Commissioner of Police v Joukhador

Legislation Cited: Civil Procedure Act 2005 (NSW), s 98
Uniform Civil Procedure Rules 2005 (NSW), rr 20.26, 42.1, 42.15, 42.15A

Cases Cited: Caine v Lumley General Insurance Ltd (No 2) [2008] NSWCA 109
Joukhador as Principal Solicitor of Thomas Booler Lawyers v NSW Commissioner of Police [2017] NSWSC 1287
Joukhador v Commissioner of Police [2017] NSWSC 1653
Joukhador v Commissioner of Police [2018] NSWSC 872
Joukhador v State of New South Wales [2024] NSWSC 1526
Kramer v Stone (No 2) [2023] NSWCA 298
Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391
Re Minister For Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6
Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368

Category: Costs

Parties: Commissioner of New South Wales Police (Plaintiff)
Marcel Joukhador (Defendant)

Representation: Counsel:
P Singleton (Plaintiff)
M Rennie (Defendant)
Solicitors:
Crown Solicitor’s Office (Plaintiff)
Turner Freeman Lawyers (Defendant)

File Number(s): 2025/00085483

JUDGMENT

1. This judgment deals only with the question of which party should pay the costs of the other party in these proceedings, since they have otherwise been resolved by consent.

Background

2. The background to these proceedings is complex and was touched upon in a number of judgments relating to other proceedings between the same two parties or related parties including: Joukhador as Principal Solicitor of Thomas Booler Lawyers v NSW Commissioner of Police [2017] NSWSC 1287; Joukhador v Commissioner of Police [2017] NSWSC 1653; Joukhador v Commissioner of Police [2018] NSWSC 872; and, Joukhador v State of New South Wales [2024] NSWSC 1526. It is not necessary for the purposes of determining the costs issue to set out in detail the background provided by those judgments but they should be read in conjunction with this judgment.

3. It is sufficient to note that these various proceedings relate, directly or indirectly, to the fact that the defendant, Mr Joukhador a legal practitioner, had sought to challenge three search warrants executed at Mr Joukhador’s professional premises. For the purposes of that challenge, Mr Joukhador sought access to the relevant applications for the warrants. This was opposed by the plaintiff, the Commissioner of the New South Wales Police, on the grounds of public interest immunity relying on confidential affidavit evidence. Eventually, Mr Joukhador was granted access to redacted versions of applications for the warrants. In addition, however, as a result of having his agent apply to inspect the Court file in one of those matters, the agent was mistakenly given access to unredacted forms of the applications for the warrants and the confidential affidavit evidence. After the plaintiff, the Commissioner of Police, became aware of this access being given to Mr Joukhador’s agent and after unsuccessful attempts to resolve by correspondence what should be done to rectify the situation, the Commissioner commenced these proceedings.

The present proceedings

4. By a summons filed in court on 4 March 2025, the Commissioner sought, in addition to certain notations, orders as follows in prayers 2, 3, 4, 5 and 6:

“2. An order prohibiting the defendant from disclosing to any person (except as may be required by law) any information in or derived from:

(a) the three search warrant applications redacted copies of which were made available to him on 16 September 2024 in the course of the proceedings Joukhador v. State of New South Wales (2023/164546) save to the extent that the information is in those redacted copies; or

(b) any confidential affidavit sworn in Joukhador v. Commissioner of Police (2017/151403) by Malcolm Arthur Lanyon.

3. An order that the defendant deal as follows with each copy of the Sidoti material that is in his possession or control (except any copy that was given to him by the Crown Solicitor’s Office or is a copy of such a copy):

(a) within 24 hours of the making of this order:

(i) destroy the copy; and

(ii) by email notify the Crown Solicitor’s Office of that destruction; or

(b) within 72 hours of the making of this order deliver the copy to the Crown Solicitor’s Office (Level 4, 60-70 Elizabeth Street, Sydney).

4. An order that the defendant deal as follows with any copy of the Sidoti material (except any copy that was given to him by the Crown Solicitor’s Office or is a copy of such a copy) that in future comes into his possession or control:

(a) within 24 hours of the making of this order:

(i) destroy the copy; and

(ii) by email notify the Crown Solicitor’s Office of that destruction; or

(b) within 72 hours of the making of this order deliver the copy to the Crown Solicitor’s Office (Level 4, 60-70 Elizabeth Street, Sydney).

5. Costs.

6. Such further or other order as the Court sees fit.”

5. On 27 May 2025, orders were made by consent effectively disposing of the proceedings except in relation to the question of costs. The orders made on that occasion included the following:

“1. The Court notes:

(a) In 2017, in proceeding 2017/151403, the Court upheld a claim of public interest immunity made by the then Commissioner of Police for New South Wales (“the former Commissioner”) in respect of three search warrant applications (“the search warrant applications”) (see Joukhador v. Commissioner of Police [2017] NSWSC 1653).

(b) The said claim of the former Commissioner was supported by two confidential affidavits sworn by Malcolm Arthur Lanyon (“the confidential affidavits”), which were received by the Court on a confidential basis and placed onto the Court’s file for proceeding 2017/151403.

(c) In or about mid-2024, John Sidoti of JS Legal Services Pty Ltd, in his capacity as agent for the defendant, copied material on the Court’s file for proceeding 2017/151403 that included copies of the confidential affidavits and copies of the search warrant applications in unredacted form.

(d) On 16 September 2024, in the course of the proceedings Joukhador v. State of New South Wales (2023/164546) the defendant (that is, the plaintiff in Joukhador v. State of New South Wales) was given redacted copies of the search warrant applications.

(e) The defendant warrants that he has not read the confidential affidavits or any part thereof (save that he has seen the title of one or both of those documents).

