McNamara v Trylow Plant Hire Pty Ltd

1. [1]

   The Second Defendant, by Notice of Motion filed 19 July 2016, seeks costs pursuant to r 33.11 Uniform Civil Procedure Rules 2005 (NSW) for the costs of complying with a subpoena issued by the First Defendant.

Factual background

1. [2]

   The Plaintiff, who was employed by the Third Defendant, was injured on 9 January 2012 when working as a labourer on the M2 motorway near Ryde. He was injured when struck by a vehicle used in the construction work that was being driven by an employee of the First Defendant, Trylow. The Second Defendant, then known as Leighton Contractors Pty Ltd and now known as CPB Contractors Pty Ltd, was the head contractor in relation to the construction work.

2. [3]

   On 17 December 2013 the Plaintiff commenced proceedings naming only Trylow as a defendant. On 27 June 2014 Trylow issued a subpoena to Leighton seeking a wide range of documents concerning the accident and the M2 motorway upgrade project generally.

3. [4]

   Objection was taken by Leighton’s in-house legal counsel on the basis of the width of the subpoena. Subsequently correspondence from Leighton sought confirmation that the subpoena would not be pressed. There was no response to that correspondence and Leighton did not produce documents in compliance with the subpoena.

4. [5]

   On 29 September 2014 the Plaintiff filed an Amended Statement of Claim joining Leighton as the Second Defendant in the proceedings. The Amended Statement of Claim was served on Leighton on 2 October 2014.

5. [6]

   The particulars of negligence alleged against Leighton were these:

6. [7]

   On 3 November 2014 Trylow issued another subpoena (the second subpoena) to be served on Leighton requiring production of the following documents:

7. [8]

   It is this subpoena in respect of which costs are sought.

8. [9]

   Solicitors for Leighton, RGSLAW, requested that on the return date of 5 December 2014 the subpoena should be stood over to a later date in December. In the meantime on 12 December 2014 Leighton delivered 42 archived boxes to their solicitors. Subsequently 4 CD ROMs were sent to the solicitors containing further documents that Leighton considered fell within the scope of the subpoena.

9. [10]

   On the adjourned date for the return of the subpoena, 19 December 2014, Mr Tavener, the solicitor having the carriage of the matter for Leighton at RGSLAW, spoke with Ms Kaminskas of Colin Biggers & Paisley, Trylow’s solicitors. Mr Tavener prepared a file note of the discussions which relevantly reads:

10. [11]

    On 16 January 2015 Mr Tavener responded to an email from Ms Kaminskas which had asked if Mr Tavener had finalised his review of the documents. Mr Tavener said he was still reviewing the documents and expected to have completed the review by the middle of the following week. The email went on to say:

11. [12]

    On 21 January 2015 Ms Kaminskas and Mr Tavener had a telephone conversation where Ms Kaminskas requested a copy of the head contract between Leighton and the Hills Motorway Ltd relating to works carried out with respect to the M2 motorway upgrade project, and she said they could worry about the other documents later.

12. [13]

    On 13 February 2015 Ms Vanessa Zai of Colin Biggers had a telephone conversation with Mr Tavener to chase up the status of the documents and the head contract. Mr Tavener says in his affidavit that he does not recall the telephone conversation and could not locate a file note of it. However, Ms Zai had a file note of the conversation. That file note records that Mr Tavener informed Ms Zai that 42 boxes were ready to be inspected but that he still had four CDs with 11 GB of data to go through which was likely to convert to 25 more boxes. Ms Zai specifically asked about the head contract but Mr Tavener said that he had not seen it at that stage. When he did he would seek instructions to provide it. The file note also records Mr Tavener saying this:

13. [14]

    On the same day Ms Zai sent an email to Mr Tavener saying this:

14. [15]

    On 6 March 2015 Colin Biggers sent a letter to Mr Tavener which relevantly said this:

15. [16]

    On 18 March 2015 Colin Biggers sent a further letter referring to the letter of 6 March. The letter said that the new return date for the subpoena was 24 March and asked that Leighton complied with the subpoena. Having received no reply to either of those letters Colin Biggers again wrote on 27 April noting that on the new return date for the subpoena no documents were produced. The letter asked RGSLAW to liaise with Leighton to ensure that documents were produced as a matter of urgency and threatened a Notice of Motion if they failed to comply with the subpoena.

