Wachtel and Sabens - [2011] FMCAfam 538

FEDERAL MAGISTRATES COURT OF AUSTRALIA

WACHTEL & SABENS

[2011] FMCAfam 538

FAMILY LAW – Subpoenas – whether an abuse of process – whether must first seek discovery – whether fishing – whether too wide and/or oppressive.

Family Law Act 1975, s.4AA(2)
Family Law Rules 2004, reg.13.01
Federal Magistrate Court Rules 2001, rr.15A.14(1), 14.02
Federal Magistrates Act 1999, s.45

Epstein and Epstein (1993) FLC 92-384
National Employers’ Mutual General Insurance Association Ltd v Waind and Hill [1978] 1 NSWLR 372
Ostasheen Pty Ltd v Deputy Registrar of Child Support (1998) FLC 98-001
Scheibner-Grover and Ryan (1987) FLC 91-833
Sharpe and Dalton
Spencer Motors Pty Ltd v LNC Industries Ltd[1982] 2 NSWLR 921
R v Barton & Ors [1981] 2 NSWLR 414
R v Kilbourne [1973] AC 729

Applicant:

MS WACHTEL

Respondent:

MR SABENS

File Number:

MLC 11482 of 2010

Judgment of:

F. Turner FM

Hearing date:

19 May 2011

Date of Last Submission:

19 May 2011

Delivered at:

Melbourne

Delivered on:

3 June 2011

REPRESENTATION

Solicitors for the Applicant:

Kennedy Partners

Counsel for the Respondent:

Ms Stoikovska

Solicitors for the Respondent:

Forte Family Lawyers

ORDERS

The subpoenas to American Express, ANZ Bank, Commonwealth Bank of Australia, National Australia Bank and BankWest, are set aside.

IT IS NOTED that publication of this judgment under the pseudonym Wachtel & Sabens is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

MLC 11482 of 2010

MS WACHTEL

Applicant

And

MR SABENS

Respondent

REASONS FOR JUDGMENT

This decision relates to objections to six subpoenas. The applicant in this matter, pursuant to orders made on 23 February 2011 in accordance with minutes of consent orders, was granted leave to issue more that five subpoenas. As a consequence ten subpoenas were issued on

19 April 2011.
Rule 15A.14(1) of the Federal Magistrates Court Rules 2001 (the “Rules”) provides as follows:
A person who objects to producing a document subpoenaed, or another party or an interested person who objects to the inspection or copying of a document subpoenaed by a party to the proceedings, must notify the Registrar and the issuing party, in writing, of the objection and the grounds of the objection before the day stated in the subpoena for production.
The respondent lodged objections in relation to the subpoenas on American Express, [H], ANZ Bank, National Australia Bank, Commonwealth Bank of Australia and BankWest.
At the hearing of the objections on 19 May 2011 Ms Stoikovska appeared for the respondent objector (the “respondent”) and Ms Grobtuch for the applicant.

Ms Stoikovska made the following submissions:

That the subpoenas are so broad, vague and ambiguous that they are a “fishing exercise”. Further, an officer of each institution would have to analyse each document to see if it related to the respondent’s business interests, or to issues between the parties.
The subpoenas are in lieu of discovery, and in the absence of any request for discovery, it is not proper for subpoenas to be issued: Sharpe (post) referred to.
The subpoenas have been issued too early, and the documents only become relevant after the Court determines whether the parties lived in a de facto relationship.
The documents covered by the subpoenas endeavour to traverse the financial position of any entity in which the respondent has an interest, which is irrelevant to the primary jurisdictional issue of whether the parties were in a “de facto relationship”. The following decisions were referred to: Spencer Motors Pty Ltd v LNC Industries Ltd[1982] 2 NSWLR 921, R v Kilbourne [1973] AC 729, R v Barton & Ors [1981] 2 NSWLR 414.
As the respondent, in his affidavits, admits the financial allegations against him, there is no necessity for the subpoenas.

Ms Grobtuch made the following submissions:

It was alleged by Ms Grobtuch that an agreement was reached between Counsel for the parties on 23 February 2011 that the applicant would issue subpoenas.
It is submitted that the documents subpoenaed are relevant to issues in s.4AA(2) of the Family Law Act 1975 (the “Act”) (post), particularly sub.s.2(d) being “the degree of financial dependence or interdependence, and any arrangements for financial support, between them”.
It is submitted that the respondent has not admitted all the allegations of financial contributions by him, and in fact has denied some [for instance Affidavit of respondent sworn 22 February 2011, para.27(c)].
It is submitted that proof of the location of bank withdrawals is relevant to show how much time the respondent spent with the applicant at [suburb omitted].
It is submitted that the financial records will evidence the duration of the relationship between the parties.
As to [H], the applicant wants to prove the level of expenses paid by the respondent, including on a cake.
It is alleged that as the respondent paid for a lot of the parties expenses out of business accounts, those records are relevant.
It is submitted that if discovery is sought, similar objections will be made to those raised against the subpoenas.
It is submitted that the decision in Sharpe is not relevant because it relates to subpoenas to the other party, and not to a third party.
It is submitted that discovery is not appropriate in relation to [H], as the respondent would not hold the documents.