(f) The defendant warrants that he has not read any unredacted copy of the search warrant applications.

(g) Subject to (i) below, the defendant warrants that he does not possess, control or have access to any copy of either of the confidential affidavits or any unredacted copy of any of the search warrant applications.

(h) Subject to (i), (j) and (n) below, the defendant warrants that he has not given to any person:

(i) any copy of either of the confidential affidavits,

(ii) any copy of any of the search warrant applications that includes without masking those parts that are masked in the copies provided to the defendant on 16 September 2024 (“the unredacted search warrant applications”), or

(iii) any access to any copy of either of the confidential affidavits or any of the unredacted search warrant applications.

(i) On or about 26 June 2024, the defendant caused copies of the confidential affidavits and the unredacted search warrant applications (among other material) to be uploaded via the Internet to a storage location accessible, and only accessible, via an electronic link (“the electronic link”) or copy of the electronic link.

(j) On or about 27 June 2024, the defendant caused the electronic link (or copy thereof) to become accessible by Turner Freeman, solicitors.

(k) Subject to (j) above, the defendant warrants that he has not provided to any person any copy of, or access to, the electronic link.

(l) The defendant warrants that:

(i) he has instructed Turner Freeman that no person should use the electronic link (or any copy of it), and

(ii) to the best of his knowledge no one has used the electronic link (or any copy of it).

(m) The defendant warrants that he has taken all reasonably available steps to delete, destroy or render unusable the electronic link (and all copies thereof) and will take no steps to use it or to facilitate or allow any other person to use it (or any copy thereof).”

(n) On 20 February 2025, the defendant surrendered to police (who then delivered to the Crown Solicitor’s Office) a universal serial bus (USB) electronic storage device that contained material that included copies of the confidential affidavits and of the unredacted search warrant applications.

(o) The Crown Solicitor’s Office warrants that the material on the said USB device was edited such that the copies of the confidential affidavits and unredacted copies of the search warrant applications were removed and the resulting USB device is available for collection by the defendant.

(p) For the avoidance of doubt, none of the foregoing precludes the defendant from:

(i) calling on the subpoena that issued on 19 March 2025 at his request in the proceedings Joukhador v. State of New South Wales (2023/164546), or

(ii) making an application to a court of competent jurisdiction for an order having the effect of giving him access to the confidential affidavits and/or the unredacted search warrant applications, nor from having any access that might thereupon be granted.

2. Court directs:

(a) the Registrar is to cause all copies of the confidential affidavits and of unredacted copies of the search warrant applications to be removed from the Court’s file for proceeding 2017/151403 and given to the Crown Solicitor’s Office; and

(b) on receipt, the Crown Solicitor is to:

(i) cause that material to be kept securely for 24 months from the date of these orders; and

(ii) deliver that material in accordance with any order of the Court during that 24-month period; and

(iii) thereafter cause that material to be dealt with by the Crown Solicitor’s Office in accordance with the requirements of the State Records Act 1998.

3. The summons is otherwise dismissed.

4. The costs of the proceedings shall be paid as agreed between the parties or as ordered by the Court.

5. The proceedings are adjourned for mention on 16 June 2025.”

6. The orders took this form because, by 27 May 2025, prayers for relief 2, 3 and 4 in the summons were no longer necessary nor sought, on the basis that the Commissioner accepted that the facts and matters warranted by the defendant or noted in order 1 made on that day were true and reliable.

7. On 16 June 2025, the parties informed the Court that agreement had not been reached in relation to costs and that a hearing on that issue was required. The hearing in relation to costs took place on 16 July 2025.

Relevant factual findings in relation to costs

8. My findings include the facts and matters set out in the following paragraphs.

9. In 2017, in proceeding 2017/151403, the Court upheld a claim of public interest immunity made by the Commissioner of Police in respect of the three search warrant applications: Joukhador v Commissioner of Police [2017] NSWSC 1653. The public interest immunity claim was supported by two confidential affidavits sworn by Malcolm Arthur Lanyon, which were received by the Court on a confidential basis and placed onto the Court’s file in proceeding 2017/151403.

10. In or about mid-2024, John Sidoti of JS Legal Services Pty Ltd, in his capacity as agent for the defendant, was given access to and copied material on the Court’s file for proceedings 2017/151403 that included copies of the search warrant applications in unredacted form and of the confidential affidavits.

11. It was not in dispute that Mr Joukhador and his agent, Mr Sidoti, were not entitled to have, and should not have been given access to, the confidential affidavits and the unredacted warrant applications (together referred to as the Sidoti material).

12. On or about 26 June 2024, the defendant caused copies of the Sidoti material to be uploaded via the Internet to a storage location accessible, and only accessible, via an electronic link or copy of the electronic link.

13. On or about 27 June 2024, the defendant caused the electronic link or copy of it to become accessible by Turner Freeman, the defendant’s solicitors.

14. On 16 September 2024, in the course of different proceedings brought by the defendant, Joukhador v State of New South Wales (file number 2023/164546), the defendant obtained redacted copies of the three search warrant applications which were the subject of the public interest immunity claim in proceeding 2017/151403.

15. Although Mr Sidoti, as agent for Mr Joukhador, copied the Sidoti material in about mid-2024, Mr Joukhador did not until 19 December 2024 inform the solicitors then acting for the Commissioner in proceedings 2017/151403 that his agent had gained access to the Sidoti material. On 19 December 2024, Mr Joukhador wrote to the Commissioner’s solicitors stating:

“We intend to review the [Sidoti material] unless you wish to file an application for public interest immunity in relation to same.

