Sometimes one knows that someone has done the wrong thing by them but are not sure if one can prove it, or if it is worth pursuing.
The Uniform Civil Procedure Rules seek to overcome this dilemma by permitting a party to apply for discovery of the other persons documents before commencing proceedings. (Rule 5.3). This procedure sets out the circumstances in which documents must be provided to a potential claimant to enable them to decide whether to commence proceedings. As you might imagine, this is often resisted by the other party.
The following is a case in which such an application was made by our client and upheld on appeal.
Our client’s employee developed a close relationship with our client’s supplier for which our client was an importer/distributor. The employee also developed a close relationship with key personnel of our client’s main customer for that imported product. The employee gave notice ending his employment and shortly afterwards the overseas supplier gave our client notice cancelling our client’s distributor rights and appointing the former employee as its new distributor. Our client’s customer for that product simultaneously directed that our client transfer the contract with our client to the former employee. Our client was alarmed by this sequence of events and searched the former employee’s computer for communications between the former employee and his supplier and/or his customer. Our client then found a draft letter on the computer of the former employee which seemed to record a prior plan to orchestrate this outcome. This document generated a lot of ‘smoke’ but not enough information to decide whether the case was strong enough to commence proceedings in a court, or whether the business lost was worth the cost of a court case. The Registrar of the Supreme Court declined our client’s application to see the defendant’s documents. Upon review of the Registrar’s decision by an Associate Justice our client’s application was again refused. It was not until an appeal to a judge of the Supreme Court that our application was upheld. His Honour Hamilton AJ emphasized that under the rule an applicant did not have to prove that they were entitled to a claim but only that they may be entitled to relief, which was a much lower threshold. The court took into account what we could prove in deciding whether we may have a case. The court also found that even if it was clear that we had a case, that we were entitled to understand the extent of the breach in order to decide whether it was worthwhile starting a court case about it.
If you wish to read our case click on the link below. The facts of the case are set out in the appendix at the end of the decision. We suggest you read them first.
The reasoning in our case mentioned above is consistent with the later decision of the NSW Court of Appeal in O’Connor v O’Connor  NSWCA 214. See also the summary of the conclusions in that Court of Appeal case which are conveniently summarised in the case of Arnaout v Arnaout  NSWSC 565 (17 May 2019).