SCVG & Estate of KLD (No. 2)

[2021] FamCA 505

FAMILY COURT OF AUSTRALIA

SCVG & Estate of KLD (No. 2) [2021] FamCA 505

File number(s):	SYC 4380 of 2008
SYC 5956 of 2016
Judgment of:	GILL J
Date of judgment:	13 July 2021
Catchwords:	FAMILY LAW – PRACTICE AND PROCEDURE – application to issue subpoenas to give evidence at trial – leave granted to issue subpoenas after allocation of trial dates.
Cases cited:	Witness v Marsden (2000) 49 NSWLR 429
Number of paragraphs:	25
Date of hearing:	24 June 2021
Place:	Canberra
Solicitor for the Applicant:	Self-representing
Counsel for the Respondent:	Ms Barnett
Solicitor for the Respondent:	Macphillamy’s

ORDERS

SYC 4380 of 2008

SYC 5956 of 2016

BETWEEN:

MR SCVG

Applicant

AND:

ESTATE OF KLD

Respondent

ORDER MADE BY:	GILL J
DATE OF ORDER:	13 JULY 2021

THE COURT ORDERS THAT:

1.Provided that no such subpoena is issued prior to the allocation of trial dates, Mr SCVG is granted leave to issue subpoenas for the attendance at trial to give evidence directed to:

(a)Ms RR;

(b)Mr Draper; and

(c)Ms Draper

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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

IT IS NOTED that publication of this judgment by this Court under the pseudonym SCVG & Estate of KLD has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

GILL J:

1. This judgment concerns an application by Mr SCVG seeking the issue of subpoenas to attend to give evidence directed to Ms Draper, Mr Draper and Ms RR, respectively the siblings and mother of the deceased Ms KLD.  Although Mr SCVG has not produced affidavits from any of these persons, he seeks to call them as witnesses in the hearings of the matters before the court that rely upon alleged fraud committed by Ms KLD to secure various favourable court outcomes.  Mr Draper now functions as a respondent as one of the personal representatives of the Estate of the late Ms KLD.

2. It is necessary to set out some background.  Mr SCVG identified that key to his allegations of fraud are the propositions that Ms KLD perjured herself in respect of her assertions as to her financial circumstances in two regards.  First, in relation to the value of what are conveniently referred to as the J Pty Ltd Farms and N Pty Ltd businesses, which he says were falsely assigned a nil or nominal value.  He asserts that Ms KLD’s statements as to the value of these entities being nominal or nil due to her status as a part owner, and expectation as to how other part owners would act, or how her mother would act as a trustee and the appointor of an associated trust, were false.  Second, in relation to whether Ms KLD owed her mother Ms RR, a sum of $650,000 in respect of legal fees.  He asserts that Ms KLD did not believe the truth of her assertion in these respects and thereby perpetrated a fraud upon the court.

3. It is Mr SCVG’s intention to cross-examine each of the proposed witnesses.  In his affidavit in support of his application filed 25 May 2021 seeking permission to issue the subpoenas, and in his oral submissions in support of his application, he ultimately identified the purpose for calling the witnesses as falling into three categories.

4. Mr SCVG identified that he wishes to cross-examine the three witnesses as to their powers, and as to their attitudes to the exercise of those powers, in respect of the J Pty Ltd Farms and N Pty Ltd businesses, along with an associated trust, the M Settlement.  He wishes to further cross-examine the three witnesses as to any conversations they may have had with Ms KLD about such, and thirdly as to the status of the $650,000 debt for legal fees and their discussions as to such.

5. Mr SCVG says that this course is justified to answer assertions made by the late Ms KLD in her affidavit of 22 November 2018, being an affidavit intended to be read into evidence at the trial of the matters on behalf of the Respondents.  He set out the relevant excerpts in his affidavit of 25 May 2021.  In summary those statements related firstly to the assertions made by Ms KLD as to her understanding of the value of her interests in various entities co-owned or co-controlled with the proposed witnesses.  Secondly, they related to assertions made by Ms KLD as to the status of funds provided to her in respect of her legal fees.

6. Mr SCVG asserts at [6] that the proposed witnesses, as co-owners, co-trustees and co-directors could give evidence as to their belief as to the value of their and Ms KLD’s interests, and as to any conversations that they may have had with Ms KLD about such.  This, he asserts would inform the court as to the true knowledge and beliefs of Ms KLD as to value.

7. At [8] Mr SCVG asserts that the proposed witnesses’ knowledge of, and “any relevant conversations” that they had with her regarding her state of belief as to value, and as to the legal fees should be before the court, as well as [9] their beliefs as to the value of their interests at the time of any such conversations.

8. Mr SCVG asserts an expectation that conversations took place, particularly given the assertions made by Ms KLD in relation to the co-ownership and interaction of the owners set out in her affidavit.

9. The Respondents raised a number of bases to resist the issue of the subpoenas.

10. Firstly, the Respondents attack the issue of the subpoena on the basis of relevance.  As identified at [54] ff of Witness v Marsden, at the application of a witness or a party a court may set aside (or, implicitly, refuse the issue of) a subpoena not only where it is an abuse of process, but also where a witness is unable to give relevant evidence.

