Other federal courts

High Court of Australia

5.136 In the Consultation Paper, the ALRC asked about the application of the Peruvian Guano case to discovery in the High Court.^[171] In his review of the civil justice system in England and Wales, Lord Woolf observed that the result of the Peruvian Guano decision

was to make virtually unlimited the range of potentially relevant (and therefore discoverable) documents, which parties and their lawyers are obliged to review and list, and which the other side is obliged to read, against the knowledge that only a handful of such documents will affect the outcome of the case. In that sense, it is a monumentally inefficient process, especially in the larger cases. The more conscientiously it is carried out, the more inefficient it is.^[172]

5.137 In this Inquiry submissions did not raise any concerns about the range of documents discoverable in proceedings before the High Court under the Peruvian Guano decision. The Law Council, for example, submitted that discovery rarely became an issue in High Court proceedings and that no changes were required.^[173]

5.138 The need for discovery arises so rarely in High Court proceedings that the application of the Peruvian Guano case is unlikely to cause any real problems. The nature of the work undertaken in the High Court in its original jurisdiction is largely confined to constitutional work. Such cases tend not to raise any significant factual issues, which means discovery processes are generally not necessary. Cases commenced in the High Court, that would involve significant questions of fact, are generally remitted to another court under s 44 of the Judiciary Act 1903 (Cth).

Family Court of Australia

5.139 As noted in Chapter 4, the duty of disclosure in Family Court proceedings is ‘absolute’.^[174] Each party is required to give full and frank disclosure of all information and documents relevant to the case.^[175]

5.140 Despite the breadth of the duty to disclose, there has not been widespread concern about the overbroad disclosure of documents in Family Court proceedings. If there are ever any issues with disclosure in the Family Court, those concerns seem to be that there is too little disclosure, rather than too much.

5.141 Instances of relevant information and documents being withheld in proceedings before the Family Court may, on the whole, be isolated. However, where there is non-compliance with disclosure obligations in the Family Court, the Court may deal with this issue in its judgment.

5.142 In property matters, for example, the Family Court may draw adverse inferences from non-disclosure and make adjustments to any property distribution between the parties. The Full Court commented, in the case of In the Marriage of Kannis,that:

Whether the non-disclosure is wilful or accidental, is a result of misfeasance, or malfeasance or nonfeasance, is beside the point. The duty to disclose is absolute. Where the Court is satisfied the whole truth has not come out it might readily conclude the asset pool is greater than demonstrated. In those circumstances it may be appropriate to err on the side of generosity to the party who might be otherwise be seen to be disadvantaged by the lack of complete candour.^[176]

Submissions and consultations

5.143 In the Consultation Paper, the ALRC asked whether the disclosure obligations on parties to Family Court proceedings were generally working well, and whether the court was adequately equipped to deal with instances of non-compliance with disclosure obligations.^[177]

5.144 The Law Council and the Family Court both submitted that the disclosure obligations imposed by the Family Law Rules were working well.^[178] The Law Council suggested that:

This is partly due to the pre-action protocol which obliges the exchange of relevant documents before proceedings are commenced and to the culture of discovery peculiar to family law proceedings.^[179]

5.145 The Family Court submitted that the Court is well equipped to deal with parties who fail to comply with disclosure obligations, by making adjustments to any property distribution between the parties.^[180] The Family Court advised that other options included staying or dismissing the ‘recalcitrant’ party’s application, and making orders for costs against a party who has not complied with the obligation to disclose.^[181] When considering making costs orders, the Family Court is specifically able to take into account the conduct of the parties to proceedings in relation to discovery, inspection, production of documents and similar matters.^[182]

5.146 The Law Council agreed that the Family Court was adequately empowered to redress any non-compliance with disclosure obligations.^[183] However, the Council stated that there was a reluctance to enforce non-compliance by awarding costs. Each party to proceedings in the Family Court is prima facie obliged to pay their own costs.^[184] In conclusion, the Council noted that ‘this is a matter of discretion and a small complaint in the totality of the scheme’.^[185]

ALRC’s views

5.147 The ALRC does not consider there to be any need for reform of disclosure obligations in the Family Court, or any significant issues with the Court’s ability to enforce the duty to disclose documents.

5.148 In the ALRC’s view, the general success of the Family Court’s disclosure regime is in part due to the transparent nature of the matters dealt with in this jurisdiction. In financial cases, for example, where property and assets are divided after the married parties separate, the parties are often familiar with each other’s case and their respective financial circumstances. The facts in issue in these types of proceedings are often relatively contained and the kinds of documents required to determine those issues may be fairly apparent. This helps to confine the scope of disclosure to those documents that are directly relevant to the important issues.

