Whiteley and Price

[2009] FamCA 594

FAMILY COURT OF AUSTRALIA

WHITELEY & PRICE [2009] FamCA 594

FAMILY LAW – COSTS – Subpoena – Objection taken in absence of production – Late production – Documents “privileged” in absence of any such order

Family Law Act 1975 (Cth)

WIFE: Ms Whitely

HUSBAND: Mr Price

Applicant for costs of subpoena: Mr A Price

FILE NUMBER: MLF 1612 of 2006

DATE DELIVERED: 1 July 2009

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Brown J

HEARING DATE: 1 July 2009

REPRESENTATION

COUNSEL FOR THE WIFE: Mr. Thompson

SOLICITOR FOR THE WIFE: Findlay Arthur Phillips

APPLICANT : In person

Orders

1. That all applications for costs arising from the subpoenas addressed to Mr A Price and C Pty. Ltd., filed herein on 5 March, 2009, be dismissed. 

2. That the reasons for judgment this day be transcribed and a copy be provided to the wife, Mr. Price having advised the court that he did not wish to receive a copy. 

3. That pursuant to Rule 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of counsel.

IT IS NOTED that publication of this judgment under the pseudonym Whiteley & Price is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 1612 of 2006

MS WHITELEY

Wife

And

MR PRICE

Husband

And

MR A PRICE
Applicant for costs of subpoena

REASONS FOR JUDGMENT

1. On 27 February this year, the wife, in the course of contested financial proceedings between the wife and the husband, was given leave to issue a number of subpoenas.  One was addressed to the husband’s brother, Mr A Price, and a company, C Pty Ltd, with which Mr A Price was connected.  The primary application before the court on 27 February was an application to adjourn a trial, fixed to commence within weeks, on the basis that matters to which the husband swore in his affidavit of evidence-in-chief, filed for that trial, required further investigation.  Particularly in issue was what was referred to in the course of subsequent submissions as a “black hole”, being significant but unparticularised losses allegedly suffered by the husband from share and option trading.  There was also evidence of money by him to his brother, which had not previously been revealed by the husband.

2. The wife was given leave to issue those subpoenas and did so on 5 March.  They were subpoenas to produce documents only, and the documents were to be produced on 31 March 2009. On 31 March 2009, Registrar Sikiotis adjourned the subpoenas to Mr. Price and C Pty Ltd to 28 April 2009 at 9.30, making a note that no documents had been received from Mr Price on the first return date.  It appears the court had heard nothing and no documents had been produced. 

3. Before the court is an affidavit deposing to four attempts by a process server to serve the subpoena on Mr Price on, variously, 12, 17, 21 and 22 March, at different times of the morning and evening.  Also before the court is an affidavit sworn by Mr Witt, the wife’s solicitor, deposing to his attempts to serve Mr. Price. 

4. His evidence was of posting to Mr Price, care of C Pty Ltd’s registered address, a copy of the subpoena addressed to Mr Price personally.  That was sent on 1 April.  On 24 April, Mr Witt was advised of an email address for Mr Price, and he subsequently forwarded a copy of the subpoena to him, via email, to that email address.  Mr Witt’s evidence, which is consistent with the account given by Mr Price, was that he received no response whatsoever to the email or the posted documents.

5. On 28 April, another email was sent by Mr. Witt, requesting advice as to whether or not Mr. Price and C Pty Ltd would comply with the subpoenas.  He received neither a response nor any objections to the subpoenas.  The evidence of Mr Witt, which is not inconsistent with that of Mr Price at this point, is that, as at 28 April, the day the matter was due before the registrar, Mr Price had not been served personally with the subpoena;  he had not responded to any of the emails;  there had been no communication from him;  no documents had been produced;  and no objections to subpoenas had been filed.  Mr Witt proceeded on the basis personal service of the subpoenas could not be proved.  He did not attend court on 28 April. 

6. It is apparent Mr Price attended this court on 28 April.  He told me that he received the subpoenas by email.  He said he received “free legal advice” that the subpoena to him had to be served on him personally, and that to C Pty Ltd at the company’s registered office.  Thus, he believed neither had been properly served.  Nevertheless, he came to court on 28 April, and voiced objection.  Unsurprisingly, the wife was not represented.  Registrar Sikiotis directed Mr Price to serve objections, including any objections on behalf of C Pty Ltd, on the solicitors for the husband and the wife by 30 April 2009, and reserved the question of his costs of that day to 7 May.  She reserved all outstanding subpoena issues to 7 May. 

7. It appears that Mr. Price did prepare objections, which were considered by the registrar on 7 May.  Her order notes that there was no appearance for C Pty Ltd on that day.  It seems that the applicant, Mr Price, had no proof with him that he was a director of C Pty Ltd and as counsel for the wife submitted he could not prove he came within Family Law Rules 2004 r.8.01(2), no appearance was noted, and he was not heard in respect of the company.

