Wilks v Qu (Ruling No 3)
[2023] VCC 764
•26 May 2023
IN THE COUNTY COURT OF VICTORIA
AT Melbourne
COMMON LAW DIVISION
Revised
Not Restricted
Suitable for PublicationDefamation List
Case No. CI-21-04887
ROBERT LEWIS WILKS Plaintiff v DORI QU also known as Qingshi Qu, Dori Deng Defendant ---
JUDGE:
HER HONOUR JUDGE CLAYTON
WHERE HELD:
Melbourne
DATE OF HEARING:
9 May 2023
DATE OF RULING:
26 May 2023
CASE MAY BE CITED AS:
Wilks v Qu (Ruling No 3)
MEDIUM NEUTRAL CITATION:
[2023] VCC 764
RULING
---Subject: CIVIL PROCEDURE
Catchwords: Costs – Subpoenas – Breach of Civil Procedure Act 2010 – Whether objection to subpoena is a cost of compliance – Whether compliance costs should be awarded on indemnity basis - Whether Civil Procedure Act 2010 applies to a subpoena addressee who is not a party – Whether plaintiff breached Civil Procedure Act 2010 by filing summons for costs – Whether costs of summons are part of costs of compliance
Legislation Cited: Civil Procedure Act 2010 – County Court Civil Procedure Rules 2018 County Court Act 1958
Cases Cited: ASADA v 34 Players and One Support Person (No 2) [2015] VSC 14
Charan v Nationwide News Pty Ltd (Ruling No 6) [2017] VSC 331
Hera Project Pty Ltd v Bisognin [No 4] [2017] VSC 270
Pyramid Building Society (in liq) v Farrow Finance Corporation (in liq) [1995] 1 VR 464
VICT v CFMMEU (Ruling No 2) [2018] VSC 467
Wilks v Qu (Subpoena Objection) [2022] VCC 1448
Ruling: The University of Melbourne’s application is allowed in part. The plaintiff’s application that the University of Melbourne pay its costs of objecting to the subpoena is dismissed.
---
APPEARANCES:
Counsel Solicitors For the Plaintiff Mr A Thapliyal (solicitor) ALT Legal Associates For the Defendant
For the University of Melbourne
No appearance
Ms R Preston
Corrs Chambers Westgarth
HER HONOUR:
Background
1The plaintiff, Robert Wilks, sues the defendant, Dori Qui, for defamation arising out of complaints Ms Qu made to the University of Melbourne (“University”) and others about Mr Wilks’ conduct.
2Mr Wilks subpoenaed the University and three individuals, Brian Lacy, David Jame and Sam Opat, in July 2022.
3The University objected to production of certain documents and to inspection of certain documents produced on subpoena by Mr Lacy. That objection was heard on 5 September 2022. I handed down my reasons on 6 September 2022[1] and reserved a right to the parties to be heard on the question of costs.
[1]Wilks v Qu (Subpoena Objection) [2022] VCC 1448.
4Since that time the University has attempted to resolve the question of costs with Mr Wilks.
5The University now seeks its costs of:
(a) compliance with the subpoena (“compliance costs”), as well as costs it incurred in connection with the subpoenas to Mr Jame and Mr Opat, and objection to inspection of subpoenaed documents produced by Mr Lacy, to be taxed in default of agreement on an indemnity basis; and
(b) this application for its costs (“summons costs”).
6By summons dated 4 May 2023, Mr Wilks seeks orders that the University pay his costs of the objection hearing (“objection hearing costs”) and his summons costs.
7The University and Mr Wilks both accuse the other of breaching the Civil Procedure Act 2010 (“CPA”).
Issues
8The issues for determination in relation to compliance costs are:
(a) What costs and expenses are recoverable under r42.11 of the County Court Civil Procedure Rules 2018 (“the Rules”);
(b) On what basis should any costs be made payable;
(c) Whether there has been a breach of the CPA or other disentitling conduct by the University such that the plaintiff is entitled to his costs of and incidental to the objection hearing. This enlivens a threshold issue of whether the CPA applies to the University. Mr Wilks concedes that if it does not, he is not entitled to a costs order pursuant to s29(1) of the CPA but presses his application pursuant to r63A.04 or the Rules.
9The issues for determination in the summons costs are:
(a) Whether the University’s costs of this summons are part of the costs of compliance and it is entitled to those costs on the same basis as any order in relation to the costs of objecting to the subpoena;
(b) Whether, if the University is not entitled to its costs on an indemnity basis pursuant to r42.11, the plaintiff’s conduct in relation to the summons is in breach of the CPA such that the Court should award indemnity costs;
(c) Alternatively, whether the University is in breach of the CPA (if it applies) or has engaged in conduct such that the Court should exercise its discretion to award summons costs to the plaintiff.
