Campbell v Willian & Anor

Outline of the substantive Proceedings

1. To further understand the claim being made, and the apparent disproportionate amount of Court time that was required to be devoted to the application, a brief outline of the factual basis of the substantive proceedings and of the notices of motion to which reference has been made, is required. It is only necessary to do so in a superficial way.
2. Lorna Una Clare Willian (the deceased) died on 9 October 2019. She was survived by three children, namely Rosalyn Miller (the Plaintiff); Warrick Willian (the first Defendant); and Debbie Willian (the second Defendant).
3. The Defendants filed 5 general caveats in the Probate Registry prior to the commencement of the substantive proceedings.
4. In the substantive proceedings, the Plaintiff propounds, in the alternative, a Will dated 13 March 2014, a Will dated 18 July 2013, a Will dated 25 January 2013 and a codicil of 25 June 2013, each of the deceased. The Defendants assert that the deceased did not have testamentary capacity from 2013 onwards; that she did not know and approve any of the testamentary instruments made in, and after, 2013; and that each of those testamentary instruments was vitiated by the equitable fraud of the Plaintiff and/or of her husband and fraudulent calumny: see, for example, Sharpe v Dyson & Anor [2022] EWHC 2462.
5. The Defendants propound a Will made by the deceased on 7 July 2011, or in the alternative, a Will dated 7 May 2009, or in the further alternative, a Will dated 26 October 1999. (There may have been a Will made in 2007, but this Will has not been referred to.)
6. Following an exchange with the Court on 6 March 2023, it became clear that the Plaintiff does not dispute the validity of either of these Wills, although it is asserted that each was revoked by a later Will made by the deceased: Tcpt, 6 March 2023, p 2(48)-3(7).
7. Following the filing of the caveats, the substantive proceedings were listed in the Succession List, first, on 25 March 2022, when orders were made for the matter to proceed by pleadings. The Plaintiff filed the Statement of Claim on 8 April 2022. It was listed in the Succession List on 14 April 2022 and has been listed, principally for directions, on various occasions, since then.
8. The Applicant had been retained by the deceased from about 1999, and he took instructions for, and drafted, a number of the testamentary instruments to which reference has been made. He had also acted for her in other matters, including, relevantly, advising her in relation to the administration of her son's estate in 2013, the sale of her home in late 2013 or early 2014, the revocation of a Power of Attorney in December 2013, and in guardianship proceedings in QCAT in late 2013.
9. In the substantive proceedings, a detailed affidavit, sworn on 7 April 2022 comprising 9 pages, by the Applicant, was filed and served in the Plaintiff's case. An exhibit to that affidavit (Ex. NPC-1) comprises 93 pages. There was filed, and served, a further affidavit sworn on 22 July 2022, by the Applicant, comprising 10 pages. An exhibit to that affidavit (Ex. NPC-2) comprises 73 pages.
10. The affidavits sworn by the Applicant were not made pursuant to the usual direction of the Court requiring an affidavit, or affidavits, from a solicitor, deposing, to the best of his, or her, knowledge, information, and belief, the circumstances in which the testamentary instrument (or instruments) of the deceased was (or were) prepared and executed. The affidavits were said to have been made "at the request of the Plaintiff/Cross Defendant".
11. There can be little doubt that the Applicant is likely to be an important witness in the substantive proceedings, particularly as he appears to have been involved with the deceased, and, therefore, knew her professionally, over a reasonably long period of time.
12. As the substantive proceedings were ready to be heard, the evidence having been completed, the proceedings were referred to the Registrar in Equity on 9 May 2023, to obtain a hearing, with an estimated duration of 5 days. JusticeLink reveals that it has been listed, for hearing, commencing on 20 November 2023.

The interlocutory relief

1. On 8 December 2022, the Defendants served upon the Applicant, by email, a subpoena, filed on 7 December 2022, relevantly, to produce the following: "2. All documents including but not limited to letters, emails, file notes, records of telephone calls, messages, other records of communication, records of personal attendances and meetings, trust account statements, invoices, records of payment of invoices, wills, deeds, power of attorney documents, revocation of power of attorney documents, instructions to operate power of attorney documents, enduring guardianship documents, revocation of enduring guardianship documents, instructions to operate enduring guardianship documents, statutory declarations and authorities, property searches and documents constituting the file or files prepared for the purpose of drafting and executing any Wills, powers of attorney and/or enduring guardianships and revocations of any powers of attorney and/or enduring guardianships of [the deceased], late of Warialda in the State of New South Wales, who died on 9 October 2019 for the period 1 October 1999 to date. 3. Without limiting paragraph 2 hereof, all documents coming into existence between 1 October 1999 and 9 October 2019 evidencing or recording: a. instructions communicated in relation to the preparation of any will, power of attorney, enduring guardianship, revocation of power of attorney, revocation of enduring guardianship; b. any effort to assess the deceased's testamentary capacity; c. any communication from the deceased about the plaintiff, Rosalyn Miller, and/or her husband, Colin Miller; d. any communications from the plaintiff, Rosalyn Miller and/or her husband, Collin Miller, relating to the plaintiff, the defendants, the deceased's estate or the preparation of any will, power of attorney or enduring guardianship. 4. All documents including but not limited to letters, emails, file notes, records of telephone calls, messages, other records of communication, records of personal attendances and meetings, trust account statements, invoices, records of payment of invoices, deeds, statutory declarations and authorities, conveyancing documents, property searches and documents constituting the file or files prepared in relation to any matter in which you have acted for, or on behalf of, [the deceased], solely or with any other person (including the partnership) or acted for [the deceased] by her appointed attorney, for the period 1 January 2011 to 9 October 2019."
