Industrial Relations Commission of New South Wales in Court Session CITATION: Portpath Pty Limited and others v Mayne Nickless Limited t/as Health Care of Australia [2005] NSWIRComm 91 Applicant: Safeport Pty Limited (ACN 088 903 066) PARTIES: Respondent: Mayne Nickless Limited t/as Health Care of Australia (ACN 004 073 410) FILE NUMBER(S): 3908 of 2001 CORAM: Backman J CATCHWORDS: Costs - Summons for Production to non-party - costs sought by non-party to produce the documents - application of Rule 92(1) of the Industrial Relations Commission Rules 1996 and Clause 20 of the Industrial Relations (General) Regulation 2001 - relevant principles to be applied in a decision to award costs to a non-party required to produce materials under a Summons - orders. Industrial Relations Commission Rules 1996 Industrial Relations (General) Regulation 2001 LEGISLATION CITED: Supreme Court Rules Deposit & Investment Co Ltd (Receivers Appointed) and Ors v Peat Marwick Mitchell & Co (1996) 39 NSWLR 267 CASES CITED: Stephen John Pilgrim and Anor v Wendy's Supa Sundaes Pty Ltd and ors (2002) NSWIRComm 4 HEARING DATES: 08/17/2004 DATE OF JUDGMENT: 03/24/2005 Applicant: Diane Hunter Solicitors: Emmerson & Emmerson LEGAL REPRESENTATIVES: Respondent: Mr D. Barton Solicitors: Freehills JUDGMENT: - 6 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Backman J 24 March 2005 Matter No IRC 3908 of 2001 Portpath Pty Limited and others v Mayne Nickless Limited t/as Health Care of Australia Application under s106 of the Industrial Relations Act 1996. INTERLOCUTORY JUDGMENT RE COSTS [2005] NSWIRComm 91 1 On 22 April, 2004 a Summons for Production ("the Summons") was served on Safeport Pty Ltd ("Safeport") by way of letter from Freehills, who represent the respondents in these proceedings. Safeport is not a party to these proceedings. 2 On 18 May, 2004 Safeport sent a letter to Freehills advising of the work required to provide the documents requested in the summons and seeking a payment of $1,860.00 to produce the documents. 3 The claim for payment is disputed by Freehills, although on 1 June, 2004 Freehills did offer to pay part of the amount. That offer to pay consisted of the payment of the costs of Mr McGeogh, Safeport's accountant, in the sum of $935.00, and half of Safeport's costs, in the sum of $487.50, a total of $1,422.50. 4 On 3 June, 2004, Emmerson & Emmerson, solicitors, ("Emmerson & Emmerson"), by that stage representing Safeport, wrote to Freehills rejecting its offer and also advising Freehills that it had incurred costs in the sum of $850.30. 5 On 3 June, 2004, Safeport was ordered by Deputy Industrial Registrar Musgrave to produce the documents sought in the Summons. Those documents were delivered to the Registry on 4 June, 2004. Safeport also sought its client's reasonable legal expenses in the sum of $1,860.00, and its costs and disbursements in the sum of $1,500.00. Deputy Industrial Registrar Musgrave indicated that he would refer the issue of costs to a judicial member. 6 On 8 June, 2004 Emmerson & Emmerson notified Freehills by way of letter that it would be seeking payment of its costs and disbursements in the sum of $1,500.00, in addition to seeking Safeport's reasonable expenses of $1860.00. 7 To date Safeport has received $50.00 from Freehills, which represents the fee to courier documents required to be produced in accordance with the Summons, from Port Macquarie (the location of Mr McGeogh's office) to the offices of Emmerson & Emmerson. In addition, on 26 August, 2004, Freehills sent under cover of letter, a cheque for $1,000.00 made out to Emmerson & Emmerson, representing conduct money, for Mr McGeoch and Safeport. 8 Emmerson & Emmerson seek from the respondent a further $860.00 which it says represents the balance of the conduct money payable for costs incurred in producing the documentation sought by the respondent from Safeport under the Summons. Also sought from the respondent is the payment of Safeport's legal costs of these interlocutory proceedings as agreed or assessed. 9 The respondent requests the Commission to make orders that it pay $372.50 by way of conduct money. This amount represents the balance after the payment of $1,050.00 already made of the total amount of $1,422.50 offered by way of settlement of the matter by the respondent to Safeport on 1 June, 2004. 10 The actual amount at issue between the parties, which the parties have been unable to resolve, therefore, is a modest sum of $437.50. 11 This sum of $437.50, from what may be gathered from the relevant material, represents part of the expenses incurred by Safeport in complying with the Summons. The expenses appear to have been incurred by two directors of Safeport who have, according to their legal representatives, Emmerson & Emmerson, spent some 15 hours at $65.00 per hour locating the documentation required to be produced under the Summons. 12 Rule 92 (1) of the Industrial Relations Commission Rules 1996 provides:- "Where a summons for production or to give evidence is issued at the request of a party, the person named is to be tendered, at the time of service of the summons or not later than a reasonable time before the day on which compliance is required by the summons, a sum required by the Industrial Relations (General) Regulation 1996 ." 13 The Industrial Relations (General) Regulation 1996 has been repealed, and has been replaced, since 1 September, 2001, by the Industrial Relations (General) Regulation 2001 ("the 2001 Regulation"). 