It is common for parties that are not involved in litigation to receive a subpoena, which requires them to produce documents to the court which may be relevant to one or more facts in issue in a proceeding. One frequently asked question is who should be responsible for the costs of compliance of the producing party and to what extent.
The applicants, McCabes Lawyers Pty Ltd and McCabe Curwood Lawyers Pty Ltd, previously acted for the plaintiff Allstar Capital Pty Ltd, on a commercial transaction it entered into with the defendant, FIP Holdings Victoria Pty Ltd (FIP). In August 2018, FIP served “McCabe Curwood” with a subpoena to attend to give evidence and to produce. The applicants sent a letter to the solicitors acting for FIP regarding issues with the scope and relevance of the documents sought. In September 2018, two further subpoenas were served. However, they were served late and FIP’s solicitors agreed to an adjournment. There was further correspondence between the applicant and FIP’s solicitors regarding the scope and delays.
The applicants estimated their reasonable costs for complying with the subpoena to be approximately $7,500 (+ GST). On a number of occasions the applicants wrote to and contacted FIP’s solicitors making a claim under r 33.11 of the UCPR for payment of the costs. FIP’s solicitors did not respond to the applicants’ correspondence. In later correspondence, the applicants noted they had fulfilled their obligations under r 42.33 which requires the parties to first have attempted, but failed to reach an agreement before the court can make a cost order. Further costs were incurred while attempting to make a claim for the reasonable costs. The total costs were $19,285.
The key issue was whether the Court should order FIP to pay the reasonable loss or expense of the applicants incurred in complying with the subpoena under UCPR r 33.11. The applicants submitted that a fixed sum costs order of $10,000 was more appropriate than an assessment of costs. Their reasoning was that FIP was largely responsible for the costs and because a cost assessment would be lengthy and expensive.
The Court referred to Foyster v Foyster Holdings  NSWSC 881 where Campbell J stated that the person issuing a subpoena should bear all reasonable expenses and loss involved in complying with it unless the expense or loss is small. Further, the Judge noted that what is considered a reasonable expense was outlined by Brereton J in A Pty Ltd v Z  NSWSC 999,  and includes the time incurred in dealing with the subpoena, costs of photocopying and the legal advice reasonably obtained regarding confidentiality and privilege issues.
The Court referred to a number of matters that increased the costs of compliance and include:
- the subpoena being defective;
- FIP’s solicitor’s failure and delay in responding to correspondence and agreeing to reasonable request for adjournment;
- the volume of documents;
- the need to consider the claim for client legal privilege; and
- FIP’s solicitor’s failure to negotiate and reach an agreement under r 42.33 of the UCPR.
The Court held that the amount sought by the applicant as a fixed sum costs order was appropriate and represented the reasonable costs of compliance with the subpoena. As such, the Court ordered the defendant to pay the sum of $10,000 to the applicants. The Court also noted that the total amount of costs does not justify a cost assessment.
This case serves as a reminder that parties issuing subpoenas will be required to pay the producing party’s reasonable costs incurred in complying with the subpoena, including the costs incurred in attempting to resolve a disagreement regarding those costs.