What are compliance costs?
10Rule 42.11 provides:
“Costs and expenses of compliance
(1)The Court may order the issuing party to pay the amount of any reasonable loss or expense incurred in complying with the subpoena.
(2)If an order is made under paragraph (1), the Court shall fix the amount or direct that it be fixed in accordance with the Court's usual procedure in relation to costs.
(3)An amount fixed under this Rule is separate from and in addition to—
(a) any conduct money paid to the addressee;
(b) any witness expenses payable to the addressee.”
11This rule is identical to r42.11 of the Supreme Court (General Civil Procedure) Rules 2015.
12The purpose of the rule is obvious. A subpoena is a means by which a stranger to the litigation is compelled under penalty to appear or make production. Failure to comply with a subpoena is a contempt of court. A non-party should not be left out of pocket when ensuring that the coercive powers of the Court to issue subpoenas are properly exercised.
13In the first instance, the issuing party is liable for the costs of the addressee. If the issuing party is ultimately successful in the proceeding, those costs will likely be payable by the losing party to the litigation. However, in the meantime, an addressee is entitled to have its costs paid in a prompt fashion and ought not have to wait until the resolution of the litigation for reimbursement.
14The requirement for an issuing party to meet the costs of the addressee is consistent with the overarching purpose of the CPA to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute. Having to pay costs of compliance discourages the use of the subpoena process to engage in “fishing expeditions”.
15The fact that an issuing party is responsible only for the “reasonable loss or expense” incurred further limits abuse of the subpoena process. An addressee who incurs unreasonable costs and expenses will not be reimbursed.
Compliance costs of the University subpoena
16The University objected to production of certain categories of documents on the basis of client legal privilege. Those objections were largely upheld. By taking the objection, the University ensured that the coercive powers of the Court to issue subpoenas were properly exercised and that evidence which ought not be adduced was excluded.
17The University says the fact that its objections were largely upheld establishes the reasonableness of the costs incurred in taking the objection, but even a losing claim for privilege may result in an issuing party being required to pay costs if there were sufficiently arguable grounds to maintain the claim.[2]
[2]Charan v Nationwide News Pty Ltd (Ruling No 6) [2017] VSC 331, [23].
18Mr Wilks argues that the Court cannot be satisfied that the costs claimed were reasonably incurred and that the University is not entitled to any costs for the work done for the objection hearing on 5 September 2023.
19I take this to be a submission that the University is entitled to compliance costs related to searching for and collating documents responsive to the subpoena, but that the University has not established the reasonableness of those costs and, in addition, is not entitled to the costs incurred in objecting to the subpoena because its conduct in relation to the objection was not reasonable.
20The parties have agreed that the assessment of costs should be done by the Costs Court in default of agreement. In the circumstances of this case, this is an appropriate means of fixing the costs pursuant to r42.11(2). Those costs are significant and ought be properly scrutinised by the Costs Court. As a result I do not have to determine the reasonableness of the quantum claimed.
21The question for determination is whether costs of compliance with a subpoena include costs of taking and being heard on an objection to that subpoena.
22In Pyramid Building Society (in liq) v Farrow Finance Corporation (in liq)[3] the Court accepted that it was “well established” that recoverable costs included not just the costs of collating and copying documents, but seeking advice as to privilege or as to claim for restricted access or use.
[3][1995] 1 VR 464, 468.
23In Charan v Nationwide News Pty Ltd (Ruling No 6), J Forest J held that an award of costs does not turn upon whether a claim of privilege is successful, but is intended to properly compensate a party who has “gone to the trouble and expense” of complying with a subpoena, and where conduct money does not adequately cover that expense.[4]
[4]VSC 331, [20].
24His Honour went on to say that it was not to the point that it might have been difficult for Mr Charan to gauge the efficacy of his resistance to the privilege claim, nor would it necessarily matter if the objection taken by the addressee was not successful. In that case it was entirely reasonable for the addressee to seek advice, take objection and be represented by senior counsel at the objection hearing. He held that the cost of compliance included those costs, though where an objection was “untenable”, the Court might exercise its discretion to refuse a costs order under the rule.
25In the present case, the objection was largely successful and it follows that it was reasonable for the University to both seek advice about taking an objection and be heard at the objection hearing.
