The defendant by notice of motion seeks an order for the separate hearing of four questions in the proceedings. The plaintiff consents to that course. I am satisfied that it is appropriate for such an order to be made. An order will be made in terms of paragraph 1 of a document entitled Consent Order provided by the plaintiff.
In that Consent Order the plaintiff seeks the costs of compliance with a notice to produce issued by the defendant in the matter. No such notice of motion has been filed but I will regard the matter as an oral application. The defendant does not allege any prejudice by my dealing with the matter in that way.
The costs sought amount to $2,990.85 for photocopied documents which are the subject of the notice to produce. The amount is derived from a tax invoice from a third party, Law in Order, who carried out the photocopying. The total cost of the invoice is $5,981.69, half of which is claimed from the defendant on the basis that the two copies of each of the documents were made, with the plaintiff retaining one copy.
Rule 21.13 UCPR says that the Court may order party A to pay the amount of any reasonable expenses, inter alia, incurred by party B in complying with a notice to produce. Rule 42.33, however, provides that unless the Court otherwise orders, an order as to costs is not to be made under r 21.13, inter alia, if the Court is not satisfied that the parties concerned have attempted but failed to agree on the amount of costs to be paid in relation to the matter for which such an order may be made under that rule.
An affidavit has been read on behalf of the plaintiff that annexes the notice to produce and subsequent correspondence between the parties about the manner of production of the documents and the costs involved.
The defendant resists the payment of the money and says that r 42.33 has not been complied with in the circumstances. The defendant asserts that both parties were under a misapprehension that documents identified in the notice to produce were required to be produced to the Court rather than inter-partes. Certainly a reading of the correspondence suggests that there may have been such a misapprehension but it was certainly on the part of both parties.
In a letter from the plaintiff's solicitor to the defendant's solicitor of 5 June 2018, the solicitor said that she proposed to comply with the notice to produce by way of soft copy. The letter went on to say that the reason for that was that the documents were voluminous, and the solicitor considered that the most cost-effective way of complying with the notice was to provide the defendant's solicitor with a compact disc or USB. The letter went on to say:
Should your client insist on us producing all documents in paper form, then we put you on notice that we will have no option other than to outsource that work, given the volume, and will be seeking reimbursement of those costs from your client pursuant to rule 21.13 of the UCPR.
The letter then mentioned the date for production in the notice which, the solicitor noted, was not a date that the matter was listed before the Court. That may be some indication of a misapprehension on the plaintiff's solicitor's part of the necessity for producing the documents to the Court.
In a letter in response from the defendant's solicitor, there was discussion about whether all parts of the notice to produce were to be pressed. The letter then went on to say:
As to the balance, as the documents may be relevant to the hearing on 20 June 2018, we will accept production electronically on 14 June 2018 and agree that formal production to the Court can occur in hardcopy by 20 June 2018.
The letter in response from the plaintiff's solicitor of 12 June said:
Given your advice that you will require a hardcopy of the documents, we see no point in providing the documents electronically. We propose producing the documents to the Court on 20 June 2018.
Given the documents are voluminous, we put you on notice that we will be seeking an order for reimbursement of the costs of producing the material from your client pursuant to rule 21.13 of the UCPR.
On 13 June the plaintiff's solicitor sent an email to the defendant's solicitor saying:
Could you please note that the cost for complying with the notice to produce will be approximately $3,000 and we will be asking that your client reimburse us these expenses. The number of pages is in excess of 38,000.
The email attached an invoice from Law in Order. It pointed out that only half of the cost of that invoice was sought because the plaintiff was making a copy for itself.
On the following day, the plaintiff's solicitor sent a further email saying that she would now be producing the documents on that day, 14 June. The email went on:
Someone from our office will be delivering the documents later this afternoon. It was not going to be possible to produce the documents to the Court on 20 June, given the volume of the material. To save on costs, I have organised for the documents to be printed double-sided.
Then on 19 June the plaintiff's solicitor sent the final tax invoice from Law in Order which was for an amount slightly less than had previously been advised.
The defendant directed my attention to the decision of Ward CJ in ADM v FDGK (No 2) [2018] NSWSC 445 where her Honour, at [67] to [73], discusses the requirements of rule 42.33 and a decision of Pembroke J in Franklins Pty Limited v Endeavour Holdings Pty Limited [2013] NSWSC 1204.
Both of those cases differ from the present. It is apparent that in those cases the party claiming the expenses took fairly peremptory action without allowing any time for the discussions and negotiations envisaged by the terms of r 42.33.
In the present matter, the plaintiff's solicitor made it clear in the first instance that the plaintiff intended to provide the documents electronically, but was met with the response that, whilst that would be acceptable in the short-term, formal production to the Court in hardcopy had to occur. The defendant was put on notice on a number of occasions, both before and after that letter, that if hardcopy was required, outsourcing of the work would have to take place and that would be at the defendant's expense.
The defendant submitted that the email of 14 June curtailed the period of time between the proposed provision of the documents electronically (14 June) and the time when they would be provided in hardcopy (20 June), such that further negotiations were stymied because the 14 June email conveyed to the defendant that the documents had already been copied.
I do not consider that that email had the effect of curtailing the negotiations. The defendant had made it clear in the letter of 7 June that formal production to the Court was to be made in hardcopy. Whether or not that was a misapprehension, it cannot be said to be the fault of the plaintiff that the defendant was under that misapprehension. If there was such a misapprehension, it was mutually held.
I do not consider that r 42.33 has not been complied with. The cost of the documents is simply the disbursement that is required to be paid by the plaintiff's solicitor. In all those circumstances, I consider that the costs claimed are reasonable and the defendant should pay them. Accordingly, I will make an order in the form of order 4 in the consent order already referred to.
I make the following orders:
(1) Order pursuant to r 28.2 of the Uniform Civil Procedure Rules 2005 (NSW) that the following questions be determined separately from any other question in the Proceedings:
a. Question 1: Is the statutory declaration dated 23 January 2017 referred to in the affidavit of Aris Zafiriou sworn 10 May 2018 a statutory declaration that answers the description in, and satisfies the requirements of, ss 268-40 and 268-90 of Schedule 1 to the Taxation Administration Act 1953 (Cth) (TAA)?
b. Question 2: If yes to 1, is the consequence of the service of the statutory declaration on the plaintiff within 7 days after the Notice of Estimate was given to the defendant, that the estimate was thereby revoked pursuant to s 268-40(4) of Schedule 1 to the TAA or reduced to a specified lesser amount pursuant to s 268-40(2) of Schedule 1 to the TAA?
c. Question 3: Is the plaintiff permitted to challenge, whether by leading evidence in rebuttal or by cross-examining the maker of the statutory declaration to test whether the statutory declaration answers the description in, and satisfies the requirements of, ss 268-40 and 268-90 of Schedule 1 to the TAA?
d. Question 4: If yes to 3, should the plaintiff, before such cross-examination, first provide further particulars as to the facts, matters and circumstances relied upon by the plaintiff to allege that the statutory declaration does not answer the description in, and satisfy the requirements of, ss 268-40 and 268-90 of Schedule 1 to the TAA?
(2) The parties file and serve written submissions as follows:
a. The Defendant, by 11 June 2018.
b. The Plaintiff, by 10 August 2018.
c. The Defendant, in reply, by 27 August 2018.
(3) Pursuant to Rule 21.13 of the Uniform Civil Procedure Rules 2005 the defendant pay to the plaintiff the sum of $2,990.85 within 14 days of these orders being made, being the sum paid by the plaintiff to comply with the defendant's Notice to Produce dated 31 May 2018.
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Decision last updated: 21 June 2018