New South Wales Supreme Court CITATION : 789TEN v Westpac & Anor [2005] NSWSC 404 HEARING DATE(S) : 22 April 2005 JUDGMENT DATE : 22 April 2005 JUDGMENT OF : McDougall J at 1 DECISION : See para [33] of judgment CATCHWORDS : PRACTICE AND PROCEDURE - where solicitor for the respondent agreed that his firm would accept service on behalf of a non-party of plaintiff's subpoena - where subpoena and conduct money given to another partner in firm - where solicitor maintained that subpoena not properly served - where notice of motion brought seeking production of documents - where agreement reached for production of documents - whether solicitor for respondent ought pay applicant's costs - whether costs incurred improperly, without reasonable cause or wasted by undue delay or misconduct - no question of principle LEGISLATION CITED : Supreme Court Act 1970 789TEN Pty Limited (Plaintiff) PARTIES : Westpac Banking Corporation Limited (Defendant 1) Colin Alexander (Defendant 2) FILE NUMBER(S) : SC 50167/03 M D Broun QC (for A G R Harper, Solicitor) COUNSEL : P J Dowdy (for Westpac) Laurence & Laurence (for 789TEN) SOLICITORS : Henry Davis York (for Westpac) LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST McDOUGALL J 22 April 2005 Ex tempore (revised 26 April 2005) 50167/03 789TEN Pty Limited v WESTPAC BANKING CORPORATION Limited & Anor JUDGMENT 1 HIS HONOUR: The nature of the substantive proceedings is set out with sufficient detail for present purposes in my judgment given on another interlocutory application on 28 July 2004: 789TEN v Westpac Banking Corporation Ltd & Anor [2004] NSWSC 596. As is apparent from that judgment, the litigation is being keenly, perhaps bitterly, fought. 2 The application that comes before the Court today relates to a subpoena addressed to a non party, Peter Gilmore Pty Limited (Peter Gilmore). That was issued on 24 January 2005. The last day for service was fixed as 2 March 2005. The uncontested evidence for the first defendant (Westpac) is that, because there were difficulties in serving Peter Gilmore at its registered office, the principal of that company (Mr Gilmore) advised process servers that Laurence & Laurence (the plaintiff's solicitors) were authorised to accept service. 3 The unchallenged evidence further shows that that indication of authority was confirmed between a solicitor from Henry Davis York (Westpac's solicitors) and Mr Harper, a partner in Laurence & Laurence (the plaintiff's solicitor). Mr Harper said: "We can accept service." The process server then attended Laurence & Laurence's office on 2 March 2003. On that day, it appears, Mr Harper personally was unavailable. However, the process server spoke to another partner in the firm, Mr Rick Laws. Mr Laws said, according to the process server, that Mr Harper was in a meeting with Mr Gilmore and that he (Mr Laws) would take the subpoena "but I can't sign anything at this stage". He was then given the subpoena and the relevant conduct money. The following day - one day after the last day limited for service - a further copy of the subpoena was given personally to Mr Harper. 4 I emphasise that none of this evidence was challenged and none of it has been answered. 5 Peter Gilmore did not produce documents in answer to the subpoena on its return date, namely 10 March 2005. Accordingly, Henry Davis York wrote to Laurence & Laurence. They said that the subpoena had been stood over until 24 March 2005 but that, because there was another subpoena returnable on 17 March 2005, the subpoena addressed to Peter Gilmore would be called on that day. The letter requested confirmation that documents would be produced to the Registry. There was no response to that letter until 23 March 2005. 6 Nothing was produced to the Registry and there was no appearance by Peter Gilmore on 17 March 2005. Accordingly, on 18 March 2005, Henry Davis York wrote again to Laurence & Laurence. The letter required information about what documents would be produced, and the reason why Peter Gilmore had not complied. 7 That letter led to the response of 23 March 2005 to which I have adverted. The response, omitting formal parts, said: "We refer to the subpoena issued to Peter Gilmore Pty Limited returnable 10 March 2005. We advise that this subpoena was served out of time." That letter was signed for Mr Harper. 8 Henry Davis York responded the same day. They set out the history of attempts to effect service (which I have summarised above.) They then stated that the subpoena would be called upon the following day (24 March) and that, if documents were not produced, and an application was not made, orders from the Court would be sought for non compliance. 