Responding to a Subpoena for Production of Documents

Daniel Gosewisch has more than 20 years’ in-house legal and company secretarial experience, and is currently General Counsel of the WorkPac Group, Australia’s largest privately-owned labour hire business. He has also previously led the legal functions for Racing Queensland, Minor DKL Food Group, and Arrow Energy. His broad experience includes managing large portfolios of litigious matters, corporate acquisitions, and the negotiation of substantial procurement, financing, and commercial transactions. Since 2020 he has additionally held a principal’s practising certificate and acts as a sole practitioner under the banner of Fletch Worland in his spare time. He is a contributing author to publications including the Caxton Legal Centre’s Lawyers Practice Manual Queensland (published by Thomson Reuters) and the Law and Business of LNG (published by Globe Law and Business) and is an occasional speaker on corporate governance and in-house legal matters. He is a member of the Queensland Law Society, the Association of Corporate Counsel and Fellow of the Governance Institute of Australia.

The rules are slightly different across Australian jurisdictions in relation to making requests to third parties for documents, and it is the jurisdiction of the litigation between the parties, not the location of the recipient of the subpoena, which determines the rules which apply. Confusingly for those unfamiliar with civil procedure there are separate Rules for a notice of non-party disclosure and a subpoena for production in each jurisdiction.[1]

For parties to litigation, the ability to obtain a formal order requiring a third party to produce relevant documents is an important avenue to obtain evidence, or at least a train of enquiry, that the litigants themselves may not have. For recipients it can be a burdensome process.

The Distinction between Discovery or Evidence

It is helpful to keep in mind the distinction between a document obtained in the pre-trial phase of litigation (normally referred to as disclosure or discovery) versus a document sought for production at a hearing as evidence (being the traditional purview of a subpoena). Issuing a subpoena for production during the pre-trial phase, rather than the available avenue of a notice of non-party disclosure, has been held in Leighton Contractors v Western Metals to be an abuse of process.[2] In Western Australia a subpoena to produce must not be issued prior to the filing of a defence without leave.[3]

The Rules of third-party discovery impose higher obligations on the party seeking documents than apply through a subpoena. In most jurisdictions, discovery can be sought from a third party who may assist in identifying a potential defendant.[4] More generally, the Rules allow a party to seek an order for discovery from a third party but, other than in Queensland, to obtain the order the party seeking the documents must make an application to court supported by an affidavit. While no application is required in advance in Queensland, if the recipient objects to the production of the documents the notice is stayed until an application is brought to the court by the party seeking the documents.[5] As the third-party recipient will be served with any such application under the Rules, any objections to discovery will be able to be raised prior to the order being made. As a result, the discovery process is less utilised by litigants seeking third-party documents as obtaining an order requires the expense and potential complexity involved in a process supervised by the court.

These rules are quite different to those which apply to the issue of a subpoena for evidence. No application is needed, and a subpoena is taken to be issued when sealed by the registry.[6] Compliance is compulsory unless a party objecting to production makes an application to set aside the subpoena.[7] The attraction of the subpoena process for those seeking document is therefore that it is simpler and cheaper to place the onus on the recipient to either comply or to go to the time and expense of applying to court to have it set aside. While complying with a subpoena is undoubtedly inconvenient and an administrative burden, in most cases it is less of a burden than applying to court to have the subpoena set aside.

Applying the test in Leighton Contractors Pty Ltd v Western Metals suggests that subpoenas are used on a regular basis in circumstances where it would be more appropriate for an order for discovery to be sought. Importantly, it is not enough for the recipient to simply assert a defect or failure to comply with the rules and decline compliance.

Grounds to Set Aside

A subpoena or notice of non-party disclosure is generally required to be served personally, but in relation to a subpoena there are rules requiring compliance if the subpoena has come to the attention of the party even if not properly served.[8] A subpoena with conduct money attached must be complied with unless the recipient seeks to have it set aside.[9] For a third party, the most common concerns relate to the relevance of the documents to the litigation, the commercial sensitivity of those documents, and potential claims of privilege. Those issues are often intertwined with concerns about the broad scope of a subpoena and the administrative burden involved in compliance.

How Relevant do the Documents need to Be?

While the Rules tend to be silent on what types of documents may legitimately sought pursuant to a subpoena, the principles applying have been stated in the following terms:[10]

The documents must be relevant to an issue raised on the pleading and be used to elicit documents to support the applicant’s existing case. It cannot be used for purposes of ‘fishing’ or for the purpose of determining a preliminary question as to whether the party has a supportable case (Hennessy v Wright (1888) 21 QBD 509), or to investigate the character of the opposing parties’ evidence (Griebart v Morris [1920] 1 KB 659, 666). The test for relevance does not require that a party demonstrate direct relevance to the contest between the parties. Rather, the documents must have some potential relevance to the pleadings as they stand.

