Walters and Walters and Anor (No. 2) - [2017] FamCA 832

FAMILY COURT OF AUSTRALIA

WALTERS & WALTERS AND ANOR (NO. 2)

[2017] FamCA 832

FAMILY LAW – COSTS – OBJECTION TO SUBPOENA – Where application for costs as against a third party objector to a subpoena for production issued by the wife – Where objection was previously dismissed – Where consideration of general principles – Where proper for order for costs to be made.

Family Law Act 1975 (Cth) s 117

Hawkins & Roe [2012] FamCAFC 77
Penfold v Penfold (1980) 144 CLR 311
Walters & Walters and Anor [2017] FamCA 502.

APPLICANT:

Mr Walters

RESPONDENT:

Ms Walters

INTERVENOR:

B Pty Ltd

FILE NUMBER:

DUC

420

2014

DATE DELIVERED:

19 September 2017

PLACE DELIVERED:

Parramatta

PLACE HEARD:

Parramatta

JUDGMENT OF:

Foster J

HEARING DATE:

By way of written submissions last received on 29 August 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Givney

SOLICITOR FOR THE APPLICANT:

McPhee Kelshaw

COUNSEL FOR THE RESPONDENT:

Mr Lethbridge SC

SOLICITOR FOR THE RESPONDENT:

Campbell Paton & Taylor

COUNSEL FOR THE INTERVENOR:

Mr Maddox

SOLICITOR FOR THE INTERVENOR:

Baldock Stacy & Niven Pty Ltd

Orders

That B Pty Ltd pay the wife’s costs of and incidental to proceedings relating to that company’s objection to the wife’s subpoena for production of documents.
That such cost be as agreed within one month from this date and in default of agreement as assessed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Walters & Walters and Anor (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: DUC 420 of 2014