16. [17]

    Nothing then seems to have happened until a telephone conversation between Mr Tavener and Ms Manetakis on 24 July where Ms Manetakis indicated that she was happy to attend the offices of RGSLAW to inspect the documents. Mr Tavener advised that an inspection could be arranged at his office but that this could not be done for a week or so. He said that he was waiting on his client’s instructions but he did not think that providing an un-redacted copy of the head contract would be a problem.

17. [18]

    On 28 July Ms Manetakis sent an email to Mr Tavener following up on the telephone conversation on 24 July. She re-iterated the offer to attend at RGSLAW’s offices to inspect the documents. The email went on to say that given the number of documents that Leighton had in response to the subpoena, Colin Biggers would agree to limit item 3 of the schedule to a period from 8 January to 1 March 2012. Mr Tavener did not reply to that email.

18. [19]

    On 25 August Ms Manetakis attempted to telephone Mr Tavener. She left a message for him to call her. He did not do so. She sent another email on 25 August saying again that she would like to arrange the inspection of documents for the following week. She asked him to contact her. There was no response to that email.

19. [20]

    On 27 August Ms Manetakis again attempted to ring Mr Tavener. She left a message for him to call her. He did not do so.

20. [21]

    She sent a further email on 31 August saying again that she would like to arrange inspection. There was no reply to that email.

21. [22]

    On 2 September Ms Hosking from Colin Biggers telephoned and subsequently emailed Mr James Riley, the principal of RGSLAW to tell him of the unanswered phone calls and emails to Mr Tavener.

22. [23]

    On 14 September Ms Manetakis sent another email saying that she still had had no response to her request to attend RGSLAW’s offices and inspect the documents. A reply was made by Mr Riley on the same day saying that Mr Riley was “dealing with a letter” from Ms Manetakis and he expected to have completed that later that day or the following day.

23. [24]

    The following day (15 September 2015) Mr Riley wrote a letter to Colin Biggers which said this:

24. [25]

    A few things should be noted at this point. First, neither the email nor the letter from Mr Riley contained any explanation or apology for the failures to respond to correspondence from Colin Biggers from as early as 6 March 2015, a period of some six months. Nor was any explanation provided in Mr Tavener’s affidavit for what can only be regarded as entirely unprofessional behaviour and discourtesy in failing to respond to emails and phone calls in July and August 2015. Secondly, nothing was said about making available the head contract whether in redacted or un-redacted form despite what Mr Tavener had said in the July phone conversation with Ms Manetakis and despite Mr Tavener knowing from January 2015 that the contract was the particular document that Trylow needed. Thirdly, although an undertaking was requested for Colin Biggers to pay RGSLAW’s fees, no indication was given of the amount involved, let alone any assessment of those costs. That was despite Mr Tavener having told Ms Kaminskas in January that he would be sending a letter dealing with the costs of producing the documents.

25. [26]

    On 25 September 2015 Colin Biggers served a further subpoena (the third subpoena) on Leighton requiring production:

26. [27]

    On 15 October 2015 Mr Michaels from Colin Biggers rang Mr Tavener to enquire about Leighton’s compliance with the third subpoena which was returnable on the following day. Mr Tavener advised that Leighton would be producing documents pursuant to the second subpoena, that they would not be producing documents in accordance with the third subpoena and would be writing to say that the third subpoena was an abuse of process and needed to be set aside.

27. [28]

    That led to a letter from Colin Biggers to RGSLAW on 19 October which relevantly said this:

28. [29]

    Everything that has happened subsequently suggests that the references in that letter to the subpoena of 27 June 2014 were intended to be references to the subpoena of 3 November 2014. The subpoena of 27 June 2014 had been ignored by both sides ever since Leighton’s in-house counsel complained about its width.

