Costs - application for leave to issue subpoenae under Commercial Arbitration Act1984 (Vic) - whether applicant should pay costs of leave hearing
[3]
1 The plaintiff and defendant are parties to a large commercial arbitration, referred to for convenience as the BassGas Arbitration. I have over the course of the past two days heard argument in relation to the plaintiff's applications for leave to issue subpoenas addressed to Thomas John Supple Kane, Michael John Paynter and Downer Engineering Power Pty Ltd. The application has been made pursuant to and of the (Vic).
2 The hearing of the first part of the arbitration has been set down to commence on 16 October 2006, for a period of three weeks. It is to be conducted on a "stop clock" basis, which involves the application by the arbitrator of strict time limits. The arbitrator has made various orders in relation to the issue of subpoenas, the most recent of which required that all subpoenas be issued by 30 August 2006 "except in exceptional circumstances". The present application was only filed on 14 September 2006.
3 During the course of argument and as a result of discussions between lawyers for the plaintiff, the defendant and one of the proposed subpoenaed parties, Mr Kane, consent orders have finally been agreed in relation to the subpoenas. The only dispute is as to costs.
4 There are two aspects in relation to the costs of the plaintiff's summons which I need to consider. The first relates to the costs of the subpoenaed parties, Mr Kane, Mr Paynter and Downer Engineering, of complying with the subpoenas. After considerable discussion, it became apparent that there is in fact no dispute in principle to the form of order, although no doubt there will be some discussion before the Taxing Master in due course as to the quantum of particular items, if the parties are unable to reach agreement as to them.
5 It is common ground that, under r42.08(1), each of the subpoenaed parties will be entitled to be indemnified in respect of any expense or loss reasonably incurred by them which substantially exceeds the amount of any conduct money given. In the case of Mr Kane, I note that he works as a consultant. The plaintiff does not dispute that in principle he will be entitled to payment in respect of time reasonably spent by him or his staff in compliance with the subpoena, subject to appropriate proof of the amount of work done and the appropriate hourly rate. But the quantification of those matters is not something that is appropriate for a judge to determine, rather, those are matters for the Taxing Master.
6 The only disputed costs issue relates to the costs of the plaintiff's summons. The defendant and Mr Kane seek to have the plaintiff pay their costs, in the case of Mr Kane on an indemnity basis. The plaintiff resists the payment of any such costs. The plaintiff says in the case of Mr Kane that he is not a party to the summons, he chose to contest it and to appear before the court, and he should pay for the privilege of doing so. In respect of the defendant's costs, the plaintiff says that whilst the defendant is a necessary party to the summons and had a right to be heard, any objections to the subpoenae could have been made earlier, thereby avoiding the necessity for appearances yesterday and today.
7 The plaintiff's summons seeking leave to issue the subpoenas was only issued late last Thursday, 14 September 2006. The application did not come to the attention of the relevant defendant's solicitor until the morning of Friday, 15 September. The matter then came on in the Practice Court on Monday, 18 September, being the next business day. Over the course of several hours of hearing this matter yesterday and today, the issues in dispute have gradually been whittled down. What were once very broad and far-ranging subpoenas have, through the participation of the defendant and Mr Kane, been reduced to something which is far more manageable. For example, as initially drawn, the subpoena to Mr Kane alone may have required the production of some 50,000 pages of documents.
8 It is true that Mr Kane did not have any right to be before the court as a matter of course. However, the parties agreed it was appropriate that he be granted leave to appear. His solicitor was of considerable assistance to the court in identifying and refining the issues. Given the enormity of the task which he faced if forced to comply with the original draft subpoena or the first amended draft subpoena, the fact that he is departing overseas next week for a number of weeks, and the need for him to know and be able to determine in advance of his departure what his obligations were, it was in my opinion proper and reasonable that he was represented here by his solicitor. Given that he is a non-party to the arbitration, it is appropriate that he be awarded his costs on a higher than usual scale. Mr Senathirajah, who appears for the plaintiff, says that Mr Kane is not a non-party in a true sense, because he has chosen to make several witness statements which will be relied upon by the defendant. That does not make him a party in any relevant sense. He has no pecuniary interest in the outcome of the arbitration and, in accordance with the authorities, it is appropriate that he receive the costs of the summons on a solicitor-client basis. For the benefit of the Taxing Master, I note that the costs of the summons obviously will include the costs of yesterday and today as well as preparation.
9 In the case of the defendant, the position is slightly more difficult. Although yesterday the plaintiff suggested that it was inappropriate that the defendant be heard at all, it has been conceded today by Mr Senathirajah that the defendant was a necessary party, this being an application for leave to issue a subpoena, and that it was right for it to be heard. I have also received some assistance from the submissions made by the defendant. The plaintiff has made this application outside the strict timetable provided by the arbitrator. Whilst I understand that there were communications passing between the parties as at 30 August (the subpoena deadline), and there is some explanation for the delay, permitting the subpoenas out of time is to some degree an indulgence. I chose to adopt the course of hearing from the defendant and the non-party, bearing in mind that the arbitration is only a month away and there is an enormous amount of work to be done in the meantime. I did so in the hope of refining the issues and making this entire subpoena exercise more manageable. The plaintiff, whilst ultimately being successful in obtaining leave, has only done so after the provision of three different drafts of the subpoenas, many affidavits, and attendances over two days. In my opinion it is appropriate that the plaintiff should pay the costs of the defendant of the plaintiff's summons, albeit merely on a party-party basis.
Parties
Applicant/Plaintiff:
# Clough Engineering Ltd
Respondent/Defendant:
Origin Energy Resources Ltd \[2006\] VSC 349
Plaintiff v Defendant - [2006] VSC 349 - VSC 2006 case summary — Zoe