FEDERAL COURT OF AUSTRALIA

Poole v Australian Pacific Touring Pty Ltd [2017] FCA 424

ORDERS

THE COURT ORDERS THAT:

1.    The parties are to provide either agreed or competing draft orders to give effect to these reasons within 14 days of the date of this judgment, or such further time as may be directed having regard to the likely need for a confidentiality regime, including as to the terms of the preliminary discovery order and as to costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BROMWICH J:

Introduction

1    This is an application for preliminary discovery made by Kimberley Poole pursuant to r 7.23 of the Federal Court Rules 2011 (Cth). Ms Poole, the prospective applicant, asserts that she may have the right to obtain relief from Australian Pacific Touring Pty Ltd (APT), the prospective respondent, in respect of a booking she made with APT for a “21 Day Magnificent Europe River Cruise”. Relevantly, Ms Poole says that a term relied on by APT for forfeiture of the entire booking price on cancellation of the cruise may be unfair within the meaning of s 24 of the Australian Consumer Law (contained in Schedule 2 to the Competition and Consumer Act 2010 (Cth)). Ms Poole seeks discovery in respect of three classes of documents, which she submits are relevant to informing the decision to start proceedings in this Court.

2    A prospective applicant may apply to the Court for an order for preliminary discovery under r 7.23 of the Federal Court Rules 2011 (Cth), which is in the following terms:

7.23    Discovery from prospective respondent

(1)    A prospective applicant may apply to the Court for an order under subrule (2) if the prospective applicant:

(a)    reasonably believes that he or she may have the right to obtain relief in the Court from a prospective respondent whose description has been ascertained; and

(b)    after making reasonable inquiries, does not have sufficient information to decide whether to start a proceeding in the Court to obtain that relief; and

(c)    reasonably believes that:

(i)    the prospective respondent has or is likely to have or has had or is likely to have had in the prospective respondent’s control documents directly relevant to the question whether the prospective applicant has a right to obtain the relief; and

(ii)    inspection of the documents by the prospective applicant would assist in making the decision.

(2)    If the Court is satisfied about matters mentioned in subrule (1), the Court may order the prospective respondent to give discovery to the prospective applicant of the documents of the kind mentioned in subparagraph (1) (c) (i).

3    APT opposes Ms Poole’s application. It asserts that an order for preliminary discovery ought not be made because Ms Poole has failed to satisfy the requirements of r 7.23.

4    Three issues of construction of r 7.23 arose in this case:

(1)    whether the tests in r 7.23(1)(a) and (c) that the prospective applicant “reasonable believes” the matters stipulated by the rule require the Court to be satisfied of the prospective applicant’s subjective state of mind;

(2)    whether evidence of that subjective belief, if in fact required, must be given personally by the prospective applicant; and

(3)    the degree to which the nature of the relief contemplated needs to be identified by the prospective applicant.

5    For the reasons set out below, including consideration of the proper construction of r 7.23, the Court will order that APT give preliminary discovery as sought by Ms Poole.

Background

The booking and cancellation of the river cruise

6    The evidence in support of Ms Poole’s application has been adduced solely by way of an affidavit of 6 September 2016, including annexures, affirmed by Daniel Edward Thomas, a solicitor employed by Ms Poole’s solicitors. The facts giving rise to the dispute are uncontentious.

7    On 30 September 2015, Ms Poole booked a “21 Day Magnificent Europe River Cruise” package for herself and her husband through Flight Centre Travel Group Limited, which acted as agent for APT, the travel service provider (the Booking). An invoice for the Booking was issued by Flight Centre on 3 October 2015. The invoice included details such as a total price of $30,030 for the package, a departure and return date in May 2016, and an itinerary detailing activities over 21 days in Paris, Amsterdam, Rüdesheim, Miltenberg, Bamberg, Nuremberg, Regensburg, Passau, Melk, Vienna, Budapest, and Prague. The invoice also recommended that Ms Poole purchase insurance for the trip, including cancellation cover, at a cost of $1,210 through an entity identified as Cover-More. It is apparent that travel insurance was obtained as an insurer is funding Ms Poole’s case.

8    The invoice specified that bookings were made subject to the additional terms and conditions imposed by the “relevant service provider(s)”, in this case being APT. That aspect of the invoice is reproduced in part below (emphasis added):

We act as an agent for, and sell various travel related products as agent on behalf of, numerous transport, accommodation and other service providers, such as airlines, coach, rail and cruise line operators, as well as all of our wholesalers.

…

All bookings are made on your behalf subject to the terms and conditions, including conditions of carriage and limitations of liability, imposed by these service providers. We can provide you with copies of the relevant service provider terms on request. Your legal rights in connection with the provision of travel services are against the specific provider and, except to the extent a problem is caused by fault on our part, are not against us. Specifically, if for any reason (excluding fault on our part) any travel service provider is unable to provide the services for which you have contracted, your rights are against that provider and not against us.

9    APT’s separate terms and conditions as the service provider were not provided or identified to Ms Poole. Accordingly, the solicitors for Ms Poole inferred that the relevant terms are those set out in a brochure titled “Unforgettable Europe River Cruising 2016”, which they obtained from APT’s website (APT’s brochure). Following the hearing, APT confirmed to Ms Poole’s legal representatives that the terms of APT’s brochure and invoice constitute the entirety of the contract between the parties. Upon the basis of that concession, Ms Poole did not press a fourth category of documents, being those comprising the terms of the contract between her and APT.

10    Senior counsel for Ms Poole drew the Court’s attention to the cancellation policy on page 281 of APT’s brochure, which included these terms (the Cancellation Term):

For all holiday packages in this brochure, the following APT cancellation fees apply:

…

60 days or less        100% of holiday package price.