2. The Applicant stated that no conduct money was served, or tendered, with the subpoena to produce documents. In relation to this matter, the Defendant appears to have been unaware of Hall v Donlon [2011] NSWSC 1088, at [4], in which Brereton J had noted that: "…the subpoena was a subpoena for production of documents. The requirements for the handing over or tendering of conduct money to an addressee are expressed in (NSW) Uniform Civil Procedure Rules 2005, r 33.6(1), as being limited to a subpoena to attend to give evidence. Thus, the requirement for handing over or tendering conduct money does not apply to subpoenas for production. This objection is spurious."
3. The Applicant also noted that "[T]he notice contemplated by section 31 of the Service and Execution of Process Act 1992 (Cth) was not served with the subpoena". This was relevant to whether service of the subpoena was effective.
4. However, that the Applicant had actual knowledge of the subpoena and of its requirements is obvious. Indeed, on 12 December 2022, he responded to the Defendant's solicitors, in writing, stating that he intended to comply with the subpoena that had been served. He observed that "… the scope and extent of the documents the subject of the Subpoena to Produce is extremely extensive covering a very wide timeline". He did not, then, state that he intended to challenge the scope of the subpoena but added that it would be expensive for him to comply, requiring about 3.5 days of work to collate the documents, at a cost of $9,850.40. In the letter, the Applicant also informed the Defendants' solicitors that he had provided a copy of his correspondence to the Plaintiff's solicitors.
5. There was no prompt response by the legal representatives of the Defendants to the Applicant's correspondence of 12 December 2022.
6. The subpoena addressed to the Applicant was returnable before the Subpoenas Registrar on 17 January 2023.
7. Presumably, in accordance with UCPR r 33.5(2), the Defendants served a copy of the subpoena to produce on the Plaintiff as the only other active party, as soon as was practicable after the subpoena had been served on the Applicant.
8. On 14 December 2022, the Plaintiff filed a notice of motion seeking to set aside three subpoenas, one of which was the subpoena addressed to the Applicant. In support of that notice of motion, the Plaintiff filed, and served, a lengthy affidavit, sworn on 13 December 2022, of Ms S M Dakin, solicitor, going to reasons why the three identified subpoenas, issued by the Defendants, including the subpoena addressed to the Applicant, should be set aside.
9. On 13 January 2023, the Applicant's solicitor wrote in the following terms: "To the Court & Parties, We act for Mr Neil Campbell, the principal of DA Harris & Associates, Solicitors, of Helensvale, Qld. Our client has been served with a subpoena returnable on 17 January 2023. Our client considers that he has lawful excuse not to comply with the subpoena & proposes to make Application to set it aside. Further, we are instructed that the Plaintiff, Miller, by Notice of Motion (filed on 08 December 2022) returnable on 06 February 2023, also seeks an Order setting the subpoena aside. Please note our interest, and our client's position in relation to the matter."
10. On the return date of the subpoena addressed to the Applicant, neither the Applicant, nor the Defendants, appeared. (There is no evidence about this, but counsel each confirmed that this was a fact not in dispute. It was not known whether the Plaintiff appeared, but it seems unlikely.) No access order was made, and the matter was listed for return of subpoenas on 14 February 2023.
11. Subsequently, the Defendants served another subpoena, in the same terms, with the relevant notice attached, upon the Applicant, by email on 6 February 2023. No complaint appears to have been made about the service of this subpoena by email.
12. The Court's record of proceedings reveals that the Plaintiff's notice of motion to set aside the Defendants' subpoenas was returnable in the Succession List on 6 February 2023. On that date, only a legal representative of each of the Plaintiff, and of the Defendants, appeared. I shall return to the explanation provided for the non-appearance by, or on behalf of, the Applicant on that date, later in these reasons.
13. The Court noted that the Applicant had not, by then, complied with the subpoena and had not filed a notice of motion to set it aside. As is obvious from the correspondence, the subpoena had come to his attention by no later than the last date for service. As a solicitor, he would have been aware of the requirements imposed on him to comply with the subpoena; and that he did have documents that would answer the subpoena.
14. So as to avoid delay, on 6 February 2023, the Court directed the Defendants to file and serve any evidence in opposition to the Plaintiff's notice of motion filed 14 December 2022, by 4:00 p.m. on 20 February 2023, and stood the proceedings over, for further directions on Monday, 6 March 2023. There was also discussion of the need for the Applicant to file and serve his own notice of motion to set aside the subpoena if he did not wish to comply with it.