29. [30]

    On 16 November 2015 Mr Riley from RGSLAW wrote to Colin Biggers confirming that Leighton would comply with the second subpoena. He advised that 46 archived boxes would be produced to the Court. He noted that, due to the volume of material to be produced to the Court, the Registry would indicate when the documents could be delivered. He said that he would advise when the documents had been produced. The letter went on to say that pursuant to r 33.11 UCPR Leighton sought recovery of its costs and expenses incurred in collating, inspecting the documents for privilege, provision of advice regarding compliance with the subpoena and of producing the documents. He advised that the total costs incurred were approximately $25,000 and he would send a tax invoice following production of the documents to the Court.

30. [31]

    The letter went on to say this:

31. [32]

    Finally, the letter reiterated that the third subpoena was an abuse of process and sought confirmation that Trylow did not press for compliance.

32. [33]

    On 16 November 2015 Ms Aristea Friedrich from Colin Biggers sent an email to Mr Riley which said:

33. [34]

    The solicitors for each party attended Court on 17 November 2015 to argue before the Deputy Registrar about the subpoenas. Ms Friedrich for Trylow again said that her client was not pressing the second subpoena but only the third subpoena. The matter was adjourned so the solicitors could obtain instructions about the matter. Later that day Colin Biggers sent this letter to RGSLAW:

34. [35]

    On 8 December 2015 Mr Tavener sent a letter to Colin Biggers enclosing a tax invoice in the amount of $14,447 being the cost of compliance with the subpoena. Subsequently Mr Tavener discovered that he had omitted costs incurred in October and November 2015. The claim by Leighton is now for $23,051. A claim is also made for $4,420 for the costs of the present Motion.

Submissions

1. [36]

   A letter from Colin Biggers to RGSLAW of 27 April 2016 disputed Leighton’s entitlement for costs of compliance with the subpoena. Colin Biggers drew attention to the decision of Hoeben J (as his Honour then was) in Simpson v Monteith [2009] NSWSC 156 and said that they relied on three matters to deny the entitlement of Leighton to costs. First it was said Leighton had continually failed to comply with the subpoena “before it lapsed in or about October 2015, and then was formally withdrawn on 17 November 2015”; secondly, Leighton was joined as a party to the proceedings and was in any event obligated to provide by way of Notice to Produce the documents directly relevant to issues in dispute; thirdly, the documents sought by the subpoena were documents relevant to the proceedings which would have been necessary and central to Leighton’s defence and would have had to be obtained and reviewed by RGSLAW for the purposes of defending the claim.

2. [37]

   Leighton in its submissions addressed these three matters. In relation to the failure to comply, attention was drawn to the width of the subpoena and the correspondence in relation both to the amount of material and the attempts to limit what needed to be produced. Reliance was placed on the issue of the third subpoena and the withdrawal of the subpoena in question. Leighton submitted that it took all reasonable steps to comply with the subpoena.

3. [38]

   Leighton submitted that the second matter was misconceived. This was because of the limited nature of what is able to be produced before a hearing by the terms of r 21.10. Leighton submitted that it could not sensibly be suggested that that Rule permitted a Notice to Produce to call up the wide ranging enquiry required by the scope of the second subpoena. Nor was discovery available in personal injury claims without special reasons pursuant to r 21.8.

4. [39]

   As to the third matter Leighton submitted that there was no basis for the suggestion that it would have undertaken such searches in any event. Searching for and reviewing a large number of documents being required to be produced by a subpoena is a task quite different to the focused task a party undertakes to determine what issues it considers are relevant to the proceedings and what documents it has or may have which are relevant to its case.

5. [40]

   Trylow submitted that an order under r 33.11 was inappropriate in the situation where at the time the subpoena was issued Leighton was already a party to the proceedings. Reliance was placed on Simpson v Monteith and the explanation for the former Rule (Pt 37 r 9 Supreme Court Rules 1970 (NSW)) in Deposit & Investment Co Limited (Receivers Appointed) v Peat Marwick Mitchell & Co (1996) 39 NSWLR 267.

