WARNE & RANSLEY
[2020] FamCA 430
•29 May 2020
FAMILY COURT OF AUSTRALIA
| WARNE & RANSLEY | [2020] FamCA 430 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Discovery – Where the applicant seeks the production of the respondent’s will and associated solicitor file – Where the respondent claims the documents sought are irrelevant and subject to a claim of legal professional privilege – Where the parties were in a de facto relationship – Where the date of separation is disputed – Where the final hearing with respect to property settlement is imminent – Where the applicant bears the onus to establish the relevance of the documents to the main issues in the proceedings – Consideration of the test of relevance – Application dismissed. |
| Evidence Act 1995 (Cth) s 55(1) Explanatory Statement to the Family Law Rules 2004 (Cth) |
| Anderson & Anderson and Ors [2014] FamCA 491 Papadopoulos & Papadopoulos (No 2) [2007] FamCA 1683 |
| APPLICANT: | Mr Warne |
| RESPONDENT: | Ms Ransley |
| FILE NUMBER: | ADC | 3782 | of | 2017 |
| DATE DELIVERED: | 29 May 2020 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Berman J |
| HEARING DATE: | 15 May 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Richards |
| SOLICITOR FOR THE APPLICANT: | Barnes Brinsley Shaw Lawyers |
| COUNSEL FOR THE RESPONDENT: | Ms Pyke QC |
| SOLICITOR FOR THE RESPONDENT: | Rosey Batt & Associates |
UPON NOTING the orders made 15 May 2020 and the reasons delivered in respect of those orders
THE COURT ORDERS THAT:
The Application in a Case filed 7 May 2020 is dismissed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Warne & Ransley has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
FILE NUMBER: ADC 3782 of 2017
| Mr Warne |
Applicant
And
| Ms Ransley |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
Mr Warne is the applicant in the proceedings and Ms Ransley is the respondent. The parties are engaged in complex litigation involving property settlement and parenting issues arising out of their relationship which commenced in or about 1992/1993 and came to an end on the applicant’s case in January 2016 and on the respondent’s case in 2007.
There are two children of the relationship X and Y both born on … 2007.
The proceedings are listed for final hearing commencing 1 June 2020.
Orders made on 28 February 2020 noted the following:-
A.The date of separation will require a judicial determination.
B.The applicant asserts that the date of separation is January 2016.
C.The respondent asserts it will be necessary to opt in pursuant to section 86A of the Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008. The respondent has signed an opting in certificate which has been provided to the applicant’s solicitor.
D.The parties acknowledge and agree that in the event that the Court determines that the date of separation is prior to 1 July 2010 that pursuant to section 86A of the Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008, the parties will opt in to the Family Law Act to the effect that Parts VIIIAB and VIIIB and subsection 114(2A) of the Family Law Act shall apply in relation to their de facto relationship and each of the parties shall sign a statement in accordance with the provisions of section 86A of the Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008.
The applicant has filed his trial material, however given the volume and complexity of the applicant’s affidavit, an extension of time was sought and granted to the respondent to file her trial material to 4.00 pm on 22 May 2020.
Whilst the parties are not agreed as to the assets and liabilities that comprise the pool, the husband considers that subject to the completion of the valuation exercise undertaken by Mr B (“the single expert”), he estimates the pool of property to be approaching $10 million with the superannuation of the parties totalling nearly $2.7 million.
A significant component of the pool relates to the respondents interests in various entities that have been referred to by Mr B as “the Controlled Trusts”. Mr B has valued the Controlled Trusts at about $4.6 million in his first valuation report but by reference to his most recent report dated 28 April 2020 he considers that the entities now hold a net value of $6.141 million including an amount of $1.435 million which the relevant entities owe the respondent.
The first report of Mr B identifies an amount of $1.32 million for an entity known as C Partnership. This relates to a 3.48 percent investment in an entity known as the D Group.
The applicant contends that Mr B has been unable to complete the valuation of the C Partnership without the most recent audited financial statements and the partner account balance in respect of the Ransley Trust as at 30 June 2019.
The apparent difficulty for the respondent is that the financial statements and other relevant documents pertaining to the D Group is the subject of a confidentiality agreement.
It appears that the respondent referred the applicant to the accountant for D Group to better understand whether the financial statements and other documents sought could be provided, and if so, what terms and conditions may be imposed. The submissions of counsel for both parties would suggest that there was opposition to the provision of the financial information as sought and that if it was provided, there is a cost of compliance of about $14,000.
As it happens, the wife’s accountant and the D Group accountant are in the same accounting firm.
The respondent concedes that the completion of financial statements for the various controlled entities and taxation returns are financial statements necessary to complete the returns for C Partnership.
The wife’s accountant has the necessary documents, retained in an electronic form.
Cost of compliance became an irrelevant consideration and the Court found that the relevant documents were in the possession or control of the respondent.
