Yasuda & Ahlers
[2024] FedCFamC1F 471
•10 July 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Yasuda & Ahlers [2024] FedCFamC1F 471
File number: SYC 8437 of 2022 Judgment of: CAMPTON J Date of judgment: 10 July 2024 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Objection to subpoena – Where the proceedings have been referred to arbitration – Where the wife issued a subpoena to the husband personally and in his capacity as the sole director of a corporation of which she was a shareholder and used to be employed – Where the categories of documents sought to be produced are not particularised and include thousands of emails – Where the wife did not identify the apparent relevance of the documents she sought to be produced – Where the sheer volume of documents sought to be produced amount to a fishing expedition – Objection to subpoena upheld – Order for costs to be paid upon the making of the arbitral award. Legislation: Family Law Act1975 (Cth) Pt VIII, ss 13E, 79, 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) chapters 6 and 7, Pt 15.3, r 15.26
Cases cited: National Employers’ Mutual General Insurance v Waind and Hill [1978] 1 NSWLR 372 Division: Division 1 First Instance Number of paragraphs: 36 Date of hearing: 10 July 2024 Place: Sydney Counsel for the Applicant: Mr A Schonell Solicitor for the Applicant: York Law Family Law Specialists Solicitor for the Respondent: Michael Conley Lawyers ORDERS
SYC 8437 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR AHLERS
Applicant
AND: MS YASUDA
Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
10 JULY 2024
THE COURT ORDERS THAT:
1.By consent paragraphs 3 to 9 of the schedule to the subpoena issued at the request of the wife on 18 June 2024 to produce documents directed to the husband personally and the husband as Director of B Pty Ltd be struck out.
2.The objection filed 21 June 2024 of the husband personally and as a Director of B Pty Ltd to the balance of the said subpoena be upheld and the subpoena be struck out.
3.The wife pay the husband’s costs of and incidental to the upheld objection to the subpoena issued 18 June 2024 fixed in the sum of $5000, such costs to be paid within 14 days of publication of the Arbitral Award of Mr C.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 the pseudonym Yasuda & Ahlers has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
CAMPTON J:
These are proceedings listed in the New South Wales National Arbitration List. On 4 March 2024 an order was made by a judge of the Federal Circuit and Family Court of Australia (Division 2) referring the whole of the Pt VIII proceedings pursuant to s 13E of the Family Law Act1975 (Cth) (“the Act”) to arbitration.
The arbitration hearing is listed before Mr C (barrister) over three days in mid and late 2024.
Background
The parties commenced cohabitation in 2002, married in 2009, and separated under the one roof either in January 2022 or July 2022. The husband vacated the home at Suburb D in early 2023. There are no children of the relationship.
Section 79 proceedings were commenced by the wife filing an Initiating Application seeking orders adjusting property between she and the husband on 29 November 2022. The husband filed a Response to the Initiating Application on 27 January 2023 seeking different orders for the adjustment of property. The relief as sought by the husband and the wife has subsequently been amended over the course of the litigation.
A trading enterprise of the husband was incorporated in 2006 by way of B Pty Ltd. The husband and the wife were both shareholders on incorporation. The wife’s shareholding was transferred to the husband in 2018. The husband is the sole director and shareholder of the corporation. The corporation provides information technology services.
The interests of the parties in B Pty Ltd have been the subject of a ch 7 single expert forensic accounting opinion from Mr F, dated 11 July 2023. The single expert is currently updating his opinion for the purposes of the arbitration hearing.
The parties have filed their affidavit evidence for the purposes of the arbitration hearing.
It is uncontroversial that the wife was engaged in corporate employment up until 2010 or 2011 and commenced employment with B Pty Ltd in 2011. Her employment with B Pty Ltd concluded in late 2021.
It is the husband’s evidence that the wife was employed at B Pty Ltd as a manager, and later in another managerial role or as a director. It is the wife’s case that her engagement with the corporation was in a partnership or co-directing role with the husband, and that she was closely connected with the operations and performance of the corporation.