If we don’t hear from you within twenty eight (28) days from the date hereof, we will presume that you are not pressing any claim for public interest immunity in relation to any documents that’s [sic] located on the court file and will inspect the file and documents accordingly.”

16. In their response of 6 January 2025, the solicitors noted that the Crown Solicitor’s Office (CSO) would be dealing with the matter and included the following:

“Given the time of year we ask that you please refrain from inspecting the documents until such time as you receive further correspondence from the Crown Solicitors’ Office, on behalf of the Commissioner of Police on the current status of the material over which public interest immunity was claimed.”

17. On 17 February 2025, a representative of the CSO inspected the relevant Court file and ascertained what it contained. On the same day, the CSO sent a letter by email to Mr Joukhador which included the following:

“In circumstances where the contents of the file now in your possession include documents provided to the Court which disclose the information the subject of an upheld public interest immunity claim, please provide a written undertaking not to inspect the contents of [the Court file] by return email to me as soon as possible.

I would also be grateful if you could indicate what arrangements are suitable to facilitate the immediate return of the copy of the Court file in your possession to the Crown Solicitor’s Office.”

18. In a follow-up email on the same day, the CSO sought an urgent response from Mr Joukhador, confirmation that the email had been received and provision of the undertaking requested as soon as possible.

19. On 18 February 2025, the CSO resent the letter dated 17 February 2025 under cover of an email which also said:

“I am instructed to seek your written undertaking not to inspect the contents of [the Court file] by midday today at the latest, given that you are now on notice that there is material on that file that is subject to a claim of public interest immunity that has been upheld by the Supreme Court.”

20. On 18 February 2025, the CSO’s telephone call to Mr Joukhador was not answered and a message was left asking him to make contact.

21. On 19 February 2025, the CSO wrote a further letter to Mr Joukhador sent by email. That letter included:

“I seek the delivery to my Office by noon on 19 February 2025 (or such other time as may be agreed [as to which see below]) of all the material copied from the Court file and of any further copies that may have been made of that material. I propose the material should be held securely and confidentially by my Office until agreement with you is reached regarding next steps.…

…

I further seek, by noon on 19 February 2025, your written professional undertaking that you will not disclose to any person the contents of any confidential material (being material covered by public interest immunity) that you may have read in the material that you received from your agent … (or, if applicable, your warranty that you have read no such material and your disclosure regarding who else, if anyone, has had access to the material in question.

I am willing to discuss a reasonable later time than noon on 19 February for the delivery of material as described above if it is not practicable for you to meet that deadline provided you provide written undertakings as proposed above and a further undertaking that pending delivery there shall be no inspection of the material. …

I am instructed to put you on notice that if you do not take the steps requested above, or reach an agreement on alternative steps, by noon on 19 February 2025 then the Commissioner intends to approach the Supreme Court duty judge at 10am on 20 February 2025 to seek urgent relief. “.

22. Two hours and 25 minutes later on 19 February 2025, Mr Joukhador emailed the CSO saying:

“…

I’ve just been sick with the flu.

My apologies for not responding.

My lawyers have informed me that it relates to 2 paragraphs in the application for search warrant that is subject to public interest immunity.

I don’t think we need to return the files.”

23. By email to Mr Joukhador later that same day, the CSO reiterated its intention to approach the duty Judge. Shortly thereafter, Mr Joukhador responded as follows:

“If you can clarify which documents are subject to public interest immunity, then I’m happy to return those.”

24. By email to Mr Joukhador sent about two hours later on the same day, the CSO requested that the entire court file in his possession or any copy of it be provided to the CSO by 5 pm that day so that the CSO could go through the documents and remove any confidential material and return the non-confidential material. In addition, a written undertaking that he not disclose the contents of any confidential material that he may have read or, if applicable, a warranty that he had not read the material was also sought, together with an undertaking not to provide the material to anyone else and, if that had occurred, disclosure of the persons to whom it had been provided. If Mr Joukhador was not willing to agree to those requests the CSO reiterated its intention to make an application to the Court the next day. Four minutes later, Mr Joukhador responded saying:

“Sorry I wrote you in December about this and now I have only one hour to deliver a file.

I don’t have a hard copy file in my position [sic].”

25. About an hour later, the CSO emailed Mr Joukhador and, after noting the location of his office, requested that he deliver a copy of a thumb drive containing whatever electronic version of the court file he had in his possession to Auburn police station by 5:30 pm on 19 February 2025. It was also noted that the Commissioner required the provision of the undertakings previously requested.

26. On 20 February 2025, the next day, after an email indicating that arrangements had been made to attend the duty judge’s courtroom at 10 am on that morning, Mr Joukhador sent an email at 9:11 am stating:

“I can have the USB delivered to Auburn police station today and give the necessary undertakings

Please advise when we are likely to receive the documents in return and who in Auburn police station do we contact?”

27. On that same day, the defendant surrendered to police (who then delivered to the Crown Solicitor’s Office) a universal serial bus (USB) electronic storage device or flash drive that contained material that included copies of the confidential affidavits and of the unredacted search warrant applications.

28. After further emails on 20 February 2025, Mr Joukhador sent an email to the CSO stating:

“Documents have been delivered.

The two persons we [sic] would have had access the following

John Sidoti …

He was my agent who collected the file and my lawyer Terry Goldberg details which I provided to you previously.

His secretary may also have access.”