This approach is often summarised the requirement for there to be a legitimate forensic purpose, so that there is a reasonable basis beyond speculation that the documents will be of assistance.[11]

Notably this differs from the narrower wording for a notice of non-party discovery, in that an order for discovery can only apply where the documents relate to “any question” in the proceedings,[12] are “directly relevant to an allegation in issue”,[13] or comprise “evidentiary material”.[14] These tests are generally referred to as requiring direct relevance an issue in contention. Notably though, that does not mean the defendant must have directly denied the relevant allegation. In AIG Australia Limited v Sudale & Anor the Queensland Court of Appeal upheld a request for non-party disclosure over documents where the defence did not admit the allegation due to being uncertain of the truth or otherwise.[15]

Asking for Proof of Relevance and Pleadings

A subpoena recipient is entitled to challenge the relevance of the documents sought, but the Rules do not explain how such a recipient is obtain the information necessary to make that determination. Occasionally the solicitors for the issuing party do include some details of the issues in dispute in the covering letter, though silence on these matters is not uncommon. A bland statement to the effect that the Court has issued a subpoena for the specified documents verges on misleading in cases where the documents have simply been filed in the registry by the issuing party.

Obtaining proof of relevance was discussed in Timcal v Sons of Gwalia in the Supreme Court of Western Australia, where it was held that an issuing party ought to provide information on the issues in dispute when the recipient queries relevance.[16] In that case the recipient asked for and was given the pleadings, but was not told the details of an separate application in the proceedings that the documents were actually related to. It was held that information ought to have been provided.[17] That appears to be the better position, even though another perspective is that ‘a stranger to an action who is asked to produce documents will not be heard to object on the ground of relevance, as it is not appropriate for a non-party to peruse pleadings and the like and attempt to assess what may or may not be relevant to proceedings to which he or she is not a party’.[18] This approach fails to accord with the judicial commentary on the importance of parties acting reasonably to negotiate on the scope of a subpoena.

Proper Role of Negotiations

In Victoria the court’s obligation towards achieving the overarching purpose under section 8 of the Civil Procedure Act 2010 (Vic) has been held to be relevant to the conduct of parties in relation to a subpoena. That overarching purpose requires that the court should encourage discussions between the issuing party and the addressee to clarify the documents relevant to the dispute, expedite the production of the documents, and minimise the inconvenience to the addressee and the costs of compliance.[19]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.’[20]

Confidentiality, Privilege and Use of Documents

Privilege is expressly a ground to object to non-party discovery under the Rules in most cases but not all.[21] However, in relation to a subpoena it is only in Queensland where there is an express statement that privilege is a sufficient ground to apply to set the subpoena aside.[22] Notwithstanding that position, it is uncontroversial that non-party discovery or production by subpoena of documents subject to legal professional privilege is not required. However, the difference is that for non-party discovery that argument can generally be raised prior to any order being made by the court, whereas a subpoena constitutes an order binding on the recipient until it is set aside. As such documents may still need to be produced to the court, as the obligation to produce documents to the court pursuant to a subpoena is separate and distinct from the later question of whether the requesting party can access them.[23] The Rules do not permit documents to be withheld from production to the court pending any such decision, but in Western Australia it is stated that the registry must not allow access to those documents while the application to set aside is pending.[24] In other jurisdictions the party objecting to production must also notify the court of the objection to inspection by other parties of the documents produced.[25]

Unlike claims of privilege, in principle there is no right to object to a party seeking discovery or production of confidential documents from a third party.[26] There have been many unsuccessful attempts at avoiding the production of  commercial sensitive documents, and any attempt to frustrate the court’s process is liable to be found in contempt.[27]  The documents produced by a third party in response to a formal court process are subject to an implied undertaking that they will not be used for any collateral purpose without leave of the court. This much is evident from Hearne v Street,[28] which confirmed that a person using those documents for a secondary purpose was at risk of being found to be in contempt of court. This implied undertaking is generally referred to as a Harman undertaking, after Harman v Secretary of State for the Home Department,[29] or more accurately in Australia as the Hearne v Street implied undertaking.