15. The Applicant filed a notice of motion on 14 February 2023, seeking an order that the subpoena addressed to him be set aside. He did not file an affidavit in support of the notice of motion at that time.
16. Having compared the terms of the Plaintiff's notice of motion with the Applicant's notice of motion, they essentially seek the same relief. Consequently, the Defendants became respondents to both notices of motion.
17. On 28 February 2023, the Applicant served an affidavit sworn by him on 27 February 2023 and, subsequently, filed in Court Exhibit NPC-3 (which had not been included with the affidavit). In the affidavit, the Applicant referred to the nature of the documents sought, and the difficulties he would experience in complying with the subpoena, including the need to engage a computer consultant to access computer files not on his current server, the need to locate all the paper and hard copy files that had not been kept as electronic files, the review, or checking, of practice records to ascertain whether there were archived records, and the need to inspect records held in two off-site storage facilities to search for archived files or documents. He noted that he would also be required to personally undertake a review of potentially relevant documents to assess whether they were responsive to the subpoena, as well as whether they were subject to legal professional privilege or another form of privilege.
18. The Applicant's notice of motion was returnable on 6 March 2023. Counsel (Mr L Judd) appeared on his behalf, as did a legal representative of each of the Plaintiff and of the Defendants.
19. The transcript of the proceedings on that day reveals that there was discussion between the Bench and the legal representatives, to ascertain whether all of the documents referred to were required in answer to the subpoena addressed to the Applicant, in circumstances where the Defendants did not assert that the deceased lacked testamentary capacity prior to 2013.
20. By way of example, the Court asked whether documents relating to the 1999 Will, in circumstances where the parties did not dispute the validity of the 2011 Will, and counsel for the Defendants said that the 1999 Will was relevant to illuminate "the testator's pattern of making Wills and the instructions": Tcpt, 6 March 2023, p 3(1-4).
21. After some discussion, counsel for the Defendants indicated, it would seem, for the first time, that the scope of the subpoena could be narrowed. Accordingly, the Court, relevantly, noted that the Defendants would inform the Applicant of the documents which were pressed in relation to the subpoena, by 4:00 p.m. on Friday, 10 March 2023; directed the Applicant to inform the Defendants of the cost of compliance and the time required to enable production of those documents, by 4:00 p.m. on 17 March 2023. The costs of all parties of the directions hearing were reserved.
22. Surprisingly, on 6 March 2023, counsel who then appeared for the Applicant, stated that he had thought the Applicant's notice of motion would be heard on that day. How he came to hold that thought was not explained. All counsel agreed that the estimated duration for the hearing of the two notices of motion was one-half, to one, day: Tcpt, 6 March 2023, p 7(4-14).
23. Any belief held by counsel for the Applicant, or, by the Applicant himself, that the notices of motion would be heard on 6 March 2023 seems to have been ill-considered. The Applicant's affidavit of 27 February 2023 could only have been served 4 working days before the Applicant's notice of motion was returnable. Furthermore, it should have been obvious that the two notices of motion, if contested, could not be dealt with in a busy List and would require a separate hearing.
24. On 10 March 2023, the Defendants' legal representatives wrote to the Applicant's legal representatives outlining the proposal to confine the date range of documents for production to 1 January 2011 to 13 March 2014. The solicitors reiterated that the Defendants would pay the reasonable expense of compliance with the subpoena.
25. In response, the Applicant's solicitors indicated that the estimated costs of compliance would be $10,000 (being slightly more than the costs of compliance in respect of the original subpoena).
26. When the matter was next before the Court, on 27 March 2023, the Defendants, by counsel, indicated, again, that they were willing to pay the reasonable expense of compliance. The matter was stood down in the list to allow the legal representatives to ascertain the quantum of those costs, as well as the costs of the notice of motion.
27. The Applicant's notice of motion was not dismissed because his counsel maintained that it was not appropriate to do so, as the Applicant wished to maintain his claim for the costs of the notice of motion: Tcpt, 27 March 2023, p 8(1-25); Tcpt, 1 May 2023, p 3(18-33), p 7(11-50). Counsel also indicated there would be a costs application.
28. To advance the preparation of the substantive proceedings, the Court suggested that, if a fixed amount could not be agreed upon, an order for the amount sought of $10,000 to be paid into Court could be made, and the Applicant's costs of compliance would then be considered after the documents had been produced and evidence of the Applicant's expenses had been filed.
29. With regards to the costs of the notice of motion, the Court stated that if they were not agreed, they would have to be assessed. The Court also suggested that the costs of the notice of motion be reserved so that the parties could agree on a gross sum costs order. There is no evidence that this was done or even attempted to be done.
30. The matter was referred to Chambers in the hope that orders by consent could be made dealing with both notices of motion and the costs thereof.
31. By email sent from the Defendants' solicitor on 4 April 2023, a request was made that the Applicant's notice of motion be stood over "to allow the other notice of motion in the proceedings, commenced by Mr Campbell, to be resolved". (This is the occasion to which earlier reference was made and is as far as the evidence goes.)
