Federal Court of Australia

Element Zero Pty Ltd v Fortescue Ltd [2025] FCA 206

ORDERS

THE COURT ORDERS THAT:

1.    The application for leave to appeal be dismissed.

2.    The applicants for leave to appeal pay the costs of the first, second and third respondents.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

STEWART J:

Introduction

1    On 14 May 2024, Perry J as duty judge made search orders in the conventional form against Element Zero Pty Ltd, Dr Bartlomiej Kolodziejczyk and Dr Bjorn Winther-Jensen on the ex parte application of Fortescue Ltd and two related companies (which I will refer to together simply as Fortescue). The object of the search orders was to preserve from the risk of destruction certain evidence relevant to a claim brought by Fortescue against those three parties and Mr Michael Masterman for, amongst other things, breaches of confidence and fiduciary duties.

2    The search orders were executed, some hard copy material was seized, and devices were imaged. A digital copy of the material is in the possession of the Court, the independent computer experts appointed under the search orders and the subjects of the search orders (being Element Zero, Dr Kolodziejczyk and Dr Winther-Jensen). The hard copy material is held by the Court.

3    On 4 October 2024, Markovic J as the docket judge dismissed an application by Element Zero, Dr Kolodziejczyk and Mr Masterman (whom I will refer to as the EZ parties) to set aside the search orders: Fortescue Ltd v Element Zero Pty Ltd (No 2) [2024] FCA 1157. The principal case for the setting aside of the search orders was said to be the material non-disclosure of three categories of facts by Fortescue on the ex parte application. Her Honour found that in respect of one of the categories of facts there was a material non-disclosure in breach of Fortescue’s obligation of candour on the ex parte application. Despite this finding of material non-disclosure, her Honour exercised a discretion, which she held that she had, to not set aside the search orders. Her Honour ordered the EZ parties to pay the costs of the application to set aside the search orders.

4    The EZ parties now apply for leave to appeal against her Honour’s orders. Dr Winther-Jensen has not joined in making the application. He is cited as the fourth respondent and has filed a submitting notice save as to costs.

5    The EZ parties’ proposed grounds of appeal concern the following. Ground 1 asserts that the primary judge erred in failing to set aside the search orders after finding there was a material non-disclosure by Fortescue on the ex parte application. Expressed in that way, which is how it is put in the draft amended notice of appeal, the ground does not capture what the EZ parties seek to agitate. Rather, they say that the ground “raises an important point of principle which should be considered by the Full Court: is there a residual discretion to not set aside a search order where there has been material non-disclosure, and, if so, what is the scope of such discretion?”

6    Ground 2 concerns whether the primary judge ought to have found material non-disclosure in relation to one of the other matters that was advanced before her. Ground 3 proceeds on the assumption that Ground 1 fails by asserting that her Honour incorrectly exercised the discretion. Ground 4 seeks to overturn the costs order made in Fortescue’s favour.

The leave to appeal inquiry

7    It is common ground that the EZ parties require leave to appeal because the orders sought to be appealed against are interlocutory orders. An “appropriate litmus test” for leave to be granted is if the applicant for leave establishes that, in all the circumstances, the decision is attended with sufficient doubt to warrant its reconsideration on appeal and, supposing the decision to be wrong, substantial injustice would result if leave were refused: Decor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 844; 33 FCR 397 at 398-399 per Sheppard, Burchett and Heerey JJ. The sufficiency of the doubt in respect of the decision and the question of substantial injustice “bear upon each other so that the degree of doubt which is sufficient in one case may be different from that required in another”: Nationwide News Pty Ltd v Rush [2018] FCAFC 70 at [3] per Lee J, Allsop CJ and Rares J agreeing.

8    Additionally, as explained in Nationwide News Pty Ltd v Rush at [4] with reference to the statutory imperative in s 37M(3) of the Federal Court of Australia Act 1976 (Cth) that the power to grant leave to appeal must be exercised in the way that best promotes the overarching purpose – being the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible – “if a tight rein is not kept upon the interference with orders of judges at first instance in the exercise of discretion on a point of practice and procedure, the result will be ‘disastrous to the proper administration of justice’”: In re the Will of F B Gilbert (Deceased) (1946) 46 SR (NSW) 318 at 323 per Jordan CJ. See also Brilliant Digital Entertainment Pty Ltd v Universal Music Australia Pty Ltd [2004] FCAFC 270; 63 IPR 373 at [7]-[8] per Black CJ and Stone J.