11    APT’s brochure also provided terms and conditions governing circumstances where APT was to change or cancel the traveller’s holiday, including in the case of a force majeure event. At page 281, the terms state:

If APT, in its reasonable opinion, considers that any force majeure event prevents APT (whether directly or through its employees, contractors, subcontractors and agents) from lawfully or safely providing any products or services subject to the booking contracted with you, APT may immediately by written notice: (a) terminate the booking contract (in whole or in part); or (b) change your travel arrangements as reasonably practicable to ensure your safety and invoice you for any additional costs.

12    On 28 April 2016, Ms Poole’s husband was admitted to St Vincent’s Hospital in Sydney with an acute lung infection and was certified by doctors there as unfit to travel until 12 May 2016. On the same date, Ms Poole instructed Flight Centre to cancel the Booking with APT due to her husband’s ill-health and inability to travel. By email on 28 April 2016, Flight Centre advised that the Booking had been cancelled. Shortly thereafter, Flight Centre provided Ms Poole with a “Cancellation of Booking” form. That form stipulated that, in accordance with APT’s cancellation policy, Ms Poole would not be entitled to a refund of any part of the Booking price of $31,620 paid. It relevantly stated:

OUTLINE OF CANCELLATION FEES    Amount Paid    Cancellation Fee*

APT Touring                    $31620.00    $31620.00

(100% non-refundable due to cancelling within 100 days before departure)

The prospective right to relief

13    In his affidavit, Mr Thomas deposes to his belief that Ms Poole may have a right to relief against APT on the basis that the Cancellation Term may be voidable as an unfair contractual term pursuant to s 24 of the Australian Consumer Law. As became relevant at the hearing of the matter, the belief of that matter and the belief in the existence of relevant documents in APT’s possession were expressed as Mr Thomas’ own. There is no evidence of Ms Poole’s state of mind.

14    The relevant paragraphs of Mr Thomas’ affidavit were as follows:

15.    Legal advice has been sought as to whether the Cancellation Term contained in the APT Standard Terms and Conditions is binding on the Prospective Applicant and consideration has been given to whether the Cancellation Term may be voidable as an unfair contractual term pursuant to Clause 24 of Schedule 2 of the Competition and Consumer Act 2010 (Cth)(‘the ACL’).

16.    In order to establish such a claim, it is necessary, amongst other things, to establish that the impugned term was not necessary to protect the legitimate interests of the party seeking to rely on same.

17.    To determine whether or not this threshold has been met and whether the prospective Applicant has reasonable prospects of obtaining relief from the Prospective Respondent, it is necessary for the Prospective Applicant to obtain access to documents embodying the contractual rights and obligations of the Prospective Respondent to its sub-contracted service providers engaged to provide the various services comprising the Booking.

18.    Those documents will also be relevant to the assessment of the prospects of claim in equity under the doctrine of penalties insofar that it can be shown that the sum forfeited by the Prospective Applicant pursuant to the cancellation term did not reflect a genuine pre-estimate of the loss that would be sustained by the Prospective Respondent as a consequence of the Prospective Applicant’s cancellation.

…

32.    As solicitor with carriage of the matter for the Prospective Applicant, I verily believe that the Prospective Applicant may be entitled to statutory and/or equitable relief from the Prospective Respondent and that the Prospective Respondent has or is likely to have, or has had or is likely to have had in its control documents directly relevant to the question of the Prospective Applicant’s prospects of obtaining such relief.

The documents sought and previous requests for their production

15    Ms Poole initially sought discovery in respect of four classes of documents identified in her application as follows:

(a)    all documents comprising the terms of the contract between the Prospective Applicant and the Prospective Respondent in respect of the Prospective Applicant’s ‘21 Day Magnificent Europe River Cruise’ booking made on 3 October 2015, including associated flights and transfers (“the booking”);

(b)    all documents comprising the terms of the contracts between the Prospective Respondent and the service providers it engaged in respect of the booking;

(c)    all documents comprising correspondence, agreements, invoices and receipts relating to payments made by the Prospective Respondent and refunds received by the Prospective Respondent in relation to the booking; and

(d)    all documents recording any attempts made by the Prospective Respondent to mitigate any losses/liabilities on and from the date of the Prospective Applicant’s cancellation of the booking on 28 April 2016.

16    As noted above, Ms Poole no longer presses for discovery in respect of paragraph (a). Ms Poole’s objective in seeking that class of documents was to ascertain whether the invoice issued by Flight Centre and APT’s brochure contained the entirety of the contract governing the Booking. The need to resolve this uncertainty ostensibly arose in circumstances where APT had not responded directly to requests in writing that it confirm the terms of the contract it relied on. At the hearing of the matter, senior counsel for APT indicated that he would seek instructions from his client on whether this issue could be resolved between the parties. On 31 March 2017, the solicitors for Ms Poole advised the Court in writing that APT had confirmed that the invoice and APT’s brochure did indeed contain the entirety of the terms and conditions governing the Booking. Accordingly, Ms Poole only presses for discovery in respect of paragraphs (b), (c) and (d) above as set out in her application.

17    Before commencing these proceedings, the solicitors for Ms Poole made several requests for documents to be provided by APT on a voluntary basis. The relevant communications were annexed to Mr Thomas’ affidavit and are outlined below.

18    On 22 July 2016, Ms Poole’s solicitor, James Tuite, wrote to APT, asserting that the Cancellation Term was unfair and requesting that APT provide certain documents. At page 2 of that letter, he relevant stated (formatting as per original):

As the Agreement is a standard form consumer contract within the meaning of the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (‘the ACL’), the Agreement is subject to the unfair contractual term provisions of Part 2-3 of the ACL.

The cancellation terms of the Agreement are unfair within the meaning of clause 24(1) of the ACL for the following reasons:

1.    The financial consequences for APT where it was required to cancel a booking due to circumstances beyond its control were significantly less grave than those facing Ms Poole, especially where the relevant circumstances arose within 60 days of the scheduled departure date.

