O'Shanassy v Turland

The issues the subject of this judgment

1. On 6 and 13 July 2021 the defendant issued four subpoenae, details of which are set out below. Applications to set aside all four subpoenae were brought on behalf of the plaintiff. One of the parties under subpoena, Sagacious Holdings Pty Ltd, also brought an application to set aside the subpoena addressed to itself, as well as objecting to two other subpoena. These applications were the subject of my rulings on 4 November 2021.
2. On 1 July 2021, the plaintiff issued a subpoena to Council which was the subject of objections. A revised schedule to this event was provided, and some of the documents sought are not objected to. Others were resolved by the making of orders for which reasons were not sought, as set out in the orders of 4 and 16 November 2021.
3. A further application in relation to two of the paragraphs of the subpoena to Wingecarribee Shire Council was brought by the Council itself, in relation to a claim for legal professional privilege, as well as by the defendant. Orders were made after further written submissions, and a request for reasons made. This judgment deals with the two categories of the subpoena the subject of that further application, namely the documents sought in paragraph (d) and (e) of the subpoena for documents considered by Council in closed session. The relevant order was made on 16 November 2021 and is set out below.
4. This judgment next deals with the issue of costs. As this includes the costs of the application by Sagacious Holdings Pty Ltd to subpoenae issued by the defendant, short reasons for the dismissal of that application are also included as these reasons are the basis for the costs orders.
5. On 4 November 2021, after hearing from the parties as well as from Mr Smartt (on behalf of Sagacious Holdings Pty Ltd) and from Mr Senior in his additional role as a representative of the Wingecarribee Shire Council, I made the following orders: (1) The application by Sagacious to set aside subpoenas to itself (filed on 15 July 2021), Mercedes-Benz (on 6 July 2021) and Nissan Financial Services Australia Pty Ltd (filed on 6 July 2021) is refused, noting the restriction of documentation to be provided in categories 5, 6, 7, 10, and 13 of the subpoenas to Sagacious is reduced from 30 June 2021 to 30 June 2019. (2) The plaintiff's application to set aside the same subpoenas and additional subpoena to Latitude filed on 6 July 2021 is refused, but noting the restriction on categories referred to in the previous order. (3) General Access by the parties to the documents produced under subpoenas by Mercedes, Nissan and Latitude. (4) Extend time for Sagacious to answer the subpoena to Monday 22 November 2021, granting the parties liberty to apply in relation to an order for general access on 25 November 2021 in the event of disagreement. (5) Costs reserved with liberty to apply. (6) Stand over part heard the application to set aside the subpoena to Wingecarribee Shire Council to 11 November 2021 to enable further submissions by the plaintiff, such submissions to be provided by 5pm 05 November 2021. (7) Any submissions in reply by defendant by 5pm Tuesday 9 November 2021. (8) Costs reserved.
6. On 16 November 2021, in response to further written submissions from the plaintiff, the defendant and the Wingecarribee Shire Council, I made the following further orders: The Court orders that: 1. The application by the Defendant and Wingecarribee Shire Council (Council) to set aside parts of a subpoena issued by the Plaintiff to the Council on 1 July 2021 (Council Subpoena) is granted. 2. Council is to produce documents in response to the parts of the Council Subpoena to which no objection was taken, as set out in Schedule A to these Short Minutes of Order, by 9 December 2021. 3. The Plaintiff, Defendant and Sagacious Holdings Pty Ltd are to exchange any submissions on costs following the determination of the objections raised to the Council Subpoena and subpoenas issued by the Defendant to Sagacious Holdings Pty Ltd, Mercedes-Benz Financial Services Australia Pty Ltd, Nissan Financial Services Australia Pty Ltd and Latitude Financial Services Australia Holdings Pty Ltd by 19 November 2021. 4. The parties have liberty to apply to the Associate to Her Honour Gibson DCJ for the purposes of obtaining a final hearing date. The Court notes that a copy of these orders is to be provided by the legal representatives of the Plaintiff and/or the Defendant to the legal representatives of Sagacious Holdings Pty Ltd.

Secretary of Department of Planning, Industry and Development v Blacktown City Council [2021] NSWCA 145