Sufficiency of doubt

Proposed ground 1:

9    In their written submissions, the EZ parties characterise this ground as raising whether there is a residual discretion to not set aside a search order where there has been a material non-disclosure and they submit that having found material non-disclosure, Markovic J “was bound to set aside the search orders following High Court and Full Court authority”. However, in their reply submissions and orally the EZ parties accept that “the High Court has made it clear that there is a very narrow or ‘residual’ discretion” and characterise her Honour’s alleged error as having proceeded on the basis of a broad and unfettered discretion, and in particular, in reliance on Savcor Pty Ltd v Cathodic Protection International Aps [2005] VSCA 213; 12 VR 639 at [29] per Gillard AJA, Ormiston and Buchanan JJA agreeing, having concluded that “it is not an inflexible rule that a non-disclosure of a material fact in an ex parte application invariably leads to the order being set aside.” They submit that Savcor does not properly reflect the state of the law and that her Honour should have followed High Court and Full Court authority.

10    It is best to begin by identifying what her Honour did on this question. In an early section of her reasons for judgment with the heading “Some legal principles”, her Honour extracted (at J [26]) the well-known characterisation of the duty of candour on an ex parte application and the consequence of its breach as expressed by Isaacs J – sitting as a single Justice in the High Court’s original jurisdiction – in Thomas A Edison Ltd v Bullock [1912] HCA 72; 15 CLR 679 at 681-682. That quote included the statement that unless the duty of candour, expressed there as one of uberrima fides, on an applicant on an ex parte application is observed “the implied condition upon which the Court acts in forming its judgment is unfulfilled and the order so obtained must almost invariably fall.”

11    Her Honour noted (still at J [26]) that what was said by Isaacs J was approved in International Finance Trust Co Ltd v New South Wales Crime Commission [2009] HCA 49; 240 CLR 319 at [133] per Hayne, Crennan and Kiefel JJ. I interpose to observe that their Honours were in dissent in that case and that the Justices forming the majority (French CJ, Gummow, Heydon and Bell JJ) did not deal with the point at all.

12    Her Honour then quoted (at J [28]) from Savcor including the statement at [22] that “[w]hether or not the court will set aside the order upon proof of the failure to discharge the obligation [of candour] depends upon the particular circumstances.” Her Honour, citing Savcor at [27]-[28], held that whether or not to set aside an order where there has been a failure to disclose material facts is a matter of discretion (J [33]). Her Honour extracted further from Savcor, including, relevantly, the following:

29    … In my view it is not an inflexible rule that a non-disclosure of a material fact in an ex parte application invariably leads to the order being set aside. … Each case will depend upon its own circumstances. Justice is the determinant. …

…

31    Whether a court will set aside an order will depend upon many factors. The court should not overlook the practical effect of such a step. What would be achieved by setting aside the order? Absent deliberate and intentional non-disclosure or misleading information (which usually leads to a discharge), the court must weigh all relevant material. …

13    Finally for present purposes, in dealing with the exercise of the discretion that her Honour identified that she had upon finding that there was a material non-disclosure, her Honour stated that “[t]he next question that arises is whether because of that, in the exercise of my discretion, the search orders should be set aside: see Savcor at [27]” (J [242]).

14    Turning now to the EZ parties’ submission that that identification of principles by her Honour reveals error, it is convenient to begin with the High Court cases. I have already identified the relevant aspects from Thomas A Edison v Bullock and International Finance Trust v NSW Crime Commission. The only other case relied on by the EZ parties is once again a decision of a single Justice of the Court sitting in its original jurisdiction, namely that of Gageler J in Aristocrat Technologies Australia Pty Ltd v Allam [2016] HCA 3; 90 ALJR 370 at [15] where his Honour said the following:

It is an elementary principle of our ordinarily adversarial system of justice that full and fair disclosure must be made by any person who seeks an order from a court ex parte, with the result that failure to make such disclosure is ordinarily sufficient to warrant discharge of such order as might be made. The principle is not confined to particular types of interlocutory orders. …

(Footnotes omitted.)