32. Subsequently, on 5 April 2023, the Court, in Chambers, ordered that the Plaintiff's notice of motion be dismissed with the costs of each party of the notice of motion being costs in the cause. (The matter was dealt with in Chambers with some of the orders being made consensually.)
33. I pause here to note that by 5 April 2023, the Applicant had filed and served the notice of motion and one affidavit in support and had appeared, by counsel, on two directions hearings, being held on 6 March 2023 and 27 March, 2023. Without any direction from the Court, and, it seems, prematurely, the Applicant's then counsel had prepared written submissions prior to 6 March 2023, which had been served with a copy provided to the Court.
34. Although there was no evidence of the Applicant's costs, calculated on the ordinary basis, as at 5 April 2023, experience dictates that the Applicant's costs and disbursements of the notice of motion, up to that time, would have been unlikely to be more than a few thousand dollars.
35. Faced with an impasse in relation to the Applicant's notice of motion, the Court directed that any further evidence in relation to the costs thereof be filed and served by 4:00 p.m. on 24 April 2023, and ordered that the proceedings, including the Applicant's notice of motion, be stood over to 1 May 2023.
36. On 1 May 2023, the parties were given a further opportunity to agree upon orders. The Court pointed out that the costs of further argument about the costs of the notice of motion would be greater than the costs involved in the notice of motion. The Court even raised with counsel for the Applicant, the possibility that the costs of a hearing to argue costs could be ordered to be paid on the indemnity basis, if the Applicant was unsuccessful in seeking the costs order that was being sought. In this regard, neither party sought, nor gave, any quarter.
37. When it appeared that the Court's hope the legal representatives would consider proportionality was a forlorn one, as the Applicant and the Defendants were unable to reach any agreement, the application for costs of the notice of motion was listed, for hearing, on 4 May 2023: Tcpt, 1 May 2023, p 1(39-50).
38. Even then, neither the Applicant, nor the Defendants, provided any evidence concerning steps taken, at any time, by him, or them, respectively, to resolve the issue of the costs of the Applicant's notice of motion. Neither filed any estimate of the costs, the subject of dispute and, as will next be read, each maintained his, and their, most favourable position, respectively.

The Submissions

1. At the hearing of the costs application, counsel submitted that there should be an order that the Applicant's costs, calculated on the indemnity basis or, alternatively, on the ordinary basis, be paid by the Defendants personally. It was said, that, as a third party to the proceedings, he should have all his reasonable outlays reimbursed.
2. Counsel repeated the four matters that were advanced in written submissions that were said to demonstrate unreasonableness in the Defendants' conduct in relation to the subpoena and the notice of motion. These matters were: "17. First, it is plain on the face of the Subpoena that is it overly broad and oppressive in terms of what Mr Campbell would have been required to do to comply with it. It was liable to be set aside or varied on that basis alone. Further, it also appears that the Subpoena's breadth amounted to "fishing" and did not call for documents relating to facts in issue: see the Applicant's Submissions dated 6 March 2023 (First Submissions), [10]-[20]. Whilst it was ultimately unnecessary for the Court to make such an order, it can be inferred by the defendants' concession that the Subpoena as filed was liable to be struck out or varied as proposed by Mr Campbell. 18. Second, the defendants' concessions at the 11th hour to significantly narrow the scope of the Subpoena's schedule reflects Mr Campbell's substantial success on the Motion. The defendants may submit that because the Subpoena was not set aside, they have achieved some success on the Motion. Any such submission mischaracterises the outcome of the Motion, and the nature of the Subpoena as first issued. 19. In the First Submissions served in March, Mr Campbell acknowledged that the subpoena may have some forensic purpose and further acknowledged his overarching duty to the Court. Mr Campbell's position since being served with the Subpoena, as reflected in the First Submissions (see in particular [20], [33]), was that his concerns could be addressed by narrowing the date period covered by the Subpoena's schedule. That position was ultimately - albeit belatedly - adopted by the defendants. 20. Third, the defendants were unreasonable in refusing address the oppressive nature of the Subpoena, and only narrowed the scope of the Subpoena once directed by the Court. Had the defendants adequately engaged with Mr Campbell in this regard, the Court should infer that the subject Motion would not have been necessary. 21. Similarly, as noted above, Mr Campbell sought an order relating to his costs of compliance as part of the Motion. Yet, despite serving affidavits setting out in detail the steps required to be taken to comply - and despite his fulsome compliance the revised Subpoena - the defendants on 3 April and again on 28 April 2023 via their solicitor refused to pay those costs, until 1 May 2023 from the bar table the defendants' counsel indicated that the defendants would pay the costs of compliance sought. As it was with the defendants' capitulation in relation to the scope of the Subpoena, had their ultimate position been taken earlier, it would have avoided unnecessary costs and delay. Over arching duty to the administration of justice. 22. Fourth, the circumstances justify a special costs order. Mr Campbell is not a party to the proceedings. At all times he has acted reasonably and in accordance with his overriding duty to the administration of justice For instance, immediately upon receiving the Subpoena, he attempted to negotiate with the defendants to minimise the oppressive nature of the Subpoena as originally issued and then, once the Subpoena was narrowed, documents were produced in a timely way."
