Zova & Elliott and Anor
[2008] FamCA 166
•14 March 2008
FAMILY COURT OF AUSTRALIA
| ZOVA & ELLIOTT AND ANOR | [2008] FamCA 166 |
| FAMILY LAW – PRACTICE & PROCEDURE – SUBPOENA - WITNESS EXPENSES – Claim by legal practitioner for witness expenses – Claim for “substantial loss or expense” – Claim assessed FAMILY LAW – PRACTICE & PROCEDURE – SUBPOENA – WITNESS EXPENSES – Unusual circumstances where subpoena issued by wife’s solicitors but served by husband’s solicitors pursuant to Court order – Question whether issuing party or serving party or both or neither should pay the witness’s substantial loss and expense – Exercise of discretion – Determination that the issuing party should be responsible to reimburse the witness his substantial loss and expense |
| Family Law Rules 2004 r 15.23(3), r 15.26, r 15.36, r 15.14(2) and (3) |
| G & D [2005] FamCA 1429 Wheeler v Philip Morris (1989) 97 ALR 282 |
| APPLICANT: | Mr Zova |
| FIRST RESPONDENT: | Ms Elliott |
| SECOND RESPONDENT: | Mr Elliott |
| FILE NUMBER: | BRF | 747 | of | 2005 |
| DATE DELIVERED: | 14 March 2008 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | O'Reilly J |
| HEARING DATE: | 7 and 12 September 2007 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Westbrook of Counsel |
| SOLICITOR FOR THE APPLICANT: | Simonidis Shoebridge |
| THE RESPONDENT WIFE: | In person |
| SOLICITOR FOR THE RESPONDENT HUSBAND: | Mr Foster, Hemming & Hart |
Orders
In relation to the orders made by Registrar Gassner on 19 April 2007:
(a)in order 2 the words “at the expense of the Applicant” are set aside; and
(b)orders 4 and 7 are set aside.
The wife is to pay to Mr Zova within 60 days $10,255.89 for his substantial loss and expense incurred in complying with the subpoena issued on 30 March 2007 and of his application to set aside the subpoena and to seek the recovery of his substantial loss and expense.
Mr Zova’s alternative applications that the husband pay his substantial loss and expense, or the wife and the husband pay his substantial loss and expense in such proportions as the Court may consider appropriate, are dismissed.
The husband’s application that the wife pay his costs of and related to Mr Zova’s application against the husband is dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Zova & Elliott & Elliott is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRF 747 of 2005
| Mr ZOVA |
Applicant
Ms ELLIOTT
First Respondent
And
| Mr ELLIOTT |
Second Respondent
REASONS FOR JUDGMENT
Application
Mr Zova, solicitor, conducts a sole practice. He seeks under Rule 15.23(3) of the Family Law Rules 2004 (the Rules) the reimbursement to him of substantial loss and expense incurred in complying with a subpoena issued to him on 30 March 2007 in s 79 proceedings between the wife and the husband.
His claim is made against the wife, or alternatively the husband, or alternatively both in such proportions as the Court may consider appropriate.
The subpoena, although issued by the wife’s solicitors, unusually was served by the husband’s solicitors, but pursuant to a Court order that they do so.
Further application
On 19 April 2007, Registrar Gassner made several orders.
The wife seeks that the orders made against her interests, namely orders 2 (insofar as it concerns her), 4 and 7, each of which comprise costs orders against her, be set aside for want of procedural fairness on the ground that she had no notice of any such costs applications against her and had neither appeared nor been represented on that date.
Background
The trial of the s 79 proceedings between the wife and the husband was listed for hearing on 23, 24 and 26 April 2007.
It had been listed on two prior occasions, namely 17, 18 and 19 July 2006 and 30, 31 October and 1 November 2006.
On the first occasion, the matter was not reached.
On the second occasion, the parties apparently were notified by the Court two days before the allocated dates that the matter was not to proceed.
Until 15 February 2007, Mr Zova had been the wife’s solicitor on the record in the proceedings.
On 16 March 2007, at a pretrial conference conducted by Registrar Stevens the wife, who appeared for herself on that occasion (by telephone), apparently told the Registrar that her witnesses included Mr Zova in relation to affidavits filed by him on 18 October 2006 and in early July 2006. The trial information sheet includes a notation that the husband required Mr Zova for cross examination. At the pretrial conference, the husband had been represented by Mr Foster, solicitor, Hemming & Hart Solicitors.
Mr Zova’s affidavit filed on 18 October 2006 relates to procedural matters, in particular earlier mutual allegations of non disclosure and the joinder of further parties to the proceedings. The second affidavit referred to by the wife as one being filed in “early July 2006” seems not able to be located on the Court file. It may be that it does not exist, or if it does, may not have been filed. It is not anywhere suggested that Mr Zova was capable of being a witness of fact in the wife’s case. I recall however, as the trial judge, that mutual allegations of continuing non disclosure remained at the commencement of the trial. Mr Foster, presumably, intended cross examination of Mr Zova directed to the non disclosure issue. It is difficult however to fathom this having regard to the wife’s legal professional privilege in respect of her former retainer of Mr Zova. Perhaps, it was proposed to argue that because at the pretrial conference the wife indicated her intention to rely on Mr Zova’s affidavit (or affidavits) she should be taken to have waived her legal professional privilege. However, as a litigant at that stage representing herself, I doubt that any judge easily would have found such intention on her part.
Underlying the wife’s stated intention at the pretrial conference to rely on the affidavit (or affidavits) of Mr Zova, there was an ongoing fee dispute between the wife and Mr Zova. Certainly, at the trial, the wife, who was born and raised in Russia, although well educated and very fluent in the English language, had difficulty in separating the issues of her dispute with the husband and her separate dispute with Mr Zova, who had claimed a possessory lien on his file related to her unpaid fees. She was concerned, as a self represented litigant, that unless somehow she was able to call Mr Zova as a witness at the trial she would not have access to documents on it which she wished to tender in her case against the husband. See, for example, affidavit Mr Zova filed 31 August 2007, annexure PDZ5, comprising a letter from the wife to Mr Zova apparently received by him on 18 April 2007, which letter enclosed a list of documents in his possession which the wife wanted to tender at the trial.
Following the pretrial conference on 16 March 2007, the subpoena naming Mr Zova was issued by the Court on 30 March 2007. It was issued at the request of Duffield & Associates Solicitors. Item 3, on the first page, which required entry of the name of the party filing the subpoena, was blank. Item 5 recorded that the lawyers who caused the issue of the subpoena were Duffield & Associates, who had also on 30 March 2007 filed a Notice of Address for Service on behalf of the wife. The inevitable conclusion thus is that the subpoena was issued on behalf of the wife. On 5 April 2007, six or so days later, Duffield & Associates filed a Notice of Ceasing to Act. Importantly, however, before ceasing to act, they did not serve the subpoena on Mr Zova, nor did the wife, and the subpoena was not subsequently served on Mr Zova by the wife or anyone representing her.
Ms Sinclair, solicitor in the employ of Hemming & Hart, assisting Mr Foster, who had conduct of the matter for the husband, told me from the Bar table that the Registry practice is that upon the issue of a subpoena one copy is kept on the Court file and service copies are provided to the solicitor or party who requested the issue, the intention being that such solicitor or party then should attend to service of the subpoena (if the solicitor or party intends to proceed to service, which may not always be the case) and that the solicitor or party who has requested and obtained the issue of the subpoena is intended to notify the recipient of the subpoena at the time of service by a covering letter the date of an occasion described by Ms Sinclair as the “subpoena listing date”. In this case, the subpoena listing date was 19 April 2007, a Thursday, and the second last business day before the trial was to commence on the following Monday 23 April 2007. It is clear that Mr Zova, prior to 19 April 2007, was not served with the subpoena, nor given any notice of the subpoena listing date. In these circumstances, it can only be imagined that the service copies of the subpoena, more likely than not, may still be in the possession of Duffield & Associates. It is unclear whether those solicitors, before ceasing to act, told the wife of the issue of the subpoena or of the subpoena listing date.
