Allison and M and Co Pty Ltd & Anor
[2014] FamCAFC 210
•31 October 2014
FAMILY COURT OF AUSTRALIA
| ALLISON & M & CO PTY LTD AND ANOR | [2014] FamCAFC 210 |
| FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – SUMMARY DISMISSAL – where the applicant seeks that the Notice of Appeal filed by the first respondent be summarily dismissed – where the applicant asserts that the appeal has no reasonable prospects of success – where a consideration of each of the grounds of appeal is required – where it is found that the appeal has reasonable prospects of success – application for summary dismissal of the appeal dismissed. FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – LEAVE TO APPEAL – where in the event that the applicant is unsuccessful in having the appeal summarily dismissed she seeks to have the first respondent’s application for leave to appeal summarily dismissed – where it is curious that in the context of the appeal having been found to have reasonable prospects of success the application for leave to appeal is challenged – where it must be demonstrated that there has been an error of principle and/or a substantial injustice caused to one of the parties – where it is arguable that there has been a substantial injustice caused and there has been an error of principle – where there are reasonable prospects of success – application dismissed. FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – COSTS – where if the application is unsuccessful the first respondent seeks an order for costs on a party/party basis – where the applicant concedes that such an application cannot be opposed – order for costs made in the terms sought. |
| Family Law Act 1975 (Cth) – ss 93A(2) & 96AA |
| Charlick Trading Pty Ltd v Australian National Railways Commission & Anor (1997) 149 ALR 647 Waind v Hill & National Employers’ Mutual General Assoc. Ltd [1978] 1 NSWLR 372 Webster v Lampard (1993) 177 CLR 598 |
| APPLICANT: | Ms Allison |
| FIRST RESPONDENT: | M & Co Pty Ltd |
| SECOND RESPONDENT: | Mr Bach |
| FILE NUMBER: | MLC | 4580 | of | 2011 |
| APPEAL NUMBER: | SOA | 49 | of | 2013 |
| DATE DELIVERED: | 31 October 2014 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | 28 February 2014 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 4 July 2013 |
| LOWER COURT MNC: | [2013] FCCA 661 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Swann |
| SOLICITORS FOR THE APPLICANT: | AIF Lucas & Co |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr Guthrie |
SOLICITOR FOR THE FIRST RESPONDENT: | Whitehead Summons |
| SOLICITORS FOR THE SECOND RESPONDENT: | Malkin Lawyers – took no part in the hearing |
Orders
The application in an appeal filed on 20 December 2013 be dismissed.
The applicant pay the costs of the first respondent of and incidental to the application in an appeal filed on 20 December 2013 such costs to be as assessed in default of agreement.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Allison & M & Co Pty Ltd and Bach has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SOA 49 of 2013
File Number: MLC 4580 of 2011
| Ms Allison |
Applicant
And
| M & Co Pty Ltd |
First Respondent
And
| Mr Bach |
Second Respondent
REASONS FOR JUDGMENT
Introduction
By application in an appeal filed on 22 August 2013, M & Co Pty Ltd (“the first respondent”) sought an extension of time to file a Notice of Appeal appealing against an order made by Judge Turner on 4 July 2013. I observe at this point that given the nature of the order sought to be appealed, leave to appeal is required.
The order provided for Ms Allison (“the applicant”) and Mr Bach (“the second respondent”) to each pay to the first respondent costs in the sum of $1,989.81. That order was made in the context of the first respondent, who is the second respondent’s accountant, making an application for costs against the applicant and her solicitors for issuing a subpoena duces tecum to the first respondent, and in the alternative, for costs against the second respondent who it was said failed to give “adequate discovery” and “provide all relevant documents to the [second respondent] for inspection”, thus making the subpoena necessary (at [2]).
On 10 October 2013 the application in an appeal came before me for hearing.
At that hearing, counsel for the applicant indicated that even though there was no utility in the “appeal”, to enable the “appeal” to be heard on its merits, the applicant would consent to the extension of time as sought.
