FEDERAL COURT OF AUSTRALIA
Element Zero Pty Ltd v Fortescue Ltd [2025] FCA 206
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Details
- AGLC
- Element Zero Pty Ltd v Fortescue Ltd [2025] FCA 206
- Case
- [2025] FCA 206
- Decision Date
CaseChat Overview and Summary
In the case of Element Zero Pty Ltd v Fortescue Ltd, the parties were engaged in a legal dispute before the Federal Court of Australia. The primary issue before the court was whether leave to appeal should be granted to Element Zero Pty Ltd (EZ) from a decision dismissing their application to discharge ex parte search orders obtained by Fortescue Ltd. The EZ sought to appeal on the grounds that there was a material non-disclosure in the application for the search orders, and that the discretion to refuse to set aside such orders was either improperly exercised or there was substantial injustice if leave was not granted. The court needed to determine the precedential value of judgments from single Justices of the High Court in its original jurisdiction and intermediate appellate courts, as well as the nature of the discretion exercised by the primary judge in dismissing the application to discharge the search orders.
The court held that there was no sufficient doubt as to the correctness of the primary judge's decision to refuse to set aside the search orders. It found that the material non-disclosure did not justify the granting of leave to appeal. The court further reasoned that the precedents from similar cases indicated that there was no substantial injustice in dismissing the application to discharge the search orders. It noted that the material seized during the execution of the search orders could not be subject to direct access by Fortescue and that any potential prejudice could be remedied under the court's supervision of the orders. The court concluded that the primary judge's discretion was correctly exercised and that there was no substantial injustice in dismissing the application to discharge the search orders.
Accordingly, the court dismissed the application for leave to appeal and ordered that the applicants for leave to appeal pay the costs of the first, second, and third respondents. The decision underscores the stringent criteria required for leave to appeal to be granted in such interlocutory matters, particularly where there is a clear precedent and no substantial injustice demonstrated.
The court held that there was no sufficient doubt as to the correctness of the primary judge's decision to refuse to set aside the search orders. It found that the material non-disclosure did not justify the granting of leave to appeal. The court further reasoned that the precedents from similar cases indicated that there was no substantial injustice in dismissing the application to discharge the search orders. It noted that the material seized during the execution of the search orders could not be subject to direct access by Fortescue and that any potential prejudice could be remedied under the court's supervision of the orders. The court concluded that the primary judge's discretion was correctly exercised and that there was no substantial injustice in dismissing the application to discharge the search orders.
Accordingly, the court dismissed the application for leave to appeal and ordered that the applicants for leave to appeal pay the costs of the first, second, and third respondents. The decision underscores the stringent criteria required for leave to appeal to be granted in such interlocutory matters, particularly where there is a clear precedent and no substantial injustice demonstrated.
Orders
Orders of the court
1. The application for leave to appeal be dismissed.
2. The applicants for leave to appeal pay the costs of the first, second and third respondents.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
This ground seeks only to upset the costs order below. Reference is made by the EZ parties to Naidenov, in the matter of 30 Denham Pty Ltd (in liq), referred to above, at [36] where I made a different costs order in similar circumstances. But there is nothing in that case that elevates what was decided there in relation to costs to a matter of principle or to circumscribe the costs discretion in any way. There is no apparent error in her Honour’s exercise of that discretion. In any event, even a clear error in the award of the costs of an interlocutory application would not ordinarily justify leave to appeal being granted.Conclusion on sufficiency of doubt: For the reasons given above, I am not persuaded that there is sufficient doubt as to the correctness of her Honour’s decision not to set aside the search orders such as to justify leave to appeal even assuming substantial injustice. Substantial injustice In Brilliant Digital the Full Court dismissed an application for leave to appeal against the dismissal of applications to set aside ex parte interlocutory orders in the nature of search orders. Chief Justice Black and Stone J dismissed the application only on the ground of the absence of substantial injustice without considering the correctness of the decision of the primary judge (at [14]). Their Honours dealt with various grounds of substantial injustice sought to be relied on in that case, which are very similar to those relied on in the present case, and rejected them (at [10]-[14]), as did Emmett J (at [76]). For the same reasons, I am not persuaded that there is any substantial injustice in the present case. I will nevertheless address each of the matters relied on by the EZ parties. The first matter relied on is that the material seized during execution of the search orders amounts to (1) the entire records of the Element Zero business, (2) “highly confidential third party material (including material provided to Element Zero by government departments and competitors of Fortescue)”, and (3) a significant amount of personal material from Dr Kolodziejczyk. The EZ parties submit that that material could be the subject of direct access by Fortescue if the search orders are not set aside. It is said that the material is exposed to potential access orders. There is no basis to the submission that the material could be the subject of “direct access by Fortescue”. Any access to the material would necessarily only be access granted by the Court in its ongoing supervision of the search orders – being interlocutory, the orders are subject to being revisited. Also, save for some notebooks and loose papers, the material “seized” during the execution of the search orders was not seized in the sense of “taken away from”, but rather in the sense of “copied”. That is to say, there is no evidence to suggest that the EZ parties do not in the ordinary course of their business have ongoing access to their records, copies of which were made and which are now held by the Court or the independent computer experts. Insofar as the notebooks and papers are concerned, any prejudice in not having access to them (on which there is no evidence) can be remedied under the Court’s continued supervision of the search orders – an application can be made for the return of the hard copy materials with copies being made and retained if necessary. The same is true of any other material that has been seized or copied which is said to go beyond the scope of what is legitimate or justified under the search orders, including so-called third party material – an appropriate application can be brought to exclude that material and have it returned, deleted or destroyed, as may be appropriate. No prejudice is shown in the status quo being maintained in the meanwhile.
Ratio Decidendi
Legal Principle Established
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