Fuelxpress Ltd v L.M. Ericsson Pty Ltd

[1987] FCA 443

PRACTICE AND PROCEDURE - scope of the expense or loss recoverable

under Order 27 Rule 4A - whether legal costs incurred in complying

with subpoena fall under Rule - whether such costs should be taxed on

solicitor and client basis.

Federal Court Rules: Order 27 rule Ik.

!?unxPRESS LIMITED v. L.M. ERICSSON PT’{. LIMITED

WAG 35 of 1986

LOCKHART J.

17 JULY 1987

S’fDNFI

IN THE FEDERAL. COURT OF AIISTRALIA	1
)

NEW	SOUTH	WALES	DISTRICT	REGISTRY	)	NO. WAG 35 Of 1986
)

GENERAL DIVISION )

BETWEEN: FUELXPRESS LIMITED

Applicant/Cross Respondent

AND : L.M. EPICSSON PTY. LIMITFD

Respondent/Cross-Clalmant

JUDGE MAKING ORDER:	LOCKHART J.
DATE OF ORDER:	17 JULY 1987
WHERE ORDER MADE:	SYDNEY

MINUTE OF ORDERS

THE COURT ORDERS THAT:

1. Pursuant to Order 27 Rule 4A the respondent L.M. Ericsson Pty. Limited pay to DMR & Associates Aust. Pty. Limited an amount which is sufficient to compensate it for the expense or loss which it reasonably incurred or lost in complylna with the subpoena issued by the respondent and served on DMP and that the amount shall be fixed by the Court’s taxing officer: and

2 . The amount so certified by the taxing officer be paid to DMP by the respondent within 21 days after the certlficate of taxation has issued.

NOTE : Settlement and entry of orders is dealt wlth in Order 3 6 of

the Federal Court Rules.

IN THE	FEDERAL COllRT OF AUSTRALIA	)
1

NEW	SOUTH WALES	DISTRICT	REGISTRY	)	NO. WAG 35 of 1986
)

DIVISION GENERAL )

BETWEEN : FUELXPRESS LIMITED

Applicant/Cross Respondent

AND : L.M. ERICSSON PTY. LIMITED

Respondent/Cross-Clalmant

17 July 1987

REASONS FOR JUDGMENT

LOCKHART J.

A subpoena was issued by L.M. Erlcsson Pty. Limlted ("the

respondent") directed to DMR h Associates Aust. Pty. Lmlted ("DMF")

which is not a party to the litlgatlon. The subpoena has been

answered thls morning. DMR was represented by its sollcltor. Earlier

thls mornlng I made orders to protect the interests of DMR from

disclosure of certain of the documents whlch it clalmed were

commercially sensitlve and therefore confidential. I also made

certain other orders with respect to other documents at the reauest of

Fuelxpress Limited ("the applicant") restricting Inspection by the

respondent on the basis of the applicant's clalm for legal

professional privilege. Otherwise the bulk of the documents are to be

inspected by both parties. These orders were:

1. I make orders in accordance with the short minutes of order

lnrtialled by me and placed with the papers. It is an order by consent by both partles and lt relates to the lnspection

2 .

of some of the documents produced on subpoena b y DMR b

Associates Aust. Pty. Limited which are the	s u b ~ e c t	of a
claim on its part for confidentiality:

2 . In additlon to the orders made in the short minutes I order further that the legal advisers of both the applicant and the respondent, who will ln fact lnspect or who have in fact inspected the documents: treat the documents as confidential and not to disclose the documents, untll further order, in whole or in part, to any other persons and to use them only for the purposes of these proceedlngs:

3 . As to the balance of the documents produced under subpoena by

DMR, objection 1s taken on behalf of the appllcant to the inspection of certain of them by the respondent on the ground

of legal professional privilege. This 1s not ln lssue.

Access to these documents IS, until further order, refused to the respondent:

4 . Otherwise the documents produced by DMR may be inspected by

both parties: and

5.	Other than the documents whlch have been the sub~ect of a
claim €or legal professional privilege and those that have

been the subject of a claim for confidentiality the documents produced by DMR may be upllfted for copyinq by either party

and returned to the Registry as soon as practicable

thereafter.