26I do not understand either of the cases relied on by the plaintiff to depart from the principles set out in Pyramid or Charan that costs of compliance can include costs of objecting to a subpoena and being heard on that objection. In Hera Project Pty Ltd v Bisognin [No 4],[5] the Court held that expenses incurred in compliance with the subpoena included: advice as to validity of the subpoena and whether the addressee should comply with it; correspondence and attendances on the issuing party regarding its terms, particularly with a view to narrowing the scope; advice as to whether documents are subject to a claim for privilege; advice as to whether inspection of documents may be restricted; and attendances in court on return of the subpoena including to assert the documents should be protected from access. Whether an expense is incurred in compliance with a subpoena and whether an expense is reasonable are both questions of fact.
[5][2017] VSC 270.
27In VICT v CFMMEU (Ruling No 2),[6] Ierodiaconou AsJ disallowed certain costs but did not depart from the principle that the costs of taking objection to production are recoverable compliance costs.
[6][2018] VSC 467.
28The authorities are uniform in respect to the entitlement of an addressee to be reimbursed for costs of compliance, which can include costs of taking an objection to the subpoena or asserting a claim of privilege.
29I am satisfied that the University is entitled to its costs of compliance with the subpoena which include costs of and incidental to the hearing on 5 September 2022.
Compliance costs on what basis?
30Mr Wilks says the University did not reasonably incur costs because “having the onus of proof it made absolutely no attempt to engage on resolving the dispute by negotiation,” and it knew or ought reasonably to have known that Mr Wilks would not have known “of the significant change which occurred on 2 August 2021 in respect of Lacy’s engagement.”[7]
[7]Plaintiff’s written submissions dated 9 May 2023, 7.
31I take this submission to be that:
(a) Mr Wilks was not aware of the facts upon which the finding of client legal privilege was based, such that he could not form a proper assessment of the prospects that the University would succeed in proving that the privilege applied;
(b) If he had been aware, or if the University had engaged in an attempt to resolve the dispute by negotiation, the University would not have incurred costs and expense.
32Mr Wilks’ submission seems to be that he acted reasonably in opposing the University objection to production and therefore the University is not entitled to its costs. However the test is not the reasonableness of Mr Wilks’ conduct, but the reasonableness of the loss or expense incurred by the University in complying with the subpoena.
33In ASADA v 34 Players and One Support Person (No 2)[8] Croft J held that the general proposition is that, where an addressee of a subpoena has incurred costs and expenses in assisting the Court with respect to compliance with a subpoena and those costs are not covered by conduct money, that person is entitled to have those costs met by the issuing party.[9]
[8][2015] VSC 14.
[9] [2015] VSC 14, 17.
34In VICT her Honour held that the starting point must be “reasonable” costs rather than indemnity or standard costs. In the exercise of her discretion, her Honour excluded certain of the costs incurred by the addressee, including preparation for and attendance at the objection hearing. Her Honour held that those costs could have been avoided if the addressee had provided a basic description of the documents in circumstances “where a reasonable request had been made.” In her decision, she excluded certain items from the list of items for which costs were sought by the addressee, and otherwise ordered that the issuing party pay the addressee’s “reasonable costs and expenses” without specifying whether those costs were on an indemnity or standard basis.
35Nothing in her Honour’s decision departs from the principle that where an addressee has reasonably incurred costs in compliance with a subpoena, it should not be left out of pocket. In the circumstances of that case, she made findings of fact that some of the costs could have been avoided and therefore were not reasonably incurred.
36Mr Wilks argues that the University did not act reasonably because it did not provide “any listing of the documents over which privilege was claimed, instead making a blanket claim of privilege over all the documents.”[10] Mr Wilks says this mirrors the situation in VICT which resulted in the Court disallowing some of the costs claimed.
[10]Plaintiff’s written submissions dated 9 May 2023, 6.
37However in VICT, the addressee failed to provide a list of documents over which privilege was claimed, setting out the basis of the claim “after a reasonable request had been made”. No such request was made by Mr Wilks in this case.
38Mr Wilks submits that, had additional information been provided by the University, the hearing could likely have been avoided. I do not accept that submission for the following reasons.
39The University had sought to narrow the issues in dispute. On 3 August 2022, Mr Wilks was notified that the University objected to the inspection of the documents produced pursuant to the Lacy subpoena on the basis they may be protected by client legal privilege. The University had engaged Mr Lacy, a barrister. On 12 August 2022, the University wrote to Mr Wilks noting that it had now been served with a subpoena but due to the large number of documents that were responsive to the categories, it sought additional time to comply.
40On 22 August 2022, the University informed Mr Wilks that it had responded to the subpoena and objected to inspection of a number of documents by claiming client legal privilege “on the basis that they were created for the dominant purpose of Melbourne University’s in-house lawyers providing legal advice regarding the allegation raised by the defendant.”[11]
[11] Affidavit of Ajai Thapliyal dated 5 May 2023, exhibit ALT-1, 27.