Reasons for Decision

The primary objection by the respondent is that the subpoenas are an abuse of process of the Court as they are being used for the purpose of discovery. Ms Stoikovska submits that issuing subpoenas in the absence of discovery ought to be regarded as an abuse of process of the Court and set aside on that ground alone (Sharpe post at 78,145).
Ms Stoikovska referred to the decision of Sharpe and Dalton (1990) FLC 92 – 167 (“Sharpe”). The first thing to note about the decision is that, being of the Family Court of Australia, the Act and Rules of that Court do not have a bar to discovery (Chpt.13, r.13.01 of the Family Law Rules 2004); whereas relevant provisions in the Act and Rules of the Federal Magistrates Court provide as follows.
Section 45 of the Federal Magistrates Act 1999:
(1)Interrogatories and discovery are not allowed in relation to proceedings in the Federal Magistrates Court unless the Federal Magistrates Court or a Federal Magistrate declares that it is appropriate, in the interests of the administration of justice, to allow the interrogatories or discovery
(2)In deciding whether to make a declaration under subsection (1), the Federal Magistrates Court or a Federal Magistrate must have regard to:
(a)whether allowing the interrogatories or discovery would be likely to contribute to the fair and expeditious conduct of the proceedings; and
(b)such other matters (if any) as the Federal Magistrates Court or the Federal Magistrate considers relevant.
Rule 14.02 of the Federal Magistrates Court Rules 2001:
(1)A declaration may be made under subsection 45 (1) of the Act to allow discovery on the application of a party or on the Court's own motion.
Note Discovery is not allowed in relation to a proceeding unless the Court or a Federal Magistrate declares that it is appropriate in the interests of the administration of justice: see section 45 of the Act.
(2)If a declaration is made, the Court or a Registrar may make an order for disclosure:
(a)generally; or
(b)in relation to particular classes of documents; or
(c)in relation to particular issues; or
(d)by a specified date.
In Sharpe a request for discovery had not been made, but a subpoena decus tecum directed to the respondent was issued, and then objected to. At the date of the decision in Sharpe, O.20 of the Family Law Rules set out the procedure relating to discovery and O.28 concerned subpoenas (Sharpe p.78,144).
Moore J.R. stated in Sharpe (at p.78,145):
“Discovery and inspection of documents is a pre-trial procedure to ascertain the existence, nature and context of relevant documents…the function and the practice and procedure relating to it differs from the issue of subpoena whether issued against a stranger or against a party to a proceeding.”
Moore J.R referred to the decision of Scheibner-Grover and Ryan (1987) FLC 91-833 at pp.76,266-76,267 that the weight of authority is against there being a practice to issue subpoenas inter parties whether or not there has been discovery.
Moore J.R. referred to the decision in National Employers’ Mutual General Insurance Association Ltd v Waind and Hill [1978] 1 NSWLR 372 at 381-382 that a subpoena may:
be set aside on the ground that it was improperly issued and an abuse of the power to compel the production of documents in any one of a number of ways. Such a case is where the subpoena is used for the purpose of discovery. The essential feature of discovery in this connection, as appears from Burchard's case (1891) 2 Q.B. 241 at pp. 247-248 and Small's case (1938) 38 S.R. (N.S.W.) 564 at p. 574; 55 W.N. 215 is that the person to whom the subpoena is addressed will have to make a judgment as to which of his documents relate to issues between the parties. It is oppressive to place upon a stranger the obligation to form a judgment as to what is relevant to the issue joined in a proceeding, to which he is not a party. Hence it is an abuse of the use of a subpoena to impose this obligation. It follows that it is an abuse to use any subpoena, i.e. even to a party to obtain discovery”
Moore J.R continued at p.78,145:
“It seems to me that, in the circumstances of this case having regard to the whole of the documents sought, the issue of the subpoena in the absence of discovery ought to be regarded as an abuse of process of the Court and set aside on that ground alone”.
Moore J.R. continued at p.78,146:
In Botany Bay Instrumentation & Control Pty. Ltd. & Anor v. Stewart & Anor (1984) 3 N.S.W.L.R. 98 at pp. 100-101 Powell J. classified the circumstances in which subpoenas may be set aside into seven categories as follows:
``Although a reference to the authorities makes it tolerably plain that the court will exercise its undoubted jurisdiction to set aside a subpoena in a variety of cases, as, for example:
1. unless the subpoena was issued for the purpose of a pending trial, hearing or application: see, for example, Central News Co v Eastern News Telegraph Co. (1884) WN (Eng) 23 (Mathew J); 53 LJ QB 236 (Divl Ct); Elder v Carter; cp Raymond v Tapson;
2. where to require the attendance of a witness would be oppressive: Raymond v Tapson; Re Mundell; Fenton v Cumberlege;
3. where the subpoena had not been issued bona fide for the purpose of obtaining relevant evidence and the witness to whom the subpoena had been addressed was unable to give relevant evidence: R v Baines; R v Hove Justices; Ex parte Donne;
4. where the subpoena has been used for the purpose of obtaining discovery or further discovery against a party: Commissioner for Railways v Small; Waind v Hill; Finnie v Dalglish;
5. where the subpoena has been used for the purpose of obtaining discovery against a third party: Burchard v Macfarlane; Ex parte Tyndall; Commissioner for Railways v Small; Senior v. Holdsworth; Ex parte Independent Television News Ltd; Waind v Hill; Finnie v Dalglish;
6. where to require a party to comply with a subpoena to produce documents would be oppressive: Commissioner for Railways v Small; Senior v Holdsworth; Ex parte Independent Television News Ltd; Waind v Hill; Finnie v Dalglish;
7. where the subpoena has been issued for a purpose which is impermissible, as, for example, `fishing': Hennessy v Wright (No 2) (1888) LR 24 QBD 445(n) at 448 ; Griebart v Morris [1920] 1 KB 659 at 664, 667; Commissioner for Railways v Small at 574;
The decision in Sharpe therefore is not a decision that, under the Act and Rules of this Court, it is an abuse of process to issue subpoenas where discovery has not been sought. However, there is a procedure for seeking discovery in this Court, and where discovery has not been sought and refused, it is an abuse of process to issue subpoenas as an aid to discovery. To hold otherwise would be to allow for a means of discovery without applying the Act and Rules of this Court.
Ms Grobtuch submits that the decision in Sharpe in not relevant because it relates to subpoenas to the other party, and not a third party. The Court rejects that submission; the principle in Sharpe is that subpoenas should not be issued in the absence of discovery, and is of general application.
