Case: Paxus Services Ltd v People Bank Pty Ltd [1990] FCA 500 ; (1990) 99 ALR 728
Outcome: cited
it is common ground between the parties that the principles articulated by Hely J in St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360 ; (2004) 211 ALR 147 with respect to the operation of O 15A r 6 are applicable in these proceedings. These principles are as follows: (a) The rule is to be beneficially construed, given the fullest scope that its language will reasonably allow, with the proper brake on any excesses lying in the discretion of the Court, exercised in the particular circumstances of each case; (b) each of the elements prescribed in subparas (a), (b) and (c) of the rule must be established. Preliminary discovery cannot itself be used to remedy deficiencies in the satisfaction of the conditions themselves; (c) the test for determining whether the applicant has "reasonable cause to believe", as required by subpara (a), is an objective one. Further, the words "or may have" cannot be ignored. The applicant does not have to make out a prima facie case; (d) belief requires more than mere assertion and more than suspicion or conjecture. Belief is an inclination of the mind towards assenting to, rather than rejecting a proposition. Thus it is not sufficient to point to a mere possibility. The evidence must incline the mind towards the matter or fact in question. If there is no reasonable cause to believe that one of the necessary elements of a potential cause of action exists, that would dispose of the application insofar as it is based on that cause of action; (e) whilst uncertainty as to only one element of a cause of action might be compatible with the "reasonable cause to believe" required by subpara (a), uncertainty as to a number of such elements may be sufficient to undermine the reasonableness of the cause to believe; (f) the question posed by subpara (b) of the rule is not whether the applicant has sufficient information to decide if a cause of action is available against the prospective respondent. The question is whether the applicant has sufficient information to make a decision whether to commence proceedings in the Court. Accordingly, an applicant for preliminary discovery may be entitled to discovery in order to determine what defences are available to the respondent and the possible strength of those defences, or to determine the extent of the respondent's breach and the likely quantum of any damages award; (g) whether an applicant has "sufficient information" for the purposes of subpara (b) also requires an objective assessment to be made. The subparagraph contemplates that the applicant is lacking a piece (or pieces) of information reasonably necessary to decide whether to commence proceedings; (h) it is no answer to an application under the rule to say that the proceeding is in the nature of a "fishing expedition". Indeed O 15A r 6 "expressly contemplates" what once might have been castigated as "fishing". As Burchett J commented in Paxus Services Ltd v People Bank Pty Ltd [1990] FCA 500 ; (1990) 99 ALR 728 at 733, the rule is: ... designed to enable an applicant, in a situation where his proof can rise no higher than the level the rule describes, to ascertain whether he has a case against the prospective respondent ...