Schmidt-Weichert v White[2015] QDC 14

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   The application in a pending proceeding filed 16 January 2015 concerns, first, whether an “implied undertaking” not to disclose extends to an affidavit of the litigation guardian for family provision (where the affidavit was filed in accordance with the relevant practice direction) and, secondly, if so, whether leave should be granted to use that affidavit in the way that the executor already has.

Background

2. [2]
   The Supreme Court of Queensland granted probate of the (informal) Will of Iain Ross Schmidt-Weichert dated 18 January 2014 to the executor, Simon Nicholas White (the respondent in the present application), on 5 November 2014.

3. [3]
   The litigation guardian of the applicants, Jane Maree Walker, is the mother of the two applicants/children (of both her and the deceased). They are Samuel Aslan Eyre Schmidt-Weichert and Hunter Roald Schmidt-Weichert.

4. [4]
   That Will, in Clause 6, strikes out a “draft” appointment of the litigation guardian as the testamentary guardian of those children during their minority and states, instead, that “(g)uardianship” of the children is to be had by the testator’s brother, Keith Walker, Simon White and his friend, Ish Davies.

5. [5]
   The Originating Application of the litigation guardian was filed on 25 November 2014. It seeks, pursuant to s 41(1) of the Succession Act 1981, that adequate provision be made for the proper maintenance and support of the children.  The affidavit in question was also filed that day.

6. [6]
   The relevant use of the affidavit was its enclosure, with other documents, in a letter dated 5 December 2015 of the executor’s solicitors to the Trustee of Russell SuperSolution concerning the distribution of superannuation entitlements for the deceased and the Trustee’s decision on 5 November 2014 that it had determined to pay that benefit to the litigation guardian “in trust for” the children. That letter expressed dissatisfaction by the executor with the Trustee’s decision and requested that the Trustee “give consideration to further material provided”. The letter stated that, apart from the consideration by the Trustee in the exercise of the Trustee’s determination, the affidavit and other documents “are otherwise confidential and not for publication”.

7. [7]
   The material filed in court for this application shows that the executor, though originally seeking that the Trustee should pay the relevant superannuation benefits “to the executor on the trusts in the Will” or to the Public Trustee or to an independent trustee, informed the Trustee before the Trustee’s decision of 5 November 2014 that it “considered that the better option” would be that superannuation would be paid to the Public Trustee.

8. [8]
   Those further submissions dated 5 December 2014 were stated to be made on behalf, also, of the testamentary guardians (although they were identified simply as the executor and Ish Davies).

Issues

9. [9]
   The litigation guardian does not apply to restrain the use by the executor/respondent of her affidavit. Her Outline of Argument opposes the relief sought and suggests that the “appropriate course” is for the court to consider the question of contempt under s 129 of the District Court of Queensland Act 1967.  But it has not been submitted that there is any contempt in the face of a Court; and no contempt proceeding has been initiated.

10. [10]
    The application that the executor filed on 16 January 2015 seeks, by paragraph 2, either a declaration that “the leave of the Court is not necessary” or that “the Court grant leave nunc pro tunc” for the furnishing of the affidavit.

Content of “implied undertaking”

11. [11]
    As authoritatively expressed by Hayne, Heydon and Crennan JJ in Hearne v Street,^[1] where one party to the litigation is compelled, either by reason of a rule of court or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave  of the court, use it for any purpose other than that for which it was given unless it is received into evidence: at 154-155 [96].  As that joint judgment went on to state, the types of material disclosed to which this principle applies include, among other documents, witness statements served pursuant to a judicial direction and affidavits (specifically citing relevant authorities for each of those categories): at 155 [96].  The italicisation of the principle was explained in the joint judgment by the statement that it is “common to speak of the relevant obligation as flowing from an ‘implied undertaking’”: at 155 [97].

12. [12]
    That joint judgment in Hearne noted that the general law protection “is often buttressed by protection from rules of Court”, referring specifically to the New South Wales Supreme Court Rules 1970: at 155 [98].

13. [13]
    Before turning to the specific cases identified in the joint judgment as supporting the stated ambit of the documents within the principle, the documents in question in Hearne were a part of an affidavit and part of a “noise impact assessment report” of an acoustic expert, both of which were filed in response to the orders of a Supreme Court Judge (White J).  That order was made in a proceeding commenced by the filing of a summons and 15 affidavits in support when, on the day the summons was returnable, such orders were for the filing of further affidavits (including the one in question) and experts’ reports (including the one in question) to be used in the proceeding.

14. [14]
    Hearne also established that, although the primary person bound by the relevant obligation is the litigant who receives documents or information from the other side pursuant to litigious process, the implied undertaking also binds others to whom documents and information are given, including (on the authority of Harman v Secretary of State for the Home Department^[2]) the party’s solicitor: at 160 [109].