6. [41]

   Trylow disputed that the costs claimed represented reasonable loss or expenses incurred by Leighton because they were entirely out of proportion to the nature of documents called for in the subpoena. Trylow submitted that the costs were improperly incurred by Leighton without proper disclosure or a proper attempt to agree on the amount of the costs before they were incurred. Trylow also submitted that whatever costs and expenses Leighton had incurred were Leighton’s costs in the proceedings and there is no reason why those costs should be assessed now or made the subject of a separate costs order. Reference was made to r 42.7 UCPR which provides that, ordinarily, costs ordered on interlocutory applications are paid at the conclusion of the proceedings.

Principles

1. [42]

   Rule 33.11 UCPR provides:

2. [43]

   The scope of the costs that can be ordered was explained by Brereton J in A Pty Ltd v Z [2007] NSWSC 999 at [45] and by Ball J in Sunfield Resources Pty Limited v Waratah Resources Limited [2014] NSWSC 788 at [9].

3. [44]

   Simpson v Monteith is informative for any consideration of the present claim. In that matter Perpetual Trustee Co Ltd was appointed a trustee of a very large award of damages that the plaintiff in that case received. Some six years later solicitors acting for the plaintiff requested from Perpetual copies of the financial records of the Trust since its establishment some five years earlier. Some 18 categories of documents were specified. Correspondence ensued between Perpetual and the Plaintiff’s solicitors but Perpetual did not collect or make available the documents.

4. [45]

   On 7 March 2008 the plaintiff commenced proceedings against her former solicitors. On 27 March 2008 the plaintiff issued a subpoena to Perpetual seeking the same documents as had been sought in the letter of 26 June 2007 and also sought the complete file for the Trust. On 6 June 2008 Perpetual produced to the Supreme Court Registry four boxes of documents and two packets of documents marked “Privileged” in answer to the subpoena. On 6 August 2008 leave was given to the Plaintiff to join Perpetual as a party to the proceedings. On 17 November 2008 solicitors acting for Perpetual provided the Plaintiff’s solicitors with its claim for costs in relation to compliance with the subpoena. The costs were assessed at $55,000 but on a “without prejudice” basis. Perpetual was prepared to accept $35,000. The offer was not accepted and an application was made by Perpetual seeking the costs pursuant to r 33.11.

5. [46]

   Relevantly for present purposes, Perpetual’s third argument in support of its claim was that the Court should approach the question by having regard to the fact that at the time the subpoena was issued Perpetual was not a party and that when it sought to comply on 6 June 2008 it was still not a party. At the time of the application Perpetual submitted that the ambit of the claim against it in the proceedings had not been made clear and that no categories of documents had been agreed or identified with the result that it was by no means obvious that documents which Perpetual would be required to produce by way of discovery would be the same as those required under the subpoena.

6. [47]

   In relation to those submissions Hoeben J said this:

7. [48]

   In a sense, the present case is a stronger one for applying the approach of Hoeben J in Simpson v Monteith. In that case it was the plaintiff who joined Perpetual, to whom it had earlier issued the subpoena. That might have suggested that it would be appropriate, all other things being equal, for an order under r 33.11 to be made. However, for the reasons given by Hoeben J, with which I entirely agree, it was not appropriate. Rather the costs were ordered to be costs in the cause.

8. [49]

   In the present case, it was not Trylow who joined Leighton to the proceedings but the Plaintiff. Further, the second subpoena was issued after Leigton was joined. Whilst there is force in the submission of Leighton that there is a considerable difference between searching for and reviewing a large number of documents required to be produced pursuant to a subpoena on the one hand, and examining which of that party’s own documents would be necessary to defend the proceedings, it seems fairly clear from what was required to be produced in answer to the second subpoena, and having regard to the particulars of negligence, that there is likely to be considerable crossover between the two exercises. The significant point is that the best time to judge what costs were specifically referable to complying with the subpoena will be after the completion of the case when it is known what documents Leighton will have needed to defend the claim made against it.

9. [50]

   At the present time, although the documents in the schedule to the subpoena of 3 November 2014 appear in many but not all respects to be documents that Leighton will need to rely on to defend the claim, there is an element of speculation about that. As has been said in a different context by the High Court, facts are to be preferred to prophecies.