8. Having regard to the matters put to me today, it is highly improbable that any valid legal objection could have been made to the production of the documents sought.  Mr Price’s real objection, and it is not an uncommon one, is that he was angry and frustrated that, as he saw it, he was being drawn into proceedings which had nothing to do with him.  In his view, it was unreasonable.  That is not an uncommon response from a person served with a subpoena, whether it is issued by this court, the Federal Court, a State Supreme Court or any other court. 

9. On 7 May, the objections of Mr Price were disallowed.  He was ordered to produce the documents sought by 20 May.  C Pty Ltd, too, was to produce the documents sought by 20 May.  Insofar as it was said that named documents were not available or never existed, Mr. Price was to file and serve an affidavit containing that information.  The registrar also ordered that Mr Price set out in one of those affidavits his costs in relation to the hearings of 28 April and 7 May, and any costs associated with the production of the subpoenaed documents. 

10. Further compliance was adjourned to the trial date, which then was 2 June.  That date had been fixed some months earlier. 

11. On 28 May, the matter was before me for a directions hearing to assess its readiness for trial.  Mr Price has told me today that he appeared on 28 May out of what he referred to as “idle curiosity”.  He had, he said, heard that his brother had a case, and he wanted to see what was happening in it.  He said he heard counsel seek an adjournment of the trial to 3 June.  Certainly, there was reference on 28 May to the fact the trial had, by then, been adjourned to 3 June.

12. Between 7 May and that voluntary appearance at court on 28 May, a number of things occurred.  On 15 May, a letter was received by the subpoena clerk from Mr Price, saying that he had had insufficient time to produce the documents.  That is the first note of something received at the court from him.  In that letter, he said he needed two weeks, and that the costs of a solicitor preparing the material would be $1,000.  It is clear from an email chain that the solicitor for the wife suggested (Mr Price says on 6 May) that if Mr. Price were having difficulty in finding time to collect and collate documents, he could sign authorities addressed to the various financial and other entities, and the solicitor could obtain the documents himself. 

13. Mr Price told the court today that he did not respond to that offer of the wife’s solicitor.  He proposed objecting to production of any documents the following day.  He did not see why he should have to do anything pro-active.  He wanted to hear the outcome of his objection before he provided any authorities. 

14. As noted, on 7 May the objections of Mr Price and C Pty Ltd were dismissed.  The documents should have been produced to the court that day; once the objections were determined, they would have been released for inspection.  As Mr. Price came to court without them, they could not be released. 

15. Mr Price then emailed Mr. Witt on 12 May, saying he would take up an offer to accept authorities signed by him.  On his own evidence, that was some six days after the original request.  By then, the registrar had ordered him to provide the documents.  Mr. Witt replied, advising that as no authorities had been received, he would be insisting on compliance with the subpoenas, and compliance with the registrar’s orders of 7 May. 

16. No documents were produced on 20 May.  Explaining the delay Mr. Price spoke of his study and other commitments and the constraints lectures placed on him although on his own account he elected to come to this court on 28 April (despite legal advice subpoenas had not been properly served) and again on 28 May, to fulfil idle curiosity. 

17. The trial was listed to commence on 3 June, and did so.  Mr Price agreed he was not at court on that day, although he conceded he knew the trial had been adjourned from 2 June to 3 June.  The evidence before the court is that inquiries by the wife’s lawyers as to whether any documents had been produced recently were responded to by court staff in the negative.  That is, the lawyers were told no documents had been produced pursuant to subpoena other than those already released and inspected.  I made a number of rulings on 3 June.  In the afternoon, junior counsel continued submissions on a number of evidentiary issues;  senior counsel were involved in negotiations.  The case was adjourned part-heard to 4 June.

18. Mr Price’s evidence is that he came to this court on 4 June.  He said he spoke to someone at the court and looked at the Law List, and saw that the case was listed that day.  He came to court because he wanted his costs.  He said he came into the court room where I was engaged in an early mention in another case.  He subsequently spoke to a number of court staff and then to his brother, the husband in the proceedings.  His brother said that the case was settling and he should “stick around”.  At about 11:30 am. Mr Price left the Registry. 

19. Mr. Price made no application that day for his costs, although he told me that is what he came to do.  Later, he ascertained from his brother that the matter had resolved;  all applications had been struck out.  The parties resolved the case by terms of settlement or a financial agreement;  the terms of the settlement are not known to the court.  As is routinely done, the court ordered that all subpoenaed documents be returned when it ordered that all applications be removed from the pending case list. 

