Taggart and Taggart & Ors (Subpoena Costs)

[2024] FCWA 213

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY LAW ACT 1975

LOCATION: PERTH

CITATION: TAGGART and TAGGART & ORS (SUBPOENA COSTS) [2024] FCWA 213

CORAM: COHEN J

HEARD: [OMITTED]

DELIVERED : 20 SEPTEMBER 2024

FILE NO/S: 5100 of 2020

BETWEEN: MR TAGGART

Applicant

AND

MS TAGGART

First Respondent

AND

MR TAGGART JNR

Second Respondent

AND

COMPANY A

Subpoena Objector

Catchwords:

PRACTICE AND PROCEDURE - Reimbursement of subpoena compliance costs - Where named party seeks the issuing party pay external legal costs following subpoena objection - Where head of power not identified - Where named party challenged subpoena after production date, produced redacted documents without leave, withdrew objection, then raised further objections without standing after objection dismissed - Where only objection properly before the Court was devoid of merit - Where named party was in default of the subpoena for over 5 months - Where only reasonable and substantial expense incurred is a partial charge for collating documents - Order made for unredacted documents to be produced within 24 hours

COSTS - Subpoena proceedings - Where issuing party seeks a costs order against the named party - Where Court significantly concerned named party has sought to obfuscate the substantive proceedings - Where subpoena issues have dominated numerous hearings - Where named party’s conduct as a participant in judicial process justifies costs order - Consideration of appropriate quantum of costs order - Where itemised bill not filed - Where costs schedule produced pursuant to Family Court Rules 2021 (WA) sch 2 - Where Court fixes a specified amount of costs

Legislation:

Family Law Act 1975 (Cth)

Category: Not Reportable

Representation:

Counsel:

Applicant	:	Counsel A
First Respondent	:	Counsel B
Second Respondent	:	In Person
Subpoena Objector	:	Counsel C

Solicitors:

Applicant	:	Law Firm A
First Respondent	:	Law Firm B
Second Respondent	:	Self-Represented Litigant
Subpoena Objector	:	Law Firm C

Case(s) referred to in decision(s):

[2024] FCWA 66

Anison & Anison (2019) FLC 93-908

Braithwaite & Braithwaite [2007] FamCA 468

Foyster v Foyster Holdings Pty Ltd (in liq) [2003] NSWSC 881

Hatton v Attorney-General of Commonwealth of Australia & Ors (2000) FLC 93-038

I and I (No 2) (1995) FLC 92-625

Ibrahim v Dias [2024] WASC 336

Idoport Pty Ltd v National Australia Bank Ltd & Ors [2007] NSWSC 23

Kelly and Kelly (No 2) (1981) FLC 91-108

Lavell & Lavell [2012] FamCA 34

Mandic v Phillis (2005) 225 ALR 760

Moriarty v Moriarty (2009) 41 Fam LR 336

National Employers' Mutual General Association Ltd v Waind & Anor [1978] 1 NSWLR 372

Parke & The Estate of the Late A Parke (2016) FLC 93-748

Pierson & Romilly (2020) FLC 93-959

Prantage & Prantage (2013) FLC 93-544

Robinson and Higginbotham (1991) FLC 92-209

COHEN J:

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES' NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

IT IS NOTED that publication of this judgment by this Court under the pseudonym Taggart and Taggart has been approved by the Family Court of Western Australia pursuant to s 114Q(2) of the Family Law Act 1975 (Cth).

This copy of the Court's Reason for judgment may be subject to review to remedy minor typographical or grammatical errors (r 312(b) Family Court Rules 2021 (WA)), or to record a variation to the orders pursuant to r 311 Family Court Rules 2021 (WA).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

1 The Court is called upon to determine a Form 2 Application filed on behalf of [Company A] [in] August 2024 ("the Form 2") in which it seeks reimbursement for the reasonable expenses of complying with a subpoena issued to it by the first respondent wife, [Ms Taggart], on 2 February 2024.

2 The wife strongly opposes [Company A's] application. Although not an order formally sought by her, it is implied from her affidavit in support that she seeks the Form 2 be dismissed. She seeks that a costs order be made against Company A for the legal fees she has incurred.

3 The other parties to the proceedings are the applicant husband, [Mr Taggart], and the second respondent, [Mr Taggart Jnr] (age 22), who is the parties' adult son.

4 Company A is registered in Mr Taggart Jnr's name; he is the sole director and member of the company, and has, on the husband's evidence, unfettered control of it. According to the husband, he is purportedly an employee of Mr Taggart Jnr.

Relevant law

5 The head of power relied on by Company A was not clarified.

6For that reason, I have contemplated both the power found in the Family Court Rules 2021 (WA) ("the Rules") to reimburse a named party and the costs power pursuant to s 117 of the Family Law Act 1975 (Cth) ("the Act").

7 The wife's application can only be founded on the Court's power to make costs orders.

Conduct money and reimbursement

8 When Company A foreshadowed its application, its counsel referred to the Court's powers set out in r 250, which provides as follows:

250.Conduct money and witness fees

(1)A named person is entitled to be paid conduct money by the issuing party at the time of service of the subpoena, of an amount that is —

(a)sufficient to meet the reasonable expenses of complying with the subpoena; and

(b)at least equal to the minimum amount mentioned in Schedule 3 Division 1.

…

(3)A named person may apply to be reimbursed if the named person incurs a substantial loss or expense that is greater than the amount of the conduct money or witness fee payable under this rule.

9 Company A's case at that time was that the conduct money paid by the wife was insufficient to meet the reasonable expenses of complying with the subpoena, and therefore it does not have an obligation to comply. For reasons which will become apparent, I reject that submission. For these purposes, I have considered the Form 2 as an application pursuant to sub‑r (3), being an application for reimbursement if it has incurred a substantial loss or expense.

10 Historically conduct money was paid to meet the named party's costs of getting the subpoenaed documents to the Court, which is less of an issue in a digital world where documents are uploaded to the e-file. It may also reasonably extend to the expenses associated with finding and collating the documents, particularly if the subpoena has complexity to it, and in certain circumstances, legal expenses.[1]

[1] Moriartyv Moriarty (2009) 41 Fam LR 336 [47]–[49] (Cronin J).