-3.

A notice of motion has been flleri in Court, returnable

instanta, by DMR seeking an order, pursuant to Order 27 R u l e 4 A of this Court's rules, that the respondent pay to DMR the sum o f $6,276.77 or, in the alternative, an order pursuant to the same r u l ~

that the respondent pay to DMR an amount whlch is sufflclent to compensate it for the expense incurred ~n complyinq with the subpoena. In support of the motion an affidavit has heen filed in court by Mrs. Gourley the solicitor for DMR. Mrs. Gourley, a member of the flrm of Messrs. Mlnter Ellison, solicltors, has the conduct of thls matter on behalf of DMR. The claim for costs made by DVR in complylnq with the subpoena has two essentlal components:

(a) a claim primarlly for time spent by varlous offlcers

of DMR in collectlng the documents and otherwise

ensuring that the subpoena was complied wlth. Some

slx people appear to have been lnvolved in the task of complying with the subpoena and they range in posltion and salary from a clerk at $6 .08 per hour to senior officers and consultants at $110 per hour. The total claim for time spent is $ 3 , 7 3 6 . 7 7 and a small sum of $90 is claimed additionally for courlers and photocopying; and

(b) a claim for $ 2 , 4 5 0 which are the legal costs of DMR's

solicitors for actlng and advislng ln relatlon to compliance with the subpoena. The particular work done has not been specified, although i t has been succinctly identifled in Mrs. Gourley's affldavit.

4 .

The solicitor for the respondent has said that his cllent ha5 no objection to paying the reasonable costs and expenses of DMR for complylng with the subpoena but as the matter has only arisen at short notice and the evidence is not elaborate in support of the claim he prefers an order to be made that his cllent pay to DMR the quantum of costs fixed by a taxing officer.

It has not been argued that legal costs do not fall within

the scope of the expense or loss that is recoverable under Order 27

Rule 4 A . Whether they are in fact recoverable depends, of course, on

the clrcumstances of each case. Where, as in a case like the present,

a third party is subpoenaed to produce a large number O E documents (some of whlch are agreed as being confldentlal and others may raise questions of legal professional privilege) if a third party seeks

legal advice wlth respect to those and other related matters, the cost

that advice answers the description of expense or loss incurred by the third party in complying with the subpoena. In prlnciple, therefore,

the claim for legal costs is not impermissible. I say nothing about

the quantum as I have no knowledge of those matters.

The other outstanding question concerns the submlsslon by

Mrs. Gourley on behalf of DMR that the legal costs Incurred hy her firm in advising and otherwise actlng in relation to the subpoena, as well as the costs of and incldental to the preparatlon of any bill for taxation and attendance on taxation, should be determlned by the

taxing officer on the basis, not	of	party and party costs, but
solicitor and client costs.

5 .

The intent of R u l e 4 A i s to compensate a person subpoenaed t o

produce documents for expense or loss reasonably incurred in complyinq with the subpoena. It is not the case of a successful party to litigation seeking recovery of costs where the distinction of solicitor and client costs on the one hand and party and party costs

on the other is observed by taxing officers. It is a case of a third

party seeking compensation for what it has actually cost it in expense or loss in complying with the subpoena. In those circumstances I think it i s approprlate in this case that the legal costs and expenses incurred by DMR in and about compliance with the subpoena (including its costs of this motion) and ln and about the preparation of the h111 for taxation and attending to the taxation should be on a sollcitor and client basis.

Accordingly I order that:

1. pursuant to Order 27 Rule 4A the respondent L.M. Ericsson Pty. Llmlted pay to DMR & Assoclates Aust. Pty. Limited an a-ount which is sufficient to compensate it €or the expense or loss which it reasonably incurred or lost in complylna with the subpoena issued by the respondent and served on DMF and that the amount shall be fixed by the Court's taxlnc

officer; and

6 .

2 . the amount so certified by the taxing officer be paid tr, DMP

b y the respondent within	21 days after the certlflcate	of
taxation has issued.

I certify that this and the precedlnq five (5) pages are a true c o p y of the Reasons for Judgment

herein of his Honour Mr. Just~cc

Lockhart

Dated: 17 July 1987

Associate