The plaintiff, Ms Alexia Crawford, is the daughter of the first defendant, Ms Lorraine Crawford and the stepdaughter of the second defendant, Mr Peter Morris.
For convenience and without intending any disrespect, I will refer to the parties by their first names.
In about 2000, Alexia, Lorraine and Peter entered into an agreement to invest in property together.
Between 2000 and 2005 the parties jointly purchased two properties in Surry Hills, a property in Granville, a property at Avoca Beach and the shares in a company which owns a property in Elizabeth Bay.
Alexia claims that between January 2005 and August 2008 Lorraine, using a power of attorney executed by Alexia in her favour, sold one of the Surry Hills properties, the Avoca Beach property and the Elizabeth Bay shares and has failed to account to her for the proceeds of those sales
Alexia also claims that in October 2009 and July 2010 Lorraine and Peter caused transfers to themselves of Alexia's interest in the second Surry Hills property and the Granville property to be registered which, to their knowledge:
1. were not in fact executed by Alexia;
2. bore a false signature purporting to be that of Alexia; and
3. were concealed from Alexia.
Lorraine and Peter have now caused the second Surry Hills property and the Granville property to be sold.
On 7 March 2016, Black J made a freezing order, one effect of which is to restrain Lorraine and Peter from dealing with the proceeds of sale of those two properties.
On 24 March 2016, Pembroke J extended those orders until further order and ordered that Lorraine and Peter serve "any further evidence on which they rely" by a specified date.
On 1 April 2016, as Expedition Judge, I fixed the matter for hearing before Sackar J for three days commencing 13 July 2016.
I have before me now, two notices of motion filed on behalf of Lorraine and Peter.
[3]
The subpoena motion
The first is their notice of motion of 10 May 2016 seeking to set aside a subpoena issued at Alexia's request to DoubleBay Law Pty Ltd trading as "& Legal" pursuant to r 33.4 of the Uniform Civil Procedure Rules 2005 (NSW).
The predecessor firm to & Legal, DenesEbner, acted on the sale of the Avoca Beach property, the second Surry Hills property and the Elizabeth Bay shares.
The relevant person acting on the transactions was Mr Denes. On 20 December 2007 Mr Denes signed a statutory declaration declaring that he was the solicitor for Alexia. In one of her affidavits, Alexia gives evidence that "I do not know Mr Denes and he is not my solicitor".
The subpoena seeks production of:
1. "all Documents in the possession, custody or control" of the recipient "which relate to any legal services provided to any of the Relevant Persons or provided in connection with the Estates during the Period"; and
2. "all Documents recording or referring to communications with either of the Defendants or any person representing the Defendants concerning the uplifting, transfer or copying of" those documents.
"Relevant Persons" is defined to mean Alexia, Lorraine and Peter as well as Lorraine's late parents. "Estates" is defined to mean the estates of Lorraine's late parents.
The recipient of the subpoena, & Legal, has produced documents and makes no objection to those documents being made available to the parties. & Legal has claimed $300 plus GST as the costs of production of the documents, which suggests that the volume of material is not particularly large.
The dispute between the parties is as to whether there is any legitimate forensic purpose to be served by production of the documents sought or whether there is reason to expect that the documents might be relevant to the proceedings.
As Mr Emmett, who appears for Alexia, submitted, the question is whether it can be reasonably expected that the documents might "throw light" on the real issues in the proceedings (to use the language in Trade Practices Commission v Arnotts Ltd (No 2) (1989) 88 ALR 90 at 103).
On behalf of Lorraine and Peter, Mr Barnett stated that Lorraine and Peter would be content for the subpoena to be amended (or a new subpoena to be issued) to seek production of documents in the possession, custody or control of & Legal which relate to legal services provided to Alexia, or to Lorraine and Peter in connection with the five properties to which I have referred.
Lorraine and Peter apprehend that compliance with the subpoena might cause production of documents relating to Lorraine's purchase of a property at Callala Beach.
Mr Emmett submitted that any documents produced by & Legal in relation to Lorraine's purchase of Callala Beach are relevant to a statement made by Lorraine to Alexia, concerning her source of funding for the Callala Beach property, that "the bank is lending me money on my inheritance".
Mr Emmett submitted that the documents sought from & Legal might tend to show that the statement was false, that the establishment of such falsity would not merely go to Lorraine's credit but would also be relevant to the overall allegation of fraud made by Alexia against Lorraine, and (because the Granville property was at one point security for the loan taken out by Lorraine to purchase the Callala Beach property) might be relevant to Alexia's ability to trace into the Callala Beach property.
Based on those submissions, I am satisfied that any documents produced by & Legal concerning the Callala Beach property may be relevant and serve a legitimate purpose.
