Hann v Hann

Supreme Court of NSW|2025-02-14|Before: Kunc J, Robb J

Summary

By further amended notice of motion dated 5 August 2023, the defendants seek to set aside two subpoenas issued at the request of the plaintiff to IMB Bank and Commonwealth Bank of Australia.
The parties are all the children of the late John Hann. The plaintiff (to whom I shall refer, without disrespect, as Steven) and the first defendant (to whom I shall refer, again without disrespect, as Paul) are the main protagonists, and all three defendants are executors of the estate of the late John Hann.
The underlying dispute is that Steven alleges that the defendants have, without his consent, sold or dealt with cattle said to have been jointly owned by Steven and Paul. The subpoenas were issued on 19 October 2023, while the parties were locked in intense interlocutory disputes. Under the Court's rules, leave was not required for the issue of the subpoenas. The subpoenas sought copies of all bank statements in the name of Paul or John (in either their own name or with any other person) from 12 August 2021 to the date of the subpoenas. The essential question is whether, having regard to the state of the litigation at that time, there was a proper forensic purpose for the issue of the subpoenas.
For the reasons which follow, the Court has determined that the issue of the subpoenas lacked a proper forensic purpose and they will be set aside. The Court acknowledges the assistance it has received from the extensive written and oral submissions of Mr E Ball of Counsel for the defendant applicants and Mr A Crossland of Counsel for the plaintiff respondent.

Proper forensic purpose - submissions

Mr Ball submitted that the present case was relevantly on all fours with my decision in Neil Street Co Pty Ltd v Ibrahim [2024] NSWSC 1382. It was submitted that, as in that case, the subpoenas had been issued prematurely, that is to say, before the issues had been properly crystallised in the pleadings, such that there was no proper forensic purpose discernible for their issue, and as a secondary complaint, that the subpoenas issued in those circumstances had the effect of subverting the operation of Practice Note SC Eq 11.
I summarised the relevant principles in Neil Street: 42 The second basis is that the Court finds the subpoenas were issued without a proper forensic purpose. So much becomes apparent when the conclusion of Bell P (as the Chief Justice then was) in Blacktown is considered (emphases in original): 65 It is sufficient, in my view, to justify a subpoena as having been issued for a legitimate forensic purpose if the documents sought are "apparently relevant" or, to use the words of Nicholas J in ICAP at first instance, it can be seen that the documents sought to be produced by way of subpoena will materially assist on an identified issue or there is a reasonable basis beyond speculation that it is likely the documents subpoenaed will so assist. Of course, if it can be shown that the material assistance will be to the party that issued the subpoena, the prospect of the forensic purpose of the issuing party being impugned as illegitimate will be virtually non-existent. 43 For pleaded cases, "apparent relevance" and the "identified issue" will be identified from the matters put in issue in the pleadings. In a case commenced by summons, the issues may be identified from the affidavit evidence and the relevant legal issues. In the present case, there could be no "apparent relevance" because there were no relevantly identified issues given that pleadings had not closed. For example, at the time the Registrar was considering the access application it was at least theoretically possible that Mr Ibrahim would, on the last available day, file a submitting appearance. 44 The third basis is that the subpoenas had the effect of subverting the operation of Practice Note SC Eq 11: Mempoll at [11] - [12]. In my respectful opinion, it is sufficient to constitute an abuse of process if the conduct has the relevant delinquent effect, even if that effect was not the subjective intent of the person or party responsible for it.
Mr Ball placed heavy emphasis on the fact that Steven's solicitor had never responded to the 23 October letter or otherwise attempted to explain the proper forensic purpose of the subpoenas.
The high point of Mr Crossland's response to what was said to be the lack proper forensic purpose was to point to two affidavits. The first was an affidavit of Steven's of 15 September 2023, in which he deposed to a telephone conversation on 12 September 2023 with the owner of a neighbouring property, Mr Maik Griefahn: 34 Maik also told me that two sales of cattle at Bolaro had taken place in 2022 which I was not aware of and that there had been a sale or removal of cattle in 2023 which had taken place after the sale of cattle in March 2023. I am not aware of any sale of co-owned cattle having taken place in 2022 nor am I aware of any sale or removal of co-owned cattle having taken place in 2023 other than a sale which took place in March 2023 as referred to in paragraph 31 of Paul's affidavit of 29 August 2023.
There was no dispute that Paul had paid the proceeds of cattle sales into his bank account, but this conversation was said to put Steven on notice of cattle sales (and, it was inferred, payments) of which Steven was unaware.
Mr Crossland then drew to attention that the defendants had themselves then filed an affidavit of Mr Griefahn on 17 September 2023 in which Mr Griefahn sought to respond to that part of Steven's affidavit: Telephone conversation with Steven Hann 9 On or about 12 September 2023, I received two missed calls and a text message from Steven Hann. I haven't heard from Steve since the funeral of his father, and I thought it was strange that he rang me as I have not spoken to him for some time. 10 During our conversation, we talked about the flood gates between the two properties and he asked me about the state of the fences. I said that it is not really my business to talk about the state of the boundary fences, but that I seek to fix the flood gates between the properties. The two properties adjoin sections of the river where floodgates need to be maintained. When the river floods, the flood gates are swept away and so my cattle can wander on their farm and vice versa. 11 Steve and I spoke about the Bolaro herd. I recall telling Steven (and also his agents a couple of days earlier) "there could be a couple of my cows up on Bolaro and yours on my place also". 12 I then said to the effect: "I am not worried about that Steve because I'll soon get them back if I'm told they are in the yards".
Much was sought to be made of the fact that Mr Griefahn did not take issue with Steven's version of the conversation, including the reference to the cattle sales about which Steven said he knew nothing. Mr Crossland submitted that demonstrated that there was clearly an issue between the parties about money that had gone into Paul's bank account from sales that were unknown to Steven.