29. On the afternoon of the same day, the CSO sent by email to Mr Joukhador a letter which acknowledged that a USB flash drive had been delivered to Auburn Police Station that morning and put him on notice that, subject to any objection he might make by 5 pm on 24 February 2025 or such later time as may be agreed, the flash drive would be inspected in order to identify material subject to public interest immunity (including the confidential evidence in support of that claim), that material would be removed from the flash drive (or if necessary the non-public interest immunity material would be transferred onto another drive) and the non-public interest immunity material would be returned to Mr Joukhador. After noting the persons who may have had access to the flash drive or a copy of its contents, the letter continued:

“To complete resolution of this matter without litigation, it will be necessary to obtain from each person who has had possession of the flash drive a copy of its content, and from any person who may have been apprised of information derived from the confidential material, and appropriate undertaking. In short, it will be necessary to have assurances from all relevant people that all the confidential material has been delivered to me or the police, any further copies destroyed, and that all confidential information will not be further disseminated.

To facilitate the drafting of undertakings in the simplest possible form [certain information was requested]. I request your response be provided to me by no later than 5pm on Friday, 21 February 2025.

… ”

30. On the same day, 14 minutes later Mr Joukhador responded saying:

“We require all the documents to be returned except for those that were subject to public interest immunity.

My understanding [is] that it was only two paragraphs in the application for search warrant.”

31. Mr Joukhador’s stated understanding was incorrect in that the material sought to be protected from disclosure included not only the redacted portions of the applications for the three search warrants but also the confidential affidavit evidence relied upon in support of the public interest immunity claim. This fact was once again, in effect, pointed out in the CSO’s response 19 minutes later which also reiterated the request for the information sought in the preceding letter.

32. On 26 February 2025, six days later, the CSO sent to Mr Joukhador by email a form of written undertaking which it requested by signed and returned by 5 pm on 27 February 2025. Seven minutes later, Mr Joukhador responded saying:

“I think you should consult with the crown solicitor in my malicious prosecution claim as this issue has already been dealt with in the Supreme Court. Terry Goldberg who acts for me in this matter will send you correspondence to that effect.”

33. On the same day, 44 minutes later, the CSO responded to Mr Joukhador in the following terms:

“I can confirm I have conferred with my colleague with carriage of the 2024 proceedings and understand she has not exchanged any correspondence with yourself and/or Mr Goldberg with respect [to] the issues of access to the Supreme Court file 2017/151403.

I remain instructed to request you sign the attached undertaking by 5pm tomorrow. If you decline to do so, please notify me of your position.”

34. A response was sent by Mr Joukhador by email about two hours later. It involved him reiterating his position that there were only approximately two paragraphs of the applications for search warrants that were then currently the subject of public interest immunity and “[t]he balance of the documents in the court file are not be [sic] subject to any public interest immunity as agreed by the crown solicitors office”.

35. On 27 February 2025 at 8:53 am, the CSO by email reiterated in effect that the relevant material included the confidential affidavit evidence and noted that the Commissioner asserted a claim of public interest immunity over the two confidential affidavits on the file including their exhibits in full. The email continued:

“As you are aware, the Commissioner’s position is that access should not have been granted to the confidential materials on the 2017 Supreme Court file. It is for that reason that my Office requested you return the materials, which I understand occurred by the surrender of the USB to Auburn Police Station last week on 20 February 2025. The undertaking now sought essentially seeks assurances that you do not hold further copies (electronic or otherwise) of the 2017 court file and, if you become aware of further copies (or persons who may hold copies) that you notify my Office so appropriate steps can be taken.

Please kindly confirm whether or not you are agreeable to provision of the undertaking as sought. If not, I anticipate I may be instructed to commence proceedings in the Supreme Court.”

36. By an email sent 10 minutes later, Mr Joukhador responded saying:

“The Notice to produce sought copies of the applications for search warrant and the affidavits are part of the application. They weren’t specifically specified in the notice to produce as we were unaware of their existence. Nor were they raised by the crown solicitors office.

Please advise what public interest immunity applies to those affidavits since they were filed in 2017. We also you also [sic] agree to an interim undertaking until the issue is resolved.”

37. The CSO responded by email 10 minutes later to Mr Joukhador stating:

“The confidential affidavits do not form part of the search warrant applications. The affidavits were sworn in support of the Commissioner’s notice of motion filed in the Supreme Court in 2017 seeking to be excused from producing the unredacted search warrant applications in answer to the subpoena issues [sic] to her in those proceedings. I note you were a plaintiff in those proceedings, and would have necessarily been aware of the existence of and the Commissioners reliance upon that evidence. Indeed, the Supreme Court judgment in that matter explicitly refers to the confidential affidavits – see Joukhador v Commissioner of Police [2017] NSWSC 1653 at [17], [19], [23] and [24].”

38. Mr Joukhador responded three minutes later by email the following terms:

“They were relied upon in the application and therefore form part of the application. In any event, please advise how public interest immunity applies today with respect to the affidavits.”

39. If Mr Joukhador’s response was intended to convey that he maintained his position that the confidential affidavit evidence formed part of the applications for the search warrants, then he was mistaken. The correspondence from the CSO, in my view, had attempted on various occasions to correct any such mistake on Mr Joukhador’s part. It is difficult to understand why Mr Joukhador maintained his mistaken position.

40. Later on the same day at 11:08 am, the CSO sent an email to Mr Joukhador in the following terms:

“For the abundance of clarity, I confirm that the confidential affidavits were not relied upon in support of the search warrant applications. The confidential affidavits were only filed and relied upon for the PII claim in the context of the subpoena issued to her in the 2017 Supreme Court proceedings. I note that the confidential affidavits are dated 15 September 2017 and 10 October 2017 respectively, and postdate the search warrant applications, which are dated 3 April 2017.

The confidential affidavits would be the subject of a claim in circumstances where they contain confidential information pertaining to matters of state. Furthermore, in circumstances where the affidavits were received by the Supreme Court on a confidential basis in 2017, the Commissioner’s position is access ought not have been provided to the confidential affidavits in 2024.

