Garth Barnett Interior Design Pty Ltd v Ellis

Garth Barnett Interior Design Pty Ltd (the applicant) sought leave to appeal from an order made by a judge of the Supreme Court of New South Wales, which had granted preliminary discovery of documents from the applicant to the respondents. The dispute concerned the respondents' desire to obtain documents from the applicant to assess the commercial viability of commencing proceedings against the applicant, even though the identity of the prospective defendant and the potential causes of action were already known.

The primary legal issue before the Court of Appeal was whether the Supreme Court had erred in principle by ordering preliminary discovery in circumstances where the respondents possessed sufficient information to identify a prospective defendant and the nature of the claims, but lacked sufficient information to determine the commercial viability of pursuing those claims.

The Court of Appeal, comprising Young JA, Giles JA, and McColl JA, held that the order for preliminary discovery was correct in principle. The court reasoned that the purpose of preliminary discovery is not limited to identifying a prospective defendant or the causes of action, but can extend to enabling a party to gather sufficient information to assess whether it is commercially viable to commence proceedings. The court affirmed that the existing rules of court permit such discovery, provided the necessary preconditions are met, which included demonstrating a sufficient likelihood that the applicant had engaged in conduct that gave rise to a cause of action and that the documents sought were necessary to determine the commercial viability of litigation.

Leave to appeal was refused, and the applicant was ordered to pay the costs of the respondents.