Karas v LK Law Pty Ltd

Link copied
Case Copied 54 min read

FEDERAL COURT OF AUSTRALIA

Karas v LK Law Pty Ltd [2023] FCAFC 15

Appeal from: LK Law Pty Ltd v Karas [2022] FCA 762
File number: SAD 112 of 2022
Judgment of: CHARLESWORTH, O’CALLAGHAN AND COLVIN JJ
Date of judgment: 17 February 2023
Catchwords: CONFIDENTIAL INFORMATION - application for leave to appeal interlocutory decision - where appellant sought interlocutory injunction preventing the use of confidential information - where injunction refused on the basis that balance of convenience did not weigh in favour of relief - where iniquity alleged as answer to claim to confidentiality - whether there exists a prima facie case to confidentiality - consideration of the proper approach to the defence of iniquity to a claim of confidentiality on an interlocutory application - leave to appeal granted - appeal dismissed
Cases cited:

A v Hayden (No 2) (1984) 156 CLR 532

AG Australia Holdings Ltd v Burton [2002] NSWSC 170; (2002) 58 NSWLR 464

Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199

Australian Broadcasting Corporation v O’Neill [2006] HCA 46; (2006) 227 CLR 57

AWB Limited v Honourable Terence Rhoderic Hudson Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30

British American Tobacco Australia Ltd v Gordon [2007] NSWSC 230

Castrol Australia Pty Ltd v EmTech Associated Pty Ltd (1980) 51 FLR 184

Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434

Crown Resorts Limited v Zantran Pty Limited [2020] FCAFC 1; (2020) 276 FCR 477

Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397

Gartside v Outram (1856) 26 LJ Ch 113

LK Law Pty Ltd v Karas [2022] FCA 762

Meyers v Casey (1913) 17 CLR 90

Moody v Cox & Hat [1917] 2 Ch 71

Popeye Holdco Pty Limited (Receivers and Managers Appointed) v Intermediate Capital Asia Pacific 2008 GP Limited (No 2) [2018] FCA 408

Samsung Electronics Co Limited v Apple Inc [2011] FCAFC 156; (2011) 217 FCR 238

Division: General Division
Registry: South Australia
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs: 121
Date of hearing: 24 November 2022
Counsel for the Appellant: Mr J Sheahan KC with Mr G Kozminsky and Ms E Brumby
Solicitor for the Appellant: Arnold Bloch Leibler
Counsel for the Respondents: Mr B Roberts KC with Mr T Besanko and Ms H Doyle
Solicitor for the Respondents: Iles Selley Lawyers

ORDERS

SAD 112 of 2022
BETWEEN:

JASON DEMETRIOS KARAS

Appellant
AND:

LK LAW PTY LTD

First Respondent

SCIPIO JOHN LIPMAN

Second Respondent

LIPMAN FAMILY PTY LTD (ACN 627 125 580)

Third Respondent

ORDER MADE BY:

CHARLESWORTH, O’CALLAGHAN AND COLVIN JJ

DATE OF ORDER:

17 FEBRUARY 2023

THE COURT ORDERS THAT:

1.The respondents’ interlocutory application filed on 15 February 2023 is dismissed.

2.The appeal is dismissed.

3.The reasons for judgment provided to the parties today (Reasons) be suppressed from publication on the grounds specified in s 37AG(1)(a) of…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Karas v LK Law Pty Ltd and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2023] FCAFC 15
Decision Date

CaseChat Overview and Summary

In the case of Karas v LK Law Pty Ltd, the appellant, Mr Karas, sought leave to appeal an interlocutory decision that refused an injunction preventing the use of confidential information. The respondents, LK Law Pty Ltd, opposed the appeal. The legal issues before the court were whether there existed a prima facie case for confidentiality, the proper approach to the defence of iniquity to a claim of confidentiality on an interlocutory application, and if leave to appeal should be granted. The court found that the appellant had established a prima facie case for confidentiality and that the primary judge had erred in considering case management as a basis for rejecting the claim to confidentiality. However, the balance of convenience did not weigh in favour of granting the relief sought, and therefore, the appeal was dismissed.

The court emphasised that matters of case management were procedural and could not be a basis for rejecting a claim to confidentiality. The court recognised that if there was a sufficiently arguable claim to confidentiality in the information, the claim could be determined concurrently with the substantive claim brought on the basis of access to that information. The court held that provisional receipt of information may be possible. In short, the precise relief sought may be refused by reason of the availability of procedural orders that may adequately preserve the confidentiality in all the circumstances. The court granted leave to appeal but dismissed the appeal on the basis of the findings. The reasons for judgment were suppressed from publication on the grounds specified in s 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth) and otherwise kept confidential until the date specified in the orders.

The court ordered that the respondents' interlocutory application filed on 15 February 2023 be dismissed, the appeal be dismissed, and the reasons for judgment provided to the parties be suppressed from publication on the grounds specified in s 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth) and otherwise kept confidential until the date specified in the orders. Any application for ongoing suppression or confidentiality orders affecting the Reasons or any part of them was to be filed on or before 4.00pm (ACDT) on 23 February 2023. The appellant was ordered to pay the costs of and incidental to the appeal. The court held that the appeal should be dismissed, and the reasons for judgment were suppressed from publication and kept confidential until the date specified in the orders.