The subpoena comprised two pages. On the first page, in the top left hand corner, appeared three bullet points allowing the selection of the purpose of the subpoena, namely to give evidence only, to give evidence and produce documents or to produce documents only. The third was selected, that is “produce documents only”. The instructions on the subpoena form directed the person or party completing the document to go to Part D. However, on the second page of the subpoena, at Part D, no documents were specified to be produced and no time or date was inserted for production of the documents, those sections being left blank, there being reference only to a place to produce documents. Although the subpoena, in the part to which I have referred on the first page, specified that it was a subpoena to “produce documents only”, on the second page, at Part B, headed “DETAILS OF ORDER TO GIVE EVIDENCE ONLY”, appeared the information “23/04/2007 or such other day as is arranged”, with the place of attendance nominated as “Family Court of Australia at Brisbane”.
I have mentioned that it is unclear whether Duffield & Associates, before ceasing to act, told the wife of the issue of the subpoena or of the subpoena listing date. However, despite the deficiencies in the subpoena to which I have referred (which in my view, because of those deficiencies ought never have been issued by the Court) there is nothing in the material to suggest that Duffield & Associates were not acting at the time of the issue of the subpoena within the scope of their retainer by the wife.
It appears that the only persons present at the hearing on 19 April 2007, the subpoena listing date, were the Registrar and Ms Sinclair.
The orders made by the Registrar on that date were:
1The Applicant’s subpoenas for production of documents addressed to National Australia Bank, Suncorp Metway, Bendigo Bank and Qld Police are enlarged to 10:00 AM on 23 April 2007.
2The Respondent is to forthwith receive copies from the Court Registry, at the expense of the Applicant, of the Applicant’s subpoenae to [MR], [JM] and [Mr Zova] requiring their attendance at trial to give evidence, and of the subpoenae to Suncorp Metway, Bendigo Bank, Qld Police, and National Australia Bank.
3In accordance with Rule 7.18 of the Family Law Rules 2004 (Cth), the Respondent be at liberty to serve by way of post, fax and/or electronic means the subpoenae to [MR] and [Mr Zova].
4The Applicant shall pay any and all costs of the witnesses in relation to compliance with the subpoenas referred to in order 3 hereof.
5The time for service, pursuant to Rule 15.28(1) of the Family law Rules 2004 (Cth), in relation to the subpoenas to [MR] and [Mr Zova], be abridged.
6The witness [Mr Zova] is ordered to attend Court to be cross-examined, and if he fails to attend, the Court shall give consideration to issuing a warrant pursuant to Rule 15.36 of the Family law Rules 2004 (Cth).
7The Applicant shall pay the Respondent’s costs of and incidental to the subpoenae, in accordance with Rule 15.26 of the Family Law Rules 2004 (Cth), on an indemnity basis. Such costs are fixed in the sum of $2138.60 and are payable by the Applicant to the Respondent by 4: PM on 31 May 2007.
In the orders, it is plain that reference to the “Applicant” is a reference to the wife and that reference to the “Respondent” is a reference to the husband.
The order records that there had been no appearance by or on behalf of the wife.
Rule 15.36, referred to by the Registrar in order 6, provides as follows:
RULE 15.36 NON-COMPLIANCE WITH SUBPOENA
15.36 If:
(a) a named person does not comply with a subpoena; and
(b) the court is satisfied that the named person was served with the subpoena and given conduct money (see rule 15.23);
the court may issue a warrant for the named person’s arrest and order the person to pay any costs caused by the non-compliance.
Note A person who does not comply with a subpoena may be guilty of contempt (see section 112AP of the Act).
Mr Zova’s evidence, which I accept, is that at 3.41pm on 19 April 2007, he received a facsimile from Hemming & Hart, the solicitors for the husband, containing a copy of the subpoena and a copy of the orders made by the Registrar earlier on that day, and that, until receipt of the facsimile, Mr Zova knew nothing of the issue of the subpoena.
Order 6 is quite extraordinary, and potentially invalid. First, the Registrar (by order 3) must be taken to have known that the subpoena to Mr Zova had not been served on him. Secondly, the time for compliance with the subpoena, according to its face, had not arisen, and would not arise until Monday 23 April 2007. Thirdly, order 6 commands Mr Zova to attend the Court (on a date not specified) “to be cross-examined”, yet purports to invoke, for any failure to attend, the remedy under the Rules which deals with non compliance with a subpoena. (Rule 15.14(3)(c), quite separately, deals with orders to attend for cross examination, but only after failure to attend pursuant to a competent notice under Rule 15.14(2), which had not occurred in this case, by reason of short service. I will refer again to this aspect of the matter below).
Order 5 is also quite extraordinary (but not potentially invalid), not for the fact of abridgement of time for the service of the subpoena on Mr Zova, but because the abridgement inevitably would have a severe impact upon him, leaving only one business day and one weekend before the date for compliance specified in it, Monday 23 April 2007.
Order 3 is also quite extraordinary (but again, not potentially invalid), requiring an adversarial party to serve a subpoena issued by the opposite adversarial party, especially having regard to the mandatory costs consequences to the issuing party (see Rule 15.23(1) and (2)), the discretionary and thus further potential costs consequences (Rule 15.23(3)) and the circumstance that it is quite open, always, for an issuing party to issue a subpoena and then, for legitimate reason, decide not to serve it.
Initially, it was not clear whether the orders affecting Mr Zova (orders 3, 5 and 6) specifically had been sought by Ms Sinclair or had been made by Registrar Gassner without application by Ms Sinclair and of his own volition. Mr Foster, in argument, agreed that only two inferences were available, namely that Ms Sinclair had asked for the orders concerning Mr Zova, or alternatively that Registrar Gassner had made them of his own volition. Mr Foster urged that I ought not draw the inference that Ms Sinclair had invited those orders, because of inability to exclude the other equally available inference. Mr Westbrook of Counsel, for Mr Zova, urged however that I should draw the inference that Ms Sinclair had invited the orders, on the basis that Registrars do not ordinarily make orders which are not sought by a party; that in essence the wife had “abandoned” the subpoena because it had not been served; and that as at 19 April 2007 the husband was the party who “nonetheless pursued it”. There is evidence that on 10 April 2007 (nine days before the subpoena listing date) the husband’s solicitors had served on Mr Zova a notice to attend for cross examination at the trial. The notice however was out of time to be effective (see Rule 15.14(2), referred to above). Conceivably thus, the husband, by his solicitors, may have had a motive in the husband’s interests to seek order 6, namely that Mr Zova attend the Court to be cross examined, because the husband’s notice to Mr Zova to attend for cross examination was short served, with the effect that Mr Zova was not required to comply with it. If, as I perceive, Mr Foster wanted the opportunity at the trial for his Counsel to cross examine Mr Zova related to the alleged non disclosure issue, plainly there is a connection between the making of order 6 and the husband’s interests, rather than the wife’s interests.
Light finally was shed on the matter, however, during the hearing on 7 September 2007, by Ms Sinclair swearing to paragraphs 17 and 27 of Mr Foster’s submissions in the matter (which otherwise had not been the subject of any evidence). Accordingly, paragraphs 17 and 27 of Mr Foster’s submissions, as sworn by Ms Sinclair during the hearing, became exhibit 3, containing the candid admission by Ms Sinclair that the husband’s solicitors had “requested that the court issue orders … including orders compelling the attendance of Mr Zova”.
However, in fairness to Ms Sinclair, her request to Registrar Gassner that the Court issue orders including orders “compelling the attendance of Mr Zova” must be put in context, in particular the context that, according to par 17(e) of ex 3, on 16 March 2007 at the pretrial conference Registrar Stevens had told the husband’s solicitors to “ensure” that the matter proceeded to trial on 23 April 2007 (there having been, as I have said, two sets of trial dates already vacated); that as at 19 April 2007, until the hearing before Registrar Gassner, the husband’s solicitors did not know about and had not seen the subpoena issued by Duffield & Associates on behalf of the wife; and that Registrar Gassner, in the course of that hearing, had stated to Ms Sinclair that the subpoena issued by the wife against Mr Zova had required the production of documents and his attendance at the trial. (I have referred above to the contradictions in the subpoena, and its deficiencies).
In fairness to Ms Sinclair, it is important to set out the full text of pars 17 and 27 of ex 3:
17. 16 March 2007: Parties attended the Pre Trial Conference before Registrar Stevens at which:
(a)The Wife informed the Respondent and the Court that she was no longer represented by [Mr Zova].
(b)The Wife indicated that she intended to rely at trial on affidavit evidence of the following:
(i)[JP]
(ii)[JM]
(iii)[Mr Zova]: in particular, the Wife sought to rely of the Affidavits produced by [Mr Zova] on 14 July and 20 November 2006.