Please kindly confirm whether or not you are agreeable to provision of the undertaking as sought.”

41. On 4 March 2025, five days later the CSO sent an email to Mr Joukhador noting that it had received no response to the email referred to in the preceding paragraph and informed him of the Commissioner’s instructions to commence proceedings urgently and attached by way of electronic service of summons, notice of motion and supporting affidavit. The email noted that, “[s]ubject to hearing from you prior, we intend to approach the duty judge at 2 pm today 4 March 2025.”

42. Mr Joukhador responded to this email within about a minute saying that he wished to retain solicitors and counsel, could not attend and asked to have the matter adjourned for one week. The CSO responded stating that, unless a signed undertaking was provided in the terms sent on 26 February 2025, the present instructions were to approach the Duty Judge at 2 pm and commence proceedings.

43. The summons by which the present proceedings were commenced was filed in court on 4 March 2025. On that occasion, Mr Joukhador did not appear and the Duty Judge granted interim relief.

44. On 1 April 2025, Mr Joukhador’s solicitors served on the Commissioner an offer of compromise under r 20.26 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). The offer of compromise was in the following form and signed by Mr Joukhador’s solicitor:

“OFFER OF COMPROMISE

Pursuant to r.20.26 of the Uniform Civil Procedure Rules 2005 (NSW), the Defendant offers to resolve the proceedings on the following basis:

1 The Court notes that:

a. In 2017, in proceeding 2017/151403 (the Search Warrant proceedings), the then Commissioner made a claim of public interest immunity in respect of three search warrant applications.

b. The PII claim by the former Commissioner was supported by two confidential affidavits sworn by Mr Malcolm Arthur Lanyon, which were received by the Court on a confidential basis and placed onto the Court file.

c. In 2023 the defendant, Mr Joukhador commenced proceedings against the State of New South Wales alleging, among other things, malicious prosecution (2023/164546) (the Malicious Prosecution proceedings). The purpose for and basis of the search warrants that were the subject of the Search Warrant proceedings are in issue in the Malicious Prosecution proceedings.

d. In May and/or June 2024 John Sidoti, as an agent for Mr Joukhador, sought access to and made a copy of the Court’s file in the Search Warrant proceedings (the Sidoti material). Mr Joukhador requested that material for the purposes of the Malicious Prosecution proceedings. Mr Sidoti delivered that material to Mr Joukhador, but neither Mr Sidoti or Mr Joukhador reviewed or inspected the Sidoti material.

e. The Sidoti material includes an amount of open material where there is no controversy, but it also contains two categories of material over which the Commissioner maintains a claim for public interest immunity:

i. The unredacted search warrant applications that were the subject of the Search Warrant proceedings; and

ii. Two confidential affidavits sworn by Mr Malcolm Arthur Lanyon, and confidential exhibits to those affidavits.

f. Mr Joukhador realised that confidential information may have been included in the Sidoti material and took steps to isolate that material and prevent access to it.

g. On 16 September 2024, in the course of the Malicious Prosecution proceedings Mr Joukhador obtained redacted versions of the search warrant applications that had been the subject of the Search Warrant proceedings.

h. In December 2024 Mr Joukhador notified the previous representation of the then Commissioner in the Search Warrant Proceedings, raising an opportunity to determine this issue before the material was accessed.

i. On 20 February 2025, after correspondence with the Crown [Solicitor’s] Office (the CSO) Mr Joukhador surrendered a USB drive to Police and the CSO that contained the Sidoti material.

j. On 4 March 2025 the Commissioner obtained interim orders in these proceedings preserving the confidentiality of the whole of the Sidoti material, including the uncontroversial parts of the Court file.

k. On 19 March 2025 Mr Joukhador requested the issue of a Subpoena to the Commissioner in the Malicious Prosecution proceedings to obtain access to the confidential affidavits of Mr Lanyon. Mr Joukhador does not seek access to the unredacted search warrants.

I. The question of Mr Joukhador’s access to the confidential affidavits of Mr Lanyon is to be resolved through the Subpoena in the Malicious Prosecution proceedings. Mr Joukhador presses for access to the uncontroversial aspects of the Court file that are within the Sidoti material.

m. On or about 31 March 2025 or 1 April 2025 the CSO provided an edited copy of the Sidoti material to Mr Joukhador, edited to remove the following specific material over which the Commissioner asserts a public interest immunity claim (the Sensitive material):

i. An Unredacted copy of Search Warrant Application dated 3 April 2017, in a highlighted form to denote the Commissioner’s public interest immunity claims;

ii. Confidential affidavit of Malcolm Lanyon, sworn 15 September 2017 (two copies); and

iii. Further confidential affidavit of Malcolm Lanyon, sworn 10 October 2017 (three copies), Confidential Exhibit MAL 1 (two copies) and Confidential Exhibit MAL 3.

2. Orders prohibiting the defendant, his agents and legal representatives from:

a. accessing the Sidoti material or the Court file of the Search Warrant Proceedings for the purposes of access to the Sensitive material.

b. disclosing to any person, except as may be required by law, any information derived from the Sensitive material as obtained through any copy of the Sidoti material.

3 An order that, on behalf of the Commissioner, the CSO is to assist the defendant, his lawyers and agents to identify the Sensitive material from any copies of the Sidoti material that the defendant yet retains or has access to (the Identification process).

4 An order that the defendant is to destroy all files identified through the Identification process outlined above.

5 An order that the following documents are to be removed from the Court file and returned to the Crown Solicitor’s Office, subject to an undertaking that they be kept securely and returned to the Court as needed:

a. The unredacted search warrant applications that were the subject of the Search Warrant proceedings; and

b. The following confidential affidavits sworn by Mr Malcolm Arthur Lanyon:

i. Affidavit sworn or otherwise executed on 15 September 2017; and

ii. Affidavit sworn or otherwise executed on 10 October 2017.

