FEDERAL COURT OF AUSTRALIA

The Epoch Holding Group Pty Ltd v Katz (Disclosure of Documents) [2025] FCA 271

ORDERS

THE COURT ORDERS THAT:

1.    Until further order, pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), these reasons for judgment will be disclosed to the following persons only:

(a)    any judge, employee or other personnel of this Court;

(b)    the applicants, including their employees, directors, shareholders and external legal representatives;

(c)    the second respondent and the legal representatives of the second respondent;

(d)    such other persons authorised by the applicants, the second respondent, or as the Court may order; and

(e)    will not be open to public inspection or disclosed in open Court or disclosed in the open part of any Court transcript.

2.    Within fourteen days of the date of the delivery of these reasons, the parties are to provide to Needham J’s chambers by email:

(a)    one set of draft orders reflecting the reasons for judgment, including any confidentiality orders over any part of the reasons, with any contested orders in markup clearly identified as to each party’s position; and

(b)    any submissions on case management of these proceedings and retention of the hearing date (as dealt with in paragraph [250] – [251] of these reasons for judgment);

such submissions not to exceed 15 pages in length in total (not including the draft orders).

3.    Matter to be relisted for Case Management Hearing on a date to be administratively advised to the parties.

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

REASONS FOR JUDGMENT

NEEDHAM J:

1 The Brazilian footballer Pelé once said, “The more difficult the victory, the greater the happiness in winning”. He also said, “If you are first you are first. If you are second, you are nothing”. These quotes give some illumination to the approach taken by the parties to the two interlocutory applications before the Court, each relating to disclosure of documents. Those applications were initially heard over two days on 2 and 3 October 2024, and judgment reserved. On 1 November 2024, the applicants amended their interlocutory application to seek additional relief. The amended application was heard on 20 December 2024. It is fair to say that the questions of discovery, issue of subpoenas, and leave to invoke the jurisdiction of foreign courts for production of documents were hotly contested. While there was some movement in the position of the parties and reduction of categories by consent, on the whole the material which remained in issue over those three days vastly outweighed the material which had been agreed. Neither side wished, it seemed, to come second, and each was prepared to test its strength for a great and difficult victory.

2 The applicants, between whom there was no significant differentiation made at the hearing, and who will be globally referred to as “Epoch” unless where differentiation is necessary, conduct a trading firm and hedge fund. The second respondent, Mr David Katz, is a former employee of Epoch. Mr Katz was employed by the third applicant, Epoch Systems, as the head of the Medium Frequency Trading Desk (MFT Desk) from around 2013 until early 2021. He is now employed by Schonfeld Strategic Advisors (Australia) Pty Ltd (Schonfeld AU), a competitor of Epoch. The proceedings arise out of the circumstances of his leaving Epoch, and that of another employee, Mr Toby Carrodus, later leaving Epoch and joining Mr Katz at Schonfeld AU. It is alleged that Mr Katz solicited Mr Carrodus to leave his employment, and that he provided information that was confidential to Epoch to various parties, including Schonfeld AU.

3 Mr Katz is now the only remaining respondent, the applicants having settled with Mr Carrodus, the first respondent, in circumstances the relevance of which is dealt with below. Accordingly, references in these reasons to “the respondent” is a reference to Mr Katz.

4 The first interlocutory application, filed by the applicants on 2 August 2024 (Epoch IA), seeks verified discovery of five categories of documents, as well as orders relating to the issuing of subpoenas to Schonfeld AU, two entities incorporated in the United States of America, being Schonfield Strategic Advisors LLC (Schonfeld US) and Millenium Management LLC (Millenium), and one incorporated in the United Kingdom, being Lascaux Partners Limited (Lascaux) on its solicitors in Australia. An amended application was filed on 1 November 2024, which amendment expanded the relief sought to include a Sabre order (see Sabre Corporation Pty Ltd v Russ Kalvin’s Hair Care Company (1993) 46 FCR 428 (at 431-432)) against Schonfeld AU in relation to communications between Mr Katz and Schonfeld Strategic Advisors (UK) LPP (Schonfeld UK), or Schonfeld UK and any other Schonfeld entity, in respect of Mr Carrodus, Mr Katz, and Mr Katz’ employment. I will refer to the amended interlocutory application as the Epoch AIA where necessary.

5 The second interlocutory application, filed by Mr Katz on 9 August 2024 (Katz IA), seeks verified discovery of the documents specified in categories 1 to 36, 38 to 44, and 48 of the Redfern Schedule, Exhibit 1. The Redfern Schedule is a Confidential Exhibit and is subject to a non-publication order of 30 November 2023, as amended by an order of 19 February 2024. Accordingly, it cannot be annexed or parts of it explicitly referred to, and this may result in some opacity in these reasons.

6 It is alleged in the Amended Statement of Claim (ASOC) that each of Mr Katz and Mr Carrodus breached his employment agreement with Epoch and misused confidential information. The respondent does not accept that all of the information particularised as confidential information is in fact confidential, nor does the respondent agree that Mr Carrodus provided Epoch’s confidential information to Mr Katz. Notwithstanding that, material alleged to be confidential to Epoch was referred to in argument, on a “without admissions” basis, as the Confidential Supplementary Particulars (CSP) or as the Epoch Confidential Information (Epoch CI). I have adopted that description as that used by the parties.

7 Various parts of evidence, both before me and in the substantive proceedings, are subject to confidentiality orders. As a result, some of the descriptions of documents in these reasons are necessarily opaque.

8 This judgment was initially published pursuant to a non-publication order and the final published version has been the subject of submissions and redactions as required to ensure compliance with that order.

Procedural History

9 The background to this matter is derived from the submissions and affidavits filed on the applications. I have relied particularly on the summaries of the history of this litigation in the affidavits of Brett Feltham of King & Wood Mallesons (KWM), solicitor for the applicants, sworn on 6 August 2024 (referred to as Feltham 6) and Shivchand Jhinku of Herbert Smith Freehills (HSF), solicitor for Mr Katz, sworn on 9 August 2024 (referred to as Jhinku 5). Each of these affidavits was read without objection but apart from annexing documents and a narrative as to developments in these proceedings, much of their respective content amounts to submissions.

10 In the substantive proceedings, the applicants seek (in broad summary):

(a)    declaratory relief that Mr Katz acted in breach of non-solicitation clauses and confidentiality obligations arising out of his employment agreements with Epoch, and misused confidential information, including breaching duties he was subject to under the Corporations Act 2001 (Cth);

(b)    declaratory relief that Mr Katz enticed Mr Carrodus to engage in similar breaches;

(c)    injunctive relief preventing the respondent from using or disclosing information confidential to one or more of the applicants in breach of the Katz confidentiality obligation and/or his equitable obligation of compensation;

(d)    an account of profits and/or equitable compensation, as well as compensation under s 1317H of the Corporations Act;

(e)    interest pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth) (FC Act); and

(f)    costs and any other orders or relief the Court sees fit.

11 The ASOC sets out a history of Mr Katz’ and Mr Carrodus’ employment within Epoch, and the circumstances of each leaving his respective employment. Essentially the applicants plead that Mr Katz commenced employment with Epoch in late 2013, and entered into various agreements as to the terms of his employment which included confidential information clauses and a non-solicitation clause. Mr Carrodus commenced employment with Epoch in early 2018 and his employment agreements included consent to a confidential information regime as well as a restraint on employment after leaving Epoch.

12 These proceedings arise out of the circumstances of his departure, and that of Mr Carrodus, who was a quantitative analyst in the MFT Desk, and who reported to Mr Katz until his departure in June 2022. Mr Katz’ employment contract was initially with Schonfeld UK, a relevant fact dealt with at [25] to [28] below, but later with Schonfeld AU. Mr Carrodus was also, after his departure from Epoch, employed by Schonfeld AU. The applicants plead that prior to his employment at Schonfeld AU, but over a period commencing prior to his departure, Mr Carrodus investigated alternative employment, by way of having discussions with Schonfeld US and Schonfeld AU (including with Mr Katz), Millennium (a competitor to Epoch), and Lascaux (a recruitment firm).

13 When these proceedings commenced, Mr Carrodus was the only respondent. The applicants obtained urgent ex parte search, disclosure and inspection orders against him on 13 July 2022. Mr Carrodus was, inter alia, required to provide information under oath as to the use of information which Epoch contended, and continues to contend, was confidential. Mr Carrodus provided three affidavits while he was a party respondent to these proceedings, on 19 July 2022, 1 August 2022, and 11 August 2022.

14 Mr Katz was joined to the proceedings as second respondent on 8 December 2022. He and Mr Carrodus each filed Defences to the Statement of Claim on 8 March 2023. An interlocutory application by Mr Katz for non-publication orders was filed on 5 May 2023.

15 Justice Cheeseman delivered judgment on 16 August 2022 (The Epoch Holding Group Pty Ltd v Carrodus [2022] FCA 947) in which her Honour made Orders relating to non-publication on the basis of commercially sensitive information.

16 On 26 May 2023, the applicants and Mr Carrodus signed a Deed of Release, which provided, amongst other things, that he would assist the applicants in their proceedings against Mr Katz by providing full disclosure of his role to the applicants, and by agreeing to make himself available for cross-examination on his affidavits (including an affidavit affirmed by him on 15 August 2023 pursuant to the terms of the Deed of Release – Carrodus 4). This affidavit was filed without some of the annexures which were described as confidential.

17 Mr Katz filed an interlocutory application which was part-heard by Cheeseman J on 15 June 2023. The applicants sought orders for discovery prior to the filing of evidence in chief, but those orders were not made (Mr Katz not consenting to those orders). Her Honour made further non-publication orders on that day, and on various dates subsequent to that, to which orders I have added some further documents by consent of the parties. An interim confidentiality regime was agreed upon, and the confidential annexures to Mr Carrodus’ affidavit were eventually provided to Mr Katz.

18 On 16 August 2023 Cheeseman J made orders dismissing the Amended Originating Application as against Mr Carrodus on terms, leaving Mr Katz as the only respondent to the proceedings.

19 What may be described as a flurry of activity then commenced. In the interests of relevance and readability, these reasons need not include all of the detail, but the actions included:

(a)    the applicants seeking to amend the Amended Originating Process and the Statement of Claim, on the basis of the information they had received by way of Carrodus 4;

(b)    completion of the applicants’ evidence in chief by 8 September 2023, subject to further lay evidence if necessary as a result of various anticipated disclosure procedures. Some of that evidence (including evidence of Mr Mast, Epoch’s COO, Mr Gordon, Head of Technology of Epoch’s MFT desk, and, as noted above, Mr Carrodus) was tendered on the Epoch IA;

(c)    orders by Cheeseman J including a referral of the application to amend to a Senior Registrar;

(d)    an application by Mr Katz to strike out parts of the unamended Statement of Claim, which was also referred to a Senior Registrar; and

(e)    Senior National Judicial Registrar Farrell (to whom I will refer without meaning any disrespect as the Registrar) determining the application to amend, and the application to strike out, giving reasons dated 22 December 2023. The applicants were given leave to amend their pleadings with further particulars, and the strike out application was dismissed.

20 At the December 2023 hearing before the Registrar, it was submitted on behalf of Mr Katz, and accepted by the Registrar in [38] and [39] of his reasons for decision, that the proposed amended pleading did not sufficiently identify the confidential information allegedly obtained by Mr Katz, nor the actual use to which the confidential information was put so that it amounted to a breach. The Registrar said (at [28], [43]-[45] of his reasons):

28. The dispute has been narrowed to this extent. Mr Katz says that the PASOC [proposed amended statement of claim] lacks the necessary precision that is required in relation to 2 key matters, being:

a)    What Epoch alleges to be the confidential information which was obtained by Mr Katz; and

b)     What does Epoch allege was the actual use to which the confidential information was put by Mr Katz such as to amount to misuse of it.

…

43. As already stated, I am of the view that the PASOC does not sufficiently identify with sufficient precision the matters set out at paragraph 28 of these reasons. The question to be decided is whether in the circumstances Epoch should be ordered to prepare another fresh pleading or further particularise the PASOC.

44. When all the relevant discretionary considerations are weighed in the balance and with particular reference to the Court’s overarching purpose as contained in s37M, as a matter of case management and in order to try to avoid further substantial costs being incurred by the parties in relation to these pleading issues, the preferable decision is to grant Epoch leave to amend the originating application and pleading but on certain conditions. I should say that this is by no means ideal given the substantial cross-referencing required by the PASOC, but it is hoped that this will be the most efficient and cost effective way of resolving these issues.

45. Those conditions will be as follows:

a) In relation to paragraph 174 of the PASOC, the particulars are to be amended and/or supplemented to provide the identification with reasonable precision of the specific confidential information which is alleged to have been disclosed to Mr Katz as alleged in paragraph 173 of the PASOC.

b) In relation to paragraphs 174B and 174BB of the PASOC, the particulars are to be amended and/or supplemented to provide the identification with reasonable precision of the specific confidential information which is alleged to have been disclosed by Mr Katz.

c) In relation to paragraphs 174AA and 177 of the PASOC, the particulars are to be amended and/or supplemented (if necessary) to provide the identification with reasonable precision of the specific ways by which Mr Katz is alleged to have misused and/or disclosed the confidential information which is alleged to have been provided to him as pleaded in paragraphs 174, 174B and 174BB of the PASOC. It may well be that Epoch alleges the use or misuse of the confidential information and nothing more. But Mr Katz is entitled to be informed with reasonable precision if there are any further allegations made against him with regards to any specific ways in which he may have misused the alleged confidential information, so that he knows the case which he is required to meet.

21 Cheeseman J made further orders in relation to inter alia confidentiality (The Epoch Holding Group Pty Ltd v Katz [2023] FCA 1468) on 24 November 2023.

22 As a result of the determination by the Registrar, in February 2024 the applicants filed a Further Amended Originating Application and the ASOC, together with the CSP (which became Ex F24 in the application before me). Mr Katz filed a Defence to the ASOC on 19 April 2024. The CSP appears to be responsive to the conditions set out at [45] of the Registrar’s reasons for decision.

23 The parties’ minds then turned, in a more focused way, to thoughts of disclosure (noting that this had been an issue between the parties for some time). I do not need to go through the extensive correspondence, but it is set out, with some degree of commentary, in paragraphs 42-82 of Feltham 6, and 63-79 of Jhinku 5. In summary, the position was that the applicants had filed their evidence, the pleadings had closed, and the respondent had not put on his evidence. Each of those positions was reached after numerous case management conferences, orders, and lengthy inter partes correspondence. That correspondence culminated in the filing of the Epoch IA and the Katz IA, each in early August 2024.

24 The proceedings had been transferred to my docket in July 2024 and the IAs were listed before me for two days on 2 and 3 October 2024. For reasons that are set out at [25]-[28] below, the matter was relisted for further hearing on 20 December 2024. Over the three days, the applicants relied on Feltham 6 and a further affidavit of Mr Feltham sworn 30 August 2024 (Feltham 7), and the respondent on Jhinku 5 and a further affidavit of Mr Jhinku affirmed 23 August 2024 (Jhinku 6). The applicants also tendered, rather than read, some of the evidence on which they will rely at the hearing, including affidavits of Mr Carrodus (those affidavits being those affirmed on 19 July 2022 (Carrodus 1), 1 August 2022 (Carrodus 2), 11 August 2022 (Carrodus 3) and 15 August 2023 (Carrodus 4)), and affidavits of Darren Mast (being those affirmed on 8 September 2023 (Mast 3) and 25 March 2024 (Mast 4), including Confidential Annexure DLM 4-27). The affidavit in support of the Epoch AIA were those of Mr Feltham sworn 1 November 2024 (referred to as Feltham 8) and 11 December 2024 (referred to as Feltham 9). No deponent was cross-examined.

25 During the October tranche of the hearing, it became clear that one of the documents that Epoch sought to be produced by the respondent was Mr Katz’ contract of employment with the relevant Schonfeld entity. Production of that document was consented to by the respondent. It seemed to me that production of that document should not await the delivery of judgment on the other issues, and so I directed that it should be produced by the respondent to the solicitors for the applicants within two weeks (i.e., 17 October 2024), and if there were any dispute, the matter should be relisted. I made an order to that effect on 3 October 2024 and made confidentiality orders in relation to the contract of employment. The wording of the order for production of the contract of employment was:

The second respondent provide the Contract of Employment between David Katz and one of the Schonfeld Group of companies to the applicants by 17 October 2024.