2.    It is improbable that APT would have been exposed to liability for the full value of the booking as a result of Mrs Poole’s cancellation.

3.    The fact that Mrs Poole was required to forfeit the full value paid for the booking, despite not being able to enjoy any aspect of it, clearly constituted a significant financial and emotional detriment to her.

In order to assist our client to determine whether or not it is entitled to make a claim for relief against your company, we kindly seek your voluntary disclosure of the following information within 28 days of receipt of this letter:

(a)    all documents comprising the terms of the contract between Mrs Poole and APT in relation to the booking;

(b)    the terms of the contracts between APT and the various service providers engaged in respect of the booking;

(c)    particulars of administrative actions required to be taken by APT as a consequence of the cancellation of the booking by Mrs Poole;

(d)    invoices and receipts in relation to payments made by APT and refunds received by APT in relation to Mrs Poole’s booking; and

(e)    all documents evidencing steps taken by APT to mitigate its losses on and after the date of the cancellation of the booking by Mrs Poole.

19    On 2 August 2016, Jessica Charleston, who is identified in the correspondence as a Customer Relations Manager for APT, replied to Mr Tuite’s letter by email. She stated:

This is entirely a matter for Mr and Mrs Poole’s travel insurer … Should clients be unable to claim on travel insurance APT can certainly review the fees charged on compassionate grounds …

In regard to the letter received from your firm, APT declines the request to provide the documents you have requested, however we will review the request per the procedures outlined above once all required documentation in [sic] received.

20    On 3 August 2016, Mr Tuite sent a further letter to APT by email, relevantly responding to Ms Charleston’s email as follows:

It remains unclear as to whether APT is refusing to release the requested documents. Please confirm whether this is the case.

We note that failure to voluntarily produce the documents may result in the Court ordering APT to pay our client’s costs of the anticipated application for preliminary discovery.

21    On 4 August 2016, Ms Charleston indicated by email addressed to a Rita Liristis that “APT expects that the client go through the standard process of making an insurance claim” and reiterated APT’s policy to review cancellation fees on compassionate grounds where insurance cover had been denied.

22    By letter on the same date, Mr Tuite wrote again to APT, referring to Ms Charleston’s email of 4 August 2016 and stating:

We assume by your failure to state whether or not you are willing to voluntarily produce the requested documents that our client has no option but to file an application with the Court seeking your production of same.

23    On 8 August 2016, Ms Charleston sent a lengthy email addressed to Mr Tuite responding to the various issues that had been raised in the correspondence. Relevant portions of that email are extracted below (emphasis in the original):

The reasonableness of the cancellation policy is to be considered as at the time that the parties entered into the contract.

APT offers premium travel packages, of significant value, that are necessarily purchased by customers (including your client) many months prior to their commencement. The packages involve overseas travel, with multiple destinations that take place over many weeks. The arrangements, including in relation to the travel and accommodation, are made many months in advance.

The late cancellation by your client (albeit unforeseen) deprived APT of any realistic opportunity to resell the ‘new’ vacancy. The cancellation fee simply allowed APT to avoid the loss that would otherwise have resulted upon your client cancelling at the point that they did.

Further, customers were repeatedly advised in the promotional materials to purchase travel insurance …

Based on the current information, APT is not prepared to go to the expense and effort of providing further documents in circumstances where there does not appear to be a cause of action, alternatively where your client may not have taken the necessary steps to mitigate their loss.

24    APT did not raise any objections to the correspondence as annexed to Mr Thomas’ affidavit and detailed above, nor did it seek to place any further communications into evidence.

APT’s evidence

25    The evidence relied upon by APT was contained in an affidavit sworn on 23 December 2016 by Felicity Dalle Nogare, a solicitor acting on its behalf. Ms Nogare deposed to 10 claims in the Federal Circuit Court, which she said have been commenced against APT in similar circumstances without the need for an application for preliminary discovery to be made. Those matters ostensibly concern claims in relation to APT seeking to withhold 100% of the cost of holiday packages in circumstances where tours have been cancelled less than 60 days prior to departure. No further details of the nature or circumstances of those claims were provided beyond the matter names and their file numbers.

26    Ms Nogare also stated that APT’s arrangements with its suppliers are of a nature that is commercially sensitive and that APT is not in a position to disclose such arrangements. Disclosure of those arrangements, she is informed, would “affect APT’s relationship with suppliers … such that they may be unwilling to continue to do business with APT”.

27    Ms Nogare estimated that the cost and burden to APT in relation to the present application is likely to be: “(a) approximately 10 hours away from the business; (b) approximately $6,000 plus GST to comply with the request for preliminary discovery; and (c) up to approximately $35,000 plus GST in legal costs and disbursements to oppose the application”.

Relevant provisions of the Australian Consumer Law

28    It is asserted in Mr Thomas’ affidavit that Ms Poole may have rights to relief against APT under s 24 of the Australian Consumer Law and under equity. No particulars of the claim in equity were identified, and senior counsel for Ms Poole did not place reliance on it for the present application.

29    At the hearing, senior counsel for Ms Poole referred the Court to a number of further provisions of the Australian Consumer Law, which were said to support Ms Poole’s prospective right to relief against APT. Particular emphasis was placed on ss 23, 24 and 27, which are reproduced in full or in part below (as applied at the time of the Booking):

23    Unfair terms of consumer contracts

(1)    A term of a consumer contract is void if:

(a)    the term is unfair; and

(b)    the contract is a standard form contract.

(2)    The contract continues to bind the parties if it is capable of operating without the unfair term.

(3)    A consumer contract is a contract for:

(a)    a supply of goods or services; or

(b)    a sale or grant of an interest in land;

to an individual whose acquisition of the goods, services or interest is wholly or predominantly for personal, domestic or household use or consumption.