41On 22 August 2022, the University sent a further letter in which it outlined its understanding of the proceedings filed by the plaintiff. In that letter the University said:
“We understand the proceeding concerns, in part, the circulation or republication of the Melbourne University Email and the allegations made within it. Given this, our client does not understand the investigation report commissioned by the University, and correspondence between Brian Lacy and the University’s in house legal team regarding the investigation after he was engaged to be caught by the subpoena. These documents relate to allegations the subject of a confidential investigation process. We do not understand these documents to concern the circulation or republication of the Melbourne University Email or the allegations made therein. The response to the subpoena is made consistent with this understanding. In any event our client considers that those documents are protected by legal professional privilege given Mr Lacy’s report was used by our client’s in house legal team for the purpose of providing legal advice to the University.”[12]
[12] Affidavit of Ajai Thapliyal dated 5 May 2023, exhibit ALT-1, 29.
42In response, the plaintiff’s solicitor, Mr Thapliyal, wrote on 24 August 2022:
“… so as to avoid any doubt, you are advised that my client entirely rejects and joins issue with all the propositions raised in your 22 August letter to me and email to the Court.”[13]
[13] Affidavit of Ajai Thapliyal dated 5 May 2023, exhibit ALT-1, 31.
43On 26 August 2022, Mr Thapliyal wrote:
“Your “understanding” of the scope of the subpoena is plainly incorrect…the understanding set out in your letter places an artificial limitation or gloss on the plain meaning of the subpoena categories. It is not clear to my client whether your client’s responses to the subpoena was limited to its own understand of the scope of the subpoena, or whether it has actually endeavoured to respond to the subpoena according to its plain meaning and your urgent clarification is required.” [14]
[14] Affidavit of Ajai Thapliyal dated 5 May 2023, exhibit ALT-1, 32.
44The response to this, if there is one, is not in evidence, but the University produced documents that included the Lacy report.
45In the meantime, the parties were discussing the objections taken by the University to inspection of documents produced by Mr Lacy. Although a consent minute was agreed as between the University and the plaintiff, the University formed the view there was little point proceeding with that consent minute. The reason for this was that time was against the parties in meaningfully progressing with those orders. In fact, the orders were not signed by Mr Thapliyal until 29 August 2022, three days after the date proposed in the orders for the University to notify the plaintiff of the objection to inspection. The objection was already listed for hearing on 5 September 2022.
46Mr Wilks sought to make much of the fact that the University did not proceed with the agreed proposal in relation to the Lacy documents. I do not accept that anything turns on this; the parties simply ran out of time, and in any event it made no difference. The University maintained its objection and Mr Wilks opposed it.
47Having regard to the response by Mr Wilks, and the tenor of his solicitor’s correspondence with the University, I do not accept that anything the University said about its claim for privilege would have avoided the objection hearing on 5 September 2022.
48Importantly, Mr Wilks never sought an itemised list of documents over which privilege was claimed and rejected any attempt by the University to clarify or narrow the category of documents sought. In VICT, the addressee failed to respond to a reasonable request. That is not the situation here.
49There is no basis for Mr Wilks’ claim that the University behaved unreasonably so as to reduce the costs to which they are otherwise entitled. In any event, the decision in VICT did not disentitle the addressee to costs on an indemnity basis, but rather to specific items which her Honour found need not have been incurred. Her Honour otherwise awarded “reasonable” costs.
50Applying the principles of ASADA and Charan, the purpose of r42.11 is to ensure that an addressee is not out of pocket for reasonable costs incurred. In ASADA, Croft J held that the authorities supported the proposition that an addressee was entitled to “all costs and expenses” provided they were reasonably incurred. He considered that a person who seeks to resist or comply with the subpoena process was entitled to be reimbursed so that they were not out of pocket,[15] necessitating an order that the expenses to which the addressee was entitled under r42.11 be calculated on an indemnity basis pursuant to r63.30.1.
[15] [2015] VSC 14, 19.
51In Charan, costs were only sought on a standard basis and were awarded accordingly.
52The language of the rule provides that the issuing party pay “the amount” of any reasonable loss or expense incurred, rather than “the costs” of any expense. The language is not that of the usual costs orders under O63A which refers to “costs” not “amounts”. “Costs” has a particular legal meaning. What is required under r42.11 is payment of the actual amount of the expense reasonably incurred.
53Provided that the steps taken by the addressee were reasonable and the expenses incurred were reasonable, making an order for “reasonable costs” would encompass an order that those costs be paid on an indemnity basis. Ordering costs on an indemnity basis acknowledges that the basis upon which costs are otherwise assessed, “standard costs”, does not reflect the true cost incurred. Rule 63A.30.1 provides that, on a taxation on an indemnity basis, all costs shall be allowed “except in so far as they are of an unreasonable amount or have been unreasonably incurred”.