26 The applicants agreed to the production of the contract of employment being subject to a non-publication order. Mr Katz’ solicitors provided the contract of employment on 17 October 2024 under cover of an email of that date. The applicants’ solicitors replied on the same date noting that (citing the summary of the email from Feltham 8 paragraph 18):

(b) … at no time did HSF disclose in the voluminous corresponden[ce] with KWM on these issues that [Mr Katz] was employed by Schonfeld UK and not Schonfeld US, and hence that Schonfeld UK may also possess relevant documents.

(c) At no time during the arguments made before her Honour Justice Needham on 2 and 3 October 2024 did [Mr Katz] nor his legal representatives provide this information to the Applicants or to the Court, which would have allowed the Applicants to appropriately consider what other or different relief may be required, in conjunction with the other matters being considered by the Court at that time.

27 The correspondence from Mr Feltham included the expression of an assumption that the contract of employment had not been subsequently varied, assigned, or novated by Schonfeld UK to any other entity, and a request for any such varied, assigned, or novated contract if so. No reply was immediately received and on 22 October 2024, Mr Feltham wrote once more to Mr Katz’ solicitors indicating that the applicants would approach the Court if no substantive reply were received. Mr Jhinku then replied by email on 23 October noting (in summary):

(a)    Mr Katz’ initial contract of appointment dated 3 March 2022 was with Schonfeld UK, however, he never did any work for Schonfeld UK;

(b)    After Schonfeld AU was established, Mr Katz’ employment was transferred by letter agreement dated 20 May 2022 (executed by Mr Katz on 24 May 2022) to Schonfeld AU.

28 Further correspondence ensued which resulted in a non-publication order over a Letter Agreement by which Mr Katz’ employment was transferred and assigned from Schonfeld UK to Schonfeld AU. I made those orders by consent on 30 October 2024. As a result of the position taken by the applicants in relation to the employment by Mr Katz by Schonfeld UK, the Epoch AIA was filed on 1 November 2024. I was at that point significantly advanced in the preparation of these reasons, but due to the further listing of the matter on 20 December 2024 the finalisation of these reasons, including those matters raised in the Epoch AIA, has been delayed.

The issues in the proceedings

29 The claims against Mr Katz fall into three categories which are generally referred to as “the Solicitation Case”, the “Carrodus Information Case”, and the “Other Information Case”. Mr Jhinku in paragraph 33 of Jhinku 5 describes these by way of high-level summary as:

(a)    the claims that allege that Mr Katz breached contractual obligations not to solicit Mr Carrodus to leave the employ of the Applicants (the Solicitation Case);

(b)    the claims that allege that Mr Katz received, has misused, and is misusing, information that is said to be:

(i)    information of the Applicants;

(ii)    confidential to the Applicants; and

(iii)    information received by Mr Katz from Mr Carrodus

(the Carrodus Information Case); and

(c)    the claims that allege that Mr Katz received, has misused, and is misusing, information that is said to be:

(i)    information of the Applicants;

(ii)    confidential to the Applicants; and

(iii)    not information received by Mr Katz from Mr Carrodus

(the Other Information Case).

30 He then sets out a lengthier and more detailed outline of the three cases in Part C (Solicitation Case), D (the Carrodus Information Case), and E (the Other Information Case) in paragraphs 35-58 of Jhinku 5. These summaries are helpful but of course do not replace the issues as pleaded in the ASOC and the Defence.

31 Each of the parties seeks discovery of documents from the other, and Epoch seeks leave to issue subpoenas, to seek documents from overseas entities by way of the US Title 28 procedure, and (consequent upon the filing of the Epoch AIA) Sabre orders, to obtain documents from third parties. As noted above, there have been attempts to confine the disclosure issues before me, but in truth there has been only some little movement from each side. I set out below the areas of continuing disagreement.

The pleadings

The applicants’ pleadings

32 As noted above, the applicants’ pleading has undergone a significant change since its first iteration. The strikeout hearing before the Registrar resulted in a requirement that Epoch identify the confidential information in a more precise way, in that particulars be provided to give a better picture of the information which was said to have been confidential, and how it is said to have been misused.

33 The Originating Application as amended on 14 February 2024 relinquished the orders previously sought against Mr Carrodus, expanded the declarations sought against Mr Katz, and sought a declaration that Mr Katz had, in summary, been an active party in contraventions by Mr Carrodus of ss 182 and/or 183 of the Corporations Act. The substantive (as in non-declaratory) relief sought includes an order restraining Mr Katz from using or disclosing information confidential to the applicants, an account of profits and/or equitable compensation, and compensation under s 1317H of the Corporations Act.

34 The ASOC introduces a claim relating to Mr Katz’ participation (through his family trust) in a share plan (the rules of which are relevant both to the Solicitation Case and the Other Information Case) the fact that Mr Carrodus engaged in recruitment discussions with Schonfeld Aus and Schonfeld US, and (in part G of the ASOC) an allegation of breach of contract and breach of confidentiality by Mr Katz in relation to his own discussions with those entities, plus Millennium and Lascaux. Part GG pleads a breach of the equitable obligation of confidence, and Part H pleads contraventions of the Corporations Act.

35 In Part G, the particulars given to a substantial number of paragraphs pleaded by Epoch say as follows:

(A)    Affidavit of Toby Carrodus dated 15 August 2023 [Carrodus 4] paragraphs [X to X].

(B)    Further particulars may be provided after discovery, evidence, and any notices to produce and/or third party subpoenas.

36 The second part of this formulation (relating to the provision of further particulars after, relevantly, discovery) also appears in Part GG, and in other parts of the ASOC. Altogether, it appears some 24 times in the ASOC.

37 Paragraphs 174AA to 177 of the ASOC appear in Part G and plead as follows:

174AA.By reason of the matters pleaded in paragraphs 115 to 116 and 170A to 170B above, and the matters pleaded in paragraph 174BB(a)-(d) below, it may be, and ought to be, inferred that Katz misused and/or disclosed the confidential information provided to him by Carrodus as pleaded in paragraph 174 above:

(a)     for the purposes of conducting discussions with Carrodus with a view to soliciting Carrodus away from the Epoch Group (for the benefit of Katz and/or Schonfeld); and/or

(b)    as part of employment discussions with potential employers (including Schonfeld) as pleaded in paragraph 170A above and for obtaining substantial offers of employment from such potential employers; and/or

(c)     in the course of his work at Schonfeld since commencing employment.

Particulars

The Applicants refer to the particulars in the document entitled Confidential Supplementary Particulars filed 14 February 2024.

174B. Further or in the alternative, it may be, and ought to be, inferred from the matters pleaded in paragraphs 115 to 116 and paragraphs 170A to 174AA above, and the matters pleaded in paragraph 174BB below, that:

(a)    Katz disclosed confidential information (not obtained from Carrodus);

(b)    to one or more of the potential employers referred to in paragraph 170A above, being Schonfeld and/or Millennium, and to the recruiter Lascaux Partners; and

(c)    being the confidential information contained in the Recruitment Documents, including Epoch Group confidential financial information and trading strategies.

Particulars

The Applicants refer to the particulars in the document entitled Confidential Supplementary Particulars filed 14 February 2024.

174BB.Those relevant matters include:

(aa) Katz was previously employed by the Epoch Group for several years up to 9 June 2021;

(a) Katz engaged in pre-employment discussions with Millennium, an Epoch Group competitor, an entity that Carrodus was asked to, and provided, information confidential to the Epoch Group;

(b) Katz engaged in pre-employment discussions with Schonfeld (and ultimately was employed by Schonfeld), and was provided a “meaningful” sign-on bonus;

(c) Katz engaged the same recruitment agency, Lascaux Partners, that Carrodus also engaged, and to which Carrodus was asked to disclose information confidential to the Epoch Group; and

(d) when asked by Carrodus if Katz “needed anything else” (in reference to Epoch Group confidential financial metrics), Katz stated that he “had everything that he needed”.

Particulars

The Applicants refer to the particulars in the document entitled Confidential Supplementary Particulars filed 14 February 2024.

175.     Katz knew, or ought to have known, that the information disclosed to him by Carrodus as pleaded in paragraphs 173 and 174 above, and any information disclosed by him as pleaded in paragraphs 174B to 174BB above, together the Epoch CI, was information confidential to one or more of the Applicants.

Particulars

(A)    It was, or ought to have been known, to Katz that the Epoch CI was: (i) not known to Epoch Group’s competitors or to the public; (ii) was valuable to the Epoch Group; (iii) conferred a considerable competitive advantage on the Epoch Group; and (iv) was of the kind of information inherently kept confidential in the financial trading industry.

(B)    The Applicants refer to and repeat the particulars subjoined to paragraph 174BB above.

(C)    Further particulars may be provided after discovery, evidence, and any notices to produce and/or third party subpoenas.

176.    Under the Katz Confidentiality Deed, and the Katz Employment Agreement, Katz was (and remains) under a continuing obligation to maintain the confidentiality of all information confidential to the Epoch Group, including not to use such information for any other purpose (Katz Confidentiality Obligation).

Particulars

(A)    Katz Employment Agreement, clause 14.

(B)    Katz Confidentiality Deed, clauses 1.1 (definitions of “Confidential Information”, “Employment”, “Group Company” and “Related Body Corporate”), 2.1, 2.2, 3 and 4.

(C)    Further particulars may be provided.

177.    By reason of the matters pleaded in paragraphs 170A 173 to 176 above, Katz received, has used, and is still using, Epoch CI in breach of the Katz Confidentiality Obligation the Epoch Confidential Information including for the purposes of: continuing the

(a) conducting discussions with Carrodus with a view to soliciting Carrodus away from the Epoch Group (for the benefit of Katz and/or Schonfeld), and/or

(b) for engaging in his own discussions with potential employers and for obtaining substantial offers of employment from such potential employers (including Schonfeld), and/or

(c) for the purposes of his employment at Schonfeld (a competitor trading firm);.

Particulars

The Applicants refer to the particulars in the document entitled Confidential Supplementary Particulars filed 14 February 2024.

(underlining and strikeouts in original to indicate matters included in amendments to ASOC).

38 This part of the pleading is set out at length to demonstrate the issues which arise in the resistance by the respondent to the discovery sought in the Epoch IA.

39 The CSP provides further particulars to paragraphs 174, 174AA, 174B, 174BB, and 177 of the ASOC. Each of the parts of the CSP which refers to each of those paragraphs of the ASOC also includes “[f]urther particulars may be provided after evidence, discovery, and any notices to produce and/or third party subpoenas”.

40 CSP Annexure A was provided as further particulars to paragraph 174B of the ASOC. CSP Annexure A is a marked-up copy of the Recruitment Documents (a defined term in paragraph 116 of the ASOC) which were documents prepared by Mr Carrodus and sent to third parties, it is alleged, in breach of his duties not to disclose the confidential information of the applicants. Parts of those documents are marked in what were referred to as the red boxes to identify the portions of each of the four documents which are alleged to be confidential. A non-publication order in relation to the CSP was made by Cheeseman J on 19 February 2024.

41 Mr Katz complains about this pleading, including that it takes “a rolled-up approach” and, in relation to the central allegation that information was the confidential information of the applicants, that it does not plead that allegation in a satisfactorily specific way.

The respondent’s pleadings

42 The Defence to the ASOC was filed on 19 April 2024. The applicants complain about this pleading. It is criticised by Epoch as being “a morass of general denials”. While much of the Defence does merely deny (or not admit) a number of the paragraphs of the ASOC, it is not the case that there is no substantive case pleaded in Mr Katz’ defence. By way of defence to the allegations in Part G (set out in [37] above), Mr Katz pleads as follows:

174AA. In answer to paragraph 174AA, the Second Respondent:

(a)    refers to paragraphs 115 to 116 and 170A to 170B;

(b)    otherwise denies the paragraph;

(c)    says further by paragraph 174AA that the Applicants have not complied with Order 4 of the Orders of Registrar Farrell dated 29 November 2023, as the paragraph does not provide identification with reasonable precision of the specific ways which Mr Katz is alleged to have misused and/or disclosed the confidential information which is alleged to have been provided to him, and is liable to be struck out for that reason; and

(d)     for the avoidance of doubt, the Second Respondent does not plead to the particulars appended to the material fact alleged in the paragraph.

174B. In answer to paragraph 174B, the Second Respondent:

(a)    refers to paragraphs 115 to 116, 170A to 174AA and 174BB;

(b)    says further that:

(i)    the information identified in this paragraph by the Applicants is information of the same or a similar kind as information requested of Mr Katz and Mr Killin by the Applicants, or one or more of them, through Mr Humphreys, prior to their employment by the Epoch Group; and

(ii)    the information referred to in this paragraph is the same or a similar kind as information requested by the Applicants, from potential or prospective employees of Epoch, including but not limited to potential or prospective employees of the MFT desk, to the knowledge of Mr Humphreys;

(c)     otherwise denies the paragraph; and

(d)    for the avoidance of doubt, he does not plead to the particulars appended to the material fact alleged in the paragraph.

174BB. In answer to paragraph 174BB, the Second Respondent:

(a)    denies the paragraph; and

(b)     for the avoidance of doubt, the Second Respondent does not plead to the particulars appended to the material fact alleged in the paragraph.

175. In answer to paragraph 175, tThe Second Respondent: denies paragraph 175.

(a)    denies the paragraph; and

(b)     says further that:

(i)    Mr Katz does not know and therefore cannot admit any facts about the context or circumstances in which the information alleged was imparted to Mr Carrodus; and

(ii)    Epoch’s solicitors have indicated to Mr Katz’ solicitors that any communications between Mr Carrodus and Mr Katz (or Mr Katz’ lawyers) concerning the proceedings, and any facilitation of such communication would constitute, amongst other things, a tort on the part of Mr Katz (and his lawyers) and receipt of information in breach of confidence.

Particulars

(1)    Letter from Herbert Smith Freehills to King & Wood Mallesons dated 14 March 2024;

(2)    Letter from King & Wood Mallesons to Herbert Smith Freehills dated 20 March 2024.

176. In answer to paragraph 176, the Second Respondent:

(a)    repeats paragraphs 12 to 14 and 152(a) and 152(b) above;

(a)     says further that, for the avoidance of doubt, he:, the Second Respondent:

(i)    does not plead to the particulars appended to the material fact alleged in the paragraph; and

(ii)    at hearing will rely upon the entirety of the particularised documents for their proper construction; and

(b)     otherwise denies the paragraph.

177. In answer to paragraph 177, tThe Second Respondent:

(a)     repeats and relies upon paragraphs 170A to 176;

(b)     otherwise denies the paragraph 177;

(c)     says further by paragraph 177 that the Applicants have not complied with Order 4 of the Orders of Registrar Farrell dated 29 November 2023, as the paragraph does not provide identification with reasonable precision of the specific ways which Mr Katz is alleged to have misused and/or disclosed the confidential information which is alleged to have been provided to him, and is liable to be struck out for that reason; and

(d)     for the avoidance of doubt, the Second Respondent does not plead to the particulars appended to the material fact alleged in the paragraph.

(underlining and strikeouts in original to indicate matters included in amendments to ASOC).

43 Epoch makes specific complaint relating to Mr Katz’ failure to engage with the particulars “appended to the material fact alleged in the paragraph”. The formulation “for the avoidance of doubt, the Second Respondent does not plead to the particulars appended to the material fact alleged in the paragraph” is a refrain in the Defence, appearing some 45 times.