15    As the EZ parties came to accept, the statements of the position by the several Justices of the High Court over the years carry with them the inevitable implication that there is a discretion vested in the court whether or not to set aside orders obtained ex parte following the finding of a breach of the obligation of candour. There is nothing in the High Court authorities about what fetters there may be on the exercise of the discretion; the terminology of “almost invariably” and “ordinarily sufficient” neither sets a threshold nor circumscribes the discretion, although it is obviously indicative of the gravity of a breach of the obligation of candour which provides important context to the exercise of the discretion. Further, the judgments of Justices of the High Court sitting outside of the appellate structure of the system of courts in Australia that deal with these issues, although persuasive, are not binding on courts that are lower in the judicial hierarchy: Bone v Commissioner of Stamp Duties (NSW) [1972] 2 NSWLR 651 at 654 per Jacobs P, Reynolds JA agreeing and 664 per Hope JA; see also Fieldhouse v Commissioner of Taxation [1989] FCA 586; 25 FCR 187 at 223-224 where Hill J’s explanation of the position is not detracted from by the fact of his Honour’s dissent in the result. The statements in the dissenting judgment in International Finance Trust v NSW Crime Commission are also not binding, although they too deserve great respect: Federation Insurance Ltd v Wasson [1987] HCA 34; 163 CLR 303 at 314. It is therefore to intermediate appellate court authority that one has to turn for binding precedent.

16    The Full Court authority that it is said that her Honour should have followed is Town & Country Sport Resorts (Holdings) Pty Ltd v Partnership Pacific Ltd (1988) 20 FCR 540. The EZ parties rely upon the statement of Davies, Gummow and Lee JJ (at 543) that “[t]he failure of the applicants to make full disclosure of all facts relevant to the application for an interim injunction in itself necessitated the discharge of the order granted.” It is to be observed that their Honours went on in the same paragraph to quote the passage from Thomas A Edison v Bullock which includes the statement that such an order “must almost invariably fall”, although both the original judgment and the authorised report of the judgment omit the word “almost” from the quotation. One must assume that despite that omission their Honours were aware of what Isaacs J had actually said. They must therefore be taken to have understood that there was a discretion and that the sentence from their reasons for judgment relied on by the EZ parties is descriptive of the position in that case on its facts, rather than a statement of principle that is prescriptive for all cases. Certainly, there is no indication that their Honours were intending to make a statement of principle or to depart from what was said by Isaacs J.

17    In those circumstances, her Honour’s finding that she had a discretion once having found a material non-disclosure is not inconsistent with the High Court and Full Court authorities referred to by the EZ parties. There is no appreciable doubt that her Honour was not in error in following Savcor as a decision of an intermediate court of appeal which has been followed on this point on countless occasions and which has not been shown to be in conflict with any binding High Court authority or any other intermediate appellate court authority. Another intermediate appellate court decision is to the same effect: Re Southern Equities Corporation Ltd (in liq) [1997] SASC 6399; 25 ACSR 394 at 423-424 per Lander J, Cox and Bleby JJ agreeing. Indeed, her Honour was bound to follow that intermediate appellate court authority: Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89 at [135].

18    Given her Honour’s reliance on Savcor, what the EZ parties’ proposed ground 1 really asserts is that Savcor is incorrect. This case is not a proper vehicle for pursuing that argument, in particular because it was never submitted to her Honour by the EZ parties that Savcor is incorrect and should not be followed. Indeed, both sides of the case referred to Savcor in detail and without criticism in submissions to her Honour. It was also not submitted to her Honour that Town & Country is authority for there being no discretion. Senior Counsel for the EZ parties before her Honour (who was different from Senior Counsel before me) accepted that her Honour had a discretion (19/08/24, T12:16-18). In those circumstances, there is little prospect that the Full Court, if leave were granted, would grant leave to run the argument.

19    I acknowledge in relation to proposed ground 1 that different courts and commentators have identified there to be different approaches to the exercise of the relevant discretion, some adopting a narrower approach and others a broader approach: see Leeming M, “Ex Parte applications for injunctions: Then and now” (2013) 87(5) Australian Law Journal 303 at 305. I am nevertheless not persuaded that there is much in the way of prospects of establishing in an appeal that her Honour was in error in following and applying Savcor, in particular in circumstances where it was not submitted to her Honour that Savcor is wrong or should not be followed.