54Provided that an expense or loss has been reasonably incurred, using the language of r63A.30.1, the addressee is entitled to “all costs”. Ordering costs on an indemnity basis in this case avoids any confusion about the basis for the assessment by the costs court.
Jame and Opat subpoenas
55Mr Wilks served subpoenas on Mr Opat and Mr Jame. The University says that at the date of the relevant events, both Mr Jame and Mr Opat were senior members of the Melbourne University Weightlifting and Powerlifting Club, which at that time was formally affiliated with the University.
56As a result, the University agreed to meet their legal costs of compliance with the subpoena. The University claims that those legal costs are a reasonable loss or expense incurred in complying with the subpoena and are thus payable by Mr Wilks.
57Rule 42.11 provides that the Court may order the issuing party to pay the amount of any reasonable loss or expense incurred in complying with the subpoena. The terms of the rule are potentially broad enough to encompass the loss or expense incurred by another party on behalf of the addressee.
58However, importantly, the costs and expenses must be reasonably incurred. The University may have considered it appropriate to incur costs on behalf of Mr Jame and Mr Opat. However there is no evidence before me to satisfy me that they had an obligation to do so.
59It was open to Mr Jame and Mr Opat to seek legal advice and seek reasonable costs of compliance in response to the subpoena. The reality may be that they did not do so because the University stepped in and paid for that legal advice. A bare assertion that the University did so because these were people “affiliated” with the University is insufficient evidence that the University was so obligated and therefore that the University reasonably incurred those expenses.
60Accordingly I am not satisfied that the University is entitled to the costs incurred in responding to the Jame and Opat subpoenas.
Lacy subpoena
61The University incurred costs of objecting to the Lacy subpoena. The basis of its objection was its client legal privilege over those documents.
62In my ruling of Wilks v Qu (Subpoena Objection)[16] I upheld those claims of privilege in relation to the majority of the subpoenaed documents. The few that were not privileged related to Mr Lacy’s engagement prior to the legal department of the University becoming involved on 2 August 2021.
[16][2022] VCC 1448.
63I do not consider the University’s costs of objecting to be costs incurred in complying with the subpoena, pursuant to r42.11. However, I am satisfied that the University is nevertheless entitled to its costs of objecting to the Lacy subpoena pursuant to my broad discretion to award costs per r63A.04, to the extent that any of those costs are separate and distinct from its costs already incurred in compliance.
64The objection was well taken and arose in the context of another non-party to the litigation, Mr Lacy, electing not to assert his own claim for client legal privilege over the produced documents. In that circumstance and given that the University was the client to whom the privilege attached, it was well within its rights to assert privilege and to have its costs for successfully doing so met.
65It is not to the point that the plaintiff had some success in resisting the application. The focus of the question is, once again, not the reasonableness of the plaintiff’s conduct in resisting the application, but the tenability of the objecting party’s position. The fact that the plaintiff may have acted reasonably, and the fact that he had some success, are matters that may be relevant to the ultimate determination of costs as between him and the defendant.
66Although the terms of r42.11 do not extend to the circumstances of the University objecting to inspection of the Lacy documents, for the same reasons articulated above, a stranger to the litigation who has a reasonable claim for client legal privilege ought not be out of pocket for exerting that claim. Accordingly, I find that the costs of the University objecting to the Lacy inspection should be paid by the plaintiff on an indemnity basis. I note that those costs are unlikely to be significant, as most would already have been incurred as part of the compliance costs.
Does the Civil Procedure Act apply to the addressee of a subpoena?
67Mr Wilks submits that the CPA applies to the University because a “party” is defined in the CPA to mean a party to a civil proceeding, and a “civil proceeding” is defined as any proceeding in a court other than a criminal proceeding or quasi-criminal proceeding. He says an objection hearing is a civil proceeding within the terms of the CPA, with the objector “necessarily assuming the position of contradictor and the role of the objecting party to a civil proceeding”.
68He says that a finding that the University is not bound by the CPA would “lead to the absurd result that … only the plaintiff would be bound by the provisions of the CPA and the Practice Note, whereas a party in the position of UniMelb [sic] can breach the requirements of the CPA at will and with impunity”.
69He submits that the County Court Commercial Division Subpoenas Practice Note provides that “consistent with the obligations under the Civil Procedure Act parties should discuss the objection to try to resolve the issue” which strengthens his argument that an addressee is a party.
70Dealing with the last point first, I do not accept that the terms of the Commercial Division’s Subpoenas Practice Note answer the question of whether the CPA applies. The CPA either applies to an addressee or does not. The fact that a practice note encourages parties to conduct themselves in a manner “consistent” with the CPA cannot impose some obligation that otherwise does not exist.