24    Meaning of unfair

(1)    A term of a consumer contract is unfair if:

(a)    it would cause a significant imbalance in the parties’ rights and obligations arising under the contract; and

(b)    it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and

(c)    it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.

(2)    In determining whether a term of a consumer contract is unfair under subsection (1), a court may take into account such matters as it thinks relevant, but must take into account the following:

(a)    the extent to which the term is transparent;

(b)    the contract as a whole.

(3)    A term is transparent if the term is:

(a)    expressed in reasonably plain language; and

(b)    legible; and

(c)    presented clearly; and

(d)    readily available to any party affected by the term.

(4)    For the purposes of subsection (1)(b), a term of a contract is presumed not to be reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term, unless that party proves otherwise.

27    Standard form contracts

(1)    If a party to a proceeding alleges that a contract is a standard form contract, it is presumed to be a standard form contract unless another party to the proceeding proves otherwise.

…

30    The relevant definition of the expression “rely on”, in this case for the purposes of ss 24(1)(c) and 232(3), is in s 2 of the Australian Consumer Law, as follows:

rely on, in relation to a term of a consumer contract, includes the following:

(a)    attempt to enforce the term;

(b)    attempt to exercise a right conferred, or purportedly conferred, by the term;

(c)    assert the existence of a right conferred, or purportedly conferred, by the term.

31    The parties both relied upon s 24(4), which, as reproduced above, provides that “a term of a consumer contract is presumed not to be reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term, unless that party proves otherwise”. It appeared to be common ground at the hearing that the crux of any claim that may ultimately be brought by Ms Poole was the question whether the Cancellation Term would be reasonably necessary to protect APT’s legitimate interests. The issue of “legitimate interests” lies at the heart of this application. It particularly focuses on whether the assertion made in Ms Charleston’s 8 August 2016 email (reproduced at [23] above) is correct in apparently asserting, in effect, that APT needed the 100% cancellation fee in order to avoid any loss arising from its downstream supplier contracts.

32    In relation to the remedies that may be available to the prospective applicant, senior counsel for Ms Poole directed the Court to ss 232 and 250, which are reproduced in part as follows (emphasis added):

232     Injunctions

(1)    A court may grant an injunction, in such terms as the court considers appropriate, if the court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute:

(a)    a contravention of a provision of Chapter 2, 3 or 4; or

…

(3)    Subsection (1) applies in relation to conduct constituted by applying or relying on, or purporting to apply or rely on, a term of a consumer contract that has been declared under section 250 to be an unfair term as if the conduct were a contravention of a provision of Chapter 2.

250    Declarations relating to consumer contracts

(1)    A court may, on the application of a party to a consumer contract or on the application of the regulator, declare that a term of such a contract is an unfair term.

…

33    A question was also raised at the hearing as to what the proper point in time would be for assessing the unfairness of the Cancellation Term in an action under the Australian Consumer Law. This issue had bearing on the purported relevance of those documents sought that may have come into existence at times after the Booking was made. Senior counsel for APT referred to the decision of Ferme v Kimberley Discovery Cruises Pty Ltd [2015] FCCA 2384, in which Judge Jarret concluded, in similar circumstances, that the appropriate point in time to assess unfairness for the purposes of s 23(1) of the Australian Consumer Law is at the time at which the contract was formed. Ultimately, no issue was taken with this proposition for the purposes of this application. Senior counsel for Ms Poole was prepared for the Court to proceed on the basis that unfairness of the Cancellation Term would be assessed at the time of the Booking, insofar as the Court was considering Ms Poole’s right to relief for the purposes of the preliminary discovery application. Senior counsel nonetheless expressly preserved Ms Poole’s position for the purposes of any later proceedings that might ensue.

The requirements of r 7.23

34    A prospective applicant may apply to the Court for an order for preliminary discovery under of r 7.23 of the Federal Court Rules, reproduced at [2] above. Rule 7.23 was introduced in the Federal Court Rules 2011 (Cth), replacing O 15A r 6 of the prior Federal Court Rules 1979. Several differences in form between the new and the old rule should be noted. The old rule was expressed in these terms:

Where:

(a)    there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description has been ascertained;

(b)    after making all reasonable inquiries, the applicant has not sufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain that relief; and

(c)    there is reasonable cause to believe that that person has or is likely to have or has had or is likely to have had possession of any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document by the applicant would assist in making the decision;

the Court may order that that person shall make discovery to the applicant of any document of the kind described in paragraph (c).

35    At the hearing of the matter, the parties relied on a number of authorities in relation to the former O 15A r 6. For the most part, it was submitted that those decisions remain authoritative statements of the requirements for preliminary discovery in this Court, notwithstanding the changes in form between the rules.

36    The differences between the new and old rules are largely minor. The new rule introduces the terms “prospective applicant” and “prospective respondent” in lieu of “applicant” and “respondent”, and reflects several other changes of expression, such as use of the word “start” instead of “commence”. In EBOS Group Pty Ltd v Team Medical Supplies Pty Ltd (No 3) [2012] FCA 48; (2012) 199 FCR 533 at 539-540 [27]-[32], Katzmann J considered that, save for the insertion of the word “directly” in r 7.23(1)(c), the revisions were made for the sole purpose of rewriting the rules in plain English, and were not intended to effect any substantial change to the rule, as was explained in the contemporaneous Explanatory Statement issued by the judges of the Court at page 10:

The provisions in Divisions 7.1 …, 7.2 … and 7.3 (Preliminary Discovery) adopt, simplify and streamline the process and procedures which operated under the former Rules and do not substantially alter existing practice.

37    Consideration of the text of the rule itself and the authorities compels the conclusion that the changes to the new rule do not substantially alter existing practice, subject to one qualification in relation to the expression “reasonably believes” in r 7.23(1)(a) and (c), which will be returned to.