Proposed ground 2:

20    By proposed ground 2 the EZ parties say that Fortescue did not disclose that upon Dr Kolodziejczyk resigning from Fortescue he was directed to work out his notice period from home, take whatever files he needed to do so, and communicate using his personal email account and phone after he had been required to hand in his work computer. It is said that in the ex parte application Fortescue had relied heavily on the fact that Dr Kolodziejczyk had “taken” certain of its documents from the office to suggest to the duty judge that the search orders were warranted, without disclosing that Fortescue had directed him to work from home. The EZ parties submit that the primary judge ought to have found that Fortescue’s silence on those matters was a further material non-disclosure. Further, the EZ parties submit that her Honour impermissibly relied on evidence that she had allowed Fortescue to file in reply on the discharge application (not the antecedent search order application) over objection, which disputed the EZ parties’ evidence as to non-disclosure.

21    Her Honour found that there was a significant factual contest on the evidence on the issue, which neither party urged her to resolve, and that she was “not in a position to assess on this application the actual facts which the [EZ parties] alleged should have been disclosed and, once established, whether they are material” (J [164], [166]). Her Honour followed the observation by Carr J in Tugushev v Orlov [2019] EWHC 2031 (Comm) at [7(viii)] that it is generally inappropriate to set aside an ex parte order for non-disclosure “where proof of non-disclosure depends on proof of facts which are themselves in issue in the action, unless the facts are truly so plain that they can be readily and summarily established” (J [166]). It is not suggested that that approach is in error.

22    Rather, the nub of the complaint seems to be that in reaching a decision on non-disclosure her Honour had regard to affidavits filed and read by Fortescue on the application to discharge the search orders rather than restricting herself, insofar as Fortescue’s evidence is concerned, to the evidence that had been before the duty judge. No error is revealed in that approach by her Honour. On the non-disclosure ground, her Honour was not being asked, and was not required, to decide the matter only on the evidence that was before the duty judge. By themselves filing and relying on evidence to establish the non-disclosure and its materiality, the EZ parties necessarily invited her Honour to decide the discharge application on a corpus of evidence broader than what was before the duty judge. As a matter of fairness, that evidence rightly included Fortescue’s evidence filed and relied on in answer to the EZ parties’ non-disclosure evidence. I see no discernible doubt in her Honour’s treatment of the issues raised by proposed ground 2.

Proposed ground 3:

23    This ground assumes that her Honour had a broad discretion in the circumstances, but that she erred in its exercise. That requires the establishment of error of the type described in House v The King [1936] HCA 40; 55 CLR 499.

24    Justice Markovic (at J [244]) identified six matters which led her to conclude that she should exercise the discretion not to set aside the search orders. They are, in brief:

(1)    the duty judge’s conclusion that Fortescue had a strong prima facie case;

(2)    her Honour’s own conclusion that that finding as to a strong prima facie case was not displaced on the discharge application notwithstanding the EZ parties’ evidence;

(3)    her Honour’s satisfaction that disclosure of the relevant facts would not have changed the Court’s decision to grant the search orders given the conclusions that were reached on the substantial body of evidence on which Fortescue relied;

(4)    the evidence of Mr Paul Dewar (Fortescue’s solicitor), which her Honour accepted, that in failing to disclose material information neither he nor Fortescue intended to mislead the Court;

(5)    “critically”, there was a lack of any utility in setting aside the search orders, noting that they had already been executed, the independent lawyers and computer experts had filed their reports, and Fortescue could apply for the search orders to be made again; and

(6)    that “it is difficult to see how there can be any prejudice to the [EZ parties] in maintaining the status quo” in preserving the evidence.

25    Although the proposed notice of appeal levels challenges at other of the considerations taken into account by Markovic J, in submissions on the leave to appeal application the EZ parties make submissions only on the matters I will now go on to deal with.

