Federal Court of Australia

AxiCorp Financial Services Pty Ltd v CABC (No 2) [2025] FCA 698

ORDERS

THE COURT ORDERS THAT:

1.    The respondent pay the applicant’s costs of and incidental to the entirety of this proceeding on an indemnity basis.

2.    The costs referred to in order 1 extend to and include costs incurred in relation to and incidental to:

(a)    the hearing before Perry J on 4 February 2025, including preparing and filing legal process, submissions and evidence;

(b)    the suppression order application hearing before Bromwich J on 25 February 2025, including preparing submissions and evidence;

(c)    the delivery of judgment by Bromwich J on 4 March 2025;

(d)    the costs hearing before Bromwich J on 17 June 2025, including preparing submissions and evidence; and

(e)    the delivery of this judgment.

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

REASONS FOR JUDGMENT

BROMWICH J:

1    The applicant, AxiCorp, seeks indemnity costs of this proceeding from the respondent, who is known by the pseudonym CABC. As duty judge, I gave judgment in favour of AxiCorp in AxiCorp Financial Services Pty Ltd v CABC [2025] FCA 144 and made the substance of the suppression order sought. A prior duty judge, Perry J, had granted AxiCorp an interim injunction, which was the principal relief sought by the commencement of this proceeding, as well as an interim suppression order covering certain parts of the evidence relied upon to obtain that relief. This proceeding was brought by AxiCorp in anticipation of CABC bringing proceedings against it in this Court following the filing of a general protections application in the Fair Work Commission which had not resolved an employment dispute between them.

2    In the Commission, an order in the nature of a suppression order had been made over information contained in the application that AxiCorp asserted was confidential, including material that is subject to claims of legal professional privilege. That order by the Commission was set to expire once a proceeding based upon that action was commenced in this Court by CABC. Such a proceeding could only be commenced after the Commission issued a certificate under s 368 of the Fair Work Act 2009 (Cth) (FW Act).

3    AxiCorp anticipated, correctly as it turned out, that CABC would refer to similar information that was asserted by AxiCorp to be confidential, in legal process filed in this Court. AxiCorp perceived, again correctly as it turned out, that it might need similar suppression orders in this Court to protect such information from disclosure. In addition, AxiCorp also correctly anticipated that CABC would seek to challenge the legal basis for confidentiality, especially in relation to any claims of legal professional privilege, by raising an argument about waiver or some other disentitling conduct. This meant that any suppression orders could not be framed in general terms as covering information protected by legal professional privilege, because that characterisation is challenged by CABC. Plainly, the continuation of any basis for confidentiality was a trial issue and any suppression order was directed to preserving for evidence, argument and adjudication the question of whether that confidentiality existed or endured in relation to the information as asserted by AxiCorp.

4    AxiCorp sought to prevent CABC from disseminating the contents of any legal process filed in this Court until it had an opportunity to seek any necessary suppression orders over any asserted confidential information. Necessarily, it did not know what information of an asserted confidential nature might be relied upon by CABC, although it must have had a fair idea from what had been included in the application filed in the Commission. To that end, by clear, blunt and repeated correspondence, AxiCorp sought an undertaking from CABC to not disseminate anything contained in a document filed in this Court until the first case management hearing, to enable any suppression order application to be made.

5    AxiCorp’s stance towards information that it asserted was confidential was clearly communicated through correspondence sent to CABC on 17 December 2024. AxiCorp asserted that certain information contained in the application filed in the Commission was confidential and expressed a concern over the potential disclosure of such information by CABC. That assertion and corresponding concern was maintained in correspondence sent on 24 January 2025, 28 January 2025 and 30 January 2025 in relation to such information being contained in legal process filed in this Court. That correspondence straddled the issue of the s 368 certificate by the Commission on 28 January 2025, after which it was open to CABC to commence a FW Act proceeding in this Court.

6    In that January 2025 correspondence, AxiCorp repeatedly indicated that if such an undertaking was not forthcoming, it would seek urgent relief to achieve the same outcome until it could consider and potentially make a suppression order application. While that correspondence sought a particular form of undertaking, AxiCorp also made it abundantly clear that it was open to considering alternative forms of undertaking which met its objective of being given an opportunity to seek a suppression order before any dissemination took place. Collaterally, the correspondence also effectively identified that what AxiCorp was seeking was mirroring the terms of, and therefore consistent with, r 2.32 of the Federal Court Rules 2011 (Cth). Relevantly, r 2.32(2) disallows third party access to legal process such as an originating application or pleadings until the earlier of a case management hearing or other hearing taking place (unless of course a prior application for access was made and granted).

7    CABC did not give any undertaking as sought, or to the effect of what was sought, or at all. CABC’s correspondence in reply did little more than indicate that a proceeding would not be commenced before a certain time – initially not until at least the week commencing Monday, 3 February 2025; and later not until after 4 February 2025. It is not necessary to reproduce the entire chain of correspondence, nor even most of its contents. It suffices to observe that at no point did CABC ever indicate that he would give an undertaking that addressed AxiCorp’s concerns. What must have been the effective clincher in AxiCorp deciding that it had no alternative but to seek injunctive or other relief was an email by Mr John Hyde Page, junior counsel for CABC, sent at 4.44 pm on Friday, 31 January 2025 to AxiCorp’s solicitors, which included the following:

I refer to [CABC] v AxiCorp and your recent correspondence, attached.