38    Critically, the policy behind r 7.23 remains the same as that of its predecessor, namely, that “even where there is a reasonable cause to believe that a person may have a right to relief, nevertheless that person may need information to know whether the cost and risk of litigation is worthwhile”: Optiver Australia Pty Ltd v Tibra Trading Pty Ltd [2008] FCAFC 133; (2008) 169 FCR 435 at 443 [36]; cited with approval by Perry J in ObjectiVision Pty Ltd v Visionsearch Pty Ltd [2014] FCA 1087; (2014) 108 IPR 244 at 254 [30].

39    Moreover, the general body of principles developed in relation to the requirements for an application for preliminary discovery in this Court, many of which were originally expounded in relation to the old rule, remain apposite and may be summarised as follows:

(1)    Rule 7.23 is to be beneficially construed and 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: Optiver at 444-5 [43] quoting with approval St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360; 211 ALR 147 at 153 [26(a)] and Paxus Services Ltd v People Bank Pty Ltd (1990) 99 ALR 728 at 733.

(2)    Each of the pre-requisites set out in r 7.23(1) must be met before the discretion in r 7.23(2) is enlivened: St George Bank Ltd at 153 [26(b)], citing Hooper v Kirella Pty Ltd (1999) 96 FCR 1 at 11 [38].

(3)    Not every element of any relevant cause of action must be established, provided there exists a reasonable cause to believe the prospective applicant “may have” a right to obtain the relief: Optiver at 445-6 [48].

(4)    A “belief” requires more than mere assertion and more than suspicion or conjecture. The evidence must “incline the mind towards the matter of fact in question”: Optiver at 446 [48], citing, inter alia, John Holland Services Pty Ltd v Terranora Group Management Pty Ltd [2004] FCA 679 at [13], [14], [17] and [73].

(5)    The rule does not speak in terms of a belief in the existence of a cause of action. It speaks of a right to relief. By reason of the expression “may have”, the rule is concerned with a belief in the possibility (not the existence) of such a right: Sandhurst Trustees Limited v Clarke [2015] FCAFC 21; (2015) 321 ALR 1 at 16 [24], citing EBOS at 540 [31].

(6)    The notion that an order for preliminary discovery is no longer appropriate once a prospective applicant has sufficient information to meet the threshold of “a bare pleadable case” is fundamentally inconsistent with the purpose of the rule, which is concerned not just with reasonable belief as to the possible right to relief, but also with whether the cost and risk of litigation is worthwhile: Optiver at 443 [35]-[36]. It follows that the question posed by r 7.23(1)(b) is not whether the applicant has sufficient information to decide if a cause of action is available against the prospective respondent, but rather whether the applicant has sufficient information to make a decision whether to commence proceedings in the Court.

(7)    It is not an answer to an application to say that preliminary discovery is in the nature of a fishing expedition, because that is precisely what such a rule contemplates: St George Bank at 154 [26(h)].

Whether the test of “reasonably believes” in r 7.23(1)(a) and (c)(i) is objective, subjective, or some combination of the two

40    One qualification as to the equivalence of the old and new rules must be made in relation to the words “reasonably believes” in r 7.23(1)(a) and (c), which differs from the expression “reasonable cause to believe” in the former O 15A r 6.

41    The former O 15A r 6 requirement that an applicant prove that “there is reasonable cause to believe” the matters stipulated in the rule posited a clear objective test, without any subjective element: Hooper v Kirella at 11-12 [39]; St George Bank Ltd at 153-4 [23(c)]. It was sufficient in answer to that test to show that a person in the position of the prospective applicant would have reasonable grounds to hold the various beliefs required, including that the applicant has or may have the right to obtain relief in the Court. It was not necessary to prove that any such belief was in fact held.

42    As expressed in r 7.23(1)(a) and (c), when read with r 7.23(2), the current requirement is that the Court is satisfied that the prospective applicant “reasonably believes” the matters stipulated by the rule. An ordinary reading of this expression is that the required belief is actually held, albeit “reasonably”. That is, the prospective applicant must prove a subjective state of belief, the reasonableness of which is to be assessed objectively by reference to the circumstances giving rise to that belief. So read, the requirement is much the same as would be imposed by the expression that a person has “reasonable grounds for believing”.

43    In George v Rockett (1990) 170 CLR 104 at 112, it was stated:

When a statute prescribes that there must be “reasonable grounds” for a state of mind – including suspicion and belief – it requires existence of facts which are sufficient to induce that state of mind in a reasonable person.

44    The existence of both a subjective and objective element in tests framed in these terms was articulated by Gageler J in Prior v Mole [2017] HCA 10, where his Honour, commenting on the expression “if the member has reasonable grounds for believing”, stated:

23.    … What is required to satisfy a precondition expressed in those “widely used” terms was spelt out in George v Rockett.

24.    First, the member must have an actual subjective belief of each of the specified matters. Belief is more than “suspicion”; it is not merely an “apprehension” or even a “fear”; it is an actual “inclination of the mind”. Second, the subjective belief of the member must be a belief that is formed by the member by reference to objective circumstances. The relevant objective circumstances are those known to and taken into account by the member forming the belief” …

45    It follows that the drafting of the tests in r 7.23 as requiring a “reasonable belief” to be held – apparently part of a worthy and doubtlessly well-intentioned endeavour to use plain English – may therefore have had the inadvertent and unintended consequence of introducing a subjective element to what was previously a purely objective test.

46    At the hearing of the matter, senior counsel for Ms Poole submitted that the test remains purely objective or, in the alternative, that the prospective applicant’s evidence meets the test if a subjective element is required. APT contended that a textual reading of r 7.23 compels the conclusion that the test is subjective and has therefore not been met, because there is no evidence from Ms Poole of her state of mind. In the alternative, APT submitted that the evidence relied upon by Ms Poole does not meet the objective test. The evidentiary matters will be returned to later.