11. The Respondents argued that the subjective understanding of the witnesses is not relevant to the determination of the subjective understanding of Ms KLD.  They are correct to assert that any belief held by the witnesses, either as to the value of their interests, or as to the value of Ms KLD’s interests, is not relevant to the belief held by Ms KLD.

12. With this aspect falling away there still remain other aspects of Mr SCVG’s case.  Firstly, the understanding of Ms RR as to the status of the monies provided for legal fees is relevant to establishing their status.  Secondly, conversations that took place between Ms KLD and the proposed witnesses evidencing her belief as to the value of her interests, or her understanding of the status of the payment of the legal fees are directly relevant to the testing of the evidence contained in her affidavit.  Each of these matters is, at face value, potentially relevant to the allegation of fraud, meaning that, unlike the subjective beliefs of the witnesses, they do not fall away for lack of relevance.

13. The Respondents secondly argued that, in the absence of pleadings as to conversations, and in the absence of material in his affidavit identifying such conversations, the examination of the witnesses would amount to fishing and thereby constitute an improper use of a subpoena.  The Respondents also assert that it is the use of a subpoena to rectify a deficit in the case, and that it would be procedurally unfair to take fresh evidence from these witnesses at the trial of the matter.

14. Mr SCVG accepted that his pleadings, which govern the conduct of these case do not refer to purported conversations.  However, it is not the function of the pleadings to set out the evidence to be relied upon.  Rather the pleadings set out the material facts to support the cause of action, being as to the knowing falsity of claims made by Ms KLD as to her financial circumstances.

15. It is also clear that Mr SCVG’s affidavit contains no references to any purported conversations.  However, Mr SCVG argued that the calling of such witnesses would allow the testing of the evidence of Ms KLD, and that an inability to do so would deprive him of procedural fairness.

16. The proposed subpoenas relate to the testing of the affidavit evidence of Ms KLD, in circumstances where she falls into the maker unavailable exception to the rule against hearsay evidence. 

17. Specifically, Ms KLD’s affidavit at [45]–[47] sets out her evidence in respect of the legal fees.  She has identified the expectations of her mother, and of her family, and the variable status of whether the monies will need to be repaid as countering the case raised by Mr SCVG that her evidence on this issue amounted to perjury.

18. This evidence falling from Ms KLD renders it as being reasonably on the cards that the witnesses will be able to give evidence of conversations pertaining to Ms KLD’s evidence of her understanding of their expectations in relation to the monies for legal fees.  This is a matter both of relevance and of central importance to the proceedings, and, in the context of Ms KLD’s own evidence, should not be perceived to be a mere fishing expedition.

19. Ms KLD also gave evidence as to her financial interests as to her status as a co-owner, co-trustee or co-director.  These assertions appeared to be uncontroversial, and it was not sought to call the witnesses to examine them in relation to the fact of such status.

20. Allied to this was Ms KLD’s evidence as to decisions, such as for the payment of dividends, or the sale of shareholdings, not being taken without family agreement.  This was a key aspect of Ms KLD’s assertion that her holdings were of nil or nominal value.

21. As with the issues concerning the legal fees, this directly introduces the proposed witnesses, and their interactions with Ms KLD, as relevant to the central issue of Ms KLD’s asserted belief as to these matters.  Her reliance upon this matter again renders it as being reasonably on the cards that the witnesses will be able to give evidence of conversations pertaining to Ms KLD’s evidence of her understanding.  Again, the content of Ms KLD’s evidence means that this cannot be regarded as a mere fishing expedition.

22. The Respondents further argued that the witnesses have a general right not to be drawn into the litigation.  It may be observed that Mr Draper, as the personal representative of the Estate is already intimately involved in the proceedings.  To the extent that the other proposed witnesses are not so involved, the potential significance of their evidence is such as to justify their involvement as witnesses.

23. While the Respondents also argued that they may be taken by surprise at the trial of the matter by the oral evidence that may be given by the proposed witnesses, where there is such a close interrelationship between the proposed witnesses and the Respondents, absent further evidence from the Respondents such an outcome appears unlikely.  Should such surprise occur then it may call for further directions being given to ameliorate any unfairness that may then arise.

24. It should be acknowledged that this judgment does not finally determine whether the proposed witnesses will give evidence, nor the scope of their evidence.  It merely deals with the propriety of the issue of a subpoena on an inter partes basis.  As with any witness, each will have the right to be heard as to whether they should ultimately be compelled to give evidence.  They will each have the right to move the court to set aside the subpoena, or for the court to determine that the witness should not be examined.[1]

    [1] Witness v Marsden (2000) 49 NSWLR 429, 440 [51]ff (Heydon JA).

25. Further, absent the allocation of a trial date it remains premature for the issue of the subpoenas.  Rather, the orders will grant leave for the issue of subpoenas directed to the witnesses following the allocation of trial dates.

I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Gill.

Associate:

Dated:       13 July 2021