(iv)[MR]
(c)The Respondent indicated that he intended to cross-examine the Wife’s witnesses, and that they would therefore be required to attend.
(d)Registrar Stevens issued a Trial Notice. Order 4 specified that:
(i)subpoenas were to be lodged by 30 march 2007, and
(ii)inspection of subpoenaed documents was to be completed by 20 April 2007.
(e)Registrar Stevens instructed the Respondents’ solicitors to ensure matter progressed to trial on 23 April 2007, whilst recognising the increased burden on the Respondents because of the Wife’s lack of representation.
27. 19 April 2007:
(a)The Respondent’s solicitors attended court for the subpoena hearing. At no time until after the hearing did the Respondents’ solicitors have the benefit of perusing the subpoenas.
(b)Registrar Gassner, in the course of the hearing, explained to the Respondents’ solicitors that the subpoena issued against [Mr Zova] required the production of documents and his attendance at trial, commencing on 23 April 2007, to give oral evidence.
(c)Given:
(i)the nature of [Mr Zova’s] assertions of lack of compulsion to attend, and
(ii)the instructions of Registrar Stevens to ensure that the matter progressed to trial, even if that meant that the Respondents had to incur the “lion share” of trial preparation,
the Respondents’ solicitors requested that the court issue orders towards that end, including orders compelling the attendance of [Mr Zova]. The Respondents’ solicitors almost made submissions that were consanguineous with the interests of [Mr Zova] in so far as the requirement for the Wife to meet [Mr Zova’s] expenses.
The matter of par 27(c)(1) will be referred to further below: see at pars 67-69.
Between 3.41pm on 19 April 2007 and 23 April 2007, as the result of the service upon him by the husband’s solicitors of a copy of the wife’s subpoena and the Registrar’s orders Mr Zova urgently set about complying with the subpoena (order 5 by the Registrar having abridged the time for its service), and obeying order 6 which, it will be recalled, carried the potential threat of the issue of a warrant (although erroneously stated to be pursuant to Rule 15.36) if he did not attend to be “cross-examined”. As a practitioner of the Court, Mr Zova well understood the authority of an order of the Court, and well understood the nature and effect of the threat of a warrant (no matter how erroneous was order 6’s reference to it).
Mr Zova, faced with service of the subpoena and the orders, engaged Simonidis Shoebridge Lawyers, who in turn engaged Mr Westbrook of Counsel, to appear for him on 23 April 2007 to bring an application to set aside the subpoena, insofar as it required him to produce documents, unspecified, on the basis of his claimed possessory lien, to have the Registrar’s orders concerning him discharged and to seek his costs of attendance and the application.
Mr Zova had not been tendered any conduct money at the time of the service of the subpoena: see Rule 15.23(1), nor within a reasonable time before the court date: see Rule 15.24(1)(b).
On 23 April 2007, at the commencement of the trial, Mr Westbrook of Counsel announced an appearance for Mr Zova and sought and obtained leave to file the application, which was then stood down until the parties in the trial had read their material. The wife, who represented herself at the trial, did not read the affidavit (or affidavits) of Mr Zova referred to in the pretrial conference notes, nor any affidavits of Mr Zova, and said that she did not wish to adduce any evidence from Mr Zova. See transcript 23 April 2007 at 36/5; 36/40; 41/24-30; 42/5-10; 42/20-25.
There was thus no question of any cross examination of Mr Zova at the trial. Put simply, at the trial Mr Zova was not a witness relied upon by the wife.
Consequently, on 23 April 2007 I discharged order 6.
To the extent that the subpoena sought the production of documents, I have mentioned already it did not specify any documents to be produced. It was thus bad on its face, which obviated the necessity to determine the validity of Mr Zova’s claimed lien.
To the extent that the subpoena required Mr Zova to attend to give evidence, the wife had made clear she did not wish to adduce evidence from Mr Zova. In those circumstances, as Mr Zova had attended, on 23 April 2007 I discharged the subpoena rather than setting it aside. See transcript 23 April 2007 at 42/25-50.
Judgment was given in the s 79 property proceedings between the wife and the husband on 3 August 2007.
On that date, pursuant to a further order made on 23 April 2007 Mr Zova’s application for costs was listed for hearing on 7 September 2007 and directions made for the filing of written submissions.
On 7 September 2007, the wife made her application that orders 2 (insofar as it concerned her), 4 and 7 made by the Registrar on 19 April 2007 be set aside. I exercised the discretion to allow that application to be made orally, without the necessity to file any application, first having regard to the wife’s position as a litigant in person and secondly to obviate further and unnecessary expense in a matter which already had been too expensive for all concerned.
It is convenient to deal first with the wife’s application to set aside those orders, then to deal with Mr Zova’s application.
The wife’s application to set aside orders 2 (insofar as it concerned her), 4 and 7 of the Registrar’s orders made on 19 April 2007
Mr Westbrook of Counsel, for Mr Zova, was neutral in relation to the wife’s application.
Mr Foster, for the husband, resisted the wife’s application.
In my view, it is plain that the wife’s application must succeed. First, as I have explained, it is not clear whether the wife had notice of the subpoena listing date. Secondly, however, even if she had had such notice (which is doubtful), certainly she had no notice of any costs applications to be made by the husband’s solicitors against her on that date or of any orders potentially to be made against her on that date. It is not to the point whether Ms Sinclair may have asked for the costs orders, or whether the Registrar may have made them of his own volition, which is unclear. Either way, she was denied procedural fairness in relation to the costs orders made against her.
Further, in relation to order 2, there was no basis for the wife to pay the husband’s costs of being provided with copies of the several subpoenas referred to (seven in number), even if they had been issued by the wife, those properly being the husband’s own trial preparation costs.
Order 4 is a subject matter usually governed by the Rules, in particular, Rule 15.23(3). In my view it was not open to the Registrar to order that the wife pay “any and all” costs, as ordered, without application under Rule 15.23(3) by the persons named in the subpoenas referred to in order 3.
As to order 7, the husband was not a “named person” in any of the subpoenas issued by the wife and arguably not a person with a “sufficient interest” in any of those subpoenas to seek costs under Rule 15.26.
It is not necessary however to determine substantively these matters (as for example on a review), for the reason that the wife was denied procedural fairness.
It follows, without more, that any and all orders made on 19 April 2007 by the Registrar against the wife’s interests must be set aside. Thus, without hesitation, I will set aside and in order 2 the words “at the expense of the Applicant” and orders 4 and 7.
Mr Zova’s application under Rule 15.23(3)
If Mr Zova incurred substantial loss or expense, should he be reimbursed, and if so who should be liable to reimburse him?
Rule 15.23 provides:
RULE 15.23 CONDUCT MONEY AND WITNESS FEES
15.23(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 Part 1 of Schedule 4.
15.23(2) A named person served with a subpoena to give evidence and a subpoena to give evidence and produce documents is entitled to be paid a witness fee by the issuing party in accordance with Part 2 of Schedule 4, immediately after attending court in compliance with the subpoena.
15.23(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.
Rule 15.24 provides (relevantly):
RULE 15.24 WHEN COMPLIANCE IS NOT REQUIRED
15.24(1) A named person does not have to comply with the subpoena if:
(a) the named person was not served in accordance with these Rules (see rule 15.22 and subrule 15.28(1)); or
(b) conduct money was not tendered to the person at the time of service or within a reasonable time before the court date.
….
As I have mentioned, Mr Zova was not tendered any conduct money at the time of service or within a reasonable time before the court date so that, having regard to Rule 15.24(1), Mr Zova was not required to comply with the subpoena.
Further, there was no “court date” in relation to the subpoena, in so far as it required him to produce documents, and, in so far as it required him to attend to give evidence, the court date was 23 April 2007 “or such other day as is arranged”.
It would be too simplistic, however, to dismiss Mr Zova’s application under Rule 15.23(3) on the basis that, quite properly, Mr Zova may have been entitled to sit back and ignore the subpoena, for the want of tender of conduct money, for the reason that coupled with service of the subpoena was service of the Court order that he attend (silent as to a court date but properly regarded by Mr Zova as 23 April 2007) under the potential sanction of the issue of a warrant for his arrest, although, as I have explained, that order wrongly on its face invoked Rule 15.36. Whilst it is true that, pursuant to Rule 15.36 (whether or not wrongly invoked in the context of order 6), a warrant could only properly issue if conduct money had been tendered, I find as a fact, in all of the extraordinary circumstances of the case, Mr Zova acted prudently and properly in obeying the subpoena (and Court order) to attend. Indeed, as a practitioner, it is difficult to think that properly he ought to have ignored it, despite the absence of tender of conduct money.