47    The question whether a subjective element was imported by the new language of r 7.23(1)(a) and (c) has arisen in the authorities, without final resolution. In EBOS at 539 [28], Katzmann J doubted whether the new rule introduced a subjective requirement, having regard to the clear indication in the Explanatory Statement issued by the judges of the Court that no significant change was intended by the revisions. Out of abundant caution, however, and in the absence of any higher authority, her Honour proceeded on the basis that the evidence of the applicant’s subjective belief was necessary as to the matters covered in (a) and (c) of the rule. This approach was subsequently adopted by Perry J in ObjectiVision at 255 [34]. There, her Honour considered caution prudent, noting that a construction of the test favouring a subjective element accords with the ordinary meaning of the phrase “reasonably believes”, which suggests that the prospective applicant must have a subjective state of belief which is reasonable.

48    As Katzman and Perry JJ separately considered, it is unlikely that any substantial change was intended to be effected to this aspect of the rule. There is no compelling reason for introducing a requirement that, as a matter of course, the Court be satisfied that the prospective applicant (at least personally) hold a particular state of mind, especially where the substantive consideration for the Court remains the objective grounds for any belief in a right to relief. Certainly, there may be cases in which a state of mind may be relevant and important, but ordinarily that would be expected to arise from the nature of the relief sought.

49    In Sandhurst, the Full Court did not comment expressly on the question of whether a subjective element was required by r 7.23. Nonetheless, the Court’s reasoning indicates acceptance of the need for satisfaction that the requisite beliefs are held upon an objectively reasonable basis. The Full Court quoted the primary judge’s exposition of the requirements of r 7.23 as follows (at 6 [10], emphasis added):

It follows that an applicant must show, apart from any other considerations, that he or she believes that he or she may have a right against the proposed respondent to relief (deriving from an identified and contended cause of action) and the belief is, objectively, reasonably held rather than a “mere” belief or mere assertion or matter of speculation, notwithstanding that r 7.23 is to be constructed beneficially so as to give the fullest scope reasonably allowed of the language of the rule (St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360 at [26])…

50    The Full Court in Sandhurst also stressed, with reference to George v Rockett, the distinction between the objective and subjective elements, stating (at 11-12 [19], emphasis added):

First, it was contended that Mr Clarke did not give evidence about the matters upon which the primary judge based his finding, and that many of those matters were neither put by the respondents nor otherwise argued before the primary judge. However, whether Mr Clarke had reasonable grounds for believing that he has rights of relief against Sandhurst is to be answered by the objective circumstances, not by Mr Clarke’s view about the reasonableness of his belief. To put it another way, a requirement that the belief be reasonably held is an objective requirement, the existence of which does not depend upon the applicant’s state of mind but upon the existence of matters upon which the court may be satisfied that there are reasonable grounds for the applicant’s state of mind: George v Rockett (1990) 170 CLR 104 at 112… It is for the court to be satisfied that the belief is one that is reasonably held.

51    What emerges from the above is that there is an apparent inconsistency between the ordinary meaning of the revised terms of r 7.23 and the intention of the drafters that no substantive change be effected. Such inconsistency confronted Perram J in Voxson Pty Ltd v Telstra Corporation Limited (No 7) [2017] FCA 267, in relation to r 8.21, the replacement to the former O 13 r 2 of the Federal Court Rules 1979. There, his Honour noted that the drafters of the division had omitted a critical analogue to the former r 3A, which meant that the aspirational comment in the Explanatory Statement that “the new Rules do not substantially alter existing practice …” simply could not be correct. However, in light of the drafters’ intention that no change was intended, his Honour was prepared to exercise the power in r 1.32 to “make any order that the Court considers appropriate in the interests of justice” to achieve the result that would have been permitted under the old rule.

52    In the present case, the subjective element now introduced by the plain words of r 7.23 cannot be ignored, except by the device, judicially exercised, of departing from the text and therefore strict requirements of the rule. Such a step should not be taken lightly. As cautioned by Spigelman CJ in a legislative context in R v JS [2007] NSWCCA 272; (2007) 230 FLR 276 at 302-3 [141]-[143], the task of the Court is “to interpret the words used by the Parliament” and “not to divine the intent of the Parliament”. This, his Honour considered, will at times require the Court to “refuse to implement an express statement as to what the Parliamentary intention is”. His Honour’s reasoning, which remains apposite to the present case notwithstanding that his Honour speaks of an Act of Parliament and not a legislative instrument, was as follows (at 303):

141.    The appellant submitted that the 2001 legislation, which applied the Criminal Code to the relevant Crimes Act provisions did not intend to alter the operation of s 39 from its prior operation at common law. The appellant relied on express statements by the Minister in the Second Reading Speech and in the Explanatory Memorandum, asserting that no change was intended. Such assertions are rarely useful and often have been rejected in the course of interpretation by the courts.

142.    The task of the courts is to interpret the words used by the Parliament. It is not to divine the intent of the Parliament: see State v Zuma (1995) 2 SA 642; Matadeen v Pointu [1999] 1 AC 98 at 108; R v PLV (2001) 51 NSWLR 736 at [82]; Pinder v The Queen [2003] 1 AC 620. The distinction between interpretation and divination is an important one. The courts must determine what Parliament meant by the words it used. The courts do not determine what Parliament intended to say: see Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 459; Wik Peoples v Queensland (1996) 187 CLR 1 at 168-169; R v Young (1999) 46 NSWLR 681 at [5]; Dossett v TKJ Nominees Pty Ltd (2003) 218 CLR 1 at [10]. At times that will require the court to refuse to implement an express statement as to what the Parliamentary intention is (as in R v Bolton; Ex parte Beane).