Relief sought in the Epoch IA

44 In the Epoch IA, the applicants seek:

(a)    discovery from Mr Katz of documents in five categories, which were set out in a Schedule which was Annexure A to the Epoch IA. The respondent suggested changes to the wording, and development of those suggestions from both sides resulted in an amended form of that document being proposed at the hearing. The version which was eventually landed upon by the parties was the Redfern Schedule which retained some alternative formulations which are not agreed, and upon which I am asked to rule;

(b)    leave to issue subpoenas to Schonfeld AU (amended by the Epoch AIA as set out below);

(c)    approval to make application for orders under §1782 of Title 28 of the United States Code seeking documents from Schonfeld US within the categories in Annexure BF6-2 to Feltham 6 (Schonfeld US Subpoena) (but see the relief sought in the Epoch AIA set out below);

(d)    approval to make application for orders under §1782 of Title 28 of the United States Code seeking documents from Millennium within the categories in Annexure BF6-3 to Feltham 6 (Millennium US Subpoena);

(e)    alternative orders for service of documents to the effect of the Schonfeld US Subpoena and on Millennium, pursuant to the Hague Service Convention, which were eventually not pressed;

(f)    leave to issue a subpoena to Lascaux care of its Australian solicitors, Gilbert + Tobin, in the form of Annexure BF6-4 to Feltham 6 (Lascaux Subpoena); and

(g)    costs.

Relief sought in the Epoch AIA

45 The Epoch AIA:

(a)    amends the terms of the subpoena to Schonfeld AU and the Schonfeld US Subpoena;

(b)    seeks a Sabre order that Schonfeld AU take all reasonable steps to obtain the documents specified in Annexure B to the Epoch AIA, or serve an affidavit setting out the steps that have been taken; and

(c)    seeks costs of the Epoch AIA on the indemnity basis.

Relief sought in the Katz IA

46 The Katz IA sought verified discovery of documents in categories 1-36, 38-44, and 48 of the Redfern Schedule in Annexure SJ5-13 of Jhinku 5 within 8 weeks, and costs. The categories were narrowed by discussion between the parties and some of the categories were agreed. The categories were included in the Redfern Schedule.

Discovery

General principles

The role of pleadings and particulars

47 As noted above, each of the Epoch IA and the Katz IA seeks discovery. Given the issues raised as to the scope of the pleadings and the nature of the documents sought, along with the formulations as to particulars in the pleadings noted above, it may be helpful to set out the relevant principles.

48 As was said by the learned author of in chapter 1 of Bray’s The Principles and Practice of Discovery (Bray, E; Reeves & Turner, 1885), “To a question of pure law no discovery can obviously be relevant. It is only, therefore, where there is some question of fact in dispute that discovery can be possible”. This is the foundation of the current test of whether a document is liable to be discovered, being whether it is “directly relevant to the issues raised by the pleadings or in the affidavits” (Federal Court Rules 2011 (Cth) (FC Rules) r 20.14(1)(a)). To be produced on “standard discovery”, a document which falls into the relevance category must also:

(i)    be a document upon which the disclosing party intends to rely; or

(ii)    adversely affect the disclosing party’s own case; or

(iii)    support, or adversely affect, another party’s case.

(see FC Rules r 20.14(2)).

49 There is a central issue of whether the particulars given by Epoch control the extent of discovery which Mr Katz can request. The Epoch pleading (as will be seen from the summary below) provides that “further particulars will be given after discovery …”. There is also an issue of whether the documents sought by Mr Katz are directly relevant to the issues raised in the proceedings. Aligned to the “directly relevant” point is the allegation that each side makes that the other is seeking to fish for tasty morsels that will allow them to expand their case against the other once documents are reviewed (see Austal Ships Pty Ltd v Incat Australia Pty Ltd [2009] FCA 368 per McKerracher J at [150]).

50 Accordingly, some consideration needs to be given to the role of pleadings.

51 Part 16 of the FC Rules deals with pleadings. Rule 16.02 deals with “Content of pleadings – general” and the rules relating to particulars appears in that Part, but in a separate Division (Division 4).

52 Rule 16.02(1)(d) requires that a pleading:

state the material facts on which a party relies that are necessary to give the opposing party fair notice of the case to be made against that party at trial, but not the evidence by which the material facts are to be proved.

53 It is, as noted during the hearing, “Pleadings 101” that particulars are not allegations of material fact and do not need to be pleaded to; they provide the details of the material facts which prevent the opponent being taken by surprise, and they inform the opponent of the case it has to meet. As the learned authors of Zuckerman on Australian Civil Procedure (Zuckerman, A, Wilkins, S, Adamopoulos, AV, Higgins, A, Hooper, S, Oreb N and Jago, C; 2nd ed, Lexis Nexis, 2023) title their chapter on pleadings – the purpose of pleadings is to “Define the Controversy”.

54 Rule 16.41 of the FC Rules provides (notes included):

16.41 General

(1) A party must state in a pleading, or in a document filed and served with the pleading, the necessary particulars of each claim, defence or other matter pleaded by the party.

Note: See rule 16.45.

(2) Nothing in rules 16.42 to 16.45 is intended to limit subrule (1).

Note 1:  The object of particulars is to limit the generality of the pleadings by:

(a) informing an opposing party of the nature of the case the party has to meet; and

(b) preventing an opposing party being taken by surprise at the trial; and

(c) enabling the opposing party to collect whatever evidence is necessary and available.

Note 2: The function of particulars is not to fill a gap in a pleading by providing the material facts that the pleading must contain.

Note 3: A party does not plead to the opposite party’s particulars.

Note 4: Particulars should, if they are necessary, be contained in the pleading but they may be separately stated if sought by the opposite party or ordered by the Court.

55 In Bruce v Odhams Press Limited [1936] 1 KB 697, Scott J in the Court of Appeal said at 711-713 (a passage cited with approval in McKellar v Container Terminal Management Services Limited (1999) 165 ALR 409; [1999] FCA 1101):

…but it is beyond question that there is a radical distinction (between a statement of material facts and particulars) and nonetheless so that in cases near the dividing line there is a penumbra where the two may and often do overlap, just as between night and day there is a zone of doubt which we call dusk …

The cardinal provision in r. 4 is that the statement of claim must state the material facts. The word “material” means necessary for the purpose of formulating a complete cause of action; and if any one “material” fact is omitted; the statement of claim is bad; it is “demurrable” in the old phraseology, and in the new is liable to be “struck out” …

The function of “particulars” under r. 6 is quite different. They are not to be used in order to fill material gaps in a demurrable statement of claim – gaps which ought to have been filled by appropriate statements of the various material facts which together constitute the plaintiff’s cause of action. The use of particulars is intended to meet a further and quite separate requirement of pleading, imposed in fairness and justice to the defendant. Their function is to fill in the picture of the plaintiff’s cause of action with information sufficiently detailed to put the defendant on his guard as to the case he has to meet and to enable him to prepare for trial. Consequently in strictness particulars cannot cure a bad statement of claim. But in practice it is often difficult to distinguish between a “material fact” and a “particular” piece of information which it is reasonable to give the defendant in order to tell him the case he has to meet; hence in the nature of things there is often overlapping.

56 Given the last sentence of the above quotation from Bruce v Odhams, it may not be so straightforward to say that a particularised fact cannot be a “material fact”. But as a general proposition, the issues which inform whether discovery may be ordered on a particular matter must be “directly relevant to the issues raised by the pleadings”. That would not, unless in case of an “overlap” as set out in Bruce v Odhams, include the particulars. The questions to be answered in this application include whether “issues raised by the pleadings” covers discovery of documents:

(a)    on matters not particularised but sought on the basis that the documents discovered may allow the party to provide further particulars of their claim (in relation to the Epoch IA); or

(b)    which may “shed light” on whether it is “true” that the information provided by Mr Carrodus was confidential (in relation to the Katz IA).

57 Some assistance, albeit in a different context, can be derived from the decision of Allsop J in Australian Securities and Investments Commission v Australia and New Zealand Banking Group [2019] FCA 1284 where his Honour said:

1 Before the Court is a proceeding for relief which includes penalties for conduct exhibiting statutory unconscionability and for providing financial services otherwise than efficiently, honestly and fairly. This is the first case management hearing. A clear and helpful concise statement in narrative form has been filed. The suit will henceforth proceed in the manner that most efficiently and effectively recognises that the rights and obligations being enforced or determined are, though derived from statute, equitable in character. Because of that, the most efficient and coherent way of approaching the matter is by a procedure that recognises the techniques of Equity:

A court of law works its way to short issues and confines its views to them. A court of equity takes a more comprehensive view and looks to every connected circumstance that ought to influence the determination upon the real justice of the case.

2 These words of Lord Stowell from 1822 in The Juliana [1822] EngR 235; 2 Dods 504 at 522; 165 ER 1560 at 1567 were applied and cited by Dixon CJ and McTiernan and Kitto JJ in Jenyns v Public Curator [1953] HCA 2; 90 CLR 113 at 119. They have been repeated more than a few times in the last few years in judgments of the High Court and in this Court. The question whether a body of conduct has in all the circumstances been unconscionable in the statutory sense or amounts to the provision of services otherwise than efficiently, honestly and fairly, is not amenable to pleading a “cause of action” constituted by “material facts”, with some distinction between them and mere “particulars” of such. Rather, the better approach is to understand what the plaintiff says are the “connected circumstances that ought to influence the determination of the case”.

58 The remedies in this case are also, at their heart, equitable in character, and so, guided by the words of Allsop J, the approach to be taken in winnowing the issues which are “directly relevant to the issues raised by the pleadings” should be determined with a view to the “connected circumstances” set out in the pleadings proper. This must be done while attempting to provide relief in a way which pays more than lip service to the requirement to facilitate the resolution of this dispute as quickly, inexpensively, and efficiently as possible (see ss 37M and 37N of the FC Act) and Central Practice Note: National Court Framework and Case Management (CPN-1), paragraph 7.1.

59 CPN-1 deals with discovery in Part 10 and notes, with a sense, with respect, of stating the obvious, that “Discovery can be extremely burdensome” (paragraph 10.3). It sets out a number of procedures to reduce that burden, including the Redfern schedule procedure helpfully utilised by the parties here. The requirement to justify utility and proportionality of discovery (see paragraphs 10.6(d) and 10.7A of CPN-1) have been addressed by the parties to some extent but it is fair to say that each side has vigorously contested the validity of the compliance of the other side with the principles set out in the Practice Note.

60 In closing, I note paragraph 10.12 of CPN-1 which provides:

Where a genuine contest relating to discovery arises, the Court will likely apply the Federal Court Rules relating to discovery strictly (eg how a party gives discovery r 20.16).

And paragraph 10.13:

How a discovery dispute is resolved by the docket judge will be a matter for … her. It may be that the dispute can be the subject of a mediation or a confidential conference with a registrar. If there is to be a dispute, one possible approach is not to prepare what might be extensive and expensive affidavit evidence, but to brief the advocates who are to appear in the matter to address the docket judge orally as to relevance, necessity or oppression or any other relevant consideration. The Court expects the parties and their representatives to display common-sense and moderation in requests for discovery, in disputes about discovery and in expending costs on both.

61 While the approach suggested in paragraph 10.13 may not be immediately appropriate in a complex case such as this, consideration should be given to this approach and its suitability in any further applications as envisaged by these reasons.

Particular objections

Burden and oppression

62 Mr Feltham, for the applicants, in his affidavit Feltham 7 in support of the Epoch IA, sets out what he says is the oppressive nature of the Katz IA discovery categories and the difficulties faced by Epoch in complying with the requests. This part of the affidavit is in response to the requirements of paragraph 10.11 of CPN-1, dealing with burdensome access and discovery. In very brief summary, he says that most of the applicants’ documents are found on the Cloud, incorporating some 7 Terabytes of information. That data is stored over several repositories, most of which is Google Workspace but includes other database systems, including messaging via Slack, and collaboration and project management through tools such as Confluence and Jira. Additionally, individual current employees have their own laptops and may store documents on those laptops. The workforce also uses mobile phones for work. There are around 80 employees of the various applicants who are physically located in Australia, the UK, the USA, and Canada.

63 Mr Feltham says that once documents were produced, the applicants’ legal representatives would have to identify responsive documents, and this (like the process of production outlined above) would take some time, including manual review, and could take many weeks. It was submitted that some of the categories were oppressive (in particular, Mr Feltham mentions categories 16 and 24).

64 A further issue of burden raised in Feltham 7 is the fact that many of the documents sought to be discovered are confidential to the applicants and are core to their business operations. It is noted that Mr Katz still works for Schonfeld AU, a competitor to the applicants, and the applicants are not satisfied by the implied or an express undertaking as to the use of the documents. The categories given (“by way of example only”) are 16-19, and 24-27.

65 Mr Feltham is concerned, if documents are ordered to be produced in the “confidential” category, that there will be further expense incurred in relation to establishing confidentiality regimes. As submitted by Epoch, “Mr Katz [is] a present trade rival of Epoch’s [and] is seeking broad ranging production of even more of Epoch’s CI” (emphasis in original). Epoch contends that the Katz IA is a fishing expedition. Mr Feltham’s estimate of costs of the discovery sought in the Katz IA (given in paragraph 31 of Feltham 7) is “over $250,000 or considerably more”.

66 Mr Jhinku did not put on any evidence in response to these general objections. Mr Katz submitted however that discovery should be granted if it facilitates the just resolution of the proceedings as quickly, inexpensively, and efficiently as possible (see r 20.11 of the FC Rules, and paragraph 10.6(a) of CPN-1). He further submits that the prospect of further disputes about confidentiality do not govern whether a document should be discovered or not, but are proper processes which can take place after discovery has been ordered.

67 In relation to whether the discovery is oppressive, by reason of breadth of the request or the cost and time of the production, the respondent pointed to proportionality and noted that these proceedings are significant litigation, which have been going on for years at a high level of conflict, and that the costs already expended and ongoing “would easily dwarf the $250,000 that is the highest number Mr Feltham is willing to swear to”.

Fishing expeditions

68 As the applicants note in their submissions on the Katz IA, a category not framed with sufficient specificity may be a fishing expedition – Austal Ships at [150]. In Austal Ships, McKerracher J cited (at [135]) Trade Practices Commission v CC (New South Wales) Pty Ltd (1995) 58 FCR 426 where Lindgren J dealt with the difficulties faced by a party seeking discovery from a party who has “the only knowledge on which the claim is based”. Lindgren J said (at [4]) that even if the party seeking discovery does not know exactly what the information was (in that case, information passed on at a meeting at which the party seeking discovery was not present), it may still know that it has a case. As long as the pleadings are particularised in reasonable detail, then a request for information, which by reason of the lack of knowledge of what actually occurred lacks specifics, may not be a fishing expedition.

69 Further, Mr Katz seeks discovery of documents which it is said may “shed light” (a phrase which appears some eight times in the respondent’s primary submissions on the Katz IA) on whether information alleged to be Epoch CI was true or confidential. Epoch regards this request as serving “only to obfuscate the inquiry” as it does not, it submits, reflect the tests in Part 20 of the FC Rules or CPN-1 [10.6] that the documents must be “very likely to be significantly probative in nature”, and “directly relevant to the pleaded issues”.

Approach taken on these applications

70 I set out in this section of my reasons the way in which I intend to apply the above general principles in relation to the discovery applications by each of the two parties, on the basis of the submissions summarised above.

71 On the Epoch IA, I consider the submission that the formulation relating to discovery on the basis that “further particulars will be provided after discovery” in order to brace provision of discovery beyond the current pleading is one which should, without more, fail. While it may be appropriate to seek further documentation if it be directly relevant to the issues in the pleadings, and it may be appropriate to provide further particulars once that discovery has been provided, it is not appropriate to go beyond the current issues pleaded in order to see what is out there by way of further particulars. That formulation does not do enough to bring in the principle stated by Lindgren J in Trade Practices Commission as set out at [68] above.

72 Should the applicants succeed on their discovery application, it may well be that they may be able to give further particulars of facts already pleaded. But the fact that they have included the formulation that “further particulars may be provided after discovery …” does not allow them to broaden the criterion of “material fact” in the sense of an as-yet unascertained fact being “directly relevant to the issues raised by the pleadings”.

73 I have accordingly compared each category to the current pleadings, including (as per [58] above), matters particularised and connected to the pleaded facts, and come to a determination as to whether the documents sought in the category should be provided.