1. By way of general observation in relation to all challenges to the subpoenae in these proceedings, the principles of law relevant to the issue of subpoenae have recently been substantially revised and simplified by the Court of Appeal of New South Wales in Secretary of Department of Planning, Industry and Development v Blacktown City Council [2021] NSWCA 145 at [65] (Bell P) and [86] and [89] (Brereton JA).
2. The President explains the concept of "legitimate forensic purpose" as follows: "[65] It is sufficient, in my view, to justify a subpoena as having been issued for a legitimate forensic purpose if the documents sought are "apparently relevant" or, to use the words of Nicholas J in ICAP Pty Ltd v Moebes [2009] NSWSC 306, it can be seen that the documents sought to be produced by way of subpoena will materially assist on an identified issue or there is a reasonable basis beyond speculation that it is likely the documents subpoenaed will so assist. Of course, if it can be shown that the material assistance will be to the party that issued the subpoena, the prospect of the forensic purpose of the issuing party being impugned as illegitimate will be virtually non-existent."
3. The President went on to redefine the border between subpoenae issued for a legitimate forensic purpose and one issued for fishing purposes as follows: "68 There is a plain difference between "apparent relevance" and "fishing", the latter being the metaphor that is frequently deployed in this area of discourse: see, for example, The Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 575; (1938) 55 WN (NSW) 215. The word "apparent" admits of the possibility that the documents sought by way of subpoena may not ultimately turn out to be relevant. Their apparent relevance, however, should be able to be ascertained by an examination of the description or identification of the document or documents sought in the schedule to the subpoena in light of the issues in the case, as they present themselves on the pleadings, in particulars and/or in affidavits or witness statements if they have been filed or served at the time of the issue of the subpoena. 69 If the documents are apparently relevant and, provided that the terms of the subpoena are not unduly vague or the ambit of the subpoena is not such that it would be oppressive to comply with it, the subpoena should not be set aside. To that extent, the statement in Chidgey at [59] that mere relevance is "not sufficient", and a similar statement in Carroll at 182 that "mere relevance is not enough" may, with respect, be apt to mislead or confuse. In the latter case, Mahoney AP said at 182 that a party issuing the subpoena: "must be able to indicate that the document is relevant in the sense that it may assist his case. In the present case, that could not be claimed. Nor was it shown. At best, the claim was: 'I wish to see the document to see if it may assist my case.' That, in my opinion, is not sufficient." There is a very subtle distinction at play in this passage which, in my view, is undesirable, is inconsistent with many of the authorities referred to above, and has the potential to lead to the unwarranted setting aside of subpoenas or refusals to inspect documents. Where apparent relevance of the documents subpoenaed to the issues in the case or to the cross-examination of a witness or witnesses is established, this should not generally lead to the setting aside of a subpoena. As King CJ put it in Carter at 453, where a document or documents sought by subpoena by their nature have a "bearing on the issues in the case and may well have evidentiary value", a subpoena seeking such a document or documents will not amount to fishing. 70 Of course it will remain the case that, if it can be demonstrated that the party issuing the subpoena has done so for some improper, illegitimate or ulterior purpose foreign to the litigation, the Court in the exercise of its discretion may set aside the subpoena as an abuse of process or refuse access to the subpoenaed documents in spite of their apparent relevance. Provided, however, that the documents sought are apparently relevant to the issues that have or are likely to arise in the proceedings or have some evidential value (which may extend to value for the purposes of cross-examination, including testing the credit of witnesses including expert witnesses), to the extent it may be necessary to establish a legitimate forensic purpose, such a purpose may be presumed."
4. Brereton JA added: [86] […] I agree with [Bell P] that the primary judge did not err in holding that it was not necessary, in order to demonstrate a legitimate forensic purpose for the issue of a subpoena, that the documents sought would likely materially assist the case of the party that issued the subpoena, and consequently did not err in dismissing the application to set aside the subpoena. For myself, however, I am inclined to the view that her Honour also did not misread this Court's decision in ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd [2009] NSWCA 307. … [89] I agree with Bell P, for the reasons given by his Honour, that an issuing party is not required to show that it is "likely" (or "on the cards") that the documents sought will materially assist its case, as distinct from that it is "likely" (or "on the cards") that they will add, in some way or another, to the relevant evidence in the case, and that the essential question is whether the documents called for are apparently relevant, or capable of providing a legitimate basis for cross-examination, in which case there is a legitimate forensic purpose for the issue of the subpoena. In my view, at least in civil proceedings and in the absence of any question of public interest immunity, no more is required to support the issue of a subpoena for production than that there is a reasonable basis for supposing that the material called for will likely add, in the end, in some way or another, to the relevant evidence in the case. This reflects the notions that the documents relate to, throw light on, or are sufficiently relevant to the dispute; that they "appear relevant in the sense that they relate to the subject matter of the proceedings"; or that they could possibly throw light on the issues in the case. Moreover, documents will add "in some way" to the relevant evidence in the case if they are capable of assisting in cross-examination, or go to credit, and notwithstanding that they are inadmissible according to the rules of evidence.
5. These helpful clarifications of the correct approach to documents sought under subpoena should substantially reduce the number of applications brought to challenge relevance and to assert "fishing expeditions". I have been guided by these principles in all the applications by all of the parties in these proceedings.

