Karllsson & Karllsson - [2021] FedCFamC1F 298

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Karllsson & Karllsson [2021] FedCFamC1F 298

File number(s): ADC 43 of 2013

Judgment of: MEAD J

Date of judgment: 15 December 2021

Catchwords: FAMILY LAW – COSTS – Subpoena – Where a subpoenaed party (school) made an application for costs of compliance – Where the application is brought pursuant to rule 15.23 of the Family Law Rules 2004 – Where it was found that the demands of complying with the subpoena were neither “unusual in the sense of requiring ordinary activity to stop” nor did they cause “an unfair inconvenience having regard to the fact that the recipient had nothing to do with the litigation” – Where it is reasonable for a subpoenaed party to seek legal advice with respect to questions of privileged documents – Where a subpoenaed party is entitled to recover an amount for reasonable expenses comprised of legal fees – Where it was found that the school had incurred a substantial loss or expense by virtue of legal fees charged – Where the Court was not satisfied that the amount of the loss or expense as claimed met the threshold of reasonable expense – Where the order provides for the reasonable expenses to be agreed or assessed on a party/party basis.

Legislation:
Family Law Act 1975 (Cth) ss 117, 117(2)

Family Law Rules 2004 rr 15.23, 15.23(1)(a), 15.23(3), Chapter 15, Pt 15.3, Div 15.3.1

Federal Court Rules O 27 r 4A

Cases cited:
Fuelxpress Ltd v L M Ericsson Pty Ltd (1987) 75 ALR 284

Moriarty & Moriarty [2009] FamCA 369

Markoska & Markoska and Anor [2011] FamCA 833

Pfenning and Anor & Snow [2014] FamCA 736

Division: Division 1 First Instance

Number of paragraphs: 97

Date of hearing: 23 April 2020

Place: Adelaide by Global Meet Telephone Conference

Counsel for the Applicant: Mr Nehmy

Solicitor for the Applicant: Mills Oakley Lawyers

Counsel for the Respondent: no appearance

Solicitor for the Respondent: no appearance

Counsel for the Intervener: Mr Cudmore

Solicitor for the Intervener: CCK Lawyers
ORDERS

ADC 43 of 2013

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:
MR KARLLSSON

Applicant

AND:
MS KARLLSSON

Respondent

THE PRINCIPAL, BB SCHOOL

Interested Party

ORDER MADE BY:

MEAD J

DATE OF ORDER:

15 DECEMBER 2021

THE COURT ORDERS THAT:
1.That the husband do pay the reasonable expenses incurred by BB School in seeking legal advice with respect to issues of compliance with the subpoena issued herein on 20 November 2019.
2.That those reasonable expenses be such of the legal fees charged by CCK Lawyers to the said BB School for the period 8 November 2019 to 4 December 2019 as agreed or assessed on a party/party basis.
3.That the husband pay the costs of the said BB School arising from preparation for and attendance at the hearing on 23 April 2020 in such sum as agreed or assessed on a party/party basis.
4.That these proceedings do otherwise stand dismissed.

Note: The form of the order is subject…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Karllsson & Karllsson

Details

AGLC: Karllsson & Karllsson [2021] FedCFamC1F 298
Case: [2021] FedCFamC1F 298
Decision Date

CaseChat Overview and Summary

The case of Karllsson & Karllsson involved an application for costs of compliance with a subpoena made by BB School against the husband. The subpoena, issued by the Court on 20 November 2019, sought the production of various documents related to communications between the school and the parties in a family law matter. BB School, represented by CCK Lawyers, incurred significant legal fees in responding to the subpoena. The husband contested the reasonableness of the costs incurred by BB School, arguing that the expenses were not necessary and that the subpoena was straightforward and should not have resulted in such high costs. The court was required to determine whether BB School was entitled to recover the costs it had incurred in complying with the subpoena.

The court considered the nature and scope of the subpoena, the ambiguity of the terms used, and the reasonableness of the legal fees incurred by BB School. The court also examined the submissions made by BB School and the husband regarding the reasonableness of the costs and the proper interpretation of the subpoena. The court found that BB School was entitled to recover its reasonable expenses, including legal fees, incurred between 8 November 2019 and 4 December 2019. The court concluded that the husband had not objected to the interpretation of the subpoena provided by CCK Lawyers and had not contested the privilege claims made by BB School. The court also noted that the husband did not object to the privileged documents being uplifted from the subpoenaed documents. The court determined that the costs of compliance with the subpoena were reasonable and that BB School was entitled to recover its costs for preparation for and attendance at the hearing on 23 April 2020.

