19 In my opinion, however, the principle of the previous paragraph needs to be qualified or explained in a number of respects, at least in the context of subpoenas. First, wilful conduct will not amount to a contempt where the conduct occurs with the consent of the party issuing the subpoena. That consent may result from an agreement but it may also be implied from the conduct of the parties. For example, I do not think that it would be a contempt if a subpoenaed party indicated to the party on whose behalf the subpoena was issued the interpretation that the subpoenaed party was taking to the subpoena and the party issuing the subpoena took no objection to that interpretation. That is so even if the interpretation adopted by the subpoenaed party was incorrect. Second, I do not think that a subpoenaed party would be in contempt because the party failed to produce responsive documents in the party's possession because those documents were not located following a reasonable search: cf UCPR r 21.4(2) in relation to discovery. Similarly, I do not think that a party would be in contempt if the subpoenaed party believed reasonably that the party had no documents in response to the subpoena and answered the subpoena on the basis of that belief, even if the belief turned out to be mistaken. Whether this qualification should be seen as a qualification on the obligation imposed by the subpoena or a qualification on the circumstances in which the court will punish someone for contempt does not matter in this context. Finally, I do not think that it would be a contempt if there is a more appropriate person to answer the subpoena, that person is identified and that person is willing or able to produce the documents. Although in one sense that conduct could be described as wilful, I do not think that it amounts to a wilful failure to produce the documents. Rather, it involves the conclusion that the documents are better produced by another: see Rochfort v Trade Practices Commission (1982) 153 CLR 134.
20 There is a question in my mind whether the amended charge in this case is defective. The charge in respect of the first subpoena records the terms of the subpoena, that it was served and that Mr Nelson wrote to the court in the terms that he did. It then asserts that "The First Respondent did have documents in his possession or power referred to in Schedule 1 of the subpoena". It then goes on to assert, irrelevantly in my view, that Mr Paul Nelson produced documents in answer to the subpoena served on him. The charge in respect of the second subpoena adopts the same structure. However, neither charge identifies the documents which were in the possession of Mr Nelson at the time the subpoena was served, which fell within the scope of that subpoena and which were not produced. In my opinion, the charges ought to have done so.
21 In any event, in my opinion, the applicant has failed in relation to both subpoenas to prove that Mr Nelson has committed a contempt.
22 As to the first subpoena, I do not think that the applicant has proved, let alone to the requisite standard, that Mr Nelson had documents in his possession or power that fell within the scope of the subpoena. The applicant says that the court should conclude that Mr Nelson had control of documents responsive to the subpoena or had possession of those documents. In support of the first contention, the applicant says that Mr Nelson could have called for the documents that he had provided to Vincent Love & Co. In support of the second, the applicant says that I should infer that Mr Nelson was in the possession of some documents falling within the scope of the subpoena because those documents were later produced in response to the subpoena served on his son.
23 I am not prepared to accept either of these arguments. It is not at all clear to me that Mr Nelson had power to call for the return of the documents. On Mrs Farrell's death, the documents became the property of the estate. The solicitors for the estate provided Mr Nelson with an authority requiring him to produce the documents to them. That is what he did. In my opinion, he had no right to request their return. The documents belonged to the estate, not to him. The applicant has not proved beyond reasonable doubt that the documents would have been returned to Mr Nelson if he had asked for them.
24 Without more evidence, I am not prepared to infer that some documents were in Mr Nelson's possession at the time the first subpoena was served on him because some documents within the scope of that subpoena were produced subsequently by his son. In order to make out that claim, the applicant would need to identify the precise documents that fell within the scope of the first subpoena which were produced later. She would also need to produce sufficient evidence to rule out the possibility that those documents were returned to the accounting firm some time after the return date of the subpoena served on Mr Nelson. The applicant did not do either of those things.
25 In any event, I do not think any conduct engaged in by Mr Nelson could be described as "wilful". He thought that he had given the relevant documents to the solicitors for the executors. He gave a reasonable explanation for the basis of his belief. It was reasonable of him to assume that those documents were no longer within his control. For those reasons, the charge of contempt in relation to the first subpoena fails.
26 In my opinion, the charge in relation to the second subpoena must also fail. I accept that Mr Nelson was physically able to produce the documents having regard to his relationship with his son and his connection with his son's accounting firm. However, I also accept that, in the circumstances, it was more appropriate for the documents to be produced by the firm. The documents were in the possession of the firm, not Mr Nelson personally. Mr Nelson was no longer a principal of that firm. Moreover, it was the firm and not Mr Nelson who owed professional obligations to the client on whose behalf the documents were held. Although Mr Nelson did not himself advise the applicant that the documents were held by the firm, it is clear from his evidence that he knew that his son would be writing to the applicant's solicitors pointing out that he (the son) had the documents and indicating that he was willing to produce them. That is what happened. I do not think that that conduct could be described as a wilful failure by Mr Nelson to produce the documents.
Costs
27 Section 98(1) of the Civil Procedure Act 2005, provides:
"Subject to rules of court and to this or any other act:
(a) costs are in the discretion of the court, and
(b) the court has full power to determine by whom, to whom, and to what extent costs are to be paid, and
(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis."
28 It is clear that s 98 confers a power on the court to award costs against non-parties and that that power includes a power to award costs against a subpoenaed party: see Re Bauhaus Pyrmont Pty Ltd (In Liq) [2006] NSWSC 879. Until recently, that power was limited by UCPR r 42.3. That rule, however, was repealed on 7 May 2010. Consequently, there is no reason in principle why an order for costs should not be made against a person who has failed to comply with a subpoena, although there may be a question of precisely in what circumstances the court should be prepared to do so.
29 Whatever those circumstances are, I do not think that they include the circumstances of this case.
30 In this case a considerable amount of time and costs were spent in relation to the production of documents. It may well be that a substantial amount of those costs were wasted. However, I do not think that that waste can be laid at the feet of Mr Nelson.
31 So far as the first subpoena was concerned, Mr Nelson took the view that he did not have possession of the documents and that he was not obliged to seek their return from the solicitors for the estate. In my opinion, that was a reasonable position for him to take. I do not think that the onus was on him to explain what had happened to the documents; and there was no evidence before me to suggest that he had been asked for an explanation at about the time he wrote to the court stating that he had no documents to produce and that he had failed to supply one.
32 So far as the second subpoena is concerned, again I think the position taken by Mr Nelson was reasonable. He took the view that he did not have possession or control of the documents the subject of the subpoena, but it is clear that he arranged for the person who he thought had possession to offer to produce them or he at least was aware that that offer would be made; and, as I have said, that is what happened.
33 In those circumstances, the application against Mr Nelson should be dismissed with costs.
34 That leaves the question whether I should order indemnity costs in favour of Mr Henshaw. One of the circumstances in which a court will order that costs be payable on an indemnity basis is where the proceedings or the application in respect of which the costs are sought was bound to fail: see J-Corp Pty Ltd v Australian Builders Labourers Union of Workers [1993] FCA 42 per French J. However, I do not think that it can be inferred from the fact that the application against Mr Henshaw was withdrawn, that it was bound to fail. No material was been put before which would justify that conclusion. In those circumstances, I decline to order that Mr Henshaw's costs be paid on an indemnity basis.