NAK Australia Pty Ltd v Starkey Consulting Pty Ltd

In the Federal Court of Australia, NAK Australia Pty Ltd brought a claim against Starkey Consulting Pty Ltd, seeking injunctive relief and an account of profits. The defendants objected to the production of certain documents, claiming commercial confidentiality and third-party privilege. The court needed to determine whether the claim of commercial confidentiality could prevail against an order for discovery, whether parties could mask documents discovered, and if the plaintiff could expand the classes of discovery. The court also needed to decide whether the defendants needed to discover documents relevant to an account of profits before liability was established and whether the plaintiff was entitled to access documents produced by the defendants' telephone service provider.

The court held that commercial confidentiality did not prevail against the order for discovery, and that protective measures could be employed to safeguard confidential information. The court found that the defendants could mask documents discovered, but not information relevant to the pricing of products sold by the plaintiff. The court granted the plaintiff leave to expand the classes of discovery, as the defendants had failed to demonstrate that the additional information was confidential. The court also held that the plaintiff was not entitled to access documents produced by the defendants' telephone service provider, as it would amount to giving the plaintiff access to a confidential client list.

The court further held that the defendants were not required to discover documents relevant only to an account of profits before liability was established. However, the court found that the defendants had failed to provide a reconstructed list of customers that complied with the discovery obligation. The court ordered the defendants to depose as to the circumstances in which Schedule 2 documents were discarded before discovery was ordered. The court also found that the defendants had waived any privilege that may have existed in relation to certain third-party communications. The court did not grant the plaintiff's application for an injunction, but the matter was remitted to the Federal Circuit Court for further proceedings.