11 The use of the phrase "reasonable expenses" requires an issuing party attempt to estimate what the expenses may be. Where the material called for is such that it is likely to be readily available, such as records likely to be kept in an organised filing system, there is no reason to estimate the costs of compliance will be anything other than nominal.[2]

[2] Foyster v Foyster Holdings Pty Ltd (in liq) [2003] NSWSC 881 (Campbell J).

12 It is the general practice of this Court that, provided named persons have been paid the minimum amount of conduct money under the Rules, and the process of collating the documents is not overly complex or taxing, the named party is required to produce all the documents set out in the schedule to the subpoena that they have in their possession or control in an unredacted form. This applies regardless of whether an objection to the subpoena is lodged or not.

13 I otherwise observe that if every named party refused to comply with a subpoena until it was satisfied it had received reasonable remuneration prior to documents being produced, many proceedings would grind to a halt, which would do little for the administration of justice, which subpoenaed parties are called to assist.

14 It is open to the named person to bring an application under sub‑r (3) to be reimbursed. This is a more widely based sum owing to the "loss" component and is far more likely to encompass external costs, such as legal advice and representation, as distinct from the internal cost of identifying and collating the documents.[3]

[3] See e.g., Ibrahim v Dias [2024] WASC 336. Acting Chief Justice Tottle considered the named party justified in obtaining legal advice, engaging counsel, preparing affidavits, and both internal and external IT costs for a focused search in circumstances where the records sought may have been captured under a statutory privilege of which his Honour and the parties were not otherwise aware.

15 In considering whether a particular claimed loss is a "reasonable expense" of complying with the subpoena such that it constitutes a "substantial loss or expense, I have had regard to Cronin J's comments in Moriarty[4] and Murphy J in Lavell & Lavell [2012] FamCA 34.[5] They can be summarised as follows:

•determination of what is "substantial" is very subjective and involves the exercise of discretionary judgment;

•it must be either an unusual activity or cause an unfair inconvenience having regard to the fact the recipient has nothing to do with the litigation;

•although the Rules are not intended to cause a loss of income or capital, the Rules refer to a "substantial expense" which must be determined in each case;

•if the subpoena is simple and clear requiring the production of the recipient's own documents, the inconvenience is intended and expected to be minimal;

•the ordinary charge rate for the named party is not envisaged; and

•the reimbursement claimed must be for a loss or expense other than the minimal or ordinary and is to be a partial compensation for being drawn into the process of administration of justice.

[4] At [58], [60]–[63].

[5] At [251]–[253], [259].

16 In any event, the costs power in s 117 of the Act can be used to cure any potential injustice worked by the operation of the subpoena rules.

Costs

17 The Court has a broad discretion in costs matters, however there are two primary matters for determination:

(a)whether there are circumstances which justify departing from the ordinary rule that each party shall bear their own costs; and if so

(b)what order for costs is just.

18 It is not the law that a costs order can only be made in what has been described as "a clear case". Although a finding of justifying circumstances is an essential preliminary consideration to the making of a costs order, there is no additional or "special" onus on an applicant for an order for costs. An order for costs is made to compensate a party against expenses incurred in litigation and is not punitive in nature.

19 The matters I am required to turn my mind to when considering a costs order are set out in s 117(2A).

20 The weight to be given to the various factors referred to in s 117(2A) of the Act is a matter for the Court. All the factors, however, must be considered and balanced when considering whether the overall circumstances justify the making of a costs order.[6] On the other hand, there is nothing to prevent any one of the factors being the sole foundation for an order for costs.

[6] I and I (No 2) (1995) FLC 92-625.

21 A disparity in financial resources between parties to family law litigation can sometimes justify an order for costs in favour of the party with fewer financial resources.[7] At the same time, the apparent inability of a party to pay costs is not a bar to a costs order being made in circumstances where, for example, that party's conduct as a litigant warrant such an order.[8]

[7] Kelly and Kelly (No 2) (1981) FLC 91-108, 76,811 (Evatt CJ, Emery SJ and Nygh J).

[8] Braithwaite & Braithwaite [2007] FamCA 468 [106]–[107] (Kay, Warnick and Boland JJ).

22 It is well settled that s 117(2A)(e) of the Act refers to a situation where proceedings as a whole have been unsuccessful, for example, where an application without merit has been dismissed.[9] An application is not wholly unsuccessful simply because a notice of discontinuance is filed; without being heard and determined, there has not been a full assessment of the application's merit.[10]

[9] Anison & Anison (2019) FLC 93-908 [37] (Kent J).

[10] Parke & The Estate of the Late A Parke (2016) FLC 93-748 [18] (May and Ryan JJ).

23 Rule 335 sets out the options available to the Court in calculating costs, in particular fixing costs at a specific amount, or to be assessed or calculated on a particular basis. The purpose in all rules of court enabling an order for costs in a specific amount without formal assessment or taxation is to "avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation".[11]

[11] Idoport Pty Ltd v National Australia Bank Ltd & Ors [2007] NSWSC 23 [9] (Einstein J).

24 It is within this framework I am required to determine the competing applications.

25 It is convenient to deal with the submissions made by both parties having regard to the chronology, as the sequence of events has informed my determination about both issues.

The Objection

26 At the time of service of the subpoena, the wife paid Company A conduct money of $25, being the minimum amount to be paid pursuant to the Rules. There was no reason for the wife to estimate that the reasonable costs of compliance would exceed this amount, as the documents sought were ordinary business records.

27 Company A did not produce documents prior to the date of production of 6 March 2024. The limitation period under the Rules to set aside the subpoena or apply for any other relief in relation to the subpoena expired on 6 March 2024.[12]

[12] Family Court Rules 2021 (WA) r 253(2) ("FCR").