The court made an order that BB School was entitled to recover an amount for reasonable expenses comprising legal fees incurred between 8 November 2019 and 4 December 2019. The amount of those fees should be as agreed or assessed. The court also made an order that there should be an order for costs in favour of BB School with respect to preparation for and attendance at the hearing on 23 April 2020 as agreed or assessed. The court found that BB School had incurred reasonable costs in complying with the subpoena and that the husband was liable for those costs. The court's decision was based on the reasonableness of the costs incurred by BB School and the husband's failure to object to the interpretation of the subpoena or the privilege claims made by BB School.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

These reasons relate to an oral application for costs of compliance with the said subpoena made on 9 December 2019 by Mr Cudmore, the solicitor appearing for BB School (also referred to herein as “BB School”). The application was against the husband only.Background Prior to the issuing of the subpoena by the Court on 20 November 2019, it is common ground that by correspondence dated 14 November 2019 the wife’s solicitors corresponded with the husband’s solicitors seeking discovery in the following terms:Karllsson – ADC43/2013 – DiscoveryWe refer to previous correspondence.Please provide the following by way of discovery:1.All correspondence between Mills Oakley and/or your client and BB School in relation to the Intervention Order (including, but not limited to, the letter referred to in paragraph 91 of your client’s trial affidavit);2.All correspondence between Mills Oakley and BB School;3.All correspondence between your client and BB School which contain any requests your client has made for the school to notify him about the time the children arrive at school, any absences of the children from school, any restrictions on the children leaving the school grounds with their mother or any similar notifications;4.All correspondence between your client and BB School in relation to B’s maths tuition during the weeks the children are in his care… By correspondence dated 26 November 2019 the husband’s solicitors communicated with the wife’s solicitors about those issues in the following terms:Karllsson – Family Law MatterWe enclose by way of service Subpoena to the Principal of BB School, served with an accompanying letter.This Subpoena was filed in response to your letter dated 14 November 2019 seeking all communications with BB School. We had not yet served it on you.The documents produced under the Subpoena ought to answer your request.We are conferring with Counsel as to whether Ms AE is required for cross-examination and will let you know once that has happened.… The subpoena had issued on 20 November 2019. BB School instructed CCK Lawyers to act on its behalf with respect to this subpoena. Although the subpoena was only issued on 20 November 2019, it would appear from annexure 2 to the Submissions of BB School filed 25 March 2020 that their instructions to their solicitors commenced as early as 8 November 2019. A tax invoice was issued to BB School by CCK Lawyers on 28 November 2019 in the sum of $4,072.20, relating to work apparently undertaken with respect to the subpoena between 8 and 21 November 2019. By correspondence dated 29 November 2019 CCK Lawyers communicated with the husband’s solicitors with respect to:·concerns about the “ambiguous” nature of the documents sought by the subpoena;·the difficulties in collating the material sought;·the liability that the subpoena would be set-aside on grounds of it being “vague or oppressive (or both)”;·BB School having had to form the judgment that reference in the subpoena to “file” means a folder containing documents,and further, that:·a folder of printed documents and an electronic folder of documents was maintained by the Principal’s secretary;·BB School proposed to produce copies of the documents in the two folders in response to the subpoena; and·if the husband’s solicitors did not agree with that interpretation they should advise CCK Lawyers by 10.00 am on Monday 2 December 2019.[1][1] Submissions of BB School filed 25 March 2020, paragraph 36.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

At the commencement of the trial the husband did not object to the documents, in respect of which privilege was claimed by BB School, being uplifted from the documents produced pursuant to the subpoena. The issue was resolved by consent order.CONCLUSION I find that BB School is entitled to recover an amount for reasonable expenses comprising legal fees incurred between 8 November 2019 and 4 December 2019. The amount of those fees should be as agreed or assessed. I find further that there should be an order for costs in its favour with respect to preparation for and attendance at the hearing on 23 April 2020 as agreed or assessed. For those reasons I make the orders as set out at the commencement of these reasons for judgment.

