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[2021] WASC 374
General information, not legal advice.
Supreme Court of WA
2021-10-28
Original judgment source is linked above.
1 This is the plaintiff's application to set aside a subpoena issued to Sally Bernadette (nee Hudson) on 14 July 2021. Before setting out the terms of the subpoena, it is necessary to say something of the background facts. These were not in dispute. It is convenient to quote from the submissions filed on behalf of the first named third and fourth defendants in opposition to the plaintiff's application. Relevantly, the submissions read as follows:
1. The deceased, William Grove ("William") died on 30 October 2015 leaving a will dated 11 September 2015 ("Will"). Probate of the Will was granted to the defendant on 8 February 2016.
2. As at the date of his death the deceased left a net estate of $28,576,435.84 As at 21 February 2020 the value of the estate was $24,598,921.16.
3. The plaintiff is not a beneficiary under the Will. On 8 August 2016 the plaintiff commenced proceedings for provision from the estate of the deceased pursuant to s6(1) of the Family Provision Act 1972 ("the Act") ("application").
4. On 8 August 2016 the plaintiff swore an affidavit in support of his application. In that affidavit, amongst other matters, the applicant deposed that:
in partnership with the deceased and his brother Andrew, having an interest in, and as the former manager of a hotel, being the Indian Ocean Hotel ("hotel"). At the date of his death the deceased held a 70% interest in the hotel, which interest was valued at $10,500,000, the plaintiff held a 20% interest and his brother, Andrew 10% (at paragraphs 14-26);
that he is a director of Talmalmo Pty Ltd ("Talmalmo") [37];
that his wife, Kerry, is a director of Bovee Pty Ltd ("Bovee") [38];
that he was the beneficiary of a trust known as the B E Lynn Trust but has never received a distribution from that trust [82], [84];
in 2011 Talmalmo and Bovee, which the applicant described as his and his wife's companies ("our two companies"), entered into management agreements with the hotel, and that Talmalmo and Bovee commenced an action against the hotel for the recovery of wages, which at the date of swearing of the affidavit was before the Supreme Court [36]-[41];
he has never received an income or distribution from the hotel partnership [85]; but
did not provide a statement of his assets and liabilities, stating only that he wished to be able to take care [sic] and assist his family and that provision for him from the Will go a long way to clearing his liabilities and supporting his family (at [93], [96]).
5. On 9 November 2017 the plaintiff swore a supplementary affidavit in support of his application. In that affidavit, amongst other matters, the plaintiff:
deposed that the Grove Superannuation Fund ("Fund") was set up to, amongst others, benefit himself [28] and that any assets held payable to the estate by the Fund have not been brought into account by the executor as an asset of the estate [31];
deposed that in respect of the estate of his sister, Sonja Grove, who died in 1992, that except for a loan from her estate of $220,000 which he paid back in 1996, he did not receive any share of his sister's estate, the corpus of which divided equally between his brothers Simon and Andrew on 27 August 2015 [32]- [40];
provided further details about the B E Lynn Trust and repeated his assertion that he had not received anything from that trust [45]-[55];
deposed that between 1985 and 2014/15 he was told by the deceased that he would be given the hotel, for which he worked for "little monetary return" [66]-[67] (contra paragraph f, above);
in 2011 Talmalmo and Bovee which the applicant described as his and his wife's companies entered into management agreements with the hotel ("our two companies"), and that Talmalmo and Bovee commenced an action against the hotel for the recovery of wages, which at the date of swearing of the affidavit was before the Supreme Court [36]-[41];
he did not receive a distribution from the B E Lynn Trust [84];
he has never received an income or distribution from the hotel partnership [85];
foreshadowed claims against the deceased's estate in respect of payment made out of the B E Lynn Trust, Sonja's Estate in respect of which the deceased was the administrator and the hotel partnership for alleged improper partnership activities, salaries and financial irregularities [178]-218];
annexed tax returns and accounts for some of the years from 2 June 2002 and 30 June 2015; and accounts for the BE Lynn Trust for 2011, 2012 and 2015: (Annexures 59-71, and a hotchpotch of other searches and correspondence relating to business and financial matters);
deposed that he and Kerry had farming assets of $3,914,514 (in the absence of any valuation), non-farm investments of $2,099,630 which are unspecified and that after deducting (unspecified) liabilities of $5,417,337 he held net assets of $596,807, as well as "a small" superannuation fund of $72,000 between the plaintiff and Kerry [221]-[227];
set out what purported to be his and Kerry's financial position, without any supporting documentation, save for his income tax returns to 30 June 2011 and 2015 and Kerry's income tax returns for 2010, 2012, 2013 and 2015 [225]-[226]. No financial documents have been provided for Talmalmo, Bovee, and other companies in which he and Kerry have an interest, including Loric Pty Ltd, Splash World Pty Ltd and Qube Hammond South Development Pty Ltd; and
annexed what purported to be a financial statement of the plaintiff, Talmalmo and Kerry that the plaintiff says he has prepared, which statement has not been expertly or independently verified, is materially inconsistent (both internally and having regard to other paragraphs of the affidavit), and makes little sense (Annexure 76 pages 434-437). No details whatsoever are provided of the assets and liabilities for Bovee or Kerry, and the other entities in which the plaintiff and Kerry have an interest notwithstanding that the plaintiff describes the statement as "identifying, to the best of my knowledge and ability...assets and liabilities at present...of my wife, Kerry" [221].
