Skywillow Pty Ltd v Budget Rent a Car International Inc
[1994] FCA 631
•5 Sep 1994
JUDGMENT No. ...,..,., 631 ..,.... J .....,- 9F NOT FOR DISTRIBUTION
| IN THE FEDERAL COURT OF AUSTRALIA | ) | ||
| NEW SOUTH WALES DISTRICT REGISTRY |
| ||
| GENERAL DIVISION | ) |
SKYWILLOW PTY LIMITED & ORS
ApplicantsBUDGET RENT A CAR INTERNATIONAL INC First Respondent
BUDGET RENT A CAR PTY LIMITED
(IN LIQUIDATION)second ~espondent
PETER LEONARD CROUCH
Third Respondent
PETER IAN HOWARD
Fourth Respondent
JOHN DUNPHY
Fifth Respondent
| Coram: | Lindgren J |
Place: Sydney
| Date: | 5 September 1994 | RECEIVED |
| FEDERAL COURT OF |
AUBTRALU
MINUTE OF ORDERS
PRlNClPAL REOIETRV
motion filed on 31 December 1993 be otherwise dismissed.
THE COURT
that the first, fourth and fifth respondents pay one half of the costs of WTH Pty Limited up to 22 March 1994 on that company's motion brought by notice of motion filed on
31 December 1993, including the costs of the hearings on 1,
2 and 5 September 1994.2 . QRDERS that the motion of WTH Pty Ltd brought by notice of
3. pursuant to Order 27 rule 4A, that the first, fourth and fifth respondents pay to WTH Pty Limited an amount sufficient to compensate it for such expense and loss which it reasonably incurred or suffered by complying with paragraphs 1,2 and 3 of the subpoena issued to it on 8 December 1993, returnable on 15 December 1993 and that the amount of such expense and loss shall be the amount certified as such by the-court's taxing officer.
4. QRDERS that the amount so certified by the taxing officer
be paid by the first, fourth and fifth respondents to WTH
Pty Limited within 21 days after the certificate of taxation has issued.
5. that the amount of the expense and loss referred to shall include WTH Pty Limited's legal costs of obtaining advice on the subpoena on a solicitor and client basis.
6 . ORDERS that the first, fourth and fifth respondents pay the
coste of WTH Pty Limited of the motion brought by notice of motion filed on 1 September 1994 which was returnable instanter.
| m: | Settlement and entry of orders is dealt with in Order | ||
| 36 of the Federal Court Rules. | |||
| IN THE FEDERAL COURT OF AUSTRALIA | 1 | ||
| NEW SOUTH WALES DISTRICT REGISTRY |
| ||
| GENERAL DIVISION | ) |
SKYWILLOW PTY LIMITED & ORS
ApplicantsBUDGET RENT A CAR INTERNATIONAL INC First Respondent
BUDGET RENT A CAR PTY LIMITED
(IN LIQUIDATION)Second Respondent
PETER LEONARD CROUCH
Third Respondent
PETER IAN HOWARD
Fourth Respondent
JOHN DUNPHY
Fifth Respondent
| Coramr | Lindgren J |
Placer Sydney
| Date | I | 5 September 1994 |
REASONS FOR JUDGMENT
There are two notices of motion before the Court. There is a
notice of motion filed on 31 December 1993, seeking orders, inter
alia, that paragraphs 4, 5 and 6 of the schedule to a subpoena,
which was issued on 8 December 1993 be set aside, and there is a more recent notice of motion, filed on 1 September 1994 seeking orders that the first, fourth and fifth respondents pay the reasonable costs of the subpoenaed party of complying with the subpoena which was issued on 8 December 1994. The subpoenaed party, and applicant in each notice of motion, is W.T.H. Pty Limited, trading as "Avis Australia". I shall refer to that party simply as "Avis". The subpoena was issued on the application of the first, fourth and fifth respondents.
Some idea of the issues in the litigation, or at least a
sufficient idea of them, can be obtained from paragraphs 95 and 96 of the further Amended Statement of Claim whi-ch was filed on 1 September 1993. The applicants allege certain misrepresentations by one or more of the respondents. Apparently the allegation is that the misrepresentations induced the applicants to become "Budget" franchisees with resultant loss to the applicants. It is not necessary for me to deal with the substantive issues in detail, or to define those issues in detail. It was of significance to the first, fourth and fifth respondents to subpoena another franchisor or company engaged in the same line of business as the first and second respondents, in the event Avis, in order to lead evidence in relation to both the issue of the falsity of the representations and the issue of loss or damage claimed to have been suffered by the applicants.