3. In oral submissions, counsel argued that it had been necessary for the Applicant to file the notice of motion dated 14 February 2023, or else he would have been in breach, as he had not otherwise complied with the subpoena. He submitted that the Applicant had not been joined as an interested party to the Plaintiff's notice of motion and did not have standing to attend the hearing on 6 February 2023. He pointed to correspondence from the Defendants that stated that the Court had indicated that the Applicant could be arrested for failure to comply with the subpoena if he did not file a motion (Affidavit, Neil Patrick Campbell, 27 February 2023 at Exhibit NPC-3, p 59).
4. He further submitted that it was only following the return of the Applicant's motion on 6 March 2023 that the Defendants had agreed to narrow the scope of the subpoenas: Tcpt, 4 May 2023, p 19(44-47), p 20(16-22).
5. Counsel for the Defendants, in his submissions, provided a broad history of the Applicant's notice of motion to which I have referred. He reiterated that the Defendants had not disputed the Applicant's entitlement to his reasonable costs of compliance with the subpoena to produce but had only questioned the quantum of those costs given the lower estimate that had been provided on 12 December 2022.
6. He invited the Court to consider three relevant factors in its exercise of discretion with respect to costs under s 98(1) of the Civil Procedure Act 2005 (NSW): first, that the Applicant's notice of motion duplicated the relief sought by the Plaintiff in her notice of motion; second, that the Applicant sought for the whole of the subpoena to be set aside in the submissions of 6 March 2023; and third, that the Applicant had since produced documents in compliance with the subpoena on a narrowed basis as was agreed between the parties, noting that both the Applicant and the Defendants had a measure of success. He argued that the Applicant's success was "more in form than in substance" in terms of the actual costs of compliance.
7. There was a brief oral submission that there was some forensic importance to the documents that had been sought from the period of 1999 to 2011, during which there was no dispute over the deceased's capacity, as it could go to the weight of the Applicant's evidence as a solicitor who had completed work for the deceased since 1999: Tcpt, 4 May 2023, p 29(50)-30(7).
8. I have already referred to the submission that the Applicant should have sought an order under UCPR r 33.11 that his costs of compliance be paid, instead of filing a motion, which, unnecessarily, duplicated the relief sought by the Plaintiff in her earlier motion.
9. His submission concluded with: "…the Defendants' position is that each party should bear their own costs of the Notice of Motion up until 1 May 2023: see, for example, Frontier Assets Pty Ltd v Fishburn [2011] NSWSC 334 at [42]. In the event that this position is accepted by the Court, the Defendants seek an order that their costs of the hearing of the Notice of Motion, calculated on the indemnity basis, be paid by Mr Campbell."

Setting aside a subpoena to produce

1. Because a subpoena to produce is an order, in writing, requiring the recipient to produce a document, or thing, to the Court (UCPR r 33.1), subject to formalities as to service having been complied with, the Applicant was required to comply with the subpoena by production to the Court of a document or thing specified in the subpoena (UCPR r 33.6). The failure to comply with a subpoena, without lawful excuse, would be a contempt of court, and the addressee may be dealt with accordingly: (UCPR r 33.12).
2. Rule 33.4 of the UCPR provides that the Court may, on the application of a party, or any person having a sufficient interest, set aside a subpoena in whole or in part, provided that notice is given to the issuing party.
3. Unsurprisingly, the term "sufficient interest" is not defined in the UCPR. However, what constitutes "sufficient interest" will be context specific, differing from case to case. Whilst it might be impossible to define the term, it seems clear that the recipient of a subpoena, who is not a party to the proceedings in which the subpoena was issued, and whose documents are being sought, and who is directly affected by having to comply with it, has standing to seek to have it set aside.
4. I am satisfied that the Applicant had standing to file and serve the notice of motion, even though the Plaintiff had filed a notice of motion in similar terms. As stated, as a solicitor, it was a prudent course for the Applicant to follow, although, equally prudently, he could have sought an order that compliance with the subpoena be extended until after the hearing of the Plaintiff's notice of motion.
5. However, I do not accept the submission made on the Applicant's behalf that he did not have standing to appear at the directions hearing on 6 February 2023. Had he done so, the Court might have simply directed him to file an affidavit in support of the Plaintiff's notice of motion, or alternatively sought the agreement of the parties that the date for compliance with the Defendants' subpoena be extended to a date after the hearing of the Plaintiff's notice of motion. More probably than not, the type of discussion, between Bench and Bar, that had occurred in Court on 6 March 2023 would have occurred.
6. In my view, it was not the filing of the Applicant's notice of motion that prompted what occurred after 6 March 2023, but the discussion held with the legal representatives present.