This implied undertaking is considered by the courts to be sufficient to protect the confidentiality and privacy of recipients while ensuring justice is done by making relevant documents available in litigation.[30] Any further confidentiality-based objections will need to clarify why that implied undertaking is not enough to suitably protect the confidentiality of the documents. In addition to claims of privilege, a further order may be requested if commercial representatives of the litigating parties are employed in roles where the information could be misused. Pricing documents and customer lists often fall into this category. If the documents are relevant and it is in the interests of the administration of justice for them to be used in the proceedings, a claim of confidentiality will not normally be a sufficient ground to deny inspection by the parties.[31] However, a court may determine that additional protective measures are required, normally in the form of specific orders confining particularly sensitive documents to access by the lawyers of the parties only.[32] In the context of an arbitration, it has been held to be appropriate for the arbitrators to make that decision.[33]

Using Documents Produced for Other Purposes

Leave of the Court is required before a party to an action can be released from the implied undertaking not to use discovered documents for any purpose outside the scope of the action in pursuance of which they were disclosed, even to further a criminal prosecution.[34]

Having seen the documents it may be apparent that the documents could be used for the purposes of joining a third party to the action, including where the documents were received from that third party. The Court will grant permission to use such documents where special circumstances exist, and that includes the situation where there is a degree of commonality between the proceedings.[35] There is no scope for a party to use such information in separate proceedings without leave of the court. It is arguable the same rule applies to prevent amendment of the pleadings to add a new cause of action or to add a new defendant to an existing cause of action, though the position in relation to these matters is less straightforward. The Western Australian Court of Appeal noted that:[36]

The nature and extent of the connection between the proceedings in which documents are produced under compulsion and the proceedings in which a party seeks leave to be able to use them is undoubtedly a relevant matter. In some cases, the closeness of that connection will mean that there is no need for leave to be granted. But the existence of a close connection is not a necessary foundation for a grant of leave.

Given the threat of being in contempt of court if there is a breach of the implied undertaking, disclosing the potential use to the party concerned and seeking guidance from the court is appropriate.

Where an informal request for production 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.

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 a relatively small sum less than $100. Even where a request is of broad scope, it is not correct to focus on the sum of the conduct money as being disproportionate to the task required. Rather costs of undertaking the work required to comply are compliance costs and are dealt with separately.[37] 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. In Shand & Sharrock & Anor a subpoena was served on the Commissioner of the South Australian Police (SA Police) to produce documents about a particular individual.[38]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 to show that 27 incident reports and one offender history report was produced. 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 the 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:[39]

“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 recipients 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 application itself, albeit not on an indemnity costs basis.[40]

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:[41]

“[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…

[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).”

The range of costs available was summarised by Mansfield J in Charlick Trading Pty Ltd v Australian National Railways Commission to include, if the expense is otherwise reasonable in the circumstances:[42]

• 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) 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.[43]

One note of caution is that in Timcal the was an obiter comment that the court does not usually award costs in favour of a subpoena recipient who engages legal representation, albeit that each case will be considered on its merits.[44] However, in that case the recipient was in fact awarded costs due to complex issues of legal professional privilege which arose and the failure of the issuing party to properly explain the relevance of the documents despite reasonable requests to do so.[45] The better view is therefore that a party seeking costs will first need to prove that the court’s intervention was justified based on the failure of the issuing party to negotiate reasonably to resolve any concerns. A non-party who brings an unreasonable challenge to a subpoena is likely to have costs awarded against them. This was the case in Autonomo where an extensive challenge to production was rejected as the ground raised (confidentiality) was not a legitimate ground of objection.[46]

Initial Steps

As shown above, both the recipient and issuing party must be willing to engage in meaningful discussions over any concerns with a subpoena 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 sufficient details to form a reasonable opinion 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 seek agreement on the way costs will be calculated. It is equally important for the issuing party to acknowledge that it is their responsibility to seek to minimise the burden being placed on the recipient and reimburse the reasonable costs incurred.

[1] E.g. Part 4; Uniform Civil Procedure Rules 2005 (NSW) (“NSW Rules”), Part 5.4 and Part 33; Supreme Court (General Civil Procedure) Rules 2015 (VIC) (“Vic Rules”), Order 32 and 42; Uniform Civil Procedure Rules 1999 (Qld) (“Qld Rules”), Chapter 7, Division 3 and Chapter 11;  Rules of the Supreme Court 1971 (WA) (“WA Rules”), Order 26A and Order 36B; Uniform Civil Rules 2020 (SA) (“SA Rules”), Chapter 10, Part 6 and Chapter 13, Part 16; Federal Court Rules 2011 (Cth) (“Cth Rules”), Part 20.23-20.25 and Part 24. Together referred to as “Rules”.

[2] Re:  Leighton Contractors Pty Ltd v Western Metals Resources Limited [2000] QSC 027

[3] Order 36B, Rule 2(2B).

[4] NSW Rules, Part 5.2, Vic Rules, Part 32.03; Qld Rules, Rule 208C; WA Rules, Order 26A Rule 4.

[5] Qld Rules, Rules 245-247.

[6] NSW Rules, Rule 33.2; Vic Rules, Rule 42.02; Qld Rules, Rule 414, WA Rules, Order 36B, Rule 2; SA Rules, Rule 156.2; Cth Rules, Part 24.12.