71The County Court Act 1958 (“CCA”) defines “party” and “proceeding” as follows:
party includes a party to a civil proceeding and every person served with notice thereof or attending on the hearing of the same although not named as a party thereto and includes a body politic or corporate
proceeding means any matter in the court
72The Rules defines a party for the purpose of O63A as follows:
party includes
(a)a person not a party to a proceeding by or to whom costs in respect of the proceeding are payable by or under any Act or these Rules or any order of the Court…
73The CPA definition of a “party” differs from the CCA definition. Under usual principles of statutory interpretation, the inclusion in the CCA of additional categories of persons who are considered a “party” must do some work. If the CPA had intended to include persons served with a notice or attending a hearing as a “party” those words would have been included in the definition.
74If, as the plaintiff submits, a subpoena objection hearing is a civil proceeding for the purposes of the CPA, then Chapter 4 of the CPA would apply, which requires a party and the party’s legal practitioner to file a proper basis certification on “the filing of the party’s first substantive document in a civil proceeding”. This is required unless the Rules provide that a document is exempt from a proper basis certification requirement. There is nothing in the Rules which exempts a subpoena objection from the requirement to file a proper basis certification, nor is there any practice in this Court or any other court for an objector file a proper basis certification. This is likely because the CPA does not apply to a subpoena addressee.
75This does not, in my view, lead to an “absurd result” as submitted by the plaintiff. There are good policy reasons why a stranger to a proceeding, such as an addressee, ought not be burdened with the significant obligations imposed by the CPA. The incentive for an addressee to act reasonably comes from the terms of r42.11 itself, which ensures that the addressee is only able to recover expenses reasonably incurred, and further from the provisions of O63A. Under O63A there is no doubt that an addressee is a party to a proceeding, and is bound by any order made by the Court under that order. Egregious conduct by an addressee could result in the Court exercising its discretion under r63A.04, including an order for indemnity costs against that party.
76The Court already has power to deal with an addressee who engages in inappropriate conduct by making costs orders. Imposing additional obligations under the CPA may be inappropriate in light of the fact that the Court is already exerting coercive powers.
77However, if I am wrong, the plaintiff has not pointed to any conduct by the University which breaches the obligations imposed on a party by the CPA.
78The University acted reasonably. It took an objection that was open to it promptly, communicated that objection to the plaintiff and attempted, without success, to narrow the scope of the subpoena.
79Nothing in the University’s conduct would either disentitle it to its costs of compliance or be in breach of the overarching obligations, if they applied.
Do the University’s compliance costs include summons costs?
80I have already found that, under r42.11, an addressee should not be out of pocket in complying with a subpoena.
81Whether the costs of chasing those costs of compliance are themselves reasonable costs of compliance will turn on the facts of a particular case.
82On 6 September 2022, I handed down my ruling in relation to the subpoena objection and said I would hear the parties on the question of costs.
83On 11 October 2022, the solicitors for the University sent Mr Thapliyal a letter on the question of costs. In that letter it set out the costs it had incurred in relation to the University subpoena and the objection to the Lacy inspection and made an offer to accept 70% of its actual costs in settlement.
84Part of Mr Wilks’ claim relates to an email the defendant sent to the University of Melbourne, referred to as “the MU email”.[17]
[17] Second amended statement of claim [5B].
85In response Mr Thapliyal sent an email response:
“As matters presently stand, my client is yet to receive a schedule of all persons who received the MU email or the allegations contained within the MU email, as was submitted to the Court and referred to in her honour’s judgment. This ought to have been provided before the scheduled hearing of the serious harm issue on 13 September 2022.”
86Many of the documents sought by Mr Wilks were subject to client legal privilege. Nevertheless it was apparent at the objection hearing that Mr Wilks may well be entitled to put before the Court the extent of circulation of the MU email at the serious harm hearing. I raised with the University whether they would be prepared to provide this information. Its lawyers indicated it would be prepared to provide this information and I referred to this in my ruling. In the end, the serious harm hearing did not proceed and, as I understand it, Mr Wilks never requested the list. Consequently it was not provided.
87By the tone of Mr Thapliyal’s email, it appears Mr Wilks was attempting to cast the non-provision of the list as a dereliction of duty by the University. This is inappropriate. The onus was on Mr Wilks to take those steps necessary to prepare his case for the serious harm hearing. It was not for the University to undertake additional work, despite being willing to do so, unless specifically requested. The University says this email is indicative of the approach taken thereafter by Mr Wilks, through his lawyer Mr Thapliyal, to “fight fire with fire”. An examination of the subsequent conduct of Mr Wilks through his lawyer demonstrates this is a conclusion difficult to avoid.