7. Nor do I accept that the Applicant had complete success on the notice of motion. It is translucently clear that the reduction in the scope of the subpoena addressed to the Applicant came about as a compromise between the parties in the substantive proceedings, which compromise followed the events on 6 March 2023, and discussion with the Court. The compromise demonstrates that at least some of the documents the subject of the subpoena should be produced.
8. Also, I do not accept the submission made by counsel for the Defendants that the Applicant should have sought an order that the costs of compliance be paid before compliance had occurred. In Hall v Donlon, at [5], Brereton J wrote: "…the absence of agreement or payment of costs and expenses of compliance is not a legitimate objection to production of documents in compliance with a subpoena. The court is given a discretion to order an issuing party to pay the amount of any reasonable losses or expenses incurred by the addressee in complying with the subpoena [UCPR, r 33.11]. Ordinarily, that question is determined after compliance with the subpoena, when the addressee has incurred expenses [Re Bauhaus Pyrmont Pty Ltd (in liq) [2006] NSWSC 253, [15]]. In Re Bauhaus, Austin J observed (at [16]) that whilst UCPR, r 33.11, does not expressly state that the Court has jurisdiction to entertain an application for an order to be made prior to the addressee incurring expenses, the Court may, under its inherent jurisdiction, have such jurisdiction which might be exercised in circumstances where the amount to be incurred will be substantial when compared with the resources of the addressee and/or there is doubt about the ability of the issuing party to meet an order for recovery of such expenses. No application was made under this rule. This objection was not a proper basis for resisting compliance."
9. Also see, M-H Engineering Solutions Pty Ltd t/as LMF Earthmoving v Michael John Rolfe & Ors [2023] NSWSC 398, where Harrison AsJ referred to the authorities at [28]-[33].

Costs of the notice of motion

1. The principles applicable on interlocutory costs applications are well-known. Costs, even of a disputed notice of motion, are in the discretion of the Court: Civil Procedure Act 2005 (NSW) s 98. The discretion must be exercised judicially and by reference to the overriding statutory purpose mandated by s 56 of the Act: Kyriacou v Raphis Securities Pty Ltd (No 2) [2022] NSWSC 339 at [27].
2. The Court has full power to determine by whom, to whom, and to what extent, costs are to be paid. Furthermore, the Court may order that costs to be awarded may be calculated on the ordinary basis or on the indemnity basis.
3. The general rule is that if the Court makes any order as to costs, the Court is to order that costs follow the event unless it appears to the Court that some other order should be made as to the whole, or any part, of the costs: UCPR r 42.1.
4. The purpose of a costs order is to compensate, or indemnify, the person in whose favour it is made, not to punish the person against whom it is made: Ohn v Walton (1995) 36 NSWLR 77 at 79 (Gleeson CJ).
5. There is no specific rule in the Civil Procedure Act, or the UCPR, dealing with costs in circumstances where the parties resolve their differences without a hearing on the merits. In those circumstances, the court's discretion must also be exercised judicially, that is, according to relevant considerations, and taking account of the contextual features and facts of the litigation. The discretion must not be exercised arbitrarily or capriciously.
6. There are, however, a number of authorities setting out the applicable principles in respect of the making of orders for costs where there has been no hearing on the merits, including, Re the Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622, particularly at 624-625; [1997] HCA 6; Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201-202; [1993] FCA 585; One.Tel Ltd v Deputy Commissioner of Taxation (2000) 101 FCR 548; [2000] FCA 270; Fire Containment Pty Ltd v Robins (No 2) [2011] NSWSC 547; Ajkay v Hickey & Co Pty Limited [2011] NSWSC 822; and Red Bull Australia Pty Ltd v Michael Peter Stacey and Christian Walter Graebner [2011] NSWSC 1350. Such cases provide guidance on circumstances that may constitute a basis for the exercise of discretion, but the overriding consideration will always be whether there is some circumstance that justifies a costs order, so as to do justice between the parties.
7. In Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin, at 624-625, McHugh J said: "... it is first necessary to state the principles which govern an application for costs when a party elects not to pursue an action because he or she has achieved the relief sought in the action either by settlement or by extra-curial means. … In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order. In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. ... Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried... If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases."
8. In Australian Securities Commission v Aust-Home Investments Ltd, at 530, Hill J set out five propositions: "(1) Where neither party desires to proceed with litigation the court should be ready to facilitate the conclusion of the proceedings by making a cost order. (2) It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial. This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue. (3) In determining the question of costs it would be appropriate, however, for the court to determine whether the applicant acted reasonably in commencing the proceedings and whether the respondent acted reasonably in defending them. (4) In a particular case it might be appropriate for the court in its discretion to consider the conduct of a respondent prior to the commencement of the proceedings where such conduct may have precipitated the litigation. (5) Where the proceedings terminate after interlocutory relief has been granted, the court may take into account the fact that that interlocutory relief has been granted." (Omitting citations)
9. In One.Tel Ltd v Deputy Commissioner of Taxation, Burchett J, referred to both Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin and Australian Securities Commission v Aust-Home Investments Ltd, writing, at [6]: "In my opinion, it is important to draw a distinction between cases in which one party, after litigating for some time, effectively surrenders to the other, and cases where some supervening event or settlement so removes or modifies the subject of the dispute that, although it could not be said that one side has simply won, no issue remains between the parties except that of costs. In the former type of case, there will commonly be lacking any basis for an exercise of the Court's discretion, otherwise than by an award of costs to the successful party. It is the latter type of case which more often creates problems, since there may be difficulty in discerning a clear reason why one party, rather than the other, should bear the costs."