26    The EZ parties submit that consideration (3), ie that disclosure of the information would not have changed the result, is in conflict with her Honour’s earlier finding that the non-disclosure “was capable of having affected the Court’s decision” (at J [227]). The earlier finding was an application of the relevant test, or inquiry, as to whether the non-disclosure was “material” and therefore a breach of the duty of candour. Her Honour (at J [30]) cited Naidenov, in the matter of 30 Denham Pty Ltd (in liq) [2023] FCA 134 at [11] as authority for that expression of the relevant inquiry, ie “the matter must be material in the sense of being capable of having affected the court’s decision, and not that it would have affected the decision.” It is not suggested that that is in error.

27    I do not think that there is inconsistency between the two findings. Her Honour is saying that although it is realistically possible that had the facts in question been disclosed the result could have been different, it probably would not have been. Looked at differently, what the two findings amount to is that although the facts in question were material in the relevant sense, they were not particularly significant, ie there was only a low level of materiality.

28    Next, the EZ parties submit that consideration (4) reveals error because her Honour accepted the evidence of Mr Dewar on the question of whether the non-disclosure was innocent rather than having been done deliberately with an intention to mislead the Court, in circumstances where his evidence was admitted subject to a limitation under s 136 of the Evidence Act 1995 (Cth). 

29    The only limitation on Mr Dewar’s evidence was to paragraphs 22 and 24 of his relevant affidavit (19/08/24, T23:5 – T24:25). In paragraph 22, Mr Dewar set out his reasons for having concluded that the facts in question were not material and therefore not disclosed. In paragraph 24, he stated that he held the view that the facts were not material but, if the Court concludes that they were, in deciding not to disclose the facts he did not intend to mislead the Court and nor did Fortescue. The relevant limitation placed on those paragraphs was that they were to be evidence only of Mr Dewar’s opinion on the subject matter in them.

30    The effect of the limitation is that the relevant evidence was admissible to prove why Mr Dewar considered, at the time of the preparation of evidence for the ex parte application, why the facts in question were not material and therefore not included. Her Honour’s acceptance of Mr Dewar’s opinion on the relevance or materiality of those facts is the basis for the finding that Mr Dewar did not intend to mislead the Court. There is no error in that approach to the matter, and the evidence was not used for an impermissible purpose.

31    The EZ parties submit that the practical effect of her Honour’s reasoning is that a search order would stand even if there has been material non-disclosure, so long as the moving party asserts that it did not appreciate the facts it chose not to disclose were material. I reject that submission. It does not follow from the fact that her Honour accepted the evidence of Mr Dewar as to his state of mind, or opinion, that courts will always adopt that approach. It was open to the EZ parties to seek to persuade her Honour that she should not accept that evidence of Mr Dewar, but they failed to do so.

32    The EZ parties also submit that her Honour erred in relation to consideration (5), ie that there would be no utility in setting aside the search orders. They submit that consideration of utility is an improper exercise of the discretion, but aside from what they submit in relation to proposed ground 1, ie that it is a narrow and tightly circumscribed discretion, they cite no authority for that proposition. There is ample authority that utility is a relevant and permissible consideration, eg J C Techforce Pty Ltd v Pearce [1996] FCA 599; 138 ALR 522 at 529-30 per Branson J; Geneva Laboratories Ltd v Nguyen [2014] FCA 1270; 110 IPR 295 at [52] and [119] per Gleeson J; Direct Flow Pty Ltd v Peterson [2023] NSWSC 318 at [51] per Robb J. No error is demonstrated, let alone error of the type identified in House v The King.

33    For those reasons, I am not persuaded that there is any discernible doubt in the correctness of her Honour’s decision in relation to proposed ground 3.

Proposed ground 4:

34    This ground seeks only to upset the costs order below. Reference is made by the EZ parties to Naidenov, in the matter of 30 Denham Pty Ltd (in liq), referred to above, at [36] where I made a different costs order in similar circumstances. But there is nothing in that case that elevates what was decided there in relation to costs to a matter of principle or to circumscribe the costs discretion in any way. There is no apparent error in her Honour’s exercise of that discretion. In any event, even a clear error in the award of the costs of an interlocutory application would not ordinarily justify leave to appeal being granted.

Conclusion on sufficiency of doubt:

35    For the reasons given above, I am not persuaded that there is sufficient doubt as to the correctness of her Honour’s decision not to set aside the search orders such as to justify leave to appeal even assuming substantial injustice.

