Findex Group Ltd v iiNet Ltd

Solicitors: Harmers Workplace Lawyers (Plaintiffs) Just Dispute Resolution (Fourth Defendant) File Number(s): 2016/00271090 Publication restriction: Nil

Judgment

1. HER HONOUR: In this matter there are opposing interlocutory applications going in essence to the issue whether the plaintiffs (Findex Group Ltd (Findex), its managing director, and two of its senior officers) should be permitted now to have access to documents obtained quite some time ago on the execution by the plaintiffs of a search order made by Rein J on 16 September 2016 against the person who then became the fourth defendant in these proceedings (Mr David McKay, a former and apparently disgruntled employee of Findex). Feelings between these parties (there being other defendants to the proceedings against whom no relief is now sought and who have taken no active role in the proceedings for some time), or at least on the part of the plaintiffs, evidently run high - given the emotive language used in much of the submissions put for the plaintiffs and the level of costs that must by now have been incurred in the present proceedings (which began life as a preliminary discovery application to ascertain what has now long since been ascertained - namely, the identity of the publisher of various allegedly defamatory publications).
2. The delay between the making and execution of the search order and the present applications is referrable, among other things, to the intervention last year - and I make no criticism in this respect - of the Australian Securities and Investments Commission (ASIC), which claimed (successfully, albeit in relation to a limited number of documents) public interest immunity in respect of certain documents seized under the search orders.
3. I set out below the procedural history of this litigious saga in the course of summarising the background to the present applications. Suffice it at this stage to note: first, as adverted to above, that the first, second and third defendants have taken no active role in the proceedings (the ongoing dispute being between the plaintiffs and the fourth defendant); and, second, that the anticipated causes of action as at September 2016 (in support of which the plaintiffs' application for preliminary discovery, and then for the search order, was made) have fallen away (the claims for defamation in relation to the then known publications and any claims for damage by reason of misleading or deceptive conduct referrable to a then imminent acquisition which has since been completed). There is now, however, a broad array of other potential causes of action that it is contemplated by the plaintiffs' legal representatives, who have inspected the relevant documents pursuant to a confidentiality regime, that one or more of the plaintiffs might have against the fourth defendant. The purpose for the plaintiffs pressing for documents at this stage is said to be to enable proper instructions to be obtained in relation to this broad array of potential causes of action. What is not pressed at this stage (though it is part of the relief claimed in the plaintiffs' amended notice of motion) is leave to use any of the documents in other proceedings. Thus considerations applicable to release of the so-called Harman undertaking are not here relevant.

Commencement of the present (preliminary discovery) proceedings

1. The plaintiffs commenced proceedings in this Court on 9 September 2016 (proceedings no 2016/00271090), seeking the preliminary discovery of documents in order to ascertain the true identity of the publisher of certain allegedly disparaging and defamatory publications. They suspected (with good reason, as it transpired) the publisher to be Mr McKay, whom they regarded as a disgruntled former employee.
2. The plaintiffs obtained orders for preliminary discovery from McDougall J on 13 September 2016, as a result of which they ascertained that Mr McKay had published certain matters complained of (in false names and anonymously).

Search order

1. On 16 September 2016, a notice of motion was filed on behalf of the plaintiffs seeking a search order against Mr McKay. That application was heard by Rein J on 16 September 2016 and was successful. Rein J noted, in his ex tempore judgment (at [6]), that: The plaintiffs now wish to commence proceedings against the author and seek effectively a search order so that they can obtain information as to whether or not he has communicated in similar terms to other persons beyond the persons already known to the plaintiffs as recipients of his various communications. ... His Honour was satisfied (at [8]) that the evidence before him gave rise to a concern that the then putative defendant (Mr McKay) would attempt to "cover his tracks" if he learnt of the proceedings.
2. On 20 September 2016, the search order was executed and a substantial volume of documents was seized, including (as is not now disputed) a large number of irrelevant documents, as well as documents that the fourth defendant claims do not fall within the terms of the search order itself, which relevantly provided for the seizure of documents "about or concerning or relating to any one or more of the applicants/plaintiffs which were sent or forwarded or otherwise provided by [Mr McKay] to any person whatsoever during the period from March 2014 to date" (see order 4, CB 205).

Joinder of Mr McKay as fourth defendant in preliminary discovery proceedings

1. On 22 September 2016, by consent, orders were made by Rein J for Mr McKay to be joined as the fourth defendant to the proceedings.

Orders following execution of search order

1. On 23 September 2016, there was a further hearing before Rein J. On that occasion there was discussion as to a regime for accessing the material that was by then in the possession of the independent solicitor, having been seized during the execution of the search order. The plaintiffs note that, on that occasion, Mr McKay was represented by two Counsel who indicated that the search order was not going to be challenged and who sought to obtain orders which would limit the documents seized in the search order to which the plaintiffs could obtain access. The plaintiffs emphasise that Rein J said, in the course of the hearing, that in his view the plaintiffs were entitled to see what was produced other than privileged documents.
2. Among other orders, on 23 September 2016, Rein J ordered that: 9. The Independent Solicitor is to provide a copy of all the Documents over which no claim within the meaning of 14(d) [legal professional privilege] or 23(a) [self-incrimination] of the Penal Notice is made to the applicants/plaintiffs' solicitors by 20 October 2016.

Access to the documents

1. On 31 October 2016, Mr McKay filed a notice of motion, seeking in effect to vary the orders made by Rein J on 23 September 2016, and an affidavit in support of that application. The hearing of that notice of motion was not pressed pending the public interest immunity claim made by ASIC, to which I refer below. The plaintiffs estimate that the order sought by Mr McKay in that notice of motion was, in effect, that production or inspection of about 75% of the documents obtained pursuant to the search order "be refused to any other party" (see order 1 of Mr McKay's notice of motion). The plaintiffs note that Mr McKay's affidavit in support of the notice of motion contained three schedules (125 pages in length) listing the documents seized pursuant to the search order in respect of which Mr McKay objected to production or inspection being permitted. (In oral argument when the matter came before me in April 2018 it was said that the relevant percentage was 74.23% but nothing turns on the precise percentage.)
2. On 3 November 2016, the independent solicitor, Ms Mulherin, provided to the plaintiffs' solicitors those documents in respect of which there was no objection by Mr McKay to production. The plaintiffs say that those constitute no more than 25% of the documents obtained pursuant to the search order.
3. On the same day, Slattery J made orders (by consent) that included an order that the independent solicitor not produce or allow inspection of documents to which an objection had been raised by Mr McKay's 31 October 2016 motion until that motion was determined or until further order of the Court.
4. On 11 November 2016, Mr McKay's solicitors gave notice of their intention to serve Mr McKay's 31 October 2016 motion and supporting affidavit on ASIC, in order to allow ASIC an opportunity to intervene in these proceedings.
5. On 15 November 2016, the plaintiffs' solicitors gave notice to Mr McKay's solicitors that, inter alia, the plaintiffs objected to the insufficient evidence provided to support Mr McKay's 31 October 2016 motion.
6. On 30 November 2016, Mr McKay's 31 October 2016 motion came before Bergin CJ in Eq, then sitting as the duty judge. A representative from ASIC appeared in Court on that morning. Her Honour granted leave to ASIC to uplift and copy the material seized in the search order (other than the documents subject to client legal privilege) in order to determine whether it wished to bring a public interest immunity application and directed Mr McKay to serve any further evidence in support of Mr McKay's 31 October 2016 motion by 14 December 2016.
7. On 14 December 2016, Mr McKay served a further affidavit.
8. On 16 December 2016, the matter came back before McDougall J. His Honour made orders by consent on that occasion for the provision to the plaintiffs' solicitors, on a confidential basis, of electronic copies of documents (other than those over which Mr McKay claimed litigation or client legal privilege and those over which ASIC claimed public interest immunity), for the purpose of assisting the parties to ascertain the real areas of dispute (see orders 3 and 4). McDougall J also ordered (order 4) that until further order of the Court the documents provided pursuant to order 3 were not to be provided or shown to any of the plaintiffs or any of their officers or employees (save for Mr Doucas - the Head of Risk Management at Findex - subject to an undertaking by him: not to provide or show them, or disclose their contents, to any of the plaintiffs or any of their officers or employees; to keep them confidential; and only to use them for the purposes of giving instructions in these proceedings, until otherwise ordered).
9. The said documents were provided to the plaintiffs' solicitors on about 21 December 2016. By this stage, therefore, the plaintiffs' solicitors had been provided with the documents in respect of which there was no objection by Mr McKay - said by them to be 25% of the material - and there was no restriction on access by the plaintiffs themselves to these documents; and the plaintiffs' solicitors (and Mr Doucas) had been provided with electronic copies of the balance of the documents (other than those over which client or litigation privilege or public interest immunity was claimed) - though for a stated purpose and subject to restrictions as to disclosure to the plaintiffs.

Public interest immunity claim by ASIC

1. ASIC formally intervened in the proceedings by notice of motion filed on 21 December 2016, seeking orders that there be no access to, or inspection of, certain identified documents and that none of those documents be tendered into evidence in the proceedings.
2. On 27 January 2017, ASIC gave notice to the plaintiffs' solicitors that it had reduced the number of documents over which it was claiming public interest immunity to 37 documents. On 1 February 2017, Registrar Walton made orders, inter alia, for the independent solicitor to provide to the plaintiffs' solicitors the documents not already provided to them, other than those documents subject to claims of privilege or public interest immunity (that is, the documents over which ASIC was no longer claiming public interest immunity but which were still objected to by Mr McKay), on a confidential basis and subject to the confidentiality regime ordered by McDougall J. Such documents (being the second tranche of disputed documents) were provided to the plaintiffs' solicitors on or about 3 February 2017.

Hearing of ASIC's public interest immunity application on 28 April 2017

1. ASIC's application came before me for hearing on 28 April 2017, by which time (as indicated above) ASIC had already substantially narrowed the scope of the documents the subject of its claim for public interest immunity. An amended notice of motion was filed by ASIC in that regard on 28 April 2017.
2. For the reasons published on 30 June 2017 (Findex Group Ltd v iiNet Ltd (Application by ASIC) [2017] NSWSC 853), I upheld the claim for public interest immunity in relation to a small number of documents and made directions to enable ASIC to review the proposed redaction of the documents that I considered would meet the competing concerns in relation to that material, before making any direction for access by the plaintiffs' solicitors to the redacted material.
3. I made orders on 17 July 2017, inter alia, requiring ASIC to serve redacted documentation on the plaintiffs' solicitors, to the extent that it was not seeking to make further objections in respect of such redactions. On 28 July 2017, ASIC provided to the Court redacted copies of the relevant documents in accordance with order 6(a) of the orders made on 17 July 2017, and its (redacted) submissions in support of further redactions.
4. Following consideration on the papers of those submissions, I made orders on 11 August 2017 (see Findex Group Ltd v iiNet Ltd (Application by ASIC) (No 2) [2017] NSWSC 1048) for service on the plaintiffs' legal representatives, within 7 days, of redacted copies of the relevant documents (being any documents within Confidential Exhibit "A" not already served on the plaintiffs' legal representatives), such redactions to be in accordance with the documents prepared by ASIC and provided to the Court on a confidential basis on 28 July 2017. Access to such documents was restricted in accordance with order 4 of the orders made by McDougall J on 16 December 2016.
5. I note that, as at the time the matter was before me in 2017, the underlying dispute between the plaintiffs and Mr McKay, arising out of the allegedly defamatory publications, was a dispute as to alleged misleading or deceptive conduct by Mr McKay and also, in the case of the second to fourth plaintiffs, a claim in defamation.
6. Relevantly, Counsel appearing for the plaintiffs on the hearing of ASIC's public interest immunity application confirmed that the plaintiffs did not need access to the documents the subject of ASIC's claim for public interest immunity for the purposes of the preliminary discovery application; rather, the position of the plaintiffs was said to be that "[t]he reason that we need them is because we say that it is almost certain that these documents will disclose further causes of action, deceptive and misleading conduct causes of action, defamation causes of action and separate causes of action that we have against Mr McKay", arising out of the disclosure or publication by Mr McKay of material to ASIC (see at [5] of my 30 June 2017 judgment). In that regard, they raised as a possibility a potential claim for tortious interference with contractual relations (i.e., clearly contemplating potential claims other than those in respect of which the preliminary discovery application had been brought in the first place).

Period between 11 August 2017 and the making of further applications

1. On 3 November 2017, the plaintiffs' solicitors received instructions to commence acting as solicitors for the first to third applicants in proceedings that were already on foot in the Federal Court of Australia (VID1026/2016) (the first applicant in those proceedings is, I am informed, the same entity as Findex, though there being differently named).
2. The plaintiffs' solicitors wrote to the fourth defendant's solicitors on 22 November 2017 in relation to Mr McKay's 31 October 2016 motion, seeking advice as to whether Mr McKay still wished to press that motion and stating that: … If he does not intend to do so, then we assume that he will be agreeable to us obtaining appropriate orders, by consent, vacating the confidentiality orders made in this matter so that the plaintiffs can review the documents to determine which causes of action they wish to pursue against your client. If your client does wish to pursue his motion, then please advise as to the proposed procedural directions your client wishes to seek in order to progress the motion. Hopefully such orders can be obtained by consent, in order to facilitate the hearing of the motion as soon as is reasonably possible.
3. It was suggested by the plaintiffs' solicitors that any additional causes of action that the plaintiffs wished to pursue, following their review of the additional documents, should be added to the current Federal Court proceedings on foot as against the fourth defendant rather than being pursued by the institution of fresh proceedings.
4. No response was received to that correspondence and on 29 November 2017, the plaintiffs' solicitors sent a further letter to the fourth defendant's solicitors as to whether Mr McKay's 31 October 2016 motion was being pressed, requesting an indication of his proposed course of action as soon as possible and foreshadowing an application to relist the matter.
5. Further correspondence ensued between the plaintiffs' solicitors and Mr McKay's solicitors in which the former unsuccessfully sought confirmation as to the latter's intentions in relation to the 31 October 2016 motion.

Subsequent applications

1. What then followed was that the plaintiffs filed a notice of motion in the present proceedings on 24 January 2018 (see CB 11ff) (the Plaintiffs' Notice of Motion) seeking: orders for the dismissal of Mr McKay's 31 October 2016 motion (in effect for want of prosecution); the setting aside of the restrictions on access and disclosure of documents obtained pursuant to the September 2016 search order (other than those portions of the documents held to be subject to public interest immunity); the discharge of confidentiality undertakings given by Mr Doucas; leave to provide to and show the plaintiffs the said documents (i.e., those other than the few in respect of which the public interest immunity claim had been successful); and leave to use the said documents in other proceedings "including, but not limited to, Federal Court of Australia proceedings" (see orders 1-7 of the Plaintiffs' Notice of Motion).
2. In the alternative, directions were sought for submissions to be filed and Mr McKay's 31 October 2016 motion to be listed for further directions or hearing; and for leave to be granted to the plaintiffs to use the documents obtained pursuant to the search order "over which no objection is taken" in other proceedings including but not limited to Federal Court of Australia proceedings (see orders 8-11 of the Plaintiffs' Notice of Motion).
3. I interpose to note that the reference to Federal Court proceedings in the Plaintiffs' Notice of Motion (though not limited in that notice of motion to any particular proceedings in the Federal Court) would obviously encompass the proceedings that I was informed (both at the time of the public interest immunity application and when the matter came back before me in April this year) were currently on foot against Mr McKay (VID 1026/2016).
4. By letter dated 1 February 2018, the plaintiffs' solicitors wrote to Mr McKay's solicitors advising, inter alia, that: As we have previously foreshadowed, the primary purpose of the Findex Notice of Motion is to resolve any outstanding issues regarding the McKay Notice of Motion, and to obtain leave from the Supreme Court of New South Wales for the Plaintiffs to use the documents obtained pursuant to the Anton Piller orders dated 16 September 2016 (other than the portions redacted for public interest immunity) (Anton Piller documents) in other proceedings. The Plaintiffs seek to review the Anton Piller documents for purposes of using them in the Federal Court proceedings in order to prevent unnecessary duplication and costs for all parties involved. According to the McKay Notice of Motion and the supporting affidavit of David McKay dated 31 October 2016, your client does not object to the production of a portion of the Anton Piller documents (Undisputed Documents). … On 30 January 2018, her Honour Justice Gleeson [in the Federal Court proceedings] ordered, amongst other things, that the Applicants file and serve any affidavit evidence in chief in the Federal Court proceedings by 29 March 2018. It would be in the interests of all parties for the Applicants in the Federal Court proceedings to be able to utilise as many of the Anton Piller documents as possible in the Federal Court proceedings prior to putting on their evidence in chief. In these circumstances, and given that it is common ground that your client has no objections to the production of the Undisputed Documents, please advise whether your client is agreeable to our respective clients seeking orders, by consent, from the Supreme Court granting leave to the Plaintiffs to use the Undisputed Documents in the Federal Court of Australia proceedings. Should your client be agreeable to our respective clients seeking such orders, by consent, we will provide you with a copy of proposed consent orders as soon as possible. In light of the obvious urgency of this matter by reason of the orders made by her Honour Justice Gleeson on 30 January 2018, we request that you provide your response to the above by Monday 5 February 2018. We would be grateful if you would also notify us as soon as possible of your client's position in respect of the Findex Notice of Motion.
5. There was no agreement to that proposal.
6. Rather, on 19 February 208, Mr McKay filed a notice of motion (CB 16ff) (the Fourth Defendant's Notice of Motion), seeking orders in effect for the dismissal of the present proceedings and all outstanding applications (failing the filing by the plaintiffs of a statement of claim within 28 days); for the discharge of the search order made by Rein J (order 6 of the orders made on 16 September 2016); for the return of all copies of electronic and hard copy documents obtained pursuant to the search order; and for leave to file and serve an application in respect of costs of the proceedings and damages pursuant to the plaintiffs' undertaking as to damages regarding the search order. Alternatively, directions were sought for the disposition of the balance of Mr McKay's 31 October 2016 motion.
7. An amended notice of motion was subsequently filed by Mr McKay (CB 45ff), relevantly seeking an order pursuant to rr 13.4(1)(b) and/or (c) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) and/or the inherent jurisdiction of the Court that the proceedings be dismissed (and the balance of the relief that had been claimed in the original notice of motion, though the order for dismissal, if a statement of claim was not filed within 28 days, was now put in the alternative to the new relief claimed).

Hearing of the respective notices of motion

• 24 April 2018

1. The respective motions were listed before me on 24 April 2018 but the hearing of those motions could not be completed in the half day then available. I indicated at the time (see T 68) that I was not proposing to dismiss the proceedings as the fourth defendant had invited me to do but nor was I proposing to grant the relief as sought in the Plaintiffs' Notice of Motion. Rather, I directed that the plaintiffs file an affidavit identifying those documents that were produced in answer to the search order and in respect of which a variation of the confidentiality orders made by McDougall J on 16 December 2016 was sought by the plaintiffs; and identifying why it was that access to those documents was sought by the plaintiffs. The respective motions were then stood over part heard to 6 September 2018, which was the earliest time available having regard to the timeframe sought by the plaintiffs for the filing of evidence in relation to the issues that had then been flagged.
2. Relevantly, in the course of the hearing on 24 April 2018, I was informed by Counsel then appearing for the plaintiffs that the Federal Court proceedings that are on foot arise out of what is contended to be a breach by Mr McKay of a shareholders' agreement "pursuant to which he in effect sold his shares in his company to Findex, or a company within the Findex group, for $1.6million in about 2010" (T 3.39) and that there were issues in those proceedings as to, for example, interference with business relations. I was informed that those Federal Court proceedings, which Counsel thought had been commenced in the Victorian Registry of the Federal Court and which may "possibly" have been transferred to the ACT (see T 4.48 were before Gleeson J on 30 January 2018, at which time directions were made as to the filing of evidence (see T 6.28ff).
3. I was also informed that the solicitors acting for the plaintiffs in the present proceedings had on 3 November 2017 been instructed to take over the conduct of the Federal Court proceedings (T 4.46) and had taken the view that the respective proceedings involved identical parties (though not the natural persons who are plaintiffs in the present proceedings and with the addition of Mr McKay's corporate "alter ego") and overlapping issues (in relation to issues of interference with the business of Findex in an attempt by Mr McKay to damage the business of Findex, breach of confidentiality, breach of restraint of trade, "and so forth") (see T 5.18-40); though it was said that those would not be the only issues, since the breach of s 18 of the Australian Consumer Law (ACL) and misleading or deceptive conduct issues - which it was noted had been contemplated at the time the preliminary discovery application was brought - did not form part of the Federal Court proceedings (see T 5.43-50) but this was "very much something" that the plaintiffs wished to pursue (T 6.4).

• Application on 6 June 2018

1. On 6 June 2018, the matter was again listed before me, for directions only, in relation to an application then sought to be made by the plaintiffs for a variation of the confidentiality orders made by McDougall J on 16 December 2016 to permit Senior Counsel now appearing in the matter for the plaintiffs (who was also briefed in the Federal Court proceedings and therefore at risk of inadvertent use of the confidential information) to have access to the documents (see T 3.39-5.5) and to address a concern that, in order to comply with the orders made by me on 24 April 2018, it would be necessary for the plaintiffs' legal representatives to look at the documents in question for purposes other than the sole purpose for which McDougall J had granted them access to the documents (see T 3.5).
2. On that occasion I made an order, to the extent necessary, varying order 4 of the orders made by McDougall J on 16 December 2016 (and order 2 of the orders made on 1 February 2017) to permit Mr Friedgut of Counsel to have access to the documents the subject of the confidentiality regime for the purpose of complying with order 3 of the orders made by me on 24 April 2018 (and I extended to 4 July 2018 the time for compliance by the plaintiffs with order 3 made on 24 April 2018 - for the filing of any amended notice of motion and an affidavit identifying the documents produced in answer to the search order in respect of which a variation to the confidentiality orders was sought and why such access was needed). The matter was then stood over to 27 June 2018, when I was sitting as the duty judge.
3. On 27 June 2018, consent orders were made further varying order 4 made on 16 December 2016 and order 2 made on 1 February 2017 in order to permit certain named individuals (including Mr Neil SC and Mr Doucas) as well as the solicitors for the plaintiffs in these proceedings to have access to and use the documents obtained pursuant to the 16 September 2016 search order which are in the possession of the plaintiffs' solicitors, for the purpose of complying with order 3 of the orders I had made on 24 April 2018.

• Affidavit in support of relaxation of confidentiality regime

1. Pursuant to the order made on 24 April 2018, as varied, the plaintiffs filed a confidential affidavit affirmed 4 July 2018 of Amy Zhang, a solicitor in the employ of the firm of solicitors acting for the plaintiffs. Exhibited to this affidavit were various documents (Exhibit "ASZ-15") as well as two volumes (Confidential Exhibit "ASZ-16" comprising a 627-page schedule summarising 1425 individual documents - the "Identified Documents" - which are the subject of the Plaintiffs' Notice of Motion).

• Resumption of part-heard hearing of respective motions on 6 September 2018

1. On 6 September 2018 the hearing of the part-heard motions resumed. By that stage, the plaintiffs moved on an amended notice of motion that had been filed on 4 July 2018. That amended motion substituted, for the relief previously sought at prayers 3-7 of the original notice of motion, an application (2A) for any one of four different sets of orders in relation to the variation and/or discharge of the restrictions on access and disclosure of "Identified Documents" as defined; for leave to use the Identified Documents in specific Federal Court proceedings or alternatively anticipated proceedings in this Court or the Federal Court against Mr McKay and Vandaman Pty Ltd (which I infer is the company earlier referred to as his "alter ego"); and other relief in relation to the use of the Identified Documents and/or release from confidentiality undertakings or the like. The alternative relief claimed (at 8-10) in contemplation of a hearing of the 31 October 2016 motion remained the same as before.
2. At the resumed hearing on 6 September 2018, further affidavit evidence was read by the respective parties. I was informed that the issue as to whether Mr Neil should be permitted access to the documents in question (due to the possibility of inadvertent breach of the confidentiality orders) ultimately did not arise because he did not look at any of the documents in these proceedings until after he had settled the proposed amended pleading in the Federal Court proceedings (see T 5.17); that there was agreement between the parties that the documents conceded to be irrelevant could be returned; and that the issue as to the release of the Harman undertaking did not presently arise as the plaintiffs were not pressing for leave to use any of the documents for other proceedings at this stage (it being agreed, I was told, that that issue be "postponed") (see T 5.35-38).
3. All that was left in issue, relevantly, was thus as to whether the plaintiffs should be permitted to have access to the documents that were obtained on execution of the search order made in September 2016 (other than the admittedly irrelevant documents or those in respect of which privilege or public interest immunity was claimed or had been found to exist) or whether there should be no access allowed and the documents returned to the fourth defendant.
4. For the reasons set out below, I have concluded that access by the plaintiffs to the documents should not be granted but that the documents (other than those conceded to be irrelevant) should be retained pending the hearing (if pressed) of the plaintiffs' application for leave to use any of those documents in the Federal Court proceedings or any other contemplated proceedings.

Issues

1. The issues raised by the competing notices of motion, as distilled and agreed between the parties are (together with my answers) as follows, the first six relating to the Fourth Defendant's Notice of Motion and the seventh relating to the Plaintiffs' Notice of Motion (as amended): 1. Should the search order made on 16 September 2016 be discharged in its entirety, and all documents obtained pursuant to the search order returned? Answer: No, pending hearing of the application, if pressed, for release of the Harman undertaking. 2. Should all documents obtained pursuant to the search order, but not the subject of the plaintiffs' application for either a relaxation of the confidentiality regime or a release from the Harman undertaking, be returned to the fourth defendant and not the subject of further consideration in these proceedings? Answer: As agreed by the parties, yes. 3. Have some documents been included in the digital file produced by the Independent Computer Expert, despite not falling within the terms of the search order (e.g. documents not "sent, forwarded or otherwise provided by the respondent to any person" or those not "about or concerning or relating to any one or more or all of the applicants/plaintiffs")? If so, should such documents be removed from the digital file and all copies held by the plaintiffs and their representatives be returned to the fourth defendant and not the subject of further consideration in these proceedings? Answer: Any documents not falling within the terms of the search order should be removed from the digital file, and all copies returned to the fourth defendant and not be the subject of further consideration in these proceedings. Mr McKay has identified those documents, which should accordingly be returned and not further used in the proceedings. 4. Is it permissible for documents obtained pursuant to the search order to be used in support of causes of action other than those specified to be "accrued causes of action" at the time of the application for a search order in September 2016? Answer: It is not necessary to consider this question as no release is yet sought from the Harman undertaking. 5. Should any document allegedly relating only to defamation be excluded, noting that no application for an extension of time in respect of defamation has been made to the Court? Answer: I repeat the answer to 4 above. 6. As to documents that are relevant only to the claim pursuant to s 18 of the ACL as set out in Mr Doucas' affidavit sworn 7 September 2016 at [31]-[33], should they be excluded on the basis that there is no "strong prima facie case" in relation to that cause of action? Answer: I repeat the answer to 4 above. 7. Whether (and what) orders should be made for relaxation of the confidentiality regime, if the documents are not excluded by reason of the above issues. Answer: There should be no relaxation of the confidentiality regime and, subject to any application for release of particular documents for use in specific proceedings, the search order should be discharged and all copies of the documents returned to the fourth defendant.
2. Issue 2 was not disputed, it being agreed between the parties that all such documents should be returned to the fourth defendant; there being only an issue as to the means by which this should occur (which the parties anticipated resolving between themselves). Hence it is not necessary to deal with that issue.
3. As to issue 7, it was agreed between the parties that the Harman issues raised in the plaintiffs' amended notice of motion should be stood over, pending resolution of the above issues and any inspection of documents by the plaintiffs. Hence, again, it is not necessary here to deal with that issue.

Submissions - introduction

1. As to the remaining issues, there were a number of sets of written submissions by both sides and, in the plaintiffs' case, seemingly some change in emphasis between the hearing on 24 April 2018 and the resumption of the part-heard hearing on 6 September 2018. In essence, however, the plaintiffs' ultimate submission was that the matter was very simple and determined by the answer to the question: "what is in the interests of justice"? The parties' respective answers to that question can be summarised as follows.
2. The plaintiffs submit that the documents are now under the control of the Court and that the answer to the question whether the plaintiffs should be allowed to look at them: is not determined by the way in which the documents came to be under the Court's control; is not determined by the grounds on which the search order was obtained; and is not informed by an inquiry "long after the execution of the search order" into the question whether "as a matter of later determined objective fact" any particular document falls within the scope of the search order (see T 4.12-26).
3. The plaintiffs argue (emotively, and, in effect, presupposing the outcome of any claim based on such a characterisation of the fourth defendant's conduct) that it is in the interests of justice that they be allowed to look at documents that were created in the furtherance of a campaign to destroy Findex and reduce the plaintiffs' reputations. It is submitted that there is no basis upon which the plaintiffs ought not to have the benefit of the order for inspection that was made by Rein J on 23 September 2016; and that none of the considerations to which the fourth defendant now points defeats that governing consideration.
4. For the fourth defendant, on the other hand, it is submitted that the interests of justice are not served by the Court's exceptional and draconian powers in respect of Anton Piller and search orders being used to interfere with a person's right to the privacy of his or her documents.
5. The fourth defendant argues that the interests of justice dictate that, where the purpose of the production of the documents has been fulfilled, those documents should be returned; and that what the interests of justice certainly do not permit is for documents obtained for that purpose to be used for completely collateral purposes, "namely, a fishing expedition to see whether or not those documents may give rise to a cause of action other than the cause of action, the accrued cause of action in respect of which the search orders were issued and which now appear to have been abandoned" (T 6.49-7.2).

Plaintiffs' submissions

1. The plaintiffs, in their written submissions, point to the different questions that can arise in the course of proceedings concerning search orders but note that in the present case there was no appeal against the order of Rein J for the making of the search order and no issue as to there being any improper purpose or illegality in relation to the execution of the search order. The plaintiffs further submit that, when considering whether a search order is or was properly executed, this does not simply entail consideration (in hindsight) of whether particular documents which are now within the control of the Court were or were not within the terms of the search order.
2. It is submitted that the Court's discretions to allow parties to examine seized documents and then to allow use of such documents for further litigious purposes (the anticipated proceedings) are manifestations of the inherent jurisdiction to regulate use of the Court's processes (or a statutory parallel thereof); and that, accordingly, the touchstone in exercising those discretions is what is in the interests of justice.
3. The plaintiffs point to what was said by Jacobson J in Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd [2006] FCA 1707 at [33] ("Aristocrat"), namely, that it "is not for the respondents to put to the applicants the task of identifying categories of documents to which they seek access on discovery", and that, once the stringent threshold conditions for grant of the order are met, ordinarily there are no particular restrictions on access.
4. The plaintiffs accept that various matters may weigh in the assessment of what the interests of justice warrant but say that no one consideration has any fixed weight or operates as a constraint on the Court's powers.
5. As to whether a search order is to be discharged and the material returned, the plaintiffs argue that this is another manifestation of the Court's power to control its own processes and that the conditions which permit the making of a search order are not (and could not be) framed as ongoing conditions on the maintenance of that order.
6. As to the particular issues agreed between the parties as arising on the motions (with the exception of issue 2, which is agreed, and issue 7, which is to be postponed), the plaintiffs' position in summary is as follows.

• Issue 1

1. The plaintiffs submit that the search order retains real utility towards legitimate ends, which it says are consistent with "and indeed positively advance" the interests of justice (plaintiffs' submissions dated 5 September 2018 at [13]). Those legitimate ends, as I understand the submissions, can be summarised as being the vindication of the plaintiffs' interests in protecting the business of the company and the reputation of the individual plaintiffs. (Pausing there, there is nothing pointing to any perceived damage to the business of the company - since the completion of the acquisition that was feared might be prejudiced by the allegedly defamatory material; and the individual plaintiffs appear to be proceeding on the assumption that the material to which they seek access will include defamatory publications, since they do not now propose to sue on the publications of which they are already aware.)
2. The plaintiffs, in their written submissions dated 18 April 2018, argue that: there is no collateral purpose in the maintenance of the search order - the purpose of the preliminary discovery application being to institute fresh proceedings against the then unidentified publisher of the damaging material in order to protect and defend the legitimate rights and interests of the plaintiffs (see submissions at [10]-[17]; [47]-[53]); there was no order (and no requirement) for the filing of a statement of claim in the present proceedings (see submissions at [18]-[21]); the assertion that there has been no loss or damage suffered by Findex (that having been identified in the proceedings before Rein J as being the potential impact publication would have on a commercial transaction that has long since proceeded in any event) is misconceived (it being said that it is "obvious and self-evident" that loss and damage has been suffered and it being argued that there was no requirement for the plaintiffs constantly to update or adduce further evidence in relation to damage) (see submissions at [22]-[27]); and any assertion that the claims in defamation would be time-barred is one that ought not be determined in a summary judgment application (and in any event it is reasonable to assume that there are further defamatory publications in the documents which have not yet been seen) (see submissions at [41]-[46]).
3. It is submitted that the (recognised to be unfortunate) fact that these proceedings have continued for so long "is a reflection of the ongoing efforts the plaintiffs have made to make good their interest in accessing the documents which underlay the proceedings in the first place" and that the circumstances which have caused that objective to take so long to be achieved are not such that the delay is inimical to the interests of justice; rather, the delay "is simply a product of hard-fought litigation" (plaintiffs' submissions dated 5 September 2018 at [15]).

• Issues 3-6

1. The plaintiffs' overall answer to these four questions is that it does not matter how any particular document has come into the control of the Court; the Court's powers to control its own processes may be exercised "without any retroactive limitation by reference to whether a particular document is contended to be within the scope of the search order as a matter of later-established objective fact, or whether it relates to a cause of action which was identified at the time the search order was made" (plaintiffs' submissions dated 5 September 2018 at [17]); and that the governing consideration for the exercise of the discretion remains always the interests of justice.
2. The plaintiffs accept that, in deciding whether to exercise a discretion to allow the plaintiffs to inspect any document that has been seized in the execution of the search order, the Court could properly give "some weight" to whether the document is as a matter of objective fact within the terms of the search order, or as to its relevance to one of the initially identified causes of action; but they submit that neither consideration is determinative and that the weight that would be attached to such considerations in any particular case properly depends on all of the circumstances (plaintiffs' submissions dated 5 September 2018 at [18]).
3. In the present case, the plaintiffs submit that a consideration to which significant weight should be given is that "they are not asking for very much", in circumstances where it has already been established that the plaintiffs "are all people who have been traduced in a vindictive campaign by the fourth defendant". The plaintiffs submit that all they are now asking "is that they be allowed to look at the material in which they have been traduced, for the purposes of vindicating and protecting their rights"; and that what use might be made of those documents "is for another day" (plaintiffs' submissions dated 5 September 2018 at [19]).
4. The plaintiffs accept that, if it were practicable to do so, the relevance and significance of a document might be a factor to which the Court could attach weight in evaluating what the interests of justice require, but they submit that in the present case it is not practicable (and would not be an appropriate use of judicial resources) to evaluate the relevance and significance of every individual document by reference to the claims the plaintiffs seek to make against the fourth defendant (both the claims initially anticipated and the additional claims). This, they say, is sufficient to dispose of issue 3 (without the need for a detailed consideration of individual documents). (The plaintiffs accept that there are extensive disputes of fact between the parties as to whether particular elements of the terms of the search order are or are not satisfied with respect to numerous documents.)
5. As to issue 4, the plaintiffs argue that "the flexibility and amplitude" of the Court's powers to make search orders "would be undermined if one read the search order as limited to the precise cause of action known" (here quoting the words of Allsop J (as his Honour then was) in Aristocrat Technologies Australia Pty Ltd v Global Gaming Pty Limited [2006] FCA 862 at [6]); and that to do so would be contrary to both statute and precedent.

• Plaintiffs' submissions as to issue 7 - appropriate relaxation of confidentiality restrictions

1. The plaintiffs submit that if issues 1 and 3-6 are resolved in their favour, then there is no reason why the existing confidentiality restrictions should not be relaxed. They seek the orders set out in Schedule C to the amended notice of motion filed 4 July 2018 (or, if it is considered appropriate to constrain the dissemination and use of the documents within Findex notwithstanding that the Harman restrictions would still apply, the orders in Schedule D). As noted earlier, the application for leave to make use of the documents in other proceedings is not presently pressed.

Fourth defendant's submissions

1. On the present applications, the fourth defendant read the affidavit affirmed on 15 August 2018 of his solicitor, Bede Webster, in response to the evidence relied upon by the plaintiffs. The fourth defendant notes that there is no evidence from any of the plaintiffs to the effect that they intend to prosecute the defamation and misleading or deceptive conduct causes of action that provided the basis for obtaining the search orders in 2016 and argues (by reference to his submissions dated 4 April 2018 at [23]-[31]) that those claims are without merit and do not support the maintenance of the search order.
2. In relation to the agreed issues on his notice of motion that are still in dispute (issues 1 and 3-6), the fourth defendant submits as follows.

• Issue 1

1. The fourth defendant points to the purpose of search or Anton Piller orders, namely to secure or preserve evidence so that it may be available at trial (see UCPR r 25.19) and to the recognition that such orders are not to be used as a mechanism by which a party may gain authorisation to attend on a "fishing expedition" in order to find out what claims it may have against its opponent (see Hytrac Conveyors Ltd v Conveyors International Ltd [1982] 3 All ER 415 at 416-417 ("Hytrac Conveyors")) (see his submissions dated 4 April 2018 at [14]-[37]).
2. Reference is made to various authorities as to the principles applicable to the grant of a search order (Brags Electrics Pty Ltd v Gregory [2010] NSWSC 1205 at [18] per Brereton J (as his Honour then was)); and to the setting aside or discharge of ex parte orders generally (Dormeuil Freres SA v Nicolian International (Textiles) Ltd [1988] 3 All ER 197 at 199) and search orders in particular (Tassinari v Pesalaccio [2018] FamCA 12 at [93]-[94] per Johnston J, his Honour there citing with approval what was said in WEA Records Ltd v Visions Channel 4 Ltd [1983] 2 All ER 589 at 593 per Sir John Donaldson MR).
3. The fourth defendant notes that the Court has power to set aside a judgment or order obtained ex parte pursuant to UCPR r 36.16(2)(b) and refers to the statement by Biscoe in Freezing and Search Orders (LexisNexis, 2nd edn, 2008) at [7.157], that once a search order is executed, "there may still be reasons for seeking to have it discharged or varied: for example, opposition to the applicant inspecting the things seized, enforcement of the applicant's undertaking as to damages, costs and vindication of the respondent's rights".
4. It is submitted that it is incumbent on parties who obtain search orders to ensure that the underlying causes of action upon which the search orders were obtained are prosecuted diligently and that the material yielded pursuant to a search order is not used for a collateral purpose (referring to what was said in Hytrac Conveyors at 418 per Lawton LJ; and to Group 4 Securitas (Northern Ireland) Ltd v Mclldowney [1997] 1 NIJB 23 at 24, 26 per Girvan J ("Group 4 Securitas")).
5. Pausing here, the plaintiffs submit that the above cases relied upon by the fourth defendant are distinguishable and not on point.
6. In particular, it is said that, in the Group 4 Securitas case, first, the plaintiffs were in breach of the relevant Rules of Court (which they say is not the case here, since there was no obligation on them to file any statement of claim "in the preliminary discovery and search order proceedings"); and, second, the plaintiffs there obtained a search order without producing any material that would have justified the making of such an order (whereas in the present case the order for preliminary discovery and the search order were each made based upon the evidence before the Court that satisfied their Honours as to the basis for the making of the orders and the suggestion that this was a fishing expedition was rejected expressly by Rein J and implicitly by McDougall J). As to cases such as Tassinari v Pesalaccio, it is again submitted that these are distinguishable, on the basis that in the present case the fourth defendant was given every opportunity to seek to have the search order discharged or varied.
7. The fourth defendant's reliance upon the Hytrac Conveyors case is said to be misconceived in that, in the present case, substantial evidence was filed on behalf of the plaintiffs in support of their application for preliminary discovery, and in support of their application for a search order; that evidence was duly considered by the Court; and orders were duly made upon the basis of that evidence.
8. It is said by the plaintiffs that this is not a case in which the plaintiffs obtained such orders to find out "what sort of charges they can make" (which was the position in Hytrac Conveyors - see at 418 per Lawton LJ); rather, it is the fourth defendant that has expressly declined to pursue his motion of 31 October 2016 in order to prevent the plaintiffs from obtaining access to, and reviewing, the documents obtained in the search order. The plaintiffs argue that the reason for the delay in this case is that the fourth defendant has declined to pursue his 31 October 2016 motion.
9. At the hearing on 6 September 2018, reliance was placed by the fourth defendant on the decision of Flick J in Metso Minerals (Australia) Ltd v Kalra (No 3) [2008] FCA 1201 ("Metso Minerals"). In that case, his Honour referred (at [24]-[25]) to the extraordinary and draconian nature of the Anton Piller or search orders and cited (at [25]) the observation by Powell JA (with whom Meagher and Handley JJA agreed) in Long v Specifier Publications Pty Ltd (1998) 44 NSWLR 545 at 547: Reduced to its essentials, an Anton Piller order is an order that the defendant to whom, or to which, it is directed should permit the persons specified in the order to enter upon his, or its, premises, and to inspect, take copies of, and to remove, specified material, or classes of material, indicating, where appropriate, documents, articles or other forms of property. It is an extraordinary remedy, designed to obtain, and to preserve, vital evidence pending the final determination of the plaintiff's claim in the proceedings, in a case in which it can be shown that there is a high risk that, if forewarned, the defendant, would destroy, or hide, the evidence, or cause it to be removed from the jurisdiction of the court. For this reason, such orders are invariably made ex parte. Flick J referred also to the admonition of Branson J in Microsoft Corp v Goodview Electronics Pty Ltd [1999] FCA 754; (1999) 46 IPR 159 at [26] that: ... The Court must, in my view, be careful to avoid the extraordinary jurisdiction of the Court to make an Anton Piller order from being subverted to a mere investigatory tool for applicants or indeed, from being used for any purpose other than the preservation of vital evidence pending the hearing and determination of a proceeding.
10. The fourth defendant notes that the decision in Metso Minerals was followed by Besanko J in Re Lamond (No 4) [2017] FCA 820. In Re Lamond (No 4), Besanko J said (at [20]), as to the use of documents obtained under a search order for a different purpose than that for which the order was obtained: ... it seems to me that access to the documents is sought for the purposes of gathering evidence for use in the winding up proceeding or the proposed proceeding. It is not sought for the purposes identified by Flick J in paragraph 28 of Metso Minerals. The documents are being sought as substitute for discovery or in tandem with, or as an adjunct to, the discovery process. As Flick J said in Metso Minerals, this course is not permitted (at [36], [43] and [49]).
11. The fourth defendant submits that, in the present case, the plaintiffs do not seek to use the documents for the causes of action which provided the basis for the grant of the search order; and that it is improper to allow a party which has seized documents pursuant to a search order to then seek to use the material seized for different purposes (there being other procedural mechanisms available to them to achieve that end).
12. The fourth defendant points to the following matters in relation to the foreshadowed defamation claims: that there has been no application for an extension of the limitation period for defamation causes of action under s 56A of the Limitation Act 1969 (NSW); that the plaintiffs' solicitors (and Mr Doucas) have had access to the seized documents since December 2016; and that, when the matter was before me in April 2018, Counsel then appearing for the plaintiffs said words to the effect that the plaintiffs would want to know about and consider the position in relation to any defamatory publications that they did not then know about (T 35) but were not seeking to bring defamation proceedings in relation to those documents that they then knew about (T 64).
13. The fourth defendant maintains that it is unlikely that any application to extend the limitation period for the defamation causes of action that were known would succeed, given the requirement that the Court be satisfied that "it was not reasonable in the circumstances" for the plaintiffs to have commenced an action within the 1 year limitation period (s 56A(2)) and the high onus this places on a plaintiff (referring to George, Defamation Law in Australia (LexisNexis, 3rd edn, 2017) at 349).
14. As to the foreshadowed misleading or deceptive conduct claim, it is noted that the plaintiffs have not served any further evidence since April 2018 as to any actual loss arising from the alleged misleading and deceptive conduct claim which provided the other basis for the search order in September 2016 (referring to the submissions made at [24]-[27] of the fourth defendant's 4 April 2018 submissions, in which it is noted that the only potential damage identified at the time of the September 2016 application for the search order was that the emails sent by the fourth defendant "may" contribute to a delay in the first plaintiff completing an acquisition of another firm, whereas that acquisition was completed some three weeks later on 30 September 2016 - CB 603). The fourth defendant argues that there is no tenable basis on which the first plaintiff can contend that it has a viable cause of action arising from the matters put forward in September 2016 in that regard.
15. I have already noted the plaintiffs' response to the those matters - see above at [76].
16. The fourth defendant thus argues: that the search orders now serve no purpose; that the plaintiffs do not intend to bring the proceedings which provided the "strong prima facie case on an accrued cause of action" under UCPR r 25.20(a); and that the plaintiffs are now seeking to use the documents seized for a collateral purpose (that being impermissible having regard to the decision in Metso Minerals and the cases referred to therein).
17. Accordingly, the fourth defendant argues that the search order should be discharged in accordance with order 2 of the Fourth Defendant's Notice of Motion.

• Issue 3

1. The fourth defendant argues that the seizure of the (admittedly) irrelevant documents obtained pursuant to the search order (such as emails advertising wine delivery or the like) cannot be said to have been authorised, referring to Metso Minerals, where Flick J said (at [7]): ... The seizure of any documents and materials falling outside of the terms of the order obviously would not have been authorised.
2. The terms of the search order have been referred to above (see at [7]) (order 4, CB 205). The fourth defendant maintains that, as well as those documents, other private documents belonging to him that did not come within the terms of the search order were seized and that those should be returned since there is no basis on which they should be in the plaintiffs' possession. In this regard, Mr McKay has identified in the annexures to his 31 October 2016 affidavit (CB 261-381) a number of documents that were not "sent or forwarded or otherwise provided" by him to any other person.

• Issue 4

1. The fourth defendant submits that it is not permissible for documents obtained pursuant to the search order to be used in support of causes of action other than those specified to be "accrued causes of action" at the time of the application for a search order in September 2016 (referring to the principles articulated in Metso Minerals) and says that while the orders may have permitted the seizure of documents going beyond the "precise cause of action before the Court", the documents obtained can only be used to support causes of action in the proceedings in which the search order is sought (referring to Long v Specifier Productions at 547).

• Issue 5

1. The fourth defendant relies upon [29]-[31] of his submissions dated 4 April 2018 and the submissions referred to above to argue that the plaintiffs should not have access to any document allegedly relating only to causes of action in defamation that was included in the documents seized in September 2016.

• Issue 6

1. Again as to this issue, the fourth defendant (relying upon his submissions dated 4 April 2018 at [23]-[28]) argues that the plaintiffs should not have access to any documents seized in September 2016 that are relevant only to the claim pursuant to s 18 of the ACL set out in Mr Doucas's affidavit sworn 7 September 2016 at [311]-[331], on the basis that there is no "strong prima facie case" in relation to such a cause of action. (It is noted that there was no response to the fourth defendant's evidence on this issue in the 19 February affidavit of Mr Bede Webster) (CB 125).
2. The fourth defendant points out that Findex has not suggested that the relief which it would seek would be other than damages (such as an injunction or a corrective remedy) and argues that since there is no evidence of any repetition of the conduct since the search order was executed and there has been a lengthy lapse of time since then, an injunction or other corrective remedy would not be justified and would lack utility.
3. As to the identification by Ms Zhang in her 4 July 2018 affidavit of potential additional causes of action, the fourth defendant notes that no evidence has been adduced to indicate whether any such cause of action has any legal or factual basis, "let alone is one which amounts to a "strong prima facie case on an accrued cause of action" pursuant to UCR [sic] 25.20(a)" and points to the matters to which Ms Zhang deposes at [16], [22] and [24] of her affidavit (fourth defendant's submissions dated 5 September 2018 at [38]).
4. It is submitted that it is impermissible for the plaintiffs to retain documents in relation to "potential claims" that were seized pursuant to orders predicated on the existence of a "strong prima facie case on an accrued cause of action" (fourth defendant's submissions dated 5 September 2018 at [40]).

Summary dismissal application

1. For completeness, I note that submissions were filed by the respective parties in relation to the relief sought by the fourth defendant for the summary dismissal of the proceedings pursuant to rr 13.4(1)(b) and/or (c) of the UCPR and/or the inherent jurisdiction of the Court. The plaintiffs staunchly resist the proposition that the proceedings are an abuse of process or that it would be appropriate for the proceedings themselves to be summarily dismissed.
2. In circumstances where the argument on 6 September 2018 focussed (leaving aside issue 7) on the five issues (issues 1, 3-6) that were agreed now to be dealt with, and the application for leave to be released from the implied Harman undertaking was simply "postponed", I do not propose to address separately in these reasons the submissions that were advanced for the fourth defendant that the present proceedings, or alternatively the proceedings insofar as they are being brought by the second, third and fourth plaintiffs, should be dismissed on the basis that no reasonable cause of action is disclosed or that they amount to an abuse of process.

Determination

1. As already noted, the restrictions currently imposed upon the plaintiffs and their legal representatives as to access to the documents subject to the confidentiality regime require that: the documents be provided only to the plaintiffs' legal representatives on a confidential basis for the purpose of assisting the parties to ascertain the real issues of the dispute and for the purpose of identifying the documents in respect of which (and the purpose for which) a variation to the confidentiality regime is sought; and, until further order of the Court, the documents are not to be provided or shown to any of the plaintiffs or any of their officers or employees save for Mr Doucas (Head of Risk Management of Findex) for the purpose of obtaining instructions (subject to an undertaking by him not to provide or show them, or disclose their contents to any of the plaintiffs or any of their officers or employees, to keep them confidential and only use them for the purposes of giving instructions in these proceedings until otherwise ordered).
2. Subject to those restrictions, the plaintiffs' legal representatives have now inspected the seized documents (other than those over which privilege is claimed or public interest immunity was established). Those documents, it is said, give rise to a number of possible causes of action against Mr McKay. It is, however, the plaintiffs' position that, in order to progress any cause(s) of action against Mr McKay which may arise from the documents, the plaintiffs themselves need to inspect the seized material and to provide instructions in relation thereto.
3. It is relevant to note that, following the plaintiffs' solicitors' inspection of the seized documents, no proceedings have been commenced in this Court in relation to the causes of action in respect of which the documents were originally preserved by reason of the search order and no such proceedings are now contemplated.
4. That is, while the search order was granted in circumstances where Rein J was satisfied that there was a good arguable case of defamation or misleading or deceptive conduct, no such causes of action against Mr McKay have subsequently been brought in this Court. (The claim for misleading or deceptive conduct that is on foot in the Federal Court relates to other conduct and any new claim for misleading or deceptive conduct does not relate to the claim that was identified before Rein J).
5. In these circumstances, the fourth defendant submits that the plaintiffs, in now making any application themselves to be permitted to inspect the seized documents, is seeking improperly to use the search order as an investigatory tool. The plaintiffs, on the other hand, say that they are still pursuing "proceedings and claims of the same nature" as were anticipated or contemplated at the time when the search order was sought and obtained (see T 11.45). The plaintiffs emphasised that when the search order was obtained, it was expressly put to Rein J that what was then known (in terms of defamatory statements and/or misleading or deceptive conduct) was "just the tip of the iceberg and that there might be more" (see T 18.36-39). However, the fact that this possibility was put to Rein J does not alter the nature and purpose of a search order as provided for by statute, which turns on the securing and preservation of evidence (not on preliminary discovery or investigation of potential causes of action).
6. Rule 25.19 in Div 3 of the UCPR confers upon the Court power to make a search order (also known as an Anton Piller order). It provides that: The court may make an order (a search order), in any proceeding or in anticipation of any proceeding in the court, with or without notice to the respondent, for the purpose of securing or preserving evidence and requiring a respondent to permit persons to enter premises for the purpose of securing the preservation of evidence which is or may be relevant to an issue in the proceeding or anticipated proceeding.
7. Practice Note SC Gen 13 supplements UCPR r 25.19 and addresses the Court's usual practice in relation to the making of such orders. It reiterates that the primary purpose of a search order is to preserve evidence pending the final determination of a hearing.
8. The "extraordinary" nature of relief pursuant to UCPR r 25.19 is expressly recognised in Practice Note SC Gen 13 and has long been recognised by courts. In Long v Specifier Publications, in the observations to which I referred at [88] above, Powell JA emphasised that an Anton Piller order is "designed to obtain, and to preserve, vital evidence pending the final determination of the plaintiff's claim in the proceedings" (see at 547). Branson J approved these observations in Microsoft Corp v Goodview Electronics and, in so doing, warned (at [26]) of the potential to misuse search orders for an investigatory purpose (see above at [88]).
9. See also Metso Minerals at [24]-[27]; Universal Music Australia Pty Ltd v Sharman License Holdings Ltd [2004] FCA 183; (2004) 205 ALR 319 at [53]-[58]; Brilliant Digital Entertainment Pty Ltd v Universal Music Australia Pty Ltd [2004] FCAFC 270; (2004) 63 IPR 373; Thermax Ltd v Schott Industrial Glass Ltd [1981] FSR 289 at 291; and Bugaj v Bates [2004] FCA 1260 at [13] per Stone J.
10. The power to grant a search order is based on the need to protect the Court's ability to do justice between the parties (Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55; [1976] 1 All ER 779).
11. As to a party's right to inspect documents obtained pursuant to a search order, Practice Note SC Gen 13 stresses the importance of the "independent solicitor" in supervising the execution of search orders (see, for example, Microsoft Corp v Goodview Electronics at [27]-[30]; Universal Thermosensors Ltd v Hibben [1992] 3 All ER 257; [1992] 1 WLR 840 at 861) and the qualified right of an applicant to access any documents seized. It provides that an applicant is not permitted to inspect seized documents without leave of the Court: 12. Ordinarily, the applicant is not permitted, without the leave of the Court, to inspect things removed from the premises or copies of them, or to be given any information about them by members of the search party.
12. Neither Practice Note SC Gen 3 nor UCPR r 25.19 sets out the circumstances in which leave may be given to an applicant to inspect seized documents.
13. Relevantly, where there is no longer a basis for believing that seized documents may be destroyed pending the final determination of the proceedings, UCPR r 25.19 cannot be invoked as a source of power to vary the search order made and to grant further access. Thereafter, if the orders are to be varied, recourse must be had to s 23 of the Supreme Court Act 1970 (NSW) and to ss 57 and 61 of the Civil Procedure Act 2005 (NSW) (see too Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 639; [1987] HCA 23; Metso Minerals at [26]).
14. The ambit of the discretion of the Court to grant leave to an applicant to inspect seized documents, and the manner in which that discretion is to be exercised, was set out in Metso Minerals at [24]-[28] by Flick J (which, as noted, was approved by Besanko J in Lamond (No 4) [19]-[20]), as set out earlier.
15. In Metso Minerals, Flick J considered, inter alia, an application for discovery in respect of documents which had been previously seized pursuant to a search order. While his Honour was dealing with the rules relating to search orders contained in the Federal Court Rules 1979 (Cth) (O 25B and Practice Note 24) (now, Federal Court Rules 2011 (Cth) rr 7.42, 7.43), they are in identical terms to UCPR r 25.19 and Practice Note SC Gen 13. Indeed, the procedure in relation to search orders is now the subject of harmonised rules across Australia.
16. Taking into account the "extraordinary" nature of relief granted in the form of a search order, Flick J (at [28]) considered that the discretion to allow an applicant to inspect seized documents is to be exercised in order: to ensure that the search order has been complied with; and to ensure that only evidence which should be preserved is in fact preserved pending the final determination of the hearing. His Honour emphasised (at [36]) that access to documents seized pursuant to a search order "should be confined to the purpose for which that power was conferred".
17. The plaintiffs maintain (see T 11.15) that the purpose of the search order was that of "obtaining documents for use in anticipated proceedings including, but not limited to, the proceedings of the kind that were identified at the time" and that this purpose will not be fulfilled "until the plaintiffs have looked at the documents". That, to my mind, conflates the purpose of preserving evidence (for use in anticipated proceedings) and the function of inspection of that material (as to which it is clear there is no absolute right). It is not a purpose or object of search order provisions to facilitate discovery processes otherwise authorised by rules or to facilitate the provision of further particulars. In Metso Minerals at [34], Flick J warned that construing search order provisions as extending to such a purpose would erode the importance attached by the common law to protecting the privacy of individuals and the constraints otherwise imposed by the rules governing discovery process.
18. Put another way, it is not a purpose or object of search order provisions to permit a plaintiff who believes that there has been an vindictive campaign made against it, him or her, the luxury of trawling through a mass of documentation that would not otherwise have been available to it, him or her at this stage, whether that be to see what else was said about it, him or her that might be defamatory or might otherwise support some other potential cause of action.
19. The plaintiffs in the present case argue that, while the purpose of a search order is a relevant consideration as to whether the Court should exercise its discretion to permit further inspection, it is not determinative. Similar to the arguments (unsuccessfully) put forward by the applicant in Metso Minerals, they submit that it is in the interests of the administration of justice that leave should be granted to permit further inspection of the documents, even if the purpose of that further inspection (that being, to determine whether or not to pursue any causes of action) is different to the purpose for which the search order was originally granted.
20. In Metso Minerals, Flick J refused to accede to such submissions. His Honour observed (at [36]) that, in the absence of consent, it "would go beyond the authority conferred" to permit access to seized materials for other purposes unrelated to the preservation of evidence (such as the purpose of facilitating discovery). Notwithstanding the force in the submission that it would be convenient to permit additional use of documents once they are already in the party's possession, Flick J emphasised (at [38]) that this "is not a sufficient reason to depart from the importance accorded by the common law to an individual's rights to preserve the privacy and confidentiality of his own documents".
21. The plaintiffs in the present case (as also did the applicant in Metso Minerals) rely on the observations of Jacobson J in Aristocrat (at [33]) to submit that the Court may exercise its discretion to allow parties to examine seized documents and then to use the documents for further litigious purposes.
22. Dealing with this submission in Metso Minerals, Flick J (at [41]-[43]) observed, respectfully, that Aristocrat is a decision as to what may be seized and, once seized, what may be looked for when inspecting those documents; and that Aristocrat does not stand as authority for the proposition that seized documents, in the absence of consent, may be inspected as an adjunct to the discovery process or to facilitate the provision of particulars.
23. As Flick J emphasised in Metso Minerals at [49], to enable a party to obtain a search order and thereafter permit the party to "rummage through" the seized documents in order to make an assessment as to those documents which that party considers would be or should be discoverable, extends beyond the purpose for which a search order is made and defeats the perimeters within which discovery is to be made by a party.
24. In the absence of consent from the party whose documents have been seized, to allow a party to inspect seized documents as a substitute for discovery or in tandem with, or as an adjunct to, the discovery process improperly permits the relief authorised by UCPR r 25.19 to become an investigatory tool (Metso Minerals at [36], [43], [49]; Lamond (No 4) at [20]; Microsoft Corp v Goodview Electronics at [26]; Bugaj v Bates at [13]).
25. In light of the above principles, it is clear that if I were to accede to the plaintiffs' application for access to the seized documents for the purpose of facilitating discovery or of ascertaining what other potential causes of action they or any of them may have against the fourth defendant (relevantly, a purpose which is different to the purpose which the search order was originally granted to assist and different from the accepted purpose of search orders) it would be endorsing an approach that courts have consistently rejected. That is, it would be allowing the "extraordinary" nature of relief granted pursuant to UCPR r 25.19 to be subverted to an investigatory tool.
26. In those circumstances I consider that the plaintiffs' application for the relief sought at prayer 2A of their amended notice of motion should be dismissed. The search order made by Rein J has now been spent, save only to the extent that there is any need to ensure that any of the documents seized under that order (other than the admittedly irrelevant documents or documents falling outside the terms of the search order and therefore not authorised by the search order) should be preserved pending an application to use those documents in other proceedings. As to that qualification, the difficulty is that the way in which the parties agreed that the hearing on 6 September 2018 was to proceed has had the result that the application for leave to use the Identified Documents (prayers 2B and 2C of the plaintiffs' amended notice of motion) has not yet been heard and it cannot be said, in my opinion, that there may not be a need for the seized documents to be preserved for that purpose. The plaintiffs should now elect whether to proceed with their motion for orders in terms of prayers 2B and 2C, failing which the appropriate order in my opinion would be for the return of all the documents seized pursuant to the search order made by Rein J in September 2016.
27. As to the alternative relief sought in prayers 8-10 of the amended notice of motion, this is otiose now that the issues agreed to have been raised by the fourth defendant in relation to his notice of motion have been heard. (I do not determine the summary dismissal application sought by prayer A1 but simply note that, once the search order is finally discharged, I would consider it appropriate to dismiss the proceedings on the basis that the preliminary discovery application has been dealt with and there is no intention, it would seem, on the part of the plaintiffs to file any statement of claim raising substantive claims in these proceedings.)
28. I accept that there was no abuse of process in the bringing of the application for a search order in the first place (nor was any such abuse of process contended for by the fourth defendant). However, it would, in my opinion, be an abuse of process to seek to continue the search order's operation once its purpose has been fulfilled.
29. As to the fourth defendant's notice of motion, I therefore am not prepared, pending the election to be made by the plaintiffs, to accede to the request for the return of all the documents seized pursuant to the search order but, save for that aspect of the matter, I consider that the search order has been spent and should be discharged.
30. I will order the return of the documents which it is admitted are of no relevance, as well as the documents identified by Mr McKay as not falling within the terms of the search order (and hence not authorised by the search order). Short minutes of order should be prepared to provide for the mechanism for the return of those documents.
31. I will hear the parties as to costs but, in the circumstances, I should note that I consider that the plaintiffs have failed in substance in the relief sought by them and am inclined to the view that they should pay the fourth defendant's costs of their motion and that of the fourth defendant, the latter on the basis of the general rule that costs should follow the event.

Conclusion

1. For the above reasons I make the following orders: 1. Save as to the relief sought at 2B and 2C of the plaintiffs' amended notice of motion filed 4 July 2018, dismiss that amended notice of motion. 2. Direct the plaintiffs to notify the fourth defendant within 14 days whether they wish to pursue the application for the relief sought at 2B and/or 2C of their amended notice of motion filed 4 July 2018. 3. Direct that all electronic and hard copies of the following documents held by the plaintiffs, any of their legal advisers, the independent solicitor and/or the independent computer expert obtained pursuant to the search order made on 16 September 2016 by Rein J be returned to the fourth defendant within 7 days in accordance with a mechanism to be agreed between the parties (or, failing agreement, to be determined by the Court following brief submissions by the parties in relation thereto): 1. all documents which the plaintiffs admitted in the course of the hearing of the respective notices of motion were of no relevance; 2. all documents identified by the fourth defendant in the annexures to his affidavit of 31 October 2016 as being documents not "sent or forwarded or otherwise provided" by him to any other person and therefore not authorised by the said search order. 1. Stand over for final orders, pending the election by the plaintiffs as to whether they wish to press for the relief sought at 2B and/or 2C of their amended notice of motion filed 4 July 2018, the fourth defendant's amended notice of motion filed 19 February 2018. 2. Reserve the question of costs of the respective notices of motion. 3. Stand the matter over for directions at 9.30am on 12 November 2018 before Ward CJ in Eq.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 October 2018