Part 37 rule 9 provides:
"Expense and loss
9(1) Where a person named is not a party and, in consequence of service of the subpoena, reasonably incurs expense or loss substantially exceeding any sum paid under rule 3, the Court may order that the party who requested the issue of the subpoena pay to the person named an amount in respect of the expense or loss."
10 Part 37 rule 3 is headed "Conduct money". However, the wording of the rule imposes a wider obligation than to merely pay fares, or reasonably anticipated expenses for accommodation or sustenance involved in complying with the subpoena. The rule requires, it seems to me, that the person tendering the subpoena make an estimate of what are the reasonable expenses of the person named of complying with the subpoena, and to tender that amount at the time of service. "Expenses" would include all money actually paid out, and the cost of items used up, in complying with the subpoena.
11 There is provision in Part 37 rule 9 for the payment of an extra amount to be ordered by the court. However, the situation ought not arise where the issuer of a subpoena tenders a fairly nominal amount at the time of issuing, has the benefit of a court order requiring the person who receives the subpoena to incur substantial expense, and then, when the documents are brought to court, says that if the person who brought the documents to court wishes to be paid for the work done in complying with the subpoena, then that person should put on a notice of motion, should put on evidence, and should arrange for a lawyer to come along to court to argue about whether there is any entitlement to be paid, and if so the quantum.
12 That way of proceeding would involve imposing a very substantial inhibition on a person being actually paid for the work done in compliance with the subpoena. It is the clear policy of Part 37 rule 3 and Part 37 rule 9 that the person issuing a subpoena should bear all reasonable expenses and loss involved in complying with it, unless the expense or loss incurred beyond the amount tendered at time of service of the subpoena is so slight that it can fairly be ignored. Subpoenas involve the exercise of a significant compulsive power, and they are issued by the Court on request, without any pre-screening of the appropriateness of the orders so made. The combined effect of Part 37 rule 6(1) and rule 6(1A) is that it is the solicitor for a party or (if the court gives leave to a party not represented by a solicitor) the party himself or herself, who procures the issue of the subpoena. While the issuing of subpoenas is necessary for the proper administration of justice, the intrusiveness of a subpoena is justified, according to this policy of the rules, only on terms that, ultimately, reasonable expenses and loss involved in complying will be paid by the party who issues the subpoena. If a request by the recipient of a subpoena to the issuer of the subpoena to be paid reasonable expenses and loss is met by an unreasonable refusal to pay, or an unreasonable statement that the only way the recipient will get paid is by going to court to seek an order under Part 37 rule 9, the issuer of the subpoena can usually expect to pay the costs of any application then made under Part 37 rule 9. And when the issuing of subpoenas is to such a large extent in the hands of solicitors, they have a professional responsibility that the power is not abused.
13 In determining what are "reasonable expenses" under Part 37 rule 3, it would be necessary to take into account that the issuer of a subpoena will not, usually, be in a position to know exactly what it is that is required to be done to search out any material that is required to be produced to comply with the subpoena. Any question of whether the issuer of a subpoena has failed to tender the "reasonable expenses" would need to be decided in that frame of reference. However, when it is completely predictable that expenses will be incurred, it is not open to the issuer of a subpoena to make no attempt to estimate what those expenses might be, and to take the attitude that it will leave the person issued with the subpoena to come along to court to make a claim under Part 37 rule 9.
14 Part 37 rule 3 requires the tender of the "reasonable expenses" at the time of service, while Part 37 rule 9 permits the later recovery of a more widely based sum, the reasonably incurred expense or loss involved in complying with the subpoena. The notion of "loss" includes reasonable reimbursement for time spent in complying with the subpoena, that would otherwise have been spent in productive activities.
15 If the recipient of a subpoena, who has been provided with the sum required by Part 37 rule 3, has a sound basis for doubting that he or she will actually be paid the extra amount that will become payable under Part 37 rule 9 if the subpoena is complied with, that could in some circumstances provide a basis for setting the subpoena aside as oppressive.
16 In the present case, the recipient of the subpoena has its office in York Street, Sydney. There is no evidence whatever before me about what the issuer of the subpoena might have known or did know, about the expenses which would be involved in complying with the subpoena. The material which is called for in the subpoena is material which might, in an office with a well organised filing system, have been very readily available. In the circumstances, I am not prepared to make a finding that there has been a failure to tender at the time of service a sum sufficient to meet the reasonable expenses of the person named in the subpoena. From there it follows that the subpoena is validly served, and the documents are ones which are required to be produced to the court.
17 While it appears, from the correspondence, that the Stitt company was not prepared to extend credit to David Foyster in connection with its expenses and loss connected with the subpoena, this was not made the basis of any application to set the subpoena aside.
18 However, the Stitt company has a claim under Part 37 rule 9. It is appropriate to order at this stage that David Foyster pay the reasonable expenses and loss of Peter H Stitt & Associates Pty Ltd of complying with the subpoena. The quantum claimed by the company is an amount which counsel for David Foyster has indicated his client would wish to challenge. It will, therefore, be necessary for the reasonable quantum of those expenses and loss to be established by either affidavit on a reference to a Master, or agreement.
19 The solicitor for Peter H Stitt & Associates appeared at court today and sought an order for his own costs for appearing in connection with the subpoena. He initially took the stance that there was no obligation to produce the documents to the court unless expenses and loss involved in searching out the documents were paid. That contention is one which I have not upheld. However, he has achieved a more limited degree of success, namely the order, which David Foyster's solicitors had not offered to consent to, that the reasonable expenses and loss be paid.
20 When he has had only this partial success, and started from a mistaken position, I decline to make an order for payment of the legal costs incurred to date of the solicitor for Peter H Stitt & Associates Pty Limited. Whether any legal costs become payable, concerning quantification of the expenses and loss properly payable, is a matter which can be decided by the judicial officer that decides that question.
21 I order that David Foyster pay the reasonable expenses and loss of Peter H Stitt & Associates of complying with the subpoena dated 9 September 2003. I refer to a Master the question of the quantum of those expenses and loss. I grant liberty to Peter H Stitt & Associates to file an affidavit and notice of motion in these proceedings to seek to quantify those expenses and loss. Otherwise I make no orders.
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