If discovery is sought in this Court, and leave is refused, it may then be appropriate for properly confined subpoenas to be issued. Those questions can only be determined if an application for discovery is made, and submissions are heard.
All subpoenas objected to, other than to [H] are set aside on the basis that discovery has not first been sought. The subpoena to [H] seeks the company’s file and documents relating to the stay of the parties at [H] around 19 August 2010. The respondent would be unlikely to hold files and documents held by [H], and discovery against him would be unlikely to produce those documents. For instance, it is unlikely that the respondent has a copy of an order form for a cake alleged to have been ordered for the applicant while on [H]. That subpoena is therefore not set aside on the ground that discovery has not first been sought.
Another ground of objection is that the subpoenas are too wide and oppressive.
The subpoenas to ANZ Bank, Commonwealth Bank of Australia, National Australia Bank , and BankWest (the “bank subpoenas”) all seek production of the following documents:
(1)A copy of this subpoena
(2)All documents for the period 1 July 2008 to date relating to accounts held in the name of MR SABENS (DOB [omitted] 1945) (also known as MR SABENS) and any entity in which the said
MR SABENS has an interest as noted on bank records and/or to which the said MR SABENS is a cardholder or signatory and including credit cards, cheque accounts, savings accounts, cash management accounts, loan accounts and term deposits, including but not limited to:
2.1Statements of all relevant accounts;
2.2All files and documents relating to loan applications made by the said MR SABENS or any entity in which he has an interest as noted on bank records or to which he is a signatory including but not limited to all applications, correspondence, valuations and memoranda.
NOT INCLUDING accounts held JOINTLY with MS WACHTEL
The bank subpoenas appear to be too wide and oppressive. To require the banks to comply with the subpoena would be oppressive (Botany Bay Instrumentation (supra) at pp 100-101, example 6) as:
·Much of the material will not relate to a fact in issue: National Employers Mutual General Insurance Association Ltd v Waind and Hill (supra).
·They are not confined to a named branch of the Bank.
·They would require a search for entities in which Mr Sabens has an interest.
·They are not limited to statements of all relevant accounts, and all files and documents relating to loan applications by Mr Sabens or any entity in which he has an interest, but relate to “all documents from 1 July 2008 to date relating to accounts of Mr Sabens and any entity in which he has an interest”.
·The subpoenas would require officers of the Bank to make judgments as to whether Mr Sabens had an interest in entities, and as to whether the documents “relate to” accounts.
A subpoena may be an abuse of process because its terms are too wide – it is too wide if it requires the named party to undertake an erroneous task of locating masses of documents or to determine if a document is relevant.
Ostasheen Pty Ltd v Deputy Registrar of Child Support (1998) FLC
98-001, Epstein and Epstein (1993) FLC 92-384:
Whether an individual subpoena is an abuse of process was considered by the Full Court of the Family Court in Hatton v Attorney-General of the Commonwealth of Australia & Ors (2000) FLC 93-038. The Full Court quoted at length with approval from the judgment of Moffit P (with whom Hutley and Glass JJA agreed) in National Employers Mutual General Insurance Association Ltd v Waind [1978] 1 NSWLR 372 (at pp 381-2):
Upon the first step the person to whom the subpoena is addressed may seek to, and have, the subpoena set aside on the ground that it was improperly issued and an abuse of the power to compel the production of documents in any one of a number of ways. Such a case is where the subpoena is used for the purpose of discovery. The essential feature of discovery in this connection… is that the person to whom the subpoena is addressed will have to make a judgment as to which of his documents relate to issues between the parties. It is oppressive to place upon a stranger the obligation to form a judgment as to what is relevant to the issue joined in proceeding, to which he is not a party. Hence it is an abuse of the use of subpoena to impose this obligation. It follows that it is an abuse to use any subpoena, i.e. even to a party to obtain discovery… Of course, discovery as such is otherwise available to a party. It follows that a subpoena can only properly be used for the production of documents described in particular or general terms which does not involve the making of such a judgment.
Subject to evidence of oppression being lead and accepted, the Court would also set aside the bank subpoenas on the ground that they are too wide and oppressive, but it is not necessary to deal with that ground as the subpoenas have been set aside on another ground.
The subpoenas to American Express and [H] are not, on their face too wide and oppressive and are not set aside on that ground.
Ms Stoikovska objects that the subpoenas are “fishing”.
Fishing seeks discovery of documents in the hope that they will reveal relevant evidence without any basis to believe that such evidence exists. In general discovery for this purpose is prohibited: Nestle Australia Ltd v FCT (1986) 10 FCR 78. The Court has likened this method of discovery to a person who has no evidence that fish of a particular kind are in a pool, but desires to drag the pool to find out whether any are there: Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd (1952) 72 WN (NSW) 250” (Butterworth’s Australian Legal Dictionary)
The applicant seeks the production of bank statements or other statements that prove expenditure by the respondent. The applicant has a proper basis to believe that payments out of accounts held by the respondent will be recorded in statements of his accounts. The subpoenas are therefore not fishing and are not set aside on that ground.
Further the applicant says that the material sought is necessary to prove the circumstances listed in s.4AA(2) of the Act which are indicators of show whether people are living in a de facto relationship.
Section 4AA(2) provides as follows:
(2)Those circumstances may include any or all of the following:
(a)the duration of the relationship;
(b)the nature and extent of their common residence;
(c)whether a sexual relationship exists;
(d)the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(e)the ownership, use and acquisition of their property;
(f)the degree of mutual commitment to a shared life;
(g)whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
(h)the care and support of children;
(i)the reputation and public aspects of the relationship.
The information sought is relevant to the hearing set down for