28 Notwithstanding this, and in the absence of a request for an extension of time, the Court accepted an incomplete Part F Objection to the subpoena filed on 19 March 2024 by Mr Taggart Jnr on behalf of Company A ("the Objection"). Mr Taggart Jnr failed to mark a checkbox indicating the relief he sought. However, as the stated grounds for resisting the subpoena were relevance and fishing, the Court treated it as an application to set aside the subpoena. The objection was listed to [late] April 2024 for determination ("the First Objection Hearing").

29 An objection to production does not operate as a stay on subpoena obligation, which remains in force.[13] To the extent counsel for Company A suggested this was not apparent on the face of the subpoena to a self‑represented litigant, I reject the submission. The note immediately under the checkboxes for relief sought indicates what obligation is stayed: the right of inspection. Further, upon Company A instructing a solicitor, it was incumbent on its solicitors to advise the company it was in breach of the subpoena, assist it in rectifying that breach, and draw Mr Taggart Jnr's attention to the consequences for non-compliance which are also clearly set out on the face of the subpoena.

[13] FCR r 252.

30 One of the significant issues to be resolved in the financial proceedings is the true ownership of Company A. It is the wife's case that it is in fact the husband, not Mr Taggart Jnr, who is the legitimate owner of the company. She says the husband has full control of the company and makes all decisions about the running of it, including about the company's finances, which includes distribution of income.

31 I adopt and incorporate the relevant section of my judgment in the parenting proceedings[14] into these, as it sets out the factual background relevant to the husband and Mr Taggart Jnr's interest in Company A; in particular findings made by the Child Support Agency and AAT, which were adopted by me.[15] In short, I was satisfied the husband had engaged in the exercise of alienating a business that once belonged to him by putting it through a different corporate structure held by Mr Taggart Jnr in order to seem as if his income and assets were less than what they actually were. My findings of financial abuse, supported by the Child Support Agency and AAT's findings about the true ownership of Company A, are highly relevant to the wife's case in the financial proceedings.

[14] [2024] FCWA 66 [124]–[164].

[15] As permitted by s 69ZX(3)(b) of the Family Law Act1975 (Cth).

32 For those reasons, it should be clear the Court is of the view that the documents sought by the wife had apparent relevance[16] and there was a legitimate forensic purpose for the same.[17] The Objection had no merit.

The First Objection Hearing

[16] The wife has set out in detail why the documents set out in each paragraph of the schedule to the subpoena are relevant: Affidavit, Wife (filed 9 September 2024) [15]–[19] ("WA").

[17] See Hatton v Attorney-General of Commonwealth of Australia & Ors (2000) FLC 93-038; National Employers' Mutual General Association Ltd v Waind & Anor [1978] 1 NSWLR 372, 381; Mandic v Phillis (2005) 225 ALR 760 [36].

33 At the First Objection Hearing, the Court permitted an adjournment as sought by counsel for Company A, [Counsel C] of [Law Firm C], on the basis that he had only recently obtained instructions. At his request, the Court directed the wife's lawyers, [Law Firm B], to provide Law Firm C a copy of my parenting judgment and her application for final orders. Mr Taggart Jnr was also given leave to file an affidavit in response, and the solicitors for Company A and the wife were to confer about the documents sought. No extension of time or suspension of the subpoena obligation was sought on behalf of Company A, and so it remained in default without reasonable excuse.

34 Mr Taggart Jnr filed no affidavit in response and the parties' solicitors did not meaningfully confer, notwithstanding the documents having been provided to Law Firm C, and the wife clarifying her position about how the Court should deal with the company, around one month prior to the hearing.[18]

[18] Seemingly the delay arose because Law Firm C sought an updated or particularised minute of final property orders sought before giving advice on the forensic purpose. From what I can tell, the delay only related to an Amended Form 1A Response, but a minute had already been provided on 2 May 2024: Affidavit, Mr Taggart Jnr (filed 27 August 2024) 41. See also Law Firm B letter to Law Firm C dated 16 May 2024 in which he advised the wife was in the process of preparing an Amended Minute of Final Orders Sought, and that she was seeking for the company to be incorporated into the asset pool with the value of the company being taken into account.

35 On 23 May 2024, Counsel C again raised the issue of forensic relevance in a letter to [Counsel B] but advised Law Firm C would take instructions from their client about whether an approach could be adopted which could see the matter resolved without the need to proceed with the second subpoena objection hearing.

36 Counsel B provided a reply the following day; in summary, he asked Law Firm C to confirm their client had the appropriate business records covered by the terms of the subpoena and whether they would be produced. Counsel B rightly, in my view, highlighted Company A's obligations to produce the documents and argue relevance later.

37 Having not received a reply from Law Firm C, Counsel B sent a further letter to Law Firm C on 5 June 2024 enquiring whether Company A intended to produce the documents sought under the subpoena or if the objection was maintained, and if so, he requested an explanation be provided as to the grounds of the objection.

38 Law Firm C wrote to Law Firm B two days prior to the adjourned hearing advising they had produced documents, made some redactions and sought the hearing be vacated by consent. Law Firm B indicated the wife was not prepared to do so without seeing an itemised schedule of what had been produced and indicated the redaction issue may need to be dealt with separately.

The Second Objection Hearing

39 The Objection was dismissed with Company A's consent at the second objection hearing [in mid] June 2024 ("the Second Objection Hearing"). [Solicitor A] of Law Firm C appeared for Company A and confirmed documents had been produced with some redactions, the extent of which I was led to believe was minor and related to some third-party names and contact details, to which I expressed concern.

40 It is important for me to stress that at no stage was any application ever made on behalf of Company A for leave to redact the documents produced pursuant to the subpoena, either in part or full. Nor did I make any order or direction that permitted Mr Taggart Jnr, his lawyers, or either of their agents to do so.

41 My comment to Solicitor A about it being unusual for redaction to take place prior to the Court giving leave should not have been taken as the Court's approval for such action to have been undertaken. It was, having been given the impression that only minor redaction had taken place, a simple observation that I hoped would convey a pointed and serious message.

42 The Court expects legal practitioners, as officers of the Court, not to authorise, permit or cause any redaction of subpoenaed documents prior to the Court granting leave to do so.