5.149 The successful operation of disclosure obligations in Family Court proceedings is also aided by the Court’s litigation process as a whole. The non-court based family dispute resolution procedures, engaged prior to the commencement of proceedings, draw out the main facts in issue, which helps to focus the scope of disclosure. The Court’s ‘first day’ process—where, for example, parties to a property case must exchange certain documents two days before the first court date^[186]—also has, as a central focus, the clarification of the issues in dispute.

5.150 In addition, the system of judicial case management established in the Court has contributed to an effective disclosure regime in Family Court proceedings. The impact of judicial case management in the context of disclosure in Family Court proceedings is discussed further in Chapter 6.

5.151 The ALRC considers that the disclosure process in most Family Court proceedings generally satisfies the law reform principles framing this Report, particularly those of efficiency and effectiveness. The disclosure of relevant documents is usually an important step towards the resolution of family law matters and the ALRC understands that this is typically achieved in the Family Court at a cost that is proportionate to the issues in dispute.

Federal Magistrates Court of Australia

5.152 The Federal Magistrates Court was established to provide a quicker, cheaper option for litigants dealing with matters of a less complex nature.^[187] The Federal Magistrates Act 1999 (Cth) directs the Court to operate under procedures that are as simple and efficient as possible, aimed at reducing delay and costs to litigants.^[188]

5.153 In the family law jurisdiction of the Federal Magistrates Court, for example, disclosure obligations are limited in comparison to the general duty to disclose documents in Family Court proceedings.^[189] For example, pt 24 of the Federal Magistrates Court Rules 2001 (Cth) requires only the production of certain classes of documents.

5.154 The process of discovering documents, and the costs involved, may be seen as contrary to the ideals of simple, cheap and fast litigation in the Federal Magistrates Court. This view is enshrined in s 45 of the Federal Magistrates Act, which provides that discovery is not allowed in proceedings unless the Court declares that it is appropriate in the interests of the administration of justice.

5.155 However, the ALRC understands that some parties to family law matters have had difficulties accessing discovery mechanisms in the Federal Magistrates Court—even the limited amount of disclosure required under the Rules has been difficult for some parties to obtain.^[190] Some parties, and also some magistrates, take the view that disclosure obligations under pt 24 of the Rules are contingent upon compliance with s 45 of the Federal Magistrates Act.In consequence, parties do not disclose the documents or information specified in the Rules unless the Court makes a declaration to allow discovery. As a result, some parties have incurred the cost of seeking the Court’s declaration and, on occasion, have been denied their request for documents or information on the grounds that discovery is not appropriate in the Federal Magistrates Court.

5.156 There were no issues raised in the course of this Inquiry in relation to discovery of documents in general civil law matters—that is, anything other than family law matters—in the Federal Magistrates Court.

Submissions and consultations

5.157 In the Consultation Paper, the ALRC proposed that s 45 of the Federal Magistrates Act should note that disclosure obligations under pt 24 of the Federal Magistrates Court Rules were not contingent upon compliance with s 45 of the Act.

5.158 This proposal sought to ensure compliance with the disclosure obligations established under the Rules, in family law matters before the Federal Magistrates Court. However, parties seeking broader disclosure than the Rules currently permit would still be required to comply with s 45 of the Act.

5.159 In its submission, the Law Council called for further reform. It submitted that s 45 of the Federal Magistrates Act should have no application in family law matters, and the breadth of disclosure obligations in the Federal Magistrates Court’s family law jurisdiction should be comparable to Family Court proceedings.^[191]

5.160 The Law Council argued that, although the Federal Magistrates Court was established to be a place in which simple matters could be determined more quickly and cheaply, its family law jurisdiction had grown to overlap with the Family Court:

Federal Magistrates do not determine cases in a summary way. They are obliged to deliver reasoned and detailed judgments which are susceptible to appeal to the Full Court of the Family Court (albeit constituted by a single judge at the Chief Justice’s discretion) in which the same standards of judging appealable error apply as to a Family Court judge sitting at first instance. In those circumstances, the existence of section 45 is misconceived.^[192]

5.161 Although the types of cases heard in the Federal Magistrates Court may be comparable to Family Court proceedings, the Law Council pointed out that the breadth of disclosure obligations in each court is not the same:

Rules 24.04 and 24.05 require the production of categories of documents which are useful in the simple cases, but those rules do not suffice in more complex financial cases with which the court is now dealing … The Rules do not set out any general obligation for full and frank disclosure [as per the Family Law Rules].^[193]

5.162 The Law Council stated that, on occasion, s 45 of the Act has been applied capriciously by some parties to protract proceedings or deprive litigants of their legitimate expectation to be informed of relevant matters.^[194]

ALRC’s views

5.163 The ALRC considers that reform is required to ensure parties’ compliance with existing disclosure obligations in financial matters under pt 24 of the Federal Magistrates Court Rules.

