See the full series on Subpoenas for Production and Notices of Non-Party Disclosure: Part 1 – Introduction; Part 2 – Relevance and Privilege; Part 3 – Using Documents for Other Purposes; Part 4 – Recovery of Costs and Negotiations.
Conduct Money and Compliance Costs
Upon receipt of a subpoena for production or notice of non-party disclosure there are likely to be number of costs incurred by the recipient, including the time taken to deal with the subpoena, obtaining legal advice, photocopying costs, and the cost of delivering the documents to the relevant court. These costs are generally referred to as compliance costs.
It is common for conduct money to be provided with a subpoena, or for the cover letter to offer to pay conduct money. It is usually offered in a relatively small sum such as $30. Perhaps the first error many practitioners make when considering a subpoena for production is to focus on the sum of the conduct money rather than raising compliance costs as an issue. Conduct money tendered can be offset from compliance costs, but there is no obligation for conduct money to be sufficient to meet all compliance costs. Rather, conduct money is best described as being the costs of giving the documents to the court, once already they are already identified, collated and ready to send. Given the prevalence of online portals to produce documents to court, conduct money is rightly a small amount.
The entitlement to compliance costs has been discussed in only a small number of cases, and they are provide illustrative examples of the approach a party should take. Shand & Sharrock & Anor[1]a subpoena was served on the Commissioner of the South Australian Police (SA Police) to produce documents about a particular individual. The initial response of SA Police was to advise that a preliminary assessment identified 39 categories of documents to be considered, and quoted a potential cost for supplying the information of $2,746. Upon a request to narrow the search, the quote was reduced to $1,970.50. The documents were requested to be produced, and upon production SA Police issued an invoice for $1,970.50, itemised as being for producing 27 incident reports and one offender history report. Each incident report produced was charged at $70.50, and the offender history report was charged at $67. The court accepted evidence that the subpoena in question took 15 to 20 hours of administrative time to comply with. No evidence of exact wages paid to the staff in question was tendered, leading to a submission that no costs had been proven. In accepting the position of the South Australian Police it was observed as follows by Judge Brown:[2]
In my view, it would be inappropriate for this court to substitute its own judgement for that of the South Australian Government in calculating what is to be charged for police incident reports and the like. This is particularly so given that the charges for the production of individual reports seems to me to be a reasonable one, given the niceties of the documents concerned and the need for care to be taken to protect confidentiality and the like matters.
In my view, it would be a nonsense if the court was to determine that a person who has subpoenaed a multiplicity of such documents should, in effect, be granted a discount on the costs related to production, because of the quantity of documents sought resulting in an exponential increase in cost.
Rather, the court should encourage those who would issue subpoenas to consider closely the range and subject matter of the documents sought and tailor their subpoenas appropriately and carefully. Such an approach, in my view, is also calculated to serve the interests of the administration of justice.
In all the circumstances of this case, I am satisfied that the Commissioner has satisfied any obligation, arising under Rule 15A.11(1)(c) that it has incurred the costs sought in complying with the subpoena issued on behalf of Ms Shand. For these reasons, the application in a case must be dismissed.
Importantly for counsel responding to a subpoena, this reasoning supports the approach of allocating a reasonable per document charge and rightly puts the risk of cost escalation on the party making expansive requests. Finally, the order of the court was that the party issuing the subpoena is responsible for payment, and was further liable for costs of the applicable, albeit not on an indemnity costs basis.[3]
Further commentary on the ability to claim costs in the Federal Court has noted the types of costs which can be incurred and properly claims:[4]
[T]he recipient of the subpoena is not at common law entitled to other subpoena-related expenses such as identifying, collating, copying documents, conveying them to the place appointed for production or taking advice as to the lawfulness of the subpoena or whether any claim in respect of privilege may be open: Bank of New South Wales v Withers [1928] ArgusLawRp 98; (1981) 35 ALR 21 (Shepherd J).
…
[The Federal Court’s] rules were amended so as to make express provision in respect of subpoena compliance costs , initially by O 27 r 4A and later by O 27 r 11 of the Federal Court Rules 1979 (Cth) and, currently, by r 24.22 of the Federal Court Rules 2011 (Cth).