That determination enabled orders to be made on 15 May 2020 that were not with the consent of the respondent but there was no strong opposition. Provisions that were respectful of the respondent’s obligations pursuant to undertakings given to the D Group were included.
Wills prepared by the wife post 1 january 2007
The applicant seeks the discovery of the following:-
(1)Any file held by the respondent’s solicitors in respect to any will prepared for her including any instructions provided;
(2)Any draft wills prepared;
(3)Any notes and/or documents with respect of any will or draft will prepared for and/or executed by the respondent since 1 January 2007.
During submissions, counsel for the applicant narrowed the period in which the documents were sought to the period 1 January 2007 to 12 January 2006.
The application is opposed on the basis of relevance and a claim of legal professional privilege as to the respondent’s solicitors’ file.
The gravamen of the dispute between the parties arises from the respondent’s contention that the parties separated in 2007 and the applicant’s date of separation being January 2016.
The purpose in seeking production of the respondent’s will or wills, draft documents and instructions to her solicitor, is that the applicant considers the documents relating to the respondent’s testamentary instructions may inform the Court as to the status of the relationship during the disputed period.
The application arises from the respondent’s refusal to provide the production of the respondent’s will files upon requests made on 10 March 2020 and 16 April 2020.
As at the date of submissions, the applicant did not know if a current will existed nor what instructions may have been provided to the respondent’s solicitors in respect of her testamentary intentions. Whilst it has now been revealed that the respondent did have a will during the relevant period, there is nothing asserted by the applicant that suggests he is aware of its contents or that there had been any discussion between the parties in respect of same.
What is a party’s obligation to make disclosure
Legislative Framework
The obligation to provide disclosure is governed by Chapter 13 of the Family Law Rules 2004 (Cth) (“the Rules”). Under r 13.01 there is a general duty on parties to a proceeding to make “full and frank disclosure of all information relevant to the case”. That duty or obligation is narrowed by r 13.07 to documents that are:-
(a)in the possession, custody or control of the disclosing party; and
(b)documents that are relevant to an issue in the case.
A party may seek an order for disclosure under r 13.22. The onus rests with the applicant seeking the disclosure order that the disclosure “is necessary for disposing of the case or an issue or reducing costs”[1].
[1]Family Law Rules 2004 (Cth) r 13.22(2).
The explanatory statement to the rules state that it was the intent of the rules that discovery be of material “directly relevant to an issue”. The explanatory statement provides:-
The requirement to disclose “directly relevant” documents will introduce a higher standard of assessment in the sifting and examination of a client’s documents. This will oblige parties and lawyers to focus attention at an early stage upon the real issues in dispute and the documentary evidence that goes directly to those issues.[2]
[2] Explanatory Statement to the Family Law Rules 2004 (Cth) at 63.
I consider that the import and intent of the rules is to stem unnecessary discovery and to require that documents that are sought have an apparent connection or relevance to the proceedings.
What is the test and breadth of relevance?
The test for relevance can be summarised as whether the documents sought “may” have a connection to the main issue in the case. Accordingly, where the applicant seeks a document pertaining to the testamentary intent of the respondent, he must establish that the production of these documents “could” better inform the Court of the husband’s financial position for the purpose of achieving a s 90SM division of property.
Section 55(1) of the Evidence Act 1995 (Cth) provides:-
The evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding.
The test was considered by the Full Court in White & Tulloch (1995) FLC 92-640 at page 82,459:-
This test is obviously difficulty to apply in the present case. We are not concerned with the proof or disproof of an alleged event, or with a list of material facts which must be proved to establish a cause of action. Rather we are concerned with an exercise of discretion whose aim is to arrive at a just and equitable outcome. Whilst the provision operates adequately in relation to evidence which is proffered to establish facts relevant to a just and equitable outcome, it does not provide much assistance in determining which facts are actually relevant to a just and equitable outcome.
In Portal Software International Pty Ltd v Bodsworth [2005] NSWSC 1115 Brereton J said at [25]:-
Thus it is plainly not the question at this (first) stage whether the documents, production of which is sought, will definitely advance the case of the parties issuing the subpoena, nor whether they will be admissible in evidence at the trial. It is sufficient that they could “possibly throw light” on the issues in the substantive proceedings, or that it appears to be “on the cards” that they will do so. What are the issues in the proceedings will appear from the pleadings (where there are pleadings), the affidavits, and the legal principles which govern the claims for relief in the substantive proceedings.
In Papadopoulos & Papadopoulos(No 2) [2007] FamCA 1683 Cronin J observed:-
49.The question of what is relevant takes on significance. The objective must be to assist the parties and the court in the determination of the issues in dispute. How does one determine that at an early stage? This issue was considered in the Victorian Supreme Court in Killorgan Investments Pty Ltd v Baycorp Advantage Business Information Services Limited and Ors where Byrne J said:
The degree of relevance for this purpose is not high: the inspecting party need only show a legitimate forensic purpose in the inspection. A party is entitled to inspect documents not only to see if they contain relevant facts, but also to see if they contain information which may be proved otherwise than through that document.