Harmers recently brought me into the matter to help plead [CABC]’s court application. Then your letter arrived.

We are at a stage in [CABC]’s matter where his pleading has not been drafted and I do not know what it will contain. So our client is in no position to give you undertakings or take any of the other steps you request. This would be the case even if I regarded the requests in your letter as reasonable, or took your threat of injunctive relief seriously.

You are presumably aware of the similar application for injunctive relief that an employer brought last year, the fate of which is described in Farrell v Super Retail Group Limited (Confidentiality Applications) [2024] FCA 954.

You know that an application by AxiCorp for an injunction would almost certainly be unsuccessful. And we know that you know.

8    It should be noted that Farrell v Super Retail Group Limited (Confidentiality Applications) [2024] FCA 954 was a case in which a suppression order was made over parts of legal process and submissions, but not over the entirety of such documents, as apparently sought by the respondents in that case. AxiCorp never foreshadowed seeking anything different to what it ultimately sought, namely a suppression order only in respect of any confidential information in legal process filed by CABC. What it sought in aid of that ultimate objective was an undertaking to enable any suppression order application made to be confined in scope and focused on any asserted confidential information that was included. Such a disciplined approach was effectively encouraged by Lee J’s adverse observations about contrary conduct in Farrell v Super Retail Group at [4]. Thus, far from Farrell v Super Retail Group supporting CABC’s stance, it supported AxiCorp’s stance.

9    The basis in Mr Hyde Page’s email for predicting that an application for an injunction would fail, beyond his misinterpretation of the effect of Farrell v Super Retail Group, is unclear. That prediction was not only wrong, but, perhaps ironically, predictably wrong. AxiCorp’s case for an injunction was, in all the circumstances, compelling, although never certain and not able to be taken for granted. That is not to say that CABC was compelled to give any such undertaking, but in taking a stance of refusal, the peril of a successful costs application by AxiCorp should have loomed large. That is especially so as the solicitors for Ms Farrell in Farrell v Super Retail Group are also the solicitors for CABC. And that is so despite the restriction that s 570(2) of the FW Act imposes on the making of costs orders in FW Act proceedings and related proceedings, addressed below.

10    Early in the afternoon of 4 February 2025, in the context of CABC’s assurance that no legal process would be filed until 5 February 2025, AxiCorp sent a letter referring to the email from Mr Hyde Page. In that letter, AxiCorp advised that since no assurance concerning the potential disclosure of asserted confidential material had been given, it assumed that CABC would commence a proceeding the next day without giving “any form of undertaking” not to disclose information that AxiCorp regarded as confidential until after the first directions (that is, case management) hearing. The letter advised that, in the absence of any contrary indication from CABC, AxiCorp would proceed on those assumptions and intended to commence an urgent proceeding to protect its confidential information without further notice. The only response by CABC, immediately prior to AxiCorp’s deadline of 3.00 pm, was to remind AxiCorp of an obligation to provide this Court with any evidence adverse to the foreshadowed application, including the recent correspondence. That correspondence was before Perry J and there is no suggestion of any failure by AxiCorp to bring to her Honour’s attention any reason not to grant the injunction.

11    As clearly foreshadowed in the correspondence referred to above, AxiCorp applied for an injunction in circumstances where it was faced with an impending proceeding against it in this Court, there was no undertaking given by CABC, and there was a real prospect that such legal process would contain asserted confidential material (as it later in fact did include). The application was made to Perry J, the then duty judge, but proceeded ex parte, despite CABC being on notice of it.

12    Perry J enjoined CABC from disseminating certain confidential information until the first case management hearing of any proceeding he commenced in accordance with the s 368 certificate granted by the Commission. The information covered by the injunction was framed by reference to the general protections application that had been before the Commission, which contains the asserted confidential information that was subject to a suppression order made by the Commission. In order to obtain that relief from her Honour, AxiCorp had to adduce evidence of the asserted confidential information said to be in need of protection, principally by reproducing the general protections application. That in turn necessitated seeking and obtaining an interim suppression order over that asserted confidential material, pending the final hearing of that suppression application. I heard that final application as the duty judge on 25 February 2025.

13    The making of a final suppression order over part of the evidence relied upon to obtain the injunction was opposed in part by a legal representative of the publisher of the Australian Financial Review newspaper, who had become aware of the proceeding, but not through any conduct by AxiCorp. CABC filed a submitting appearance save as to costs. I granted a version of the suppression order that was sought.

14    Between the injunction and interim suppression order application before Perry J on 4 February 2025, and the subsequent final suppression order application before me on 25 February 2025, CABC commenced the anticipated proceeding against AxiCorp on 11 February 2025. The legal process by which that proceeding was commenced could not be accessed via this Court by any third party without leave until the first case management hearing due to the operation of r 2.32(2) of the Rules. CABC was also restrained by the injunction from disseminating the asserted confidential information in that legal process until that time.