5.164 The duty of disclosure established under pt 24 of the Rules—including the duty to produce documents^[195]—is a duty of general application, albeit limited in its range of documents and information. A general duty of this nature applies independently of any action of the Court or any party. As such, disclosure under pt 24 of the Rules is not contingent upon a court declaration under s 45 of the Federal Magistrates Act.

5.165 The ALRC considers that reform is necessary to promote a party’s right to disclosure of information and documents under pt 24 of the Rules. This could be achieved, for example, by inserting a note to s 45 of the Federal Magistrates Act, to clarify that disclosure under pt 24 of the Rules is not contingent upon compliance with this section. This would promote the principle of consistency, in comparison with the Family Court, in terms of parties’ access to disclosure processes. That is, in both courts, parties would have a clear right to disclosure of documents—albeit a right that differs in the scope of disclosure.

5.166 This means that s 45 of the Act would continue to apply generally in family law proceedings before the Federal Magistrates Court—to restrict discovery of documents beyond the limited duty of disclosure currently required by the Rules.

5.167 The current scope of disclosure obligations under existing Rules is appropriate for proceedings in the Federal Magistrates Court. That is, the ALRC does not support reform to expand disclosure obligations in the Court’s family law jurisdiction to match the duty to disclose in Family Court proceedings.

5.168 The Federal Magistrates Court is intended to operate under informal and streamlined procedures suitable for the simple and less complex cases which the Court is intended to handle. The limited duty to disclose documents under rr 24.04 and 24.05 of the Rulesis indicative of the types of cases that are supposed to be conducted in the Court’s family law jurisdiction. These rules indicate that straight forward financial cases which can be determined on the basis of contained categories of documents are suited to the Federal Magistrates Court.

5.169 Likewise, s 45 of the Federal Magistrates Act provides important statutory guidance as to the types of cases Parliament intended for the Court’s family law jurisdiction. It sends a clear message that complex cases which require broader disclosure than the Rules permit are generally unsuitable for the Federal Magistrates Court.

5.170 The current restrictions on discovery, under s 45 of the Act, and the current limitations on disclosure in family law matters, under pt 24 of the Rules, in the Federal Magistrates Court are supported by the principle of appropriateness—that the justice system should be structured to create incentives to encourage people to resolve disputes at the most appropriate level.^[196] Where there are concerns that compelling disclosure in the Federal Magistrates Court is more difficult than in the Family Court, this may be symptomatic of underlying issues about family law matters being determined at the appropriate level—rather than an issue with the laws of disclosure.

5.171 The ALRC recognises that the streamlined procedures employed in the Federal Magistrates Court—such as the limited duty to disclose documents^[197]—may be at odds with the fact the Court’s family law jurisdiction is now more expansive than was originally intended. However, the ALRC notes that the Access to Justice (Family Court Restructure and Other Measures) Bill 2010 (Cth) proposed to remove the Federal Magistrates Court’s family law jurisdiction and make the Family Court the single court dealing with all family law matters.^[198]

5.172 The Bill would establish two Divisions within the Family Court, and confer discretion on the Chief Justice to allocate matters commenced in the Court to either of its two divisions.^[199] The Superior and Appellate Division would hear complex cases and appeals, and apply existing Family Court rules.^[200] The General Division would hear less complex cases, and would have powers to make rules of court which apply to only that Division.^[201] The General Division’s caseload is intended to be equivocal to the simple, straightforward cases which the Federal Magistrates Court is intended to hear in its family law jurisdiction. In that event, the ALRC understands that the General Division might adopt Rules similar to those currently applying in the Federal Magistrates Court’s family law jurisdiction.

5.173 The ALRC considers that reform to address the respective jurisdictions of the Family Court and the Federal Magistrates Court in family law matters would be a better approach than reform to expand disclosure obligations in family law proceedings before the Federal Magistrates Court.