53    The ordinary meaning of the expression “reasonably believes” must prevail, to the effect that the Court is required to be satisfied, by reason of r 7.23(2), of the existence of a subjective state of mind as to the matters covered by r 7.23(1)(a) and (c). This interpretation accords with the passages from Sandhurst above. While this entails finding a subjective element that may not have been intended and does not appear to achieve any particularly useful purpose, at least in the circumstances of this case, the language used in the rule must be worked with and only reluctantly departed from, such as where it produces an outcome that is contrary to the interests of justice (which this Court has an express power to address under r 1.32).

Whether r 7.23 requires a prospective applicant to give evidence in person

54    A further issue arising on the facts of this case is whether, in light of the interpretation of the rule above, a prospective applicant must satisfy the Court that they personally hold the beliefs required by r 7.23(1)(a) and (c).

55    Senior counsel for APT contended that nothing less than evidence from the prospective applicant in person will suffice to satisfy the subjective elements of r 7.23. On that basis, APT says that the lack of direct evidence from Ms Poole is fatal to her application.

56    Senior counsel for Ms Poole contended that, if subjective evidence is in fact required, it is sufficient for the purposes of r 7.23 for a person in Ms Poole’s position to have her solicitor depose to the requisite beliefs on her behalf, as has been done by Mr Thomas. It was suggested that a solicitor acting as agent for a prospective applicant will be consulted for legal advice on the very matters necessary to form the requisite beliefs, and that his or her evidence would therefore be of comparable or even greater utility to the Court. Senior counsel for Ms Poole went further to identify a number of circumstances in which it would be impossible for a prospective applicant to hold the requisite beliefs personally, such as where the prospective applicant is a child and a litigation guardian has been appointed, or where the prospective applicant is a corporation.

57    In support of this contention, senior counsel for Ms Poole referred to ObjectiVision, in which Perry J found that, to the extent that the rule introduced a subjective requirement, the Court could be satisfied on the evidence of the Chief Executive Office of the prospective applicant, a corporation. Senior counsel for Ms Poole also referred to EBOS at 538 [21], where Katzmann J was prepared to accept that the general manager of the first applicant could speak for all three prospective applicants on the basis that he was authorised to give evidence on their behalf.

58    Both parties were on notice that the Court would consider departing from the precise terms of r 7.23 if necessary and appropriate. A copy of the Full Court decision in Sydney Equine Coaches Pty Ltd v Gorst [2017] FCAFC 34 (relevantly at [12], [14] and [19]) was provided to the parties as an example of when this had taken place, albeit in an indemnity costs context by reference to r 1.35, which permits the Court to make orders inconsistent with the rules. If necessary, a similar outcome might be permitted in this case, whether by exercise of the powers in r 1.35, r 1.32 (making an order considered appropriate in the interests of justice) or r 1.34 (dispensing with compliance with the rules).

59    The submissions made on behalf of Ms Poole are compelling. Most steps and other actions taken in litigation are not taken by the litigant in person, unless a litigant is unrepresented. The Federal Court Rules would be rendered practically unworkable much of the time if every reference to a step or action required to be taken by a litigant would need to be taken by such a litigant personally. References to a litigant in legislation and in the rules of a court should not be interpreted as requiring personal action or evidence in person unless the subject matter and context precludes that being done on a litigant’s behalf, especially by a solicitor retained by a litigant, including employed solicitors.

60    The decisions in ObjectiVision and EBOS also suggest that the Court can and should be flexible in its approach to this aspect of the rule. That the Court should not be pernickety in satisfying itself that the requisite beliefs in r 7.23 are held is supported by the reasoning of the Full Court in Sandhurst at 12 [21]:

… In the first place, r 7.23(1)(a) does not require an affidavit from an applicant deposing as to his or her belief. The onus is on an applicant for preliminary discovery to satisfy the criterion in r 7.23(1)(a) but that onus can be established inferentially. That is to say, the nature of the allegations against the prospective respondent and the circumstances out of which they arise may provide a sufficient basis upon which the Court may be satisfied that the applicant for preliminary discovery reasonably believes that there is a right of relief.

61    It follows from Sandhurst that there is no strict requirement in r 7.23(1) of evidence in person from the prospective applicant. Of course, this does not mean that evidence in person may not be required in some cases. What is required must turn on the facts, legal issues and circumstances of each case. In some cases the existence of the requisite beliefs may be sufficiently established by inference, having regard to the nature of the allegations against the prospective respondent and the circumstances out of which they arise. In some other cases, the Court may consider it sufficient for evidence to be given by an authorised representative of the prospective applicant, such as a retained solicitor or appropriate corporate officer. Sometimes evidence in person from the prospective applicant may be indispensable.

62    The question arises whether this is a case in which evidence in person is indispensable. Consideration of the evidence and subject matter in this case reveals that it is not. Given the essentially legal character of the main issues, it is difficult to see how direct evidence from Ms Poole could be helpful, let alone essential. The reasonable enquiries of APT have been carried out by Ms Poole’s solicitors. Ms Poole is unlikely to have any special knowledge of the existence of relevant documents in APT’s possession. The nature of Ms Poole’s possible claim under the Australian Consumer Law is such that the matters necessary to establish the elements of that claim may be discharged by evidence given on her behalf. Indeed, once the elements of such a claim have been established, the onus in any action would presumably lie with APT to prove that the Cancellation Term was reasonably necessary to protect its legitimate interests: see s 24(1)(b) and (4), Australian Consumer Law. The evidence critical to this question would be evidence of the commercial circumstances of APT, including its relationships with “downstream” contractors. Ms Poole’s personal evidence is unlikely to have any bearing on these matters.