Substantial injustice

36    In Brilliant Digital the Full Court dismissed an application for leave to appeal against the dismissal of applications to set aside ex parte interlocutory orders in the nature of search orders. Chief Justice Black and Stone J dismissed the application only on the ground of the absence of substantial injustice without considering the correctness of the decision of the primary judge (at [14]). Their Honours dealt with various grounds of substantial injustice sought to be relied on in that case, which are very similar to those relied on in the present case, and rejected them (at [10]-[14]), as did Emmett J (at [76]). For the same reasons, I am not persuaded that there is any substantial injustice in the present case. I will nevertheless address each of the matters relied on by the EZ parties.

37    The first matter relied on is that the material seized during execution of the search orders amounts to (1) the entire records of the Element Zero business, (2) “highly confidential third party material (including material provided to Element Zero by government departments and competitors of Fortescue)”, and (3) a significant amount of personal material from Dr Kolodziejczyk. The EZ parties submit that that material could be the subject of direct access by Fortescue if the search orders are not set aside. It is said that the material is exposed to potential access orders.

38    There is no basis to the submission that the material could be the subject of “direct access by Fortescue”. Any access to the material would necessarily only be access granted by the Court in its ongoing supervision of the search orders – being interlocutory, the orders are subject to being revisited. Also, save for some notebooks and loose papers, the material “seized” during the execution of the search orders was not seized in the sense of “taken away from”, but rather in the sense of “copied”. That is to say, there is no evidence to suggest that the EZ parties do not in the ordinary course of their business have ongoing access to their records, copies of which were made and which are now held by the Court or the independent computer experts. Insofar as the notebooks and papers are concerned, any prejudice in not having access to them (on which there is no evidence) can be remedied under the Court’s continued supervision of the search orders – an application can be made for the return of the hard copy materials with copies being made and retained if necessary. The same is true of any other material that has been seized or copied which is said to go beyond the scope of what is legitimate or justified under the search orders, including so-called third party material – an appropriate application can be brought to exclude that material and have it returned, deleted or destroyed, as may be appropriate. No prejudice is shown in the status quo being maintained in the meanwhile.

39    The second matter relied on is that “[t]he impact of the surveillance and execution of the search orders has also resulted in serious reputational damage to the [EZ] parties”. No evidence of reputational damage flowing from the search orders in the overwhelming volume of evidence adduced in the leave application has been brought to my attention. Insofar as surveillance is concerned, what is referred to is surveillance undertaken at the instance of Fortescue prior to the search orders being granted in order to establish what the Element Zero parties were doing. Setting the search orders aside will have no bearing on whatever harm may have flowed from that.

40    The third matter relied on to establish substantial injustice is the submission that if the search orders are not set aside the EZ parties will be prevented from relying on s 138 of the Evidence Act at the final hearing in due course to object to the admissibility of any of the seized or copied material on the ground that it was improperly obtained. However, that submission proceeds on the unarticulated assumptions that the evidence in question is relevant (otherwise it would be inadmissible under s 56) and that it would not be available to the Fortescue parties to adduce as evidence other than by way of the (improperly obtained) search orders. The second assumption can only be true if the EZ parties failed to produce relevant material under the discovery orders that have already been made in the principal proceeding. The potential for such a failure is the rationale underlying the search orders. The submission is therefore self-defeating.

41    The final matter relied on is the submission that if the search orders were improperly obtained, which is what is sought to be established in the proposed appeal, the EZ parties would have an action in trespass which a refusal of leave to appeal would deny them. Reliance is placed on Smethurst v Commissioner of the Australian Federal Police [2020] HCA 14; 272 CLR 177. It is not identified against whom an action in trespass might be pursued, but presumably it would be the people who executed the search orders being the independent solicitor and computer experts and solicitors on behalf of Fortescue, ie the members of each “search party” for the different premises to be searched as defined in the search orders.

42    Shortly put, Smethurst involved an entry, search and seizure of materials in a journalist’s home premises by members of the Australian Federal Police pursuant to a warrant obtained from a magistrate. That warrant was found to be not compliant with s 3E(5)(a) of the Crimes Act 1914 (Cth) and therefore invalid, consequently invalidating the entry, search and seizure. At [67], Kiefel CJ, Bell and Keane JJ considered the “consequences of trespass”, noting that it is “well settled that conduct involving the search of premises and the seizure of property under an invalid warrant constitutes a trespass”. To similar effect, other members of the Court contemplated that such conduct could amount to the infringement of common law rights: at [119]-[121], [129] per Gageler J; [148] per Nettle J; [196] per Gordon J; [246] per Edelman J.