9 Laurence & Laurence replied on 24 March 2005. The letter referred to the events of 2 March 2005 involving the process server and Mr Laws. It is clear from the letter (if it were not clear from the evidence of the process server) that Mr Laws was given and retained a copy of the subpoena; and the letter confirms that, as I have said, Mr Laws was a partner in the firm at the relevant time. 10 The letter then referred to the events of 3 March 2005 and stated: "Accordingly it appears the subpoena has been served out of time. We do now have a copy of the unserved subpoena and will request that Peter Gilmore Pty Limited arrange for the collation of the documents referred to in the schedule to the subpoena so that they are ready to be produced to the court in answer to a properly served subpoena. In the meantime we would be grateful if you would advise the relevance to the current proceedings of the documents listed in categories 2 and 3 of the schedule to the subpoena." 11 The letter was written by Mr Harper. I understand that the reference to the unserved subpoena was a reference to the document provided to Mr Harper, to use a neutral expression, on 3 March 2005. I mention that, although the letter queried the relevance of some of the documents sought by the subpoena, no application has been made to the Court to set aside or limit the terms of the subpoena. 12 Henry Davis York wrote a further letter to Laurence & Laurence on 13 April 2005. That letter made complaint of a number of matters, including the non-response to the subpoena to Peter Gilmore. It contended that the subpoena was served in time; that the allegation that service had not been effected in time was unreasonable and obstructive; and it requested that documents be produced by 21 April 2005. It then stated: "If you do not provide this confirmation, the bank will apply to the court on 22 April 2005, or as soon as possible thereafter, for orders that you, or alternatively, your client, produce such documents, together with an order that you pay the costs necessitated by the application." I understand the reference to "your client" to be a reference to Peter Gilmore. 13 Laurence & Laurence replied on 20 April 2005. Dealing with the question of a subpoena, the letter said that Mr Gilmore was ill and unable to work. (That has been confirmed by a certificate from Dr Feller dated 13 April 2005.) The letter then said: "Notwithstanding that the subpoena has been served out of time, we suggest in the spirit of cooperation, at the directions on 22 April 2005 we agree to a reasonable return date for the subpoena sometime after 30 April 2005 on the basis that a subpoena is properly served on the writer." 14 In the context to which I have referred, and given the unchallenged evidence that service was effected on the firm (and that the agreement to accept service was an agreement by the firm), I regard the reference to a "spirit of cooperation" as being, putting it as mildly as I can, hypocritical. 15 Westpac, by notice of motion filed on 18 April 2005, sought "a peremptory order" that Peter Gilmore, through Mr Harper, produce documents in answer to the subpoena. It has been agreed, having regard to Mr Gilmore's medical condition, that the "peremptory order" should not be made and that Mr Peter Gilmore should produce documents by 10 May 2005. 16 Because that has been agreed, I will make the order, even though it is by no means clear to me why Mr Gilmore's illness (devastating though no doubt it is) requires more than two months for the documents in answer to the subpoena to be collated. No evidence has been furnished as to the nature or extent of the task or as to the extent of Mr Gilmore's disabilities. Although it may be that his condition has fluctuated in the course of treatment, I do note that on 2 March 2005 he was said to be in conference with Mr Harper. 17 Westpac also seeks an order that Mr Harper pay the costs thrown away "through the necessity of this notice of motion" and by reason of the failure of Peter Gilmore to answer the subpoena on 10, 17 and 24 March 2005 and 7 April 2005; alternatively, an order that Peter Gilmore pay those costs. 18 It was not disputed that the Court has power to order a solicitor to pay costs in certain circumstances. Clearly, that power exists: see s 76C of the Supreme Court Act 1970 and Pt 52 r 43A of the Supreme Court Rules. 19 The circumstances in which the Court may order a solicitor to pay costs are set out in Pt 52 r 43A. Those circumstances include "where costs are incurred improperly or without reasonable cause or wasted by undue delay or any other misconduct or default" for which a solicitor personally, or through a servant or agent, is responsible. 20 The Court must allow the solicitor a reasonable opportunity to be heard. Today Mr M D Broun QC appeared and put submissions for Mr Harper. I was not requested to adjourn the proceedings to enable any evidence or further explanation to be provided. 21 The subject matter of costs is also dealt with in Practice Note 108. Paragraph 1 of that Practice Note points out that its purpose is to "ensure … compliance with directions and the rules of the Court" and notes that "the requirement that parties and practitioners comply with directions and rules will be confirmed by the use of cost sanctions in appropriate cases including costs orders against practitioners personally." 