14 September 2011 to determine the nature of the relationship between the parties. Ms Stoikovska contends that the information will become relevant only if the Court determines that the parties lived in a de facto relationship. The Court rejects that submission for the reason just set out. The subpoenas are not set aside for “fishing”. Also they are not too early.

As to the argument that an agreement was reached on 23 February 2011 that the applicant would issue subpoenas in lieu of discovery,

Ms Grobtuch did not appear at that hearing. Ms Stoikovska appeared at that hearing and denied that such an agreement was reached that subpoenas would be issued in lieu of discovery.
·
A letter dated 2 May 2011 from the respondent’s solicitors to

Ms Grobtuch was tendered by Ms Stoikovska and marked Exhibit “1”. The passage in that letter:
“Furthermore, any potentially relevant documents under those subpoenas were capable of first being requested by your client through disclosure. Your client has not made any requests.”
is consistent with Ms Stoikovska’s denial that an agreement was reached that subpoenas be issued instead of discovery.
·As stated, Ms Grobtuch did not appear on 22 February 2011 and could only submit what she had been told by counsel she had briefed for that day.
·The Court found at the hearing that no such agreement had been reached. The alleged agreement cannot therefore be raised in opposition to the objection to the subpoenas by the respondent.
In light of the decision of the Court, findings on the other issues raised are not necessary
The Court therefore orders that the subpoenas to American Express, ANZ Bank, Commonwealth Bank of Australia, National Australia Bank and BankWest, are set aside.

I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of F. Turner FM

Date: 3 June 2011