Elanor Funds Management Limited v Alceon Group Pty Ltd

1. The prospective first respondent pay 25% of the prospective applicant's costs of and incidental to the application.
2. Pursuant to s 23 and s 37P of the Federal Court of Australia Act 1976 (Cth), rule 1.32 and rule 1.36 of the Federal Court Rules 2011, these orders and the reasons for judgment in support of these orders are made and published from Chambers. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

GREENWOOD J: 1 These proceedings are concerned with the resolution of the question of costs arising out of an application under rule 7.23 of the Federal Court Rules 2011 (the "Rules") by the "prospective applicant" ("Elanor") for an order that the first prospective respondent ("Alceon") and the second prospective respondent ("CPRAM") give discovery to Elanor of the documents described in Schedule B to the application (and Annexure "A" to the reasons published on 26 March 2021). These reasons ought to be read together with the reasons in Elanor Funds Management Limited v Alceon Group Pty Ltd [2021] FCA 298 (the "primary judgment"; "PJ"). The abbreviations adopted in the primary judge are adopted in these reasons. 2 The applicant for the relief (and the orders ultimately made on 11 May 2021 giving effect to the reasons) contends that it ought to have 80% of the costs of the application on the footing that it was largely successful in its application for preliminary discovery; that Alceon and CPRAM adopted an adversarial approach to the application; that the pre-application request made of Alceon and CPRAM on 8 November 2018 was rejected on the footing that there was "no basis" for the request; that once served with the affidavits in support of the application, Alceon and CPRAM conceded the position that many of the documents ought to be produced; and although all parties had some success in the application, the discretion ought to be exercised so as to award 80% of the costs to the applicant. 3 The position on costs reflects the following considerations. 4 It is not clear to me that the pre-application request and its consequent rejection is a significant, much less decisive, factor in the exercise of the discretion. An order under rule 7.23 is a reasonably invasive order and a party made subject to it is entitled to see and consider the affidavit material in support of the propositions going to the applicant's "reasonable belief" and the scope of the documents said to be "directly relevant" to the prospective relief to be sought against the prospective respondents. 5 In this case, having seen the strength of the affidavit material, the contest was not one of whether an order for preliminary discovery ought to be made but rather a contest as to the scope of the documents to be produced by way of preliminary discovery. 6 As to the Category 1 documents, Alceon and CPRAM conceded that the documents ought to be discovered: PJ, [18] and [19]. 7 So too, as to the Category 2 documents: PJ, [20]. 8 As to the documents described as 3(a), (b) and (f), Alceon and CPRAM contended that they ought to be deleted entirely from any proposed order, as the documents contemplated by those paragraphs went beyond the tenancies described as the "Food Outlets", and as to the documents at 3(e), Alceon and CPRAM contended that the "Cash Detail Reports" also ought to be confined to reports concerning only the Food Outlets. Elanor contended that documents going to the "overall health" of the shopping centre ought to be produced, not just documents revealing the position concerning rent abatement and offsets concerning the Food Outlets. Alceon and CPRAM accepted that the 3(e) documents ought to be produced limited to the Food Outlets: PJ, [23]. The Court in the primary judgment determined that the 3(a), (b) and (f) documents ought to be limited to the Food Outlets: PJ, [28]. Alceon contended that the 3(a) documents fell within the Category 1 documents in any event. However, the Court determined that the Category 3(a) documents, limited to the Food Outlets, ought to be the subject of the orders: PJ, [30]. So too the Category 3(b) and (f) documents: PJ, [41] and [43]. 9 As to the Category 4 and 5 documents, they were to be produced redacted to show only entries relevant to the Food Outlets. 10 No objection was taken to the Category 6 documents concerning the legal relationship between Alceon and CPRAM although the correct description of the particular documents was given precision as identified by Alceon. The category was extended to any document recording arrangements by which CPRAM assisted Alceon in discharging any obligation to provide services in respect of the shopping centre. 11 In the result, Elanor was successful in obtaining access to classes of documents although important concessions were made by Alceon and CPRAM as to a number of the categories of documents to be produced. Those parties also successfully established that other documents ought to be confined to documents "directly relevant" to the issues concerning the Food Outlets. 12 Alceon says that it ought to have its costs from 27 November 2020 being the date from which it did not oppose orders for preliminary discovery but merely took issue with the breadth of the orders sought, and otherwise there ought to be no order as to costs. CPRAM adopts the position put by Alceon. 13 Having regard to all of these factors concerning the substance and outcome of the application (taking into account Alceon's point about the contest being confined to the breadth of the documents), I am nevertheless satisfied that the ultimate orders took the form they did by reason of the contest made necessary by the hearing of the application. It seems to me that justice between the parties, on the application as it came forward, is achieved by ordering Alceon to pay 25% of the applicant's costs of and incidental to the application and the Court so orders. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Greenwood.