Charlick Trading Pty Ltd v Australian National Railways Commission

[1997] FCA 1216

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SG 78 of 1996

BETWEEN:

CHARLICK TRADING PTY LTD
APPLICANT

AND:

AUSTRALIAN NATIONAL RAILWAYS COMMISSION
FIRST RESPONDENT

NATIONAL RAIL CORPORATION LIMITED
SECOND RESPONDENT

JUDGE:	MANSFIELD J
DATE:	4 NOVEMBER 1997
PLACE:	ADELAIDE

REASONS FOR DECISION

HIS HONOUR:        On 22 October 1997, and then on 28 and 29 October 1997 Patrick Stevedores Holdings Pty Limited, Patrick Rail Operations Pty Limited, Strang Patrick Holdings Pty Ltd, Patrick Stevedores No. 3 Pty Ltd, Patrick Stevedores No. 2 Pty Ltd, Patrick Stevedores ESD Pty Ltd, Jamison Equity Limited, National Stevedoring Holdings Pty Ltd and Patrick Stevedores No. 1 Pty Ltd (“the Patrick Group”) produced to the Court certain documents pursuant to subpoenas directed to them on the request of the applicant and of the second respondent.  On 23 and 24 October 1997 TNT Australia Pty Ltd (“TNT”) produced to the Court certain documents pursuant to a subpoena directed to it on the request of the second respondent.  Orders were made permitting limited access to the documents so produced, having regard to their confidential nature.  That the documents contained confidential commercial information was acknowledged by the parties.  The Court itself has not seen those documents.

Persons permitted access to those documents included proposed expert witnesses for the parties.  That access was upon terms that any such person should provide an undertaking in writing to keep confidential both the documents and the information they contain and to refrain from using the information for any purpose other than in relation to this proceeding.  As it was perceived by the Court that the Patrick Group and TNT may wish to ensure that the confidentiality of the documents was preserved at the stage of the giving of evidence by any expert who had access to the documents so produced, the orders made included a direction that the Patrick Group and TNT be notified when it was proposed that any such expert was to give evidence.  Liberty to apply generally was given.

The hearing has now reached the point where an expert witness is giving evidence.  He has had access to the confidential documents produced both by the Patrick Group and by TNT.  They were each, pursuant to my direction, informed that that expert was to give evidence.  There is now before the Court, pursuant to the liberty to apply referred to, applications both by the Patrick Group and by TNT for orders, in effect, that the costs and expenses to be incurred by each of them in the attendance or appearance of a person or persons at Court during the course of the evidence given by such expert witnesses should be treated as expenses reasonably incurred in complying with the subpoenas referred to.

It was confirmed in submissions that the application in each case was made under O 27 r 4A of the Federal Court Rules (“the Rules”) only.  There was no other basis of the application for such an order identified.  I treat the application, because of the orders which have already been made, as an application under O 27 r 4A(2), inviting me to fix, in an anticipatory way, the amount or amounts which might be allowed by way of such expenses.  Order 27 rule 4A provides:

“(1)Where a person named in a subpoena is not a party to the proceeding and he incurs substantial expense or loss in complying with the subpoena the Court or a Judge may order that the party who requested the issue of the subpoena pay to that person, in addition to any amount which the person served with the subpoena is entitled to be paid pursuant to Order 27 rule 3 or the Second Schedule, an amount to compensate him for such expense or loss as is reasonably incurred or lost by that person in complying with the subpoena.

(2)Where an order is made under sub-rule (1) the Court or a Judge shall either fix the amount or direct that the amount be fixed by the taxing officer.

(3)The provision of Order 62 shall apply mutatis mutandis to any taxation under this rule.”

I treat the applications in that way because, in each case, costs orders in favour of the Patrick Group and TNT respectively have already been made in the following terms:

“Pursuant to Order 27 Rule 4A, the applicant [or the second respondent] pay to [the entity to which the subpoena was directed] an amount by way of compensation for such expense or loss as is reasonably incurred by those persons in complying with the subpoenas issued against them by the applicant [or the second respondent] such amount to be fixed by the Taxing Officer or agreed between the parties.”