Mr Walters

Applicant

And

Ms Walters

Respondent

B Pty Limited
Intervenor

REASONS FOR JUDGMENT

The discrete application for determination arises from orders made on 17 July 2017.
Those orders were as follows:
(1)That the Notice of Objection to Subpoena filed 2 March 2017 be dismissed.
(2)That the application for costs of compliance with the subpoena be dismissed.
(3)That any application for costs of the objection hearing be made by way of written submission filed and served within 28 days from this date with any submissions in response to be filed and served within a further 14 days, thereafter judgment reserved to chambers.
The wife now makes application for an order for costs as against the objector company.
The notice of objection to subpoena for production of documents was lodged by B Pty Ltd. That company’s relationship with the proceedings is set out in the earlier reasons for judgment referred to below. The subpoena sought production of documents in the possession or control of certain solicitors relating to B Pty Ltd.
The objection to subpoena was made on the ground of legal professional privilege.
Ultimately, the objection to subpoena was dismissed for reasons set out in Walters & Walters and Anor [2017] FamCA 502.
It was said in those reasons:
21.Whilst Annexure B contains perfunctory descriptions of the documents to which it is alleged privilege attaches, what it does not contain is evidence as to why each of the documents came into existence and the basis upon which privilege is asserted to attach to that document.
22.There is no affidavit evidence sought to be adduced in support of the asserted claim. Indeed no evidence at all save for counsel’s bald assertion that “the majority of the documents sought by the requesting party relate to the legal advice provided by [X] to [BPL]”.
23.As observed by Murphy J in Strahan:
[44]In Trade Practices Commission v Sterling [1979] FCA 33, Lockhart J said (at [5]):
It is not open to doubt that the court has power, in a proper case, to inspect documents where a claim of privilege is made to resist an application for inspection of documents by the opposite party. See Grant v Downs [1976] HCA 63; (1976) 135 CLR 674, and Westminster Airways Limited v Kuwait Oil Co Limited (1951) 1 KB 134. However, it is as well to bear in mind what was said by Jenkins L.J. in Westminster Airways Limited v Kuwait Oil Co. Limited: “But there is nothing in the rule, or in the authorities, to constrain the court to hold that, in every case where a claim to privilege is made and disputed, the party seeking production is entitled to come to the court and (as it were) demand as of right that the court should go behind the oath of the opposite party and itself inspect the documents. The question whether the court should inspect the documents is one which is a matter for the discretion of the court, and primarily for the judge of first instance...” (1951) 1 KB, at p 146. (at p247)
24.A party cannot rely on the Court inspecting the impugned documents as a mechanism to rectify lacking or defective descriptions of those documents. In any event, in this matter there was no application for the Court to inspect the disputed documents and even then in the absence of evidence on the issue the Court would be required to infer from the nature of the document the purpose for it coming into existence and whether any asserted privilege is made out. Such a course is properly addressed by appropriate and relevant evidence adduced by the objector.
25.The failure to adequately describe and adduce sufficient evidence to establish the privileged nature of the disputed documents is fatal to the claim as to legal professional privilege and as such the claim has not been made out by the objector as to the documents referred to in 10. a) and b).
In submissions both parties contend that an order for costs can be made under s 117 of the Family Law Act 1975 (Cth) (“the Act”).
For the purposes of the section, the wife and the solicitors are the parties to the proceedings in so far as such proceedings comprise the objection to subpoena issue. “Proceedings” are defined in the Act to mean:
…a proceeding in a court, whether between parties or not, and includes cross proceedings or an incidental proceeding in the course of or in connection with a proceeding. (emphasis added)
Section 117 of the Act provides that each party to the “proceedings” shall bear his or her own costs.
That principle is, however, subject to the discretion afforded to the trial judge in subparagraph (2), which provides that if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may, subject to further subsections thereof and the applicable Rules of the Court, make such order as to costs as the Court considers just.
Although s 117(2) requires a finding of justifiable circumstances as an essential preliminary to making an order for costs, there is no additional or special onus on an applicant who seeks an order for costs: see Penfold v Penfold (1980) 144 CLR 311.
The matters relevant to determining what order, if any, should be made for costs are set out in subsection (2A) of that section. They relevantly, in these proceedings, relate to the following:
a) the financial circumstances of each of the parties to the proceedings;
b) whether any party has legal aid and the terms of any grant of aid;
c) 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 answers, questions, admissions of facts, production of documents and similar matters;
d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court;
e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
g) such other matters as the Court considers relevant.
The Full Court in Hawkins & Roe [2012] FamCAFC 77 said:
17. With respect to the application of the section, in Penfold and Penfold (1980) 144 CLR 311, the High Court said at 315 and 316:
Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s. 117 (2) in "a clear case".
Sub-section (2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised (Kent v. Kent). Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.
(footnotes omitted)
18. The weight to be given to a particular consideration under s 117(2A) is a matter for the discretion of the judge. However, in I and I (No 2) (1995) FLC 92-625 the Full Court of this Court held that the relevant matters in s 117(2A) “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs”. That is not to say that one single matter may not ultimately be determinative. The Full Court confirmed this in Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 at paragraph 41:
… A number of factors are then listed in the subparagraphs. The financial circumstances of each of the parties to the proceedings is the first mentioned factor. Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.
The wife contends that she has been wholly successful in her application to dismiss the objection of the solicitors, such being a justifying circumstance for an order for costs.
In the circumstances of this application with the objection being dismissed, it is just to make an order that the wife have her costs of and incidental to the objection proceedings.
The wife has contended for an order for costs in the sum of $8,845.00 plus GST. Such contention is supported only by a lump sum tax invoice and a purported itemised bill. It is not apparent on what basis such fees are charged, for example, whether they are in accordance with scale or pursuant to a costs agreement between the wife and her solicitors.
In such circumstances, it is appropriate that the costs of the wife of and incidental to the objection proceedings be determined by agreement or in default of agreement by assessment.
Orders will be made accordingly.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 19 September 2017.

Associate:

Date: 14 September 2017