Element Zero to fight court upholding search orders despite Fortescue not revealing dealings

Former Fortescue employees are appealing against a Federal Court judge’s refusal to shred contentious search and seizure orders despite the company failing to disclose important information.

Andrew Forrest’s former senior lieutenant Michael Masterman and his new green iron processing venture Element Zero are challenging Justice Brigette Markovic exercising her discretion in favour of Fortescue on October 4 after juggling an array of claims and counter-claims.

Justice Markovic rejected the Element Zero team’s application for the return of documents seized in mid-May during raids on its Malaga premises and on the homes of former Fortescue Future Industries scientists Bart Kolodziejczyk and Bjorn Winther-Jensen.

Justice Markovic upheld the search and seizure orders despite finding that Fortescue should have told the court about various dealings between Fortescue and Element Zero, featuring Mr Masterman in his new job running the seemingly successful technology developer.

Element Zero barrister John Hennessy told Justice Markovic about the appeal on Tuesday, revealing it would focus on the narrow issue of her exercising her discretion to not quash the search and seizure orders despite finding Fortescue had engaged in material non-disclosure.

Justice Melissa Perry granted the search and seizure orders in May after secret hearings where Sydney-based lawyers working for Fortescue outlined an array of allegations, including that Dr Kolodziejczyk had copied numerous FFI computer files before leaving the company in late 2021.

In her decision of October 4, Justice Markovic reviewed evidence filed by Fortescue before and after the secret hearings in late April and early May.

She also reviewed affidavits filed by Dr Kolodziejczyk, the scientific driving force at Element Zero, challenging the alleged connections between his work at Fortescue and his new venture that appears to be successfully developing a so-called ionic process for refining ores..

Justice Markovic rejected Element Zero’s attacks on Justice Perry’s conclusion that Fortescue had a strong prima facie case and claims that Fortescue’s case was weak.

She rejected allegations by Element Zero that it failed to disclose arrangements for Dr Kolodziejczyk to work from home while it was making a series of allegations about him copying FFI’s computer files.

But she ruled Fortescue engaged in material non-disclosure when it failed to tell Justice Perry about an ongoing relationship between Element Zero.

That relationship included meetings between Mr Masterman and former colleagues at Fortescue that continued until January this year.

This included discussions about a non-disclosure agreement that would allow Fortescue to examine access to Element Zero’s technology ahead of a potential future commercial arrangement.

Justice Markovic exercised her discretion in favour of Fortescue, saying Justice Perry was satisfied in May that the miner had a strong prima facie case and that view had withstood challenge by Element Zero.

She said Justice Perry’s view that there was a real risk of destruction of documents was reached based upon a substantial body of evidence.

“Critically, there is a lack of any utility in setting aside the search orders,” she said.

The seized documents are now locked away and subject to the usual discovery procedures of the court.

Mr Hennessy spelt out the appeal while asking Justice Markovic to consider overturning a costs orders that she made in favour of Fortescue on October 4 after exercising her discretion in its favour.

Justice Markovic rejected the request, telling the Element Zero team to challenge the costs order in its appeal against her decision.

She set aside February 6 for a variety of legal arguments about document disclosure and pleadings in the main battle.