As to documents relating to Lorraine's parents', Mr Emmett submitted that:
"The DenesEbner files relating to the Estates are likely to be relevant to what sources of funds were available to the defendants other than drawing down on a mortgage secured against one of the properties which the plaintiff says was fraudulently taken away from her". [Emphasis in original]
I am not sure that it can be said that any material produced in relation to the Estates is "likely" to be relevant to such matters. However the material may be so relevant.
As Brereton J said in Re Streetscape Projects (Australia) Pty Ltd (Subject to Deed of Company Arrangement) [2013] NSWSC 355 at [5], the relevance test is "an undemanding one…it suffices to pass the test of relevance that there be a rational possibility that the documents production of which is sought could illuminate the issues in the main case."
It appears to me that such a rational possibility exists in this case.
For those reasons I do not propose to set aside the subpoena.
Lorraine and Peter's notice of motion of 10 May 2016 should be dismissed.
[4]
The s 87(4) certificates motion
The second matter before me is Lorraine and Peter's notice of motion of 19 May 2016 seeking:
1. an order revoking the order of Pembroke J to which I have referred "as requires [them] to provide the evidence contained in the sealed affidavit[s] sworn [by them on] 12 May 2016…on the ground that the evidence may tend to prove that [they] have engaged in culpable conduct"; and
2. the issue of a certificate under s 87(4) of the Civil Procedure Act 2005 (NSW) ("the Act") in respect of those affidavits.
The affidavits are referred to as "sealed" affidavits because they were provided to me in a sealed envelope together with an invitation that I read them to determine whether, as they apprehend, they bespeak "culpable conduct" for the purpose of s 87 of the Act on their part; namely a possible contravention of s 192E of the Crimes Act 1900 (NSW).
Lorraine and Peter wish to adduce evidence in accordance with those affidavits but, evidently, apprehend that to do so "may tend to prove" that they have contravened s 192E of the Crimes Act. Hence, they seek the protection of a certificate under s 87 of the Act and, to achieve that result, have adopted the device of seeking revocation of Pembroke J's order.
Section 87(1) of the Act defines an "order for production" as being "an interlocutory order requiring a person…to provide evidence to the court".
Sections 87(2), (3) and (4) of the Act are in the following terms:
"(2) This section applies in circumstances in which:
(a) an application is made for, or the court makes, an order for production against a person, and
(b) the person objects to the making of such an order, or applies for the revocation of such an order, on the ground that the evidence required by the order may tend to prove that the person has engaged in culpable conduct.
(3) If the court finds that there are reasonable grounds for the objection or application referred to in subsection (2) (b), the court is to inform the person, or the person's legal representative:
(a) that the person need not provide the evidence, and
(b) that, if the person provides the evidence, the court will give a certificate under this section, and
(c) of the effect of such a certificate.
(4) If the person informs the court that he or she will provide the evidence, the court is to cause the person to be given a certificate under this section in respect of the evidence."
As I have mentioned, in these proceedings Alexia alleges that Lorraine and Peter have falsified her signature on instruments of transfer relevant to the second Surry Hills property and the Granville property.
Lorraine and Peter deny these allegations and allege that Alexia signed the relevant transfer documents. Affidavits already filed by Lorraine and Peter deal with the circumstances in which they contend that Alexia signed the transfers.
Those affidavits do not, however, deal with the circumstances in which Alexia's signature was witnessed on those transfers. During argument I was told that that matter is dealt with in the sealed affidavits.
During argument I was also told that the person who has purported to witness Alexia's signature on the transfers is a Mr Andrew Whitlam, who was described to me as being "an old friend of the family". Mr Emmett said that his instructions were that Alexia knew Mr Whitlam but had not seen him "for decades".
In his written submissions, Mr Barnett stated:
"11. The Court should inspect the sealed affidavits. Without disclosing the substance of the affidavits in these submissions, it is apparent that there is an appreciable risk that the evidence could tend to show that the defendants engaged in culpable conduct and in particular conduct that could constitute an offence under s 192E of the Crimes Act. That section provides that a person who by any deception dishonestly obtains property belonging to another or any financial advantage is guilty of the offence of fraud.
12. Whether an offence under that section (or another section) actually was committed would involve consideration of all the elements of the offence and it is not suggested that the evidence in the sealed affidavits establishes such an offence. But there is a real risk that the evidence goes someway down that path and that is sufficient to 'tend to bring' the defendants into peril or raise the relevant appreciable risk."
