The Application of Jan L. Brodie (Judge of the Circuit Court of Fairfax County, Commonwealth of Virginia, United States of America) v. ex parte Laura E. Dunlop [2013] NSWSC 793

Supreme Court New South Wales

Medium Neutral Citation: The Application of Jan L. Brodie (Judge of the Circuit Court of Fairfax County, Commonwealth of Virginia, United States of America) v. ex parte Laura E. Dunlop [2013] NSWSC 793 Hearing dates: 4 June 2013 Decision date: 04 June 2013 Jurisdiction: Common Law Before: Slattery J Decision: Time for compliance with the subpoenas extended. Catchwords: PROCEDURE - subpoenas issued under Evidence on Commission Act 1995 on request from the Virginia Circuit Court in the United States- application for the time for production to be extended - scope of subpoenas ambiguous - law in relation to modifying the scope of a subpoena discussed - subpoenaed material includes confidential information - possibility of masking the confidential material before production discussed - HELD: time for compliance with the subpoenas extended. Legislation Cited: Evidence on Commission Act 1995 s 32, s 33 Uniform Civil Procedure Rules 2005 r 33.11 Cases Cited: Ainsworth v Hanrahan (1991) 25 NSWLR 155 Home Office v Harman [1983] 1 AC 280 Re Application of Monier Inc [2009] NSWSC 986 Category: Principal judgment Parties: Jan L (Judge of the Fairfax County Virginia Circuit Court, United States of America) Brodie Representation: Counsel: M.J. Heath R. Flecknoe Brown Solicitors: File Number(s): 2013/00143902

EX TEMPORE Judgment 1On 10 May 2013 McCallum J made orders in these proceedings for the issuing of subpoenas in this Court in aid of proceedings in the Fairfax County Virginia Circuit Court, Laura E Dunlop v Cameron V Dunlop, being matter CL2012-3284 in the Virginia Circuit Court in the Commonwealth in the United States of America ("the Virginia proceedings"). Her Honour's 10 May orders gave effect to a letter of request from Judge Brodie under the Hague Convention on the Taking of Evidence Abroad in Civil and Commercial Matters ("the Hague Convention"). This Court has power under ss 33 and 32 of the Evidence on Commission Act 1995 ("EOC Act"). The request nominated Judge Brodie as applicant. The subpoenas were issued and served. 2The letter of request summarises the nature of the Virginia proceedings, which are divorce proceedings between Laura Dunlop, as plaintiff, and Cameron Dunlop, as the defendant. And they include financial issues of spousal support, child support and equitable distribution of the marital property. Relevant to those financial matters is the income of the parties, including income from their assets. And the subpoenas issued pursuant to the orders made by McCallum J sought production of documents relevant to the assets of Cameron Dunlop. 3Two of the issued subpoenas were addressed to Stuart and Andrew Dunlop, brothers of Cameron Dunlop, the defendant in the Virginia proceedings. Cameron, Stuart and Andrew Dunlop are co-executors and beneficiaries of the estate of their late mother, Josie Dunlop. And the subpoenaed documents relate to the administration of that estate. 4The third subpoena was issued to Vardun Pty Ltd, a company in which Cameron Dunlop owns shares. The requested documents related to the financial statements and the operation of that company. 5The subpoenas required the production of material to the Court originally by 9.00am on 24 May 2013. That time for compliance was extended by Davies J until Monday 3 June 2013. Argument on this matter took place before me yesterday, 3 June, and the proceedings were adjourned until today. The subpoenaed parties said that they could not produce all the documents requested for the trial before Judge Brodie within the time allowed for production. I am told that trial is due to commence next Monday 10 June in the Virginia proceedings. Yesterday the Court asked the parties whether at least partial production was possible before 7 June, to facilitate the imminent trial of the Virginia proceedings. Authority suggests that a Court may not modify a subpoena issued under the EOC Act but a party may elect not to press particular paragraphs of the subpoena: Re Application of Monier Inc [2009] NSWSC 986 ("Monier") 6Mr Flecknoe-Brown who appears in the interests of Mrs Laura Dunlop, the applicant for the request before her Honour Judge Brodie in the Virginia proceedings, obtained instructions from Mrs Dunlop's US attorneys overnight. It became clear as a result that of the three subpoenas, one to Andrew Dunlop, another to Stuart Dunlop and a third to Vardun Pty Ltd that the heart of what is sought is now only paragraphs 5 and paragraph 14 (both of which are in identical terms) in the subpoenas to Andrew and Stuart Dunlop. I will extend time for the production of that material to 2.00pm on Friday 7 June. And I will note that the material described in the other paragraphs of the Schedule to the subpoenas is not pressed. 