EBOS Group Pty Ltd v Team Medical Supplies Pty Ltd (No 3)

EBOS Group Pty Ltd sought preliminary discovery from Team Medical Supplies Pty Ltd and two former employees under rule 7.23 of the Federal Court Rules 2011 (Cth). The purpose was to investigate the possibility that the respondents had misappropriated confidential information. The application was made on an ex parte basis, without notice to the respondents. The primary legal issue was whether the applicants had established a sufficient basis to warrant the exercise of the Court's discretion in favour of an order for discovery. In particular, the Court had to determine whether the applicants needed to provide evidence of their belief that the documents existed and whether the term “reasonably believe” in rule 7.23 meant something different to the equivalent term in O 15A r 6 of the Federal Court Rules 1979 (Cth).

The Court held that the applicants needed to provide evidence to support their belief that the documents existed and were in the possession of the prospective respondents. This was necessary to discharge the onus of demonstrating that the exercise of the Court's discretion should be in favour of making an order for discovery. The Court found that the term “reasonably believe” had the same meaning in rule 7.23 as it did in O 15A r 6. The Court also found that the applicants had not demonstrated that they had a sufficient basis to warrant the exercise of the Court's discretion in favour of an order for discovery. The application was dismissed, but the confidentiality orders in relation to certain documents were continued. The prospective applicants were ordered to pay the costs of the prospective respondents unless substantive proceedings were started within 60 days of compliance with the order for discovery.