John Bridgeman Limited v National Stock Exchange of Australia Limited

John Bridgeman Limited (JBL) filed an application against National Stock Exchange of Australia Limited (National Stock Exchange) and NSX Limited (NSX) under r 7.23 of the Federal Court Rules 2011 (Cth) for pre-action discovery. JBL seeks documents that may assist it in deciding whether to commence proceedings against the NSX parties for the alleged improper suspension of trading in JBL's shares. The NSX parties, who did not respond to JBL’s allegations, argued that JBL had sufficient information to decide whether to commence proceedings. The central legal issues in this case were whether JBL had a reasonable belief that it might have a right to relief and whether the NSX parties held documents that would assist JBL in deciding whether to commence proceedings.

The Court found that the NSX parties had not provided sufficient information to justify their decisions to suspend and maintain the suspension of JBL’s shares. The letter dated 16 July 2019 did not address the validity of the original suspension decisions. The NSX parties were in possession of documents directly relevant to JBL’s claim, and these documents would assist JBL in making its decision. Additionally, the conduct of the NSX parties in this litigation, including their failure to respond to JBL’s allegations and their apparent attempt to prevent evidence of their shortcomings from being exposed, further supported JBL’s case. The Court exercised its discretion in favour of JBL, finding that the NSX parties’ conduct warranted the making of discovery orders.

The Court ordered that within 14 days, the NSX parties must provide JBL with all documents related to complaints made against JBL, communications with ASIC regarding the suspension decision, and the reasons for the suspension decision. JBL’s costs of this application will be its costs in any subsequent proceedings if commenced within 90 days. Otherwise, each party bears their own costs. JBL will also bear the costs of discovery, which will be added to its costs in any subsequent proceedings.