The second respondent did not appear at the hearing on 10 October 2013, either in person or by way of any legal representative. However, I was provided with a letter from the solicitors who acted for him, dated 3 October 2013, and in that letter the solicitors confirmed that the second respondent consented to the application for an extension of time to file the “appeal”. Thus, as both the applicant and the second respondent had given their consent, I made an order extending the time for the first respondent to file a Notice of Appeal against the orders of Judge Turner made on 4 July 2013, to the close of business on
17 October 2014.
On 14 October 2013 the first respondent filed a Notice of Appeal seeking leave to appeal, and in the event of leave being granted, seeking to appeal, and on
8 November 2013 a draft appeal index was filed.
On 20 December 2013 the applicant filed an application in an appeal seeking an order “[t]hat the Notice of Appeal filed by the [first respondent] on
14 October 2013 be summarily dismissed”.
Reasons for Judgment delivered on 4 July 2013
The trial judge commenced his reasons for judgment by setting out the terms of the application and the orders sought by the first respondent, as set out at [2] above.
His Honour then set out the history of the matter leading up to the hearing before him on 4 June 2013 as follows:
a)Pursuant to a discovery request made by the applicant, the applicant and her solicitor inspected documents provided by the second respondent on 31 August 2011 and 1 September 2011 respectively.
b)On 10 November 2011 the court made orders for further discovery by the second respondent. The applicant asserted that the second respondent failed to comply with this order.
c)
The applicant’s solicitor wrote to the second respondent’s solicitor on
6 February 2012, requesting copies of further documents. The response from the second respondent’s solicitor was unsatisfactory, and on
2 March 2012 and 15 March 2012, the applicant’s solicitor again wrote to the second respondent’s solicitor requesting production of certain documents.
d)The applicant says that as a result of the second respondent’s non-compliance, on 15 March 2012 her solicitor caused a subpoena to be issued to the second respondent’s accountant, the first respondent in these proceedings.
I also note the following:
a)On 27 March 2012 the first respondent’s solicitor advised the applicant’s solicitors of the estimated expense in complying with the subpoena, namely “in excess of $3,500 plus GST”.
b)On 29 March 2012 the first respondent produced documents to the court in compliance with the subpoena.
c)On 13 April 2012 the first respondent’s solicitor forwarded an account to the applicant’s solicitors in the total sum of $5,267.42 and sought payment of the same.
d)On 29 August 2012 the first respondent filed an application in a case seeking the following orders:
1.That the costs totalling $5,267.42, incurred in relation to complying with Subpoena of 15 March 2012, be paid jointly and severally by the Respondent [Ms Allison] and the lawyer for the Respondent Vernon Da Gama & Associates.
2.That costs in making this application be paid jointly and severally by the Respondent [Ms Allison] and the lawyer for the Respondent Vernon Da Gama & Associates.
3. Any other orders the Court sees fit.
This was the formal application of the first respondent that was before his Honour on 4 June 2013.
e)By letters dated 9 October 2012 and 28 November 2012 the first respondent’s solicitor advised the applicant’s solicitors that the application would be amended to also seek that the cost of obtaining advice on the subpoena be included, and that if the application was successful costs would be sought on an indemnity basis.
f)
In a subsequent affidavit of the first respondent’s solicitor filed on
3 December 2012 it was made clear that in addition to the above the costs of and incidental to the application itself would also be sought, and it was confirmed that all of the costs sought would be sought on an indemnity basis. That position, and the range of costs sought, was made the subject of the written submissions filed on behalf of the first respondent on 4 June 2013, and was pursued during the hearing before his Honour (for example see Transcript 4 June 2013, pages 38-42).
At the hearing before his Honour, counsel for the second respondent submitted that the applicant had not taken all steps open to her to access the material she sought, that the subpoena was “an abuse of process, and that costs should not be awarded against the [second respondent]” (at [13]). He further argued that the subpoena had been issued “for the purposes of discovery” and that the second respondent had not been given an opportunity to argue against it being issued (at [19]). Counsel for the first respondent also submitted “that the subpoena was an abuse of process”, and counsel for the applicant submitted that any costs ordered to be paid should be met by the second respondent, as his “failure to make full discovery caused the issue of the subpoena” (at [18]).