Ratio Decidendi

Legal Principle Established

It was submitted on behalf of the husband in Written Submissions tendered to the Court by the husband’s counsel Mr Nehmy that:·it was surprising that the correspondence from CCK Lawyers to the husband’s solicitors on 29 November 2019 expressed confusion as to what was meant by “a file” in the context of a subpoena to a large private school seeking production of documents relating to two of its students;·the husband did not object to the interpretation of the subpoena referred to in the correspondence to the husband’s solicitors from CCK Lawyers dated 29 November 2019;·the husband’s solicitors were advised on 3 December 2019, in correspondence from CCK Lawyers serving the Notice of Objection, that BB School had by then incurred fees to that time of $8,572;·these fees were associated with compliance with a straightforward subpoena;·the cost was incurred within thirteen days of service of the subpoena;·BB School complied with the subpoena on 4 December 2019;·the husband did not object to privileged documents being uplifted from the subpoenaed documents;·the costs of compliance with the subpoena by way of increased legal fees continued to rise after 9 December 2019;·the costs of compliance argument was listed in the afternoon on 25 February 2020;·the submissions relied on by BB School with respect to the cost of compliance with the subpoena do not provide an accurate representation of the test and considerations to which the Court must have regard;·there is no reference to relevant public policy considerations in the submissions;·whilst legal expenses may be recoverable pursuant to r 15.23(3) such recovery is discretionary and the rule does not serve as an indemnity for costs or expenses incurred;·the reasonable compliance costs of complying with a subpoena requiring production of the files of two students at BB School cannot be said to be “large causing loss”, “usual in the sense of requiring normal activity to be stopped”, or cause “unfair inconvenience”;·the Court should have regard to the matters set out in the cases of “Moriarty” and “Markoska” in determining what if any order should be made in favour of BB School;·the application for payment of $21,021.84 is an application that the husband pay BB School’s legal fees on an indemnity basis;·the claim was not formulated on the basis of the actual costs of compliance with the subpoena;·the description “entire file” is a usual and common description in subpoenas of the nature of the subpoena to BB School and should have made compliance easier;·no objection was made to the subpoena on the basis of its scope;·the claim for payment of $21,021.84 conflates the issue of reasonable costs of compliance with the subpoena with an application for costs pursuant to s 117 of the Family Law Act 1975 (Cth) (“the Act”); and·the matter was adjourned shortly after it commenced that day in circumstances where approximately two hours prior to the hearing an affidavit sworn by a solicitor at CCK Lawyers had been filed in the Court comprising some eighty pages including annexures. It had only just been served on the husband’s solicitors. The Court ordered it be uplifted from the file and adjourned the argument to 23 April 2020.Consideration of the issues

File number(s):	ADC 43 of 2013
Judgment of:	MEAD J
Date of judgment:	15 December 2021
Catchwords:	FAMILY LAW – COSTS – Subpoena – Where a subpoenaed party (school) made an application for costs of compliance – Where the application is brought pursuant to rule 15.23 of the Family Law Rules 2004 – Where it was found that the demands of complying with the subpoena were neither “unusual in the sense of requiring ordinary activity to stop” nor did they cause “an unfair inconvenience having regard to the fact that the recipient had nothing to do with the litigation” – Where it is reasonable for a subpoenaed party to seek legal advice with respect to questions of privileged documents – Where a subpoenaed party is entitled to recover an amount for reasonable expenses comprised of legal fees – Where it was found that the school had incurred a substantial loss or expense by virtue of legal fees charged – Where the Court was not satisfied that the amount of the loss or expense as claimed met the threshold of reasonable expense – Where the order provides for the reasonable expenses to be agreed or assessed on a party/party basis.
Legislation:	Family Law Act 1975 (Cth) ss 117, 117(2) Family Law Rules 2004 rr 15.23, 15.23(1)(a), 15.23(3), Chapter 15, Pt 15.3, Div 15.3.1 Federal Court Rules O 27 r 4A
Cases cited:	Fuelxpress Ltd v L M Ericsson Pty Ltd (1987) 75 ALR 284 Moriarty & Moriarty [2009] FamCA 369 Markoska & Markoska and Anor [2011] FamCA 833 Pfenning and Anor & Snow [2014] FamCA 736
Division:	Division 1 First Instance
Number of paragraphs:	97
Date of hearing:	23 April 2020
Place:	Adelaide by Global Meet Telephone Conference
Counsel for the Applicant:	Mr Nehmy
Solicitor for the Applicant:	Mills Oakley Lawyers
Counsel for the Respondent:	no appearance
Solicitor for the Respondent:	no appearance
Counsel for the Intervener:	Mr Cudmore
Solicitor for the Intervener:	CCK Lawyers

ADC 43 of 2013
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:	MR KARLLSSON Applicant
AND:	MS KARLLSSON Respondent
THE PRINCIPAL, BB SCHOOL Interested Party

ORDER MADE BY:	MEAD J
DATE OF ORDER:	15 DECEMBER 2021