This offer will remain open for acceptance until 5pm on 30 April 2025.”

45. The offer of compromise was not accepted by the Commissioner.

46. As noted above, on 27 May 2025 orders were made by consent disposing of the proceedings except in relation to costs. The terms of the consent orders have been set out above at [5].

Submissions

47. The Commissioner sought that the defendant pay costs and submitted that the two general principles that should guide the Court in its costs determination were that costs are compensatory and not punitive and that costs should ordinarily follow the substantive event or result.

48. The Commissioner also noted at one point that there was an additional issue, namely whether or not what the plaintiff achieved was inferior to what the defendant offered in his offer of compromise dated 1 April 2025.

49. The Commissioner submitted in effect that the result of the proceedings as set out in the consent orders made on 27 May 2025 represented substantially what the plaintiff sought in the summons. In particular, it was effectively contended that the notations included in the orders of the Court made on 27 May 2025 substantially met the purposes of, and correspond with, the substance of what was sought in the summons.

50. It was further submitted, that if the event was found to be mixed or equivocal, the conduct of the parties in the lead-up to the commencement of the proceedings, and/or during them, may be a relevant consideration that the Court will take into account.

51. In effect, it was submitted that institution of the proceedings was necessary to obtain the undertakings or assurances in relation to non-disclosure of the information in the confidential affidavit evidence and the redacted portions of the search warrant applications. While Mr Joukhador had taken steps to return the Sidoti material and other parts of the file copied by Mr Sidoti, the defendant did not provide the undertakings or assurances as to non-disclosure.

52. As to the defendant’s offer of compromise dated 1 April 2025, the Commissioner submitted that it was “not better than what the plaintiff ultimately secured, nor would have been an appropriate resolution of the proceedings.” A number of aspects of the offer of compromise were identified as “problematic”, including the plaintiff being required to agree to the Court’s noting of facts asserted by the defendant that were not known by the plaintiff or supported by any warranty of the defendant, one of which was not entirely accurate.

53. The plaintiff also pointed to what was described in the written submissions to be “disentitling conduct” on the part of Mr Joukhador, if it were otherwise determined that he should have his costs paid by the Commissioner. That conduct included aspects of the defendant’s conduct and correspondence from 19 December 2024 in relation to these proceedings.

54. Mr Joukhador submitted that he was entitled to his costs of the proceedings on the basis that the 1 April 2025 offer of compromise represented a more favourable outcome to the Commissioner than the result actually achieved by way of the consent orders made on 27 May 2025. The defendant relied on r 42.15A of the UCPR (or alternatively r 42.15). The outcome by way of the consent orders was said to be “no less favourable” to the defendant than the terms of the offer. This was said to be because the offer of compromise provided for orders against Mr Joukhador in proposed orders 2 and 4 whereas the consent orders made no order against him. The notations in the consent orders were said not to be an “event” for the purposes of r 42.1. In addition, the defendant contended that the matters raised by the plaintiff did not mean that the defendant should be deprived of his costs.

55. The defendant also contended that the plaintiff had failed to discharge the burden of establishing a basis for depriving him of his costs and that various factors tended against the Court “ordering otherwise”, for the purposes of r 42.15A (or r 42.15). Those factors were said to include that:

56. the Commissioner’s pre-litigation conduct, including “changing requests for undertakings”, was unreasonable;

57. the undertakings sought and the summons was “ultra vires in that they sought to restrain Mr Joukhador’s lawful access to the entirety of the Court file in dispute”;

58. the result achieved was that “other than notations, the Summons was dismissed” and no orders were made against Mr Joukhador which “signifies that the intervention of the Court was never necessary”;

59. the notations in the consent orders as to the defendant’s warranties did not represent a change in position from that adopted in the email sent at 9:11 am on 20 February 2025;

60. Mr Joukhador may be able to obtain copies of the confidential affidavit evidence by a subpoena issued in other proceedings between Mr Joukhador and the State of New South Wales; and

61. “[t]here has never been any wrongdoing on the part of Mr Joukhador”.

62. The defendant also made submissions concerning what were described as “Errors in the summons as to jurisdiction and authority” which focused upon the orders originally sought in these proceedings.

63. Furthermore, it was submitted that the Commissioner’s application for costs should be rejected on the basis that there had been no hearing on the merits and thus there was no “event” to enliven r 42.1 of the UCPR.

Consideration

58. The Court has a wide discretionary power in relation to costs under s 98 of the Civil Procedure Act 2005 (NSW) in a case such as the present. Both parties sought orders that the other pay their costs.

59. It is appropriate to deal first with Mr Joukhador’s claim to be entitled to costs and then with the Commissioner’s claim.

Mr Joukhador’s claim for costs

60. Mr Joukhador claimed to be entitled to his costs under r 42.15A of the UCPR. That rule provides:

“42.15A Where offer not accepted and judgment no less favourable to defendant

(1) This rule applies if the offer is made by the defendant, but not accepted by the plaintiff, and the defendant obtains an order or judgment on the claim no less favourable to the defendant than the terms of the offer.

(2) Unless the court orders otherwise—

(a) the defendant is entitled to an order against the plaintiff for the defendant’s costs in respect of the claim, to be assessed on the ordinary basis, up to the time from which the defendant becomes entitled to costs under paragraph (b), and

(b) the defendant is entitled to an order against the plaintiff for the defendant’s costs in respect of the claim, assessed on an indemnity basis—

(i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and

(ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made.

