Federal Court of Australia The Epoch Holding Group Pty Ltd v Katz [2023] FCA 1468 File number(s): NSD 527 of 2022 Judgment of: CHEESEMAN J Date of judgment: 24 November 2023 Catchwords: COSTS – whether costs order should be made – where, if costs order made, whether costs should be payable forthwith following the dismissal of an interlocutory application – where the application concerns access to documents – where the application has been rendered otiose by reason of access to documents being provided without final determination of the merits of application – Held: Cost orders made on usual terms. PRACTICE AND PROCEDURE – where parties seek confidentiality orders – where agreement in principle as to necessity to protect confidential information – Held: application successful Legislation: Federal Court Rules 2011 (Cth) r 40.13 Cases cited: Capic v Ford Motor Company of Australia Limited (Costs Forthwith) [2019] FCA 1065 ONE.TEL Ltd v Deputy Commissioner of Taxation [2000] FCA 270; 101 FCR 548 Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; 186 CLR 622 Tour Squad Pty Ltd v Fifth Amendment Entertainment Inc [2020] FCA 1649 Division: General Division Registry: New South Wales National Practice Area: Intellectual Property Sub-area: Copyright and Industrial Designs Number of paragraphs: 10 Date of last submissions: 17 November 2023 Date of hearing: 15 June 2023, determined by consent on the papers. Counsel for the Applicants: Mr P W Flynn SC with Mr J M Elks Solicitor for the Applicants: King & Wood Mallesons Counsel for the Second Respondent: Mr J Lockhart SC with Mr P Gaffney Solicitor for the Second Respondent: Herbert Smith Freehills ORDERS NSD 527 of 2022 BETWEEN: THE EPOCH HOLDING GROUP PTY LTD ACN 169 456 517 First Applicant EPOCH CAPITAL PTY LTD ACN 128 329 395 Second Applicant EPOCH SYSTEMS DEVELOPMENT PTY LTD ACN 144 882 744 (and others named in the Schedule) Third Applicant AND: DAVID KATZ Second Respondent order made by: CHEESEMAN J DATE OF ORDER: 24 November 2023 THE COURT ORDERS THAT: 1. The interlocutory application dated 5 May 2023 be dismissed. 2. The applicants pay the second respondent's costs of and incidental to the application. 3. By 4pm, 28 November 2023, the parties are to submit proposed joint short minutes of order addressing confidentiality and access to documents in accordance with these reasons. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT CHEESEMAN J 1 These reasons concern two issues: (1) cost orders consequential on the finalisation of an interlocutory application; and (2) whether interim confidentiality orders should be continued. Costs of the interlocutory application 2 The costs orders in issue relate to an interlocutory application brought by the second respondent, Mr Katz, dated 5 May 2023 against the applicants, the Epoch Parties. The application has essentially resolved without requiring the Court to formally determine it. During the period the application was on foot, there were a number of developments in relation to the substantive proceeding. Foremost among those developments is that the proceeding against Toby Carrodus, the first respondent, settled and has been dismissed by consent. An application by the Epoch Parties to amend the Statement of Claim (SOC) has since been made. 3 By his application, Mr Katz in substance sought an order that he personally and his legal representatives have access to various categories of documents which were referred to in the Epoch Parties' SOC. It is unnecessary to recount the twists and turns in the procedural history of the application, which are travailed in detail in the parties' written submissions. The key point is that since the application was filed Mr Katz and his legal representatives have progressively obtained, without the need for Court order, access to the documents to which they sought access save for some discrete documents which have faded in relevance as result of the Epoch Parties applying to amend their SOC. 4 That outcome was achieved following negotiations between the parties after the hearing of the application was adjourned. Mr Katz seeks his costs of the application and an order that the costs be payable forthwith. The Epoch Parties submit that the appropriate order is that there be no order as to costs. 5 The Epoch Parties submit that in circumstances where the application has not been determined on its merits on a final basis, costs should not be ordered unless it can be said that a party has acted so unreasonably that the other party should be awarded costs, or where one party was almost certain to have succeeded if the matter had been heard, citing Capic v Ford Motor Company of Australia Limited (Costs Forthwith) [2019] FCA 1065 at [10] (Perram J) which cited Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; 186 CLR 622 (McHugh J). 