HQ Insurance Pty Limited v Stonehatch Risk Solutions Limited (No 2)

HQ Insurance Pty Limited, an Australian bloodstock and livestock insurance broker, sought an order for preliminary discovery against Stonehatch Risk Solutions Limited, a UK-based insurance broker, in relation to the latter's alleged interference with HQ's business. The dispute arose following HQ's acquisition of a client book from Ausure Insurance Solutions, which included the Go Bloodstock policy. Stonehatch was identified as the insurer on the tax invoice issued by Ausure, and subsequently, Go Bloodstock appointed Stonehatch as its exclusive insurance broker. HQ sought preliminary discovery to ascertain whether Stonehatch had unlawfully interfered with its business, potentially contravening the Corporations Act 2001 (Cth) and constituting a tort.

The court had to determine whether HQ had a reasonable belief that it might have a right to relief under the Act and if, after reasonable inquiries, it had sufficient information to decide whether to start proceedings. The court considered whether HQ had satisfied the threshold of "sufficient information" to make a decision about commencing proceedings. This involved examining the evidence HQ had already gathered and whether it had disclosed all relevant information to the court.

The court found that HQ had not satisfied the necessary threshold. The evidence HQ presented was insufficient to determine whether Stonehatch had indeed interfered unlawfully with HQ's business. The court noted that HQ had not placed all available information before it, which was critical given the intrusive nature of preliminary discovery. Moreover, the court emphasised that the decision to grant preliminary discovery depended not just on the availability of a cause of action but on whether the applicant had enough information to decide whether to commence proceedings. The court concluded that HQ had not demonstrated it had sufficient information to make this decision. Consequently, the application for preliminary discovery was dismissed, and HQ was ordered to pay Stonehatch's costs.