The result of my finding of fact in Mr Zova’s favour is that, provided that I am satisfied that he has incurred substantial loss or expense within the meaning of Rule 15.23(3) I need to proceed to consider whether the discretion pursuant to Rule 15.23(3) should be exercised in his favour, and if so, against whom.
It is axiomatic that a clear distinction must be drawn between the issue of a subpoena (which, for a variety of reasons, quite properly may never be served by an issuing party), and the service of a subpoena because it is only by the service of a subpoena that the “named person” in it becomes bound to do the things specified in it.
Plainly, the wife did not cause the service of the subpoena, and, in particular, played no part whatever in the seeking or obtaining of order 3 made by Registrar Gassner on 19 April 2007 for the service of the subpoena by the husband’s solicitors on Mr Zova.
Equally plainly, it was the service of the subpoena on Mr Zova, by the husband’s solicitors, which caused Mr Zova to respond to it and, based upon the evidence of Ms Sinclair (ex 3, referred to above), it was the husband’s solicitors who invited Registrar Gassner to make orders towards “compelling the attendance of Mr Zova” at the trial. Thus, although, clearly, Ms Sinclair may not have invited the Registrar, specifically, to make orders 3, 5 and 6 in the terms in which they were made, there is no doubt that Ms Sinclair invited orders of compulsion against Mr Zova.
In relation to orders 3, 5 and 6, Mr Westbrook of Counsel, for Mr Zova, placed reliance upon Reg 4 of the Family Law Regulations 1984 (Cth), which provides, in effect, that where a court is satisfied that the provisions of the Act, the Regulations and the Rules do not make adequate provision for practice and procedure, or a difficulty arises or doubt exists as to practice or procedure, the court may give such directions with respect to the practice and procedure to be followed in the case as the court considers necessary. Mr Westbrook relied upon Reg 4 as giving validity to orders 3, 5 and 6, in case the validity of those orders was in doubt. However, the relevant inquiry, in relation to liability under Mr Zova’s application, is not the validity of orders 3, 5 and 6 (I have referred already to their extraordinary nature and the potential invalidity of, at least, order 6), but rather which party in all of the circumstances more appropriately should be regarded as responsible for the incurrence of Mr Zova’s claimed substantial loss and expense or, having regard to responsibility, whether that burden should be shared between them and if so in what proportion.
Rules 15.23(1) and (2) speak of the tender of conduct money and payment of witness fee “by the issuing party” (conduct money by the issuing party at the time of service and witness fee by the issuing party immediately after attending court in compliance with the subpoena).
However, Rule 15.23(3), which provides that a named person may apply for the reimbursement of “substantial loss or expense” that is greater than the amount of conduct money or witness fee payable under Rules 15.23(1) and (2), invites the exercise of a discretion and, it must be observed, the discretion is not fettered by the requirement that the reimbursement may be sought or ordered only against the issuing party.
Therefore in my view it is open to me to order the reimbursement of Mr Zova’s substantial loss or expense (if I find there has been any) against either or both of the wife, as the issuing party, or the husband, as the serving party, or both of them by way of apportionment.
In short, whilst usually the issuing party is responsible for the named person’s costs (conduct money and witness fee) and loss and expense, Rule 15.23(3) is not constrained to order such only against the issuing party. It is not for me to speculate whether this may be by oversight or intention. It is sufficient that I observe that whilst Rules 15.23(1) and (2) contain a constraint, Rule 15.23(3) does not.
It is convenient to deal first with the circumstances of the husband.
In relation to order 6, Ms Sinclair asked the Registrar for coercive orders against Mr Zova. She understood from the pretrial conference that Mr Zova’s affidavits were to be relied on at the trial by the wife. However, Mr Foster and Ms Sinclair had failed to serve at least 14 days before the trial a notice to him to attend for cross examination. The notice, it appears, was one day short, leading Mr Zova to assert in correspondence dated 17 April 2007 that he need not and would not comply with it: see annexure PDZ2 to Mr Zova’s affidavit filed on 23 April 2007. There was no legitimate basis thus for Ms Sinclair to ask the Registrar to make an order under Rule 15.14(3)(c) that Mr Zova attend the trial to be cross examined or any other basis to seek any order “compelling the attendance of Mr Zova” other than perhaps under Rule 1.12 which allows the Court to dispense with compliance with the Rules in certain circumstances, the dispensation being one required by the husband for failure to give the requisite notice to Mr Zova. Plainly enough, the coercive part of order 6 was needed by Ms Sinclair because of short service of the notice to attend for cross examination and thus must be seen as an order sought by the husband’s legal representatives in the husband’s interests.
However, as I understand the matter, Mr Zova’s real complaint in relation to order 6 was not that it ordered him to attend to be cross examined but that the order (wrongly) referred to a potential warrant for his arrest under Rule 15.36, on the basis that at the time that order was made the subpoena had not even been served on him let alone conduct money tendered. Indeed, in relation to attendance for cross examination, unbeknown to Ms Sinclair Mr Westbrook had already contacted Mr Galloway of Counsel, instructed by Ms Sinclair and Mr Foster for the husband, to arrange for Mr Zova’s attendance: see facsimile Simonidis Shoebridge to Hemming & Hart 20 April 2007 (ex 2):
We note that on Wednesday 18th April 2007, Mr Westbrook of counsel, acting on the instructions of our client, attempted to make contact by telephone with Mr Galloway of counsel, whom we understand to be retained on behalf of your client, with a view to discussing mutually satisfactory arrangements for the giving of evidence by our client, in the event that he was indeed required for that purpose. We note that Mr Galloway attempted to return that call but that as at yesterday, the busy practices of those practitioners meant that they had not in fact had a chance to have that discussion.
If Ms Sinclair had known this, she may not have sought any coercive order against Mr Zova that he attend to be cross examined.
The genesis of orders 3 and 5 however, which are the orders relating to the service of the subpoena and the abridgement of time for its service, is less clear, as is the matter of order 6 wrongly referring to the sanction for failure to comply with a subpoena. It may be that Ms Sinclair offered to serve the subpoena on the wife’s behalf, and asked the Registrar to abridge the time for its service. Alternatively perhaps, which is unknown, the Registrar may have considered that because the subpoena had issued it should be served. Whilst there is no evidence in relation to this, Mr Foster’s written submissions, par 12, seem to me to contain an admission that Ms Sinclair also may have invited orders 3 and 5:
12.The Respondents had no part in the production of the subpoena: deficient or otherwise. They should not be penalised for ensuring, so far as it was possible, that the matter progress to trial commencing 23 April 2007. In particular, it should be recognised that the Respondents were endeavouring to assist the Wife and the court in securing the attendance of the Wife’s witnesses for trial. (original unamended text)
However, even if (which despite the apparent admission is not certain on the evidence) Ms Sinclair may have asked for orders 3 and 5, there is no doubt, and I find as a fact, that her motive in this regard was to endeavour to “ensure” that the trial proceeded on the allocated dates, Registrar Stevens earlier having told her to “ensure” that, having regard to the circumstance that twice before allocated trial dates had been vacated, and the wife was now an unrepresented litigant. Thus Ms Sinclair, as I find, at all times acted reasonably, genuinely and in good faith to try to save the trial dates. She was entitled to do this, in the husband’s interests. Indeed, it is impossible to attribute any other motive to her other than to try to save the trial dates.
In relation to the wife, it would be easy to take the view that she was not responsible for the incurrence of any loss or expense by Mr Zova because neither she nor her solicitors served the subpoena and she played no part in seeking or obtaining the service order. However, in reality, in all of the circumstances of the case, it was the wife, by her solicitors, who by issue of the subpoena created the circumstance that the husband’s solicitors and the Registrar acted upon, against the background of her earlier having stated at the pretrial conference her intention to call Mr Zova as a witness, the subpoena apparently having issued to further that end.
The “trigger” for the ensuing orders 3 and 5, regardless of whether they were invited by Ms Sinclair or made by the Registrar of his own volition, and despite their extraordinary features upon which I have earlier remarked, was thus the wife’s conduct in (1) stating her intention to call Mr Zova as a witness and (2) issuing a subpoena to that end, which subpoena had not been served as at one business day before the trial was due to commence.