His Honour found that the subpoena was not issued for the purposes of discovery and that it was not an abuse of process. Thus, his Honour concluded that the “proper costs incurred in complying with the subpoena are recoverable by the [first respondent]”.
His Honour then turned to the amount of costs sought by the first respondent in the formal application, namely, the sum of $5,267.42, including an amount of $1,291.80 for photocopying expenses. Counsel for the first respondent submitted that “the [applicant] did not object to the provision of photocopies when notified that copies would be provided” (at [23]). However, his Honour found that the first respondent assumed that consent to copies was given, when in fact “agreement to the production of photocopies was not specifically sought, and was not reached” (at [23]). Thus the costs incurred in photocopying the documents could not be claimed, and his Honour dismissed that part of the application.
At [26] his Honour set out r 15A.11 of the Federal Circuit Court Rules 2001 (Cth). At [27] his Honour found for the purposes of that rule that the first respondent was not a party to the proceedings, and further, that the first respondent had given the applicant notice of the “considerable expense” involved in complying with the subpoena, estimated to be $3,500 plus GST.
His Honour at [28] said this:
The Court is satisfied that substantial loss or expense has been incurred by [the first respondent] properly complying with the subpoena, other than the cost of photocopying.
And at [29] his Honour directed that the applicant and the second respondent (because he had “failed to give proper discovery”), each pay one half of the costs incurred by the first respondent in the sum of $1,989.81.
Finally, his Honour found there was no abuse of process in the applicant’s solicitor issuing the subpoena, and he dismissed that part of the application seeking in the alternative that the solicitor pay the costs.
Grounds of Appeal
The grounds of appeal as set out in the Notice of Appeal filed on 14 October 2013 are as follows:
1.That the Court erred in finding that the Wife’s subpoena (the “Subpoena”) issued to the appellant on 15 March 2012 was not an abuse of process.
2.That the Court did not take into account the wording of the Subpoena in finding that the Subpoena was not an abuse of process.
3.That the Court took into account an irrelevant consideration in finding that the Subpoena was not an abuse of process.
4.That the Court did not address the appellent’s (sic) submissions on costs.
Orders Sought
The first respondent seeks the following orders in the Notice of Appeal filed
14 October 2013:
1.That leave to appeal be granted.
2.That the orders of Judge F. Turner on 4 July 2013 be set aside.
3.That the wife pay the appellants costs of compliance with the Subpoena on an indemnity basis, such amount to include:
a)$5,267.42, being the amount quoted in [M] & Co Pty Ltd’s fee invoice dated 31 March 2012; and
b)the appellant’s legal costs, including the costs of its application issued 29 August 2012.
4.Alternatively: (a) that the wife pay the appellent’s (sic) legal costs associated with its application issued 29 August 2012 on a solicitor/client basis; or (b) that the Wife and Husband pay in equal portions the appellent’s (sic) legal costs associated with its application issued 29 August 2012 on a solicitor/client basis.
(Emphasis added)
Application for summary dismissal
As referred to above, on 20 December 2013 the applicant filed an application in an appeal seeking orders that the Notice of Appeal filed on 14 October 2013 be summarily dismissed. That application was supported by an affidavit also filed on 20 December 2013.
In the summary of argument filed by the applicant on 17 February 2014, at paragraphs 2 and 3 on page 1 of that summary, the applicant expands on the orders sought as follows:
The [Applicant] seeks an order pursuant to section 96AA of the Family Law Act 1975 (Cth) (“the Act”) and the inherent jurisdiction of the Court that the [First Respondent’s] Notice of Appeal filed on 14 October 2013 be summarily dismissed on the basis that it has no reasonable prospect of success.
Further, in the event that the [Applicant’s] application for summary dismissal is unsuccessful, then she opposes the granting of leave to the [First Respondent] to proceed with the appeal for the reasons set out below and seeks to have the [First Respondent’s] application for leave summarily determined.
This is a curious application. Although logically the first respondent’s primary application before the court is for leave to appeal, the case was run first on the basis of whether the appeal has a reasonable prospect of success, and the grounds of appeal were scrutinised as a result, but secondly, if the application for summary dismissal of the appeal was unsuccessful then summary dismissal of the application for leave to appeal was sought. In any event, I continue.