15. [15]
    The relevant practice direction here, pursuant to which the affidavit was filed by the litigation guardian, was District Court Practice Direction No. 8 of 2001. As stated by paragraph 6 of that Practice Direction, at the time of service of the Originating Application, the litigation guardian “shall also serve”, amongst other things, “a supporting affidavit”: see sub-paragraph (a). By paragraph 7, it is required that that supporting affidavit “shall” show, provide and contain various enumerated facts. It must be said that such facts, at least predominantly, would be those which would be necessary for an application to be successful. Furthermore, it might be remarked that where, as in applications such as this, there are no pleadings as such, such a supporting affidavit discloses material facts supporting the cause of action, although, obviously, other facts as well.

Extent of “implied obligation”

16. [16]
    It is necessary to refer to the specific identified authorities which the joint judgment in Hearne expressly incorporated as examples of the types of material to which the principle applies.

17. [17]
    The first category is that of witness statements served pursuant to a judicial direction. A seminal authority is that of the well respected Queensland Judge, McPherson J (as he then was) in Central Queensland Cement Pty Ltd v Hardy.^[3]  The document in question was a witness statement which was delivered pursuant to a Supreme Court order which had the effect of applying to the action a provision of a Practice Direction that such a documentary witness statement be delivered.  In response to a submission that the principle is confined to discovered documents and should not be applied to witness statements, McPherson J, after stating that the underlying principle “is in my view plain enough” (being that a document furnished for use for one purpose may not legitimately be used for another), held that he was in “no doubt” that the undertaking applies equally to a witness statement such as that in question “as it would to any other document produced by one side to the other for the purpose of litigation”: at 510.  What was sought, and granted, in that case was an injunction.

18. [18]
    The second of the cases in this category is Springfield Nominees Pty Ltd v Bridgelands Securities Ltd.^[4]  Importantly, the joint judgment in Hearne referred to a specific section of that report.  Wilcox J (at 223), after referring to Hardy and respectfully agreeing, added that a witness statement fulfils a function very similar to that of an affidavit or an admission of facts.  He added that in the Federal Court there was rule limiting the documents on Court files which may be inspected without leave of the court or a judge.  With respect to them, he noted that they were all documents brought into existence “for the purpose of the instant litigation which may contain confidential or personal information and which may, or may not, ultimately be read in open Court”: at 223.  Thereafter, he held that the witness statement made pursuant to a Court direction which was never tendered in Court was not allowed to be used without that person’s consent or leave of the court: also at 223.  It should be noted that Wilcox J observed that, had the matter come to trial, it was likely that the statement would have been tendered as an exhibit in open Court and, in that way, entered the public domain: at 218.

19. [19]
    The third of the cases referable to this category is State Bank of South Australia v Smoothdale (No. 2) Ltd.^[5]  Again, there was a specific reference in the joint judgment in Heard to a specific passage in that decision.  In Smoothdale King CJ, with whom Mullighan and Nyland JJ agreed, (at 229) held that the relevant obligation extended to the recipient of documents pursuant to an order of the Court “of the present kind”.  Those documents were brought into existence as statements of witnesses for the purpose of litigation.  The statements were prepared pursuant to a Practice Note.  That Note prescribed a “usual order for hearing”, with such an order being made and providing for delivery of both reports and statements of evidence: at 225.

20. [20]
    The next category of documents involves affidavits. The first of these cases is Medway v Doublelock Ltd.^[6]  There, Goulding J, in the Chancery Division, was concerned with two affidavits “made in obedience to an express order of the Court in the Family Division”: at 1262.  The relevant rules required the placing of full information as to “means” before the Court.  The objection was based upon the obligation to disclose full particulars of means in proceedings brought by the plaintiff’s former wife, where the projected use was against the plaintiff’s company in the Queens’s Bench Division to obtain security for costs: at 1263.  It should be remarked that the decision was said to be “confirmed” by the practice of the Family Division in requiring parties to make full disclosure of their means and that, in ordinary circumstances, such “are heard”  in chambers and not in “open court”: at 1264.  Additionally, reference was made to the relevant Matrimonial Causes Rules then in force which were said to go “far to protect all affidavit evidence in matrimonial proceedings”: at 1265.

21. [21]
    The second, and last, decision in respect of affidavits is Re Addstone Pty Ltd (In liq); Ex parte Macks.^[7]  In that case, Mansfield J was concerned with whether the “normal implied undertaking” would apply to an order directing that the liquidator file and serve copies of affidavits sworn earlier (including exhibits).  Mansfield J stated that he saw “no reason why it should not apply in respect of material directed to be disclosed by the Court”: at 106.  In doing so he relied upon both Springfield Nominees and Hardy: also at 106.