10. This passage was cited, with approval, by the Full Federal Court in Chapman v Luminis Pty Ltd [2003] FCAFC 162, at [7] and by Davies AJA (with whom Mason P and Meagher JA agreed) in Edwards Madigan Torzillo Briggs Pty Ltd v Stack [2003] NSWCA 302 at [5]. Davies AJA prefaced his reference to the relevant passage stating: "When proceedings are brought to an end without a determination after a trial, the judge may find it difficult, even impossible, to make an award of costs. If the judge does make an award, it will generally be because the judge is satisfied that one party has had a substantial victory and the other a substantial loss, or that there has been a marked difference in the reasonableness of the actions taken by the parties, so that one party should be rewarded for its reasonable actions and the other party should suffer a detriment in costs. ..."
11. In Boscaini Investments Pty Ltd v Corporation of the City of Kensington and Norwood (1999) SASC 327, Debelle J wrote, at [22], of the third of Hill J's propositions in Australian Securities Commission v Aust-Home Investments Ltd: "I immediately acknowledge the assistance of Hill J but suggest that proposition (3) is of limited assistance. The fact that a party has not conducted himself reasonably may disentitle him to costs. But, beyond that, the reasonableness of the conduct of the parties is not likely to assist in determining whether the applicant should recover his costs. The real question is whether the applicant had reasonable prospects of success. It seems preferable, therefore, to express proposition (3) in different terms. Depending on circumstances, where the applicant had acted reasonably in commencing proceedings, has an arguable case, and it is reasonable to conclude that that respondent has acted in consequence of the commencement of proceedings, the court may be prepared to make an order as to costs in favour of the applicant."
12. The court is required to make such order as it thinks just in the particular circumstances of the case. In Howards Storage World Pty Ltd v Haviv Holdings Pty Ltd (2010) 182 FCR 84; [2010] FCAFC 5, Gray J, at [17], observed that: "The overriding principle that costs are in the discretion of the Court can also be expressed in terms of the negative proposition that no rule or principle should be applied mechanically in the determination of the question where costs should lie in any particular case. Attention must always be paid to the particular circumstances of the individual case. The aim is to do substantial justice in relation to costs, based on the outcomes of the various issues in the proceeding, as between the entities that are parties to that proceeding."
13. The general rule is that costs are payable on the ordinary basis. A court should only depart from the general rule and award indemnity costs where the conduct of the party against whom the order is sought is plainly unreasonable: Sydney City Council v Geftlick [2006] NSWCA 280 at [90] per Tobias JA, Mason P and Hodgson JA agreeing. Indemnity costs orders should be reserved for the most unreasonable action by an unsuccessful plaintiff: see Leichhardt Municipal Council v Green [2004] NSWCA 341 per Santow JA at [57].
14. More recently in Cappello v HomeBuilding Pty Ltd [2023] NSWCA 109, Mitchelmore JA, with whom Meagher JA and Simpson AJA agreed, wrote at [47] - [48]: "For an order of indemnity costs to be made, the conduct of the party against whom such costs are sought must usually exhibit some special or unusual feature. The focus is on the way the litigation was conducted. For example, the discretion may be enlivened where a party persists in what should have been seen to be a hopeless case, such as where the case was unduly prolonged by groundless contentions. It has also been said that indemnity costs may be awarded where the unsuccessful party's conduct was unreasonable or delinquent. The categories of circumstances in which the discretion may be exercised are not closed. Ultimately, the question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on the ordinary basis." (Omitting citations)

Conclusion

1. Having considered all the evidence, and the submissions, and in the exercise of the Court's discretion, I find that the Applicant filed the notice of motion, and the subsequent affidavit of 27 February 2023, with good reason. There was no suggestion, by the Defendants, that he need not comply with the subpoena until after the determination of the Plaintiff's notice of motion.
2. However, I am not satisfied that the Defendants engaged in conduct that warrants an order for indemnity costs in relation to requiring the filing and service of the notice of motion and affidavit in support. Therefore, the Applicant should receive, from the Defendants, his costs, calculated on the ordinary basis, of the notice of motion, the first affidavit in support, and the appearance, for directions, on 6 March 2023.
3. The Applicant should also receive the costs of the consideration of the correspondence between the legal representatives between 6 March 2023 and 5 April 2023.
4. The Defendants should bear the Applicant's costs referred to as it should not have required discussion with the Court to come to the view that, perhaps, the scope of the subpoena might be narrowed, as it ultimately was, although it is to be noted that the Defendants had agreed to pay the Applicant's costs of compliance with the subpoena as originally drafted.
