FEDERAL COURT OF AUSTRALIA

Ann Street Mezzanine Pty Ltd v Beck [2011] FCA 1328

THE COURT ORDERS THAT:

1.    Simon Andrew Read pay Freehills’ costs of and incidental to the interlocutory application to set aside the subpoena issued to Mr Read at the request of Freehills, which was filed on 11 November 2011.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    By an interlocutory application filed on 11 November 2011, Simon Andrew Read unsuccessfully applied to set aside a subpoena issued to him at the request of Freehills.

2    On 15 November 2011, after delivery of interlocutory judgment refusing the application, Freehills sought its costs of and incidental to Mr Read’s interlocutory application. Mr Read has since sought an order that Freehills pay his costs.

3    Although s 43 of the Federal Court of Australia Act 1976 (Cth) confers a broad discretion on this Court with respect to costs, the exercise of the discretion is guided by settled principles. Generally, the discretion is exercised in favour of the successful party. Freehills submitted that there were no circumstances of an appropriate kind to justify a departure from the usual rule.

4    In support of Mr Read’s costs application, by letter dated 15 November 2011, Mr Read’s solicitors referred me to A Pty Ltd v Z [2007] NSWSC 999 (“A Pty Ltd v Z”), Darcey v Pre-Term Foundation Clinic [1983] 2 NSWLR 497, R v Barbaro (1992) 108 ACTR 1, and Re Bauhaus Pyrmont Pty Ltd (in liq) (2006) 67 NSWLR 289. None of these authorities support an award of costs in favour of Mr Read as opposed to Freehills in this case. In the same letter, Mr Read’s solicitors relied on numerous factors as supporting a costs award in favour of Mr Read, including the propriety of Mr Read’s conduct with respect to his application, the rule with respect to expert witnesses (as to which, see Ann Street Mezzanine Pty Ltd v Beck [2011] FCA 1304 at [9]), and that one of a number of factors bearing on the Court’s decision had not been drawn to Mr Read’s attention prior to the hearing. Furthermore, Mr Read’s solicitors asserted that, with respect to a subpoena, “[a]s a general rule, a party who causes a subpoena to be issued is ordinarily required to pay any legal expenses reasonably incurred by the recipient of the subpoena”.

5    The last-mentioned proposition is a reference to a power, which in this Court, is the subject of Rule 24.22 of the Federal Court Rules 2011 (Cth) (“the Rules”). In relation to subpoenas, pursuant to Rule 24.22(1) of the Rules, the Court has power to order the issuing party to pay an amount of any reasonable loss or expense incurred in complying with the subpoena. If an order is made under Rule 24.22(1), the Court must fix the amount or direct that it be fixed in accordance with the Court’s usual procedure in relation to costs: Rule 24.22(2). An amount fixed under Rule 24.22 is separate from and in addition to conduct money paid to the addressee and witness expenses payable to the addressee: Rule 24.22(3). Costs incurred in respect of an application to set aside a subpoena are not, however, fairly described as loss or expense incurred in complying with the subpoena: compare A Pty Ltd v Z at [48]-[49]. Rule 24.22 does not assist Mr Read with respect to the current costs issue.

6    Further, none of the other considerations mentioned by Mr Read warrant departure from the usual rule as to costs. No question of litigation propriety arises. The operation of the so-called expert witness rule has already been considered. So too have the factors relevant to its operation, and nothing pertaining to them leads me to conclude that Freehills should not have the costs of Mr Read’s interlocutory application. Freehills has reiterated that it will pay Mr Read’s reasonable expenses of preparing for and attending at trial in accordance with the general principles applying to costs of a subpoenaed person.

7    Accordingly, I would order that Mr Read pay Freehills’ costs of and incidental to Mr Read’s interlocutory application filed 11 November 2011.

Associate:

Dated:    18 November 2011

SCHEDULE OF PARTIES