Gorman, J.P. v Australia & New Zealand Banking Group Ltd

[1994] FCA 399

EX PARTE: EASTERN PASTORAL COMPANY PTY LIMITED
JOHN PATRICK GORMAN, JEANETTE MARY GORMAN AND KRISTINA GORMAN v. AUSTRALIA AND
NEW ZEALAND BANKING GROUP LIMITED
No. NG599 of 1993
FED No 399/94
Number of pages - 3
Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
BURCHETT J

CATCHWORDS

Practice and Procedure - motion by a stranger to a proceeding for costs of compliance with a subpoena to produce documents - whether legal costs of advice as to possible claims for privilege or confidentiality were reasonably incurred - any possible privilege was the privilege of a party represented in the action - motion dismissed - observation re public interest in the containment of the costs of litigation.

Federal Court Rules, Order 27 rule 4A

Fuelxpress Ltd v. L.M. Ericsson Pty Ltd (1987) 75 ALR 284, distinguished

HEARING

SYDNEY, 9 June 1994
#DATE 9:6:1994

Counsel for the Applicants: Mr M.L. Brabazon

Solicitors for the Applicants: Messrs Andrew P Quigley and Co.

Counsel for Eastern Pastoral Mr T.D. Blackburn
Company Pty Limited:

Solicitors for Eastern Pastoral Messrs Barker Gosling
Company Pty Limited:

JUDGE1

BURCHETT J In this matter, an application is made by notice of motion under rule 4A of Order 27 of the Federal Court Rules. I have been referred to a decision dealing with the operation of that rule, Fuelxpress Ltd v. L.M. Ericsson Pty Ltd (1987) 75 ALR 284. The rule and the decision are concerned with the costs of complying with a subpoena served on a stranger to a proceeding in the court, and particularly a subpoena to produce documents. What rule 4A provides is that such a person, if he incurs substantial expense or loss in complying with the subpoena, may seek from the court or a judge an order that the party who requested the issue of the subpoena pay, in addition to any amount to which the person served is entitled under Order 27 rule 3, or under the Second Schedule, what is described as an amount to compensate him for such expense or loss as is reasonably incurred or lost by that person in complying with the subpoena.

1. The test thus posed by the rule is whether the expense or loss is reasonably incurred or lost. In Fuelxpress, the expense in question was the cost of obtaining legal advice and representation for the purpose of the making of a claim particularly related to the confidentiality of commercially sensitive material, and also for considering questions of privilege. Lockhart J actually made orders, upon the return of the subpoena, designed to protect the sensitive commercial interests of the party required to produce confidential documents, and if I may respectfully say so, it is not at all surprising that, having done so, his Honour also thought it appropriate to make an order under rule 4A. Plainly, it had been demonstrated that it was reasonable for the party to incur those costs in that situation. His Honour (at 285), however, specifically sounded the warning that whether legal costs are, in fact, recoverable depends, of course, on the circumstances of each case.

2. It seems to me that the circumstances of the present case are different. Before I come to them, I think the argument that has been put to me requires that I make one particular comment. The rule imposes a duty on the court to determine whether a particular cost was reasonably incurred. That means the court must attempt to hold the scales even between a party, who has exercised a right given by the law to ensure the availability of documents which may be of vital importance in the proof of his case, who has to be able to assert that right, and, at the same time, the stranger to the litigation, who may have incurred expense or loss in facilitating the party's assertion of his right, and should not as a result be left unreasonably out of pocket. The rule certainly does not, in my opinion, intend to encourage persons subpoenaed to incur inflated costs, and then load them on to parties to litigation. There is an important public interest in containing the costs of litigation, so far as that can properly be achieved, and the courts would be failing in their duty if they readily made orders under rule 4A, without ensuring that the situation does justify putting the further burden on the litigant which an application of the present kind seeks to impose.

3. In this case, I am asked to make a lump sum order in an amount of almost $3,000, which appears to have been incurred, so far as the evidence put before me and the submissions made to me indicate, in order to enable the subpoenaed company to obtain detailed legal advice on every document in its file, which had been the subject of the subpoena, on the topic of confidentiality or privilege. The only concern suggested in argument, in relation to this confidentiality or privilege, involved what could be claimed by one of the clients of the subpoenaed party, Australia and New Zealand Banking Group Limited, which was also the respondent in the principal proceeding in which the subpoena had been issued.

4. There was some mention of the possible legal professional privilege of the parties to that proceeding, the applicants, on whose behalf the subpoena had been issued. Plainly, however, those parties could have no complaint if the subpoena that had issued was simply complied with. Plainly also, both the applicants and the bank, being the only persons whose confidentiality or privilege was suggested to be involved, would have the opportunity, upon production of the documents to the court in compliance with the subpoena, to put any submissions they thought ought properly to be put on these topics.

5. In those circumstance the situation is entirely different from the situation in the case to which I have referred, where sensitive commercial concerns of the party subpoenaed were involved. The position here is that the applicant in the motion was subpoenaed to produce its file in relation to a particular farming property. It carried on the activity of an agricultural consultant, and the case in the principal proceeding was between farmers, who had borrowed money from a bank, and the bank. As agricultural consultant, the applicant in the motion had prepared a report, in relation to the farm, for the bank at some stage in the history of the loan arrangements, and had then been engaged, as I understand it at the bank's request, but by the farmers, to prepare a plan of the farming operations to be conducted on the property. It was the file relating to these involvements of the consultants with the farm which was the subject of the subpoena.

6. No cost has been shown to have been incurred in relation to the subpoena, over and above the costs for which rule 3 and the Schedule provide, apart from the cost involved directly or indirectly in the obtaining of legal advice from the consultant's own solicitors.Even an amount of courier's fees, which has been included in the lump sum, appears, so far as the very imprecise evidence on that subject goes, to be related, at least in substantial measure, to the sending of the documents between the Melbourne solicitors and their Sydney agents, possibly, indeed probably, so far as I can see, more than once. In these circumstances, I do not think the expense claimed was reasonably incurred, and the motion is dismissed.

7. The respondents to the motion seek an order for costs, and in the circumstances I think they should have it. The motion is dismissed with costs.