The terms of the Council subpoena

1. The documents sought in the subpoena were as follows: "1. All documents, communications, and records of matters arising and dealt with by Wingecarribee Shire Council ("the Council") at: the Council's open to the public meetings; meetings between the elected Councillors and the Councils staff; and/or by the Council staff independently, during the period from 1 December 2012 to 31 December 2017 in connection (without limitation) to: a) The unlawful earthworks carried out by Paul O'Shanassy on Lot 11 and Lot 12 Range Road Mittagong. b) The decision to commence NSW Land Environment Court proceedings ("the Proceedings") in respect of the unlawful earthworks carried out by Paul O'Shanassy. c) Any legal advice received either internally or from external sources in connection with the Proceedings including but not limited to the without prejudice offer to plead guilty received by Council from Paul O'Shanassy in about 27 February 2014. d) The enforcement of the cost assessment made against Paul O'Shanassy and in favour of the Council. e) All financial information provided to the Council by any third parties including the NSW State Debt Recovery department in relation to the recovery of the fine of $93,500 imposed on Paul O'Shanassy arising out of the Proceedings. 2. All documents, communications, and records of matters arising and dealt with by Wingecarribee Shire Council ("the Council") at: the Council's closed sessions meetings of elected Councillors; meetings between the elected Councillors and the Councils staff in closed sessions; and/or by Council staff independently, during the period from 1 December 2012 to 31 December 2017 in connection (without limitation) to: a) The unlawful earthworks carried out by Paul O'Shanassy on Lot 11 and Lot 12 Range Road Mittagong. b) The decision to commence NSW Land Environment Court proceedings ("the Proceedings") in respect of the unlawful earthworks carried out by Paul O'Shanassy. c) Any legal advice received either internally or from external sources in connection with the Proceedings including but not limited to the without prejudice offer to plead guilty received by Council from Paul O'Shanassy in about 27 February 2014. d) The enforcement of the cost assessment made against Paul O'Shanassy and in favour of the Council. e) All financial information provided to the Council by any third parties including the NSW State Debt Recovery department in relation to the recovery of the fine of $93,500 imposed on Paul O'Shanassy arising out of the Proceedings. 3. In this Subpoena to Produce, and pursuant to Pt 2.2, s 47 of the Evidence Act 1995 (NSW) with reference to the dictionary attached to the instrument, the word "document" means any record of information, and includes- (a) anything on which there is writing, or (b) anything on which there are marks, figures, symbols, or perforations having a meaning for persons qualified to interpret them, or (c) anything from which sounds, images or writings can be reproduced with or without the aid of anything else, or (d) a map, plan drawing or photograph." [Emphasis added]
2. The two categories the subject of this judgment (2(d) and 2(e)) are highlighted.
3. As to the balance of the documents sought, there were objections to (a) and (b) on the grounds of oppression and relevance. The obviously privileged nature of the documents sought in (c) was accepted and is not the subject of a request for reasons. The defendant took no objection to paragraphs 1(d) and 1(e) (for documents produced in open session of the Council) and these are to be produced.

The parties' submissions

1. Ms Roberts' submissions are to the effect that if the documents produced in 1(d) and 1(e) (which relate to documents produced at open meetings of the Council) are to be provided, then the documents discussed by Council in closed session should be produced as well. If a claim for privilege is made, they can be resolved by my inspection of the documents. She also challenged the entitlement of the plaintiff to challenge a subpoena on the basis of legal professional privilege, but withdrew that challenge when Mr Senior confirmed that he was instructed by the Council as well as by the plaintiff.
2. Mr Senior objected to production on the following two bases: 1. The Council claimed legal professional privilege for the documents in question. 2. Both the defendant and the Council submitted that there was no legitimate forensic purpose in seeking the documents falling within these two subcategories; additionally, the call for such a vast amount of documentation is oppressive.

Privilege

1. Mr Senior, in paragraph 37 of his submissions of 17 September 2021, commences by noting that section 10A of the Local Government Act 1993 (NSW) expressly provides for meetings of Council and committees of counsel to be close to the public where there is discussion, or the receipt of, any advice concerning litigation or other material that would otherwise be privileged from production.
2. Section 10A of the Local Government Act is headed: "Which parts of the meeting can be closed to the public?" and a series of reasons is then set out. Section 10A(2)(g) provides: "(g) advice concerning litigation, or advice that would otherwise be privileged from production in legal proceedings on the ground of legal professional privilege."
3. Although not referred to by the parties, regard should also be had to s 10B(5), which provides: "In deciding whether part of a meeting is to be closed to the public, the council or committee concerned must have regard to any relevant guidelines issued by the Departmental Chief Executive."
4. There is no claim that the meeting was closed contrary to the relevant guidelines.
5. While it may be appropriate in some circumstances for a party the recipient of a subpoena to provide copies of the documents sought to the court for the purpose of determination of the claim for privilege, it is plain, both from the wording of the document sought under subpoenae and s 10A(2)(g), that the documentation in question, which relates to the enforcement of costs against the plaintiff, financial information provided to Council in relation to recovery of the farm and other matters associated with the litigation between the plaintiff and the Council, is all the subject of privilege which has been maintained through the use of the statutory process as set out in s 10A of the Local Government Act. This is to be contrasted with documents provided to the Council in relation to the recovery of the fund which were discussed during open sessions of counsel, to which Council has taken no objection.
6. Ms Roberts notes in her submissions that courts have been critical of a practice of "mere assertion" of privilege (Perazzoli v Banksa [2017] FCAFC 204 at [71]), such as inviting a lawyer to be present at a meeting for the purpose of claiming privilege when the meeting was discussing issues which were not privileged at all. She cites as an example Verde Terra Pty Ltd v Central Coast Council [2019] NSWLEC 166 where Pepper J stated at [95]: "These bases may be rejected for the following reasons. First, neither of the privileges asserted is, as it was argued before the Court, a proper basis to resist the production of documents under a subpoena or notice to produce. While a successful claim to either privilege may deny [Verde Terra] access to any documents produced, it is not necessarily a sufficient reason to set aside these compulsory processes."
7. In the present case, however, where there has been litigation between the parties, and where Council has clearly followed the provisions of s 10A(2)(g) in ensuring the relevant part of the meeting is closed to the public, those concerns are without any basis. Mere supposition, without a reasonable basis, is insufficient, as Brereton JA notes in Secretary of the Department of Planning, Industry and Environment v Blacktown City Council at [89].