14 Clause 20 of the 2001 Regulation provides:- "(1) This clause applies to any summons (however described) for the purposes of the Act that is issued at the request of a party and requires a person to do either or both of the following: (a) attend and give evidence, (b) attend and produce documents or other things. (2)Any such person is not required to comply with the summons unless an amount sufficient to meet the reasonable expenses of the person in complying with the summons is paid or tendered to the person at the time of service of the summons or not later than a reasonable time before the day on which the person is required to comply with the summons. (3)If the person required to comply with the summons is not a party and, in order to comply with the summons, incurs expense or loss substantially exceeding any amount paid under sub-clause (2), the Commission may order the party who requested the issue of the summons to pay to the person an amount sufficient to make good the expense or loss." 15 Here, Safeport, the person required to comply with the summons, is not a party and, has incurred expenses in gathering material for the purposes of production to the Court in accordance with the Summons. 16 Safeport relies expressly on sub-clause 20(3). This necessitates consideration of the degree by which the expenses incurred exceed the amount of conduct money paid, which, according to sub-clause 20(2) must be "sufficient to meet the reasonable expenses" of the person complying with the summons. 17 It is difficult to assess what amount might be sufficient to constitute reasonable expenses, under sub-clause 20(2). An examination of sub-clause 20(3) suggests it is intended to compensate a non-party where that non-party incurs expenses which substantially exceed the reasonable expenses which are sufficient to comply with the Summons. 18 Initially, Safeport was paid $50.00 by way of conduct money by the respondent. Certainly the total costs sought on Safeport's behalf for complying with the summons, substantially exceed that amount. 19 It is up to the discretion of the Court once it is determined that Safeport has incurred expenses which substantially exceed the amount paid to it by way of conduct money, whether the respondent should be ordered to pay an amount sufficient to make good its expenses. 20 It is my view that Safeport should be paid its expenses in accordance with sub-clause 20(3) unless there is some reason why it might otherwise be disentitled to such payment. 21 The respondent contends that the costs which Safeport and McGeogh are alleged to have incurred (namely $1,860.00) are "excessive" and "unreasonable". The respondent, however, in an attempt to resolve the issue, made an offer of $1422.50 to settle the matter. 22 This offer was rejected by Emmerson & Emmerson on behalf of Safeport even though the difference was only $437.50. 23 In Deposit & Investment Co Ltd (Receivers Appointed) and Ors v Peat Marwick Mitchell & Co (1996) 39 NSWLR 267, Bainton J in commenting on Part 37 Rule 9 of the Supreme Court Rules (which was similar in terms to sub-clause 20(3)) said, at 23:- "Part 37, r 9, expressly complying with a subpoena issued by this Court, entitles a person to be paid "an amount in respect of the expenses or loss which he reasonably incurs substantially exceeding the conduct money paid to him in consequence of service of the subpoena upon him". I can see no reason to read it down in any way: on the contrary it should be given full force and effect. A professional person taken away from his income earning activities will lose what he would have earned in the time he has to spend in obeying the subpoena. A body corporate required to answer a subpoena duces tecum will be put to expense or loss in having employees or persons especially engaged in the task of having to devote themselves to searching for the documents sought, in collating them, and in many if not most cases, in making a copy to be retained in the body corporate's records if the subpoena requires the originals of documents to be produced. An individual whose business records are sought may similarly need to make and retain a copy of them. I can see no reason why in complex litigation, particularly such as is instanced by the present case, that such loss or expense should be borne by a stranger to the litigation rather than by the party requiring the documents in the first place and in the ultimate the party who is ordered to pay the costs of the litigation. Litigation in the last decade of the twentieth century is quite different from litigation in the first half of the nineteenth century. The issues, especially in commercial litigation, are commonly much more complex; the duration of the hearing is commonly much longer; the legislation governing the rights of litigating parties is usually much more complex and of late in many cases less readily intelligible. The use of subpoenas in dragnet form such as are instanced by those in question in this matter have become common indeed, particularly in the Commercial Division of this Court. In my view it would be intolerably unjust to leave the burden of the cost of responding to such subpoenas upon a stranger to the litigation on whom the subpoena is served." 24 I agree with, and apply, his Honour's comments in relation to Part 37 Rule 9 (as it then was) of the Supreme Court Rules to the present circumstances. Although I do not understand the Summons, the subject of the present proceedings to be of a "dragnet form", it seems reasonably clear from the material before me that the substantive proceedings, which are part-heard and have been set down for a further six weeks hearing to commence in June this year, may involve long and complex litigation. I am not satisfied in these circumstances that the material has demonstrated that the level of cost burden imposed on Safeport, a non-party, was not a substantial one: see, for example Stephen John Pilgrim and Anor v Wendy's Supa Sundaes Pty Ltd and ors (2002) NSWIRComm 4 per Peterson J at [16]. 25 I therefore make the following orders: 1. I order the respondent Mayne Nickless Limited (t/a Health Care Australia) to pay Safeport Pty Limited the amount of $1,860.00 (being a balance of $860.00). 2. I order the respondent to pay Safeport Pty Limited's legal costs as agreed or assessed of these interlocutory proceedings. 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