20. What was not known at that time by the wife’s lawyers, or indeed, by me, was that on 26 May Mr. Price delivered a box of documents and a sealed envelope of documents to the registry.  Both were firmly sealed, and taped.  On every flat surface the word “privileged” was written in large letters, in red pen.  Mr Price told the court that he obtained further free legal advice as a result of an approach to Victoria Legal Aid, and it was as a result of that legal advice he wrote “privileged” all over them.  He said he was told that if he did that, the judge would have to inspect the documents, rather than the lawyer. 

21. Mr. Price said he told the lawyer advising him that his concern was confidentiality.  By marking the documents this way he anticipated a judge would look at the documents before they were provided to the wife’s solicitors;  the notation was designed to ensure the solicitors could not easily inspect the documents they had sought. 

22. Mr Price is not a lawyer.  He had only brief legal advice, on two occasions.  I cannot say if he told the solicitor to whom he was referred by VLA that his objections to production had already been overruled; it is unlikely.  Unsurprisingly, boxes of documents so marked were not brought to the attention of the solicitors for the wife. 

23. Unfortunately, included in the sealed box and sealed envelope, and thus tarred with the “privileged” brush, were two affidavits sworn by Mr Price, one in respect of C Pty Ltd and one in respect of the subpoena addressed to him, in which he set out his claim for costs, and in which he provided information about documents not produced.  In an affidavit sworn on 26 May but included in the sealed envelope, he claimed $105.75 costs.  Most of that was for taxis on 28 April and 7 May, $11.40 was for photocopying, and $2 for two phone calls he made to the court.  In an affidavit sworn the same day and included in the sealed box (in which were C Pty Ltd documents) he deposed to (and attached) an unparticularised account from Davidson’s Lawyers of $700.70.  It must be said that it is a very, very bare account.  It does not specify an hourly rate, or the number of hours work. It sets out no disbursements.  It simply notes that the account relates to the collection of the material, including a courier fee. 

24. The account is dated 18 May, which was a Monday.  It was two days before the final deadline for the production of documents, set by the registrar.  Mr. Price had the documents.  He had had the subpoenas since at least 28 April.  No documents were produced on 20 May. 

25. On 21 May, the day after the documents were to be produced, Mr Price sent an email to the wife’s solicitors advising that he had just received the documents necessary to comply with the subpoena.  It is clear from other emails which passed between them, that by 24 May, he was still corresponding with Mr Witt.  On 24 May, a Sunday, Mr Witt emailed Mr Price, saying he had received Mr Price’s email about the costs of compliance, and upon receipt of Mr. Price’s affidavit itemising the costs, he would review them and seek his client’s instructions as to payment.  At this stage, the documents were four days overdue.  Mr Witt noted his concern that the subpoenas had not been complied with.  By then, all that had been provided was the letter of 15 May, saying Mr. Price was too busy to comply. 

26. Mr. Witt repeated his earlier advice that compliance was not optional;  the documents had to be produced.  In that email of 24 May Mr Witt advised that unless there had been full compliance by Tuesday, 26 May 2009, his client would be asking the court to make a finding that Mr. Price was in contempt and for a penalty to be imposed. 

27. That same day, in the late evening, an email was sent to Mr Witt by Mr Price.  Mr. Price made it clear he did not accept the analysis he had been attempting to avoid compliance.  Rather, he said in that email:

    I have quite reasonably been questioning my rights at law regarding this gross invasion of my privacy and encroachment on my time, which has necessitated me directing numerous queries to the court and other legal sources, rather than simply relying on your comments.

28. In that email, he said he was “in the process of complying” and that should be obvious from the:

    …very fact that I have just obtained documents relating to the [C Pty Ltd] subpoena from Davidson’s and advised you of such.

    That was clearly a reference back to his email of 21 May.  He said he already had a large box of documents accumulated for Mr Witt’s reading enjoyment.  He concluded the email saying:

    Please do not be concerned.  You will receive all the documents in due course.

29. The boxes of documents to which I have referred were, in fact, delivered to the court on 26 May.  Whether it was coincidental that that was the deadline Mr Whitt had set or not, I cannot say. 

30. It is certainly not the fault of the wife or her solicitors that requests made to court staff about the production of documents did not bring to light these boxes marked “privilege”.  The court’s computer records note the delivery of a box from Mr. Price on 26 May.  The wife’s solicitors should have been advised.  Given the markings they would have had to stand the matter down while attempts were made to find Mr Price, and ascertain on what basis (for example, pursuant to an order of which they were unaware) the documents were deemed to be privileged. 