The Court and the parties were not informed by the wife until the commencement of the trial on 23 April 2007 that she did not propose to read any affidavits by Mr Zova nor call him as a witness. If she had communicated this earlier to the Court and the husband, plainly enough on 19 April 2007 the orders made concerning Mr Zova would not have been made and the subpoena thus not served.
In all of the circumstances of the case, I have concluded that (1) it would not be just that Mr Zova should not be reimbursed such substantial loss or expense as he may be able to prove and (2) the just result as between the husband and the wife is that the wife should bear the burden of that reimbursement. In essence, the wife was the “trigger” for the events which ensued and, to the extent that Ms Sinclair and the Registrar may have intermeddled, they acted genuinely and in good faith and it was reasonable in all of the circumstances that they do so, in a genuine effort to secure the attendance of Mr Zova at the trial and thus to save the trial dates.
I will therefore order accordingly, provided I am satisfied for the purpose of Rule 15.23(3) that Mr Zova has incurred substantial loss or expense and subject to other discretionary considerations.
The result is unusual, in that the wife did not cause the service of the subpoena. However, the facts are unusual, and I am satisfied that the wife in all of the circumstances must take responsibility.
I have considered apportionment as between the husband and the wife on the basis that both had input into what may be regarded as the chain of causation. However, to do so would counter my finding that Ms Sinclair acted reasonably, genuinely and in good faith in all of the circumstances.
Substantial loss or expense incurred?
The claim
The amounts claimed for reimbursement are set out in a schedule provided by Mr Westbrook of Counsel, for Mr Zova, on 12 September 2007, described as “Basket 1”, and “Basket 2”, which schedule it is convenient to set out (the schedule):
Basket 1 – Costs of seeking recovery of witness expenses
Date
Scale Item
Description
Amount
3 August 07
108
Solicitor attending Court upon delivery of Judgement and when directions made regarding costs application (1 hour)
$192.90
3 August 07
107
Copy of Reasons for Counsel and client (118) pages)
$59.00
Various
201
Counsel’s advice re costs application (allowing for overlap in advices provided between Court appearances. Drawing affidavit filed 31 August (4 hours)
$1,263.60
31 August 07
107
Copy of Affidavit and Submissions for filing (22 pages)
$11.50
7 Sept 07
204
Counsels attendance at hearing of Costs Application
$1,565.60
7 Sept 07
108
Solicitor instructing at hearing of Costs Application, including one hour conference with counsel prior (7 hours)
$1,350.30
12 Sept 07
203
Counsel’s attendance for further hearing of submissions (short hearing – 3 hours or less)
$928.55
12 Sept 07
108
Solicitor instructing at further hearing of submissions (say 1 hour)
$192.90
$4213.45
In addition to the above, Mr Zova also claims the following out of pocket expenses associated with his attendance in relation to the costs argument:
1.Travel to Brisbane 7 September 2007 (air flight) - $534.40
2.Loss of income whilst at Court 7 September 2007 – 1 day - $2,062.50
GRAND TOTAL OF “BASKET 1” $6,810.35
Basket 2 – Witness Expenses
Date
Scale item
Description
Amount
Various
201
Counsel’s advice sought and received after the service of Registrar Gassner’s Order (6 hours) – includes settling advices, settling correspondence, drawing Affidavit and drawing written submissions
$1,895.40
23 April 07
203
Counsel’s attendance at Court (short attendance – 3 hours or less)
$928.55
23 April 07
108
Solicitor attending Court instructing Counsel (3 hours)
$578.70
$3,402.65
In addition to the above, Mr Zova also claims the following out of pocket expenses associated with being a witness:
2.Travel to Brisbane (time) 23 April 2007 – 4 hours at charge out rate of $250 per hour - $1,000
3.Costs of accommodation in Brisbane 23 April 2007 - $240
4.Travel to Brisbane (costs of travel) 23 April 2007 - $389
5.Loss of income whilst at Court 23 April 2007 - $2,062.50
6.Collecting, collation and perusal of file – 4 hours at charge out rate of $250 per hour - $1,000
GRAND TOTAL OF “BASKET 2” $8,094.15
Mr Westbrook’s schedule seeks to distinguish between Basket 1 and Basket 2.
Chronologically, Basket 2 deals with Mr Zova’s claimed loss and expense incurred between 19 and 23 April 2007, whereas Basket 1 deals with his loss and expense claimed between 3 August 2007 and 12 September 2007.
In essence however there is only one claim for his loss and expense, that being under Rule 15.23(3).
On 23 April 2007, Mr Zova applied for the subpoena to be set aside (Rule 15.26(a)); objected to the production of documents (Rule 15.26(b)); sought that he be paid his loss and expense related to his attendance to object to the production of documents and in complying with the subpoena for his attendance (Rule 15.26(c)); and, as required by Rule 15.26 attended Court “on the court date” to apply for those orders.
Although Mr Zova’s application filed on 23 April 2007 does not refer to the objection to the production of documents, this was made clear in Mr Westbrook’s written submissions provided to the Court on that date (see in particular pars 1.1, 3.2.2 and 3.2.3).
Those written submissions made clear also Mr Zova’s claim for costs as a witness (par 4.1) including his costs of appearing by legal representatives “to deal with questions associated with” the subpoena (par 4.2.1).
As noted earlier, Mr Zova’s application sought also the discharge of orders made by Registrar Gassner on 19 April 2007 in so far as those orders concerned Mr Zova.
As I have mentioned earlier, on 23 April 2007 after making orders for the discharge of the subpoena and order 6, I was not able to deal with Mr Zova’s claim for his “costs” (loss and expense) because that court date had been allocated to the s 79 proceedings between the husband and the wife, already delayed on that day by the necessity to deal with Mr Zova’s application. Thus, I ordered that Mr Zova’s “application for costs” be adjourned to a date to be arranged after judgment was given in the s 79 proceedings. On 3 August 2007, the date on which judgment was given in those proceedings, Mr Zova’s application was then set down for hearing on 7 September 2007.
In these circumstances, whilst I do not think anything turns on it, it seems to me that Mr Zova’s claim should be considered as a whole, rather than as separated into Baskets 1 and 2 as set out in the schedule.
Principles relating to exercise of the discretion under Rule 15.23(3)
In G & D [2005] FamCA 1429 (19 May 2005) Carmody J at [13]-[22] succinctly set out the principles relating to the exercise of the discretion under Rule 15.23(3), which summary respectfully I would adopt.
The relevant rules
13.A subpoena is an ex parte court order directed to a named person, requiring him or her to attend on a specified date (the court date) to give evidence or to produce documents or do both of those things.
14.A subpoena cannot be amended after service (r 15.20) and remains in force until it is complied with or the witness is excused or released by the issuing party or the court from the obligation to do so (r 15.24(2) and 25(a), (b)).
15.Failure to strictly comply with a valid subpoena may lead to the issue of a warrant for arrest or proceedings for contempt, or both (see: s 112AP Family Law Act 1975 (Cth) and r 15.36(1)).
16.A named person is entitled to be paid conduct money sufficient to meet the reasonable expenses of compliance and at least equal to the minimum amount in Pt 1 of Sch 4, viz., $10.00 (r 15.23(1)).
17.After a witness has duly complied with a subpoena to give evidence he or she is also entitled to be paid travel and accommodation allowances (r15.23(2)) and appearance fees at the rate of $75.00 a day, in accordance with Pt 2 of Sch 4 (r 15.23(2)).
18.In addition to any sum payable under the Rules for conduct money, travelling and accommodation expenses and witness fees, the court has discretionary power to order that the issuing party pay a subpoenaed witness who incurs substantial additional expense or loss in complying with a subpoena the amount needed to compensate him or her for such expense or loss (r 15.23(3)): cf. Bank of New South Wales v Withers & Anor (1981) 35 ALR 21 at 30. This has been taken to include recovery of the costs of legal advice and representation in relation to documents under subpoena: see Fuelexpress Ltd v LM Erickson Pty Ltd (1987) 75 ALR 284.
19.A person is not bound to comply with a subpoena which is oppressive because of late service or unreasonable requirements. Nor is there any obligation to go to court unless a proper sum for conduct money has been offered or received (rule 15.24). However, because a subpoena remains valid until set aside on notice, the named person must, in any event, attend on the court date to raise his or her objection or seek compensation for losses or expenses caused by the subpoena or apply for any other relief (r 15.26(b), (c), (d)).