88Notably, Mr Thapliyal’s email of 11 October 2022 made no response on the question of costs.
89On 19 October 2022, the University’s solicitors, Corrs Chambers Westgarth, provided a list of the persons who had received the MU email, noting that it had not been requested to provide the list and that it “cannot be expected to intuit when its assistance is required or when court dates are taking place without express communications from the parties”. The letter also noted that there had been no response to the costs offer and reiterated that offer.
90No response to that letter was received.
91On 27 October 2022, Corrs informed Mr Thapliyal that if there was no response by 28 October 2022 the University would contact the Court seeking that the question of costs be resolved.
92On 27 October 2022, Mr Thapliyal responded, saying that the offer was “unreasonable and not one to which my client can either give due and proper consideration or formulate a meaningful response”. He requested an itemisation of costs as well as reasons for a number of the claimed items.
93On 15 November 2022, Corrs sent Mr Thapliyal a further letter setting out the costs claimed for the University, Mr Lacy, Mr Jame and Mr Opat. That letter included a breakdown of the costs incurred, the basis of its offer, and a four-page schedule itemising the date, action taken and time recorded for each cost claimed.
94There was no response to that letter.
95On 23 December 2022, the University contacted the Court seeking a date for its costs summons. Due to availability of parties the matter was listed for hearing on 9 May 2023.
96On 24 April 2023, John Tuck of Corrs filed his affidavit in support of the University’s claim for costs.
97On 27 April 2023, Mr Thapliyal sent a lengthy email making various assertions in relation to the conduct of the University including, “Your client elected to proceed by stealth as opposed to the path of cooperation mandated by the CPA” and “The conduct … constitutes a breach of the overarching obligations enlivening the discretion of the Court to make costs orders against your client under Section 29 of the CPA”. He then made what purported to be a Calderbank offer to resolve the issue of costs on the basis that “both parties walk away bear their own costs of and incidental to the Subpoena served on the University of Melbourne, the Objections hearing and (given this has been raised by your client) the Jame and Opat Subpoenas”.
98On 4 May 2023, the University rejected the offer to bear its own costs, informed Mr Thapliyal of its further costs incurred in relation to the summons and made a further offer to settle the costs question for an amount less than 50% of the actual costs incurred. Included in this offer was the invoice of costs sent by Corrs to the University including a schedule itemising of the date, action, lawyer, time and price of the work done, as well as the invoice raised by Dever’s List for counsel fees with the date, action and price itemised.
99In response to this offer, Mr Wilks filed a summons seeking orders that the University pay his costs of and incidental to the objection hearing and the summons.
100While all this was occurring, Mr Thapliyal and Corrs had engaged in correspondence in relation to a separate but related matter involving Mr Wilks and the Commonwealth Bank of Australia (“the CBA matter”). The University submitted that the conduct by Mr Wilks through his lawyer in this separate matter ought to be considered in this application. I do not consider there is sufficient evidence for me to draw any conclusions about Mr Wilks’ or Mr Thapliyal’s conduct in the related matter and have not considered it for the purpose of this application.
101What the evidence does disclose is that the University made a number of offers to resolve the question of costs, offering to accept 70% and then 50% of the actual costs it had incurred, and responding to each request of Mr Thapliyal to provide information.
102In response Mr Wilks made various assertions about the University’s conduct and, eventually, an offer for each party to bear their own costs.
103At the hearing the University informed the Court that a further offer by the plaintiff had been made shortly prior to the hearing for the plaintiff to pay reasonable costs, taxed immediately, of the following items only:
(a) Advice;
(b) Work to collate; and
(c) Delivery of documents
in relation to the University subpoena.
104Mr Thapliyal maintained at the hearing his submission that Corrs had failed to properly disclose the basis for the costs the University incurred and had not provided an itemisation enabling his client to meaningfully respond. It is not apparent, on the basis of the evidence, what more he was seeking from Corrs; however, if the information was in fact deficient, it was up to him to request further detail.
105A subpoena addressee entitled to costs of compliance is ill-served if it is put to considerable expense which it cannot recover in order to obtain those costs.
106Unless there is unreasonable conduct by an addressee such that the costs incurred in recovering the expense of compliance are excluded, or egregious behaviour such that the Court’s discretion to make an adverse costs order against the addressee is enlivened, costs of obtaining the reasonable loss or expense incurred in complying with the subpoena are costs caught by r42.11 and are included in compliance costs and payable on the same basis.