There are a number of decisions of the Court where orders have been made under O 27 r 4A, including the decision of Lockhart J in Fuelxpress Ltd v L M Ericsson Pty Ltd (1987) 75 ALR 284 to which I was referred, and more recently, the decision of Hill J in Hadid v Lenfest Communications Inc (1996) 65 FCR 350. In my view, they establish that the scope of the rule is sufficient to encompass, if the expense is otherwise reasonable in the circumstances, the expense incurred in seeking advice as to the validity of the subpoena, including whether to comply with it at all or in part; correspondence or attendances on a party issuing the subpoena, regarding its terms, and including with a view to narrowing or clearly identifying the scope of documents to be produced; advice as to whether documents are confidential or properly subject to claims for privilege; correspondence and attendances and negotiations with the party issuing the subpoena, as to the terms upon which access to the documents should be permitted by the Court, including the negotiation of and formulation of any undertakings as to confidentiality; attendances in Court when the subpoena is called on or when it is stood-over, including attendances to assert and make out any claim that the documents subpoenaed should be protected from unrestricted access due to their confidential character and to seek orders restricting access to the document or documents produced; and steps to ensure that any confidentiality undertakings proposed to be entered into have, in fact, been properly given: Hadid’s case (above).  That list may not be exhaustive.  And, of course, whether any order should be made is a matter to be determined in the particular circumstances of the case.  See generally Burns Philp Trustee Co Ltd v Moneylink Financial Planning (Systems) Ltd (Wilcox J, 7 June 1990, unreported); Moorehead Nominees Pty Ltd v Barclays Australia Securities Ltd (Hill J, 17 May 1991, unreported); Beneficial Finance Corporation Ltd v Commissioner of Taxation (Olney J, 2 March 1992, unreported); Ex parte Eastern Pastoral Co Pty Ltd; Gorman v Australia and New Zealand Banking Group Ltd (Burchett J, 9 June 1994, unreported); Mowie Fisheries Pty Ltd v Switzerland Insurance Australia Ltd (Tamberlin J, 23 July 1996, unreported).

That enumeration of the circumstances in which a costs order under O 27 r 4A may be appropriate indicates that they have not extended beyond the second of the three stages in the process for the production of documents under subpoena described by Moffit P (with whom Hutley and Glass JJ A agreed) in Waind v Hill and National Employers’ Mutual General Association Ltd [1978] 1 NSWLR 372 at 381. His Honour said:

“The first is obeying the subpoena, by the witness bringing the documents to the court and handing them to the judge.  This step involves the determination of any objections of the witness to the subpoena, or to the production of the documents to the court pursuant to the subpoena.  The second step is the decision of the judge concerning the preliminary use of the documents, which includes whether or not permission should be given to a party or parties to inspect the documents.  The third step is the admission into evidence of the document in whole or in part; or the use of it in the process of evidence being put before the court by cross-examination or otherwise.  It is the third step which alone provides material upon which ultimate decision in the case rests.  In these three steps the stranger and the parties have different rights, and the function of the judge differs.”

Effectively, as costs orders have already been made, I am now asked under O 27 r 4A(2) to determine that the costs, the subject of those orders, include the costs of attendance in Court during the course of the evidence which I have identified.  That is at the third stage of the process as so described

I decline to do so.

Whether particular costs are costs of compliance with the subpoenas is a matter of fact.  So too is the question of whether those costs are reasonable.  See generally Hill J in Moorehead Nominees (above, at 6).  So far as I am aware no case determines that the costs of compliance with a subpoena extended to such attendances as now proposed by the Patrick Group and TNT.  No case in support of the proposition was cited.  I am not aware of any case in which the rights of the ‘the stranger and the third parties’ as described by Moffit P in Waind (above) are considered in the context of the present claim.  I therefore turn to the wording of the Rules and of the subpoenas.

