Frigger v Trenfield

1. The question of the terms of any order as to the reasonable costs and expenses of FTI Consulting (Australia) Pty Ltd complying with the subpoena dated 28 November 2023 be reserved until the event in the proceedings is known.
2. There be liberty to FTI Consulting (Australia) Pty Ltd to relist its application for costs upon reasonable notice to the applicant. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

COLVIN J: 1 Mrs and Mr Frigger have brought proceedings against Ms Trenfield, the trustee of their bankrupt estates, seeking her removal. Broadly speaking, they claim that the arrangements between Ms Trenfield and her employer FTI Consulting (Australia) Pty Ltd (FTI) mean that she is acting in a position of conflict and for that reason her appointment is invalid or that an order should be made removing her as trustee and requiring loss and damage to be paid. 2 Leave was given to Mrs and Mr Frigger to issue a subpoena to FTI. It was issued on 28 November 2023. The subpoena required the production of the professional indemnity insurance policy and the fidelity insurance policy that was maintained in respect of Ms Trenfield's activities as trustee of the bankrupt estates of Mrs and Mr Frigger. 3 A dispute arose as to the terms of confidentiality orders to be made in respect of documents produced in answer to the subpoena. Confidentiality orders were made on the application of FTI. At the time of the making of those orders, liberty was reserved to FTI to apply as to the costs of the subpoena and as to the issue of confidentiality. 4 FTI now applies for an order that Mrs and Mr Frigger pay to FTI the amount of any reasonable loss or expense incurred by it in complying with the subpoena dated 28 November 2023 including submissions in relation to confidentiality. Further, it seeks an order fixing those costs in the amount of $17,000 or that they be assessed. 5 Before the return of the subpoena, FTI invited Mrs and Mr Frigger to consent to the making of confidentiality orders as to the documents to be produced. They did not respond. On the return of the subpoena, FTI sought orders as to confidentiality limiting access to the documents produced to persons who had signed an undertaking as to confidentiality. The return of the subpoena and the request for confidentiality orders were referred to me as case managing judge. My associate communicated a request to FTI that it provide a copy of the proposed orders as to confidentiality together with submissions of no more than three pages to support the making of those proposed orders. 6 Lawyers acting for FTI sought the consent of Mrs and Mr Frigger to the making of confidentiality orders. They refused to consent to the proposed orders. 7 In support of its application for confidentiality orders, a solicitor for FTI deposed as follows concerning the policies the subject of the subpoena: I am informed by … Senior Advisor, Risk and Operations at FTI, and believe that: (a) as a global professional services firm, some insurances are maintained in each local country and/or at a global level by FTI Consulting, Inc (FTI's ultimate parent entity, incorporated in the United States of America); (b) a fidelity insurance policy for each of the years mentioned in the Subpoena is not - and was not - maintained by FTI, but was maintained by FTI Consulting, Inc; (c) a professional indemnity insurance policy was - and is - maintained by FTI for each of the years mentioned in the Subpoena (PI Policies); (d) the PI Policies contain highly sensitive and confidential information concerning FTI's insurance arrangements, deductibles, and exclusions for coverage; and (e) FTI therefore seeks orders only permitting the Applicants and the Respondent (and their lawyers) to uplift and inspect the PI Policies after they have executed a confidentiality undertaking (discussed below). 8 A lawyer acting for FTI has deposed to the legal costs incurred by FTI in complying with the subpoena. They are said to have been $7,776.50 for costs up until the first return and $13,189.70 for costs after the first return including the preparation of submissions and the preparation of the application for costs orders. The amounts include counsel's fees. 9 By way of written submission in support of the application for costs it was said that the costs incurred included the following: (a) seeking advice in relation to any confidentiality claims in relation to the production of documents under the Subpoena; (b) costs for corresponding with the Applicants in relation to the confidentiality regime; (c) attendance by Counsel at the first return date of the Subpoena on 11 December 2023; (d) advising FTI in relation to confidentiality claims for the production of documents under the Subpoena; (e) preparing and filing the submissions of 15 February 2024, including the preparation of supporting affidavit material (as well as earlier affidavit material); (f) preparing these submissions and associated affidavit material. 10 There is no other information provided to support the quantification of the amounts. 11 Mrs and Mr Frigger oppose the application on the following basis: (1) they claim that FTI is an interested person in the proceedings and, in effect, should be treated as a party to the proceedings; (2) the application for the issue of the subpoena was brought because Ms Trenfield did not comply with an obligation to discover the insurance documents that relate to liabilities that arise from her activities as trustee; (3) the costs claimed have been incurred by the same firm who acts for Ms Trenfield in the conduct of the defence of the substantive application; (4) in those circumstances, the costs of complying with the subpoena should be treated as if they were costs of discovery and form part of the costs of the proceedings; (5) if costs are to be ordered, then the order should provide for the costs to be taxed at the same time as a bill of costs that has been filed by FTI pursuant to a separate order as to the costs in respect of a separate subpoena issued to FTI at the request of Mrs and Mr Frigger (see Frigger v Trenfield (Subpoena to FTI Consulting) [2023] FCA 1001); and (6) if costs are fixed, then they should be no more than $5,000. 12 Some other submissions were advanced by Mrs and Mr Frigger concerning the application of funds by Ms Trenfield 'to pay her employer, FTI'. Those submissions raise aspects of the substantive claim. I do not consider them to be matters that properly bear upon the present application.