The subpoena, as I said, was issued on 8 December 1993 and was returnable on 15 December 1993. Paragraphs 4, 5 and 6 of the schedule to the subpoena were in wide terms. Those paragraphs were as follows (and I quote):
| " 4 . | A l l documents containing or referring t o guidelines for or | |||
| the terms and conditions for: | ||||
|
franchisees; or
( c ) the provision o f finance by Avis t o i t s licensees for The current licence or franchise agreements, and a l l variations and amendments thereto (including a l l not i f icat ions o f change o f the name or the address o f the licensee or franchisee), entered in to between Avis and i t s licensees or franchisees i n respect o f the following terr i tories :
the acquisition o f vehicles by i t s licensees.
5.
(a ) G1 adesvil l e , and/or Hornsby and/or Rosevil l e , New South Wales;
(b) Wollongong and/or the I l l a w a r r a region o f New South Wales; ( c ) The Eastern Suburbs o f Sydney, New South Wales;
( d ) Cof fs Harbour, New South Wales; (e) Lismore and/or the North Coast of New South Wales;
(f)
Bathurst and/or Orange and/or Lithgow and/or Wagga Wagga and/or the Western Region of New South Wales; and
(g) Brookvale, New South Wales.
6 . Annual accounts and financial reports in respect of each of the Avis franchisees or licensees referred to in the previous paragraph for the years ending 30 June 1988, 30 June 1989, 30 June 1990, 30 June 1991 and 30 June 1992."
It suffices to say, at this stage, that those paragraphs are expressed in very wide terms and suggest, at least, that they are drawn far more widely than warranted by the issues in the proceedings to which the subpoena was supposed to relate. The subpoena was returnable, as I said, on 15 December 1993 and no doubt it was served on or shortly after the date of issue, 8 December 1993.
Apparently, there was an immediate response on the part of Avis as is revealed by a letter dated 10 December 1993 from Mallesons Stephen Jaques to MS Sheri Young of Budget, that is the client of Mallesons. Indeed, according to the letter there had, by 10 December 1993, been three telephone calls from various recipients of subpoenae issued, including one from the solicitor acting for Avis. The letter recorded the understanding of the writer of the letter, Mr Steven Glass of Mallesons, that Avis did not intend
| whether they would be able to be produced by Wednesday, 15 | to oppose production of the documents, but that Avis was not sure | |
| December. The letter also recorded that the understanding of the writer (Mr Glass) was that Avis may need to seek Court orders in order to preserve the confidentiality of the material sought under the subpoena. | ||
| The next event was a letter dated 15 December 1993 from Mallesons to Freehill Hollingdale and Page. The latter firm acted for | ||
| Avie . The letter referred to recent discussions between | ||
| Malleeone and Freehills and recorded that on 15 December Mallesons had, apparently by agreement, arranged for the subpoena to be stood over to 9 February 1994. Importantly, the letter also referred to the fact that any "notice of motion" in respect of the subpoena was to be filed by Avis by 31 December 1993. The letter also went on to deal with the indication which had come from Freehills that many of the documents the subject of the subpoena may be commercially sensitive. | ||
| The evidence as to precisely what transpired between Mallesons and Freehills in December 1993 is not altogether satisfactory. There is no affidavit from any of the actual participants in any of the conversations which took place. A reading of the letter of 15 December may suggest that Freehills had, in referring to the proposed notice of motion, raised a question as to the appropriateness of the form of the subpoena, but this is less than clear. A reading of the letter would also be consistent with the proposition that the proposed notice of motion was to relate to the issue of confidentiality rather than the width of the language of the subpoena, although a reading of the letter alone might tend to favour the former construction of it. There was evidence on information and belief that Mr Stevens, who is no longer employed at Mallesons, had no recollection of the raising by Avis of any objection to the width of the subpoena, as distinct from the issue of confidentiality. | ||
| However, the next event made it clear that there was a challenge to the width of the subpoena. The next event was in fact the | ||
| ||
| subpoena was oppressive in various respects, and there was enclosed a copy of a notice of motion which Freehills said would be filed that day, that is 31 December, and indeed that was the notice of motion which was filed that day. Clearly, from that time it was being asserted by Avis that the terms of the subpoena were too wide. | ||
| The next event was a letter dated 5 January 1994 from Mallesons to Freehills offering to limit the scope of paragraph (4). I do not think it necessary to go into the detail of that letter. | ||
| There was a further letter of 27 January 1994 from Mallesons to Freehills; according to that letter, if Avis intended to proceed with its motion seeking to have the subpoena set aside, Mallesons were instructed to oppose that motion strongly. That letter asserted that the subpoena had been issued in accordance with the rules, and that the documents covered by the subpoena were clearly relevant to the issues in the proceedings. | ||