7Paragraphs 5 and 14 of the Schedule to the subpoenas to Andrew and Stuart Dunlop require the production of the following: 5. All distributions and payments made by the Estate including any trust established thereby for the period of June 26, 2011, until the date of these orders. 14. The periodic account statements for the period of June 26, 2011, to April 15, 2013, for savings, share or investment accounts held by the Estate or any trusts established by the Estate, with the following entities, identified in "annexure C" to the affidavit of Cameron V. Dunlop and Stuart C. Dunlop, for the Estate, as the "inventory of Property of the estate of Josie Janette Dunlop": a. The National Australia Bank b. The Commonwealth Bank FPO c. Westpac Banking Corporation FPO d. ANZ Bank FPO e. ARGO FPO f. David Jones 95 FPO g. Santos FPO h. Telstra Corporation Limited FPO i. WestfieldG Stapled (WDC) j. Wesfarmer FPO k. Wesfarmer Part PROT l. Woolworths FPO m. Westftrust and Stapled (WRT) 8Andrew and Stuart Dunlop have explained through their lawyers' evidence on this application, the difficulties they have encountered in producing that material. I accept that evidence and the submissions Mr Heath has made on their behalf. That is why time for compliance is being extended until 7 June. Some of these difficulties, I am also told from the bar table, arise because the accounts referred to in paragraph 14, especially the cash management accounts, were held originally by CommSec, a stockbroking subsidiary of the Commonwealth Bank. But the Commonwealth Bank decided to transfer those accounts from CommSec to itself. This has now made it more difficult for Mr Stuart Dunlop and Mr Andrew Dunlop to get access to those documents. 9Accepting as I do what Mr Heath has said, the Court has indicated that, if necessary, it will grant liberty to apply to Mr Andrew Dunlop and Mr Stuart Dunlop for the issue of a subpoena to the Commonwealth Bank, returnable for 2.00pm on Friday, should they encounter any unexpected difficulty in complying with the Court's orders to produce material under paragraphs 5 and 14 of these two subpoenas. 10Two issues arise out of the form of paragraph 5 of the subpoenas to Andrew and Stuart Dunlop. First there is said to be a degree of ambiguity in paragraph 5. The background to this issue is that Josie Dunlop's will created three testamentary trusts, one for each of Andrew, Stuart and Cameron Dunlop. All three brothers are co-trustees of each testamentary trust. So Andrew and Stuart would have information about distributions made under Cameron's trust in their capacity as his co-trustees of that trust. 11Without altering the text of the subpoena that has been settled in the USA, but interpreting it as best I can, it seems to me that what paragraph 5 requires for production is all distributions and payments made by the estate of the late Josie Dunlop both to and from any trust established under her will. Thus, it would require the production of payments made by the estate to a testamentary trust established under her will. And it would require the production of such material as is in the possession of Stuart and Andrew Dunlop as co-trustees at least of Cameron Dunlop's trust. 12Interpreting paragraph 5 this way leads to the second issue. Paragraph 5 so interpreted would mean that a large volume of information about payments made by the estate to each of the three brothers, Andrew, Stuart and Cameron, and then the payments made by their respective testamentary trusts to the beneficiaries of those trusts is potentially produceable in accordance with these orders. Andrew and Stuart say that private and confidential material relating to payments made to each of them within their own testamentary trusts will therefore have to be produced to comply with paragraph 5. They are concerned about this. They do not want their confidential information relating to their own testamentary trusts to be widely distributed as a result of this Court's subpoena. This is understandable. 13The law seems clear that under the EOC Act ss 32 and 33 this Court cannot redraft what is sought in the subpoena. It cannot modify the subpoena to vary the amount of material required to be produced. However, as has occurred here, the parties seeking the issue of the subpoena can decide not to press some of what has been sought: cf Monier. But the Court may also, when it receives the material, make orders to protect the interest of the parties subsequent to its production. 