Section 96AA of the Act is as follows:
SECTION 96AA APPEAL MAY BE DISMISSSED IF NO REASONABLE PROSPECT OF SUCCESS
96AA(1) If:
(a) an appeal has been instituted in a court under this Part; and
(b)having regard to the grounds of appeal as disclosed in the notice of appeal, it appears to the court that the appeal has no reasonable prospect of success (whether generally or in relation to a particular ground of appeal);
the court may, at any time, order that the proceedings on the appeal be dismissed (either generally or in relation to that ground).
96AA(2) This section does not limit any powers that the court has apart from this section.
The present s 96AA was inserted into the Act in 2011 pursuant to the Family Law Legislation Amendment (Family Violence and Other Measures) Bill 2011 to bring the section “… more in line, but not identical to, similar provisions in other Commonwealth Acts dealing with other federal courts” (Explanatory Memorandum, at [136]). This amendment also means that the court is:
… able to dismiss an appeal if it appears to the court, having regard to the grounds of appeal as disclosed in the notice of appeal, that the notice of appeal has no reasonable prospect of success. That is, the focus of item 27 on the “prospects of success” would allow the Family Court to dismiss an appeal that is founded on a proper ground of appeal, but which has no reasonable prospect of success.
(Explanatory Memorandum, at [137])
The Federal Court of Australia Act 1976 (Cth) (“the FCAA”) is one such Act. Section 31A(2) of the FCAA provides as follows:
(2)The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a)the first party is defending the proceeding or that part of the proceeding; and
(b)the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.
(Emphasis added)
The High Court in Spencer v The Commonwealth (2010) 241 CLR 118 considered what constituted “reasonable prospects” for the purposes of s 31A, and in light of the overlap between s 31A of the FCCA and s 96AA of the Act, that discussion is of assistance here. At [22] French CJ and Gummow J said this:
In the Federal Court and in the Court of Appeal of Queensland, the criterion of a “reasonable prospect” of success has been understood in analogous statutory settings to mean a “real” rather than “fanciful” prospect. This exegesis adds little to the words of s 31A. The section authorises summary disposition of proceedings on a variety of bases under its general rubric. It will apply to the case in which the pleadings disclose no reasonable cause of action and their deficiency is incurable. It will include the case in which there is unanswerable or unanswered evidence of a fact fatal to the pleaded case and any case which might be propounded by permissible amendment. It will include the class of case in the longstanding category of cases which are “frivolous or vexatious or an abuse of process”. The application of s 31A is not, in terms, limited to those categories.
And at [25], their Honours said:
Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a “fanciful” prospect of success. …
(Footnotes omitted)
The relevant principles which govern the exercise of discretion to dismiss proceedings summarily were also usefully distilled by Kirby J in Lindon v Commonwealth of Australia (No. 2) (1966) 136 ALR 251 at 544-545 as follows:
1. It is a serious matter to deprive a person of access to the courts of law for it is there that the rule of law is upheld, including against government and other powerful interests. This is why relief, whether under O 26, r 18 or in the inherent jurisdiction of the Court, is rarely and sparingly provided.
2. To secure such relief, the party seeking it must show that it is clear, on the face of the opponent's documents, that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious.
3. An opinion of the court that a case appears weak and such that it is unlikely to succeed is not, alone, sufficient to warrant summary termination. Even a weak case is entitled to the time of a court. Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment.
4. Summary relief of the kind provided for by O 26, r 18, for absence of a reasonable cause of action, is not a substitute for proceeding by way of a demurrer. If there is a serious legal question to be determined, it should ordinarily be determined at a trial for the proof of facts may sometimes assist the judicial mind to understand and apply the law that is invoked and to do so in circumstances more conducive to deciding a real case involving actual litigants rather than one determined on imagined or assumed facts.
5. If, notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a court will ordinarily allow that party to reframe its pleading. A question has arisen as to whether O 26, r 18 applies to part of a pleading. However, it is unnecessary in this case to consider that question because the Commonwealth's attack was upon the entirety of Mr Lindon's statement of claim.