Has privilege been waived?

1. Ms Roberts alternatively argues that privilege has been waived.
2. Where a person acts with apparent authority to waive privilege, waiver may occur: Global Medical Imaging Management Ltd (in liq) v Australian Mezzanine Investments Pty Ltd [2003] NSWSC 430 at [18] per Einstein J. The privilege in question being that of the Council, that privilege may be waived by persons such as the defendant, as a Councillor, making statements in public of the kind contained in the matters complained of. In addition, another Councillor and an employee of the Council, who are both former defendants, were also present when the matters complained of was spoken.
3. The plaintiff's waiver argument relies on statements made by members of the Council, and not merely the matters complained of, in which they referred to reports in Council's possession which were related to the matters being discussed in relation to these proceedings. These are as follows: 1. In transcripts of audio recordings dated 26 April 2017, 24 May 2017 and 8 April 2019, there is express reference to the enforcement of the costs assessment and the recovery of a fine against the plaintiff. The payment arrangements with the plaintiff were discussed in considerable detail on 24 May 2017 and the defendant refer to the matter being "reported in Council". 2. In the course of a Council meeting on 26 April 2021, a councillor said that he understood from "previous reports" that the plaintiff had lost his license. Other councillors appear to agree, suggesting that they had read the report as well. It was only after this significant information was disclosed to the public, that the counsellor in question suggested that the conversation continue in a closed session.
4. The plaintiff's argument is that there is one or possibly a series of reports about the topics addressed in relation to the matters complained of that have been tabled in Council would not produce to him. Part of the substance of such a report appears to have been disclosed by reason of the statement set out above. This is inconsistent with the maintaining of any claim for privilege.
5. Ms Roberts relies upon Ashfield Municipal Council v Roads and Traffic Authority of NSW [2004] NSWSC 917, where Barrett J held that a council had waived privilege in relation to an advice is received by referring to it in correspondence, even though the correspondence in question stated specifically that privilege had not been waived. Similarly, in Western Developments Pty Ltd v Orange City Council [2007] NSWLEC 141, reference to the substance of advice amounted to waiver, as was noted at [15] - [18] (see also Waite v Hornsby Shire Council [2007] NSWADT 265).
6. Each of these cases turns on its facts. In each case, the reason for the finding of waiver was that there was disclosure of the substance of the legal advice, not a mere reference to a report.
7. In the present case, the fact that there was express reference to a fine and to the recovery of costs by Council is not sufficient, of itself, to require production of the files, reports, advice or other documentation in the possession of counsel for the purpose of those proceedings. Certain information had to be made public, because Council was required to set out information about the use and quantity of public monies spent on litigation, monies owed to the Council as a result of such litigation, and other matters relevant to the performance of Council's duties as a public body. The transcript of the first matter complained of makes it clear that what was being considered was an agenda item "attachment 1 cost of legal proceedings - March 2017"; this was what the defendant was referring to when he made reference to the amount of costs owed by the plaintiff to the Council, the fair amount of fine imposed and the amount paid by the plaintiff to date. However, after the matters referred to by the defendant had been raised, the first item on the agenda, which was the status of legal proceedings involving Council, then felt to be considered. It was at this stage that the motion was passed to consider the issue enclosed Council.
8. The same as the case with the second matter complained of. The agenda for the meeting of Council on 24 May 2017 sets out that information relating to the ongoing legal costs of the litigation against the plaintiff was to be noted that a resolution was to be passed that the legal costs as detailed in the legal affairs report were to be made public. It is clear from the transcript of the second matter complained of that this was the agenda item that the counsellors were considering at this meeting, and the document to which the defendant was referring when he said there were amounts owed by the defendant to the Council.
9. The references in the matters complained of two counsellors learning that the plaintiff had lost his driver's licence and was driving while unlicensed are not inconsistent with the maintenance of privilege over documents disclosed during closed Council meetings, and in particular meetings were the particular matters set out in paragraphs 2(d) and (e) may have been discussed.