20.The terms of r 15.23(3) differ from those of its 1984 forerunner. The old O 20 r 17 provided a process for compensating a subpoenaed third party who reasonably incurred costs or expenses (but not losses) connected with compliance. Thus, while the actual cost of the time and effort spent in answering a subpoena were recoverable, trading margins or losses were not: cf. Kennedy and Evans; Trust Bank (Intervener) (1994) FLC 92-514. The commercial charge-out rates for a professional service therefore had to be reduced by any profit component to be recoverable. Moreover, the costs or expenses claimed had to not only be reasonable but reasonably incurred as well.
21.Under the new rule, by contrast, a business loss is just as recoverable as an actual expense, provided it is a substantial one. The rule does not give any clue to the meaning of "substantial" in this context but I take it to denote something considerable as distinct from a mere trifle.
22.Technically speaking, there is no separate requirement to establish that the loss or expense in question was reasonable as well as substantial. However, that does not mean that the concept of reasonableness is irrelevant to the discretionary exercise.
Claim determination
Mr Westbrook’s schedule is not sworn by Mr Zova as loss and expense incurred.
Rather, his affidavits filed on 23 April 2007, pars 12-18, and on 31 August 2007, pars 15-19, 23 and 27-31 deal with the reasons for and quantum of his claim. The schedule, not being sworn, is not evidence. It comprised part of Mr Westbrook’s written submissions provided on 12 September 2007. See at pars 4.1-4.2.
Before awarding Mr Zova any amount of compensation for loss or expense, I am required to be satisfied on the evidence that the loss or expense claimed was incurred, was substantial, and greater than the amount of conduct money and witness fee payable under Rules 15.23(1) and (2). Further, as observed by Carmody J in G & D at par 22, whilst there is no requirement to establish that the loss or expense was reasonable, as well as substantial, that does not mean that reasonableness is irrelevant to the discretionary exercise.
Mr Zova was not tendered any conduct money at the time he was served with the subpoena and there is no evidence that “immediately after” attending the Court in compliance with the subpoena, or at any later date, he has been paid any witness fee, nor any amount under Part 1 or Part 2 of Schedule 4 to the Rules, referred to in Rule 15.23, which Schedule provides:
Schedule 4 Conduct money and witness fees
(rules 15.23 and 19.18)
Part 1 Conduct money
Item
Matter for which allowance is paid
Amount of allowance
101
Minimum amount
The minimum amount for conduct money is $10
102
Travel
(a) the amount to be paid for fares on public transport for return travel between the place of employment or residence and the court; or
(b) if no public transport is available, the amount calculated at the rate of 80 cents per kilometre required to be travelled between the place of employment or residence and the court
103
Accommodation and meals
A reasonable allowance for accommodation and meals to be incurred during the estimated time of the hearing or trial
Part 2 Witness fees
Item
Type of witness
Amount of fee
201
All witnesses
$75 per day, or part of a day, for necessary absence from the witness’s place of employment or residence
It is convenient to consider Mr Zova’s claim under the following headings.
Travel 22-23 April 2007- costs of travel and time for travel
Mr Zova deposes to travelling from Bundaberg to Brisbane to attend the hearing on 23 April 2007, the travel time occupying 4 hours. He seeks $389 “costs of travel” on the basis of a Client Agreement with the wife in relation to her former retainer of him, plus his “time” for travel (4 hours) at his charge out rate of $250 per hour, thus $1,000. His affidavit deposes to the Client Agreement providing for the charge out rate of $250 per hour plus GST. He does not appear to claim travel time for the return trip, Brisbane to Bundaberg, which also would have occupied 4 hours.
In my view reference to the Client Agreement does not assist Mr Zova. First, his claim is under Rule 15.23(3) (see also Rule 15.26(c)) and not pursuant to the wife’s former retainer of him. Secondly, the Client Agreement is not in evidence. There is no basis thus to determine whether it complied with the Rules so as to be binding. Thirdly, to the extent that Mr Zova’s claim was also made against the husband, he was not a party to the Client Agreement and it is irrelevant concerning him.
However, independently of Mr Zova’s reference to the Client Agreement, he has deposed in effect that the rates referred to in the Client Agreement are his usual charge out rates, namely $250 per hour plus GST professional fees, $1,875 plus GST for each court day event, $389 for travelling expenses for a return trip from Bundaberg to Brisbane plus accommodation expenses. (See Mr Zova’s affidavit filed on 31 August 2007, par 27, deposing to the circumstances that the Client Agreement “states that I charge” the amounts referred to, which I thus take to be his usual charge out rates).
There is no basis to conclude that Mr Zova’s charge out rates are not reasonable, although I note that in Schedule 3 to the Rules, being the Itemised Scale of Costs for the purpose of Rule 19.18 (the scale), Part 1 item 108 allows $192.90 per hour for time reasonably spent by a lawyer on work requiring the skill of a lawyer (except work to which any other item in Part 1 applies).
In relation to travel time, Mr Zova does not claim GST, properly, as if compensated by the Court on the basis of his charge out rate for travel time, he would not collect GST and thus not be required to pay it.
Schedule 4, Part 1, provides either for the cost of public transport, or if none is available, 80 cents per kilometre. Mr Zova deposes that his travel was by motor vehicle. There is no evidence as to the distance Brisbane/Bundaberg return, however, I am able to take judicial notice that the trip is approximately 350 kilometres each way, about 4 hours driving time, or round trip 700 kilometres, about 8 hours driving time.
Mr Westbrook submits that because Mr Zova was subpoenaed “in his professional role” as the wife’s former solicitor and otherwise was a stranger to the proceedings between the wife and the husband, his charge out rate for his travel time should apply. I do not accept this submission, primarily because the time which Mr Zova spent driving was not work requiring the skill of a lawyer, and further because there is no evidence that if Mr Zova had not travelled to Brisbane on 22 April 2007 he would on that day (a Sunday) have been engaging in professional work for his clients so that on that day he suffered business loss. I will therefore not allow his time claim for 4 hours travel on Sunday 22 April 2007. The matter of his return driving time on Tuesday 24 April 2007 is a different matter. However, as will be seen, I propose to allow him professional fees for that full day. Thus it would be “double dipping” to allow him the same time (for travel time) under this head for his return trip Brisbane to Bundaberg on that day.
In my view Mr Zova’s costs of travel should be assessed on the basis of 80 cents per kilometre Brisbane/Bundaberg return, 700 kilometres, thus $560, which I will allow. Mr Zova was required to attend at Court on 23 April 2007 to answer the subpoena and to make his claim for loss and expense. The travel expense thus necessarily was incurred.
I will not allow separately $389 claimed for “costs of travel” as it seems to me this is precisely the cost which 80 cents per kilometre is intended to cover.
Accommodation and meals 22-23 April 2007
Mr Zova deposes to incurring costs of $240 to stay overnight on Sunday 22 April 2007 at the Sofitel Hotel Brisbane. I am satisfied this expense was incurred, is substantial, was reasonably incurred, reasonable in amount and should be allowed. In particular, I do not consider that it would have been reasonable to expect Mr Zova to travel from Bundaberg to Brisbane on the morning of Monday 23 April 2007, on which date his attendance at Court was required at 10am.
No amount is claimed for meals.
Travel 7 September 2007
The schedule claims as an expense air travel Brisbane/Bundaberg (presumably return) on 7 September 2007 $534.40.
Mr Zova’s affidavit material does not depose to the incurrence of this cost. However, even if it had been deposed to, in my view it was neither necessary nor reasonable for Mr Zova to incur this cost in order to answer the subpoena, apply for it to be set aside or pursue his claim for loss and expense. Rule 15.26 provides that in order to “seek to be paid” loss or expense relating to his attendance, he “must attend court on the court date” to apply for the order. His obligation thus was discharged by his attendance on 23 April 2007, on which date he had already applied for an order for his loss and expense to be paid. The claim thus having been made, in my view it was sufficient that on 7 September 2007 he rely on his representation by Mr Westbrook of Counsel and Mr Shoebridge, solicitor, instructing Mr Westbrook, and to have been available at Bundaberg by telephone if Mr Westbrook or Mr Shoebridge needed to contact him for any instructions not already given. In this regard, I note that as at 7 September 2007 all of Mr Zova’s affidavit material had been prepared and filed and Mr Westbrook’s written submissions filed also (although subsequently supplemented by further written submissions on 12 September 2007).