14It seems to me that the Court can take steps to address the concern about confidential information that Andrew and Stuart Dunlop raised. They are not surprisingly concerned about third parties having access to all the payments made by their testamentary trustees to whatever beneficiaries there are of those trusts. They are concerned about the possibility of misuse of that private material by persons who may gain access to it in the Virginia proceedings. But this may just be a consequence of the operation of this legislation and the Hague Convention that underpins it. 15The Court has ample power under EOC Act s 33(1) "by order to make provisions for obtaining evidence in the State as may appear to the Court to be appropriate for the purpose of giving effect to the request". Fashioning "appropriate" directions to protect the confidential information of subpoenaed parties lies within this power. 16Two approaches may address this concern. The Court could raise with the Virginia Circuit Court the implied undertaking to use the material only for the purposes of the proceedings for which they are produced: Home Office v Harman [1983] 1 AC 280 and Ainsworth v Hanrahan (1991) 25 NSWLR 155. But I do not think it necessary to do that. It can be assumed that the Courts in the United States will administer the material in the interests of the parties and of third parties whose confidential information is contained in the material, in the same way that Australian Courts would do. 17But there may be better course. Andrew and Stuart Dunlop must produce all the material sought in paragraphs 5 and 14. But they may also at their option produce masked copies of the material sought, eliminating what they say are the irrelevant confidential entries. Mr Flecknoe-Brown, then will endeavour to agree upon the final production only of the material that is not masked. If that can all be done by 2.00pm this Friday production 7 June, may still take place in the US before next Monday morning, 10 June. It may be possible both sets of material could be sent to the USA with a request that the masked material be dealt with by special orders preserving its confidentiality, if that is practicable. 18I will also grant the parties liberty to restore. This will allow any practical difficulties with implementation of this idea to be ironed out. I have extended time already for compliance with paragraphs 5 and 14 of the subpoena to 2.00pm on Friday. I will also direct the parties to consult before 2.00pm on 7 June about the masking of irrelevant material before production in the Virginia proceedings. 19The subpoenaed parties seek the payment of their reasonable costs of compliance with the subpoena under Uniform Civil Procedure Rules 2005 r 33.11 I note that as a result of discussion that took place yesterday that the parties have exchanged information about costs of compliance with the subpoena. Stuart and Andrew Dunlop have through their lawyers indicated the total quantum of costs associated with production to Mr Flecknoe-Brown, and to those that instruct him. He has taken instructions on that overnight. I am told there seems to be an agreement about the quantum of those costs. But there are still matters to resolve about the timing of such payments, the provision of security within this jurisdiction for those costs, and the provision of necessary evidence to comply with Uniform Civil Procedure Rules 2005 r 33.11. Mr Flecknoe-Brown is concerned about the question of the Court's power to order costs. He and Mr Heath may wish to argue about this on 7 June. 20The better course is to see if all of that effort and expenditure can be avoided by some agreement. The parties may be able to build upon the agreements already reached. I will stand over the issue of costs. I grant liberty to restore on that issue as well. 21In the result therefore the Court's orders are: (1)Extend to 2.00pm on 7 June 2013 the time for compliance with paragraphs 5 and 14 of the subpoenas issued to Andrew Dunlop and Stuart Dunlop, pursuant to orders of McCallum J on 10 May 2013. (2)Note that the production of the balance of the subpoenas to Andrew and Stuart Dunlop and all the material sought in the subpoena to Vardun Pty Limited is no longer pressed. (3)Direct the subpoenaed parties and the representatives of Laura Dunlop to consult about the masking of confidential material to be produced pursuant to these orders. (4)Grant liberty to restore on 24 hours notice. o0o