6. The guiding principle is, as stated in O 26, r 18(2), doing what is just. If it is clear that proceedings within the concept of the pleading under scrutiny are doomed to fail, the court should dismiss the action to protect the defendant from being further troubled, to save the plaintiff from further costs and disappointment and to relieve the court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit.
(Footnotes omitted)
Discussion
The applicant says that the appeal has no reasonable prospects of success, and that clearly requires a consideration of each of the grounds of appeal.
Grounds 1, 2 and 3 all relate to and challenge the finding by his Honour that the subpoena issued by the applicant was not an abuse of process.
The first submission that the applicant makes in relation to these grounds is that whether the issuing of the subpoena was an abuse of process or not, it was too late to raise that at the hearing of the application to recover the costs of complying with the subpoena. In other words, the time to raise that as an objection was when the subpoena was received by the first respondent, but that was not done and in fact the subpoena was complied with, without any demur by the first respondent.
The applicant relies on the decision of the Full Court in Ostasheen Pty Ltd v The Deputy Registrar of Child Support (1998) 23 Fam LR 220, at 52 and 56 in support of this submission. There the objections were to the width of the subpoena and that there was an ulterior motive for its issue, but neither of these issues were raised until the costs recovery application. The Full Court held that it was then too late to raise these challenges and they should have been raised at the earliest available opportunity.
The first respondent submits that that case is distinguishable here on a number of grounds, including that the first respondent “did not know the status of discovery between the husband and wife and therefore did not know at the time of production that the subpoena was an abuse of process and could not have possibly objected.”
For my part, despite the retort by the applicant that as the second respondent’s accountant, the first respondent could easily have ascertained from the second respondent the status of discovery, I consider it arguable that Ostasheen does not apply to the circumstances here. That view is bolstered by the fact that in a summary dismissal application the court is to proceed on the basis that the version of the party opposing the summary dismissal will ultimately be accepted “at the trial of the action” (Webster v Lampard (1993) 177 CLR 598 at 608).
Thus, returning to Grounds 1, 2 and 3, his Honour found that the subpoena was not issued for the purposes of discovery and was not an abuse of process. In so finding his Honour appropriately set out the oft-quoted passage from the decision of the New South Wales Court of Appeal in Waind v Hill & National Employers’ Mutual General Assoc. Ltd [1978] 1 NSWLR 372 at 381 on this topic. His Honour then said this at [20]:
The Court finds that the subpoena was not issued for the purposes of further discovery. It was therefore not an abuse of process. It was not issued for the purpose of discovery as [the first respondent] did not have to make a judgment as to which of the documents relate to the issues between the parties: Waind.
Pausing there, the applicant queries what this finding has to do with the question of costs, which is what the appeal is ultimately about. However, it is plain that what the first respondent argues is that if the subpoena was an abuse of process then the first respondent would be entitled to indemnity costs, something which his Honour did not provide for.
In the written submissions filed on behalf of the first respondent, the first respondent says that his Honour erred because:
a)whether or not the Appellant had to make a judgment as to which of the documents related to the issues between the parties was not raised in oral or written submissions;
b)his Honour did not take into account the wording of the subpoena as required by the New South Wales Court of Appeal in Waind (at 382);
c)his Honour took into account two irrelevant considerations – the contents of paragraph [16] of the Respondent Wife’s affidavit filed 7 June 2013 and exhibit IA-21 of that affidavit;
d)his Honour did not address oral submissions from the Husband, and adopted by the Appellant, that the Subpoena was an abuse of process because the Respondent Wife did not seek particular discovery or issue a notice to produce to the Husband as prescribed by the Federal Circuit Court Rules.