Proper forensic purpose - consideration

Insofar as the subpoenas were issued before the statement of claim had been filed, I accept that the present case is indistinguishable from Neil Street. However, as I said in that judgment, in interlocutory disputes being fought out before the Duty Judge before pleadings are filed, the joinder of issue which would provide a basis for determining the legitimate forensic purpose of subpoenas can and often does occur through the exchange of affidavits between the parties. That exchange will generally highlight the factual disputes that inform the particular interlocutory dispute.
Looking at the state of play of the interlocutory dispute at the time the subpoenas were issued, the correspondence between the parties made clear that they were in dispute about the adequacy of the information provided about the cattle sales. This is why there was ultimately no complaint concerning a subpoena to the cattle registry (NLIS) as a means of trying to determine what sales had in fact taken place.
However, there was no discernible dispute or matter in issue warranting access to the bank statements. That type of information was not a subject matter of complaint by Steven's solicitors in relation to the defendants' compliance with Order 5A (see [8] above). I accept Mr Ball's submission that the failure to respond to the 23 October letter is the first and best indication that there was no proper forensic purpose for the issue of the subpoenas.
I do not accept Mr Crossland's reliance on the two affidavits to which I have referred (see [25] and [27] above). Mr Griefahn's silence does not make an issue of the question concerning unknown (to Steven) cattle sales and the consequent payment of money into Paul's bank account. The silence is obviously explained by the fact that it was not an issue to which Mr Griefahn's affidavit was directed. The live issue between the parties at that time concerned the identification and sale of the cattle, and it is the identification question which Mr Griefahn's affidavit clearly sought to address.
For these reasons, the Court concludes that there was no proper forensic purpose for the issue of the subpoenas, and they will be set aside.

Costs

There is no real dispute that costs should follow the event. The real issue between the parties was whether those costs should be paid on the indemnity basis and whether they should be assessed and payable forthwith. Mr Crossland resisted both of these outcomes.
I accept Mr Ball's submission that the costs should be payable forthwith. I will apply what was said by Barrett J (as his Honour then was) in Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1; [2002] NSWSC 432 and find that: (1) The dispute about the subpoenas is a discrete issue, which will never be revisited and will be unaffected by the ultimate outcome of the litigation. (2) The issue of the subpoenas was unreasonable for want of proper forensic purpose. (3) This litigation has a long way to go. It is still in its interlocutory stages. On any view, a final hearing is at least 12 months away and probably more.
Taking those three circumstances into account, the justice of the case warrants an order that the defendants' costs of their motion in relation to the subpoenas be assessed and payable forthwith.
Turning to the question of indemnity costs, Mr Ball submitted that it was unreasonable to issue the subpoenas and that the six week silence to which I have referred (see [21] above) was itself a further indication of the unreasonable way in which the litigation had been conducted. He submitted that the issue of the subpoenas was itself an abuse of process and plainly such, and that Steven had conducted himself in an unreasonable fashion.
The 23 October letter did not foreshadow an application for indemnity costs. However, it is clear from the authorities that the failure to do so in a letter of that kind is not determinative of the question. For present purposes, what is more relevant is that every iteration of the motion sought orders on the indemnity basis payable forthwith. In those circumstances, it seems to me that Steven could not be in any doubt as to what was being sought and to what he had to respond.
The six week delay is unexplained in the evidence and is undoubtedly unsatisfactory. However, it is not serious enough in my view in the context of the litigation in and of itself to warrant an order for indemnity costs.
Turning to the broader question of the issue of the subpoenas as examples of an abuse of process and unreasonable conduct, I accept that there is a strong case to be made for indemnity costs. However, looking at the matter as a whole and taking into account the issue of the subpoenas in the much larger context of the intense interlocutory disputes then extant between the parties, the Court is not satisfied that Steven's conduct in obtaining the subpoenas was of the requisite character to attract an order for indemnity costs. The application for indemnity costs is therefore refused.

Orders

The orders of the Court are: 1. Set aside the following subpoenas issued at the request of the plaintiff: (1) subpoena filed 19 October 2023 to IMB Bank; and (2) subpoena filed 19 October 2023 issued to Commonwealth Bank of Australia. 1. The plaintiff is to pay the defendants' costs of the motion to set aside those subpoenas, such costs to be assessed and payable forthwith. 2. Insofar as the plaintiff's legal advisers or the plaintiff himself have had access to any documents produced pursuant to either of the subpoenas referred to in order 1, the plaintiff and his solicitors are to destroy all copies of any such documents in their custody, possession and control, and any notes of the contents of those documents in their possession, custody and control, no later than 21 February 2025. 3. The plaintiff's solicitor is to file and serve an affidavit on or before 7 March 2025 deposing to the steps taken by the plaintiff's legal representatives and the plaintiff himself to comply with the order in the preceding paragraph. 4. The defendants are to file and serve their evidence on or before 21 March 2025. 5. Proceedings are listed before the Registrar for directions on 25 March 2025.

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: 20 February 2025

At a glance

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Judgment (7 paragraphs)

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Cases Cited (3)