Bach and Allison and Anor

FEDERAL CIRCUIRT COURT OF AUSTRALIA

BACH & ALLISON & ANOR

[2013] FCCA 661

Catchwords:
FAMILY LAW – Issue of subpoena to non-party – whether seeking discovery – whether failure to give adequate discovery caused the issue if the subpoena – nature of discovery considered.

Legislation:
Federal Circuit Court Rules 2001, rr.15A.10, 15A.11

Cases cited:
Waind v Hill and National Employers’ Mutual General Association Ltd [1978] 1 NSWLR 372

Applicant:

MR BACH

Respondent:

MS ALLISON

Other Party:

MS M & CO PTY LTD

File Number:

MLC 4580 of 2011

Judgment of:

Judge F. Turner

Hearing date:

4 June 2013

Date of Last Submission:

4 June 2013

Delivered at:

Melbourne

Delivered on:

4 July 2013

REPRESENTATION

Counsel for the Applicant:

Mr Hall

Solicitors for the Applicant:

Gibsons Solicitors

Counsel for the Respondent:

Ms Wald

Solicitors for the Respondent:

Vernon Da Gama & Associates

Counsel for the Other Party:

Mr Guthrie

Solicitors for the Other Party:

Whitehead Summons Lawyers

Solicitors for the Independent Children’s Lawyer:

Westminster Lawyers

ORDERS

The husband and wife each pay $1,989.81 to Ms M & Co Pty Ltd within 14 days.
The application for costs against the wife’s solicitor is dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Bach & Allison & Anor is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 4580 of 2011