It is of course not for this court to determine whether his Honour did or did not err; rather it is this court’s task to determine whether the appeal has no reasonable prospects of success, and Kirby J in Lindon v Commonwealth
(No. 2) tells this court the degree or the extent to which this court needs to be satisfied of that. Thus, as to a) above, it is certainly true that this was not raised in submissions, but of course, during the hearing of the application his Honour was referred to Waind and the passage set out above by the first respondent’s counsel (Transcript 4 June 2013, page 37), and his Honour was himself able to apply the test there identified to the terms of the subpoena. Accordingly, I am not necessarily persuaded that his Honour has erred in the way suggested. What is also said though, and which does concern me, is that nowhere is it apparent that his Honour actually had any regard to the terms of the subpoena to be able to properly apply the test.As to b), it seems that that picks up the concern to which I have just referred, and thus it is arguable that his Honour has erred by not taking into account the wording of the subpoena. I am not assisted by the written submissions of the first respondent as to whether this is the only issue being raised, and nor does the bald reference to Waind help. However, there is a hint in the applicant’s written submissions as to a further issue. At page 6 this appears:
Ground 2: It was argued before Turner J (sic) by Counsel for the Appellant and for the Husband on 4 June 2013 that the wording of the Subpoena was too wide in that it required the production of more documents than the Wife needed to see in light of her previous inspection of documents. However, it was not argued that the Subpoena was oppressive or was a fishing expedition. To the extent that there was a “doubling up” of documents already produced for the Wife’s inspection, the Appellant has been compensated by being awarded its claimed production costs (exclusive of photocopying expenses for the reason set out above, being the absence of an agreement that copies could be produced).
In that light, page 382 of the decision in Waind is relevant, identifying as the Court of Appeal does, that a subpoena that is too wide is oppressive and thus an abuse of process.
It is apparent from the reasons for judgment that his Honour also did not refer to the wording of the subpoena in the context of a submission that it was an abuse of process to require “the production of more documents than the wife needed to see”. Thus, I accept that it is also arguable that his Honour erred in overlooking this, and I observe that it is no answer to say that the first respondent has been compensated for producing all of the documents, if the first respondent should not have been required to do so in the first place.
As to c), it has not been adequately explained to this court why the documents identified were irrelevant to the decision his Honour had to make. Indeed, the applicant makes a good case in her written submissions as to why that material was directly relevant to whether or not the subpoena was necessary. As his Honour said at [24]:
The wife has provided evidence to show that the subpoena was necessary because of a failure by the husband to provide full discovery.
As to d), I am satisfied to the necessary degree that it is arguable that his Honour has erred in the way suggested, and this also prevents a finding that there is no reasonable prospect of success. It is not necessary for a trial judge to address in his or her reasons for judgment each and every point raised in submissions, but it seems to me that these submissions go to the heart of the complaint that was being made by the first respondent.
In the written submissions of the first respondent it is suggested at paragraph 6:
To be successful in its Application in relation to grounds 1 to 3, the Respondent Wife must prove either of two inter-related propositions on the balance of probabilities: first, that the Appellant has no reasonable prospects of success in convincing this Court that Turner J (sic) erred in finding that the Subpoena was not an abuse of process; and secondly, that the Appellant has no reasonable prospects of succeeding in its contention that the Subpoena was an abuse of process.
However, I do not accept that division. What needs to be demonstrated to satisfy s 96AA of the Act is that there is no reasonable prospect of successfully establishing that the trial judge has erred, for example, in finding that the subpoena was not an abuse of process. That said, it seems to me that what the first respondent says in the context of his second proposition further supports that there is an arguable case here on appeal. What is said is:
15 a)that the documents were under the power and control of the husband;
b)the respondent wife did not take the path mandated by the rules of requesting particular discovery or issuing a notice to produce to gain access to documents.
These circumstances suggest that the subpoena was an abuse of process. As does the fact that on 15 March 2012 the applicant’s solicitors wrote to the second respondent’s solicitors requesting production of certain documents, but then on the same day, without waiting for a response, issued the subpoena to the first respondent.
Given that this court has found that the appeal has reasonable prospects of success insofar as Grounds 1, 2 and 3 are concerned, strictly this court does not need to consider Ground 4, but because of the further order sought by the applicant, I propose to do so.
The complaint raised in Ground 4 is that his Honour failed to address the first respondent’s submissions on costs.
It is beyond doubt that what the first respondent was seeking before his Honour was the costs of complying with the subpoena and the legal costs including the costs of the application, all to be paid on an indemnity basis.