UCPR provision

22. [22]
    In Northbuild Constructions Pty Ltd v Discovery Beach Project Pty Ltd^[8] McMurdo P, with whom Muir JA expressly agreed, referred to the fact that r 981 of the Uniform Civil Procedure Rules 1999 (“UCPR”) states that any person, upon paying the prescribed fee, can search the file pertaining to the proceedings in question and obtain copies of many documents that might otherwise be the subject of the implied undertaking: at [18].  Nevertheless, she did note that the fact that others had access to the documents who were not bound by the implied undertaking “does not in itself warrant the (party’s) release from it”: also at [18].

23. [23]
    It must be remarked that it is slightly curious that where at least some of the authorities relied upon by the joint judgment in Hearne are confirmed, or fortified, in the conclusion that is reached by the existence of the relevant rules which limit, sometimes severely, the access of third parties to such material, that a rule which permits searches and the obtaining of copies of documents does not have some effect on the content of the implied obligation.  Nevertheless, in the absence of any authoritative binding decision considering the applicability of r 981 of the UCPR to the present analysis, particularly where Northbuild Constructions ceases to be of significance – at least to the applicability of the principle in the circumstances later canvassed – it cannot be seen to be of significance here.

Conclusion on implied undertaking

24. [24]
    Although initially attracted to the approach that compliance with the relevant Practice Direction concerning Family Provision Applications simply involves the identification, by affidavit, of the nature of both the prima facie and (potentially) final cases in circumstances where there is no pleading other than the Originating Application, there is, on an analysis of the relevant authorities, little scope for determining that the litigation guardian’s affidavit in this case falls outside the relevant category of documents.  That may well be thought to be reinforced because of the obligation to provide details of assets, liabilities and sources of income, as well as a “best estimate” of costs.

25. [25]
    Thus, the relevant affidavit here cannot be seen to escape the ambit of the documents covered by the applicable principle on existing authority.

26. [26]
    Accordingly, I conclude that the affidavit of Jane Marie Walker filed 25 November 2014 is the subject of an implied undertaking, without the leave of the court, not to use it for any purpose other than that for which it was given unless and until it is received into evidence. The fact that the respondent has read it in this application does not satisfy that last aspect.

Should leave of the court be granted?

27. [27]
    In Re Addstone Pty Ltd (in liq); Ex-parte Macks (No. 2),^[9] an application was made before Mansfield J to be relieved of the relevant undertaking discussed in the earlier decision of Re Addstone.  Mansfield J, referring to Wilcox J in Springfield, stated that there can be “no exhaustive list of the factors relevant to the exercise” of the relevant discretion.  He stated that, in his judgment, however it may have occurred, the extent to which information is now generally available is an overwhelming consideration in the circumstances that he was then considering, because it would be impossible to enforce in a meaningful and in a useful way the relevant undertaking: at 169.

28. [28]
    But, quite obviously, somewhat different circumstances apply here.

29. [29]
    Before proceeding to consider the particular circumstances here, it should be noted that in Northbuild Constructions leave was given to use certain of the documents.  McMurdo P, after noting that the onus is on the person to establish why that person should be relieved from the undertaking and that discharging that onus and persuading the Court to relax or waive those obligations “is no easy matter”, and after further noting that such an applicant for relief is required to show “what are conveniently termed as special circumstances”, held that the important public policy considerations are “about securing justice between the parties and maintaining public confidence in the judicial system”, with it to follow that courts “will usually relieve a party from its implied undertaking where, after giving proper consideration of the public policy reasons behind it, the circumstances of the case demonstrate this is plainly in the interests of justice”: at [13]-[16].  In particular, it was held to be highly relevant that, if the applicant were not to be released from its implied undertaking, its cross-examination of certain witnesses about a particular alleged oral agreement “could be farcically hamstrung”: at [17].  Further, it was said to be relevant that the specified documents were “not commercially sensitive” and “appeared potentially significant and relevant to the central issue” in the relevant dispute determination (namely, whether the key witnesses were honest): also at [17].  It was during those considerations that reference was then made to r 981 of the UCPR.

30. [30]
    In Northbuild Constructions, Chesterman JA, while concurring in the decision reached because the appeal was argued principally on the basis of leave, canvassed whether the projected use of the documents would be “for a collateral or ulterior purpose”.  In the case in question, Chesterman JA held that he would not regard the purpose of the production of the documents in the application for the freezing order as being limited to the conduct of that application because it was ancillary to, and an adjunct of, the wider dispute between the parties to be determined by the relevant expert and, thus, they were “connected” and each “related” to the other: at [46].  Furthermore, he held that one should not take any narrow or technical approach to the analysis of what the litigation or proceeding in question is: at [47].