74 I have also taken into account the respondent’s submissions as to what may be sought on discovery, in circumstances where a significant hearing has already been undertaken before the Registrar on an amendment and avoidance of strikeout on the basis of proper particulars being a condition of the repleading of the Statement of Claim. That prior determination, and the specific conditions imposed on the amendment of the pleading (see [32] above), leads me to take a restrained approach in not venturing beyond the particulars as provided in the current ASOC.

75 The issue of the inferred use by Mr Katz of Epoch CI is one of the matters relevant on the pleadings. Accordingly, while the respondent has complained that it is difficult to assume that because Mr Carrodus did something, Mr Katz also did it, it remains an issue “directly relevant to the issues on the pleadings” (for a further discussion of this, see [91] below). I have not excluded documents sought by Epoch in relation to this pleading on that basis.

76 In relation to the Katz IA, I have taken the position that, again, while “relevance to issues in the pleadings” can where appropriate be broad enough to include particularised facts, the suggestion that documents should be produced to “shed light” on the truth or confidentiality of pleaded facts is insufficient to bring the request within the proper scope of discovery. That request does not sufficiently reveal “connected circumstances” between the pleadings and the request. Nor are many of the documents sought “very likely to be significantly probative in nature” as required by the FC Rules and CPN-1.

Discovery sought in the Epoch IA

77 I turn now to the specific documents sought by Epoch in its IA.

78 The applicants sought documents in five categories. The competing positions are set out in the table below, taken from the Redfern Schedule.

(underlining and strikeouts in original to indicate respondent’s proposed differences from Annexure A of the Epoch IA).

79 The parties are agreed that the applicants are entitled to discovery of some documents at least in each of the categories sought by the applicants.

General limitations sought by the respondent to Epoch’s discovery categories

80 As can be seen from the table, a number of objections are common to a number of categories. Each of the respondent’s proposed categories 1-4 includes:

(a)    a removal of the requirement to discover documents “merely evidencing or recording the fact of any communications” between Mr Katz and Mr Carrodus;

(b)    a dispute as to the end date of the period of the documents sought;

(c)    a restriction of the category to “information or requests for information particularised at CSP [1] or depicted in the red boxes in CSP Annexure A.” (CSP [1] deals with the information alleged to be confidential to Epoch which was provided by Mr Carrodus to Mr Katz); and

(d)    a restriction to documents recording or referring to, or relating to (as alternatives) Schonfeld (in category 1) or Mr Carrodus (in category 2).

81 In relation to the restriction in (a), Epoch says that the limitation would exclude contextual exchanges between Mr Katz and the relevant third party, for example, exchanges which refer to a meeting with Mr Katz of which there may be no other record. It is also contended that the “subject matter restriction” would exclude other purposes for which Mr Katz was using alleged Epoch confidential information, or would exclude metadata of deleted text messages and emails.

82 The respondent counters that the communications pleaded between Mr Katz and Mr Carrodus are all alleged to be oral, and seeks that discovery be limited to the facts in issue. It is submitted that the proposed reason given by Epoch that it would exclude Mr Katz’ use of the confidential information for his own employment, which is not a pleaded part of the applicants’ case. Mr Katz makes the point that the Solicitation Case is based on a pleading that Mr Katz lured Mr Carrodus away from Epoch, not that he himself was induced away (see ASOC paragraphs 174AA(a) and 177(a), extracted above at [37]). It is contended that Epoch is in fact “fishing” for further documents.

83 It is submitted by Mr Katz that the need for a “subject matter restriction” is clearer for categories 2-4, as evidence of mere communication with potential employers or recruiters cannot be as vital to the issues in dispute as those between Mr Carrodus and Mr Katz.

84 In relation to the date restrictions in (b), Epoch submits that the appropriate end date is 31 July 2022, given that that was when Mr Carrodus accepted the offer to work at Schonfeld. Mr Katz commenced work there in March 2022. Mr Katz agitates for a shorter period, ending (at the latest) when Mr Katz executed his employment agreement with Schonfeld (noting that the applicants had not then, as at the November hearing of the IAs, seen that employment agreement, but the respondents contended that the relevant date was 4 March 2022). In relation to category 2, Mr Katz contends that a longer date will catch an enormous amount of employment material which is not relevant to the issues in dispute, given that Mr Katz was then working for Schonfeld AU. Epoch submits that communications post-March 2022 are relevant to the Solicitation Case, and the alleged use of the confidential information, and that these are clearly relevant to the applicants’ case.

85 The subject-matter restrictions proposed by Mr Katz in (c) and (d) are submitted by Epoch to be too narrow, and would “artificially limit” the documents sought. In their written submissions, Epoch submits that in categories 3 and 4, for example, contacts referring to the provision of information would not be caught were the subject matter to be limited in this way. Mr Katz submits that the question in issue in the pleadings is the provision of the actual information in the red boxes, and limiting discovery to that issue “is not artifice; that is how discovery is supposed to work”. The respondent consents to discovery of any information that “relates” to the information that Mr Carrodus gave to either Schonfeld entity, Millennium, and Lascaux.

86 It was submitted for Epoch that there was no evidence by Mr Katz of any particular burden which the sought categories would impose. Mr Katz submitted that he does not say that the category is oppressive; merely that it should not be granted in terms which are wider than the facts in issue.

Specific categories of Epoch’s discovery categories

87 Epoch argues that the documents sought in category 1 are appropriate, given that Mr Carrodus has deposed in his affidavits (and it appears not to be in dispute) that he destroyed or securely deleted most of his documents (including the physical destruction of a laptop) – see paragraphs 14-16, and 98-107 of Carrodus 4. It is said that these documents are relevant to both the Solicitation Case, and the Other Information case.

88 Mr Katz took the position that any documents sought to be discovered which were not tied to the issues in dispute in the pleadings were by way of a fishing expedition. In his written submissions, Mr Katz offered to have a subject matter limitation that the documents be limited to documents relating:

to any of the following:

-     Mr Carrodus’ potential employment at Schonfeld;

-     the information or requests for information particularised at CSP [1] or depicted in the red boxes in CSP Annexure A.

89 Mr Katz submitted that this formulation would pick up any documents either relating to Mr Carrodus’ potential employment, or to information which is alleged to be confidential in the case. Epoch however characterised the formula “relating to” as too broad, and submitted that the categories as drafted by them (“recording or evidencing”) did not involve any subjective judgments by those undertaking the discovery review.

90 The documents in category 2 relate to communications between Mr Katz and the two Schonfeld entities, and are said by Epoch to be relevant to the Solicitation Case, and will be probative of the provision by Mr Katz to Schonfeld AU or Schonfeld US of Epoch confidential information. It will be noted from the pleading of the ASOC in paragraphs 174AA and 174BB that there is an inference to be drawn from the conduct of Mr Carrodus in relation to the Schonfeld entities to the effect that Mr Katz conducted himself in the same way.

91 In relation to the pleading of an inference, Epoch relies on a number of matters. They are:

(a)    Mr Carrodus and Mr Katz had meetings over a period of months prior to Mr Carrodus leaving Epoch and accepting an offer at Schonfeld AU to work with Mr Katz;

(b)    Mr Carrodus then destroyed devices and digitally deleted correspondence, leaving the only repository of that correspondence being Mr Katz;

(c)    Mr Carrodus admits giving confidential information to Mr Katz (Feltham 6 at paragraph 120);

(d)    Mr Carrodus says he was required to provide significant detail about his employment at Epoch in order to establish his worth with recruitment firms; and

(e)    in the context of reviewing his options for further employment, Mr Katz told Mr Carrodus that he had “everything he needed”.

92 From the above, Epoch alleges that it is an “irresistible inference” that Mr Katz obtained Epoch confidential information from, and from sources other than, Mr Carrodus, and that that confidential information was used by Mr Katz to “demonstrate his worth” to trading firms Schonfeld AU, Schonfeld US, and Millennium, and to the recruitment firm Lascaux. This is the pleading set out above in paragraphs 174AA, 174B, and 174BB of the ASOC. Mr Flynn SC, for Epoch, also noted in oral submissions that the terms of employment offered to Mr Katz at Schonfeld (including a sign-on bonus said in the evidence to be the equivalent of that of a star football player) would give rise to an inference that the provision of confidential information prior to his employment at Schonfeld AU would be a requirement to ground that kind of sign-on bonus. (It should be noted that there was no particular football player identified as the comparator, but the assumption expressed in oral submissions was that the person in question was European or from the UK, and male).

93 Categories 3 and 4 seek similar documentation to category 2, but in relation to Millennium and Lascaux respectively. Mr Katz submits that the inference pleaded does not work in the context of the two non-Schonfeld firms; it is said that it is difficult to infer that Mr Katz gave to one of those firms the documents that Mr Carrodus gave to the other, for example. In response, Epoch says that the restriction proposed is a way of limiting production to only direct requests, and not to documents which are relevant to the red boxes while not having a “complete coincidence” with them.

94 Category 5 is (after some disagreement on day 1) now agreed, on the basis that not every single document evidencing each payment ever made by Schonfeld to Mr Katz would need to be produced. As noted at [25] above, during the hearing it was discussed that the contract of employment – about which there was no dispute unless there was a need for confidentiality orders –should be produced by the respondent to the solicitors for the applicants within two weeks (i.e., 17 October 2024), and if there were any dispute, the matter should be relisted. I made an order to that effect on 3 October 2024 and made confidentiality orders in relation to the contract, along with another document apparently within category 5, on 30 October 2024.

The “further particulars” issue

95 I have noted above at [36] the repetition of a formula that further particulars of the claims would be provided after (inter alia) discovery. Counsel for the applicants dealt with this in oral submissions by saying:

… we have pleaded a case, we’ve given detailed particulars, and we say there may be further instances, further particulars, falling within the material facts for which we seek discovery, and we’re entitled to it.

96 Counsel for the applicants gave an example of the pleading in paragraph 170B, which referred to “a ‘meaningful’ sign-on bonus and percentage bonuses based on trading points”. He made the point that he did not, prior to having the documents in category 5, know what those details were. He gave other examples in relation to persons and bodies canvassed in relation to the Solicitation Case, and the difficulties they had in particularising that case in the context of the deletion or destruction of Mr Carrodus’ digital information. He submitted that the case was “particularised as best as we currently can, but we say we’re not restricted on discovery categories by the case we’ve presently particularised”.

97 The nub of this submission was articulated by counsel for the applicants in oral submissions as follows (in relation to the issue of the disclosures of allegedly confidential information by Mr Carrodus in the Recruitment Documents, but relevant to the general position taken by the applicants):

So ... there’s an argument between us that our friends seek to restrict the discovery to that which we’ve already particularised. And we say, “No. You’ve provided a particularised case, but we’re entitled to get discovery to ascertain the full extent of the disclosure, and the detail of the disclosure”.

98 In correspondence between the solicitors, Epoch’s solicitors wrote on 15 March 2024 in response to a request for further particulars that:

The Applicants are presently unable to provide additional or better particulars until the completion of the Court’s document discovery and third party subpoena process.

This position was taken in relation to paragraphs 174AA and 177 of the ASOC “as supplemented by CSP”.

99 In answer to this contention, Mr Lockhart SC for Mr Katz relied on the transcript of the hearing before, and the reasons for decision of, the Registrar in the interlocutory application to strike out Epoch’s claim. At [38] of his reasons the Registrar said:

Mr Katz is entitled to be able to ascertain with sufficient precision which information he is alleged to have used which is claimed to be confidential. I accept the submission made by him that he should not be required to “piece together” various parts of the evidence to identify what is said to be the confidential information.

And at [39]:

The connection between the confidential information and the alleged use or misuse of that confidential information should also be sufficiently articulated.

100 Counsel for the respondent also pointed to the conditions upon which leave to amend was granted by the Registrar, in [45(a)] of his reasons, which are set out at [20] above. He also relied upon his submissions in the proceedings before the Registrar (which were marked MFI-2), where complaints were made (which complaints were, he submits, resolved by the conditions of the grant of leave to amend) as to the formulation of the pleading. In particular, he notes that the provision of the CSP (including the CSP Annexure A) and the deletion of the words “information of a similar kind” means that:

… they cannot now turn around and say, on an application for discovery, “well we provide the confidential supplementary particulars, but look what we did. We put at the bottom, further particulars might be provided. And they say to the court on a discovery application that that now means that their case may be wider than the particular matters identified in [the CSP].

Disposition of the Epoch IA discovery claims

101 I refer to the table in [78] above. Where I have ordered discovery, the documents produced should be produced in accordance with the requirements of FC Rules r 20.16.

102 Category 1 seeks documents relating to communications between Mr Katz and Mr Carrodus and goes to the Solicitation Case, as well as the Carrodus Information Case. I am of the view that the pleadings in Part G, in particular the paragraphs leading up to the allegation of solicitation in paragraphs 171L and 171M of the ASOC, make the whole story of the contact between Mr Katz and Mr Carrodus relevant to the issues on the pleadings (and noting the affidavit of Mr Carrodus of 15 August 2023 which demonstrates that he no longer has digital or other records of these meetings).

103 Mr Katz commenced working for a Schonfeld entity in around March 2022 and then is alleged to have contacted Mr Carrodus in relation to Mr Katz recruiting a team to work at Schonfeld (paragraph 171F of ASOC). The proposal of ending the discovery documents at the time that Mr Katz commenced work at Schonfeld would somewhat defeat the purpose of the category. I am not convinced that the other amendments proposed by the respondent are necessary in order to restrain the production as sought. In particular, the restriction that the documents be restricted to the CSP-1 information or the “red boxes” information would be unnecessarily restrictive given the relevance of the material to the Solicitation Case. These documents should be produced as sought.

104 Category 2 refers to communications between Mr Katz and Schonfeld. As noted, Mr Katz commenced working for Schonfeld in around March 2022. Production of all communications between Schonfeld AU or Schonfeld US without subject matter restriction would be unduly burdensome and would include a significant amount of material which would need to be reviewed to assess the particular document’s relevance. Accordingly, I will order that production be made as per the Epoch proposal with the proposed dates but with the addition:

recording to or referring to:

· Mr Carrodus; or

·  Information or requests for information particularised at CSP-1 or depicted in the red boxes in CSP Annexure A.

105 As noted above at [4], the Epoch AIA seeks document production from Schonfeld AU in relation to Mr Katz’ employment with Schonfeld UK, which was unknown to the applicants prior to the production of the contract of employment in October 2024. That amendment is appropriate for the reasons which are dealt with below and the order should be made as sought, and including Schonfeld UK.

106 Mr Carrodus gives evidence in relation to Millennium and Lascaux, which are dealt with in categories 3 and 4. He says that he spoke to Lascaux in mid-2022, and Lascaux put him in touch with Millennium. He met with representatives from Millennium in May-June 2022. That date range reflects the request for documents in category 3 and 4 and should be maintained. Given that the two categories deal with fairly restricted contacts, I am of the view that there does not need to be a subject matter restriction on the production. I will order that documents be produced as per the Epoch request.

107 In relation to category 5, which is generally agreed, for completeness, I will make an order that the documents sought in category 5 be produced.

Discovery sought in the Katz IA

General Submissions

108 Mr Katz has taken a “subject matter approach” to discovery. This means that there are a significantly greater number of categories, an approach which is said to be justified on the broad nature of the allegations made against him. He says that these are either relevant to an issue on the pleadings, or that they “shed light” on the nature of the confidential information alleged to be Epoch CI.

Categories of discovery sought

109 The Katz IA seeks discovery in particular categories. Some are agreed and need not be dealt with here (categories 7, 20, 21, 30, 33, 41). Some are not pressed on the basis of alternative production referred to as “the Carrodus Database” (categories 10-14).

110 Categories 1, 2, 4, 5, 8, and 22 are resisted on the basis that the applicants say that all relevant documents have already been produced. Epoch’s submissions (in Part D1, Group 1) sets out a summary of the evidence of Mr Feltham in Feltham 7 as to what has already been produced, and why further discovery may not be helpful in that requests overlap, documents do not exist, or all documents have already been produced. Mr Katz contends that if the categories are relevant, “the fact that there is said to be nothing further to produce is a reason to order discovery”. He seeks a verified list in accordance with FC Rules r 20.16.

