Fairman v Jonelca Holdings Pty Ltd

The applicants sought preliminary disclosure prior to the commencement of litigation brought pursuant to r 208D Uniform Civil Procedure Rules 1999. They had been parties to “off-the-plan” purchase contracts in respect of which the sunset date was approaching. The parties wanted preliminary disclosure to determine whether or not to commence proceedings against the respondents for failing to complete the contracts. After considering the requirements under r 208D, her Honour granted the applicants the disclosure sought.

Treston J

7 February 2025

The applicants sought preliminary disclosure prior to the commencement of litigation pursuant to r 208D Uniform Civil Procedure Rules 1999 (“UCPR”). [1]. The applicants had entered into “off-the-plan” purchase contracts, and delays in construction had meant that the sunset date was approaching. [2].

The applicants sought preliminary disclosure to enable them to consider whether they ought to commence proceedings against the respondents for failing to complete the contracts prior to the sunset date. [3]. Various reasons had been given by the respondents for the delays, including cost escalations and cashflow issues. [4].

Rule 208D was introduced to the UCPR in 2021; the parties agreed that for preliminary disclosure to be ordered, the applicants would need to satisfy each of the requirements set out in sub-rr 1(a)–(e). [17]–[18]. Subrules 1(a)–(e) provide:

“(1)The court may make an order under subrule (2) if it appears to the court that:

(a)an applicant may have a right to relief against a prospective defendant; and

(b)it is impracticable for the applicant to start a proceeding against the prospective defendant without reference to a document; and

(c)there is an objective likelihood that the prospective defendant has, or is likely to have, possession or control of the document; and

(d)inspection of the document would assist the applicant to make the decision to start the proceeding; and

(e)the interests of justice require the order to be made.”

Her Honour proceeded by dealing with each of the subrules in turn. [22].

“Applicant may have a right to relief against a prospective defendant”

The applicants contended that they may have a right to relief against the respondents for specific performance, injunctive relief and breach of contract if the respondents have not taken reasonable steps to complete the development. [24].  The respondents argued that while a prima facie or pleaded case was not necessary, the assertion of a possible case was insufficient. [26].

Relying on the case of Optiver Australia Pty Ltd v Tibra Trading Pty Ltd (2008) 169 FCR 435, [48], her Honour concluded that it was not necessary for the applicants to demonstrate all the elements of the potential causes of action sought to be relied on in order to determine whether there was a “reasonable cause to believe that each of the necessary elements exist”. [28]. Her Honour’s conclusion was reinforced by noting that it was only necessary to demonstrate a singular right to relief, and that the phrase “if it appears to the court that” indicates that an applicant is not required to specify with precision the cause of action proposed. [29]–[30].

“It is impracticable for the applicant to start a proceeding against the prospective defendant without reference to a document”

The applicants argued that they did not have the evidence necessary to assess the steps the respondents had taken to complete the development, which was necessary to determine whether proceedings should be commenced against the respondents. [31]. Her Honour noted the absence of guidance within the UCPR and the Explanatory Note to the introduction of the rule as to the meaning of “impracticable”. [33]–[34].

Although her Honour acknowledged the differences between the relevant rule in New South Wales and r 208D, her Honour thought the differences were not so great that New South Wales authorities could not be instructive. [35]. Her Honour also considered Victorian authority. [36]. Ultimately, her Honour concluded that “‘impracticable’ denotes, I find, concepts of disproportionate expenditure of time and resources”. [37]. Her Honour concluded that while it would not be impossible for the applicants to commence a proceeding without the preliminary disclosure, it would be impracticable for them to do so, with the likely outcome for the applicants in the absence of such disclosure being the need to rely on assumptions which might ultimately be unsustainable. [38].

Subrules (1)(c) and (d)

There was no serious contention as to sub-rr (1)(c) and (d). [40]–[41]. Her Honour took sub-r (1)(d) to be a statutory acknowledgement that the documents sought must be relevant to the proceeding sought to be commenced. [42].

“The interests of justice require the order to be made”

Her Honour acknowledged the difficulty of this criterion; it required the Court to balance a range of factors including the significant imposition on the privacy of persons who do not wish to disclose documents. [43]. Against that was the obvious purpose of the rule which provides an efficient and cost-effective procedure for the provision of such documents. [44]. Referring to the decision of Chesterman J in Evans Deakin Pty Ltd v Orekinetics Pty Ltd [2002] 2 Qd R 345, her Honour noted that an order should not be made unless proper to do so but that the rules ultimately exist to promote the efficient and economical conduct of litigation. [44]–[45]. This prompted a conclusion that the proper application of this rule would require that an order be made save for “some countervailing circumstance to suggest that the interests of justice do not require the provision of the documents”. [46].

After considering the circumstances of this case, and noting that the Queensland Court of Appeal had described the UCPR as favouring a “cards on the table, face up” approach in Parr v Bavarian Steak House Pty Ltd [2001] 2 Qd R 196, [13], her Honour concluded that in the absence of a legitimate alternative means of obtaining the documents in the time available, the interests of justice favoured the making of the order sought. [47]–[52].

Disposition

The application was granted, but her Honour gave the respondents liberty to apply if they should determine that they took issue with disclosing particular documents or parts of documents amongst those subject to the order. [53]–[56].

B Wilson of Counsel