DBCT Management Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd and Geosea Australia Pty Ltd Joint Venture (No 2)

• Jurisdiction: Australia Federal only
• Judgment Date: 16 July 2021
• Neutral Citation: [2021] FCA 810
• Court: Federal Court
• Date: 16 July 2021

Federal Court of Australia

DBCT Management Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd and Geosea Australia Pty Ltd Joint Venture (No 2) [2021] FCA 810

File number:	NSD 100 of 2017
Judgment of:	ABRAHAM J
Date of judgment:	16 July 2021
Catchwords:	COSTS – reasonable costs of compliance with subpoena under r 24.22 of Federal Court Rules – where claim for legal professional privilege upheld – indemnity costs – no departure from ordinary rule – costs awarded on party and party basis
Legislation:	Federal Court Rules 2011 (Cth) rr 24.22, 40.01
Cases cited:	Ann Street Mezzanine Pty Ltd v Beck [2013] FCA 960; (2013) 215 FCR 150 Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 5) [2021] FCA 246 Cadbury Schweppes Pty Ltd v Amcor Ltd (No 3) [2008] FCA 1668 Charlick Trading Pty Ltd v Australia National Railways Commission (1997) 149 ALR 647 DBCT Management Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd and Geosea Australia Pty Ltd Joint Venture [2021] FCA 512 Fuelxpress Ltd v L M Ericcson Pty Ltd (1987) 75 ALR 284 Taylor v Dixon Advisory Limited [2010] ACTSC 161; (2010) 5 ACTLR 136 Titan Enterprises (Qld) Pty Ltd v Cross [2016] FCA 1275 Viagogo AG v Australian Competition and Consumer Commission (No 2) [2021] FCA 411
Division:	General Division
Registry:	New South Wales
National Practice Area:	Admiralty and Maritime
Number of paragraphs:	14
Date of hearing:	Determined on the papers.
Counsel for the Applicants:	Mr E Cox SC with Mr J Kennedy
Solicitor for the Applicants:	Wotton + Kearney
Solicitor for the Second Respondent:	Kennedys
Counsel for the Subpoenaed Entities	Mr C Colquhoun with Mr B Smith
Solicitor for the Subpoenaed Entities	Holman Fenwick Willan

ORDERS

		NSD 100 of 2017
BETWEEN:	DBCT MANAGEMENT PTY LTD ACN 097 698 916 First Applicant ; DALRYMPLE BAY COAL TERMINAL PTY LTD ACN 010 268 167 Second Applicant
AND:	MCCONNELL DOWELL CONSTRUCTORS (AUST) PTY LTD AND GEOSEA AUSTRALIA PTY LTD JOINT VENTURE First Respondent ; WORKBOATS NORTHERN AUSTRALIA PTY LTD Second Respondent ; CORTLAND COMPANY AUSTRALIA PTY LTD ACN 055 288 321 Third Respondent

order made by:	ABRAHAM J
DATE OF ORDER:	16 July 2021

THE COURT ORDERS THAT:

1. The objection of BM Alliance Coal Operations Pty Ltd (BMA) to any party to the proceedings uplifting or inspecting the document entitled “HPX3 ICAM Investigation Report” dated 4 July 2014 and the five attachments to the document (Report) produced in answer to the subpoena served by the first and second applicants on Ashurst Australia (Ashurst) on 6 November 2020 and the subpoena served by the first and second applicants on BMA on 3 August 2020 is upheld.

2. The applicants and the second respondent pay BMA and Ashurst the costs of and incidental to the application before Abraham J, being BMA’s objection to uplift or inspection of the Report, to be agreed or taxed.

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

REASONS FOR JUDGMENT

ABRAHAM J:

1. This application for costs is consequent on my decision of DBCT Management Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd and Geosea Australia Pty Ltd Joint Venture [2021] FCA 512 (Judgment), delivered on 14 May 2021. That Judgment addressed the claim for legal professional privilege by BM Alliance Coal Operations Pty Ltd (BMA) and Ashurst Australia (Ashurst) (together, the Subpoenaed Entities). The terms of the order made to reflect the result of that Judgment is not in issue.