111 Category 1 seeks Mr Katz’ personnel file for a period of 1 March 2013 to 31 May 2022. The reason given is that Mr Katz seeks the documents “to confirm … the contractual terms on which he was employed”. Epoch says that it does not maintain such a personnel file, and that copies of Mr Katz’ employment agreements, confidentiality deed, and termination of employment letter, have been produced in response to a request for particulars.

112 Category 2 seeks documents “recording the terms of Mr Katz’ employment” including those regarding compensation payable to him or the trustee of his family trust, including documents recording any verbal agreements, from 1 March 2013 to 9 March 2021. Epoch says that all documents have been produced over a period from February 2023 to March 2024 and sets out a list of documents which have been produced in paragraphs 40-42 of Feltham 7. Mr Katz submits (as he does in relation to other categories) that “the puzzling resistance to these categories itself indicates a possibility that other documents exist”.

113 Categories 4, 5, and 6 seek documents referring to the Plan Rules and the Katz family trust, in the context of an estoppel and whether the common assumption or Mr Katz’ pleaded representation was formed or relied upon. That estoppel is pleaded in paragraphs 21E-21K of the ASOC. Epoch says it has produced the documents in these categories already in the productions referred to in Category 2. There is some significant overlap of categories. In fact, Mr Katz says that if Category 5 (a category which Epoch says has been complied with) is subject to an order for production, then Category 6 need not be.

114 Category 8 seeks Mr Carrodus’ notice of resignation of employment from the Epoch Group. Epoch says this has been produced and nothing further can be produced (and relies on production on 16 February 2023 and an annexure to Ms Russell’s affidavit of 12 July 2022 which contains a letter from Mr Humphreys to Mr Carrodus confirming that resignation). Accordingly, it is said that no further discovery is required. Mr Katz takes the position that they are entitled to seek the documentation and to rely upon a verified list.

115 Category 9 is said by Mr Katz to be significant, and seeks documents from 1 June 2019 recording or referring to Mr Carrodus’ reasons for resigning from Epoch. While there appeared originally to be a dispute about the timeframe, in oral submissions it appears that the applicants were prepared to accept a range of 1 October 2021 (prior to his first speaking to recruiters) to 15 August 2023 (the date of his final affidavit).

116 The parties make a global submission in relation to Categories 15, 16, 17, 18, 19, 23, 24, 25, 26, 27 and 28. The applicants say that Mr Katz has not put forward an affirmative case that the information pleaded in the Carrodus Information Case is in fact confidential. In support of this, Epoch cites the Defence paragraphs 173, 174, 174B, and 175. The pleading that the information was confidential to one or more of the applicants however is found in paragraph 174A, and that assertion is denied. The applicant contends that the mere denial of the confidential nature of the information, without an affirmative defence, is indicative of the respondent “trying to find a defence” and again, rather than deal with a material fact, seeks to “shed light” on whether the pleaded allegations of confidentiality are “true” that the information was “confidential”. The respondent however characterises the pleading failure as being the applicants’ need to prove “that information is information of the applicants, and that it is information confidential to the applicants”.

117 Categories 15, 16, 17, 18, and 19 are mainly relevant to the Carrodus Information Case (and category 15 to the Solicitation Case). Each category seeks documents which are specified as being confidential information in paragraphs 173 and 174 of the ASOC and is particularised in the CSP. The request in Category 15 seeks that Epoch provide, for example, “MFT Desk employees’ (including Mr Carrodus’) … [form of remuneration]” in 2021 and 2022, including complaints regarding that form of remuneration. The question of that kind of remuneration is dealt with in the CSP at sub-paragraphs 1(a)(ii), 3, 4, and 5. It is alleged by the applicants that this was confidential information. Category 16 refers to “documents recording or referring to the financial metrics and profit metrics that it was alleged were disclosed by Mr Carrodus in paragraph 174(a), or the circumstances in which such information was imparted to Mr Carrodus”. In relation to this, Epoch points to the confidentiality alleged in relation to this information and the fact that Mr Katz is employed by a competitor. Categories 17, 18, and 19 are in similar terms and refer to other particularised matters in the CSP relating to the pleaded confidential information in paragraph 174.

118 Category 22 seeks documents referred to in paragraph 23 of Carrodus 4. The respondent says he is clearly entitled to these documents. The applicants say they have been produced (being Slack messages) and that no additional basis to suspect that there are further documents has been provided.

119 Category 23 is a request for a Google Sheets document referred to by Mr Mast in his affidavit of 9 September 2023, and “any document recording access to that file occurring in the second half of 2021”. Epoch contends that this information is highly confidential, and that the date is too broad as the information was sought in late 2021. Finally, the question is in some sense moot; the Google Sheet in question is a “living document” and the evidence of Mr Mast (tendered, not read, in these proceedings) is that the form it was in at a particular point in 2021, or a stretch of time in 2021, no longer exists. Mr Mast’s affidavit provides details of those who have had access to the file.

120 Category 24 refers to confidential information in the form of data which is pleaded at paragraph 174(c) of the ASOC and particularised in A.1(d) of the CSP. It is contended by Epoch to be highly confidential, and that the request – “documents recording or referring to the Epoch Group’s trading strategies, ‘[description] data’, trading performance, changes in risk model and portfolio size” that is alleged were disclosed by Mr Carrodus in paragraph 174(c), or the circumstances in which such information was imparted to Mr Carrodus – would require disclosure of a much broader kind that is required for documents directly relevant to the issues raised by the pleadings. In reply, Mr Katz submits that “the applicants have produced no business records evidencing that this information is true or is confidential to the applicants”.

121 Category 25 seeks a range of document categories for documents which “record or refer to any of the following” between 1 July 2021 and 31 March 2022, including “the performance of the Epoch Group’s [nominated] strategies” and “the performance of”, “the implementation of”, the “nature, performance, or [description] testing of” various signals used by the Epoch Group. The applicants submit that this category is much broader than the information that it is alleged that Mr Katz obtained from Mr Carrodus, and are confidential. The respondent says that its case is that the pleadings contend that Mr Carrodus disclosed this information to Mr Katz, and that Mr Katz continues to use that information, and should be enjoined from doing so. The respondent submits that CSP.1(c) (which sets out the matters which Mr Carrodus allegedly informed Mr Katz in February/March 2022) informs the appropriate production in this category. The matters which are included in CSP.1(c) include fairly broad statements such as “Epoch Group’s [nominated] strategies had “done pretty well recently”, and some more specific comments which identified areas in which prior strategies had not properly captured information and where some problems lay. The particularised comments also identify elements of the then current signals which Mr Carrodus identified as “doing a better job” of particular functions. The respondent seeks production because the categories seeking, in effect, the data behind each of these assertions would “shed light on whether it is true that the information in question was confidential information of the applicants”.

122 I have already noted my concern that the descriptions of the content of the Epoch CI would be opaque; that concern in relation to the paragraphs dealing with categories 24 and 25 is justified.

123 Category 26 arises out of s 174(c), and CSP.1(d), and seeks “documents recording or referring” to a table of data set out in CSP.1(d). Sub-paragraph 174(c) describes the alleged disclosure as being:

confidential information relating to Epoch Group trading strategies, “[description] data”, trading performance, changes in risk model and portfolio size.

124 The respondent submits that the category seeks “precisely what it is said to have been disclosed to Mr Katz”. The applicants make the same submissions as with the above categories and note that even though this is a narrowed category, the request still seeks “documents referring to or recording the [description] data”.

125 Category 32 relates to the Other Information Case, which is pleaded in ASOC paragraphs 174B to 177, and 179A to 179F. The request seeks documents “referring to or recording the information identified in the red boxes in CSP Annexure A, or the circumstances in which it is alleged that such information was imparted to Mr Katz”. The respondent justifies this broad request on the basis that the Other Information Case as particularised by the red boxes in the CSP is equally broad, and that the information particularised was used, not by Mr Katz, but by Mr Carrodus.

126 For example, one of the questions answered by Mr Carrodus in the Recruitment Documents is (page 10 of the CSP):

Please describe in detail your choice of instruments to structure trades in this strategy. Include details about your philosophy in sizing trades, market liquidity, and how you think about concentration of this strategy in your overall portfolio.

127 Mr Carrodus answered:

Here we trade the following RICs: XXX, XXXX, XXXX, XX, XX ,XX XXX, XXXX, XXX.

[Then follows two sentences about trade sizing]

In general, we will include markets in an asset class strategy if they are liquid enough for us to trade if we can get quality data (incl historical) for the assets and also for the signals for the assets. We typically require at least XXXX volume per day.

[Then follows a description of constraints and strategy over six sentences with more granular detail]

(The first redaction reflects information in a red box. The italicised portion is also within a red box but only the identifying information is redacted)

128 The allegation is that Mr Katz can be inferred to have used the same information in similar ways. The relevant pleading (paragraph 174B of the ASOC) pleads that it can be inferred from specified paragraphs of the ASOC that Mr Katz “disclosed confidential information (not obtained from Carrodus)”. That information is pleaded as being the information contained in the Recruitment Documents, and particularised as being the matters in the CSP. The CSP provides that the alleged confidential information is in the red boxes.

129 The respondent suggested that the applicants identify “a subset of documents that the applicants say would evidence the truth of the allegations in the ASOC referred to in the [Redfern Schedule]”, failing which he presses for discovery, noting that the “breadth of the discovery sought is necessitated by the extraordinary breadth of the allegations made”.

130 The category commences on 1 March 2021 with no end date, and the respondent submits that this is because the applicants do not put an end date on the alleged misuse. The applicants point, in addition to saying that the request is unnecessarily wide, to the burden of the request as set out by Mr Feltham in Feltham 7. It is said that the information in the CSP constitutes “core trading information central to the applicants’ trading business”, and is highly confidential. The evidence from Mr Feltham is that the process to review each of the red boxes, and search across the applicants’ systems in order to “locate, review and produce each and every document that refers to or records the information contained in each of those red boxes would take months”. The applicants submit that compliance would require for example production of “every document that refers to the specific crypto-currencies traded by Epoch. Self-evidently this will create a discovery exercise of thousands to millions of documents for a trading firm.” They say that the documents likely to be produced do not meet the tests for production as they are not directly relevant or probative.

131 The final group of categories – Categories 15 (dealt with above), 34, 35, 38, 42, 43, and 48) –is described by the respondent as “regarding multiple cases”. The applicants describe them as “miscellaneous and even more speculative categories”.

132 Category 34 seeks documents allegedly requested by Epoch from Mr Katz, another employee (or then prospective employee), in 2013, prior to their commencing employment with Epoch. It is submitted that this is relevant to whether, in effect, Epoch had any:

… compunction about asking for this kind of information from competitors, including in their dealings with Mr Katz himself, then that is relevant to whether the information of the kind that the Applicants allege was confidential has the requisite character of confidentiality, and also whether (as is alleged here) a person working in this industry in the position of Mr Katz ought to have understood that such information was confidential …

133 The applicants respond by noting that this appears to be a “tit for tat” defence, and is not relevant to Mr Katz’ pleaded case. The respondent submits that the applicants’ practice of asking for similar information as is shown in the Recruitment Documents in the CSP goes to whether the information has the requisite character of confidentiality, and whether Mr Katz would therefore have appreciated that the information was information confidential to Epoch. In response, the applicants contend that “it is not a valid defence to a breach of confidential information to say that someone else did it ten years earlier in respect of different information”.

134 Category 35 is similar but refers to documents “recording or referring to” the information provided by Mr Carrodus to Epoch, before his employment commenced. Category 36 seeks similar documents in relation to information in the CSP which was requested by Epoch from third parties (noted in the respondent’s submissions as being “other employees”). The reach of this request is from 1 March 2013 to the present. The applicants refer to this category as an “exercise in further trawling” and submit that there is no relevance to the current defence. Additionally, the reference to “trading employees”, Mr Feltham deposes, reaches to at least 50 employees, over several countries.

135 Category 38 seeks documents “referring to or recording trading strategies of any member of the [Mr Katz’ former employer] Group.” The rationale for this is submitted to be similar to category 34, in that it goes to the confidential nature of the information set out in the CSP. The applicants submit that there is nothing in the Defence noting the actual provision of any information to Epoch; it merely pleads a request (in paragraphs 174(b) and 174B). The applicants further say that the category itself is onerous, given that the period sought is over 11 years (1 March 2013 to the present) and will pick up many irrelevant documents. The respondent was prepared to amend the category to narrow it, so that any documents merely speculating about the trading strategies were excluded. The former employer is a third party competitor, to both Epoch and Schonfeld.

136 Categories 42 and 43 seek, generally, documents relating to the personal trading of one of the applicants’ executives, using MFT “desk code”, including Mr Carrodus (and the respondent calls in aid Mr Carrodus’ Defence at paragraphs 33(e), 33(f), 145A, and 156). They seek:

Documents sent or received by Mr Carrodus regarding trading strategies used in personal trading, including those that related to [Epoch CEO] Mr Humphreys directing Mr Carrodus to develop a trading system called “Low Frequency Trading”

And

Documents recording, referring or relating to Mr Humphreys trading on his own account using [code or research developed for or by] the Epoch Group

137 These categories are said to be justified on the basis that if Mr Humphreys were using Epoch code for his personal trading, it is relevant to whether the code was indeed confidential and whether Mr Katz would have understood it to be so.

138 The applicants submit that it is not alleged that Mr Carrodus disclosed Low Frequency Trading code or strategy. They submit that there is a qualitative difference between employees of Epoch using code, and former employees providing that code to a new employer. Use of that information by Mr Humphreys, or the other alleged personal trading uses, are not pleaded in the Defence.

139 The respondent asserts that the information contended by the applicants to be confidential is “routinely not considered to be confidential” by Epoch employees, including the CEO. The applicants submit that the use of information within a company by current employees “has no rational bearing” on whether an ex-employee may use that information. The applicants submit that this link is not pleaded, and the production would be onerous.

140 Finally, Category 48 seeks production of “draft affidavits or witness statements of the affidavit of Toby Carrodus dated 15 August 2023, and any document recording the interviews as defined in clause 2.1(a) of the Deed of Release”. This is, it will be recalled, the affidavit Mr Carrodus gave after the settlement of the proceedings against him. Mr Katz submits that there are “curious aspects” of Mr Carrodus’ evidence that go to his credibility, which makes production of the drafts “highly relevant”. In answer, the applicants say that the given reason by Mr Jhinku (of “testing” Mr Carrodus’ evidence) is not appropriate, given that the affidavits are privileged material and there is no basis suggested that privilege has been waived.

Disposition of the Katz IA discovery claims

141 I turn now to the determination of each category. Where I have ordered discovery, the documents produced should be produced in accordance with the requirements of FC Rules r 20.16.

142 The applicants contend that various categories of documents are highly confidential. If they take the view that Mr Katz should not be granted access to documents ordered to be produced as per below, they should file an application for a confidentiality regime which specifies the way in which access to documents can be managed. I note, as I have noted above, that Mr Katz works for a competitor of the applicants, and a number of categories where production is to be ordered may have the unintended effect of providing further confidential material to Mr Katz where I have had misgivings about the breadth of the original requests. I am particularly focused on categories 24, 25, 26, 27, 28, and the documents in category 32 which are eventually produced once the category has been narrowed, but if any other documents fall under this description then the applicants may seek an order for restricted access.

143 Should such an application be filed, I urge the parties to consider utilising the suggestions in paragraph 10.13 of CPN-1 (as set out in [60] above).

144 Categories 7, 20, 21, 30, 33, and 41 are agreed between the parties. I order that they be produced in accordance with the requests.

145 Categories 10, 11, 12, 13 and 14 are not pressed on the basis that the Carrodus Database is agreed to be provided. The Carrodus Database will be provided on an order being made. Accordingly, I will make the order sought in relation to those categories should the Carrodus Database not be provided. The parties have leave to seek such an order by email to my Associate.