I will therefore not allow this claim on the basis that it was neither necessary nor reasonable for Mr Zova to attend the Court on 7 September 2007. If I am wrong in that view then, in any event, incurrence of the claimed air travel expense has not been proved.
Collecting, collating, perusing and organising files for production pursuant to the subpoena
According to the schedule, this is claimed at 4 hours x $250 charge out rate, $1,000.
Although the subpoena purported to be one to produce documents (as well as to attend to give evidence) it did not specify any documents, a matter to which I have referred already in detail. Mr Westbrook submits however, and I accept, that acting sensibly it was reasonable for Mr Zova to presume that the only documents which conceivably could have been intended for production pursuant to the subpoena comprised his files relating to the wife’s former retainer of him, and that it was reasonable thus for him to collect the files and bring them to Court, in particular, to avoid waste of time if the Court required to see the files to rule on the objection to their production. In my view, this was a proper and professional response to the subpoena, even though it did not specify any documents which he was to produce and, after service, could not be amended (Rule 15.20).
Mr Zova deposes that his files were archived at an external storage facility on the Sunshine Coast, en route from Bundaberg to Brisbane. He deposed that his time taken to collect the files was 1 hour (affidavit filed on 23 April 2007, par 17). He deposed later however (affidavit filed on 31 August 2007, pars 15-18 and 28) that the files comprised approximately 40 A4 size folders and that according to his estimate he had spent 4 hours collecting, perusing and collating the files and organising them in his vehicle so that “relevant documents” would be easy to find if they were required. The effect of Mr Zova’s evidence thus appears to be that 1 hour was occupied collecting the files out of the storage facility and 3 hours perusing, collating and organising them.
In my view, despite my finding that it was reasonable for Mr Zova to collect the files, it was neither necessary nor reasonable for him to peruse, collate or organise the files. It is not as if the subpoena had referred to any specific documents which had to be selected or found. Although the subpoena required Mr Zova also to attend to give evidence, and order 6 required him to attend for cross examination, in my view there was no requirement and no reasonable basis for him to do other than to collect the files, and then to produce them (as they were) if his application to set aside the subpoena to produce documents should have failed. There was no requirement and no reasonable basis for him to peruse the files to ready himself for any oral evidence or cross examination until its specific likely subject matter (if any) was identified by those proposing to call or cross examine him. I will therefore not allow the 3 hours claimed for perusing, collating or organising the files.
As to the 1 hour occupied by collecting the files out of the storage facility, Mr Zova does not depose to increased travel time, only collection time, being a physical task. He does not depose to any expense incurred, in the collection exercise. Rather, his claim is time based at his charge out rate. The collection exercise, like the driving exercise, was not work requiring the skill of a lawyer, and as I have mentioned already there is no evidence that on 22 April 2007 (a Sunday) Mr Zova otherwise would have been engaged in professional work for his clients so that on that day he suffered business loss.
I will therefore not allow this claim.
Loss of income/business loss 23 April 2007 and 7 September 2007
The schedule claims:
·Loss of income while at Court 23 April 2007 - $2,062.50
·Loss of income while at Court 7 September 2007 - $2,062.50.
Mr Zova deposes to this as comprising, for each day, $1,875 plus GST of $187.50.
I have determined already that it was neither necessary nor reasonable for Mr Zova to attend at the Court on 7 September 2007. Further, his affidavit does not depose to any loss of income in relation to his attendance at Court on 7 September 2007. I therefore reject this claim.
In relation to 23 April 2007, it is fair to observe that although the matter concerning Mr Zova was disposed of (apart from the loss and expense claim) by about 12.15pm or 12.30pm on 23 April 2007 (see transcript 37/30 and 43/40-44/15), in reality Mr Zova lost the better part of the day, particularly because after his excusal from attendance at the Court it was necessary for him to return to Bundaberg. Although I have not allowed him an hourly rate for travel time on Sunday 22 April 2007, the necessity for him to spend the balance of 23 April 2007 (a working day) to return to Bundaberg has the result that in my view he should be compensated for 1 lost professional day.
Mr Zova does not depose, directly, that he cancelled clients or other work on 23 April 2007. However, that is the thrust of his claim and in my view is the proper inference to be drawn from the circumstances that the day, a Monday, was a professional working day and that he has deposed to “loss of income” for that day (affidavit filed on 31 August 2007, par 30). I accept thus that if Mr Zova had not been required to attend the Court at Brisbane on that day, in the ordinary course of his practice as a sole practitioner he would have attended to professional work at his usual charge out rate. Mr Zova described in his evidence that his usual charge out rate for “each court day event” is $1,875 plus GST. This is not the proper basis, because he was not on 23 April 2007 attending a “court day event” for any client pursuant to any retainer. However, at his usual charge out rate of $250 per hour, a full day at 7 or 8 hours (7.5 hours) is more or less the same amount.
In G & D, Carmody J at par 20 observed that under the 1984 Rules, loss was not compensable, so that commercial charge out rates “had to be reduced” by profit component, to reflect “expense”. Other authorities relating to professional persons refer to the possibility of rescheduling cancelled clients, performance of civic duty in answer to a subpoena, and the like, as reduction factors in relation to exercise of the discretion. However, Rule 15.23(3), whilst discretionary, speaks of reimbursement if “substantial” loss or expense is incurred greater than the amount of conduct money or witness fee payable under Rule 15.23. In this particular case, in the exercise of my discretion, I am satisfied that no good reason is shown why the amount of Mr Zova’s proved business loss should be reduced and not be reimbursed to him. It is not appropriate to allow him GST because, as explained, he will neither collect nor be required to pay GST on this amount. There is no basis to reduce the amount having regard to the likely incidence of income tax. See Wheeler v Philip Morris (1989) 97 ALR 282 per Gray J at 312-3; Halsbury’s Laws of Australia [135-365]; [405-2005].
I am satisfied that loss of income was suffered by Mr Zova, the loss as assessed is substantial, greater than the amount of conduct money or witness fee payable under Rules 15.23(1) and (2) and in all of the circumstances a reasonable amount to award. The loss arose directly because of the necessity for Mr Zova to attend at Court on 23 April 2007 in answer to the subpoena and to claim his loss and expense.
Expenses related to legal advice and representation April and September 2007
Mr Zova deposes that he engaged Mr Shoebridge, solicitor, who in turn engaged Mr Westbrook of Counsel to advise him in relation to the subpoena and orders and to appear on his behalf in his application to set aside the subpoena and orders, to object to the production of documents and to seek reimbursement of his loss and expense relating to his attendance.
It is not in doubt that, in appropriate cases, there may be reimbursement of the costs of legal advice and representation. Mr Westbrook submitted, which I accept, that although the authorities in this regard mostly deal with the costs of legal advice and representation where a witness is subpoenaed to produce documents, there is no reason in principle why the cost of legal advice and representation ought not apply equally in relation to a subpoena to appear to give evidence because, as is well understood, each case must depend upon its own facts and circumstances.
In G & D at par 33 Carmody J rejected the claim of a solicitor (acting as a receiver) that he had acted reasonably in engaging Counsel to appear on his behalf in relation to a subpoena on the basis that the applicant was a “qualified and experienced solicitor”, his complaint was “a simple one that was easily addressed”, and he “could have taken steps under r 15.24 or 15.25 but chose not to”. The facts of that case, however, are in marked distinction from the facts of this case. First, although Mr Zova similarly is a “qualified and experienced solicitor”, he was required to act urgently having regard to the extraordinary circumstances to which I have referred already, namely severe abridgement of time in relation to service of the subpoena; the circumstance that it was served not by the issuing party, but by the issuing party’s opposite adversarial party; the subpoena required him both to attend to give evidence and to produce documents in circumstances where the only relevant documents in his possession (although not specified in the subpoena) were the subject of a possessory lien claimed by him and the subject of legal professional privilege of the wife; and further, he was faced with the extraordinary order made by the Registrar that if he did not attend Court for cross examination consideration should be given to the issue of a warrant for his arrest pursuant to Rule 15.36, being a provision which relates to non compliance with a subpoena. Mr Zova’s position was further compounded by the circumstance that he was engaged in a fee dispute with the wife, his former client, who by her subsequent solicitors had caused issue of the subpoena, with service of it and his first knowledge of it occurring only one business day before he was required to attend at the Court. As shown in correspondence (see ex 2), he also had been denied the courtesy usually extended to professional persons against whom it is proposed to issue a subpoena of any warning as to its imminence, content or purpose. Faced with these circumstances, in my view it was very reasonable for Mr Zova to “step aside” from the matter, in which he had prior professional involvement, and in order to distance himself from both the wife and the husband’s solicitors, engage solicitors and Counsel to advise and represent him.