2. The Subpoenaed Entities seek their costs in respect to the following subpoenas:

1. a subpoena served on Ashurst, DBCT Management Pty Ltd (DBCT Management) and Dalrymple Bay Coal Terminal Ltd (DBCT) on 6 November 2020 (Ashurst Subpoena); and

2. a subpoena served on BMA on 3 August 2020 (BMA Subpoena) (together, the Subpoenas).

3. The Subpoenaed Entities seek their costs of compliance with the subpoenas, incurred to date on an indemnity basis. Those costs include (but are not limited to) the Subpoenaed Entities’ costs of and incidental to BMA’s objection to uplift or inspection (including the privilege hearing) of the HPX3 ICAM Investigation Report dated 4 July 2014 (the ICAM Report), the subject of, inter alia, the Ashurst Subpoena.

4. In a nutshell, the Subpoenaed Entities contend that although the reasonable costs and expenses of complying with a subpoena are to be determined in the circumstances of each case, generally the starting point is that reasonable costs of compliance with a subpoena under r 24.22 of the Federal Court Rules 2011 (Cth) (Federal Court Rules) can extend to the judicial determination of a privilege claim, and the costs of compliance are usually assessed on a solicitor and client (i.e. indemnity) basis: citing Titan Enterprises (Qld) Pty Ltd v Cross [2016] FCA 1275 at [12] (Titan). The Subpoenaed Entities submit that r 24.22 should not be interpreted narrowly: Ann Street Mezzanine Pty Ltd v Beck [2013] FCA 960; (2013) 215 FCR 150 at [59] (Ann Street Mezzanine). Relying on, inter alia, Charlick Trading Pty Ltd v Australia National Railways Commission (1997) 149 ALR 647 (Charlick), the Subpoenaed Entities submitted that reasonable costs of compliance with the Subpoenas include, in circumstances where BMA was entirely successful in its objection to inspection of the ICAM Report, the Subpoenaed Entities’ costs of and incidental to BMA’s privilege claim: c.f. Titan at [13], [19]. The Subpoenaed Entities submitted that a subpoena recipient is ordinarily entitled to its costs and expenses of compliance on a solicitor and client basis, the rationale being that a stranger to the litigation should be fully compensated for what it has in fact cost that party to comply with the subpoena: citing Fuelxpress Ltd v L M Ericcson Pty Ltd (1987) 75 ALR 284 at 286 (Fuelxpress); Titan at [12]. The Subpoenaed Entities submitted that the reference to a “solicitor and client basis” in Fuelxpress should be understood as a reference to costs on an indemnity basis: Taylor v Dixon Advisory Limited [2010] ACTSC 161; (2010) 5 ACTLR 136 at [42]-[47].

5. The Subpoenaed Entities submitted in the alternative, that the applicants and the second respondent (Work Boats) should pay those costs on an indemnity basis in any event. This is said to be based on the procedural history and the conduct of the applicants and Work Boats. It is submitted that it is clear that BMA had a very strong claim to privilege over the ICAM Report, and that so much appears to have been accepted by the applicants in their decision no longer to press for compliance with the subpoena first issued by BMA in July 2018 (2018 Subpoena).

6. The applicants submitted that no costs order should be made respecting compliance with the Subpoenas generally, with orders giving effect to the reasons for Judgment. That related to a specific issue referred to me, whether specific documents were properly the subject of a claim for legal professional privilege. The costs order following the Judgment should accordingly be limited to those costs concerned with that application. This is in the context where the Subpoenas have been returnable before Registrar Cridland and these proceedings are otherwise case managed by Rares J. The applicants submitted that there is no evidence before the Court (because it was not an issue) as to the nature of any costs incurred by the Subpoenaed Entities that would fall within the scope of their proposed orders. It submitted that in any event, contrary to the Subpoenaed Entities’ submission, the costs incurred by a subpoenaed party in advancing a ...