Supreme Court New South Wales Medium Neutral Citation: Greencapital Aust Pty Ltd v Pasminco Cockle Creek Smelter Pty Ltd (subject to Deed of Company Arrangement) (No 2) [2018] NSWSC 1641 Hearing dates: 26 October 2018 Decision date: 26 October 2018 Jurisdiction: Equity - Commercial List Before: Stevenson J Decision: Third party to pay costs of notice of motion to set aside subpoena; defendant to pay 75 per cent of amended notice of motion seeking to be excused from compliance with the subpoena; defendant to pay $79,221.95 for third party's reasonable costs of compliance with subpoena Catchwords: COSTS – Party/Party – costs orders in interlocutory proceedings – subpoena served on third party – costs of motion to set aside subpoena and alternatively be excused from compliance with subpoena - costs of compliance with subpoena Legislation Cited: Federal Court Rules Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: A Pty Ltd v Z [2007] NSWSC 999 Charlick Trading Pty Ltd v Australian National Railways Commission (1997) 149 ALR 647 Category: Procedural and other rulings Parties: Secretary of the Department of Planning and Environment (Applicant) Pasminco Cockle Creek Smelter Pty Ltd (subject to Deed of Company Arrangement) (Respondent) Representation: Counsel: A Harding (Applicant) J C Lee (Respondent) Solicitors: McCullough Robertson (Applicant) Minter Ellison (Respondent) File Number(s): SC 2018/208684 EX TEMPORE Judgment (REVISED) 1. On 17 August 2018 the defendant, Pasminco Cockle Creek Smelter Pty Ltd (subject to Deed of Company Arrangement), served a subpoena on the Department of Planning and Environment. The subpoena sought production of one identified letter and seven broadly expressed categories of documents. 2. Between 7 and 12 September 2018, 15 lawyers from the Department conducted a review of some 2,600 documents that were caught by the subpoena. 3. On 12 September 2018 the Department filed and served a Notice of Motion seeking to set aside the subpoena on the grounds that it had no legitimate forensic purpose and was oppressive. 4. Alternatively, the Department sought to be excused from complying with the subpoena on the basis that some 2,000 of the 2,600 documents caught by the subpoena were the subject of client legal privilege. 5. I dealt with that motion on 14 September 2018. 6. The matter was then said to be urgent because of the then imminence of the hearing date. The hearing date has now been postponed to 3 December 2018. 7. After debate, the Department did not press its application that the subpoena be set aside and accepted that further evidence was required to justify its contentions concerning privilege. 8. On 17 September 2018 the Department filed an Amended Notice of Motion abandoning its claim that the subpoena be set aside, but maintaining its claim that it should be excused from producing the 2,000 documents on the basis of legal client privilege. 9. Also on 17 September 2018 the Department produced 600 odd documents that were not said to be privileged. 10. On 24 September 2018 Pasminco's solicitors wrote to the Department's solicitors, confining Pasminco's challenge to the Department's claim for privilege to some 220 of the 2,000 documents. In effect, Pasminco accepted the Department's claim of privilege for some 1,800 of the 2,000 documents. 11. On 5 October 2018 I noted those documents remained in dispute and made directions to have the dispute ready for determination today. 12. On 17 October 2018 the Department served a further affidavit. It set out in more detail the evidence upon which the Department relied to justify the claim for privilege in respect of the 220 documents. 13. On 24 October 2018 Pasminco's solicitors refined their dispute to some 26 documents. Overnight the dispute was reduced to some 22 documents. I heard argument earlier today about those documents. 14. For the reasons I gave this morning, I upheld the Department's claim for all but two of those documents. 15. Two questions arise. 16. The first is what order for costs should be made in respect of the Department's notice of motion and amended notice of motion. 17. The second is whether an order should be made under Uniform Civil Procedure Rules 2005 (NSW) r 33.11 for the Department's reasonable expenses of complying with the subpoena. 18. The distinction between the costs incurred in challenging a subpoena and the costs incurred in complying with the subpoena is not always easy to identify. 19. Unlike the circumstances that were before Brereton J, as his Honour then was, in A Pty Ltd v Z [2007] NSWSC 999, I do not see this is a case where that distinction can be drawn by reference only to the date upon which the Department moved to set aside the subpoena (cf [49] in Brereton J's judgment). 20. The question is complicated here by the fact that, because of the then imminence of the hearing date, the Department was obliged to search and assemble the documents called for and to seek advice and make a decision about any basis upon which production should be resisted in a very tight timeframe. 