Background
8 On 21 November 2019, the Clover companies filed an originating application seeking injunctive and compensatory relief against Mr Tobias and Pharmamark in respect of alleged misuse of the Clover companies' confidential information. By their concise statement, the Clover companies alleged that their former employee, Mr Tobias, made unauthorised copies of their confidential information shortly before he resigned and has disclosed or is threatening to disclose the confidential information to Pharmamark.
9 The Clover companies also made an ex parte application for a search order against the respondents pursuant to Division 7.5 of the Federal Court Rules 2011 (Cth). On 21 November 2019, Wheelahan J made that order, which required the respondents to allow various representatives of the Clover companies to, amongst other things:
(a) enter their premises and search for, inspect and make copies of "listed things" described in the annexure to the order; and
(b) in respect of any computer to be searched, permit an independent computer expert to make a copy or digital copy of the computer hard drive and remove that copy from the premises so as to conduct a search for "listed things".
10 A large number of electronic documents were copied from the respondents' computers during the execution of the search order and uploaded onto a secure database by the independent computer expert appointed for the purposes of the search order, Korda Mentha.
11 On 6 December 2019, O'Callaghan J made orders setting up a regime to determine which of the seized electronic documents could be inspected by the Clover companies and by which Pharmamark could object to inspection. The orders provided that inspection would occur through a web portal established by Korda Mentha for that purpose. The orders then set out the following steps:
(a) The Clover companies would provide Korda Mentha with a set of filtering criteria to be applied to the documents to create a subset of the documents (the initial subset).
(b) Korda Mentha would give the respondents and their lawyers access to the initial subset through the web portal for a period of 10 business days for the purpose of identifying any documents in the initial subset to which they have any objection to disclosure.
(c) Korda Mentha would make available to the Clover companies and their lawyers all of the documents in the initial subset to which no objection was made.
(d) The respondents were then required to provide the Clover companies with an itemised list of objections on a document-by-document basis which was to include a description of the document, the objection and the basis and detailed reasons for that objection.
12 On 6 February 2020, O'Callaghan J made orders extending the time for the respondents to inspect and object to the initial subset of documents under the orders made on 6 December 2020.
13 On 7 February 2020, the respondents filed interlocutory applications seeking variations to the search order made on 21 November 2019 and the inspection order made on 6 December 2019.
14 On 24 February 2020, O'Callaghan J dismissed the respondents' interlocutory applications and made orders further extending the time for the respondents to inspect and object to the initial subset of documents under the orders made on 6 December 2020.
15 On 18 March 2020, O'Callaghan J made orders establishing a confidentiality regime in respect of the disclosure of confidential documents between the parties to the proceeding.
16 On 3 April 2020, the respondents provided their list of objections to the initial subset of documents. Pharmamark's Chief Executive Officer, Guy Drummond, made an affidavit on that day which categorised the initial subset of documents as follows:
(a) listed things (to which no objection was taken);
(b) not listed things (to which objection was taken because they are not listed things within the terms of the search order);
(c) confidential (to which objection was taken on the ground that the documents are confidential to Pharmamark);
(d) irrelevant (to which objection was taken on the ground that the documents are irrelevant to the issues between the parties); and
(e) confidential and irrelevant (to which objection was taken on the grounds that the documents are confidential to Pharmamark and irrelevant to the issues between the parties).
17 The Clover companies re-categorised Mr Drummond's list as follows:
(a) category A, being all documents stated to have been disclosed by Mr Tobias to third parties (comprising 124 documents);
(b) category B, being all documents identified by Pharmamark as confidential listed things (comprising 554 documents);
(c) category C, being all documents identified by Pharmamark as irrelevant listed things (comprising 33 documents);
(d) category D, being all documents identified by Pharmamark as confidential and irrelevant listed things (comprising 21 documents);
(e) category E, being all documents identified by Pharmamark as not a listed thing (comprising 13,026 documents); and
(f) category F, being all other documents in Pharmamark's list of objections (comprising 19,240 documents).
18 Following an interlocutory hearing on 20 May 2020, O'Callaghan J made orders on 29 May 2020 to the following effect:
(a) the respondents were permitted to make reasonable redactions to the documents in categories A to D in respect of claims of confidentiality;
(b) Korda Mentha would then make the redacted documents available to the lawyers for the Clover companies who had given confidentiality undertakings in accordance with the regime ordered on 18 March 2020; and
(c) in relation to documents in categories E and F, counsel for the parties were required to confer for the purposes of agreeing a means of resolving the dispute regarding inspection and, failing agreement, were to provide a proposed protocol supported by written submissions.
19 The parties were unable to agree on a protocol in respect of categories E and F and each filed written submissions.
20 On 24 June 2020, O'Callaghan J made an order that there be an inspection of the documents in categories E and F pursuant to the protocol in Attachment A to the orders. The terms of the protocol are relevant to the issues raised on this stay application. The protocol was as follows:
Appointment of expert
1. The parties propose to appoint a legal practitioner (the Expert) for the purposes of providing a further review of the Category E Documents and Category F Documents (as defined in the Order of Justice O'Callaghan made 29 May 2020 (Orders)) (together, Determination Documents) to determine whether the Determination Documents are "Listed Things" for the purposes of the Search Order of Justice Wheelahan made 21 November 2019 (Search Order).
Identity of Expert
2. The Expert shall be chosen by the Applicants. The Expert shall be a practising barrister of no less than 10 years' standing, specialising in commercial litigation, and shall be independent of the Applicants' lawyers. The Applicants will notify the Respondents of the name of the Expert within one day of him or her being engaged.
Briefing material
3. Within 7 days, the Applicants shall provide to the Expert a copy of:
3.1 the Search Order;
3.2 the material filed in support of the Search Order;
3.3 the Orders.
Provision of Documents in Categories E & F
4. Within 2 business days of being notified of the appointment of the Expert, Grant Whiteley of Korda Mentha (Independent Computer Expert) shall provide access to the Determination Documents through the Relativity One database and web portal (Web Portal) to the Expert. The Expert may consult with, and obtain assistance from, the Independent Computer Expert at any time to assist in the efficient review of the Determination Documents, as the Expert sees fit.
Technical consultation
5. Where the Expert is unable to determine the status of particular documents as a Listed Thing then the Expert may consult Mr Adam Tyson of Produco Ltd as an independent technical expert (Technical Expert). The details of Mr Tyson can be found at https://produco.co.nz/business-profile/.
Determination
6. As soon as reasonably practicable after receiving the Determination Documents and meeting with the parties, the Expert shall provide a written report to each of the parties in which the Expert indicates:
6.1 which of the Determination Documents are Listed Things for the purposes of the Search Order;
6.2 which of the Determination Documents are not Listed Things for the purposes of the Search Order; and
6.3 for which of the Determination Documents it is not clear to the Expert whether the Determination Documents are Listed Things or not for the purposes of the Search Order.
General matters
7. The Expert does not act as an arbitrator of the matters in dispute and the Determination is not an arbitration within the meaning of any law.
8. The Expert shall keep all information disclosed during the Determination confidential, save as where appropriate that information may be revealed to the Court or, where it concerns confidential information of a party, then that information may be revealed to that party.
9. The costs of the Expert, the Independent Computer Expert and the Technical Expert shall be paid by the Applicants and are reserved.
21 As stated earlier, Pharmamark seeks leave to appeal from the order made on 24 June 2020. These reasons concern its application to stay the order pending the determination of its application for leave, as now varied by its reply submissions filed on 26 August 2020.