31. [31]
    In this particular case, if the executor/respondent had not abandoned his claim addressed to the relevant superannuation trustee that the Trustee ought exercise the discretion to pay out the funds to the executor, then it is clear, from the analysis undertaken by Atkinson J in McIntosh v McIntosh,^[10] that what the executor would have been doing was complying with a duty, which duty was identified by Atkinson J as one arising from having the standing to compel a trustee of a fund to exercise a discretion to pay out a superannuation fund (noting that the application was made as part of a duty to get in the estate): at [71]-[73].  It may, therefore, have provided the required connection and relationship.

32. [32]
    Incidentally, there is no evidence whatsoever that any binding nomination has been made in this case. Atkinson J’s identification of the failure of the executor in that case was that it was “in breach of her fiduciary duty” to act in the best interests of the estate, relying upon Re Hayes Wills Trust^[11]: at 764 [78].

33. [33]
    But such a course has now not been taken. That very abandonment should not necessarily give rise to declining to find special circumstances, because the Will has nominated as beneficiaries of the Will the children in question. But there are limits to what a court of limited jurisdiction can do here.

34. [34]
    The second basis relied upon by the executor was that he and the others who disclosed the relevant affidavit to the Trustee of this superannuation fund were acting as testamentary guardians.

35. [35]
    Section 61A of the Succession Act defines a “testamentary guardian”, of a child, as being a person “who is a guardian of the child under an appointment by Will”.  It is contended by the executor/respondent that Clause 6 of the Will satisfies that definition.

36. [36]
    If so, relevantly, s 61D(3)(a) states that, if the appointer is survived by a parent of the child, the appointment takes effect on the appointer’s death, but only if the Will shows that the appointer intended the appointment to take effect on the appointer’s death. It is open to conclude that the Will does so show such an intention, by the explicit deletion of the litigation guardian/mother in Clause 6 of the “draft”, concerning such an appointment following the testator’s death, and the substitution of the “new” guardians; and, if admissible for this purpose, the email of the deceased on 19 January 2014.

37. [37]
    By s 61E(1), a testamentary guardian of a child has all the powers, rights and responsibilities, of making decisions about the long-term care, welfare and development of the child, that are ordinarily vested in a guardian. From the meaning derived from sub-sections (2) and (3) of s 61E, those powers, rights and responsibilities are separate, and apart, from daily care authority for the child. But really important questions then arise here about the effect of potential inconsistency between them and s 61C of the Family Law Act 1975 (Cth), even though Queensland has expressly excluded these provisions from the general referral of powers in this area to the Commonwealth: see s 7(2) of the 2000 Amending Act (No. 55/2000).

38. [38]
    While no detailed argument was presented to me about the effect of s 61E (particularly where “parenting orders” appear to have been made in the Family Court) – without making any decision on the validity or accuracy of the accompanying submissions, and other documents, to the document that delivered the relevant affidavit – it is arguable that, in order to satisfy the interests of justice, at least systemically, this executor, considering the nature of this Will, should be legally capable of referring concerns dealing with the long-term care, welfare and development of the relevant children by informing the relevant Trustee of such information before a final decision is made as to whom the “trust” monies should be paid on the childrens’ behalf.

39. [39]
    Nevertheless, there are at the moment significant concerns that such a threshold has not yet been reached. One concern is that not all of the “3” appointed guardians appear to have been part of the decision to disclose the relevant affidavit, where s 61F of the Succession Act requires the discharge of responsibilities and the exercise of powers to be exercised “jointly” with the “other” guardians.  It has also not been explored whether, given the definition of “guardian” in s 61A, the mother is another “guardian” for this engagement.  Additionally, nothing has been addressed as to the effect of the applicants not applying to the Supreme Court pursuant to s 61H – or even the effect of s 61G if s 61D(3)(a) has not been triggered.  Thus, given the special circumstances of this case, including the litigation guardian’s own disclosure of what she did with other superannuation “trust” monies, in the very unusual circumstances that apply here, it may yet be possible to conclude that it is appropriate to relieve the executor/respondent in this application from its implied undertaking not to deliver to the relevant Trustee the litigation guardian’s affidavit, particularly where it has done so on the basis of seeking to maintain confidentiality and non-publication.

Summary

40. [40]
    Although the executor/respondent’s application in this case does not seek to be relieved by the Court of the implied undertaking concerning the litigation guardian’s filed affidavit, in oral submissions, after questioning from the Court, the executor agreed that it was an appropriate course to follow.

41. [41]
    But I decline to make that order on the present material for the reasons expressed above.

42. [42]
    There was, in addition, a contest about whether the usual directions orders pursuant to the District Court Practice Direction No. 8 of 2001 should be followed. Although I take note of the fact that the estate is financially stressed, given that there are not numerous claimants on the estate, or even beneficiaries, the steps to be taken before a “without prejudice” meeting is due or before 20 April 2015 is not unreasonable in this case. Accordingly, I will make orders to that effect, as well.

43. [43]
    I will reserve the matter of costs of the executor’s application and follow the Practice Direction as to other costs of this proceeding.