Mr Zova deposes to the incurrence of his legal costs in his affidavit filed on 23 April 2007, par 13, and his affidavit filed on 31 August 2007, par 23. He does not, however, depose to any amount or amounts charged or incurred. In particular, he does not annex to either of his affidavits, and did not tender, Mr Shoebridge’s or Mr Westbrook’s tax invoices.
The schedule claims $3,402.65 for “various” dates and for 23 April 2007, and $4,213.45 for the period 3 August to 12 September 2007. (The loss and expense claim, set down for 7 September 2007, spilled over to 12 September 2007). These amounts of claim are not sworn, but comprise only Mr Westbrook’s submission.
In these circumstances, at first blush, it would have been open for me to dismiss this part of Mr Zova’s claim, he having had ample opportunity to file all necessary affidavits to support this part of his claim not only in his own capacity as a solicitor but in particular having the assistance of representation by the solicitor he engaged and the engagement of Counsel.
However, there is another way, I think, to enable me to overcome these evidentiary deficiencies and proceed to assess the claim. Mr Westbrook, in his supplementary submissions provided on 12 September 2007, which attach the schedule, included the following:
4.Costs – quantum
.1 These submissions attach a schedule (which replaces that previously delivered – the amounts are the same but the characterisation of the amounts set out in it is different) by which the third party sets out the costs associated with his involvement on a “party and party” basis. It will be observed that the schedule separates “witness fees” and costs.
.2 The third party, having regard to his arrangement with his solicitor and counsel, does not claim any further amount on a “solicitor and own client” basis.
Expressly, the amounts totalled in the schedule, $3,402.65 and $4,213.45, are “scale” amounts, claimed by reference to specified scale items extracted from Schedule 3 to the Rules.
Thus, I propose to consider Mr Zova’s claim from the perspective that he has sworn to the engagement of Mr Shoebridge and Mr Westbrook to advise and to represent him; his claim is not sought to be proved on the basis of their tax invoices but on the basis of scale items, this apparently being the basis of the retainer of Mr Shoebridge and Mr Westbrook; in relation to the scale charges for advice, Mr Zova has not sworn the amounts charged, but has sworn to the fact of the engagement for advice, represented in the schedule by scale items; and in relation to scale charges for the preparation of Court documents and appearances, these matters are proved by reference to the Court record which, being self evident, need not themselves be sworn.
In this exercise, having regard to the scale items and charges in Schedule 3 to the Rules, and the scale items and charges referred to in the schedule, the amount of $3,402.65 seems to me to be reasonable in amount. As to proof of incurrence, in relation to item 201, Mr Zova has deposed to seeking Counsel’s advice; the correspondence referred to in the schedule is referred to also in Mr Zova’s affidavit filed on 23 April 2007, par 14 (see also ex 2); the application, affidavit and Mr Westbrook’s written submissions referred to in the schedule are on the Court record. I note that ex 2 refers to Mr Westbrook contacting Mr Galloway on 18 April 2007, a matter to which I have earlier referred. This was before service of the subpoena on 19 April 2007. However, I note that the text description for item 201 expressly refers to Counsel’s advice sought and received “after” the service of the Registrar’s orders. In relation to items 203 and 108, it is a matter of record that Mr Shoebridge and Mr Westbrook appeared for Mr Zova on 23 April 2007. These items are “3 hours or less”, which is appropriate for the hearing on 23 April 2007.
As to the amount of $4,213.45, I am not satisfied that the two scale items referable to 3 August 2007 were necessarily or reasonably incurred, that being the date upon which judgment was given in the s 79 proceedings between the husband and the wife. The next two scale items, being items 201 and 107, relate predominantly, it appears, to the preparation of Mr Zova’s affidavit filed on 31 August 2007 and the preparation and filing of Mr Westbrook’s submissions. According to the record, this work was undertaken and thus there is not further necessity for its proof. The remaining items appear to relate to the appearances on 7 and 12 September 2007 and incidental matters related to that, charged at the scale rate. These charges are proved to have been incurred, and are reasonable in amount. There is however a calculation error in the schedule. Excluding the items relating to 3 August 2007, the subtotal is $5,312.45.
In aggregate, $3,402.65 and $5,312.45 amount to $8,715.10.
Schedule 3 to the Rules contains, as a note, that the amounts in it include GST. If I have understood Mr Westbrook’s submissions correctly (pars 4.1 and 4.2 set out above) Mr Shoebridge and Mr Westbrook have charged Mr Zova, that is, rendered tax invoices to him, on the basis of the scale items in Schedule 3. If this is correct (and there is no basis on which to consider it is not) then there is no basis to exclude the GST component, because Mr Zova has been or will be obliged to pay that component to Mr Shoebridge and Mr Westbrook.
However, that is not the end of the matter. Mr Shoebridge’s and Mr Westbrook’s retainers, as they related to the first assessed amount of $3,402.65, comprised three components, first, the application to set aside the subpoena and object to the production of documents; secondly, to seek the discharge of the orders concerning Mr Zova made by the Registrar; and thirdly, to seek Mr Zova’s loss and expense. In my view it is reasonable therefore to reduce that component of the claim by one third, $1,134.21 so that it should be assessed at $2,268.44. There is no similar basis to reduce the amount of $5,312.45 referable to Mr Zova’s expenses of and relating to his legal representation on 7 and 12 September 2007. Thus, doing the best I can, I would assess the reasonable amount of Mr Zova’s reimbursement under this head at $7,580.89 ($2,268.44 and $5,312.45). At the risk of repetition, these amounts, effectively, are proved as having been incurred. In my view of the matter, they were reasonably incurred and, having regard to my analysis above, are reasonable in amount. Further, they are “substantial” within the meaning of Rule 15.23(3), as explained.
I propose therefore to allow the amount of $7,580.89 under this head.
Total substantial loss or expense as assessed
As a result of the above analysis, the amounts which I will allow as substantial loss or expense pursuant to Rule 15.3(3) greater than the amount of the conduct money or witness fee payable otherwise under Rule 15.3, are:
·$560 travel expense
·$240 accommodation expense
·$1,875 business loss
·$7,580.89 expense of legal advice and representation
Total $10,255.89
I am aware of the wife’s financial circumstances, by reason of the s 79 decision, and subsequent consent variation to it under s 79A(1)(b) made on 29 November 2007. Having regard to the wife’s circumstances, she should have 60 days to pay the assessed amount to Mr Zova, and I will so order.
Husband’s cost application against the wife
Mr Foster, in his written submissions, par 15, sought an order that the wife pay the husband’s costs of Mr Zova’s application. For clarity, I will set out par 15:
15.The Respondents costs in relation to this Application should also be met by the Wife, on an indemnity basis, for reasons including but not limited to:
(a) the orders in relation to the subpoena hearing, being the source of complaint, specified an order for the Wife to pay the Husband’s indemnity costs,
(b) the Wife has failed to pay the Husband’s costs, and
(c) the costs incurred in responding to [Mr Zova’s]Application ought not to have been incurred by the Husband.
I refuse the husband’s application. First, in relation to subparagraphs (a) and (b) of paragraph 15 of the submissions, the order referred to being order 7 made by the Registrar, has today been set aside by me, for reasons already explained.
As to the claim otherwise, it is not evident to me that on 23 April 2007 the husband incurred any costs in relation to Mr Zova’s application to set aside the subpoena and order 6. The husband’s solicitors and Counsel were required to be in Court in any event on that date for the first day of the trial. About an hour on that date was taken up by Mr Zova’s application. (Mr Westbrook was excused at about 12.15pm or 12.30pm, however, excluding the morning tea break, most of the time was taken up with trial matters, including the parties reading their material, objections to evidence and so forth). That hour or so did not in my view extend the duration of the trial which, for other (unrelated) reasons, proceeded not only on 23, 24 and 26 April 2007 but was continued on 3, 4 and 10 May 2007.
As to the husband’s costs of 7 and 12 September 2007, it was Mr Zova, not the wife, who made his claim for substantial loss and expense against the husband.
The husband’s application against the wife will be dismissed.
I certify that the preceding one hundred and forty three (143) paragraphs are a true copy of the reasons for judgment of the Honourable Justice O’Reilly
Associate:
Date:
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