Lenark Pty Limited ACN 123 715 962 v TheChairmen1 Pty Limited

In the matter of Lenark Pty Limited ACN 123 715 962 against TheChairmen1 Pty Limited, the Federal Court of Australia was asked to determine whether certain documents were within the "control" of the defendant for the purposes of an order for discovery. The case centred around the interpretation of a unitholders agreement and the extent to which it granted the plaintiff access to the defendant's trust documents. Specifically, the plaintiff sought discovery of documents that were within the defendant's control, but the defendant argued that the unitholders agreement already provided sufficient access to the trust documents, thereby limiting the scope of the discovery order.

The primary legal issue the court had to address was the interpretation of the phrase "or any other reasonable purpose" within the unitholders agreement. The plaintiff argued that this phrase allowed for discovery of documents beyond those that would typically be considered in the ordinary course of business. The defendant, on the other hand, contended that the phrase should be narrowly construed, limiting discovery to documents strictly within the ordinary course of business. The court needed to decide whether the unitholders agreement's provisions granted the plaintiff sufficient access to the trust documents, and if not, what the scope of the discovery order should be.

The court held that the phrase "or any other reasonable purpose" within the unitholders agreement was not ambiguous and did not extend beyond the ordinary course of business. It found that the agreement provided the plaintiff with adequate access to the trust documents and that the defendant's control over these documents was limited by the agreement. Consequently, the court granted the plaintiff's application for discovery to the extent that the documents were necessary for the ordinary course of business and not for any other reasonable purpose as interpreted by the plaintiff. The court emphasised that the discovery order should be narrowly construed and not be used as a means to circumvent the limitations imposed by the unitholders agreement.

The final orders of the court included granting the plaintiff's application for discovery but limited it to documents necessary for the ordinary course of business. The court explicitly stated that the discovery order did not extend to any other reasonable purpose that the plaintiff might argue for. This decision underscores the importance of carefully interpreting unitholders agreements and the limitations they impose on the discovery process in civil litigation.