2 The subpoena to Ms Hudson was issued on 5 July 2021. Under the heading 'Schedule of documents', Ms Hudson was required to produce the following:
The documents and things you must produce are as follows:
In relation to:
(a) John Willem Grove ("John Grove") of 55 Barbados Turn, Hillarys in the State of Western Australia born on 4 August 1960:
(b) any company of which John Grove is a director or office holder or shareholder including the companies in paragraphs (f) to (h) below; and
(c) any trust in which John Grove is an appointor, guardian, trustee or beneficiary; and
(d) any partnership in which John Grove is a partner; and
(e) any property, including without limitation shares and intellectual property in which John Grove has an interest; and
(f) Talmalmo Holdings Pty Ltd (ACN 066 048 968); and
(g) Loric Pty ltd (ACN 009 022 842); and
(h) Qube Hammond South Development Pty Ltd (ACN 152 250 747).
(together "The John Grove Entities")
and in relation to
(i) Kerry Anne Grove ("Kerry Grove") of 55 Barbados Turn, Hillarys in the State of Western Australia born on 4 August 1960:
(j) any company of which Kerry Grove is a director or office holder or shareholder including the companies in paragraphs (n) to (r) below; and
(k) any trust in which Kerry Grove is an appointor, guardian, trustee or beneficiary; and
(l) any partnership in which Kerry Grove is a partner; and
(m) any property, including without limitation shares and intellectual property in which Kerry Grove has an interest; and
(n) Bovee Pty Ltd (ACN 009 032 884); and
(o) Talmalmo Holdings Pty Ltd (ACN 066 048 968); and
(p) Loric Pty ltd (ACN 009 022 842); and
(q) Qube Hammond South Development Pty Ltd (ACN 152 250 747); and
(r) Splash World Pty Ltd (ACN 87 611 200 134)
(together "The Kerry Grove Entities")
All documents held by Sally Hudson pertaining to the John Grove Entities and Kerry Grove Entities, including but not limited to correspondence, advice, file notes, faxes, emails, financial statements, reports, accounts, loan applications, loan approvals, valuations and agreements
for the period 29 June 2013 to 31 December 2020.
For the purposes of this subpoena: "documents" include but is not limited to any material, records stored in electronic form which are capable of being printed onto paper or viewed by means of a computer, phone or other electronic device.
3 It was not in dispute between the parties that O 36B r 8(2) of the Rules of the Supreme Court 1971 (WA) permits the court, on the application of a party, to set aside a subpoena in whole or in part. Furthermore, the court has an inherent jurisdiction to set aside a subpoena. The subpoena may be set aside where it does not have a legitimate forensic purpose, is oppressive or is otherwise an abuse of process. Whether a subpoena is an abuse of process there is a broad merit based judgment which takes account of the public and private interests involved. It also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the processes of the court. There are no hard and fast rules: see Jensen v Nationwide News Pty Ltd [No 6] [2018] WASC 415 at [26] and [28].
4 Oppression is determined by reference to the breadth of the subpoena, the definition of the documents involved and the type and degree of burden placed on the addressee. A legitimate forensic purpose will be established if the documents give rise to a line of enquiry which is relevant to the issues before the trier of fact. The court will also consider whether the documents are required for a fair disposal of the action and allow the parties to appraise the strengths and weaknesses of their and their opponent's case. A subpoena that serves no legitimate forensic purpose is an abuse of process.
5 In both his written and oral submissions, counsel for the defendants pointed to the fact Ms Hudson had not sworn an affidavit in support of this application and on that basis alone, the application should fail. Counsel referred to the decision of Simmons J in Goldie v Gordon Theodore Hothershall Getley as Executor of the Estate of Janet May Goldie [No 2] [2010] WASC 66. Relevantly, his Honour said at [65]:
65. On the basis of my discussion of legitimate forensic purpose above, I consider that the documents sought by the subpoenas in this case have not been shown to be only 'marginally' related to the issues in the litigation. In assessing whether the interest in obtaining those documents outweighs the interests of those to whom the subpoenas are addressed, I note that neither Ink Mark nor Mrs Julie Goldie has indicated a concern about the subpoenas imposing a burden of the present kind. I note in this regard the observation in Kimberley Homes that where the burdensome nature of the subpoena is not relied on by the person to whom it is addressed, and the documents are relevant to an issue between the parties, it would be 'a rare case indeed in which the subpoena would be set aside as oppressive, and so an abuse of process'.