5. I am not satisfied, however, that the Applicant should receive the fees charged by counsel for the written submissions, which were prepared, and then served on 6 March 2023, without any direction from the Court to do so, and in circumstances where it was highly unlikely that the two notices of motion would be heard on that day.
6. As occurred on 6 March 2023, following discussions between Bench and Bar, directions were made with a view to the Defendants considering, and advising the Plaintiff and the Applicant, how the scope of the documents could be narrowed. The directions were complied with and resulted in the Defendants agreeing to narrow the scope of the documents required to be produced, the Plaintiff's notice of motion being dismissed on 5 April 2023, with the costs of each of the parties being costs in the cause, and the Applicant producing the documents that were sought.
7. However, the Applicant's notice of motion needed to be adjourned to 1 May 2023. It could properly have been dismissed on 5 April 2023, leaving outstanding any issue of the costs of the notice of motion to be resolved.
8. In this regard, it is to be remembered that the Applicant's notice of motion sought the whole of the subpoena to be set aside. In the events that happened, it was unlikely that the relief sought would, in its entirety, have been granted.
9. That result also means that the Defendants were not entirely successful in obtaining all of the documents that, initially, had been sought. In other words, by compromise, each of the parties and the Applicant was partially successful. Contrary to what was argued by counsel for the Applicant, neither was wholly successful.
10. Also critical to the determination of how other costs should be borne, is the approach of both the Applicant, and the Defendants, after the narrowing of the scope of the documents to be produced. In my view, that approach was quite unreasonable. On the available evidence, neither appears to have made any effort to resolve the issue of what should have been a relatively modest amount of the Applicant's costs that had been incurred. Instead, both engaged, relentlessly, in incurring further costs and disbursements, without any apparent consideration of the quantum of those costs and disbursements, when compared with the Applicant's costs up to, and including, 27 March 2023.
11. Bearing in mind the likely costs that would be incurred by the Applicant in relation to the costs of the notice of motion prior to 6 March 2023, every effort should have been made, by both, to resolve the costs issue before additional, more significant, costs were incurred. The Court raised this matter squarely on 27 March 2023, noting that it would be "sensible" for the parties to reach agreement on costs: Tcpt, 27 March 2023, p 2(20-21). The Court did so, again, on 1 May 2023: Tcpt, 1 May 2023, p 1(35-43).
12. Furthermore, it is to be remembered that the Applicant's expense of compliance with the subpoena had been accepted as being payable by the Defendants, and those costs are substantial.
13. I have not been persuaded that either party should receive costs from the other after 6 March 2023, other than the costs of the consideration of the correspondence sent between 6 March 2023 and 5 April 2023. Each party had sufficient information, following the directions hearing on 6 March 2023, to enable an assessment of the costs that had been incurred to that date, and to estimate the costs that would be incurred in the event that the costs of the notice of motion were not agreed. The Court made every effort to encourage both parties to consider these matters.
14. In relation to the application for the costs of the notice of motion, the Applicant, and the Defendants, should also have considered his, and their, prospects of success, in circumstances where there had been no determination of the notice of motion and what had occurred involved compromise. Had each party, done so, he, and they, should have realised that the additional costs to be incurred, with further evidence being filed and served, counsel being briefed to appear at the hearing, and a hearing of 2 to 3 hours duration, would far exceed the costs that had been incurred already.
15. Section 60 of the Civil Procedure Act provides that in any proceedings, the practice and procedure of the court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute. The Court endeavoured, more than once, to direct the parties' attention to all these matters. The failure by them to do so demonstrates an alarming lack of insight.
16. The lack of any evidence of having attempted, but failing, to agree on the amount of costs to be paid in relation to the notice of motion speaks volumes in circumstances where the Court indicated the good sense in trying to do so before a hearing. I hasten to mention the consideration of the efficient use of available judicial, and administrative, resources. Costs should not have been unnecessarily incurred, and the Court's time should not have been taken up, without there having been any apparently genuine attempt to resolve the costs issue.
17. Finally, I should add that there can be little doubt that the Applicant was, and the Defendants were, respectively, seeking to advance, and then maintain, his, and their, own interests, respectively, in seeking, and opposing, the costs application. He, and they, individually, should bear the costs of that indulgence. Even at the hearing of the Applicant's notice of motion, each sought to advance his, and their, best position, respectively.
18. Accordingly, the Court: 1. Orders that the Applicant's notice of motion filed on 14 February 2023 be dismissed. 2. Orders the Defendants to pay the Applicant's costs of filing and serving the notice of motion, the costs of preparing and serving the affidavit of 26 February 2023, the costs of the appearance, by counsel at the directions hearing held on 6 March 2023, and the costs of the consideration of the correspondence sent between 6 March 2023 and 5 April 2023. 3. Makes no other order as to the Applicant's costs, to the intent that he is to bear his own costs of the notice of motion. 4. Makes no order as to the Defendants' costs of the notice of motion, to the intent that they are to bear their own costs thereof.

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: 05 June 2023