43 The fact redacted documents were produced to the Court at all, without said leave, is troubling. I was also concerned when I was advised a legal practice director had accepted instructions from their client to do so and directed another member of the practice to perform the redactions.

44 Irrespectively, with the dismissal of the Objection, Company A no longer had standing to be heard in respect of production and inspection. The Court, without objection, made an unqualified order for inspection by the parties, their lawyers, and any single expert witness.

45 The seriousness of the redaction conduct, which only came to light approximately six weeks later, was magnified by the degree of redaction that had actually taken place and the nature of the documents redacted.

46 On 5 August 2024, the wife's solicitors wrote to the Court seeking a relisting of the proceedings on the basis that approximately 145 pages of bank statements produced by Company A had the details of every transaction redacted. According to Counsel B, his office had attempted to confer with Law Firm C on five separate occasions about the issue without receipt of any substantive reply.[19]

[19] Counsel B advised the Court two attempts were made at telephone conferral and three letters were written.

47 Counsel C and Law Firm C should have known that the degree of redaction undertaken on the instruction of Company A rendered those documents entirely useless to the parties, their solicitors and, if not remedied, quite possibly the Court. It was incumbent on the company's legal representatives to advise against those instructions.

The Compliance Hearing

48 The matter was listed on an urgent basis into an already busy court list [in mid] August 2024 ("the Compliance Hearing"), as the Court had set down the interim hearing in the financial proceedings for [mid] September 2024, and the husband and wife, who agree about very little, were in agreement that it was essential for:

•Company A to have fully complied with the subpoena;

•the husband and wife to have had the opportunity to review the same before the interim hearing; and

•the documents were likely to be highly relevant to any single expert witness appointed to value Company A, which was an important step in advancing the substantive proceedings.

49 The Court did not have the capacity to deal with the various issues being agitated by Counsel C on behalf of Company C. From the Court's perspective, Counsel C's lack of concern about the following matters was, frankly, extraordinary:

•his client's default in complying with the subpoena, then for some five months;

•the redaction without leave of the Court;

•the manner in which the Court had been led to believe all outstanding issues had been resolved; and

•introducing not one, but two new issues about why his client would not comply, which he seemingly asserted ought to have been raised by Counsel B.

50 I stood the matter down so the solicitors could confer, noting it was a busy list. They subsequently returned with a minute of consent orders ("the Consent Minute"), which I incorporated into the following order:

With the consent of the Applicant, [MR TAGGART], the First Respondent, [MS TAGGART], and the Subpoena Objector, [COMPANY A], and not with the consent but not opposed by the Second Respondent, [MR TAGGART JNR]:

(a) Without admission as to need, the Applicant, Second Respondent and First Respondent shall be restrained by injunction and an injunction is hereby granted retraining them from disclosing any information that they may become aware of during these proceedings to any third party other than for the purposes of legal or financial advice.

(b) Without admission as to need, the First Respondent shall be restrained from contacting any clients of the Subpoena Objector other than by a legal practitioner.

(c) Without admission as to need, the Applicant, First Respondent and Second Respondent be restrained from communicating with any of the other parties' business contacts other than:

(i)in the course of their business; or

(ii)through a legal practitioner

51 The parties were otherwise given orders programming the matter to the interim hearing, anticipating Company A and the wife's costs applications.

Company A's case

52 I now turn to the specific arguments advanced on behalf of Company A.

Reasonable expenses, confidentiality and commercial sensitivity

53 Counsel C adopted a position at the Compliance Hearing that his client was not required to produce unredacted documents until its "reasonable expenses" were met. I reject the submission. The caveat to the obligation to comply with a subpoena only applies if conduct money is not paid at the time of service, or prior to the date of production. If Company A had incurred a substantial loss or expenses greater than the conduct money, it was open to apply to be reimbursed,[20] not refuse to comply with the subpoena.

[20] FCR r 250(3).

54 Mr Taggart Jnr's evidence about this issue is limited to a letter sent by Law Firm C to Law Firm B on 16 August 2024. The minute was accepted into evidence at the costs hearing, with an express waiver of legal professional privilege.[21] In essence, the minute proposed to extend the date of production for the unredacted bank statements for a further seven days and no order as to costs. I am not satisfied this was a reasonable offer to settle any extant issues, as Company A was required to produce these documents in any event and had been in default for some five months; it was Company A and its solicitors' conduct that necessitated a further hearing.

[21] Exhibit SR1 "Letter from Law Firm C to Law Firm B dated 16 August 2024 attaching a Minute of Consent Orders".

55 Company A also introduced a confidentiality and commercial sensitivity argument, which had not been raised before the Court. The context for the same is set out at [15]-[26] of Mr Taggart Jnr's affidavit.

56 It is not sufficient that these grounds were being pursued outside the Court prior to and following the Objection being withdrawn; in the absence of amending or refiling Company A's Part F Objection in the Court prior to the Objection being dismissed, the company had waived its right to argue the issue at a later date. This "back channel" discussion, if any, appears to have been resolved by Company A or Law Firm C making a "captain's call" about what objections the Court would have notice of and be in a position to determine. As part of that process, Law Firm C or Company A arbitrarily decided what information the wife should have access to, based on a ground of objection that was not before the Court.

57 Turning now to the substantive merits of the argument. In short, Mr Taggart Jnr was witness to a phone call in or around May 2020 between the husband and a client of the husband's now-wound-up company, Company B. The client indicated he would not continue working with that company because the wife had allegedly contacted him, threatened to sue, and lodge a caveat over his home because of monies owed.

58 Although the evidence is contested, I am not satisfied this event gave rise to an objectively reasonable concern which ought to be protected by the Court. It relates to one phone call four years ago during a particularly caustic time in Mr Taggart Jnr's parents' bitter separation. Further, it was not Company A that lost its client, and there is no evidence suggesting the wife has contacted any of its clients nor interfered with the proper running of the company.

59 I would not have relieved Company A from complying with the subpoena, nor permitted any redaction on this basis. The very real prejudice to the husband and wife's respective cases and the Court's capacity to do justice as and between the parties would have outweighed any potential prejudice to the company.