Conclusion

1. For the above reasons, I am satisfied that the claim for legal professional privilege for the material discussed in closed session was properly made and that the subsequent conduct of the defendant and other council members does not amount to waiver of that privilege.

Legitimate forensic purpose

1. Mr Senior alternatively submitted (on behalf of the defendant as well as Council) that, if his arguments on legal professional privilege were unsuccessful, the documents in question were not sought for a legitimate forensic purpose and (given the broad scope of documentation sought, a complaint addressed to the whole of the subpoena as well) oppressive.
2. As to the documents in (d) and (e), given Council's willingness to provide the documents discussed in open session, it is hard to see (even without the benefit of Bell P's redefining of the test in Secretary of the Department of Planning Industry and Environment v Blacktown City Council) how these documents could not be just as relevant as the documents produced in open meetings, and I note Ms Roberts' reference to this judgment in her submissions on costs.
3. However, the issue of oppression, which was the crucial factor in relation to the requests for documents set out in paragraphs (a) and (b), was a significant factor. The costs and hours involved, as set out in the affidavit of Ms Lumsden, were wholly out of proportion. While those costs essentially related to production of the documents sought in (a) and (b), there would clearly be a cross-over, because the documents considered in the closed meeting are documents that would have been part of categories (a) and (b) (where the whole of Council's file was sought).
4. I briefly note, as to categories (a) and (b) of the subpoena, that the principal reason for my rejection of the request for documents sought was the total lack of any relevance to the issues in these proceedings. The fact that these proceedings were heard and determined in the Land and Environment Court is not in dispute, and neither is the result. There could be no possible reason for requiring Council to produce its files and documents for the whole of this saga. This is particularly the case given that these files could (and probably do) contain material which may be privileged, and the files would need to be checked for their privileged content as well as put into some semblance of order after slumbering peacefully in the archives for some years. That same reason for rejection would apply to (d) and (e) as well.

The subpoenae issued by the defendant

1. The defendant issued subpoenae to the following four representatives of companies: 1. The Proper Officer, Mercedes-Benz Services Australia Pty Ltd ("Mercedes") (6 July 2021). 2. The Proper Officer, Nissan Financial Services Australia Pty Ltd ("Nissan") (6 July 2021). 3. The Proper Officer, Latitude Financial Services Australia Holdings Pty Ltd (6 July 2021) ("Latitude"). 4. Sagacious Holdings Pty Ltd ("Sagacious") (15 July 2021).
2. On 14 July 2021 Sagacious Holdings outlined objections to the subpoena sent to that company, as well as the subpoenae issued to Mercedes-Benz and to Nissan. An objection to the subpoena to Latitude by the plaintiff was added in further correspondence dated 22 July 2021, but Sagacious never challenged this subpoena.
3. Mr Smartt's submissions on behalf of Sagacious (which were supported by Ms Roberts, for the plaintiff) were put on the basis that "the vast majority of categories appear directed at fishing for details of a "financial association" between the plaintiff and Sagacious" (submissions, paragraph 3). He identified three difficulties with the use of this rationale: 1. The alleged financial association between the plaintiff and Sagacious "appears to be irrelevant to any issue in the proceedings". 2. Even if it were relevant, many of the categories went beyond seeking documents directed at this issue, such as bank statements. 3. The true object, considering the breadth and subject matter, "appeared to be to fish for information about the plaintiff's personal affairs in an entirely untargeted fashion" and Sagacious "is entitled to be kept out of it".
4. Mr Senior responded by pointing out that one of the issues was whether the plaintiff unjustifiably failed to pay a substantial fine and legal costs while being wealthy enough to do so. Only one criteria of that wealth was the fact that he was asserted to own three cars worth half a million dollars. The plaintiff had operated his legal practice through Sagacious Legal Pty Ltd until it was liquidated in or about March 2013. In 2015 the company Sagacious Holdings Pty Ltd was incorporated. While the plaintiff was not a director or shareholder, this company was the Trustee of the O'Shanassy Family Trust No 1, operates from the same address at which the plaintiff conducts his legal practice, has granted a lease to the plaintiff for his home, has made substantial payments to the plaintiff totalling more than $2.3 million and, perhaps most importantly, is the registered owner of two of the Mercedes-Benz vehicles asserted to have been driven by the plaintiff.
5. The defendant has administered interrogatories to the plaintiff going to the ownership and use of motor vehicles, including these vehicles, and no objection to answering those interrogatories was taken by the plaintiff.
6. Neither Mr Smartt's submissions on the setting aside of the subpoenae nor his submissions on costs refer to the principles set out by Bell P and Brereton JA in Secretary of Department of Planning, Industry and Development v Blacktown City Council, and he has not engaged in the delineation of the issues in terms of the principles set out in that decision.
7. Looking at the issues raised in the pleadings, I was satisfied that the plaintiff's financial position generally, and not merely in relation to the cars he drove or who in fact owned them, is one of the issues relevant to the defence of justification at the trial. The comparatively low bar for forensic purpose described by Bell P and Brereton JA is readily made out.
8. Ms Roberts, who supported those submissions, added an additional reason for objection, namely that parties who do not have documents at the time of publishing the matter complained of should not be entitled to issue subpoenae to third parties for proof of those statements at the trial, citing Rush v Nationwide News Pty Ltd [2018] FCA 357.
9. Wigney J's decision in Rush was that the relevant subpoena (for a complaint asserted to have been made by a young actress about the plaintiff) had no legitimate forensic purpose after the relevant particulars of justification had been struck out on the basis that they were not capable of sustaining the defence (at [175]). That is not the case here; not only is there an unchallenged plea of justification but interrogatories on these issues have also been answered by the plaintiff.
10. I also accept Mr Senior's additional submission that the documents are made relevant by reason of the plaintiff's plea that knowledge of the falsity of the imputations aggravated his hurt to feelings. In Della Bosca v Arena [1999] NSWSC 1057 at [14(f)], Levine J pointed out that a plea of this kind "raises an 'issue' in the proceedings", citing Tabe v Amalgamated Television Services Pty Ltd (1987) A Def R 50,025. Production of documents relevant to falsity, not only on subpoena but also on discovery, would accordingly be required in order to meet this 'issue" in the proceedings.
11. For the above reasons, I consider that the defendant had made out a legitimate forensic purpose. While the contents of the subpoena to Sagacious were (in 5 of the categories) read down (from 2021 to 2019), that was a minor issue in terms of the "all or nothing" challenge brought by both the plaintiff and Sagacious to the whole of the subpoena.
12. This finding is relevant to the issue of costs, as the principal reason for Mr Smartt now opposing a costs order is the reading down of the date for production in five of the paragraphs.