61. In the present case, an offer was made under r 20.26 of the UCPR by Mr Joukhador by way of the offer of compromise dated 1 April 2025, the terms of which have been set out above at [44]. The offer was not accepted by the Commissioner.

62. The issue then arises whether Mr Joukhador obtained “an order or judgment on the claim no less favourable” to him than the terms of the offer. It should be accepted, in the present case, that a comparison between the offer of compromise and the consent orders is not a simple task as, for example, it might be if the only relevant comparison was between one sum of money and another. One reason for this is that the defendant’s offer of compromise sought to address the issues of concern by a mandated process and consequential orders whereas the consent orders disposing of the matter made on 27 May 2025 addressed the issues of concern in a different way, essentially by relying on warranties as to various matters.

63. In my view, the defendant’s submission that simply because the offer of compromise provided for orders against Mr Joukhador and the consent orders did not contain any orders against him, the consent orders were “no less favourable” to Mr Joukhador than the terms of the offer should not be accepted. If r 42.15A is to be applied in the present case, it is necessary to look at the substance of both the offer and of the outcome actually achieved by way of the consent orders, in light of all the circumstances at the relevant times.

64. The issues of concern underlying the present proceedings were that Mr Joukhador, his agent Mr Sidoti, his solicitor and potentially other persons had obtained, or had the ability to obtain, access to information from a court file to which they ought not to have access. The material on the court file and the information in it should not have been made available to Mr Sidoti for copying. That information included parts of applications for search warrants which attracted public interest immunity and the confidential affidavits relied on in support of the application for public interest immunity, which had previously been upheld.

65. It is obvious that these issues did not relate to purely private interests of the parties. Serious issues affecting the public interest arose in the circumstances and involved protecting from disclosure:

66. information on the court file which had been found to attract public interest immunity; and

67. information on the court file provided to the Court on a confidential basis in order to allow the claims for public interest immunity to be determined on a fully informed basis.

68. The Commissioner in the present case properly sought to uphold the significant public interest in ensuring that such information was not disclosed or likely to be disclosed and this was the purpose of the proceedings. Mr Joukhador did not have any right to have access, whether by himself or through any agent or other person acting on his behalf, to that information or to disclose it. Thus, he could not have been seeking to vindicate such rights in these proceedings. It appears that both sides accepted that the material to which access ought not to have been granted should be returned and secured, and any further disclosure of that material should be prevented.

69. In these circumstances, given the purpose of the proceedings being to uphold the public interest and the fact that Mr Joukhador had no basis on which to oppose the relevant documentation being recovered and further disclosure of the information being prevented, it is difficult to perceive how any outcome which achieved those things could properly be said to be, in substance, favourable or “no less favourable” to him than any other process for achieving them.

70. Accordingly, to the extent that both the consent orders and the offer of compromise were designed to ensure that the material to which access ought not to have been granted should be returned and secured, and any further disclosure of that material should be prevented, I do not accept that “the defendant obtain[ed] an order or judgment on the claim no less favourable to the defendant than the terms of the offer” for the purposes of r 42.15A. Consequently, the costs consequences which might flow under that rule do not arise in the present case.

71. If I am wrong in that conclusion, it is necessary to consider whether the Court should exercise its discretion to order otherwise, as referred to in the chapeau to r 42.15A(2).

72. The onus is on the party seeking the exercise of the discretion to order otherwise to demonstrate why the Court should depart from the consequence of the rejection of the offer of compromise: Caine v Lumley General Insurance Ltd (No 2) [2008] NSWCA 109 at [35] (McColl JA with Mason P and McClellan CJ at CL agreeing); Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391 (Leach) at [45] (McColl JA with Gleeson JA and Sackville AJA agreeing).

73. McColl JA said in Leach at [48]:

“It is impossible exhaustively to state the circumstances in which the court's discretion to ‘order otherwise’ might be exercised: New South Wales Insurance Ministerial Corporation v Reeve (at 102). The mere fact that it was reasonable for the litigant to take the view that he or she did in rejecting the offer is not enough to displace the rule: Morgan v Johnson (at 582). However that does not mean that reasonableness of the rejection is an irrelevant consideration: see Seven Network Ltd v News Ltd (at [64] - [67]); Uniting Church in Australia Property Trust (NSW) t/as Northaven Retirement Village v Takacs (No 2) [2008] NSWCA 172 (at [15]) per Hodgson JA (McColl JA agreeing); cf Basten JA (at [32] - [33]).

72. Nonetheless, it is well established that in order for an offer of compromise made under the UCPR to attract an indemnity costs order, it must involve a “genuine offer of compromise” and not merely be made so as to trigger the costs consequences under the rules: Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 (at [16]) (Spigelman CJ; Beazley and McColl JJA); Kramer v Stone (No 2) [2023] NSWCA 298 at [18] (Ward P, Leeming and Kirk JA).

73. In my view, the offer of compromise in the present case did not involve a genuine element of compromise. Mr Joukhador was in a position, in effect, where he had no compromise to offer. As noted above, both sides accepted that the material to which access ought not to have been granted should be returned and secured, and any disclosure of that material should be prevented. The consent orders and the offer of compromise were in substance both designed to ensure that those outcomes were achieved.

74. In addition, I am of the opinion that it was reasonable, or not unreasonable, for the Commissioner not to accept the offer of compromise. The terms of the proposed order 2(a) relating to Mr Joukhador in the offer of compromise contained a qualification which had the potential to undermine the effectiveness of the orders. Order 2(a) had the effect of prohibiting the defendant, his agents and legal representatives from accessing the Sidoti material or the relevant court file but was confined to where the access was “for the purposes of access to” the unredacted search warrant applications or the confidential affidavits (the protected material). Thus, the order would only prevent access to the Sidoti material if the person seeking access had the subjective purpose of gaining access to the protected material. If the Sidoti material were accessed for a different purpose but the person happened to access the protected material and read what it contained, that arguably would not breach the order.

