mr B Venter, V Pty Ltd and F Company;
(c) The agreement dated 6 March 2013 between V Pty Ltd and F Company, Mr HH, Mr B Venter, Mr J, Mr Venter, YY Pty Ltd (in its own right and as trustee for Superannuation Fund 1) and ZZ Inc;
(d) The recording made on 6 March 2013 of a conversation between Mr Venter, Mr B Venter, Mr HH and Mr J;
(e) The agreement dated 16 April 2013 between Mr AB and Ms Venter in her capacity as the sole director of EE Pty Ltd as trustee for the EE Family Trust;
(f) The share transfer form signed by Mr AB dated “2013”;
(g) The emails between Mr J and Mr Venter dated 27 April 2013;
(h) The email from Mr J to Mr Venter dated 29 November 2013;
(i) The emails between Mr J and Mr Venter including attachments dated 20 May 2014;
(j) Paragraphs 33, 40, 43, 99.5.4 of the husband’s trial affidavit filed 20 June 2023.
6. The Principal Registrar of the Federal Circuit and Family Court of Australia (Division 1) is further directed to give notice of paragraph 5 of this Order to the following persons:
(a) Mr J by posting a copy of this Order (with all paragraphs save for paragraphs 5 and 6 redacted) to him at his address at AC Street, Town AD, Qld;
(b) Mr AB by posting a copy of this Order (with all paragraphs save for paragraphs 5 and 6 redacted) to him at his address at AE Street, Suburb AF, Qld; and
(c) F Company by posting a copy of this Order (with all paragraphs save for paragraphs 5 and 6 redacted) to the proper officer at its registered address at AH Property, Suburb AJ. Qld.
7. The operation of paragraphs 5 and 6 herein are stayed for seven days.
8. The first, second, third, fifth and/or seventh respondents have liberty to apply upon the giving of 48 hours written notice to each other party to request that the matter be listed before the Honourable Justice Carew as a matter of urgency.
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.
Background
Background to the litigation
Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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