One can ask rhetorically what more the Patrick Group or TNT can be called upon to, or should, do in complying with the subpoenas.  Order 27 r 1 defines a ‘subpoena for production’ as an order in writing requiring the person named to attend as directed and to produce a document for the purpose of evidence.  Rule 2 empowers the Court to issue subpoenas, and there are complementary rules dealing with conduct money, costs and banker’s books:  rules 3, 4A and 5 respectively.  Rule 4 permits a non-party to produce documents under subpoena by production to the Registrar.  Such production would fulfil that person’s obligation of compliance with the subpoena.

The subpoenas in issue were each in the proper form and each in relevant respects was in the same terms.  Essentially, pursuant to the Rules, each required the party subpoenaed to attend at Court at a specified time and to produce the subpoena and the documents listed in the schedule to it for the purposes of evidence, and thereafter until excused from further attending.  They each contained reference to rr 3, 4, 4A and 5.  As a matter of fact, the Patrick Group and TNT each did attend at Court as directed, each produced their respective subpoenas, and each has produced documents as required.  In the case of the Patrick Group, as it was unclear whether all required documents had been produced, the subpoena was adjourned to a date to be fixed with liberty to apply to call it on if further documents as described came to light.  I do not think that alters the position, as the claim now made relates to the documents already produced.  It is claimed to be a proper expense of complying with the subpoenas in steps taken to ensure that confidentiality in the documents so produced is preserved when, and if, they are tendered or they or their contents are otherwise referred to in evidence.  That concern might fairly be said to arise because the subpoenas have been complied with so that those documents and the information in them might become part of the evidence.  It does not however relate to the process of complying with the subpoenas.

My view is that attendance during the hearing by a non-party who has produced documents under subpoena, and who wishes to ensure that any necessary orders under s 50 of the Federal Court of Australia Act 1976 (“the Act”) are made to restrict publication of particular evidence which discloses confidential information from those documents, is not part of the process of compliance with the subpoena.  That process was completed when the documents were produced and orders made reflecting the matters properly addressed in the process of complying with it, and in the terms to which I have referred.  As I have said, the practical boundary of that process of compliance as addressed in the cases to date is reflected in the decision in Hadid (above).

In Burns Philp Trustee Co Ltd (above) Wilcox J said in his reasons at 9 that O 27 r 4A should be interpreted “in a practical and common sense way, with some view to commercial realities”.  I have considered whether that observation would support the contention of the Patrick Group and of TNT in the present circumstances.  The observation, with which I respectfully agree, was in a quite different factual context.  His Honour refused an order for costs under O 27 r 4A because the documents produced under subpoena by Estate Mortgage Financial Services Limited should have been discovered by the applicant in the proceeding Estate Mortgage Managers Limited; his Honour had regard to the practical commercial relationship between those two companies in rejecting the claim.  In my view that decision does not assist the contention now under consideration.

In Moorehead Nominees (above), the boundary for the proper operation of O 27 r 4A was also addressed.  Hill J isolated the costs incurred in complying with the subpoena from the costs incurred in seeking advice with regard to setting aside the subpoena.

As I have said, in a practical sense the subpoenas have been complied with. The use of the documents so produced, for the purposes of evidence, is up to the parties. The third parties have notice of the witnesses proposed, so that they can anticipate such use, and if they wish, attend to pursue any claim under s 50 of the Act. It is anticipated that the parties themselves, through counsel, will seek any such orders as necessary, having regard to the terms upon which access to the documents was given. I do not regard the costs of the attendance of the Patrick Group or TNT in the form of a watching brief to be properly categorised as costs in the process of complying with the subpoena.