Mr Barnett informed me that if, having inspected the sealed affidavits, I was satisfied, for the purposes of s 87(3) of the Act, that there were reasonable grounds for Lorraine and Peter to seek revocation of Pembroke J's order (a matter to which I will return), and I were to inform Lorraine and Peter, pursuant to ss 87(3)(a) and (b) of the Act, that they "need not provide the evidence" in the sealed affidavits but that, if they did so, the Court would provide them with a certificate, his instructions were that Lorraine and Peter would inform the Court that they would provide the evidence once the certificate was given.
I have, as invited by Mr Barnett, inspected the sealed affidavits.
It is not appropriate that I set out, in these reasons, what is stated in those affidavits save to say that I am satisfied that what appears in pars 4 to 20 of Lorraine's affidavit and pars 3 to 22 of Peter's affidavit may tend to prove (I would put it no higher than that) that they have engaged in culpable conduct of the kind described.
However, an anterior question arises.
Section 87 of the Act is only enlivened when there is threatened, or there has been made an "order for production" "requiring" a person to give evidence that "may tend to prove that the person has engaged in culpable conduct" (s 87(2) read with the definition of "order for production").
Like ss 128 and 128A of the Evidence Act 1995 (NSW), s 87 of the Act is addressed to a circumstance where a person is "required" to give evidence which may incriminate that person. Section 128 deals with the circumstance where a person "objects" to giving such evidence (typically in the course of a trial). Section 128A deals with the circumstance where an order requiring disclosure of such evidence is made in connection with the making of a freezing order. Section 87 of the Act deals with the circumstance where an interlocutory order requires disclosure of such evidence.
The Court of Appeal made clear in Song v Ying [2010] NSWCA 237; 79 NSWLR 442 at [20] that s 128 is directed to the circumstance where a person is "actually compelled" to give incriminating evidence. Sections 128A of the Evidence Act and 87 of the Act are also directed to that circumstance. Each of ss 128 and 87 speaks of the Court informing the relevant person that they "need not" give or provide the evidence unless, in effect, a certificate is granted (s 128(3)(a) of the Evidence Act and s 87(3)(a) of the Act). The sections seek to strike a balance between the interest that the law has in protecting a person from involuntarily incriminating him or herself on the one hand, and in uncovering the truth on the other. The sections are not designed to provide protection to a person who chooses to give incriminating evidence (see Song v Ying at [26] and [28]).
The particular question which arises in this case is whether the order made by Pembroke J on 24 March 2016 "requires" Lorraine or Peter to adduce incriminating evidence (evidence which "may tend to prove that [they have] engaged in culpable conduct").
Pembroke J's order was that Lorraine and Peter file and serve "any further affidavit evidence on which they rely". That is, of course, a very common, if not the usual, form of words used in interlocutory orders for the filing and service of affidavits.
The order did not specify the topics with which such affidavits should deal. In particular, it did not specify that Lorraine and Peter give an account of the circumstance in which Alexia's alleged signature on the relevant transfers was witnessed.
Mr Barnett submitted that, as Lorraine and Peter do wish to rely upon the material in the sealed affidavits, it follows that they are "required" by Pembroke J's order to file and serve the sealed affidavits.
I do not accept that submission.
Lorraine and Peter do not have to give the evidence in the sealed affidavits. They do not, by reason of Pembroke J's order, have to file or serve any affidavits at all. The order only "requires" Lorraine and Peter to serve any affidavits "on which they rely" (that is, on which they choose to rely) by the date specified in the order. The order does not "require" Lorraine and Peter to file or serve the sealed affidavits. The fact that they wish to rely on those affidavits cannot, in my opinion, have the consequence that they are "required" to file and serve them. Whether they file and serve those affidavits is a matter for them.
Mr Barnett, drew my attention to the decision of Rein J in Sheikholeslami v Tolcher [2009] NSWSC 920; 75 NSWLR 418. In that case his Honour granted a certificate under s 87 of the Act in circumstances indistinguishable from those in the present case. However, his Honour's decision was made prior to the Court of Appeal's decision, Song v Ying and, I would respectfully suggest, no longer reflects the correct position.
Mr Barnett also referred to the decision of Brereton J in Vaughan Constructions Pty Ltd v Luong [2008] NSWSC 1033. In that case his Honour granted a certificate under s 87 of the Act. However, there is no suggestion in his Honour's reasons that the applicant for the certificate was not "required" to provide the incriminating material in response to the orders in question.
In my opinion, s 87 of the Act is not enlivened in this case. I refuse to grant the certificate sought.
The notice of motion of 19 May 2016 should be dismissed.
I will return the sealed affidavits and invite submissions as to costs and as to what further directions should be made in the proceedings (including as to mediation).
[5]
Amendments
30 June 2016 - Case title amended
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 30 June 2016