10. [51]

    On the other hand, I do not agree with Trylow’s submission that Leighton would have been obligated to produce these documents pursuant to a Notice to Produce. Rule 21.10 UCPR restricts the documents that can be required to be produced to the classes of documents referred to in the Rule. A Notice to produce in terms as wide as the second subpoena would be liable to be set aside.

11. [52]

    There is no particular prejudice to Leighton for the matter of its costs in complying with the subpoena to be dealt with at the end of the proceedings. It is no secret that Leighton is a large company and that, probably, one or more of its insurers will be, or are already, involved in the litigation.

12. [53]

    It is necessary, however, to say something about one significantly different matter on the present application from that which was considered in Simpson v Monteith. That matter is the fact that Trylow’s solicitors withdrew the subpoena of 3 November 2014 after Leighton and its solicitors had carried out a good deal of work in order to comply with the subpoena. Having reviewed the procedural history of the matter, which I have summarised earlier in this judgment, I am satisfied that the withdrawal of the subpoena and the requirement to comply with the third subpoena of 25 September 2015 should not bring about a different result on the present application for the reasons which follow.

13. [54]

    Whilst criticism can be directed at both sides in respect of the way the subpoena issue has been dealt with, there can be no doubt that the main reason for the issue of the third subpoena and the withdrawal of the second subpoena was the extremely dilatory way the solicitors for Leighton acted in relation to the second subpoena. It can be accepted that the subpoena was couched in wide terms but, although there were some discussions about limiting the width of the subpoena, at no time did Leighton’s solicitors seek to set aside the subpoena by reason of its width. When they did ask specifically for what Trylow’s solicitors were looking in particular, they were told as early as January 2015 that it was the head contract between Leighton and Hills Motorway that was most urgently needed. That was a document that might be thought to be of some significance for Leighton in defending the claim made against it by that time. Notwithstanding that the contract was identified in January and that numerous requests were made for it during the course of that year it had not been produced by September 2015.

14. [55]

    The considerable frustration of Trylow and its solicitors in endeavouring to obtain a copy of that contract can be well understood. I cannot help observing that there is no mention in Mr Tavener’s affidavit of the two telephone conversations of 21 January and 24 July where Trylow’s need for the head contract was discussed and made known. These conversations undoubtedly happened as the diary notes of the solicitors at Colin Biggers attest. Yet, the printout of the itemised fees from RGSLAW shows that nothing was done on their part with respect to the subpoenaed documents from 27 January 2015 to 14 September 2015. It was as if the matter was forgotten as soon as the phone was put down on each occasion.

15. [56]

    That fact, coupled with the letters, emails and telephone conversations instigated by Colin Biggers which were ignored by RGSLAW between March 2015 and September 2015 (apart from the one telephone conversation on 24 July 2015 that achieved nothing), the decision by Colin Biggers to issue the third subpoena to obtain a copy of that contract and to advise RGSLAW that it no longer required production of the other documents was not unreasonable. Nor was it, in all the circumstances, an abuse of process.

16. [57]

    Perhaps Colin Biggers should have taken more decisive action to require compliance with the second subpoena but set alongside the astonishing failure of Leighton’s solicitors to do anything to comply with, or move to set aside, the subpoena over an eight month period (and it hardly needs to be said that a subpoena is an order of the Court with which the solicitors here were obliged to ensure that their client complied), Colin Biggers cannot be criticised for the course they took in September 2015 and thereafter.

17. [58]

    For these reasons, no order should be made under r 33.11. Leighton’s costs of compliance with the second subpoena should be costs in the cause but reserving Leighton’s rights to argue for costs that can be shown to have been thrown away as a result of the withdrawal of that subpoena. Costs will only have been thrown away to the extent that (a) work in relation to the documents was performed before RGSLAW was notified that the subpoena was abandoned and (b) the documents produced were not needed by Leighton whether in defence of the Plaintiff’s claim or any cross-claims, or in support of cross-claims brought by Leighton in the proceedings.

18. [59]

    Notwithstanding that reservation of Leighton’s rights, I consider that Leighton has been largely unsuccessful on the Motion and should pay Trylow’s costs.

Conclusion

1. [60]

   I make the following orders: