Kraft Foods Group Brands LLC v Bega Cheese Limited

1. Mondelez Australia (Foods) Ltd (Mondelez) pay the applicants' costs of and incidental to the orders made on 6 July 2018, including the costs of the hearings on 26 June, 2 July and 4 July 2018.
2. Mondelez and the applicants bear their own costs of and incidental to the orders made on 13 July 2018, including the costs of the hearing on 6 July 2018. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

O'CALLAGHAN J: 1 It is necessary to resolve a dispute between the applicants (collectively Kraft) and a non-party, Mondelez Australia (Foods) Ltd (Mondelez), about who should bear the costs in relation to two applications brought by Kraft against Mondelez in this proceeding. 2 The first application arose out of the fact that Kraft had subpoenaed certain documents (the precise nature of which it is unnecessary to identify for these purposes) from Mondelez. 3 Mondelez, which is a competitor of Kraft, produced the documents to the court pursuant to the subpoena, but resisted production of the documents in un-redacted form, other than to two named external solicitors. Kraft and Mondelez were unable to agree about terms upon which, and to whom, access to the documents was to be permitted. I heard argument about the competing proposals, and ruled that the regime contended for by Kraft was to be used: see Kraft Foods Group Brands LLC v Bega Cheese Limited (No 3) [2018] FCA 1023 (No 3). 4 The second application by Kraft was in two alternative parts. The first was an application for leave to serve a subpoena on a company called International Great Brands LLC (IGB), a United States corporation which is part of the Mondelez international group of companies. Kraft's alternative application was for a "Sabre order", so called after the decision in Sabre Corporation Pty Ltd v Russ Kalvin's Hair Care Company (1993) 46 FCR 428: see Kraft Foods Group Brands LLC v Bega Cheese Limited (No 4) [2018] FCA 1055 (No 4). 5 As to the application for leave to serve a subpoena on IGB, I held that the question whether the court has power to grant leave to issue a subpoena to a person outside Australia is controversial and, to an extent, remains unsettled. I further held that, even on the assumption that this court had the power to issue a subpoena to a foreign corporation requiring it to produce documents in circumstances where non-production would render it liable to contempt in a jurisdiction to which it has not relevantly submitted, I would have declined to exercise that power in this case, particularly because the evidence disclosed that IGB would not have complied with such a subpoena. 6 I granted the Sabre order, in these terms: 2. By 20 July 2018, Mondelez Australia (Foods) Ltd take all reasonable steps available to it to obtain the documents, or copies thereof, which fall within the categories set out in the form of annexure 1 to the minute of proposed order submitted by counsel for the applicants at the hearing on 6 July 2018, which are in the power, custody or control of Intercontinental Great Brands LLC. 3. If the document(s) are not produced by 4.30pm on 20 July 2018, Mondelez Australia (Foods) Ltd, by a director having knowledge of the facts, is to file and serve an affidavit as to Mondelez Australia (Foods) Ltd's efforts made pursuant to (2) above. 7 Kraft submits that it should have its costs of proceedings No 3 and No 4 and each of the appearances in respect of them on 26 June 2018, 2 July 2018 and 6 July 2018, and in respect of receiving judgment for those applications. 8 Mondelez, on the other hand, says that I should apportion costs. 9 As to No 3, the application concerning confidentiality, Mondelez says that it should have its costs with respect to the hearing on 26 June 2018, essentially because counsel for Kraft unsuccessfully disputed the confidentiality of the redacted parts of the documents produced pursuant to the subpoena. It says that it should also have the costs of the affidavit of Mr Syme which set out the basis for the confidentiality of the redacted parts of those documents. It also says that it should have its costs of the hearing on 2 July 2018 because it was at that hearing, it submits, that Kraft "abandoned" its challenge to confidentiality. Further it says that it should have its costs with respect to the preparation of an affidavit by Mr Oliver which also addressed the issue of confidentiality. 10 As to No 4, the application concerning IGB and the Sabre order, Mondelez submits that it should have its costs of the hearing on 4 July, it submissions in respect of that hearing, an affidavit filed in respect of the same hearing, and the hearing on 6 July 2018, the majority of which it says was concerned with IGB. 11 The disposition of costs is in the discretion of the court: s 43 of the Federal Court Act of Australia 1976 (Cth). "Usually, in the exercise of this discretion, it is ordered that the costs should follow the event": Plaintiff M76/2013 v Minister for Immigration, Multicultural Affairs and Citizenship (2013) 251 CLR 322, 393 at [241] (M76); Idenix Pharmaceuticals LLC v Gilead Sciences Pty Ltd (No 2) [2018] FCAFC 7 at [3]. 12 As Keifel and Keane JJ said in M76, "[i]n some cases the 'event' may be contestable, especially where separate issues have fallen in different ways": Plaintiff M76/2013 v Minister for Immigration, Multicultural Affairs and Citizenship (2013) 251 CLR 322, 393 at [241]. 13 In my view, the relevant "events" are sufficiently clear in this case. 14 In No 3, Kraft succeeded in persuading me that the regime it proposed for the preservation of the confidentiality of the relevant parts of the subpoenaed documents was to be preferred, for the reasons I gave. In my view, Kraft should have its costs of that application. It is artificial to seek to dissect those costs by reference to costs associated with the production of the affidavits or particular parts of the hearing. The fact of the matter is that Kraft prevailed on that application. 15 As to No 4, Kraft did not succeed in persuading me that a subpoena should be issued against a foreign corporation, for the reasons given. But it did succeed in obtaining a Sabre order. They were sufficiently discrete applications for the purposes of costs apportionment. In my view, there should accordingly be no order as to costs in respect of those applications. Mondelez submitted that it was relevant that the Sabre order was not, in the events that transpired, productive of anything, but in my view that is not a reason that goes to the question of costs in the circumstances of this case. 16 For those reasons I will order that Mondelez pay Kraft's costs of No 3 and that the parties bear their own costs with respect to No 4. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice O'Callaghan.