Australian Securities and Investments Commission, in the matter of Whitebox Trading Pty Ltd v Whitebox Trading Pty Ltd

Federal Court of Australia|2017-04-13|Before: Gleeson J

The defendants' application to the Court to vary order 2 made on 30 March 2017 be refused. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

GLEESON J: 1 On 30 March 2017, I made an advance ruling in favour of the plaintiff ("ASIC"), pursuant to s 192A(b) of the Evidence Act 1995 (Cth) and an order that the defendants ("Whitebox") pay ASIC's costs of the application for the advance ruling: Australian Securities and Investments Commission, in the matter of Whitebox Trading Pty Ltd v Whitebox Trading Pty Ltd [2017] FCA 324. 2 Counsel for Whitebox, Mr Livingston, immediately sought an opportunity to make submissions in support of the proposition that the costs of the application should be costs in the cause or, alternatively, ASIC's costs in the cause. After hearing brief oral submissions, I made directions for the parties to make written submissions on the basis that I would deal with Whitebox's application to vary the costs order on the papers.

Whitebox submissions 8 Whitebox submitted that the purpose and effect of the ruling sought by ASIC under s 192A of the Evidence Act was to determine whether any of the subject documents are prevented, by reason of s 118 or s 119, from being adduced in evidence at the final hearing of the proceedings. It argued that, in the particular circumstances, it is "right to make the costs of the interlocutory proceedings depend on who won or lost in the main action": cf. Metropolitan Petar at [19] citing JT Stratford Ltd v Lindley [1969] 1 WLR 1547 at 1554. Whitebox argued that this is a case in which "it can be expected that the final award of costs will reflect how the costs of the interlocutory proceeding should be awarded:" cf. Vaughan Super at [8]. Whitebox submitted that an advance ruling on the admissibility of evidence may be seen as a paradigm example of an interlocutory application the utility and object of which is so bound up with the ultimate outcome of the final hearing as to make such a costs order appropriate. This was said to be so because whether the ruling obtained by ASIC is ultimately fruitful will necessarily turn upon whether or not ASIC succeeds at the final hearing: cf. Metropolitan Petar at [25]. 9 Whitebox contended that its proposed order is consistent with other cases in which the courts have given a ruling under s 192A of the Evidence Act upon terms that the costs of the application be costs in the cause, including Kernahan v ACN 003 134 475 Pty Ltd [2010] NSWSC 51; (2010) 77 NSWLR 452 ("Kernahan") at [69], 462; NA & J Investments Pty Ltd v Minister Administering Water Management Act 2000 (No 4) [2012] NSWLEC 120 ("NA & J Investments") at [49]; The Council of the New South Wales Bar Association v Franklin [2014] NSWCA 329 ("Franklin") at [22].

ASIC's submissions 10 ASIC argued that the cases involving rulings pursuant to s 192A cited by Whitebox do not support a conclusion that an order of "costs in the cause" is the usual order in relation to such applications. None of those cases concerned an advance ruling concerning a question of privilege. Further, no reasons were given for the making of the costs orders in those cases. 11 In contrast to those authorities, ASIC referred to ACCC v Allphones Retail Pty Ltd [2009] FCA 1075; (2009) 259 ALR 541, a case in which a ruling pursuant to s 192A of the Evidence Act was made in relation to a dispute as to "without prejudice" privilege under s 131 of the Act. In that case, the Court determined (at [90]) that costs should follow the event and ordered the substantially unsuccessful party to pay the substantially successful party's costs. 12 ASIC argued that it is common for costs to follow the event in applications to resolve privilege disputes separately from, and in advance of, a final hearing. See, for example, Guess?, Inc v Guccio Gucci SpA [2016] FCA 1218 at [5].

Consideration 13 The application is not relevantly analogous to an application for an interlocutory application, because the Court has made a final determination as to claims of privilege that were made by Whitebox. Nor is it necessarily analogous to an advance ruling as to the admissibility of evidence, which was the nature of the rulings sought in Kernahan, NA & J Investments and Franklin. 14 ASIC's application was made in response to Whitebox's assertion of privilege. Whitebox was unsuccessful in maintaining its claims of privilege on the application. In my view, costs should follow the event on such an application, in the absence of circumstances warranting a departure from the default position. There are no circumstances warranting such a departure. 15 Accordingly, I decline to vary order 2 made on 30 March 2016. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson.

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