It is important to emphasise that there is no dispute that evidence given concerning the confidential documents so produced under subpoena should be confidential. It is the position of all parties that it should be confidential. Orders have been made to that effect, as necessary, to date. The only problem really is the practical one of identifying when confidential material may be given in evidence. Counsel for the parties, very fairly and responsibly, and I suspect at some inconvenience, have to date recognised that issue, and have isolated the occasions when evidence is proposed to be led which deals with confidential material by dealing with that material in a block and upon notice. No apparent problem has arisen so far. There is no reason to think that that process will not be done effectively in the future. There is some risk of an inadvertent answer, or a lack of appreciation of what is confidential, giving rise to a problem. That may in part be because the orders restricting access were not contested as to the scope of the material, but were blanket orders. It may be that some of the material produced may be less commercially sensitive than other parts of it. It was in part for that reason that I directed that notice be given to the third parties so that they might be present during such evidence, and might pursue any application under s 50 of the Act.

However, those comments provide another reason why I do not make the orders sought on the present applications.  I could not at present be satisfied, on the limited information before me regarding the nature and extent of the documents produced, which is only that identified by reference to the description in the subpoenas, that the costs of attendance, including possibly costs of solicitors and counsel and, as was suggested, the costs of attendance of a representative of the Patrick Group and TNT, are necessarily reasonable, even if such attendance was in principle in compliance with the subpoena.  I simply do not know.  That is the sort of issue which would need to be determined by a taxing officer.  To make such a determination now would involve determining, in an anticipatory way, and with limited and insufficient information, that such attendances as the Patrick Group and TNT determine upon are necessarily reasonably incurred in complying with the subpoena.
I have not refused the applications specifically on the ground that they are premature, although O 27 r 4A(2) contemplates as one option the Court determining that an expense has been reasonably incurred in compliance with a subpoena and then fixing that amount of that expense.  I regarded it as appropriate to address the general issue which had arisen for consideration.  I am not however to be taken as accepting that the seeking of such anticipatory determinations is necessarily a proper course of action.

For those reasons, I decline to make the orders sought. The Patrick Group and TNT are, of course, at liberty to remain, and subject to any issue as to their standing to pursue any application under s 50 of the Act if circumstances call for it.

I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Decision herein of the Honourable Justice Mansfield.

Associate:

Date:

Counsel for the Applicant:  Mr A J Besanko QC
  with him
  Mr R C White

Solicitors for the Applicant:  O’Loughlins

Counsel for the First Respondent:  Mr P W Taylor SC
  with him
  Mr R D Ross-Smith

Solicitors for the First Respondent:  Phillips Fox

Counsel for the Second Respondent:  Mr R A Conti QC
  with him
  Mr P W J Gray

Solicitors for the Second Respondent:  Deacons Graham & James

Counsel for:    Patrick Stevedores Holdings Pty Limited:     Dr B Baxter
  Patrick Rail Operations Pty Limited
  Strang Patrick Holdings Pty Ltd
  Patrick Stevedores No. 3 Pty Ltd
  Patrick Stevedores No. 2 Pty Ltd
  Patrick Stevedores ESD Pty Ltd
  Jamison Equity Limited
  National Stevedoring Holdings Pty Ltd
  Patrick Stevedores No. 1 Pty Ltd

Solicitors for:  Patrick Stevedores Holdings Pty Limited:     Johnson Winter & Slattery
  Patrick Rail Operations Pty Limited
  Strang Patrick Holdings Pty Ltd
  Patrick Stevedores No. 3 Pty Ltd
  Patrick Stevedores No. 2 Pty Ltd
  Patrick Stevedores ESD Pty Ltd
  Jamison Equity Limited
  National Stevedoring Holdings Pty Ltd
  Patrick Stevedores No. 1 Pty Ltd

Counsel for TNT Australia Pty Ltd:  Mr P Campbell

Solicitors for TNT Australia Pty Ltd:  Kelly & Co

Date of Hearing:  4 November 1997

Date of Decision:  4 November 1997