Orders

Orders of the court

1. The respondents’ interlocutory application filed on 15 February 2023 is dismissed.

2. The appeal is dismissed.

3. The reasons for judgment provided to the parties today (Reasons) be suppressed from publication on the grounds specified in s 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth) and otherwise kept confidential until:

(a) if an application is filed in accordance with paragraph 4, the date of the resolution of that application; or

(b) if no application is filed in accordance with paragraph 4, 10.00am (ACDT) on 24 February 2023.

4. Any application for ongoing suppression or confidentiality orders affecting the Reasons or any part of them is to be filed on or before 4.00pm (ACDT) on 23 February 2023.

5. Any application filed in accordance with paragraph 4 is to be determined on the papers.

6. The appellant pay the costs of and incidental to the appeal.

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

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

For those reasons, there should be leave to appeal.Conclusion and costs The orders should provide for leave to appeal and for the appeal to be dismissed. This is not a case in which it would be appropriate to contemplate a separate order as to costs to reflect the extent to which Mr Karas has been successful. The Lipman Applicants have been successful as to the result. Many of the points were interconnected. We have dealt with the appeal on the basis of assumptions that were favourable to Mr Karas. However, many of those points were in issue. In all the circumstances, we would also order that Mr Karas pay the costs of and incidental to the appeal. There is an order of the primary judge that is in place that preserves the confidentiality of the Information in the course of the conduct of the proceedings. It operates until the first day of the final hearing with liberty to apply. It will be a matter for the case managing judge as to the appropriate approach to the Information in the further conduct of the proceedings. In the appeal, confidentiality orders were made to continue the protections put in place by the primary judge for the purposes of the appeal. It appears that those orders, if continued, may apply to matters addressed in these reasons. In case Mr Karas takes the view that there remains some basis upon which aspects of the appeal proceedings or these reasons ought to be kept confidential we will make an order that the reasons be kept confidential for 14 days or until further order and we will allow for liberty to apply as to any further order as to confidentiality in respect of the appeal and these reasons. If no application is made then the confidentiality orders made in the appeal will come to an end. Otherwise, any ongoing issues as to confidentiality in the conduct of the proceedings should be dealt with by the primary judge having regard to the matters determined by these reasons.Subsequent interlocutory application After these reasons were prepared and the parties were notified of when they were to be delivered, the Lipman Applicants (the respondents to the appeal) filed an interlocutory application in which they sought to adduce in the appeal further pleadings that had been filed since the hearing of the appeal in the cross‑claim by Mr Karas. It appeared that they were of the view that the filing of those documents provided support for contentions they had advanced in the hearing of the appeal. The interlocutory application was, in effect, an application for leave to reopen the case for the Lipman Applicants on the appeal. In circumstances where this Court had concluded that the appeal should be dismissed, no purpose would be served in entertaining the interlocutory application. In those circumstances, we are of the view that the delivery of these reasons should not be delayed on account of the interlocutory application. In those circumstances, the interlocutory application should be dismissed.

Ratio Decidendi

Legal Principle Established

For those reasons, we accept that ground 2 has been made out.Alleged error in having regard to case management considerations (proposed ground 3) In finding that the balance of convenience was against the grant of the relief sought, one of the matters relied upon concerned the consequence of a separate hearing of the cross‑claim. His Honour put the matter in the following way at [89]:The prospect of a multiplicity of proceedings leads inevitably to a significant increase in the quantum of costs; delay in the event there is an appeal from the decision on the cross-claim ahead of the main proceedings; the prospect of inconsistent findings; and given credit is likely to be in issue, the need for different judges of this Court to hear the cross-claim and the main proceedings. For Mr Karas it was contended that in doing so the primary judge incorrectly allowed matters of case management to be used as a source of authority to affect substantive rights. Reliance was placed upon the following reasoning of Allsop CJ in Crown Resorts at [2]‑[4]:The error was in applying … the proposition (reflected in the terms of the relief sought and granted in the proceeding below) that the Court possessed power, discretionary in character, to relieve a person of a subsisting and otherwise enforceable obligation of confidence owed to a party to the litigation if to do so, on balance, was in the interests of the more convenient running of the litigation and so in the administration of justice. This power was said to be derived from the cases concerned with the voidness or unenforceability of contract, or provisions in contracts, that have a tendency to interfere with or affect the administration of justice when placed in the context of modern statutory and judicial approaches to litigation and case management ……… The courts themselves are obliged to approach the management and control of litigation informed by reference to the same considerations [as are expressed in statutory provisions concerned with the overarching or overriding purpose of the conduct of civil litigation] The effects of these obligations are real and powerful; and the width and strength that they give to the power of the courts in case management of litigation should be recognised. Such recognition should not, however, distort the reach of that procedural power into some false warrant of authority to set aside, revoke or suspend substantive rights of parties to litigation. It may be accepted that matters of case management are procedural. It may be accepted that case management could not be a basis for rejecting a claim to confidentiality (noting that such claims are themselves subject to principles that protect the open administration of justice). In a case such as the present, a determination that there was a sufficiently arguable claim to confidentiality in the Information would not mean that matters of case management were irrelevant when it came to the balance of convenience. There remained the possibility that the claim to confidentiality may be determined concurrently with the substantive claim brought on the basis of access to that information. Provisional receipt of information may be possible. In short, it may be that the precise relief sought may be refused by reason of the availability of procedural orders that may adequately preserve the confidentiality in all the circumstances.