146 Category 1 and Category 2 are, as drafted, too broad. They cover a very long period of time – category 1 is longer than Mr Katz’ employment at Epoch – and include documents which are not kept by the applicants (“personnel file”). I will order that in lieu of categories 1 and 2, that Epoch produce (or refer in the r 20.16 list of documents the documents which have already been produced and the date of their production):

(a)    Mr Katz’ employment agreements, including any documents varying, novating, or amending the terms of those agreements, and including the Katz Plan Rules (referred to in paragraph 171 of the ASOC);

(b)    Mr Katz’ termination of employment letter;

(c)    Mr Katz’ Confidentiality Deed;

(d)    any document recording or referring to verbal agreements regarding the terms on which Mr Katz’ compensation was payable;

(e)    any document which records that Mr Katz was subject to an obligation of confidence owed to any of the applicants in relation to his employment; and

(f)    the documents listed in paragraphs 40-42 of Feltham 7.

147 There is no Category 3.

148 Categories 4, 5, and 6 are appropriate categories. I will order that Epoch produce (or refer in the r 20.16 list of documents the documents which have already been produced and the date of their production) the documents in these categories. As Mr Feltham has already deposed to searches given, I will not require the applicants to undertake further searches for these documents, but of course the applicants will in any event be bound by the verification of the r 20.16 list of documents.

149 Category 8 is the subject of sworn evidence by Mr Feltham that there is nothing more to produce. Accordingly, similarly to the categories 4, 5, and 6 above, in the interests of reduction of costs, I will not require the applicants to undertake further searches for these documents, but will require category 8 to be the subject of a verified list in accordance with r 20.16 of the FC Rules.

150 Category 9 documents should be produced in the date range of 1 October 2021 to 15 August 2023.

151 Categories 15, 16, 17, 18, and 19 relate to facts in issue on the pleadings. The fact that the respondent characterises its wish to have those documents discovered as being to “shed light” on the information allegedly provided to Mr Carrodus does not, I do not think, take away from the fact that the applicants particularise each of the matters in these categories as information confidential to Epoch, and they are sufficiently connected to be matters relevant to issues on the pleadings. However, I do not think that the mere fact that in paragraph 174 of the ASOC reference is made to particular aspects of Epoch’s business – such as the form of remuneration made to Mr Carrodus or its financial metrics and profit metrics – requires that all documents recording or referring to those matters should be discovered. That is an extraordinarily broad request. Additionally, I take into account the burden of production and review outlined in Feltham 7, particularly to category 16. Instead of the formulation suggested by the respondent, I will order the following documents be discovered in accordance with r 20.16 of the FC Rules:

(a)    Category 15 should be limited to Mr Carrodus (so the words “MFT Desk Employees” should be replaced by “Mr Carrodus”) and the words “including Mr Carrodus” should be removed;

(b)    Categories 16, 17, and 18 should be limited to any such documents which were in fact provided to Mr Carrodus;

(c)    Category 19 relates to information around Epoch Holding’s share price. Carrodus 4 indicates that Mr Carrodus provided this information to Mr Katz verbally. On that basis it is difficult to require Epoch to produce “all details relating to Epoch Holding’s share price”. I will limit this category to “documents containing information relating to Epoch Holding’s share price that were disclosed to Mr Carrodus between 1 October 2021 and 31 March 2022” (noting that the particularised disclosure was in February/March 2022).

(d)    Categories 16-19 should be the subject of appropriate confidentiality orders, possibly protecting the applicants’ interests by restricting access to legal representatives in the first instance.

152 There is nothing in the pleadings or particulars which would indicate that there are any further Category 22 documents to be produced. The current production should be verified pursuant to r 20.16.

153 Category 23 appears either impossible to produce or its intricacies have already been explained by Mr Mast. I reject this category, noting that the respondent has the benefit of both Mr Feltham’s and Mr Mast’s evidence on this point.

154 Categories 24, 25, 26, 27, and 28 are sought by the respondent inter alia to “shed light” on whether it is “true” that the information was confidential. The pleaded case is that Mr Carrodus disclosed information which was confidential to the applicants to Mr Katz. The respondent should not be entitled to all of the information which goes to make up the information which Mr Carrodus provided to Mr Katz; the categories should be limited to the provision of that data by Epoch to Mr Carrodus. The categories seeks on its face all the information (“referring to” and “any of the following”) underlying the particularised information; that has to be too broad. Additionally, I take into account the burden of production and review outlined in Feltham 7. These categories should be limited subject to any confidentiality orders, perhaps (as above) restricting access in the first instance to legal representatives only, to:

(a)    the provision of the data in CSP A.1(d) by Epoch to Mr Carrodus; and

(b)    the provision of the information in CSP A.1(c) and (e) by Epoch to Mr Carrodus;

in the period 1 October 2021 to 31 March 2022.

155 There is no Category 29 or 31.

156 In relation to Category 32, the respondent submits that the request is precisely as wide as that pleaded against Mr Katz. I do not agree. The red boxes information is indeed broad, but to request all documents “referring to or recording the information identified” would be, on the basis of the evidence of Mr Feltham, impossible.

157 For the applicants to discover all documents referring to or recording the requested information, over the kind of volume of data disclosed by Mr Feltham in paragraphs 17, 18 and 19 of Feltham 7 (see [62] above), would indeed be an arduous undertaking. Additionally, some significant consideration of each document would be required in order to determine “the circumstances in which it is alleged that such information was imparted to Mr Katz”.

158 The request to produce all documents which refer to or record the information in the red boxes is not so directly relevant to the pleadings, or very likely to be probative, that I would order it, taking into account the evidence from Mr Feltham of its oppressive nature.

159 Additionally, the request seeks “the circumstances in which it is alleged that such information was imparted to Mr Katz”. This aspect is not, in my view, a matter directly arising on the pleadings. What is alleged is that Mr Katz disclosed certain information, and that information was confidential to the applicants. The collection and production by way of a verified list of all the documents referring to that information held by the applicants over an open-ended timeframe is not a proper use of the discovery process, given the disproportionate effort which would be required to satisfy the request, and the slight connection with the pleaded issue.

160 I decline to order discovery in the form sought. The respondent has leave to identify a “subset” of documents (as he suggested the applicants might do, see [129] above) which he seeks in relation to the first half of the request – that is, allegedly confidential information pleaded in paragraph 174B of the Statement of Claim and the particulars in the CSP.7 – in order to seek production of documents which are properly discoverable in accordance with the principles outlined in these reasons. Where the respondent is seeking disclosure, it should not fall on the shoulders of the applicants to suggest the documents that might be produced.

161 While I do not wish to encourage further disputes in this matter, as a further alternative, the respondent can issue subpoenas or notices to produce for particular documents. The test for relevance in relation to subpoenas is less stringent than that for discovery and requires only a “legitimate forensic purpose” – Roberts-Smith v Fairfax Media Publications Pty Ltd (No 42) [2023] FCA 750 at [27] where Besanko J said:

An issuing party need not establish that the documents being sought will definitely advance his or her case and it is sufficient if the documents could possibly throw light on the issues or it appears to be “on the cards” that they will do so.

See also Marcos Accountants Pty Ltd v Nigtol Pty Ltd [2019] NSWSC 909 at [58] (Ward CJ in Eq).

162 Category 34 seeks documents which it is alleged were sought by Epoch from Mr Katz or another named prospective employee, or a representative of either of them, prior to their employment commencing. Mr Katz alleges in his Defence that information of the kind alleged to have been disclosed by Mr Carrodus and/or Mr Katz during the recruitment processes with Schonfeld AU and others.

163 This category can be considered along with Category 35, which seeks information provided by Mr Carrodus (or his representative) to the applicants prior to his employment commencing, and Category 38, which requests information referring to “trading strategies of any member of the [Mr Katz’ former employer] Group”, Mr Katz’ employer prior to Epoch.

164 Even though the Defence raises the issue of Mr Katz being requested to provide information which may be confidential to a third party in his employment process with Epoch, it is not obvious that that request has any bearing on the question of whether the information alleged by Epoch to be confidential has that quality, nor does it have the requisite importance to the Defence that it is proportionate for Epoch to search for, analyse, and disclose it. I decline to order production in relation to categories 34, 35, and 38.

165 Category 42 and Category 43 can again be dealt with together. These categories are not related to any issue on the pleadings and I decline to order discovery in those categories.

166 Category 48 seeks draft affidavits or witness statements prepared for Carrodus 4. These documents are clearly privileged, and it would not be appropriate to seek such documents on discovery. The applicants rely on the statement of Black J in In the Matter of Wetherill Park Holdings Pty Ltd [2020] NSWSC 982 at [12]:

It seems to me that these paragraphs are framed in a way that they are calculated to, and very likely to, require the production of advice that is subject to legal professional privilege. The documents that record the seeking of legal advice will, in the ordinary course, be the client's request for advice which is at the core of legal professional privilege, and the documents which record the obtaining of legal advice will, in the ordinary course, be the advice or any record of it. Mr Fernon submits that documents can be produced, and a claim for legal professional privilege can be made in respect of them. While that is so, the Courts have regularly set aside notices to produce or subpoenas which, on the face of them, are likely to require production of largely privileged material, because a party should not be put to the wasted costs of producing documents, and then claiming legal professional privilege over them: Xinfeng Australia International Investment Pty Ltd v GR Capital Group Pty Ltd [2020] NSWSC 620 at [39]-[40]. Those paragraphs should be set aside so far as they are targeted, on the face of them, to advice which would be subject to legal professional privilege.

167 While that decision related to advices, it seems to me that there is no real difference between advices and a clearly privileged draft of an affidavit (where the party seeking the production does not say that the privilege has been waived by the service of the final version). The proper way to do this would be to issue a subpoena to Mr Carrodus and he, as the holder of the privilege, would be able to assert it or waive it, as the case may be. I decline to order production of the documents in Category 48.

Epoch IA - Production by third party entities

Production by Schonfeld AU and Lascaux

168 Epoch seeks leave pursuant to FC Rules r 24.2 to issue subpoenas to Schonfeld AU (a company which has its registered office in Sydney) and Lascaux (a company which is based in the United Kingdom but which has consented to accept service in Australia of any subpoena on service of its solicitor, Gilbert + Tobin). The Schonfeld AU subpoena is sought by the Epoch AIA to be amended to the form of the annexure BF8-18 to Feltham 8, to include correspondence between Schonfeld AU, and Mr Katz referring to (inter alia) Schonfeld UK (paragraph 1 to the Schedule), and “any other Schonfeld entity” (paragraph 2 to the Schedule). Those changes were the subject of some objection from the respondent but do not, in my view, significantly change the scope and effect of the subpoena. There is clearly a legitimate forensic purpose in extending the scope to include Schonfeld UK, and the inclusion of “any other Schonfeld entity” is warranted given the lack of disclosure of Mr Katz’ original employer. I intend to allow that part of the Epoch AIA which seeks to amend the subpoenas to these entities.

169 Epoch contends that the subpoenas are each for a legitimate forensic purpose (see Roberts-Smith at [161]).

170 The Schonfeld AU subpoena (as amended) seeks production of documents referring to Mr Carrodus, to Mr Katz’ potential and actual employment, and between Schonfeld AU and other Schonfeld entities, in relation to the respondent’s potential and actual employment. The relevance is said to be to the Carrodus Information Case and perhaps to the Solicitation Case, and Mr Feltham cross-references the documents sought to paragraphs in the ASOC and the CSP.

171 Mr Katz contends that the subpoena is “an overbroad fishing expedition” and should be limited in the way that discovery category 2 of the Epoch IA was contended for by the respondent to be limited. However, I consider that the subpoena does limit the subject matter quite specifically to correspondence between relevant parties, referring to the relevant subject matters, for a sensibly restricted period of time (1 August 2021 to 31 July 2022).

172 Schonfeld AU will have the opportunity to seek to set aside any part of the subpoena which it considers is not appropriate. I am of the view that the documents “could possibly throw light on the issues” and that the applicants should be granted leave to issue the subpoena as amended by the Epoch AIA.

173 The Lascaux subpoena seeks a similar set of documents in relation to communications between it and the respondent. However, it is broader in that it refers to Mr Katz’ “potential employment or engagement with any trading firm”. The respondent contends that this is too broad and goes beyond the facts in issue, and says that the CSP in paragraph 12(a) is limited to a misuse of Epoch confidential information to four named entities, being potential employers or recruiters.

174 While that analysis of the CSP is correct, it must be relevant to the applicants’ case to know how the alleged confidential information was in fact used by Lascaux. In other words, there appears to be a legitimate forensic purpose. I do not, on the test enunciated by Besanko J in Roberts-Smith, view the subpoenas as too broad, and the applicants should be granted leave to issue the subpoena.

Production by overseas entities

175 The applicants seek to issue subpoenas to overseas entities, being Schonfeld US and Millennium. The parties make similar submissions as to relevance, and to breadth.

176 The applicants relied on the evidence of Professor Gene Burd, being affidavits sworn 1 August 2024 (Burd 1) and 13 August 2024 (Burd 2). The admissibility of that evidence was the subject of an ex tempore decision (The Epoch Holdings Group Pty Ltd v Katz (Evidence Admissibility) [2024] FCA 1531). In that decision I allowed the affidavits to be read with the exception of some paragraphs which went to the application, rather than the content, of the relevant US law. I accepted him as an expert witness in the area of cross-border litigation, including seeking of §1782 orders.

177 Given that the entities are not located in Australia, each of them being companies located in the United States of America, this Court cannot directly grant leave for a subpoena to issue: see Lavecky v Visa Inc [2017] FCA 454 (Perram J) at [26]. Instead, the relief sought is as follows (as amended by the Epoch AIA):

4.    Approval to the Applicants, pursuant to s 23 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) or otherwise, to make an application for orders under §1782 of Title 28 of the United States Code seeking documents from Schonfeld Strategic Advisors LLC (Schonfeld US) which fall within the categories in Annexure BF8-20 to Feltham 8 BF6-2 to Feltham 6 (Schonfeld US Subpoena).

…

7.    Approval to the Applicants, pursuant to s 23 of the FCA Act or otherwise, to make an application for orders under §1782 of Title 28 of the United States Code seeking documents from Millennium Management LLC (Millennium) which fall within the categories in Annexure BF6-3 to … Feltham 6 (Millennium US Subpoena).

178 In support of the application to utilise the §1782 procedure the applicants submitted:

The most efficient course for third party discovery in these circumstances is utilising the Section 1782 procedure: Feltham 6 [16]; Burd 1 [28]-[47], [51]. This procedure has been used several times before in Australian courts, where parties have sought the Court’s approval or leave to seek documents through this mechanism for use in an extant Australian proceeding: Lavecky v Visa Inc [2017] FCA 454 per Perram J; Schiff v Nine Network Australia Pty Ltd (No 7) [2023] FCA 1432 per Jackman J; Alto Pty Ltd v General Motors Australia and New Zealand Pty Ltd (formerly GM Holden Pty Ltd) [2023] NSWSC 759 per Meek J. Prior approval is appropriate so that this Court retains supervision and control of documentary production processes in proceedings before it: see e.g., Lavecky at [11] (and cases cited therein).

179 Professor Burd’s evidence was to the effect that Title 28 of the US Code is a federal statute that allows a litigant in a foreign legal proceeding to apply to a US court for an order compelling a third party to produce documents for the purpose of evidence. Generally applications are made ex parte and parties, including Mr Katz, can file a motion to quash the subpoena after service.

180 The evidence of Professor Burd set out the following steps to obtain an order under the section:

(1) the person from whom discovery is sought resides (or is found) in the district of the district court to which the application is made, (2) the discovery is for use in a foreign proceeding before a foreign [or international] tribunal, and (3) the application is made by a foreign or international tribunal or any interested person.

181 Professor Burd considered other means of seeking documentation, including the issue of a subpoena in a foreign court (such as this Court), Letters Rogatory, or a request pursuant to the Hague Evidence Convention. Professor Burd opined that there was no law of which he was aware which would require production by a US-based company with a foreign-issued subpoena, and the other two processes require months, as opposed to weeks, for the §1782 procedure. It is noted that the applicants no longer seek a Sabre order by which an order for production to Schonfeld AU would be required to produce documents held by Schonfeld US (however, as to the Sabre order later sought, see the below section on the Epoch AIA).