31. Without the benefit of the documents, the case settled and orders were made by me at 1:24 pm. on 4 June. 

32. Mr Price contacted the court soon after the consent orders were made on 4 June, advising that he wanted his costs.  He was advised to confirm that they had been sought from the wife’s solicitors, and refused.  When he advised the court that that was the case, and that he wanted to press his applications for costs, the matter was listed to today. 

33. The wife’s solicitor swore an affidavit on 26 June setting out the history of the matter.  The account is broadly consistent with my earlier summary.  I may have referred to matters not in Mr Witt’s affidavit, including court orders.

34. In his affidavit, Mr Witt opposed any order that his client pay Mr Price’s costs.  In his submission, the subpoena was never complied with.  He sought that Mr Price pay the wife’s costs of and incidental to the subpoena on an indemnity basis and he particularised those costs at $7,170, including counsel’s appearance today.  About half the costs relate to the attendance before the registrar on 7 May, 2009 to deal with the objection Mr Price sought to make on behalf of himself and of C Pty Ltd.  Thus, the court has before it is Mr Price’s application for costs, which I have outlined, and the wife’s cross-application.

35. As a general proposition a person who is required to produce documents on subpoena is entitled to be paid the reasonable costs of complying with the subpoena.  Compliance is central to that proposition.  Mr Price had these subpoenas by 28 April;  he appeared before the registrar that day.  He produced a box and an envelope of documents on 26 May, some six days after the last of a series of deadlines.  Further – deliberately and he says, based on legal advice – the documents were labelled to guarantee that they could not be readily inspected by the wife.

36. In the course of the first and second days of trial, counsel for the wife negotiated a settlement.  The wife’s lawyers knew nothing of these documents.  The case was compromised on the basis of the evidence as known.  When final orders were made on 4 June, no applications for costs were made.  I cannot say whether, absent Mr. Price’s application for costs, the wife would have sought costs from him. 

37. There is no doubt, on Mr Price’s evidence, that he is out of pocket.  It is impossible to say, on the documents before the court, what work by Davidson’s justified a bill of $700.  It notes no disbursements, no hourly rate, no summary of work undertaken.  His claim for taxi fares is much weaker.  He appeared on 28 April when he had received advice the subpoenas had not been served properly.  He had not responded to at least two emails from the wife’s solicitor.  It was reasonable for Mr. Witt to assume that Mr. Price had refused to acknowledge informal service and personal service would be necessary. 

38. The attendance at court on 7 May was necessitated solely by Mr. Price’s objection to production of documents.  Mr Price clearly finds it remarkable that he could end up paying a party’s costs of a day when he, the subject of a subpoena, merely exercised a legal right to make an objection.  That analysis ignores the reality of non-production.  An objection is routinely heard after documents are produced.  The judicial officer hearing the objection may need to look at documents to assess an objection.  If the objection is not sustained, the documents are then released.  In this case, the objection raised by Mr Price was found by the registrar to be without substance, but the wife’s lawyers were unable to inspect the documents sought, as Mr. Price had not produced them.    

1. A person who objects to production may make the objection when the documents are produced.  They will not be released for inspection or photocopying until the objection is dealt with.  On this occasion, because the objection was without substance, it could be dealt with absent the documents, but the wife’s lawyers had to come to court in order to meet the baseless objection. 

2. The court has a discretion as to costs.  Counsel for the wife realistically referred to the “ambitious scope” of an application for indemnity costs, but says the discretion to award costs should be exercised in his client’s favour. 

3. If the court were to make an indemnity costs order, a copy of the costs agreement would need to be before the court, which it is not. 

4. These have been very lengthy proceedings, although Mr Price’s involvement in them has been relatively brief.  Considering all matters that need to be taken into account, including the reasonableness of the behaviour of those involved;  their conduct, as evidenced by the various documents;  the fact that neither is responsible for the fact the wife was not told of the documents;  I would normally be minded to make an order that Mr Price receive some part of the costs he claims. 

5. However, having regard to the circumstances of his objection, made in the absence of production of the documents sought;  the failure of that objection;  the fact documents were produced well after the due date, I would normally be minded to make an order that Mr Price pay some of the costs thrown away by the wife as a result of his failure to comply with the subpoena.  As is clear, the costs the wife seeks are significantly higher than the costs Mr Price seeks. 

6. Balancing the matters advanced by Mr Price and by counsel for the wife and relevant evidence before the court, I propose to make no orders as to the costs of the subpoenas to Mr. Price and C Pty Ltd.  Costs will lie where they fall;  I find that appropriate.  My reasons for judgment will be transcribed and a copy will be available to the wife and to Mr. Price, if sought. 

7. I will certify for counsel. 

I certify that the preceding 45  paragraphs
are a true copy of the reasons for
judgment herein of the
Honourable Justice Brown AM.

Dated the           day of            2009.
…………………………………………
Associate.