Pre-action Disclosure: Obtaining Documents Before Launching Action
A potential litigant is often reluctant to initiate a claim because they lack the evidence to prosecute it at first.
In many cases, the aggrieved party knows or strongly suspects that key documents exist, but cannot easily get access to them.
Strategically, securing those documents that are most prejudicial, and perhaps most closely protected, can be a great advantage in litigation and can save time and legal fees. Commencing a claim without having secured critical evidence to support it is both strategically risky and costly.
In the usual course of litigation, a party will issue proceedings first, and then seek disclosure of material after the close of pleadings. This can be an expensive process, and if complete disclosure is not received initially because a party is not complying with their obligations, it may be a matter of months or even years before complete disclosure is obtained.
There is an inherent level of risk in this approach which may be avoided by way of pre-action disclosure in some circumstances.
PRELIMINARY DISCLOSURE BEFORE ACTION
A recent decision on the Queensland Supreme Court illustrates how a party can use the preliminary disclosure process in S208 D of the Uniform Civil Procedure Rules 1999 (Qld).
S208D (1) provides that:
“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.”
A RECENT CASE ON SECTION 208D
In Fairman v Jonelca Holdings Pty Ltd [2025] QSC 40, Treston J made orders under S208D that the respondent provide preliminary disclosure of a list of confidential documents and ordered costs against the respondent.
Facts
The case considered an issue that has been unfortunately common in South East Queensland’s soaring and yet turbulent property market in the current property market cycle.
The Applicants were buyers under “off the plan” contracts (most of which were dated in or around 2020) to buy residential apartments. The contracts contained a sunset date clause under which either party could terminate if registration of the community titles scheme had not occurred by 28 February 2025. The Developer intended to terminate the contracts on this basis.
It was apparent to the buyers that:
- The values of the units had significantly increased from 2020 to 2025 when the purported termination occurred;
- The developer had explained that “financial pressures” as well as “cost escalation within the construction industry” were responsible for the failure to register by the sunset date; and
- That the developer, by deliberately delaying construction to surpass the sunset date, would obtain a far higher re-sale price in the 2025 market.
The Applicants therefore needed evidence that the Developer had intentionally or recklessly fallen short of their contractual or common law obligations to do all things necessary to achieve registration by the sunset date in order to launch action to resist the termination or seek damages.
The Applicants had sought voluntary disclosure from the Respondents previously but were frustrated by the lack of co-operation and limited disclosure provided.
The Applicants therefore brought an application for preliminary disclosure under section 208D.
The Application for Preliminary disclosure
In granting the orders sought, Treston J observed there was little previous authority in Queensland to guide the Court when she considered the elements of S208D. Regard was had to the only other relevant Queensland decision of Brown J in Blue Dog Group Pty Ltd v Glaucus Research Group California LLC (Blue Dog’s case).
Elements of Section 208D to be satisfied
Right to relief
On the element of a “right to relief” in section 208D(1)(a) her honour observed that:
“While it is not incumbent upon an applicant to establish every element of a relevant cause of action, the applicant must demonstrate reasonable cause to believe that it has – or may have – the right to relief alleged…Some particularisation of the nature of the relief in contemplation is required.”
Impracticability of commencement of action (without preliminary disclosure)
As to the element of impracticality of commencement of proceedings in section 208D(1)(b), her honour said:
“In my view, it is sensible to approach the word “impracticable” in a similar manner to the way in which his Honour (Brown J in Blue Dog) described the word “impracticality.” The word is not intended to mean impossible. If it did, the rule could easily have said that. The use of the word “impracticable” denotes, I find, concepts of disproportionate expenditure of time and resources. It invokes concepts of efficiency in proceedings which, of course, is consistent with the provisions of rule 5 of the UCPR.”
Objective likelihood of possession or control of a document
On this element contained in section 208D(1)(c), little consideration was given as the objectively likelihood of the documents being in the control and possession of the Respondents, as they had already agreed to file a confidential affidavit in response to earlier orders.
S208D (1) (d): Inspection of the document would assist the applicant to make the decision to start the proceeding”
On the element of whether inspection of the documents would assist the applicant’s decision making contained in section 208D(1)(d), Her Honour said:
“I take sub-paragraph (d) merely to be a statutory acknowledgment of the fact that the documents must be relevant to the proceeding which the applicant would seek to commence, in the sense that the provision of the documents alone is of little assistance without the inspection and therefore some evaluative exercise in respect of them.”
The interests of justice
The final element contained in section 208D(1)(e) is the rather elusive requirement of being “in the interest of justice.” In finding that the Applicants had satisfied each of the prior elements as required, her honor observed that the interests of justice required a “cards on the table face up” approach, but cautioned it was to be “carefully balanced against the considerations of fishing expeditions, privacy and the protection of legitimate commercial interests, just to name a few.”
Identifying documents
Implicit in any such application is the need to carefully identify the document or documents sought to evidence the cause of action being contemplated. Careful thought needs to be given to what documents should exist, where and in whose hands they are to be located, how they are relevant to a potential cause of action and whether any legitimate objection could be taken to production.
In many cases, a court order for preliminary disclosure will include terms of confidentiality of the documents.
Of course, as in all litigation, an applicant should have regard to their Harman undertaking.
Impact of the decision
This is a highly indicative decision consistent with the policy of the UCPR that litigation should be conducted in a manner to “facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense”, in this case, “with cards face up on the table”.
It is clear that the preliminary disclosure regime in S208D will be of great assistance to many potential litigants in a wide variety of actions.
Obtaining key documents early can sometimes be a “killer blow” to an opponent and lead to successful resolution of a claim early on or even before proceedings issue, saving significant time and money on protracted litigation.
Other times, obtaining such documents may not serve as a killer blow, but will narrow the scope of the dispute and discern the real issues from the “noise” that often surrounds them.
To name a few more common examples of how this might be used to obtain key documents before action, consider potential actions for:
- Breach of restraints of trade: Correspondence between a former client and ex-employee may suggest an effort to maintain or continue a business relationship during a restraint period or dealings with third parties which show pre-departure planning to establish a competing business.
- Breach of confidential information or intellectual property provisions: emails between a work email address and a personal one sending confidential information outward or to third parties.
- Estate litigation: evidence of who accompanied the Testator and provided instructions on their behalf to the draftsperson of the Will.
- Shareholder disputes: communications which show dealings in breach of the terms of shareholder agreements or fiduciary obligations.
- Director’s breach of fiduciary and statutory duties: Correspondence from an alleged competing business entity that would prove a breach of the “no conflict rule”.
HOW WE CAN ASSIST YOU
If you think you have a good cause of action against a prospective defendant and believe that they have key documentary evidence which would assist you but they are refusing to disclose it, then we can advise and assist you in determining whether you have a good prospect not just of obtaining those documents but in assessing the merits of your case.
Contact Michael Sing for an appointment.