182 The respondent did not file any expert or other evidence on this part of the case. However, he made submissions to the effect that:

(a)    citing Lavecky per Perram J at [25], “this is not a case where the document production sought is “a directed strike at a perceived and visible forensic reality” but rather it is a “stab in the dark hoping to connect with some unknown target”;

(b)    there are other methods of obtaining documents, including a targeted subpoena to Schonfeld AU, or a targeted discovery from Mr Katz; and

(c)    the application in the US is likely to fail in the form sought.

183 Additionally, the respondent says that any leave if granted should be made on the basis that the respondent has the right of first access to any document produced, and the applicant pay the reasonable costs of the third parties complying with the order.

184 In my view it cannot be said that the documents sought are a “stab in the dark”. They reflect the categories sought in the subpoenas to Schonfeld AU and Lascaux, and accordingly I do not regard them as having no forensic purpose. In any event, each of the addressees and Mr Katz is able to make that argument, if they or he wishes, before the relevant foreign courts.

185 I consider, on the basis of the evidence of Professor Burd, that the §1782 process is more convenient than the alternatives under Letters Rogatory or the Hague Convention, and so I will order that the applicants have leave to make an application under §1782. The question of first access, and costs, should be dealt with by the foreign courts.

Epoch AIA

186 I refer to the summary of the relief sought in the Epoch AIA at [45] above, and note that I have dealt with the amendments to the Schonfeld AU and Schonfeld US production under the headings “Production by Schonfeld AU and Lascaux” and “Production by overseas entities” respectively.

187 I have summarised the timeline of the production of the contract of employment as set out in Mr Feltham’s affidavits in support of the balance of the Epoch AIA in [25]-[28] above.

Relevant pleadings

188 The question of the identity of Mr Katz’ employer is one which is an issue on the pleadings, although I note that Epoch may wish to amend its pleadings consequent upon the realisation that Mr Katz was first employed by Schonfeld UK.

189 The relevant pleading is paragraph 170B of the ASOC, which provides:

170B. At a date currently unknown to the Applicants, but approximately in or around March 2022, Katz accepted an offer from Schonfeld, including a “meaningful” sign-on bonus and percentage bonuses based on trading profits.

190 The reference in paragraph 170B to “Schonfeld” is defined in the ASOC in paragraph 115 as:

Schonfeld Strategic Advisors (Australia) Pty Ltd and/or its US related entity Schonfeld Strategic Advisors LLC (together, Schonfeld) (including Katz);

191 Schonfeld AU is separately defined in paragraph 128 of the ASOC as “Schonfeld Australia”.

192 The particulars to this paragraph include references to paragraphs 41-43, and 53, of Carrodus 4. Each of those paragraphs refers to “Schonfeld” but there is no definition of the term “Schonfeld” in any of Carrodus 4, or Carrodus 1, 2, or 3. There are numerous references to “Schonfeld” in Carrodus 4. Section D4 of that affidavit is entitled “Schonfeld Australia”. Mr Carrodus’ contract of employment (and letter of offer) was with Schonfeld AU. An unexecuted Deed between Mr Carrodus and Mr Katz defines “Schonfeld” as Schonfeld AU “or its related or successor entities”. From the above context, the references in the particulars to paragraph 170B of the ASOC which are the references to Carrodus 4 can be construed as references to Schonfeld AU.

193 Mr Katz’ pleading to paragraph 170B in the Defence reads as follows:

170B. In answer to paragraph 170B, the Second Respondent:

(a) admits that in or around March 2022:

(i)    he accepted an offer of employment from an entity in the Schonfeld group; and

(ii)     that offer of employment included a sign-on bonus and percentage bonus; and

(b) otherwise denies the paragraph.

194 In paragraph 170A, Mr Katz admits, in response to the ASOC pleading that he was in discussion with “Schonfeld”, that he was in discussion with “several entities … including Schonfeld US” and “otherwise denies the paragraph” (noting the definition of “Schonfeld” in ASOC paragraph 115). There is no definition of “Schonfeld group” in the pleadings.

Argument at the October hearings

195 The identity of the “entity in the Schonfeld group” was raised by counsel for the applicants on the first day of the October hearings. In relation to the range of dates of category 1 in the Redfern Schedule, Mr Flynn SC noted that the respondent had informed them, at that stage, only that “we are instructed that the employment agreement was executed on 4 March 2022”. Soon after that, counsel referred to paragraph 170B and the pleading in the Defence, and said:

... the respondent admits that in or around March 2022, he accepted an offer from an entity in the Schonfeld Group … the pleading … has not even indicated which entity it is, which is why we’ve made it Schonfeld or Schonfeld Australia …

196 There was no response in oral submissions to the suggestion that the respondent had not indicated the relevant entity. However, the following day, in dealing with proposed limitations to category 1, Mr Lockhart SC said:

We don’t really see the problem, because if it relates to his potential employment, even if it’s still very embryonic in terms of whether you want to come to Schonfeld, or whatever the concern is, we don’t see it. It would be caught. However, if that’s the concern, then maybe it could be cured by deleting the words other than Schonfeld. In other words, relating to Schonfeld.

197 At no point did Mr Lockhart SC clearly suggest that there was any other entity which would relevantly be caught by the various discovery categories, or that Schonfeld AU was not the initial employer of Mr Katz, merely referring in the above exchange to “Schonfeld”.

198 While the Redfern Schedule does not define “Schonfeld”, references in the applicants’ categories refer back to the ASOC. Category 1 includes in the column “Reasons for the Request” the words “… to commence employment at Schonfeld (see e.g. ASOC paragraphs 170A to 171 …). From context, the reference to “Schonfeld” in the Redfern Schedule must be the reference to the defined term in the ASOC, meaning either Schonfeld AU or Schonfeld US.

199 The respondent’s submission that the applicants “should have known” because of the denial in the Defence of the allegation that Mr Katz was employed by “Schonfeld” and the pleading that he accepted an offer of employment “from an entity in the Schonfeld group” is not a compelling submission. I agree with the applicants’ description of this as a “pregnant denial”. While the applicants should in my view have asked for particulars of this particularly opaque pleading, it was not at all obvious from the pleading that Mr Katz had been initially employed by a third Schonfeld entity. Rule 16.02(1)(d) requires that a pleading must

state the material facts on which a party relies that are necessary to give the opposing party fair notice of the case to be made against that party at trial, but not the evidence by which the material facts are to be proved.

200 The respondents contested that the identity of the employer was a “material fact” when the focus of the proceedings was the use of confidential information. Mr Lockhart SC said “we could have, in fact, denied the lot” (meaning all of the allegations in paragraph 170B of the ASOC).

Relevant correspondence

201 The provision of information relating to the contract of employment, and the letter agreement by which Mr Katz became employed by Schonfeld AU, was the subject of some testy correspondence between the solicitors for the parties after the contract of employment was provided by KWM to HSF in accordance with my orders of 3 October 2024. Mr Feltham wrote to Mr Jhinku and others in his email of 17 October 2024, after indicating that the applicants would need to amend their interlocutory application to involve Schonfeld UK:

We consider that s 37M and s 37N [of the FCA Act] required you and your client to disclose such a basic matter as the identity of Mr Katz’ employer which is not controversial, could not possibly have been confidential, and was relevant to the subject matter of the interlocutory application.

202 In response, Mr Jhinku pointed out that:

Mr Katz denied that he accepted an offer of employment from [Schonfeld AU] and/or its US related entity [Schonfeld US] in or around 4 March 2022. … he admits as much as possible by admitting that he accepted an offer of employment from an entity in the Schonfeld group at the time alleged by Epoch, admitting that the offer included some of the matters alleged by Epoch, and otherwise denying the paragraph.

Thus your clients are on notice, through the pleadings, that Mr Katz both (a) denies that he accepted an offer of employment from … either [Schonfeld AU] or [Schonfeld US] in or around 4 March 2022, and (b) admits that he accepted an offer of employment from an entity in the Schonfeld group at that time. Your clients did not request any particulars of Mr Katz’ positive pleading that he accepted an offer of employment from an entity in the Schonfeld group at that time …

Further Epoch plainly understood that Mr Katz may not be employed by either [Schonfeld AU] or [Schonfeld US], because that possibility is accounted for in the relief it sought in its most recent interlocutory application. …

The fact that your clients have made allegations that are wrong, and which Mr Katz has denied, does not oblige Mr Katz to volunteer such information in those circumstances.

(emphasis in original)

Submissions on Sabre order against a non-party

203 After this exchange, and some others in a similar vein, the matter was relisted and the Epoch AIA set down for hearing.

204 The main issue in the relisted hearing on 20 December 2024 was whether the applicants could seek documents from Schonfeld UK by way of a Sabre order. Paragraphs 9A and 9B of the Epoch AIA provide:

9A. On a date ordered by the Court, Schonfeld AU must take all reasonable steps available to it to obtain the documents, or copies thereof, which fall within the categories in Annexure B to this interlocutory application, which are in the power, custody or control of Schonfeld Strategic Advisors (UK) LPP (Schonfeld UK).

9B. If the document(s) are not produced by 4.30pm on the date in Order 9A, Schonfeld AU, by a director having knowledge of the facts, is to file and serve an affidavit as to Schonfeld AU’s efforts made pursuant to Order 9A above.

(underlining and emphasis in original)

205 Schonfeld AU was served with the Epoch AIA, and did not wish to be heard on the issue. Ms Harding, Head of Legal, EMEA of Schonfeld AU wrote to Epoch on 11 November 2024 and confirmed that it did not want to make any submissions “… in addition to any submissions that Mr Katz may wish to make about the matter”. Ms Harding indicated that were any order to be made, she considered that there should be an order that Epoch pay the reasonable costs of Schonfeld AU of compliance with the order, and that Schonfeld AU would comply with any order (unless stayed or set aside), which Epoch has confirmed it is willing to do. Schonfeld AU reiterated its lack of intention to appear or make submissions at the December hearing by a second letter to Epoch dated 3 December 2024.

206 The main point of contention between the parties was whether the Court has power to make a Sabre order against a non-party. It will be recalled that the decision in Sabre (Lockhart J) determined that (at 404):

In my opinion the court has power to direct a party to take steps to obtain access to and discover documents which are in the possession, power or control of a third party where there is a real likelihood that the party to the proceeding would be given access to the documents upon request. Section 23 of the Federal Court of Australia Act confers ample power upon the court to make orders of [that kind], namely, that an order that the applicant be required to request Joico to take steps to obtain access and discover documents in the possession, power or control of Joico … Section 23 provides:

The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate.

207 Section 23 has not been amended since the decision in Sabre in 1993.

208 The respondent contends that the words “the Court has power to direct a party” at the beginning of the quoted section above restrict the operation of any orders and writs referred to in s 23 of the FC Act. The respondent cites in support the passage at 431-432 of Sabre which refer to actions taken against “the party to the proceeding”.

209 Further, the respondent analysed the cases referred to in Sabre at 432, being Palmdale Insurance Ltd v L Grollo & Co Pty Ltd [1987] VR 113, Burgundy Royale Investments v Westpac Banking Corporation (unreported, Federal Court of Australia, 21 February 1990, Foster J), Arhill Pty Ltd v General Terminal Co Pty Ltd (1991) 23 NSWLR 545, and Aetna Pacific Securities Ltd v Hong Kong Bank of Australia Ltd (unreported, Supreme Court of New South Wales, 29 April 1993, Giles J) as being cases which did not extend the principle in Sabre to a non-party. In particular, the respondent relied on the statement of Giles J in Aetna to the effect that “the order would be directly to a party, and would not purport to bind the non-party”.

210 The respondent’s position was based on the lack of a sanction for a party not responding to a Sabre order. In Zapf Creation AG v OWT Australia Pty Ltd [2001] FCA 759 at [14], Branson J said:

The justification for the exercise of the power in a case of this kind will ordinarily be that, where companies operate as a group, the purposes intended to be served by orders for discovery ought not to be frustrated because relevant documents are, or may be, held by a member of the group other than the litigants.

211 The submission by the respondent was that this Court does not have power to make a Sabre-style order against a non-party to proceedings. He calls in aid a consideration by Gordon J in Walker v Newmont Australia Ltd [2010] FCA 298 where her Honour dismissed an application for an order against a non-party which was represented before the Court for the purpose of making submissions against the order. At [38], her Honour said:

That application should be dismissed. CIBC Australia is not a party to the proceeding and is not the subject of any process (whether by subpoena, application for third party discovery or otherwise) which would make it subject to the jurisdiction of the court. Even if CIBC Australia was subject to the jurisdiction of the court, the best the Applicants could hope for was a Sabre type order or an order requiring it to use its best endeavours to obtain the documents from CIBC WM. Such an order is unnecessary - I am prepared to make an order of that kind directly against CIBC WM.

212 Gordon J did, however, make an order in Walker v Newmont Australia Ltd that CIBC WM produce documents subject to a subpoena, given that it had submitted to the jurisdiction of the Court by appearing. The respondent submitted that her Honour’s statement should not be read as opening the door for a “Sabre type order” in these circumstances, as the “best the applicants could hope for”, but in any event, given that there was a power to order the production by way of subpoena, the passage was obiter. The applicants on the other hand noted that Gordon J was in a position to make a direct discovery order given that CIBC WM had consented to the jurisdiction, and so a Sabre order was otiose.

213 The respondent noted that while I am not bound by the decision in Sabre, it being a decision of a single judge of this court, I should follow it, unless it is “plainly wrong” (Takapana Investments Pty Ltd v Teco Information Systems Co Ltd (1998) 82 FCR 25 at 32E-F).

214 The applicants submitted that the respondent’s twelve areas of objection to the making of a Sabre order against Schonfeld AU are, in fact, merely one ground restated twelve times; that the Court does not have power to make an order for production against a non-party. While recognising that Sabre involved orders against a party to proceedings, the applicants contend that Lockhart J “did not hold that a Sabre order could not be made against a non-party – that question did not arise for determination” (emphasis in submissions). Pointing to the broad words of s 23 of the FC Act, the applicants noted that the section is not confined to making orders against parties to litigation. The applicants pointed to a myriad of areas where the Court may exercise jurisdiction over a non-party – for example, pre-trial discovery, including orders against non-parties – FC Rules r 20.23, and, in the context of freezing orders, Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 405 [56].

215 The applicants submit that the respondent has not provided “any process of conventional statutory construction that the power under s 23 is limited by necessary implication in [the manner contended for]”. In order for the words of s 23 to be read down to apply only to parties, it was submitted that there would need to be express words authorising that limited reading. As the applicants set out in their written submissions:

In truth, there can be no limitation by implication, because that would be directly contrary to the well-established principle that “[i]t is quite inappropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words” (Owners of “Shin Kobe Maru” v Empire Shipping Co Inc (1994) 181 CLR 404 at 421; Australasian Memory Pty Ltd v Brien (2000) 200 CLR 270 at [17]-[18]).

216 In effect, the applicants accept that Sabre is in its terms a decision in which the jurisdiction of s 23 of the FC Act was exercised in relation to parties to proceedings, but say that the power under which Lockhart J did so is not confined only to parties. They say that O’Callaghan J’s order in Kraft Foods Group Brands LLC v Bega Cheese Limited (No 4) [2018] FCA 1055, making a Sabre order against a non-party, is properly decided, and the Sabre decision does not have any “special status simply because it is older than Kraft Foods”.

217 O’Callaghan J did not specifically consider s 23, but instead made orders based on the fact that a letter written by the proposed target of the Sabre order indicated that it had the documents sought in its power or control.

218 The respondent asserted that Kraft Foods is plainly wrong and should not be followed. The basis for this appears to be that it is contrary to the respondent’s interpretation of the Sabre principles. The applicants call on the criteria relating to non-party discovery (and in the process sought to distinguish Walker v Newmont Australia on the basis that the order sought differed from that sought in both Kraft Foods and in these proceedings). Counsel for the applicants contended that the indication by Ms Harding for Schonfeld AU that it would comply with an order “unless stayed or set aside” was a “clear intention” that it would enter the fray.

