Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd (No 5)

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FEDERAL COURT OF AUSTRALIA

Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd (No 5) [2019] FCA 474  

File number: VID 1157 of 2017
Judge: O’CALLAGHAN J
Date of judgment: 5 April 2019
Date of hearing: On the papers
Date of last submissions: 7 December 2018
Registry: Victoria
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Category: No catchwords
Number of paragraphs: 15
Counsel for the Applicant/First Cross-Defendant: Mr M W Wise QC with Ms N J Hickey
Solicitor for the Applicant/First Cross-Defendant: K & L Gates
Counsel for the First and Sixth Respondents/Cross-Claimant: Dr S B McNicol QC with Mr A N McRobert
Solicitor for the First and Sixth Respondents/Cross-Claimant:

Norton Rose Fulbright

ORDERS

VID 1157 of 2017
BETWEEN:

DIRECTED ELECTRONICS OE PTY LTD

Applicant
AND:

OE SOLUTIONS PTY LTD

First Respondent

HANHWA AUS PTY LTD

Second Respondent

HAN HWA HIGHTECH AUSTRALIA PTY LTD (and others named in the Schedule)

Third Respondent
AND BETWEEN:

JOHNNY MENESES

Cross-Claimant
AND:

DIRECTED ELECTRONICS OE PTY LTD (and another named in the Schedule)

First Cross-Defendant

JUDGE:

O’CALLAGHAN J

DATE OF ORDER:

5 APRIL 2019

THE COURT ORDERS THAT:

1.The first and sixth respondents pay the costs of the applicant in meeting objections raised in respect of the applicant’s application of 10 October 2018 to uplift, inspect and copy documents produced pursuant to subpoenas issued on 11 September 2018 and 12 September 2018.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

O’CALLAGHAN J:

  1. The applicant (Directed) seeks an order that the first and sixth respondents (the Meneses Parties) pay its costs of meeting objections raised in respect of an application made by Directed for access to subpoenaed documents. The objections were withdrawn by Directed the day before they were to be heard.

  2. The parties have filed written submissions, and I will deal with the matter on the papers.

    Background

  3. Directed made an application on 10 October 2018 for orders seeking leave to uplift, inspect and copy documents produced by the following parties, pursuant to subpoenas issued to them:

    (a)Albert Biviano & Co, on 11 September 2018;

    (b)Kenmarco Industries Pty Ltd, on 11 September 2018;

    (c)Westpac Banking Corporation, on 11 September 2018; and

    (d)American Express Australia Limited, on 12 September 2018.

  4. At the return of the subpoenas on 10 October 2018, before a Registrar of this court, the Meneses Parties advised that they wished to object to Directed’s application in respect of the subpoenas on the grounds of privilege against self-incrimination and self-exposure to civil penalty (privilege grounds) and requested that their objection be heard and determined on 26 October 2018, together with other privilege applications to be heard that day.

  5. On 15 October 2018, the solicitors for the Meneses Parties sent a letter to the applicant’s solicitors setting out their clients’ objections to the uplift of the documents produced pursuant to the subpoenas (the objection letter).

  6. The…

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Details
Case
[2019] FCA 474
Decision Date

CaseChat Overview and Summary

Directed Electronics OE Pty Ltd sought orders for leave to uplift, inspect, and copy documents produced by several parties pursuant to subpoenas. The Meneses Parties, including Albert Biviano & Co, Kenmarco Industries Pty Ltd, Westpac Banking Corporation, and American Express Australia Limited, objected to the subpoenas on grounds of privilege. The objections were based on privilege against self-incrimination and self-exposure to civil penalty. The Meneses Parties requested that their objections be heard on 26 October 2018. However, on 25 October 2018, the day before the hearing, the Meneses Parties abandoned their objections.

The primary legal issue the court had to decide was whether the Meneses Parties should be held liable for the costs incurred by Directed in meeting the objections they raised. The court considered the submissions from both parties. The Meneses Parties argued that the subpoenas were issued too close to the hearing date, making it difficult for them to properly object. Directed, on the other hand, contended that the objections were unrelated to the privilege issues and that Directed had waited appropriately before issuing the subpoenas.

The court ruled that the Meneses Parties had ample time to consider their objections before and after the hearing before the Registrar. The fact that the Meneses Parties abandoned their objections the day before they were to be heard meant that their objections were no longer relevant. Therefore, the court ordered that the first and sixth respondents should pay the costs that Directed incurred in meeting the objections raised in respect of the subpoenas.