MR BACH

Applicant

And

MS ALLISON

Respondent

MS M & CO PTY LTD

Other Party

REASONS FOR JUDGMENT

This decision relates to an application by the husband’s accountant Ms M & Co Pty Ltd for costs against the wife and her solicitor, for work allegedly resulting from the wife causing a subpoena duces tecum to be issued to Ms M & Co.
In the alternative, the application for costs is against the husband, who it is said, made the subpoena necessary because he failed to give adequate discovery and provide all relevant documents to the wife for inspection.
The wife sought discovery from the husband and was provided access to documents that she and her solicitor inspected on 31 August 2011 and 1 September 2011.
On 15 March 2012, the wife’s solicitor caused the subpoena duces tecum to be issued to Ms M & Co requiring production of further documents.
On 4 June 2013, the Court ordered the wife’s solicitor to prepare a schedule listing the documents provided for inspection, compared with the documents sought under the subpoena. The schedule was prepared by the wife and is Exhibit “IA-21” to her Affidavit filed 7 June 2013.
Details of some documentation held by the husband are included in Exhibit “IA-5” (Ibid). The wife’ solicitor’s responded that documents set out in “IA-5” were incomplete and requested further discovery (Ibid Exhibit “IA-6”).
At [16] of the Affidavit [Ibid], the wife sets out further documents she wanted discovered. They are listed precisely.
Orders were made on 10 November 2011 for further discovery by the husband. The wife deposes that the husband failed to provide the discovery requested (Ibid [20]).
The wife’s solicitors then wrote to the husband’s solicitor requesting copies of documents as particularised in the letter (Ibid Exhibit “IA-14”). The response did not contain most of the documents particularised (Ibid Exhibit “IA-21”). The wife’s solicitor wrote again on 2 March 2012 requesting documentation (Ibid Exhibit “IA-15”). The wife’s solicitors wrote again on 15 March 2012 (Ibid [20]).
The wife deposes that as sufficient discovery had not been forthcoming, she instructed her solicitor to cause the subpoena to be issued to Ms M & Co (Ibid [27]).
At the hearing on 4 June 2013, Mr Guthrie of Counsel appeared for Ms M & Co, Ms Wald of Counsel for the wife and Mr Hall of Counsel for the husband.
Mr Hall submits that the wife’s solicitor caused the subpoena to be issued without seeking further discovery from the husband, or taking any other action to obtain access to further material. It can be seen from the above, that further discovery was sought and not provided.
Mr Hall submits that the subpoena is an abuse of process and that costs should not be awarded against the husband.
The wife’s solicitor wrote to the husband’s solicitor on the day the subpoena was issued without referring to the issue of the subpoena.
Ms M & Co wrote to the wife’s solicitor on 27 March 2012 warning of the high cost involved in complying with the subpoena (post).
It is clear that it is an abuse of process to have a subpoena issued for the purposes of discovery.
The following is stated in Waind v. Hill and National Employers’ Mutual General Association Ltd [1978] 1 NSWLR 372 at p.381 at G:
Upon the first step the person to whom the subpoena is addressed may seek to, and have, the subpoena set aside on the ground that it was improperly issued and an abuse of the power to compel the production of documents in any one of a number of ways. Such a case is where the subpoena is used for the purpose of discovery. The essential feature of discovery in this connection, as appears from Burchard’s case [1] and Small's case [2] is that the person to whom the subpoena is addressed will have to make a judgment as to which of his documents relate to issues between the parties. It is oppressive to place upon a stranger the obligation to form a judgment as to what is relevant to the issue joined in a proceeding, to which he is not a party. Hence it is an abuse of the use of a subpoena to impose this obligation. It follows that it is an abuse to use any subpoena, i.e. even to a party to obtain discovery. This was the reasoning in Small’s case [3]^{- 1978-1-NSWLR-372.fn_ak#1978-1-NSWLR-372.fn_ak}. Of course, discovery as such is otherwise available to a party. It follows that a subpoena can only properly be used for the production of documents described in particular or general terms which does not involve the making of such a judgment”
[1] [1891] 2 Q.B. 241, at pp. 247, 248.
[2] (1938) 38 S.R. (N.S.W.) 564, at p. 574; 55 W.N. 215.
[3] (1938) 38 S.R. (N.S.W.) 564, at p. 575; 55 W.N. 215, at p. 218.
Mr Guthrie argued that the subpoena was an abuse of process. Ms Wald submitted that if any costs are awarded, they should be paid by the husband because his failure to make full discovery caused the issue of the subpoena. The Court accepts that argument; The husband was given plenty of opportunity to give full discovery before the subpoena was issued, but failed to do so.
Mr Hall argued that a request for further discovery was not made to the husband, and the husband was not given an opportunity to advise against the issue of the subpoena, and therefore he cannot be held responsible for the costs. Mr Hall submitted that the subpoena was sought for the purposes of discovery. The Court rejects those submissions for the reasons set out above.
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 Ms M & Co did not have to make a judgment as to which of the documents relate to the issues between the parties: Waind (supra).
The proper costs incurred in complying with the subpoena are therefore recoverable by Ms M & Co.
The amount of costs is set out in the invoice (Exhibit “MLC3” to the Affidavit of Ms M sworn 1 August 2012) totalling $5,267.42. The invoice includes $1,291.80 for photocopying. The subpoena had a note that:
Note: You may, with the consent of the issuing party, produce a copy, instead of the original of a document
At the hearing, Mr Guthrie argued that the wife did not object to the provision of photocopies when notified that copies would be provided (Exhibits “CWS 1 and 2” to the Affidavit of Mr S sworn 3 December 2012). The Court finds that agreement to the production of photocopies was not specifically sought, and was not reached. An unjustified assumption of consent was made. The costs of photocopying cannot be claimed. That part of the claim for costs is dismissed.
The wife has provided evidence to show that the subpoena was necessary because of a failure by the husband to provide full discovery.
The Court may order that payment be made for any loss or expense incurred when complying with a subpoena [r.15A.10 of the Federal Circuit Court Rules 2001 (“the Rules”)].
Further r.15A.11 of the Rules provides:
Cost of complying with subpoena if not a party
(1)This rule applies if:
(a)a subpoena is addressed to a person who is not a party in the proceeding; and
(b)before complying with the subpoena, the person subpoenaed has given the issuing party notice that substantial loss or expense would be incurred in properly complying with the subpoena, including an estimate of the loss or expense; and
(c)the Court is satisfied that substantial loss or expense is incurred in properly complying with the subpoena.
(2)Unless the Court or a Registrar otherwise directs, the amount of the loss or expense estimated under paragraph (1)(b) is payable by the issuing party.
(3)The Court may fix the amount payable having regard to the scale of fees and allowances payable to witnesses in the Supreme Court of the State or Territory where the person is required to attend.
(4)The amount payable is in addition to any conduct money paid.
(5)If a party who is to pay an amount under this rule obtains an order for the costs of the proceeding, the Court may:
(a)allow the amount to be included in the costs recoverable; or
(b)make any other order it thinks fit.
Ms M & Co is not a party to the proceeding. Before complying with the subpoena, Ms M & Co gave the issuing party notice that considerable expense would be incurred in complying with it, and included an estimate of the cost of $3,500.00, plus GST (Exhibit “CSW 1” to the Affidavit of Mr S filed 3 December 2012).
The Court is satisfied that substantial loss or expense has been incurred by Ms M & Co properly complying with the subpoena, other than the cost of photocopying.
Pursuant to r.15A.11(2), the Court directs that as the husband failed to give proper discovery, he pay half the costs (being $1,989.81) and the wife pay the other half of $1,989.81.
The husband argues that the wife’s solicitor should have waited for a reply to his letter dated 15 March 2012 (Exhibit “IA-20” to the wife’s Affidavit filed 7 June 2013) instead of issuing the subpoena.
The Court finds that in circumstances where the husband’s solicitor was tardy in providing documents in the past, the wife’s solicitor had good cause to issue the subpoena without waiting for a reply to the letter, as the next hearing was on 9 May 2012.

Costs against the wife’s solicitor

Ms M & Co claims in the alternative, that the wife’s solicitor pay the costs.
There was no abuse of process in having the subpoena issued. There is no basis on which the wife’s solicitor should pay the costs; the action was taken on behalf of the wife. That part of the application is dismissed.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of Judge F. Turner

Date: 4 July 2013

[2013] FCCA 661

4 July 2013

Key Legal Topics

Areas of Law

Family Law

Civil Procedure

Legal Concepts

Costs

Remedies