Similar rules are found in other jurisdiction, including Rule 42.11 of the Supreme Court (General Civil Procedure) Rules 2015 (Victoria), Rule 417 of the Uniform Civil Procedure Rules 1999 (Queensland), and the Uniform Civil Procedure Rules 2005 (NSW). The range of costs available was summarised by Mansfield J in Charlick Trading Pty Ltd v Australian National Railways Commission[5] to include, if the expense is otherwise reasonable in the circumstances:
- the expense incurred in seeking advice as to the validity of the subpoena, including whether to comply with it at all or in part;
- correspondence or attendances on a party issuing the subpoena, regarding its terms, and including with a view to narrowing or clearly identifying the scope of documents to be produced;
- advice as to whether documents are confidential or properly subject to claims for privilege;
- correspondence and attendances and negotiations with the party issuing the subpoena, as to the terms upon which access to the documents should be permitted by the Court, including the negotiation of and formulation of any undertakings as to confidentiality;
- attendances in Court when the subpoena is called on or when it is stood-over, including attendances to assert and make out any claim that the documents subpoenaed should be protected from unrestricted access due to their confidential character and to seek orders restricting access to the document or documents produced; and
- steps to ensure that any confidentiality undertakings proposed to be entered into have, in fact, been properly given
This approach was supported by Logan J in Titan, where it was held that the recipient who had failed in a claim of privilege in response to a subpoena was still entitled to be paid the reasonable costs and expenses incurred, but not those costs of the application to set aside the subpoena. In relation to what costs are reasonable, see also the discussion in Hera Project Pty Ltd v Bisognin (No 4)[6] where it was held that even though the lawyers had expended over 40 hours on the matter, the court held that only 8 hours were reasonable and the remainder could have been avoided if the recipient’s solicitors had engaged more productively with solicitors for the issuing party.
Service
A subpoena or notice of non-party disclosure is generally required to be served personally,[7] though there are exceptions some in particular in the lower courts.[8] Queensland has a more flexible approach which does allow service by email for a subpoena, and compliance is then required if the party serving the subpoena can prove that it has been received by the person it was sent to.[9] The service of subpoenas is dealt with specifically in the Service and Execution of Process Act 1992 (Cth) and requires the period for compliance to be at least 14 days after service takes place. For corporations, service can be effected under section 109X Corporations Act by leaving it at, or posting it to, the company’s registered office or by personally delivering a copy to a director residing in Australia.
Proper Role of Negotiations
In Victoria, it has been noted that a court’s obligation under s 8 of the Civil Procedure Act 2010 (Vic) to give effect to the overarching purpose in the exercise of its powers relevantly requires that in relation to a dispute about a subpoena that the court should encourage discussions between the issuing party and the addressee for the purposes of clarifying the documents relevant to the dispute before the court; expediting the production of the documents; and minimising the inconvenience to the addressee and the costs of compliance.[10]Recently Dalton JA in Sudale (in the Queensland Court of Appeal) found similarly that a subpoena recipient will not be able to recover their actual legal costs as “the issues disputed before the primary judge, and on this appeal, could have been settled sensibly between the parties by agreement.”[11]
Parties should engage in meaningful discussions before seeking judicial intervention. Given that a non-party would not usually have copies of the relevant pleadings, it seems uncontentious that a non-party ought to be offered some details of the relevant issues in dispute on the pleadings so they can satisfy themselves in relation to relevance. A recipient seeking reimbursement for costs incurred should raise this with the party issuing the request at an early stage. Best practice would be to include an estimate of cost and seeking agreement on the way costs will be calculated, as well as giving appropriate warnings as to scope and cost if an excessive number of documents are likely to fall within the identified categories.
Finally, the party making the request ought to remain vigilant as to their own obligations under the Hearne v Street implied undertaking. Where an informal request is made in advance of a subpoena or notice of non-party disclosure it is not unreasonable for a recipient to refuse any such request unless the relevant undertaking is provided expressly.
Special Thank You: This series of articles on Subpoenas for Production has also been published on at the Queensland Law of Contract page, under “Categories”
[1] Shand & Sharrock & Anor [2016] FCCA 2234
[2] Shand, as above, per Judge Brown held at [97] to [100]
[3] Shand & Sharrock & Anor (No.2) [2016] FCCA 2774
[4] Titan Enterprises (Qld) Pty Ltd v Cross [2016] FCA 1275, at [6] to [8]
[5] Charlick Trading Pty Ltd v Australian National Railways Commission [1997] FCA 674; (1997) 149 ALR 647 at 649-650 per Mansfield J
[6] Hera Project Pty Ltd v Bisognin (No 4) [2017] VSC 270
[7] Rule 243 UCPR(Q); Rules 5.2, 5.3 and 33.5(1) UCPR(NSW); Order 36B Rule 4 Rules of the Supreme Court (WA)
[8] Rule 10.20(2)(d) UCPR(NSW)
[9] Rule 421 UCPR(Q)
[10] Hera Project Pty Ltd v Bisognin (No 4) [2017] VSC 270 at [37]
[11] AIG Australia Limited v Sudale & Anor [2022] QCA 160