The subpoena subject to objection
On 18 June 2024 a subpoena for the production of documents was issued by the Court at the request of the wife directed to the husband personally, and to the husband in his capacity as the sole director of B Pty Ltd. That subpoena, by way of its schedule, sought eight categories of documents to be produced for the period from 1 January 2011 to 31 December 2021, being:
1. A copy of this subpoena;
2. A copy of the entirety of the contents of business email accounts, sent or received by [Ms Yasuda] between 1 January 2011 to 31 December 2021 (‘the period’), using any [B Pty Ltd] (‘the company/companies’) email accounts or platforms including any attachments including any emails archived or stored on the companies’ server/s including but not limited to the following email addresses:
a. […@...]
b. […@...]
c. […@...]
d. […@...]
e. […@...]
f. […@...]
g. […@...]
3. All emails sent and received during the period in the companies’ Procurement email mailbox in which [Ms Yasuda] is a sender or recipient.
4. All emails sent and received during the period in the companies’ Accounts email mailbox in which [Ms Yasuda] is a sender or recipient.
5. All emails sent and received during the period in the companies’ HR email mailbox in which [Ms Yasuda] is a sender or recipient.
6. All [documents and folders] and their contents any other records relating to work performed [Ms Yasuda] during the period on the network and servers of the Company.
7. A copy of all other documents in the Directors folder on the network for the period.
8. All correspondence available via Microsoft teams chat during the period that involve [Ms Yasuda].
9. All the forensic data logs […] under [Ms Yasuda] between the period.
(Hyperlinks removed)
The objection taken by both the husband in his personal capacity and as a director of B Pty Ltd to the subpoena was grounded from contentions as to a lack of apparent relevant, abuse of process, fishing expedition, the cost of compliance and insufficient time to comply.
At the commencement of the hearing today, the wife advised that she would not press for compliance with the production of documents in paragraphs 3 – 9 of the schedule to the subpoena issued 18 June 2024. A consent order will be made striking out those paragraphs of the schedule to the subpoena.
The wife presses for compliance with paragraph 2 of the schedule to the subpoena, as set out above (at [10]).
The husband presses his objection to the balance of the subpoena as identified.
These reasons determine the objection.
CONSIDERATION
A subpoena is an ex parte order of the Court requiring the production of documents. Part 15.3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) regulates the issue of a subpoena to produce documents. Rule 15.26 confirms that the recipient of a subpoena can have standing to object to it. I am satisfied that B Pty Ltd in the circumstances has standing to object to the subpoena.
Jurisprudence may establish that the use of a subpoena as a forensic process to require a party to produce documents may be an abuse of process. That is not a ground of objection as taken by the husband insofar as the subpoena is directed to him personally. It is not the subject of dispute that no request for disclosure has been made by the wife of the husband pursuant to ch 6 of the Rules for the documents sought by way of the original or amended schedule to the subpoena.
The fundamental principle in relation to an objection as to apparent relevance is identified in National Employers’ Mutual General Insurance v Waind and Hill [1978] 1 NSWLR 372. The pivotal issue for determination here is as to apparent relevance of all the documents sought to be produced in the proceedings. It is not a high threshold.
It is the wife’s contention that the husband’s affidavit evidence for the arbitration seeks to minimise or distort her role by way of an employee in B Pty Ltd to ground subsidiary findings underscoring the assessment of her contributions.
It seems that the parties wish to promote before the arbitrator a factual dispute as to the nature, character, and content of the wife’s role by way of an employee in the corporation, notwithstanding that each of the parties were shareholders of the corporation until 2018, and notwithstanding an absence of evidence in the husband’s affidavit as to the wife not contributing both financially and non-financially, to the best of her capacities, within the marriage dynamic.
The husband’s affidavit evidence for the arbitration records his observations over a period from 2011 until 2021 that the wife “struggled in dealing with staff”. He gives some broad summary evidence as to “staff attrition rates” being high in the period 2011 to 2021 “as compared to the period prior to 2011”. In more recent times the corporation has employed 20 staff. There is an absence of particularity in the husband’s affidavit evidence as to the identity of the staff who left and were replaced, when those events occurred over the 10-year period, the circumstances of each staff member leaving, and any nexus between the wife’s role when she was a manager dealing with staff and HR issues and the departure of the unspecified staff members. The husband gives evidence in late 2021 of B Pty Ltd employing a manager who undertook the wife’s role in addition to other roles in the operation of the corporation.