60 Had the issue been properly ventilated before the Court, it could have made various orders, if it deemed it necessary to do so, to ameliorate those concerns. However, the failure to properly bring the confidentiality and commercial sensitivity concern to the Court's attention at the Second Objection Hearing, which was when the issue ought to have been raised and dealt with, may amount to a breach of Law Firm C's professional obligation to ensure cases are resolved in a just and timely manner at a cost which is reasonable in the circumstances. The Court cannot fulfil its obligations under the Rules to deal with as many aspects of a case as possible if the issue in dispute have not been brought to the attention of the Court.

61 No concerns were raised by Law Firm C at the Second Objection Hearing about conduct money, substantial loss or expense, or costs.[22] Nor were concerns raised on behalf of the company, in particular about confidentiality or commercial sensitivity. These arguments, though dealt with in the Court only by way of the Consent Minute, were unreasonable. The fact the husband and wife's solicitors were prepared to confer with Law Firm C about this when they had no obligation to do so speaks to their pragmatism more than anything.

[22] In a letter from Law Firm C to Law Firm B dated 30 April 2024, Counsel C advised amongst other things that Company A were "willing to consider a resolution that involves the reasonable production of documents within a reasonable period of time to comply". There is nothing in Law Firm C's letter which raises concern about the issue of conduct money.

62 These issues were only introduced after the Objection had been withdrawn, and only served to necessitate Company A and the parties having to deal with the subpoena issues on a further two occasions.

63 While they are argued in support of costs against the wife, the material before the Court suggest it was Company A and its solicitors who drove up the costs associated with the exercise.

Failure to argue non-compliance

64 It was submitted on behalf of Company A, in essence, that because the wife's solicitors did not inspect the documents in the two days between production and to the Objection being withdrawn, it was her failure to argue non-compliance at the Second Objection Hearing that drove up costs and that she ought to be estopped from agitating the issue.

65 It seemed there may have been some confusion about how electronically produced subpoena items are handled via the eCourts Portal.[23]

[23] I extend my thanks to the Subpoena Office for their assistance in preparing this summary.

66 Subpoena material may be lodged through the "Upload Requested Items" portal as per the Court's directions on the subpoena instruction notice. These documents are not placed on the court file, nor is any party to the proceedings or the presiding judicial officer notified of their lodgement. The documents are automatically hidden from inspection on the eCourts Portal and are manually made available for electronic inspection by the Subpoena Office. In the case where there is no objection, the relevant officers will grant access no less than three days after the issuing party files a Notice of Request to Inspect. If a Part F Objection is filed however, the Subpoena Office will not assign inspection permissions until the Court determines the objection and provides a direction. For the avoidance of doubt, covering letters to produced documents are not passed on to the presiding judicial officer.

67 Until Company A withdrew the Objection and the Court made directions to the Subpoena Office, no party or solicitor could inspect any of the documents produced by the company, including the covering letter. Any argument that Law Firm B drove up costs, or that the wife should be estopped from arguing non-compliance, on this basis is strongly rejected.

68 The fact this argument was repeated at the costs hearing, notwithstanding it was already dealt with at the Compliance Hearing, was inappropriate to say the least.

69 Further, it conflates the issue of an objection to production with the monitoring of compliance. I raised this with Counsel C at the hearing and put to him that this cannot be correct as it would have the consequence that the issuing party and the Court would lose the ability to enforce its subpoena. His response was convoluted and with respect, I did not understand the submission.

Specific costs incurred

70 Company A has incurred legal costs totalling $16,867.40, which it seeks be paid by the wife on an indemnity basis. In the alternative, it claims the amount should be calculated in accordance with schedule 2 of the Rules, being $12,180.43 and provides a schedule calculating the same. These charges do not include preparing the costs application but do include attending the costs hearing.

71 For convenience, I refer to the charges at the scale rate, noting there is no itemised bill.

72 Prior to the Second Objection Hearing and incorporating a charge of $75.65 for reading the extracted orders from that hearing (the sole relevance to Company A being the order discharging the subpoena by consent), the total costs incurred by Company A was $10,251.85.

Parenting judgment

73 Of that amount, $7,448.57 relates to reading the parenting judgment, of which only approximately 40 paragraphs relate to the husband's circumstances with Mr Taggart Jnr and Company A. Whilst I appreciate Counsel C was required to familiarise himself with the matter in order to provide Company A with legal advice, the extent to which he considered the balance of the parenting reasons relevant to the subpoena issue was ultimately an issue for him, presumably in consultation with his client. My parenting judgment should only have served to reinforce to Counsel C why the subpoena was entirely appropriate in the circumstances, and further, why any objection on the grounds of relevance and fishing were devoid of merit.

74 While Counsel C submitted the charge was at the scale rate, I cannot accept this was a reasonable amount. There is absolutely no reason for the wife to be responsible for this particular charge, in part or in full, and Counsel C's client may wish to query the reasonableness of it.

75 Therefore, deducting that charge, the legal costs incurred by Company A up to and including the Second Objection Hearing, were approximately $2,803.28.

Follow-up and conferral

76 As noted above at [34], there was no meaningful conferral between Law Firm C and Law Firm B in the two months between the First and Second Objection hearing. Counsel C asserts this was because of the wife's failure to promptly provide the documents required. I do not accept this to be the case.

77 Law Firm B provided the parenting reasons, the Form 1A Response, and latest minute of final property orders sought on 2 May 2024, less than a week after the hearing. At an initial conferral on 8 May, Counsel C had not read the parenting reasons and no agreement was reached. Law Firm C then followed up an Amended Form 1A Response, which was provided less than a week later and a month prior to the subpoena hearing. On 24 May and 5 June 2024, Law Firm B wrote to Law Firm C inviting them to confer. I note the next correspondence adduced by Mr Taggart Jnr is the covering letter to the subpoena lodgement on 13 June 2024.

78 I consider it was Law Firm C who drove up the costs between 3 May and 13 June 2024, as the parenting reasons ought to have been sufficient to understand the wife's financial case. Had the reasons, which had been requested and provided, been read prior to the conferral, no costs may have needed to be incurred.