Costs orders following upon these rulings

1. After I made orders in relation to all but categories (d) and (e) of the subpoena, further submissions were provided on both categories (d) and (e) and on costs. I have been asked to provide reasons for the rulings for categories (d) and (e) and to consider the issue of costs on written submissions only. I have interpreted the request for costs to be determined as requiring me to indicate briefly the reasons for the rulings I made earlier in the application in relation to Sagacious and the other categories of the subpoena to the Council (the challenge by Sagacious and by the plaintiff to the other subpoenae issued by the defendant was not pursued at the hearing before me). Those reasons are set out above.
2. Pursuant to order 3 of my orders of 16 November 2021, the defendant seeks costs following the determination of: 1. The applications by both the defendant and Council to set aside parts of a subpoena issued by the plaintiff to the Council. 2. The plaintiff's application to set aside subpoenae issued by the defendant to Sagacious, Mercedes-Benz, Nissan and Latitude. 3. The application by Sagacious to set aside subpoenae addressed not only to itself but also to Mercedes-Benz and to Nissan.
3. The defendant seeks orders that the plaintiff pay the costs of and incidental to the Council's and the defendant's applications (and opposition to the plaintiff's applications) other than for Sagacious, where those costs should be shared jointly by the plaintiff and by Sagacious. He also seeks orders that these costs be payable forthwith pursuant to Uniform Civil Procedure Rules (NSW) 2005 ("UCPR") UCPR r 42.7.
4. The plaintiff and Sagacious seek orders that costs be costs in the cause or that each party to the proceedings pay his own costs. No submission was made by the plaintiff in relation to the costs of the Council. Additional submissions were provided on behalf of Sagacious on 24 November and on behalf of the Council on 25 November, after I drew to the parties' attention the potential for a different approach to the entitlement of third parties to costs in relation to subpoena issues.