6 Lai Qin was considered by Burchett J in ONE.TEL Ltd v Deputy Commissioner of Taxation [2000] FCA 270; 101 FCR 548 at [5] and his Honour relevantly subsequently stated as follows: 6 In my opinion, it is important to draw a distinction between cases in which one party, after litigating for some time, effectively surrenders to the other, and cases where some supervening event or settlement so removes or modifies the subject of the dispute that, although it could not be said that one side has simply won, no issue remains between the parties except that of costs. In the former type of case, there will commonly be lacking any basis for an exercise of the Court's discretion otherwise than by an award of costs to the successful party. It is the latter type of case which more often creates problems, since there may be difficulty in discerning a clear reason why one party, rather than the other, should bear the costs. … 7 By contrast with the decisions I have been discussing, the present matter involves a clear winner. The applicants, by their proceeding, sought to challenge the validity of certain notices, and to have them set aside. The respondent, after initially defending those notices, encountered at least an evidentiary difficulty, and acknowledged that they were to be set aside. That means that the applicants have succeeded, just as the respondent succeeded in Ahmetaj v Minister for Immigration and Multicultural Affairs [1999] FCA 332, where a proceeding failed by reason of the occurrence of an event that was always liable to occur and to defeat the proceeding; in those circumstances, Sackville J, when the hearing did not proceed, distinguished Ex parte Lai Qin and made a costs order. As in that case, so here, the result one party sought was achieved without a hearing, but not by a "settlement" in the ordinary sense, or as McHugh J used the word, and certainly not by what his Honour called "extra-curial means". 7 The observations I have extracted are apt to describe the outcome achieved by Mr Katz on his application. Without the necessity of an order of the Court, Mr Katz and his legal representatives obtained access from the Epoch Parties to almost all of the documents to which they sought access. As mentioned, the documents to which access was not given have ceased to be relevant because the Epoch Parties foreshadowed amendment of their SOC to abandon those parts of the SOC which hitherto referred to those documents. There is no utility in pursuing the interlocutory application and the parties seek for the application to be dismissed. Mr Katz in substance has achieved the relief that he sought by his application. In my view, this outcome falls within the first of the two categories described by Burchett J in ONE.TEL. I am satisfied in the circumstances of this application notwithstanding that it has not been determined on the merits that it is appropriate that the Epoch Parties should pay Mr Katz's costs of the application. 8 The remaining issue is whether costs should be payable forthwith. Mr Katz submits that the Epoch Parties has acted unreasonably in opposing the application and that such conduct should attract an order for immediate taxation pursuant to r 40.13 of the Federal Court Rules 2011 (Cth), citing Tour Squad Pty Ltd v Fifth Amendment Entertainment Inc [2020] FCA 1649 (Derrington J). I am not satisfied that the Epoch Parties' conduct has reached the threshold required to justify a departure from the usual order as to the time when costs should be paid. Confidentiality 9 The Epoch Parties also sought an additional order to continue interim non-publication orders made on 15 June 2023 which would otherwise expire upon the determination of Mr Katz's application for access to documents. The confidentiality order sought is based on protecting matters of commercial confidence. Mr Katz does not oppose the orders being made in principle. In Mr Katz's written submissions in reply, Mr Katz raised a number of issues as to the precise form of the orders that should be made including as to whether the existing orders should be discharged and replaced by new orders pursuant to the Court's implied jurisdiction. In these circumstances, being satisfied that it is appropriate to make an order over the relevant material, I will order that the parties confer and submit proposed consent orders for my consideration in chambers. Conclusion 10 Accordingly, I will make orders in accordance with these reasons. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Cheeseman. Associate: Dated: 24 November 2023 SCHEDULE OF PARTIES NSD 527 of 2022 Applicants Fourth Applicant: THE EPOCH TRADING GROUP PTY LTD ACN 165 280 357 Fifth Applicant: EPOCH SERVICES AUSTRALIA PTY LTD ACN 639 479 762 Sixth Applicant: EPOCH TRADING SERVICES LTD UKCN 11558491 Seventh Applicant: EPOCH CAPITAL LTD UKCN 09184730 Eighth Applicant: EPOCH CAPITAL US LLC DFN 4801861