79 The total cost for the bundle of communications in that period is $382.61; the wife should not be responsible for Company A's solicitors not being prepared to meaningfully engage in the conferral process.

Letter to the Court

80 There is a charge of $168.51 for drafting and producing a letter to the Court raised on 23 May 2024. I could not identify this letter on the Court file, nor could my Associate identify an email to Chambers, nor is it annexed to Mr Taggart Jnr's affidavit.

81 In the circumstances where the Court cannot identify the actual work charged for, I would not consider it appropriate for the wife to be responsible for the same.

Review and collation of documents

82 The only charge relating to reviewing and compiling the documents was $440.21 on 5 June 2024. I cannot identify a charge for redaction, nor for actually producing the documents to the Court, so I consider this charge must necessarily include to those matters.

Charges incurred after [Second Objection Hearing]

83 Between [late] June and [mid] September 2024, being the "compliance and costs phase" of the subpoena dispute, Law Firm C charged $1,997.95, including attending at the costs hearing.

Conclusion as to Company A's application

84 I will first consider the Form 2 as an application under r 250(3) to be reimbursed for a substantial loss or expense greater than the amount of conduct money payable.

85 Mr Taggart Jnr provides no evidence about any internal costs of compliance incurred by Company A associated with him, or another employee of the company, or even an accountant being called on, to assist in the identification, collation, and production of the documents to Law Firm C.

86 The only evidence about this cost is contained in the schedule for which Company A was billed $440.21 for "reviewing and collating the documents for the purpose of producing them to the Court", which according to Solicitor A would also have included redaction.[24]

[24] Incurred on 5 June 2024.

87 According to the schedule, it took a lawyer (or clerk of a lawyer) approximately 2.7 hours to undertake this work. Having regard to the scope of the documents to be produced, I do not consider this to be an unreasonable expense. However, I do not accept that Company A should be entitled to this full amount, as it should not be reimbursed for any time spent in the redaction of documents where it was not permitted to do so. I would exercise my discretion to reduce this charge to two hours of work, which at the scale rate recorded, would equal approximately $326 and consider that a reasonable and substantial expense which should be payable by the wife.

88 As noted above, I have rejected charges for:

•reading the parenting judgment;

•the communications between 3 May and 13 June 2024; and

•the seemingly unfiled letter to the Court.

89 I turn now to the balance of the expenses incurred by Company A in complying with the subpoena, which relate to legal advice, negotiations and court attendances. The question is whether the amount claimed is reasonable in the circumstances of the case. In answering this question, I have also turned my mind to the underlying principles which guide the Court in determining an application for costs pursuant to s 117(2) of the Act, which are set out in my consideration of the wife's application for costs.

90 Applying the legal principles and legislative considerations set out above, I am not satisfied that any additional legal costs claimed by Company A should borne by the wife.

91 I have reached this conclusion for various reasons.

92 One of the matters noted by Cronin J in Moriarty and Murphy J in Lavell was that the purpose of the Rules was to balance the unfair inconvenience of, or compensation for, a subpoena recipient, being a stranger to the proceedings and drawn into the process of the administration of justice.

93 Company A cannot claim to be an unfortunate unrelated entity drawn into a litigation that has nothing to do with it. It is alleged to be a willing accomplice to the husband in escaping his obligations and a vehicle for hiding assets, income, and expenses. Both Mr Taggart Jnr and Company A are implicated in this allegation.

94 Counsel A went to great lengths to stress Mr Taggart Jnr, in his capacity as proper officer of Company A, was distinct from Mr Taggart Jnr, in his personal capacity as Second Respondent. I accept the distinction in legal persona. However, he is a party to a financial case, and his financial circumstances insofar as they relate to Company A (as a company under his sole control) are relevant to the issues in dispute. Pursuant to his obligation to provide full and frank disclosure he was and remains required to disclose all documents in his possession and control that relate to him or any entity that is fully or partially controlled by him.

95 In the absence of Mr Taggart Jnr's compliance with his disclosures obligations and having regard to the issues in dispute, the wife had little choice but to issue the subpoena. It cannot be an abuse of process to seek that a third-party entity provide documents by subpoena when the person in control of that entity refuses to voluntarily comply with his disclosure obligations.

96 It was Mr Taggart Jnr's right and his choice to obtain legal advice about the subpoena to Company A. However, the only actual objection lodged by him on behalf of Company A was entirely devoid of merit and would have been dismissed by me in any event, had the documents not been produced prior to the Second Objection Hearing. In fact, the Objection was for all intents and purposes withdrawn and the documents were voluntarily produced.

97 Any expense incurred by Company A in advancing the confidentiality issue after Law Firm C withdrew the Objection are costs the company should be responsible for. The husband and wife had no obligation to entertain those concerns after Law Firm C asserted substantial compliance and withdrew the Objection; it is a credit to their pragmatism that the parties' solicitors did so. Further, Company C's confidentiality argument, at least as advanced in these costs proceedings, had no merit.

98 Having regard to the facts of this case, I am not satisfied there was any reasonable grounds upon which Company A could have objected to the production or inspection of the documents.

99 There was no justifiable ground argued which warranted the documents being redacted, in any manner, particularly without leave of the Court. Whilst names and phone numbers were redacted from tender documents, to which the wife did not object, it was entirely inappropriate for 145 pages of bank statements to be redacted in the manner that they were. The Court is concerned it was an attempt to withhold crucial information for the wife's case and contrary to the interests of justice.

100 The entire exercise of the subpoena proceedings has been a complete waste of the Court's limited resources, unnecessarily increased the husband and wife's legal costs, and arguably of most importance in a high conflict case such as this, caused a significant delay in the parties being in a position to advance the litigation they both want to see finalised.

101 I am very concerned steps were taken to obfuscate and delay Company A's obligation to produce the documents in compliance with the subpoena and question the competence of the advice provided to the company, particularly in respect to the redaction issue.

102 However, I am satisfied Company A did incur a substantial and reasonable expense above the conduct money paid to it, being the $326 incurred to collate and review the documents for production to the Court, minus any conduct money already paid.