Costs applications by third parties the subject of subpoenae

1. While it is trite to note that a party issued with a subpoena is not a party to the proceedings, it is a distinction which is important not to overlook. Costs of applications in relation to production of documents under subpoena commonly give rise to applications for payment of costs at times other than at the end of the litigation. In this regard, the usual rule that costs are assessed at the end of the matter needs to be seen in the context of proceedings by or against a third party which has no interest in waiting for a hearing date.
2. The court's powers to make a costs order against, or in favour of, a non-party are set out in s 98 of the Civil Procedure Act 2005 (NSW): Health v Greenacre Business Park Pty Ltd [2016] NSWCA 34 at [33] and also at [98]. One of the established circumstances in which a court may make an order for costs to be payable forthwith is where an unsuccessful applicant is not a party to proceedings: Morton v Williams [2017] NSWSC 1506. There are also specific provisions in the UCPR as follows: 1. UCPR r 33.11 confers on the Court a power to order the issuing party to pay the amount of any reasonable loss or expense incurred in compliance with a subpoena. If such an order is made, the cost to the issuing party in paying the costs of the subpoenaed party forms part of that issuing party's costs of the proceedings. They can become a disbursement which may be recovered by the plaintiff if they are ultimately successful in the proceedings, but such costs are often required to be paid immediately as a condition of obtaining the documents. The ordering of the issuing party to pay those costs does not reflect any finding of fault on the part of the issuing party but instead reflects the court's acceptance of the financial imposition, upon the subpoenaed party of having to provide information under force of law: Lam v Rolls Royce PLC (No 2) [2014] NSWSC 204 at [22]. No such application is made in the present case, but the rule is an example of the court's recognition of the different role a third party answering or objecting to a subpoena has, as opposed to that of the parties. 2. Applications to set aside subpoenae made by (or against) third parties are applications often resulting in the determination of costs orders payable forthwith under UCPR r 42.7 because of the involvement of a third party: Hani Property Investors Pty Ltd v Taouk [2015] NSWSC 614. This is partly because the third party is not waiting for a hearing date, but also appropriate where there may be a long wait for a hearing (as is the case in these proceedings): All Services Australia Pty Ltd v Telstra Corporation Ltd (2000) 171 ALR 330. In Butcher v Balog [2017] NSWSC 1409 at [46] Parker J stated this general rule as follows: "Ordinarily, a non-party who successfully has a subpoena addressed to it set aside should be entitled to obtain payment of costs without waiting for the completion of the proceedings, and I see no reason why the subsequent joinder of the deceased's parents to the proceedings should make any difference." [Emphasis added]. 1. That observation is particularly apt here, as at one stage Council was a party. 2. In addition to Butcher v Balog, I note statements to this effect in Hani Property Investors Pty Ltd v Taouk at [33] and Margaret Lesley Marshall and Kim Neil Marshall v Michael Prescott (No 4) [2012] NSWSC 992 at [103] (although noting the partial setting aside of those orders on other grounds: Marshall v Prescott (No 2) [2013] NSWCA 292). This general rule has been held to be appropriate for subpoenae issued in defamation claims: Marsden v Amalgamated Television Services Pty Ltd [2001] NSWSC 77 (costs of third party subpoena payable forthwith).
3. Mr Smartt points out, in his supplementary submissions of 24 November 2021, that such costs orders are made in favour of parties only in cases that are "out of the ordinary": Elsmore Resources Ltd [2014] NSWSC 1390 at [5] per Black J. The application in those proceedings, however, was for security for costs, and made between the parties, as opposed to an application by a stranger to the litigation to set aside a subpoena from the parties of the kind identified by Parker J in Butcher v Balog. It is, however, relevant to the defendant's claim for his own costs to be assessed forthwith.

Was there success in the applications?

1. The first question is whether the defendant and Council were substantially successful. In those circumstances, costs generally follow the event: r 42.1 (see also Oshlack v Richmond River Council (1998) 193 CLR 72 at [67]). In Commonwealth of Australia v Gretton [2008] NSWCA 117, Hodgson JA with whom Mason P agreed observed (at [121]) that: "In my opinion, underlying both the general rule that costs follow the event, and the qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the court considers to be the responsibility of each party for the incurring of the costs. Costs follow the event generally because, if a plaintiff wins, the incurring of costs was the defendant's responsibility because the plaintiff was caused to incur costs by the defendant's failure otherwise to accord to the plaintiff that to which the plaintiff was entitled; while if a defendant wins, the defendant was caused to incur costs in resisting a claim for something to which the plaintiff was not entitled … Departures from the general rule that costs follow the event are broadly based on a similar approach."
2. Mr Senior points not only to his clients' success but also to the conduct of the application before the hearing, which included offers to narrow the scope of the subpoena; if engaged with, this might have limited the extent of the argument (submissions on costs, paragraph 6).
3. Ms Roberts, in reply, submitted that the plaintiff and Sagacious had both enjoyed success in terms of reading down the Sagacious subpoena. A similar submission was made by Mr Smartt on behalf of Sagacious. (The subpoena to Sagacious was read down to require production of documents up to 30 June 2019 as opposed to 30 June 2021, but this was the only change of substance to that subpoena.)
4. Both Sagacious and the plaintiff raised "all or nothing"-style objections to all subpoenae issued by the defendant on the basis of relevance and fishing. Their challenges on these bases did not take into account the careful redefining of these issues by the Court of Appeal in Secretary of Department of Planning, Industry and Development v Blacktown City Council.
5. The Council's challenge to the subpoena on the basis of legal professional privilege was entirely successful, and Council should be entitled to its costs on that application. Any additional costs incurred by the defendant (who opposed the subpoena on oppression and relevance grounds) should also be the subject of costs orders in the defendant's favour.
6. The defendant was substantially successful in relation to the subpoenae to Sagacious. Challenge to the other subpoenae was largely abandoned on the day, and Sagacious did not challenge the Latitude subpoena at all. While these were wise steps, the not inconsiderable costs incurred by argument up to the hearing of the application could have been avoided if these concessions had been made earlier.
7. As to whether costs should be payable at all and when they should be payable, I note Ms Roberts' submissions that while the plaintiff has been unsuccessful in opposition to setting aside the subpoena to the Council, that it was not unreasonable to issue a subpoena to Council and that certain categories of the documents would be produced. I have taken that into account, but the reality is that Mr Senior's clients were successful on all issues apart from a reading down of five of the categories in terms of the period for production covered, a suggestion which only came up during argument.