22 Paragraph 2 of the Practice Note reminds practitioners of "their duty to the court to ensure the efficient and expeditious conduct of proceedings." 23 Paragraph 3 of the note identifies the duty of practitioners to "facilitate the just, quick and cheap disposal of proceedings." 24 These proceedings have been entered in the Commercial List. As Practice Note 100 makes clear, the function of that list is to provide the "just, quick and cheap disposal of proceedings" of a nature appropriate to be entered into the Commercial List. It cannot be doubted that these proceedings were appropriately entered in the Commercial List. 25 The only view of the evidence is that the agreement to accept service was an agreement on behalf of Laurence & Laurence. It cannot be doubted that Mr Harper, a partner in that firm, had power to enter into such an agreement. There is no suggestion in the evidence that the requirement to serve Laurence & Laurence was a requirement requiring Mr Harper to be served personally. The only time that such a requirement has been raised is in the letter of 20 April 2005 which referred to a condition "that a subpoena is properly served on Mr Harper". It follows inevitably that service on Mr Laws, a partner in the firm, was service in accordance with the undertaking given. I fail to understand how any competent practitioner, acting reasonably, could come to a different view. It follows that the consistent attitude taken by Mr Harper in correspondence that the subpoena has not been served or properly served is baseless. 26 But even if that were wrong, the evidence shows that the subpoena was served out of time on Mr Harper. That may well have meant that Mr Harper, or more accurately Peter Gilmore, required more time to comply. No request was made for further time to comply. 27 Except for Mr Gilmore's unfortunate illness, there is no suggestion that there has been at any time a need for an extension of time. It can only be assumed that the attitude taken reflected not the difficulty of compliance with the subpoena but a desire to avoid answering it on the ground that it was not served in time. 28 A practitioner acting in accordance with the obligations identified in Practice Note 108 and seeking to facilitate the purposes identified in Practice Note 100 would take the view, I think, that even if a subpoena was served on him (or his firm) out of time, nevertheless the duties and objectives identified required that the subpoena be complied with, subject to the allowance of sufficient time for that to occur. 29 If the person to whom the subpoena were addressed wished to take the technical point that service had not been effected, or not effected in time, one would expect there to be clear instructions on that point; and in my view the solicitor's duties to the Court would require the solicitor to inform the client that such an attitude was uncooperative and likely to lead only to an increase in costs. In any event, there is no evidence in the present case that Mr Gilmore on behalf of Peter Gilmore has given any instructions to take such a technical point. 30 The result is that this entirely pointless notice of motion has been required to be brought. Documents that should have been produced to the Court were not because of a manifestly inadequate, and wrong, excuse. The nature of that excuse, in my view, is capable of supporting the inference that the motivation of Mr Harper was not to take a just point on behalf of a client, but to seek to delay the production of documents that the other party and lawyers require in proceedings in this Court. 31 I repeat that Mr Harper has offered no explanation, oral or on affidavit, of his position; and that as late as 20 April 2005 Mr Harper maintained the erroneous position to which I have referred. It was not until Mr Broun's submission today that any semblance of a reason was revealed. 32 I regard the conduct that I have described as entirely inappropriate. In my view, if ever there were a case that required a costs order against a solicitor, it is conduct of the kind that I have described. Further, I regard the conduct in question as capable of being unsatisfactory in a professional sense. 33 I therefore make the following orders: (1) Order that Peter Gilmore Pty Limited produce to the Court by 10 May 2005 the documents described in the subpoena issued on 23 February 2005, a copy of which is Annexure A to the affidavit of Scott Andrew Harris sworn 17 April 2005. (2) Order Angus Graham Rainy Harper to pay Westpac's costs of and incidental to and thrown away by this notice of motion together with the costs thrown away by reason of the failure of Peter Gilmore Pty Limited to answer the said subpoena on 10, 17 and 24 March 2005 and 7 April 2005. (3) Direct the Principal Registrar to forward a copy of these reasons to the Law Society of New South Wales and to the Legal Services Commission of New South Wales. ****** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.