21. The costs incurred by the Department in reviewing the documents, considering whether a claim for privilege should be made, and seeking advice as to whether that claim would be justified, fall within the costs of compliance with the subpoena: see Mansfield J in Charlick Trading Pty Ltd v Australian National Railways Commission (1997) 149 ALR 647 at 649 (dealing with the corresponding provision in the Federal Court Rules). The costs of the Notice of Motion and the Amended Notice of Motion 1. The Department was, in effect, unsuccessful on its application to set aside the subpoena. 2. The matter was argued before me on 14 September 2018. After I expressed the view that there was a legitimate forensic purpose to the subpoena and that it was not oppressive, the application was not pressed. It was formally abandoned when the Department filed its Amended Notice of Motion on 17 September 2018. 3. Otherwise, the Department has in substance been successful. It has made out its claim to privilege, whether by agreement or adjudication, to all but two of the 2,000 odd documents in question. 4. It is true that, had the Department's affidavit served on 17 October 2018 been to hand earlier, the matter is likely to have been resolved before today and perhaps with less costs. 5. However I do not accept the submissions of Mr Lee, who appears for Pasminco that the matter could or should then have finally resolved on 14 September 2018. 6. On that day, I found that the evidence then adduced was insufficient to make out the claim for privilege which has now been established. 7. On 17 September 2018 (after the Department undertook a detailed review of documents over the intervening weekend) the Department served a further affidavit setting out in more detail the basis upon which privilege was claimed for the 2,000 odd documents. 8. Evidently, that led to Pasminco reducing its challenge from 2,000 to 220 documents. 9. The further affidavit of 17 October 2018 led, I infer, to Pasminco accepting that only 26 (later 22) of those documents should be challenged. 10. That suggests to me that, had the Department earlier articulated the matters ultimately set out in the 17 October 2018 affidavit, the dispute would have been quelled earlier and with less costs. 11. Overall my conclusion is that the costs orders I should make are that the Department pay Pasminco's costs of the Department's Notice of Motion of 12 September 2018 and that Pasminco pay 75 per cent of the Department's costs of its Amended Notice of Motion of 17 September 2018. Reasonable costs of compliance 1. UCPR r 33.11 provides that the Court may order a party issuing a subpoena to pay the amount "of any reasonable loss or expense incurred in complying with the subpoena". 2. During debate this morning, a number of categories of costs that the Department had originally sought under UCPR r 33.11 were not pressed. 3. What remains are legal costs (of McCullough Robertson and of Mr Harding, who appears for the Department) incurred by the Department in: 1. reviewing documents for privilege ($40,312.25); 2. obtaining advice about whether the documents were privileged ($29,000.15); 3. appearances in Court in connection with the subpoena ($4,681.60). 1. I propose to allow the first of these two amounts. They represent the charges made by McCullough Robertson and Mr Harding for work which is described in detail in the narration to its tax invoice of 17 October 2018. Those charges appear to me to be reasonable. 2. I do not propose to allow the third figure, which is in substance part of the costs of the Amended Notice of Motion. 3. The Department also claims $7,875.28, being costs incurred by the Department for Ms Rayner's review of the documents. Ms Rayner was then on secondment to the Department from her employer, McCullough Robertson. That sum represents a portion of the fee charged by McCullough Robertson for the whole of Ms Rayner's secondment, which was between May and October 2018. 4. The invoice for that fee is dated 26 June 2018 which, as Mr Lee pointed out, predates the subpoena. 5. However, as Mr Harding pointed out, the invoice does appear to be a lump sum fee for the whole of Ms Rayner's secondment. 6. The amount claimed is Ms Rayner's calculation of that part of that fee as was referable to the time she spent reviewing the documents. I propose to allow that amount. 7. The Department also claims $2,034.27 for printing costs. There is no dispute about that amount. 8. The total of the figures I propose to allow is $79,221.95. 9. I make the following orders: 1. Order that the Secretary of the Department of Planning and Environment ("the Department") pay the defendant's costs of the Department's Notice of Motion filed 12 September 2018. 2. Order that the defendant pay 75 per cent of the Department's costs of its Amended Notice of Motion filed 17 September 2018. 3. Pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 33.11(1) order that the defendant pay $79,221.95 to the Department for its costs of complying with the subpoena of 17 August 2018. ********** Amendments 15 November 2018 - Case title on coversheet amended to include "(No 2)". 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. Decision last updated: 15 November 2018