103 In the event it has not already done so, Company A will be required to produce all of the documents previously uploaded to the Court file in an unredacted form within 24 hours from the date of publication of this order.

104 I otherwise intend to dismiss the Form 2 application filed [in]August 2024.

Wife's application for costs

105 I now turn to the wife's costs application against Company A.

106 Pursuant to my orders [in mid] August 2024, the wife filed her Form 2A response [in early] September 2024. She seeks an order that Company A pay her costs fixed in the amount of $11,677.43, with said payment to be made in seven days.

107 In support of her application, the wife relies on an affidavit of herself filed on the same date.

108 The wife has not provided the Court with a copy of the costs agreement she has entered into with her solicitors. She filed a schedule of costs pursuant to schedule 2 of the Rules on the morning of the costs hearing, which were calculated to $5,522.

109 As I understand it, she is seeking her costs be paid on a party‑party basis.

110 I have canvassed many of the issues raised by the wife in her affidavit in my consideration of Company A's costs application, which will not be repeated here.

The financial circumstances of each of the parties to the proceedings

111 The wife has not filed a Form 13 Financial Statement since 16 May 2022. However, I am aware from my fairly longstanding involvement with the proceedings that she is unable to work for medical reasons and is reliant on Centrelink benefits, child support paid by the husband, some minor share dividends and ad-hoc interim property payments she has received along the way to support herself and the children.

112 The only financial information the Court has about Company A is as set out in the parenting reasons, in particular the findings made by the Child Support Agency and AAT that Mr Taggart Jnr is running a company that generated a gross income of approximately $465,151.80. The financial strength of the company was further highlighted during the trial when the father gave evidence about Mr Taggart Jnr giving him an undisclosed bonus just prior to the trial commencing of $30,000 (net) and the various international holidays Mr Taggart Jnr had taken that year. I infer Mr Taggart Jnr would not have authorised the bonus payment to his father, or spent money on travel, if it were not financially viable for the company or himself to do so.

113 Although I do not have any updating information about the financial circumstances of Company A, there is no evidence to suggest the company has suffered a downturn or is no longer performing as it has in previous years. I otherwise observe Mr Taggart Jnr felt comfortable enough about the company's finances to instruct a law firm to represent it, which he would not have done if he had not felt confident about the company's capacity to meet its own legal fees.

114 I am satisfied the company has funds to draw on to meet a cost order if made against it.

Whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party

115 This is not a relevant consideration.

The conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters

116 It is important to bear in mind that the terms of s 117(2A)(c) refers to the conduct of parties within the litigation, rather than their personal conduct more broadly.[25]

[25] Prantage & Prantage (2013) FLC 93-544.

117 It should be apparent from my earlier comments that I consider Company A has acted in a manner which warrant a costs order being made against it.

118 The company should have produced the documents on or before the production date and the Objection should have been withdrawn promptly once Company A had obtained legal advice. Instead, what followed was a trickle feed of objections with the company having wonton disregard for its standing to be further heard about the subpoena after the Objection was withdrawn.

119 It is unacceptable that the substantive issues in dispute were unable to be advanced because five months of time was committed to dealing with a simple subpoena objection, which was first listed for determination [in] April 2024.

120 I do not consider the Consent Minute a "win" for Company A but a pragmatic position adopted by the wife and husband in an attempt to move matters along in order to avoid further delay. If the confidentiality issue was as important to the company as it purported it to be, the Objection should have been amended or a Further Part F - Notice of Objection filed. In the absence of doing so, and upon the Objection being dismissed, the company may view the money spent on legal fees securing the Consent Minute money well spent.

121 I also have regard to the unauthorised redaction of subpoenaed material, which was done by Law Firm C on instructions from its client and to this date has not been rectified.

122 I have real concern that the approach adopted by the company was designed to obfuscate and delay its compliance with a properly issued subpoena for the production of documents that were highly relevant to the proceedings, and where many of the documents being sought should have been produced by Mr Taggart Jnr in any event, in compliance with his disclosure obligations.

123 I am also troubled by the wife's assertion that Company A purported not to have documents in its possession, which when cross-referenced with other material, appears to be incorrect. This will no doubt be explored further at the trial, and if the wife's allegation can be established, significant consequences may follow for Mr Taggart Jnr, in his capacity as director of the company.

Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of a court

124 Whilst Company A is a distinct legal entity in its own right, Mr Taggart Jnr, as the sole director and the Second Respondent, had an obligation to provide full and frank disclosure of all documents in his position relevant to the proceedings, which extended to any entity owned or controlled by him. In addition to this general duty of disclosure, Mr Taggart Jnr has failed to comply with a single order made for him to file documents or provide disclosure.

125 Many of the documents sought pursuant to the subpoena should have been disclosed by Mr Taggart Jnr in any event. Had he complied with his disclosure obligations, the subpoena may not have been necessary, or at least the scope of it would have been significantly narrowed.

126 Ultimately, I place limited weight on this consideration because of the separate legal personas.

Whether any party to the proceedings has been wholly unsuccessful in the proceedings

127 It is well settled that s 117(2A)(e) refers to a situation where proceedings as a whole have been unsuccessful. For example, where an application without merit has been dismissed. In the oft-cited authority in this area of Robinson and Higginbotham (1991) FLC 92-209 Nygh J (with whom Simpson & Smithers JJ agreed) said:[26]

Her Honour then makes a reference to the question of which party was wholly successful but, of course, as counsel for the wife rightly submitted, paragraph (e) deals with a situation in which the proceedings as a whole have been unsuccessful. In other words, in which an application which was without merit has been dismissed.

[26] At 78,417.

128 Although I have views about the merit of the various objections, formally or informally advanced by Company A, and the manner with which the company and Law Firm C dealt with them before the Court (or not before it as was the case in respect to the confidentiality concern) those matters were ultimately resolved without the need for a judicial determination. Therefore, I cannot comfortably conclude the company was wholly unsuccessful.

Whether a party to the proceedings has made an offer in writing to another party to the proceedings to settle the proceedings and the terms of any such offer

129 I have recorded at [54] that I do not accept the offer Company A made to be a reasonable offer to the wife in an attempt to settle the issues remaining in dispute.