43    On this basis, the EZ parties say that the primary judge, in declining to set aside the search order, “determined what would have been substantive rights”: T25:1-5. Their point is that unless leave to appeal is granted, the effect of the discharge application being dismissed was that “there was no trespass and thus materials are not to be returned”, amounting to a substantial injustice: T25:9-16.

44    Account needs to be taken of the High Court’s recent decision in Queensland v Stradford [2025] HCA 3. There, the plurality of Gageler CJ, Gleeson, Jagot and Beech-Jones JJ held (at [149]-[150]) that the protection of immunity is conferred on those charged with a legal duty to enforce or execute court orders or warrants made or issued by a court in judicial proceedings, including an inferior court, even if those orders or warrants are invalid. Their Honours held (at [149]):

This is so regardless of whether such persons are amenable to the supervision and punishment of the court as court officers. To perform their role effectively, courts must have their orders enforced and that must be done by officials not subject to the unreasonable burden of having to investigate the validity of the orders or warrants presented to them.

The judgments of the other Justices of the Court, although expressed in differing ways, are to like effect.

45    Strictly speaking, Queensland v Stradford does not resolve whether this protection extends to the solicitors of an applicant when executing a search order which may ultimately be found to be invalid. That is because they may not be regarded as “officials” although the orders in this case and the standard form of orders in the Search Orders Practice Note (GPN-SRCH) authorise such solicitors to be part of the search party. However, it is uncontroversial in the law that, as an incident of judicial power, “the orders of a federal court which is established as a superior court of record are valid until set aside, even if the orders are made in excess of jurisdiction”: New South Wales v Kable [2013] HCA 26; 252 CLR 118 at [32]. Although some of the Justices of the High Court in Queensland v Stradford questioned the utility of the superior-inferior court distinction for these purposes (see especially [232]-[247] per Edelman J; [325] per Steward J), the distinction remains a core part of the law: Queensland v Stradford at [53]. In any event, on either view, orders of this Court enjoyed the relevant status.

46    With respect to what was said in Smethurst, as discussed, it is clear the effect of a court order is inherently tied to its status as an exercise of judicial power: see, eg, Queensland v Stradford at [179], [181] per Gordon J. Even aside from the fact that Smethurst concerned an act of a magistrate of an inferior court, the issue of a search warrant is generally of an administrative rather than judicial character, in which “a judge makes no order and nothing that he or she does is enforced as an order of the court”: see Love v Attorney-General (NSW) [1990] HCA 4; 169 CLR 307 at 321-322 citing Hilton v Wells [1985] HCA 16; 157 CLR 57. The issue of a search warrant under s 3E of the Crimes Act in particular has been held to be an administrative act: see Price v Fitzgerald [2000] FCA 134; 97 FCR 227 at [22] per Black CJ, Sackville and Emmett JJ. Plainly, the legal authorisation for tortious acts contemplated in Smethurst was very different to that provided by the search orders in this case, which is derived from the judicial power vested the Court under s 23 of the Federal Court Act: see Chandrasekaran v Commonwealth [2019] FCA 1169 at [26] per Wigney J and the authorities cited there.

47    The point is that the search orders authorised their execution, and even if they were to be set aside in due course they would still provide a complete defence to any action in trespass. Moreover, as the respondents correctly identify, an undertaking as to damages is in place such that if some damage arising from the search can be shown, its recovery is not necessarily prevented by a denial of leave to appeal; that matter can still be ventilated in due course.

48    Hence, I consider the applicants’ submission that substantial injustice arises from their inability to pursue a trespass claim to be without foundation.

Disposition

49    To recapitulate, I have found that there is little doubt in the correctness of her Honour’s decision and that there is no substantial injustice if, assuming the decision to be wrong, leave to appeal is not granted. In those circumstances, the application for leave to appeal must be dismissed.

50    The parties were agreed that in that event the EZ parties should pay Fortescue’s costs of the application for leave to appeal.

Associate:

Dated:    14 March 2025

SCHEDULE OF PARTIES