| However, the letter went on in a more conciliatory tone to indicate that Mallesons were willing to consider ways in which the scope of the subpoena might be narrowed, and that was, of course, a sensible approach to take. Nonetheless, the appropriateness of the subpoena was asserted in that letter. There was no attempt to argue on the hearing before me that the subpoena was not in fact too wide. | ||
| The next event was a fax from Freehills to Mallesons dated 28 January 1994 in which Freehills said that their instructions were to proceed with the motion. Apparently the subpoena and motion were stood over on 9 February 1994. | ||
| On 22 March 1994 Mallesons wrote to Freehills offering further to limit the scope of paragraph (4) of the subpoena. After that date, from time to time the subpoena and motion were stood over on the basis that (according to Mallesons) settlement discussions | ||
| ||
| Avie at the Court and to save costs. | ||
| Eventually, however, the questions of liability for costs on the motion to set aside the subpoena and of liability to pay the costs of compliance with the subpoena, have come before the Court. | ||
| It seems to me that the basic cause of the disputation over the subpoena arises from the issue of a subpoena which was clearly in terms which were far too wide. M r Menadue, solicitor for the first, fourth and fifth respondents, submitted that it was | ||
| incumbent upon the subpoenaed party to indicate that this complaint was being made before it filed its notice of-motion on 31 December 1993. However, whilst a failure to send a letter before the filing of the notice of motion is normally a consideration relevant to orders for costs, (a) I am not sure that there was not some raising of the question of the width of the subpoena during December, and (b) in any event it lies ill in the mouth of a party which issues a subpoena in terms demonstrably too wide to complain in the event that a motion is taken out, without notice, to set it aside. | ||
| The terms of the subpoena as originally issued were clearly in terms too wide and there appears to have been no difficulty subsequently in the issuing parties reducing the scope of the subpoena so as to accommodate its terms more closely to the issues involved in the case. | ||
| On the other hand, it seems to me that Avis is not entirely free from criticism. It could have raised the issue of the width fairly and squarely prior to filing its notice of motion on 31 December. A stage was subsequently reached when both parties, it seems to me, were at fault, at least at fault for the purpose of this costs argument, when the issuing parties asserted the appropriateness of the terms of the subpoena which they intended to support, and when the receiving party, Avis, indicated | ||
| ||
| with the issuing parties, I will, in my orders, take into account against Avis the matters to which I have referred. | ||
| So far as the second notice of motion is concerned, it seems to me to have been a proper course for Avis to file the notice of motion seeking payment of compensation to it for the cost of complying with the subpoena. | ||
| Both parties have submitted forms of orders which they suggest are appropriate to be made. The orders which I in fact make do not conform precisely to either set of orders suggested by the parties. | ||
| The orders of the Court will be as follows: | ||
|
half of the costs of WTH Pty Limited up to 22 March 1994 on that company's motion brought by notice of motion filed on 31 December 1993, including the costs of the hearings on 1, 2 and 5 September 1994.
QRDEB that the motion of WTH Pty Ltd brought by notice of
motion filed on 31 December 1993 be otherwise dismissed.
3. pursuant to Order 27 rule 4A, that the first, fourth and fifth respondents pay to WTH Pty Limited an amount sufficient to compensate it for such expense and loss which it reasonably incurred or suffered by complying with paragraphs 1, 2 and 3 of the subpoena issued to it on 8 December 1993, returnable on 15 December 1993 and that the amount of such expense and loss shall be the amount certified as such by the Court's taxing officer.
| 4. | that the amount so certified by the taxing officer be paid by the first, fourth and fifth respondents to WTH Pty Limited within 21 days after the certificate of taxation |
|
QBPEE that the amount of the expense and loss referred to
shall include WTH Pty Limited's legal costs of obtaining
advice on the subpoena on a solicitor and client basis.
m that the first, fourth and fifth respondents pay the
costs of WTH Pty Limited of the motion brought by notice of motion filed on 1 September 1994 which was returnable instanter.
I certify that this and the
preceding 7 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lindgren
Associate: / (U& Dated: 7 September 4
| Ek@XS!: | 2 September 1 9 9 4 |
EusQ: Sydney
| pecieioa: | 5 September 1 9 9 4 |
| &pearancea: | Mr D.Robinson of counsel instructed by Freehill |
| Hollingdale h Page appeared for W.T.H. Pty Ltd. | |
| Mr P.J. Menadue, solicitor of Mallesons Stephen | |
| Jaques appeared for the first, fourth and fifth respondents. |
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