Costs sought by (or against) third parties

1. The first of these "third parties" is the Council. I consider that Council should be entitled to costs of its opposition to the subpoena. That would include not only the legal professional privilege argument but also the cost of challenge to the subpoena in relation to the oppression and relevance issues. Council was producing these documents, and these were Council's arguments (in relation, at least, to oppression).
2. The second is Sagacious, which will play no further part in the litigation. If Sagacious had been successful, it would have sought an order for costs payable now. I see no reason why that rule should not also apply where Sagacious has been unsuccessful.

Should there be a separate costs order in relation to the defendant's costs?

1. The defendant would not ordinarily be entitled to have his costs assessed now unless there were circumstances out of the ordinary, of a kind warranting costs orders pursuant to UCPR r 42.7. In general terms, as Mr Smartt notes, this restriction has been interpreted as requiring conduct of some kind which is out of the ordinary, such as bringing a hopeless application or otherwise failing to conduct the litigation efficiently.
2. I am unaware of any decision where costs orders sought on behalf of third parties were made on a different basis to the costs sought by a party on the same application. It seems artificial to separate out the costs in this fashion, and would materially extend the assessment process for costs which would be of a comparatively small nature.
3. The same principles of efficiency and fairness which are the basis of many costs decisions of Brereton JA when his Honour was a first instance judge (generally referred to as the "broad axe" rule: Metlife Insurance Ltd v Visy Board Pty Ltd & 25 Ors (Costs) [2008] NSWSC 111 at [4] and [12]; In the matter of Eastmark Holdings Pty Limited (receivers and managers appointed) and 1 Denison Street Holdings Pty Ltd (receivers and managers appointed; In the matter of Eastmark Holdings Pty Limited (receivers and managers appointed) (subject to a deed of company arrangement) & ors [2015] NSWSC 2071 at [9]; In the matter of Optimisation Australia Pty Ltd (Costs) [2018] NSWSC 280 at [16] and [27], to name but a few) would suggest that, in the interests of the costs being assessed at the same time, the defendant's costs should be included in the same assessment process.
4. Why, however, should the defendant be put to the expense of assessment without the benefit of being able to have those costs paid now? It seems an unfair imposition in the circumstances. I also note, in this regard, that it is likely to be some time before these proceedings are heard: Kazal v Fairfax Media Publications Pty Ltd (No 2) [2015] NSWSC 1422 at [40]), which is of itself a reason for assessment now.
5. Accordingly, taking the above factors into account, the defendant's costs should also be assessed forthwith.

Conclusions: appropriate costs orders, applicable to all parties, for costs to be assessed forthwith

1. I propose to make orders to take the following into account: 1. Council is entitled to its costs in seeking the setting aside of the subpoena to itself and, pursuant to s 98, is entitled to those costs to be assessed now. 2. The defendant is also entitled to his costs in relation to his challenge to the setting aside of the subpoena. Ordinarily, those costs would be assessable at the end of the litigation. However, in circumstances where Council is entitled to have those costs assessed now, and for the additional reasons set out above, the defendant is also entitled to have his costs assessed forthwith. 3. The plaintiff and Sagacious should be jointly and severally liable for the costs of the challenges to the subpoenae issued by the defendant. While I note that Sagacious did not challenge the Latitude subpoena, in practical terms that makes no real difference. The defendants' costs for meeting the application to set aside these subpoenae should also be assessed forthwith.

Order: 1. Pursuant to s 98 of the Civil Procedure Act 2005 (NSW) and UCPR r 42.7, the plaintiff is to pay the costs of the Council and of the defendant of and incidental to the application by the Council and the defendant to set aside the plaintiff's subpoena to the Council, such costs to be assessed forthwith. 2. Pursuant to s 98 of the Civil Procedure Act 2005 (NSW) and UCPR r 42.7, the plaintiff and Sagacious Holdings Pty Ltd are jointly and severally liable to pay the costs of the defendant of and incidental to the application by the plaintiff and Sagacious Holdings Pty Ltd to set aside the subpoena to Sagacious Holdings Pty Ltd, Mercedes-Benz Financial Services Australia Pty Ltd, Nissan Financial Services Pty Ltd and Latitude Financial Services Australia Holdings Pty Ltd, such costs to be assessed forthwith.

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