107I order the plaintiff to pay the summons costs on an indemnity basis, notwithstanding the University has not been successful in relation to the Opat and Jame subpoenas. I do this because:
(a) The additional costs incurred in pursuing the costs on summons of the Opat and Jame subpoenas are negligible;
(b) The University’s willingness to negotiate and to have the matter assessed by the Costs Court strongly supports a finding that the matter could have resolved without the need for this application had the plaintiff negotiated in good faith. I note that the University’s first offer did not include any claim in relation to the Opat and Jame subpoenas;
(c) The plaintiff’s offers were not reasonable. They did not include any component for the costs incurred in the objection hearing, despite clear authority that such costs are generally recoverable. In light of my ruling on the subpoena objection, there could be no basis upon which Mr Wilks could have reached the conclusion that the objection was untenable so as to disallow those costs;
(d) My findings below in relation to the CPA.
Has the plaintiff breached the CPA?
108If I am wrong that the summons costs are compliance costs, I am nevertheless satisfied that the University is entitled to its costs of the summons on an indemnity basis.
109While there might be doubt as to whether the overarching obligations under the CPA apply to the University, there is no such doubt they apply to both Mr Wilks and Mr Thapliyal.[18]
[18] Civil Procedure Act 2010, s10(1).
110Each person to whom the overarching obligations applies has a paramount duty to the Court to further the administration of justice in relation to any civil proceeding including any interlocutory proceeding.[19]
[19] Civil Procedure Act 2010, s16(a).
111A person to whom the overarching obligations apply must not make any claim that is frivolous, vexatious, an abuse of process or does not, on the factual and legal material available to the person at the time of making the claim, have a proper basis.[20]
[20] Civil Procedure Act 2010, s18.
112Mr Wilks, by his solicitor Mr Thapliyal, made a claim by summons for the University to pay his objection hearing costs and his summons costs.
113The purported basis of this claim was that the University conduct breached the overarching obligations of the CPA, or was otherwise so egregious as to warrant a costs order in favour of Mr Wilks.
114This was an extraordinary step to take. The evidence does not disclose any factual or legal material upon which Mr Wilks or Mr Thapliyal could consider that there was a proper basis to make such a claim.
115I am satisfied on the evidence that at all times the University behaved appropriately in compliance with the subpoena.
116The conduct of Mr Wilks and Mr Thapliyal in issuing this summons was a blatant attempt to exert pressure on the University to resolve the dispute on a basis favourable to Mr Wilks.
117The basis for Mr Wilks’ claim appears to be his assertion that the University had acted unreasonably in not providing a list of documents over which privilege was claimed. Even on the authority on which he relied, VICT, a failure to provide a list of documents over which privilege was claimed did not result in a costs order in favour of the issuing party. A court would have to be comfortably satisfied that an addressee had behaved in an egregious way, to make a costs order in favour of the issuing party. At most, the conduct of which Mr Wilks complains would have disentitled the University to some or all of its costs. I can see no basis on the evidence for either Mr Wilks or Mr Thapliyal to have concluded that this would entitle Mr Wilks to a costs order in his favour.
118I am satisfied that issuing the summons was a breach of the overarching obligations owed by Mr Wilks and Mr Thapliyal and would warrant an order for indemnity costs.
Should the University pay the plaintiff’s costs of the summons?
119It follows from my findings above that there is no basis for the claim that the University should pay the plaintiff’s costs of the summons.
120This finding does not mean there could be no circumstances in which an addressee is required to pay the costs of the issuing party; it will depend on the facts and circumstances of the individual case and the reasonableness or otherwise of the conduct.
121Nor does this mean that an addressee will always be entitled to its costs of pursuing compliance costs on an indemnity basis. There may be circumstances in which costs cannot be agreed and must be determined by the Court. So much was envisaged by my reserving the rights to the parties to be heard on the question of costs.
122What is required is for parties to engage sensibly on the question of costs. In this case only the University made a genuine attempt to engage sensibly on the question of costs.
Orders
123For the reasons set out above I will make orders that:
1. The plaintiff pay the University of Melbourne’s costs of compliance with the subpoena issued to the University of Melbourne, including the costs of and incidental to the objection hearing, on an indemnity basis to be taxed forthwith;
2. The plaintiff pay the University of Melbourne’s costs of objecting to inspection of documents produced by Brian Lacy pursuant to subpoena, on an indemnity basis, to be taxed forthwith;
3. The plaintiff pay the University of Melbourne’s costs of and incidental to its summons for costs dated 24 April 2023 and of and incidental to the plaintiff’s summons for costs dated 4 May 2023. For the avoidance of doubt, those costs include costs incurred in attempting to resolve the costs dispute, but do not include costs incurred in relation to the CBA matter.
4. The plaintiff’s application by summons dated 4 May 2023 is dismissed.
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