15    The suppression order I made over the confidential material in this proceeding ends seven days after the conclusion of the proceeding brought by CABC. On 21 March 2025, a registrar made a broadly similar suppression order over the legal process in the proceeding brought by CABC, remaining in place until the determination of an interlocutory application filed by AxiCorp which seeks suppression orders and a strike out of CABC’s proceeding. That interlocutory application has not yet been heard.

16    Although both sides provided detailed written submissions and adduced a deal of evidence on the question of costs in this proceeding, the dispute ended up turning on a number of quite narrow propositions. I see no need to delve into all of the detail that goes beyond what I have found to be determinative. Nonetheless, I have taken into consideration the balance of the evidence and submissions (both written and oral) before me.

17    One point that requires further consideration is CABC’s contention that he contemplated making a complaint or report of some kind either to the Australian Securities and Investments Commission, or to another regulatory or law enforcement agency, about the asserted conduct of AxiCorp. CABC’s submissions relied upon such action being impeded by the undertaking sought and advanced that alleged impediment as a good reason for not giving the undertaking. I reject that argument because:

(a)    this concern did not feature in any response to AxiCorp’s repeated requests for an undertaking;

(b)    this concern, if genuinely held at that time in relation to giving an undertaking, could readily have been accommodated as a qualification to any undertaking that was given or offered to allow such a complaint or report to be made;

(c)    the evidence adduced by CABC did not go further than expressing a concern that the later suppression orders might impede making such a complaint or report – it was not suggested in the evidence that was relied upon that this concern extended to the short-term undertaking sought;

(d)    no attempt has been made by CABC to seek any variation of the suppression orders to clarify that such a complaint or report can be made, noting that over four months have elapsed since such action was said to have been in contemplation.

18    AxiCorp’s application for costs requires it to surmount s 570(2)(b) of the FW Act, which relevantly provides that a party may be ordered to pay costs only if this Court is “satisfied that the party’s unreasonable act or omission caused the other party to incur the costs”.

19    The substance of AxiCorp’s application for CABC to pay its costs and to do so on an indemnity basis is that:

(a)    it was unreasonable for CABC to fail or refuse to give an undertaking which enabled AxiCorp to consider any legal process that he filed and make any suppression order application over asserted confidential information in any such document, including information subject to a claim of legal professional privilege;

(b)    CABC’s stance had made it necessary to apply for the injunction and to apply for a suppression order over the asserted confidential information which formed part of the evidence upon which the application for an injunction was made, and therefore caused the entirety of those costs to be unnecessarily incurred.

20    The response by CABC was a curious mixture of misconceptions, erroneous reasoning, and a failure to grapple with the substance of AxiCorp’s case. The highwater mark of the contrary argument advanced by CABC seemed to be that since a suppression order could not have been obtained over the entirety of the legal process that CABC filed, it was reasonable for CABC to not give an undertaking against its dissemination. This submission cannot be accepted, and it necessarily follows that the weaker arguments advanced must also be rejected.

21    AxiCorp was not seeking an undertaking amounting to a suppression order, but rather a brief period of voluntary restraint on the part of CABC to enable any such suppression order application to be made over any parts of filed process that contained information it asserted to be confidential. The course proposed by AxiCorp, or something to similar effect, was entirely reasonable and sensible. The act or omission of CABC in not giving an undertaking in substance as sought by AxiCorp was plainly and obviously an unreasonable act or omission that directly caused the costs of and incidental to obtaining an injunction to achieve the same end to be incurred. None of those costs would have been incurred but for CABC’s unreasonable behaviour. AxiCorp should not be left out of pocket by reason of incurring those costs.

22    I reject a collateral submission made by CABC, to the effect that a costs order would in some way unfairly operate to indirectly impede CABC from conducting the proceeding he commenced on 11 February 2025. The protection given by s 570 of the FW Act is not to be used as a shelter for unreasonable behaviour causing manifestly unnecessary costs to be incurred. If such a costs order does have the effect of imposing any hardship on CABC – and there was no evidence that that was so or likely to be so – that is a consequence of unreasonable and cost causative behaviour that s 570 does not shield from a costs order.

23    I am satisfied that had an undertaking to the effect of what AxiCorp had sought been given, what in fact later took place would in substance have taken place only within the proceeding brought by CABC (as in fact occurred), and not additionally within a separate proceeding. That is, once the proceeding had been commenced by CABC on 11 February 2025, an application for a suppression order would have been made by AxiCorp prior to the first case management hearing on 21 March 2025, without any need for AxiCorp to obtain an injunction or the collateral suppression order relief.

24    For abundant caution, the indemnity costs order I make expressly extends to include costs incurred in relation to and incidental to:

(a)    the hearing before Perry J on 4 February 2025, including preparing and filing legal process, submissions and evidence;

(b)    the suppression order application hearing before me on 25 February 2025, including preparing submissions and evidence;

(c)    the delivery of judgment by me on 4 March 2025;

(d)    the costs hearing before Bromwich J on 17 June 2025, including preparing submissions and evidence; and

(e)    the delivery of this judgment.

Associate:

Dated:    27 June 2025