In summary, the court found that the Meneses Parties were liable for the costs incurred by Directed in addressing their objections to the subpoenas. This decision highlights the importance of timely objections and the court's discretion in awarding costs in civil proceedings.

Orders

Orders of the court

1. The first and sixth respondents pay the costs of the applicant in meeting objections raised in respect of the applicant’s application of 10 October 2018 to uplift, inspect and copy documents produced pursuant to subpoenas issued on 11 September 2018 and 12 September 2018.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

The parties have filed written submissions, and I will deal with the matter on the papers. Background Directed made an application on 10 October 2018 for orders seeking leave to uplift, inspect and copy documents produced by the following parties, pursuant to subpoenas issued to them:(a)Albert Biviano & Co, on 11 September 2018;(b)Kenmarco Industries Pty Ltd, on 11 September 2018;(c)Westpac Banking Corporation, on 11 September 2018; and(d)American Express Australia Limited, on 12 September 2018. At the return of the subpoenas on 10 October 2018, before a Registrar of this court, the Meneses Parties advised that they wished to object to Directed’s application in respect of the subpoenas on the grounds of privilege against self-incrimination and self-exposure to civil penalty (privilege grounds) and requested that their objection be heard and determined on 26 October 2018, together with other privilege applications to be heard that day. On 15 October 2018, the solicitors for the Meneses Parties sent a letter to the applicant’s solicitors setting out their clients’ objections to the uplift of the documents produced pursuant to the subpoenas (the objection letter). The second, third, fourth, fifth, eighth and twelfth respondents also objected to Directed’s application at the return of the subpoenas on 10 October 2018, and referred to and relied upon the oral submissions of counsel for the Meneses Parties, but withdrew their objection on 15 October 2018. The applicant does not seek its costs against them. On the afternoon of 25 October 2018, the day before the hearing of the objections, the Meneses Parties gave notice that they had abandoned their objections to the uplift of the documents produced pursuant to the subpoenas.Costs principles The awarding of costs is, of course, at the discretion of the court: s 43 of the Federal Court of Australia Act 1976 (Cth). Usually, in the exercise of this discretion, it is ordered that the costs should follow the event: see Plaintiff M76/2013 v Minister for Immigration, Multicultural Affairs and Citizenship (2013) 251 CLR 322 at [241] and Idenix Pharmaceuticals LLC v Gilead Sciences Pty Ltd (No 2) [2018] FCAFC 7 at [3]. The court must use its discretion “in the way that best promotes the overarching purpose of the civil procedure provisions of the FCA Act and Rules”: see Specsavers Pty Ltd v Optical Superstore Pty Ltd (No 4) [2012] FCA 652 at [25]. SubmissionsThe Meneses Parties The Meneses Parties’ principal submission was that Directed only issued the subpoenas a short time before the hearing on 26 October 2018, and that the Meneses Parties, at the return of the subpoenas before the Registrar, considered that the production of the documents under the subpoenas was related to those matters and therefore any objections should be heard by me on that date. They also submitted that the uplift of documents under the subpoenas and the documents the subject of the privilege dispute were interrelated, and that this was illustrated by the “no increased jeopardy” submission advanced by Directed. They submitted that this “no increased jeopardy” issue could have been dealt with as part of the parties’ earlier submissions, had the subpoenas been issued earlier.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

In response to the Meneses Parties’ submissions, Directed further submitted that: (1)there was no connection between the issues in the privilege applications that were to be decided and the objections to the subpoenaed documents, as was illustrated by the grounds of objection contained in the Meneses Parties’ objection letter; and(2)the issue of timing was not raised in the Meneses Parties’ objection letter, and that it was appropriate that Directed awaited discovery from the respondents before seeking documents under subpoena. Consideration Directed should have the costs that it seeks. The Meneses Parties had sufficient time to consider any objection to the uplift and inspection of documents produced pursuant to the subpoenas before and after the hearing before the Registrar. Whether their objections were “interrelated” with the issues the subject of the privilege dispute, it seems to me, is beside the point, in circumstances where they abandoned the objections the day before they were to be heard. Accordingly, the first and sixth respondents should pay the costs of the applicant in meeting the objections raised in respect of the applicant seeking to access the documents produced pursuant to the subpoenas.