Watson v Schreuder Partners Lawyers

In the matter of Watson v Schreuder Partners Lawyers, the applicant, Mr Watson, sought a bill of discovery from the respondent, Schreuder Partners Lawyers, pursuant to Federal Court Rule 7.23. Mr Watson alleged that the legal costs and disbursements charged by the respondent in personal injury litigation were excessive. He sought disclosure of the respondent's files of former and current clients to investigate the possibility of commencing a class action. The court was required to determine whether Mr Watson, as a prospective applicant in a potential class action, had the power to seek preliminary discovery in a representative capacity and whether the application engaged Federal Court Rule 7.23. The court also had to consider whether discretionary considerations militated against granting the relief sought by Mr Watson.

The court held that a prospective applicant in an anticipated class action is entitled to agitate for relief based on common issues and that Mr Watson had both the statutory power and the responsibility to advance those claims for relief based on common issues in any class action that may be commenced. The court found that Federal Court Rule 7.23 could not be limited in a way that prohibited a prospective applicant from relying on any reasonable belief as to a possible entitlement to relief by group members in a proposed class action. However, the court declined to make the order in the exercise of its discretion because the structure of Part IVA is designed to allow a class action to be commenced on behalf of class members without any need for certification and the gateway provisions are deliberately undemanding. The court considered the availability of the mechanism of communicating important information to group members as a pointer as to why imposing pre-commencement discovery obligations ought to be approached with a degree of caution.

The orders of the court were that the application for preliminary discovery be dismissed with costs and that the respondent file a document of no longer than one page identifying the costs they seek by 21 July 2020. Thereafter, the issue of costs will be determined on the papers. Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.