It is also beyond doubt that the trial judge failed to address all of these claims, and logically therefore all of the submissions made by the first respondent in support of them. For example, his Honour did not address whether the first respondent should have their legal costs of complying with the subpoena or the costs of the application, or the claim for indemnity costs. All his Honour appeared to address was the claim for $5,267.42.
As correctly summarised in the first respondent’s written submissions at paragraph 20, it is said on behalf of the applicant that:
a)there is no authority for the proposition that a non-party who complies with a subpoena is entitled to be paid its legal costs in addition to the costs of production (page 10); and
b)due to the nature of the dispute between the parties, no further evidence could be adduced on legal costs incurred by the Appellant if the matter was re-heard and therefore the appeal is of no utility (page 10).
In addressing the first submission the first respondent relies on authorities such as FuelXpress Ltd v LM Ericsson Pty Ltd (1987) 75 ALR 284 and Charlick Trading Pty Ltd v Australian National Railways Commission & Anor (1997) 149 ALR 647 as supporting the proposition that it is entitled to be reimbursed its legal costs associated with the subpoena on a solicitor/client basis. However, the applicant does not cavil with the proposition that legal costs can be awarded, but argues that it depends on the circumstances (including the issue on which legal advice is sought) and may also be subject to s 117 of the Act; in other words the applicant says that a third party is not “entitled” to its costs as a matter of course, and there is no authority that says so. Further, the applicant says that the circumstances here do not justify costs being paid on a solicitor/client basis.
As to the applicant’s first proposition, the argument the applicant makes is attractive, and as to the second I am not yet able to form a concluded view, but it seems to me that it is appropriate for a third party to obtain legal advice before complying with a subpoena. In any event, the fact that there may be no “entitlement” to costs does not provide a basis for his Honour in the circumstances of this case to fail to address the application for legal costs associated with the subpoena. Further, although given his Honour’s finding of no abuse of process it is arguable that his Honour did not need to deal with the question of indemnity costs, it was still necessary for his Honour to address the application for legal costs in relation to the subpoena. Nor can it be said that in making the order that he did his Honour impliedly “dismissed” the application for legal costs. His Honour needed to formally dismiss the application if that was his intention.
In relation to the second proposition of the applicant, I accept the submissions of the first respondent that no further evidence is in fact required because the costs can be assessed, or if the Appeal Court needs evidence then further evidence can be provided pursuant to s 93A(2) of the Act.
In summary then, as a result of his Honour’s failure to address the claims for legal costs, it is readily apparent that this ground of appeal has a reasonable prospect of success.
Accordingly, insofar as the application of the applicant seeks summary dismissal of the appeal, I propose to dismiss the same.
Turning then to the issue of leave to appeal, again I note how curious it is in the context of an appeal being found to have a reasonable prospect of success, for the application for leave to appeal to then be challenged.
In any event, in this court at least, the principles applicable to an application for leave to appeal are well settled. The applicant must demonstrate that there has been an error of principle and/or a substantial injustice caused to one of the parties (Rutherford & Rutherford (1991) FLC 92-255).
In my view, and bearing in mind again that what this court needs to determine is whether the first respondent has a reasonable prospect of success in applying for leave to appeal, the first respondent has satisfied that requirement. The first respondent is well able to argue that a substantial injustice has been caused by for example, his Honour not addressing the claim for legal costs. Further, given this court’s findings in relation to the prospects of success of the appeal, it is plain that the first respondent is able to argue that there has been an error of principle, at least in relation to his Honour’s finding that there was no abuse of process.
Thus, I propose to also dismiss this aspect of the application in an appeal.
Costs
At the conclusion of the hearing I sought submissions as to costs depending on the outcome of the application.
In the event that the application was unsuccessful, the first respondent sought an order for costs on a party/party basis, with such costs to be assessed in default of agreement. The applicant conceded that such an application could not be opposed, and accordingly I propose to make an order in the terms sought.
I certify that the preceding fifty-nine (59) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on
31 October 2014.
Associate:
Date: 31 October 2014
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