219 The appropriateness of the Sabre order in this case was stated by the applicants as satisfying the four pre-requisites to an order as stated by Edmonds J in SPI Spirits (Cyprus) Ltd v Diageo Australia Ltd (No 2) (2006) 155 FCR 150 at [31]-[34]. These are, using the names of the relevant parties:

(a)    There must be a real likelihood that Schonfeld UK would give access to Schonfeld AU;

(b)    There must be a real likelihood that the documents sought are in fact in existence in the possession of Schonfeld UK;

(c)    It is preferable for the order to specify what reasonable steps should be taken to obtain the documents; and

(d)    The order should be considered only after discovery has taken place, in order to confine the requests.

220 The applicants submitted that the four matters from SPI Spirits are present in these proceedings. Schonfeld AU and Schonfeld UK are closely related, and Schonfeld AU has indicated (as set out above) that it would comply with the orders. The documents are reasonably contained and specified in the orders, and the applicants submit that there has been no indication that Schonfeld AU would encounter any difficulty.

221 The applicants submitted that the documents sought are confined, probative, and only in the possession of Schonfeld UK. It is thus contemplated that the process would run concurrently with other discovery orders.

222 In response, the submissions from Mr Katz traversed much of the same ground as the primary submissions, and pointed to (inter alia) a decision of Jackman J in DC Rd DC Pty Ltd v Zhang (No 2) [2024] FCA 157 at [26]. That paragraph does not do much more than describe Lockhart J’s decision in Sabre as holding

that the Court has power to direct a party to take steps to obtain access to and discover documents which are in the possession, power or control of a third party where there is a real likelihood that the party to the proceeding would be given access to the documents upon request.

223 That summary of Sabre is clearly correct, but it does not bolster the respondents’ submissions that the decision in DC Rd DC in its terms restricts the operation of the principle to a party to the proceedings. The point did not arise, and accordingly Jackman J did not consider it.

224 The respondents submitted that in any event it was not appropriate to make a Sabre order until discovery was completed (noting category (d) in SPI Spirits).

Disposition

225 I have considered carefully the question of whether either Sabre or Kraft Foods is plainly wrong. Neither seems to be. They sit fairly easily together. As Jackman J noted in DC Rd DC at [26], Sabre has been followed many times. The findings in the main proceedings in Kraft Foods were not disturbed on appeal (Kraft Foods Group Brands LLC v Bega Cheese Limited [2020] FCAFC 65) although it does not appear that the order relating to the provision of documents by a non-party was in dispute in that matter. I note that in Kraft Foods the third party was an intervenor; here, Schonfeld AU has indicated to Epoch that it would comply with any order. That, to some extent, brings it within the Kraft Foods position as well as that of Walker v Newmont Australia (where the third party the subject of a subpoena had consented to the jurisdiction).

226 The reading of s 23 of the FC Act contended for the applicants is, I think, correct. The section reads:

The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate.

227 The Court has power to determine the issues in dispute in these proceedings. The relief sought is within its jurisdiction, the Further Amended Originating Application invoking both the Corporations Act and the FC Act. Once the Court has jurisdiction, it can make orders “of such kinds … as the Court thinks appropriate”.

228 There is no question that the Court has jurisdiction to issue a subpoena to a third party. Nor, as noted above, is there any rule that orders cannot be made against non-parties. It does not seem to me that the focus by Lockhart J on an order against a party to proceedings to take the steps now known as a Sabre order was intended to exclude the possibility of such an order being made against a non-party.

229 I acknowledge that as Schonfeld AU is not a party, there may need to be additional steps taken to compel compliance if, contrary to Ms Harding’s indications, that company does not take the steps required to obtain the documents. That does not, however, incline me to refuse the relief sought.

230 Taking note of Edmonds J’s conditions for a Sabre order canvassed above at [219], the first three conditions are in my view met by the processes in paragraphs 9A and 9B of the Epoch AIA. The fourth – that a Sabre order should only be made after inter partes discovery – is not in this case so important, as the request is confined and targeted. I am prepared to make the orders sought by the applicants.

Costs

231 The length of this judgment is of course governed by the issues the parties sought to contest. Each party painted the other as unreasonable and unyielding. As noted in the opening paragraph of these reasons, what was agreed between the parties paled into insignificance against what was not agreed. The hearing took three days, the application book took up 27 tabs of double-sided documents in three folders, the Epoch AIA took up a further two folders, and senior and junior counsel appeared on both sides. While I cannot fault the quality of the advocacy and the attention to detail by each side, it would have been both more efficient and proportionate to have fought these battles either through a mediation process, or through a process or processes before a Registrar, leaving only those matters (if there were any) which required the attention of a Judge to determine them.

232 In relation to the Epoch IA, the applicants in the main obtained the relief they sought.

233 In relation to the Katz IA, the respondent was successful to some extent, successful in part to some extent, and unsuccessful in the balance. It is difficult to be any more specific as to proportions However, as a rough estimate, it appears that the respondent was successful to around 40% of the orders sought in the Katz IA.

234 In relation to the Epoch AIA, the applicants obtained the desired relief. Somewhat oddly, the respondent – who was not by definition a party affected by the orders sought in relation to the Sabre order argued on 20 December 2024 – put himself up as a “sort of amicus contradictor” (Transcript, 20 December 2024, p 31) despite making, as has been seen, substantial submissions on behalf of his current employer.

235 Each party has had some degree of success, and some degree of failure. Neither party got everything they wanted. However, the approach taken by Epoch was in my view more measured, and took more note of the requirement that discovery categories need to have a direct relationship to issues on the pleadings, and would be likely to be probative of those issues. As can be seen from the discussion of the Katz IA, many categories were narrowed down, or refused, for the failure to grapple with the issues raised on the pleadings.

236 Costs are of course discretionary. Section 43 of the FC Act confers that wide discretion on the Court. As Perry J said in Australian Society of Otolaryngology Head and Neck Surgery Limited v Australian Health Practitioner Regulation Agency (No 2) [2025] FCA 34 at [13], this discretion:

must be exercised judicially, consistently with the purpose of the power and with regard to all relevant facts and circumstances: see Kazar (Liquidator) v Kargarian; In the matter of Frontier Architects Pty Ltd (in liq) [2011] FCAFC 136; (2011) 197 FCR 113 at [4] (Greenwood and Rares JJ); AOU21 v Minister for Home Affairs (No 2) [2021] FCAFC 212 at [7] (Griffiths, Mortimer and Perry JJ).

237 In exercising my discretion as to costs, I am mindful of the following factors which I have dealt with above, including the conduct of the parties, the issues which were pursued or not, and the varying degrees of success. On the whole, the applicants pursued issues on which they were likely to succeed. The respondent on the other hand fought strongly on issues which were not appropriate areas for discovery applications. He also sought to engage with processes such as subpoenas and the production by overseas entities which, while they affect his case, were not orders sought against him. I do not agree that the self-described “amicus contradictor” means that there would be no costs consequence of the appearance on 20 December 2024 by the respondent, who was entirely unsuccessful on that day.

238 The applicants seek indemnity costs in relation to the Epoch AIA. This is based on the contention that the interim employment by Mr Katz by Schonfeld UK should have been disclosed to the applicants well before the two days of hearing in October 2024 or, at the very latest, when the issue was raised by Mr Flynn SC in clear terms on the first day of hearing. The opaque pleading, combined with the failure to disclose the employer until the contract of employment was actually produced, meant that the applicants had to amend the Epoch IA and now may need to amend their pleading, and enter into further discovery processes, in order to include Schonfeld UK.

239 I also consider in relation to costs that, while there was some reduction of issues by consent, and some agreement as to production (for example, the Carrodus database and the contract of employment), the parties appeared only to give the most cursory of attention to the numerous exhortations to reduce the cost, burden, and formality of discovery applications in CPN-1 (see, for example, paragraphs 10.3, 10.5, 10.7, and 10.13).

240 This is of course an interlocutory application. The usual position in relation to costs of an interlocutory application is that costs be reserved, and become part of the usual order for costs to the benefit of the successful party in the litigation. The award of costs should, however, “reflect the justice of the situation”: O’Keeffe Nominees Pty Ltd v BP Australia Ltd (No 2) [1995] FCA 109; (1995) 55 FCR 591 at 598 (Spender J). In O’Keeffe, Spender J observed (at 598):

This circumstance reinforces the not uncommon position that in respect of the payment of costs of an interlocutory application, it is not necessarily just that the costs of an interlocutory application should follow the result of that interlocutory application but rather should be determined by the result of the principal litigation of which the interlocutory application forms but a part.

241 Further, the rules provide that, absent an order to the contrary, an interlocutory costs order not be taxed until the conclusion of the proceedings: FC Rules r 40.13. I have not been asked to vary that position.

242 The applicants sought that the costs of the Epoch AIA be paid on the indemnity basis. This was on the basis that they did not know, and were not told, until provided with the contract of employment, that Schonfeld UK was the initial employer of Mr Katz. The respondent relied upon their denial of the balance of the pleading to paragraph 170B after some admissions (as set out above at [193]).

243 The applicants cited the cogent passage of Wigney J in Australian Competition and Consumer Commission (ACCC) v Colgate-Palmolive Pty Ltd (No 5) [2021] FCA 246 at [6]-[9]:

The Court’s discretionary power to award costs derives from s 43 of the Federal Court of Australia Act 1976 (Cth) (FCA Act). The usual rule is that an order for costs means costs “as between party and party”: r 40.01 of the Rules; see also the definition of “costs” in the Dictionary in Sch 1 of the Rules; Mango Boulevard Pty Ltd v Whitton [2015] FCA 1352 at [12]. A party or person who is entitled to costs may, however, apply for an order that costs be awarded in their favour “other than as between party and party”: r 40.02(a) of the Rules. That includes an order that costs be awarded on an indemnity basis.

The discretion to award costs on a basis other than as between party and party, including on an indemnity basis, is “unfettered, save that it must be exercised judicially and not arbitrarily or capriciously”: Australian Competition and Consumer Commission v The Construction, Forestry, Mining and Energy Union (No 4) [2018] FCA 684 at [96]. The discretion must also be exercised in light of the requirement that the Court consider any failure by a party to comply with the overarching purpose of the civil practice and procedure provisions to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible: see ss 37N(4), 37M(1) of the FCA Act; LFDB v SM (No 2) [2017] FCAFC 207 at [7].

The discretion to depart from an order for party and party costs will not be exercised unless there is some special or unusual feature or the justice of the case so requires: Cirillo v Consolidated Press Property Ltd (formerly known as Citicorp Australia Ltd) (No 2) [2007] FCA 179 at [3]; Seven Network Ltd v News Ltd (2009) 182 FCR 160; [2009] FCAFC 166 at [1102]; Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited (No 2) [2017] FCAFC 116 at [5].

The purpose of a costs order is to compensate the successful party, not to punish the unsuccessful one: King v Yurisich (No 2) [2007] FCAFC 51 at [19], citing Latoudis v Casey (1990) 170 CLR 534; Seven Network at [1099]. An award of indemnity costs is to “serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs”: Hamod v New South Wales (2002) 188 ALR 659; [2002] FCAFC 97 at [20]; see also Kazal v Independent Commission Against Corruption and Ors (No 2) [2020] NSWSC 17 at [60]-[62]; Cirillo at [4]-[5]; Melbourne City Investments at [5].

244 The applicants’ position, that the Epoch AIA would not be necessary had the respondent disclosed to them in the previous two years of the proceedings that Mr Katz had been employed by Schonfeld UK, is one of understandable frustration. The respondent’s reliance on its carefully worded pleadings (described by the applicants as “fostering Epoch’s misapprehension”) is equally frustrating. The submission by the respondent that the use of the phrase “Schonfeld, or any other entity within its corporate group” by the applicants in their discovery schedule (see [78] above) indicated that Epoch actively knew (or had “putative comprehension”) of Schonfeld UK’s involvement is again, a submission which, in the light of the reaction of Mr Feltham to Schonfeld UK’s appearance on the contract of employment, should not be accepted.

245 In response, the best three arguments available to the respondents are that no particulars were sought in relation to the pleading in paragraph 170B of the defence; that it is only pleaded that Schonfeld AU and Schonfeld US were involved in the misuse of the Epoch CI; and that s 37M of the FC Act does not impose an active duty to correct what could be seen as a misapprehension of another party. The respondents submit that “it is unremarkable that a party might learn new facts through discovery”.

246 In counterpoint to those three factors, where the identity of the employer was raised in oral argument but not engaged with in reply, there was also a failure by the respondent to be open with the Court and with the applicants. This is in addition to the failure to plead the defence in a way which would “define the controversy”. Defences are required, by FC Rule 16.02.(1)(d), to give fair notice of the respondent’s case.

247 Epoch submits that it has been put to an extra day of argument by the need to seek a Sabre order against Schonfeld AU. However, it is the case, as noted by the respondent, that Schonfeld AU had not been notified as at the October tranche of hearings, and Epoch would not have succeeded on the application had Schonfeld AU not engaged with the correspondence and agreed to abide by the ruling of this Court.

248 I have considered how to deal with the gamesmanship in this approach to pleadings by the respondent, but doubtless disappointingly for the applicants, I have determined that the conduct of the respondent which resulted in the Epoch AIA does not reach the level required for an indemnity costs order. The conduct of the respondent is balanced by reason of the applicant’s failure to request particulars, as well as the late notice to Schonfeld AU which took place after the first hearing tranche. That late notice would have meant that a third day was required in any event, had the respondent dealt with the identity of the initial employer of Mr Katz during that tranche.

249 Mr Katz’ approach of taking an “amicus contradictor” approach to the proceedings does not excuse him from bearing the costs consequences. If, truly, he had no “dog in this fight”, then the applicants could have presented their case for a Sabre order without the extra time taken by considering the submissions, oral and written, of Mr Katz. That is not to say that the submissions were not helpful; they were. But ultimately Mr Katz chose to enter the fray and was not successful; see Australian Society at [14] and the cases cited therein.

250 Taking all of the above into account, I am of the view that the varying degrees of success of each of the parties on these applications results in the following costs outcomes:

(a)    Mr Katz should pay the costs of Epoch in relation to the Epoch IA on the ordinary basis, such costs not to be taxed until the conclusion of the proceedings;

(b)    there should be no order as to costs of the Katz IA, given that there was no clear winner, with the costs of the Katz IA following the event of the main proceedings; and

(c)    Mr Katz to pay the costs of Epoch in relation to the Epoch AIA on the ordinary basis, such costs not to be taxed until the conclusion of the proceedings.

Ongoing management of the proceedings

251 Given that these proceedings have been on foot for over two years, and are still at the discovery stage (noting of course that significant interlocutory applications and confidentiality orders were required), I had tentatively listed the hearing before me for three weeks in February 2026. I indicated to the parties that I intended to case-manage the proceedings fairly intensively going forward.

252 It appears to me, particularly with the Title 28 and Sabre orders to be made, and the possibility of an amendment to the ASOC to incorporate the employment by Mr Katz by Schonfeld UK, that a hearing in February 2026 is somewhat optimistic. Accordingly, I will deal with the realities of a hearing date at the next case management hearing.

Orders

Orders on Epoch IA, Epoch AIA, and Katz IA

253 I invite the parties, on consideration of these reasons, to provide short minutes of order covering the following:

(a)    any variation to the orders proposed in these reasons (I specify that this does not include any variations based on re-arguing the points already made, but is limited to any issues of coherence between the reasons and the orders);

(b)    any variation to the reasons and orders based on compliance with existing confidentiality orders, or the making of any necessary further confidentiality orders;

(c)    a timetable for any short hearing required as contemplated by these reasons;

(d)    a timetable for preparation of any further evidence by the applicants, and evidence in reply by the respondent; and

(e)    referrals to a Registrar, where possible, to manage any further issues arising out of the disclosure orders, any disputes as to the implementation of those orders, or new issues arising out of any applications for subpoenas or discovery;

within 14 days of the delivery of these reasons.

254 I will also list the matter for a further case management hearing on a date convenient to the parties and the Court.

255 I will give the parties the opportunity to formulate, by consent if possible, orders reflecting the above reasons and, where no consent is reached, time to make submissions as to the appropriate orders.

Publication restrictions

256 This judgment was published in the first instance only to the parties, to enable them to consider the matters raised and to make submissions as to any steps needed to comply with existing or necessary confidentiality orders.

Associate:

Dated:    28 March 2025

SCHEDULE OF PARTIES