6 Counsel for the plaintiff noted that under O 36B, it was not just the addressee of the subpoena who could apply to have the subpoena set aside, but any party. Nonetheless, it is clear that the addressee of the subpoena is the person in the best position to know whether or not complying with the subpoena is oppressive. This application has to be approached on the basis that there is no such evidence from Ms Hudson. The only evidence on this question is a letter from Ms Hudson to the court dated 15 July 2021. A copy of that letter appears as attachment AVV-4 to the affidavit of Andreus van der Vyver sworn 7 September 2021 and filed in support of this application. Ms Hudson says:
I am a sole practitioner and I do not have any administrative staff. As the 2020/2021 financial year just ended this is my busiest time of the year. I was not expecting the subpoena as I have not previously been contacted about producing documents for this Court action.
In order to comply with the subpoena, I need to review 8 years' worth of files, and identify, collate and produce a potentially enormous amount of documents by myself in effectively 4 business days at the busiest time of the year for my practice.
I will need to spend a significant amount of time in order to produce the documents to the Court. As I am a sole practitioner, any time I spend looking for the documents is time that I cannot spend working in my practice. My hourly rate is $220 (including GST) so the time I spend trying to comply with the subpoena will result in a substantial loss of income.
I would be very grateful if you would extend the time for me to comply with the subpoena from 20 July 2021 to 24 August 2021. This should give me enough to time to be able to complete the backlog of work I have (being the end of the financial year) and review my files to locate and identify the enormous number of documents I am required to produce by the subpoena.
7 Based upon this correspondence, it is difficult to see how the plaintiff can make out an argument that complying with the subpoena would be oppressive. It certainly appears to involve a good deal of work on the part of Ms Hudson given the range of documents sought and the period involved. Be that as it may, Ms Hudson indicates given time she could comply. That being the case, I would not be prepared to set the subpoena aside on the basis it is oppressive.
8 Nor am I prepared to set the subpoena aside on the basis it is vague and uncertain. The subpoena is wide and it is difficult to see what documents might be in Ms Hudson's possession that relate to Mr and Mrs Grove, but would not be the subject of the subpoena. Of course there is a date range, but the date range is very wide; essentially, Ms Hudson would have to produce virtually every document she had in her possession. If she did so, she could be said to be complying with the subpoena. To that extent, the subpoena is not vague.
9 There are however, two other grounds on which the plaintiff says the subpoena ought be set aside. The first is that it is being used for the purpose of obtaining discovery from a non-party. The authorities are to the effect that it is not a legitimate use of a subpoena to obtain discovery from a non-party who is not liable to make discovery. In those circumstances, an application under O 26A is required. In this case, the plaintiff points to the breadth of the subpoena and says there is no real difference between the documents Ms Hudson is required to produce pursuant to the subpoena and the documents she would be required to produce were she the subject of an order for discovery. For their part, the defendants say they are simply looking to examine the financial records of the plaintiff and his wife to make proper enquiry as to their financial position.
10 In my view, this is a clear case where the subpoena does nothing more or less than require a non-party to give discovery. The categories of documents are so wide they would clearly fall into the rubric of documents related to a matter in issue - in order words, the subpoena effectively picks up the requirements of discovery. The focus is not on documents which are directly relevant or relevant to a particular transaction. They are broad in their scope and they cover a wide period of time. That being the case, the use of the subpoena is effectively a means of obtaining discovery from a non-party and for that reason, the subpoena ought be set aside.
11 There is an additional reason why this subpoena cannot stand. In Family Provision Act litigation, it is generally not the case that discovery between the parties will be ordered. It can be done, but it is unusual. That much is recognised by the practice direction. The reason why discovery is not generally ordered in Family Provision Act claims has to do with the nature of the claim itself. What the Act requires is for a claimant to establish at the date of death of the deceased, the will did not provide adequately for the claimant's proper maintenance, support, education or advancement in life. It is up to the claimant to provide evidence to support his or her claim. It is perfectly proper for an executor or a beneficiary under the will whose interests might be affected by the claim, to test the veracity of the claimant's contentions. At the hearing of an action, an executor or beneficiary may point to a failure on the part of a claimant to make full disclosure of his or her financial position. But it is not for a defendant to mount a positive case. If the claimant fails to satisfy the court a full and frank disclosure has been made or some financial interest has not been revealed, then the claim may well fail. But the litigation envisaged by the Act does not anticipate the same extensive pre-trial procedures as a conventional civil action.
12 This subpoena really is an attempt to circumvent the restriction on discovery. That proposition can be tested in this way. If there was an obligation on the plaintiff to give discovery, what further documents could be provided above and beyond those subpoenaed by the defendants? The answer must be very few, if any. Afterall, what is at issue is the financial position of the plaintiff as at the date of death of the deceased and then his financial position as at the date of trial. If anything, the scope of the documents to be discovered would be less than the scope of the documents sought in the subpoena. Any documents which came into existence after the date of death of the deceased - except perhaps for those documents which were records of the financial year in which the deceased died - would not be related to a matter in issue. That being the case, it is simply not open to the defendants to argue this subpoena is not discovery by alternate means.
13 The subpoena issued to Ms Hudson will be set aside. The defendants ought pay the costs of the application to set aside the subpoena, such costs to be taxed and paid forthwith.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.