[7] NSW Rules, Rule 33.4; Vic Rules, Rule 42.04; Qld Rules, Rule 416, WA Rules, Order 36B, Rule 8A; SA Rules, Rule 156.5; Cth Rules, Part 24.15.

[8] NSW Rules, Part 5.2, 5.3 and 33.5; Vic Rules, Rule 42.05 and 42.06(3); Qld Rules, Rule 243 and 421; WA Rules, Order 36B Rule 4.

[9] NSW Rules, Rule 33.6; Vic Rules, Rule 42.06; Qld Rules, Rule 420, WA Rules, Order 36B, Rule 6; SA Rules, Rule 156.7; Cth Rules, Part 24.17.

[10] McIlwain v Ramsey Food Packaging Pty Ltd & Ors (2006) 221 ALR 785 (per Greenwood J at 785)

[11] Secretary of the Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145; Stanley v Layne Christensen Co [ 2004] WASCA 50.

[12] NSW Rules, Part 5.4; Vic Rules, Part 32.07; SA Rules, Order 26A Rule 5.

[13] Qld Rules, Rule 242.

[14] SA Rules, Rule 116.

[15] AIG Australia Limited v Sudale & Anor [2022] QCA 160.

[16] Timcal Pty Ltd v Sons of Gwalia Ltd (Subject to Deed of Company Arrangement) [2010] WASC 406.

[17] Timcal, above n. 16, at [15].

[18] Santos Ltd & Ors v. Pipeline Authority of SA [1996] SASC 5628; (1996) 186 LSJS 257 per Perry J at [87], 278.

[19] Hera Project Pty Ltd v Bisognin (No 4) [2017] VSC 270 at [37].

[20] AIG Australia v Sudale, above n.15.

[21] NSW Wales, Part 5.7; Vic Rules, Rule 32.03; Qld Rules, 245; Fed Rules, Rule 20.02. For Rules that do not state this expressly, see WA Rules, Order 26A; SA Rules, Rule 116.

[22] Qld Rules, Rule 415(6).

[23] Gilmore Finance Pty Ltd v Aesthete No 3 Pty Ltd [2019] NSWCA 181.

[24] WA Rules, Order 36B, Rule 8A(6).

[25] NSW Rules, Rule 33.9(5); Vic Rules 42.09(3); Qld Rules, Rule 422B, SA Rules, Rule 156.10; Fed Rules 24.20(5).

[26] Santos Ltd v Pipeline Authority, above n. 18.

[27] Martino, D. & Riethmuller, P., “Subpoenas and Commerical Secrets – Who Can See What and How” [1997] AUMPLawJl 75; (1997) 16(3) Australian Mining and Petroleum Law Journal 231.

[28] Hearne v Street [2008] HCA 36; (2008) 235 CLR 125.

[29] Harman v Secretary of State for the Home Department [1983] 1 AC 280.

[30] Hearne, above n. 28, per Hayne, Heydon and Crennan JJ at [107].

[31] Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34, per Hayne JA at 38; Boase v Axis International Management Pty Ltd [No 3] WASC 498 per Beech J at [19] – [21].

[32] See Mobil Oil Australia v Guina Developments, above n. 31.

[33] Xstrata Queensland Ltd v Santos Ltd & Ors; Santos Ltd & Ors v Xstrata Queensland Ltd [2005] QSC 323.

[34] Bailey v. Australian Broadcasting Corporation [1995] 1Qd R 476.

[35] Sweetman v Australian Thoroughbred Finance Pty Limited (23 July 1992, not reported); Re Springfield Nominees Pty Ltd [1992] FCA 472.

[36] Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [2022] WASCA 67 at [97].

[37] NSW Rules, Parts 5.8 and 33.12; Vic Rules, Rules 32.11 and 42.11; Qld Rules, Rules 249, 417 and 418; WA Rules, Orders 26A Rule 7 and 36B Rule 11; SA Rules, Rules 116.2 and 156.12; Fed Rules, Rule 20.25 and 24.22.

[38] Shand & Sharrock & Anor [2016] FCCA 2234.

[39] Shand, as above n.38, per Judge Brown at [97] to [100].

[40] Shand & Sharrock & Anor (No.2) [2016] FCCA 2774.

[41] Titan Enterprises (Qld) Pty Ltd v Cross [2016] FCA 1275, at [6] to [8]

[42] Charlick Trading Pty Ltd v Australian National Railways Commission [1997] FCA 674; (1997) 149 ALR 647 at 649-650 per Mansfield J.

[43] Hera Project Pty Ltd v Bisognin (No 4) [2017] VSC 270.

[44] Timcal, above n. 16, per Le Miere J at [15].

[45] Timcal, above n. 16, per Le Miere J at [12] and [15].

[46] Progresso Pty Ltd v Hansen Price Pty Ltd [2020] WASC 151.