The wife contends that all the conceded thousands of emails she seeks over the 12-year period to the seven email addresses will establish, by way of their content, that the husband’s contention, as identified in his arbitration affidavit, is absent substance and ought not be accepted.
There seems to be little dispute that at least the first two email addresses contained within the schedule were email addresses exclusively operated by the wife, and that the remaining five email addresses were generic addresses that a number of different persons had capacity to access and use.
The husband contends that the production of thousands of emails does not forensically advance the wife’s case.
The wife’s response is that unless she has access to the thousands of emails over a 12-year period, she will be deprived of her ability to test the husband’s evidence or will be restricted in her capacity to engage in the dispute as to her role and performance in the corporation.
With the greatest of respect to the parties, on my reading of the affidavit material, the dispute between them on this subject matter is somewhat arid. I do not accept the wife’s submissions that she will be derived of a capacity to test the husband’s broad unparticularised summaries of events over 12 years as contained in his arbitration affidavit evidence should the subpoena be struck out.
The husband identifies an absence of proportionality in the wife’s case by the forensic process pursued through the amended schedule to the subpoena. He gives evidence as to the difficulties in accessing where the emails are stored on an external hard drive and costs that, he says, may be in the range of $75,000 and take weeks to undertake, as being a foundation of his abuse of process contentions. The wife contends that the husband could easily engage with the production of documents by simply producing the relevant hard drive to her. She does not seek production of the hard drive. She seeks copies of the thousands of emails. The wife contends that the husband’s time in undertaking the recovery of the relevant emails to the seven addresses over the 12 years would only take a few hours.
In submissions, the wife was requested to identify with precision what would be contained in the thousands of emails that would establish the findings of fact that she would seek to ground, as contained in her affidavit evidence, as to the nature, content, and character of her role and performance in the corporation. That enquiry was not the subject of engagement.
As would be self-evident from these reasons, it would be a relatively simple matter for the wife to specify with some precision, when seeking disclosure from the husband pursuant to ch 6 of the Rules, the identity of a sender or receiver of an email relevant to the wife’s role and performance in the operations of the corporation, the approximate date of the email, its context and the subject matter it recorded. This would focus the apparent relevance of the information sought to the issue or fact the parties will seek by way of findings to be made by the arbitrator.
I am not satisfied that the wife has established that the production of thousands of emails by way of seven specific email addresses over a period of 12 years are apparently relevant to the subject matter in dispute. If I am in error in relation to that determination, the sheer volume, being thousands of emails sought, is a fishing expedition and an abuse of process. These determinations are pivoted and supported by an absence of evidence that there has been a request of the husband to produce any specified emails in the terms identified in these reasons.
COSTS
The husband makes an application for costs arising from the determination made upholding his successful objection to the issue of a subpoena to produce documents at the request of the wife directed both to him personally and to him as a director of B Pty Ltd fixed in the sum of $5,000.
The relevant principles as to costs are well settled. While the starting position established by section 117(1) of the Act is that each party pay their own costs, section 117(2) allows the Court to make such orders as to costs as it considers just if there are circumstances which justify it doing so.
In considering what order, if any, should be as to costs, a requirement is to have regard to the matters set out in section 117(2A) of the Act and to give weight, as considered appropriate, to any relevant factor. It is well settled that no single factor in section 117(2A) has priority, nor must there be more than one factor satisfied. Rather, any one factor may be sufficient.
These parties are to be engaged in an arbitration soon. I am told that, at the least, the gross value of their home at Suburb D is in the range of $8 million, and the prior valuation of their interests in B Pty Ltd was in the range of $1 million. The financial circumstances of the wife do not militate against the making of a costs order. By upholding the objection to the subpoena, and the subpoena being struck out, the wife has been unsuccessful. That circumstance justifies the making of an order as to costs in favour of the husband.
The wife, appropriately, did not dispute the reasonableness of the quantum sought by the husband as to costs. It is just for the wife to pay the husband’s costs in the fix sum as sought of $5,000.
Until the financial circumstances of the parties distil by way of arbitration, I am unaware as to the wife’s capacity to immediately make such a payment. An order will be made that the payment of the husband’s costs be stayed pending the publication of the arbitral award.
I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 10 July 2024
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