50.Accordingly, the bar is not set very high in respect to the question of relevance in a civil proceeding as between strangers. It should be less so in family law proceedings provided the pursuit of information is genuinely designed to assist in determining the issue and not for some illicit or harassing type of reason.
51.The onus in establishing the relevance lies on the person seeking the production of the documents either by way of subpoena or through discovery.
(Footnotes omitted)
What informs whether something is relevant and not a fishing expedition?
In Anderson & Anderson and Ors [2014] FamCA 491, Cronin J considered the position in Hatton, VR & Attorney-General of the Commonwealth of Australia (2000) FLC 93-038 and said at [19]:-
In Hatton (supra) at para 59, the Full Court was referring to the fact that the affidavit material was the only material that was available to the trial judge in that case. I consider the principle to be a guide. The strict nature of the disclosure obligations as set out in chapter 13 of the rules of the Court also provide guidance but so too does contemplation of the provisions of Part VIII of the Act which have to be established if a matrimonial cause is prosecuted. Whilst it was asserted by the objector that the perception was that this was a case based upon income, the substantive proceedings are significantly different. The interlocutory proceedings are but a prelude to, and clearly assist in, the substantive proceedings. I consider that the Court is entitled to determine the relevance issue on the affidavit material, the financial statements and the applications of the parties knowing of the legal issues to establish them.
It is therefore necessary to consider what is not relevant and what may constitute a fishing expedition.
In K & K [2008] FamCA 957, the husband was previously the director of a number of companies and subsequently tried to distance himself from those companies around the time of separation. The wife sought disclosure in relation to the companies. The companies were now owned and controlled by members of the husband’s family.
The wife argued that disclosure by the husband of company documents was relevant.
In assessing what disclosure was “directly relevant”, Cronin J considered it a useful assessment to determine what is not relevant and would be considered a fishing expedition. At [18] his Honour noted:-
In Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 575 “fishing expedition” is defined as an exercise “endeavouring not to obtain evidence to support a case, but to discover whether the person has a case at all” and in Rowntree v ASC (Fed C of A, Lockhart J, 27 November 1992, unreported), Lockhart J described fishing as
allowing a party who can produce no material to support an allegation, access to the documents of his opponent in the hope that he may discover something that supports his case.
Cronin J considered that the “fishing” test applied equally to this Court.
His Honour opined that a “less strict approach” of what is relevant should apply in family law proceedings than the standard adopted in other jurisdictions. In considering whether the wife was “fishing” his Honour considered:-
20.There is an indication here that the wife is “fishing” within the meaning of the civil law definition but because of the family connection of the husband and more importantly, the parties’ past connections with that enterprise, she should only have to show that there is a plausible explanation for her endeavours.
Cronin J was not satisfied that the documents pursued by the wife were in the possession or control of the husband and even if they were and notwithstanding the “less strict approach”, the wife had not been able to show that an order for specific discovery of the documents should be made.
The current application relies upon the bald assertion that a will document will likely inform as to the relationship that the testatrix has with others but in particular the applicant.
The converse is also possible namely, that a will document may say nothing about the relationship in respect of any person mentioned.
The request made by the applicant is rendered otiose by the reference to the production of the solicitors’ file.
It is noted that the applicant does not present evidence that would make the respondent’s testamentary intentions relevant. He simply seeks the production of the respondent’s solicitors’ file, draft and/or concluded will documents.
I do not consider the applicant has demonstrated a “plausible explanation for [his] endeavours”. The application for production is a “fishing expedition”.
Even applying a “less strict approach” to the question of what is relevant, I would still find the application falling well short of the mark in the absence of more.
It is possible to consider that there may be many categories of documents that hold the potential to assist a party in the case that they intend to pursue. If the test of relevance was satisfied upon the mere assertion that a document or category of documents may contain relevant evidence but that possibility would only be determined upon production, the obligation for discovery and production would be without effective limit.
The obligation on a party to make discovery of documents that are likely to inform the Court’s determination of the issues of contention between the parties is necessarily a high bar to satisfy. If the respondent is aware of documents that would speak in favour of the applicant’s case then she is obliged to produce them.
My determination that documents evidencing the respondent’s testamentary intentions are not relevant to the proceedings does not require a consideration as to whether, in any event, legal professional privilege would apply and be a barrier to production. Even documents protected by legal professional privilege are required to be discovered with sufficient information to identify a relevant document together with the assertion of a claim of privilege.
Parties to proceedings are entitled to rely upon the clear obligation on each of them to provide discovery even if documents identified have the potential to assist the other parties’ case.
I dismiss paragraph 5 of the Application in a Case filed 12 May 2020.
I make orders as appear at the commencement of these reasons.
I certify that the preceding fifty two (52) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 29 May 2020.
Associate:
Date: 29 May 2020.
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