75. Similarly, proposed order 3 required the CSO, on behalf of the Commissioner, to assist the defendant, his lawyers and agents to identify the protected material from any copies of the Sidoti material that the defendant yet retained or had access to. This order envisaged the defendant retaining or having access to the Sidoti material as well as copies of that material and then the defendant and the CSO (who while acting for the Commissioner is not a party to the proceedings) together identifying the protected material in the Sidoti material and any copies of it. If this were done, there would be a substantial likelihood of the CSO being required to identify for the defendant and others the very protected material which ought not be disclosed to them. In addition, it would involve the risk that the CSO would be required to indicate where the protected material was and perhaps debate with the defendant or others whether it was protected material and why, before such documents were destroyed in accordance with proposed order 4. Such a process would involve a significant increase in the risk of inappropriate access and disclosure.

76. Taking into account these considerations concerning the terms of the orders proposed in the offer of compromise, I am of the view that it would not have been unreasonable to fail to accept the offer of compromise.

77. The absence of a genuine element of compromise and the problematic terms of the orders in the offer of compromise together lead me to conclude that, even if r 42.15A(1) were engaged in the present case, I would order under r 42.15A(2) that the plaintiff was not required to pay the defendant’s costs at all in these proceedings.

The Commissioner’s claim for costs

78. The Commissioner’s claim for costs was put initially on the basis that costs should follow the event, in accordance with r 42.1 of the UCPR. However, as the defendant contended, the present proceedings were resolved by consent and there was no hearing on the merits and, accordingly, there was no “event” for the costs to follow. McHugh J explained the situation in Re Minister For Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622 at 624-625; [1997] HCA 6 (Lai Qin):

“In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order.

In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. Thus, for example, in R v Gold Coast City Council; Ex parte Raysun Pty Lt**d, the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans.

Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. This is perhaps the best explanation of the unreported decision of Pincus J in The South East Queensland Electricity Board v Australian Telecommunications Commission where his Honour ordered the respondent to pay 80 per cent of the applicant’s taxed costs even though his Honour found that both parties had acted reasonably in respect of the litigation. But such cases are likely to be rare.

If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases.”

79. These principles have been adopted and applied in a number of cases. Based on the reasoning in Lai Qin there are two considerations in the present case which are relevant:

80. Whether any party’s conduct was unreasonable either in prosecuting or defending the proceedings;

81. Whether one party was almost certain to have succeeded if the matter had been fully tried.

82. I have set out in detail above at [15] to [45] aspects of the correspondence between the parties related to the proceedings. In my view, there was nothing in the correspondence or conduct on behalf of the Commissioner which could properly be described as unreasonable. The approach taken by the Commissioner often involved careful explanation of the position and a willingness to resolve, in a practical but principled manner, the issue of retrieval of the Sidoti material and all copies so that it could be examined to determine what should not have been made available and what steps should be taken to ensure that any of the relevant information in the protected material would not be disclosed. I do not accept that the Commissioner’s conduct involved making improper threats or was a “moveable feast”. The changes in position reflected a developing understanding of what had occurred and how the situation might be remedied.

83. On the other hand, Mr Joukhador’s conduct involved aspects which caused me some concern. This included the fact that he apparently did not raise the issue of access to the unredacted search warrant applications and the confidential affidavits being mistakenly provided to his agent immediately after he became aware of it, the fact that although he was a party to the proceedings in which the public interest immunity claim was upheld on the basis of the material in the confidential affidavits he in effect gave the Commissioner an ultimatum in the letter of 19 December 2024 rather than offering to remedy the problem, the fact that he appeared to persist in asserting that the only material which should be of concern to the Commissioner was the redacted portions of the search warrant applications and not the confidential affidavits despite numerous explanations from the CSO, and a degree of general uncooperativeness demonstrated by, for example, his stating on 19 January 2025 “I don’t think we need to return the files” and his not appearing at the hearing before the Duty Judge on 4 March 2025. Notwithstanding my level of concern, if the reasonableness of the conduct of the parties were the only factor, I would not be satisfied that Mr Joukhador’s conduct was so unreasonable that, by itself, this would have justified a costs order being made against him.

84. As to the second consideration, whether one party was almost certain to have succeeded if the matter had been fully tried, I have reached the conclusion that the Commissioner was always going to succeed in the present case. There was never asserted to be any proper basis on which the defendant was entitled to access the unredacted search warrant applications or the confidential affidavits on the court file or to disclose the information contained in that material. Whatever the position might be in relation to subpoenas issued on Mr Joukhador’s behalf in other proceedings he has brought against the State of New South Wales, in the present case it should be accepted that the material to which access ought not to have been granted should be returned and secured, and any disclosure of information in that material should be prevented. The correspondence and discussions between the parties was in substance about how those ends could be achieved. In those circumstances, this is one of the rare cases where, although there has been no determination on the merits, one party was certain, or at least almost certain, to have succeeded if the matter had been fully tried.

85. That consideration, together with the degree of uncooperativeness of the defendant tending towards the unreasonable, justifies an order for costs being made in the plaintiff’s favour. Having regard, however, to the fact that the defendant did hand over the USB containing the Sidoti material before proceedings were instituted and took steps to instruct other persons who might have had the ability to access to that material not to access it, in my view the defendant should only be ordered to pay 80% of the plaintiff’s costs.

Orders

84. For these reasons, the orders of the Court are:

85. The defendant is to pay 80% of the plaintiff’s costs.

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