130 Having regard to my determination in respect to that issue, the wife's refusal to pay anything over and above the costs associated with Law Firm C collating and reviewing the documents prior to production to the Court was an entirely reasonable position for her to adopt.

131 It does not appear from the wife's affidavit that she similarly made an offer to Company A in an attempt to settle her costs application, although having regard to the parties' fairly polarised views on the issue of costs, and who was to blame for unnecessarily incurring them, I am not persuaded any offer put forward by her would have been given any due regard.

Such other matters as the court considers relevant

132 There are no other matters I consider relevant.

Disposition

133 I have considered all the matters referred to above and balanced them. I am satisfied there are circumstances which justify the making of an order for Company A to pay the wife's costs in responding to its objection to the subpoena (inclusive of the Form 2).

134 The wife argues that she has incurred substantial costs arising from Mr Taggart Jnr's failure to comply with his disclosure obligations. Whilst she may very well have a case to argue in this respect, her application appropriately seeks costs against Company A and not Mr Taggart Jnr personally and it is that application I am required to determine.

135 The question is whether I ought to make a fixed sum order or leave it to be determined by agreement between the parties or by assessment of costs under the Rules. In determining the quantum of costs, I refer to the remarks of Strickland, Kent and Watts JJ in the decision of Pierson & Romilly (2020) FLC 93-959 in which their Honours said at [85]:

It is the policy of this Court to attempt to fix costs at the conclusion of the hearing in order to save the parties the cost, time and resources of a taxation, as well as to save the time of a Registrar in taxing the costs.

136 Whilst their Honours were considering this issue from the perspective of a decision made by the Full Court of the Family Court, the underlying reasoning must be equally relevant to determining costs at first instance.

137 The determination of the quantum of costs is a process of assessment not taxation. The Rules enable the Court to make an order for a specific amount.

138 Rule 335(3) provides that in making an order for costs of a specific amount, as is presently sought, the Court may consider:

(a)the importance, complexity or difficulty of the issues; and

(b)the reasonableness of each party's behaviour in the case; and

(c)the rates ordinarily payable to lawyers in comparable cases; and

(d)whether a lawyer's conduct has been improper or unreasonable; and

(e)the time properly spent on the case, or in complying with preaction procedures; and

(f)expenses properly paid or payable.

139 There was nothing novel about the circumstances of the subpoena issued to Company A. It was entirely appropriate in the circumstances of this case, particularly where Mr Taggart Jnr had failed to engage in the proceedings and comply with his disclosure obligations. Whilst it is true the wife arguably should have filed an application seeking orders for specific disclosure from Mr Taggart Jnr prior to issuing the subpoena to Company A, context is important. The history of the proceedings lends me to believe it would have been futile and a waste of time. Even the production of documents pursuant to a subpoena has been an unnecessarily long and drawn-out process.

140 Ultimately, I do not know what documents to the schedule were produced and what was not. Counsel for the wife conceded they had exhausted disclosure requests and attempts to obtain documents pursuant to subpoena and the issue of compliance will now be an issue for trial.

141 Given the parties' poor relationship, I have no confidence they could reach agreement about the quantum of costs to be paid. Further, requiring the parties to undertake an assessment pursuant to the Rules will only increase costs in a proceeding where proportionality is arguably an issue.

142 The assessment of legal costs must involve a careful consideration of the scope and nature of the work undertaken by a legal practitioner.

143 Pursuant to a costs schedule filed on 12 September 2024, the wife seeks Company A pay her costs fixed in the amount of $5,522. There are some observations I wish to make about the Schedule.

144 First, it includes charges for seeking disclosure from Mr Taggart Jnr, which is not a cost the company should be required to meet (having regard to the separate legal personas).

145 Second, it includes costs associated with the drafting, amending, serving and filing of the subpoena, which were all costs the wife would have reasonably incurred. Those costs can be dealt with as part of any further costs application the wife may bringing following the trial in the substantive proceedings, after which the Court will have the benefit of any findings made about the conduct of the parties, including Mr Taggart Jnr.

146 Third, there is a charge on 30 April 2024 in the amount of $648 with the notation "call to client". There is no further information about the nature of the call, which may have been about multiple matters given the degree of ongoing dispute between the parties. I cannot be satisfied this wholly relates to the subpoena issue.

147 Finally, there are no charges associated with reviewing the Objection, preparing for or attending the First Objection Hearing, which the Court can only assume is because the wife was not charged for the same.

148 I have also considered the legal and factual issues that arose during the proceedings and the parties' personal circumstances.

149 Ultimately, a costs order must be assessed as being fair, reasonable, and proportionate to the issues involved. I have applied these principles.

150 I am satisfied in all the circumstances, that it would be both fair, reasonable, and proportionate for Company A to pay the wife's costs fixed in the amount of $4,100. I observe this is not too dissimilar to Company A's costs once various items were deducted from Law Firm C's cost schedule as previously commented on by me.

Orders

151 For these Reasons, I make the following orders:

IT IS ORDERED THAT:

1Within 24 hours of the date of publication of these Orders, in the event he has not already done so, the Second Respondent, MR TAGGART JNR, in his capacity as director of Company A is to upload or cause to be uploaded to the Court file, unredacted copies of all documents previously provided to the Court in compliance with the subpoena issued to it on 2 February 2024.

2The First Respondent, MS TAGGART, shall pay Company A's reasonable costs of compliance with the subpoena issued at the First Respondent's request, fixed in the amount of $301, with said money to be deducted from costs to be paid by Company A to the First Respondent pursuant to paragraph 3 of these Orders.

3Within 14 days of the date of publication of these Orders, Company A shall pay the First Respondent's costs of the subpoena objection filed by it on 19 March 2024, and the Form 2 application filed on behalf of Company A on [redacted] August 2024, fixed in the sum of $4,100.

4The Form 2 application filed on behalf of Company A on [redacted] August 2024 and the Form 2A response filed by the First Respondent on [redacted] September 2024 be otherwise dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.

MF

Associate

20 SEPTEMBER 2024