63    In the circumstances of this case, the relevant requirements of the rule can therefore be expressed as follows:

(1)    rule 7.23(1)(a) should be read as requiring establishment of a belief held by or on behalf of Ms Poole, on reasonable grounds, that she may have a right to obtain relief in this Court from APT; and

(2)    rule 7.23(1)(c)(i) should be read similarly, requiring establishment of a belief held by or on behalf of Ms Poole, on reasonable grounds, that APT is, to paraphrase, a likely source of documents which will be directly relevant to the question of commencing proceedings.

64    Alternatively, if a proper reading of the terms of r 7.23 requires evidence in person from the prospective applicant in all instances, strict application of the rule should be confined to cases in which such a requirement is truly necessary in order to meet the underlying objectives of the rule. To do otherwise is to allow form to triumph over substance. Such an approach would be contrary to the interests of justice. Accordingly, if r 7.23 does indeed require evidence in person from a prospective applicant of the requisite beliefs, contrary to the conclusion I have reached, then compliance with that rule can and should be dispensed with under r 1.34 to the extent necessary or, alternatively, the Court should exercise the power to make orders inconsistent with the rule as permitted by r 1.35. In this case, the better course is probably via r 1.34. This would not entail the Court dispensing, in any way, with the real and substantial threshold requirements of r 7.23: see McAlister v New South Wales [2014] FCA 702; (2014) 223 FCR 1 at 5 [23].

Whether the order for preliminary discovery should be made

65    In summary, the central submission advanced on Ms Poole’s behalf is that an order for preliminary discovery should be made on the basis that it is necessary to inform Ms Poole’s decision to commence proceedings against APT. While Ms Poole’s legal representatives believe that the Cancellation Term may be voidable under s 24 of the Australian Consumer Law, they do not know whether APT will be able to establish that the clause is reasonably necessary to protect its legitimate interests. The documents sought are said to be directly relevant to considering that question. It is contended that, in circumstances where APT has refused to provide the documents on a voluntary basis, Ms Poole has had no choice but to make the present application to this Court.

66    APT opposes the application for preliminary discovery, either on the basis that Ms Poole has not satisfied the requirements of r 7.23 or, alternatively, on the basis that the Court should otherwise decline to grant the relief sought on discretionary grounds. Senior counsel for APT made various submissions to this effect, which may be summarised as follows:

(1)    Ms Poole has failed sufficiently to articulate the nature of the right to relief she may have against APT;

(2)    the application for preliminary discovery is unnecessary, as Ms Poole is sufficiently informed to decide whether to commence proceedings against APT;

(3)    Ms Poole has failed to adduce sufficient evidence to establish that the classes of documents sought are relevant to informing her decision to commence proceedings against APT;

(4)    the classes of documents sought by Ms Poole are irrelevant to the question of relief, as they have no bearing on the question of unfairness of the Cancellation Term, having come into existence after the point in time at which any unfairness is to be assessed; and

(5)    the scope of the preliminary discovery sought is inappropriate because it is in the nature of general discovery and is more akin to “trawling” than “fishing”.

67    There was some divergence in the submissions made by the parties as to how preliminary discovery should be viewed, almost as a point of philosophy. Senior counsel for APT asserted that preliminary discovery is not to be given as of right and should only be ordered with caution. It was described as a special type of relief and one that was extraordinary because it involves an invasion of the prospective respondent’s private affairs in order to determine whether or not a case can properly be brought against that party, citing J & A Vaughan Super Pty Ltd v Becton Property Group Limited [2013] FCA 340 at [17]. It was argued that preliminary discovery was not to be used to secure all the documents and other information that would be discoverable if a proceeding were already on foot, but rather was to be confined in light of the purposes of the rule, citing SmithKline Beecham plc v Alphapharm Pty Ltd [2001] FCA 271 at [19] and CGU Insurance Ltd v Malaysia International Shipping Corporation Berhad [2001] FCA 1223; (2001) 187 ALR 279 at 286 [25].

68    It was therefore submitted on behalf of APT that the Court should be guided by the principle that preliminary discovery is directed to providing only sufficient evidence to enable a prospective applicant to decide whether to commence a proceeding. This does not need to go so far as to enable the prospective applicant to decide that there is a prima facie case or to evaluate the prospects of success at any high level of probability. It was submitted further that the purpose of preliminary discovery was not to produce material which would strengthen or enhance a decision to commence proceedings, but rather to provide what was reasonably necessary to enable that decision to be made.

69    Senior counsel for Ms Poole did not take issue with the principles advanced on behalf of APT as stated in the abstract, provided that they meant nothing more than that preliminary discovery was not to be given as a matter of course or other than by meeting the requirements of the rule. However, senior counsel took care to emphasise that, as the Full Court in Optiver made clear – expressly endorsing the sentiments expressed by Burchett J in Paxus at 733 – preliminary discovery is to be regarded as a “beneficial procedure” and the rule should be given the fullest scope its language will reasonably allow.

70    There is nothing in the words of cautions relied upon by APT that infringes upon the principles endorsed in Optiver, nor upon the need to meet the requirements of the rule. As was pointed out by Allsop J (as the Chief Justice then was) in Evans Deakin Pty Ltd v Seable Furniture Ltd [2001] FCA 1772 at [11], while preliminary discovery has been said in some cases to be an order of an exceptional nature or an order only to be issued with caution, those comments reflect only an appreciation of the content of the obligations provided by the rule, and should not be read as engrafting any qualification not present in the words used. Rule 7.23 is made under statutory power, and should be construed liberally, eschewing limitations and implications not found in the words of that rule. The Full Court in Optiver accepted that it would be unfortunate if a rule designed to amplify the court's power to penetrate insecurities and uncertainties in the interests of justice were to be weakened by restrictive and unnecessary glosses. To repeat the observation made above, the proper brake on any excesses lies in the discretion of the Court, exercised in the particular circumstances of each case: Optiver at 443-5 [43].

71    It was commented on behalf of APT that every element of the requirements of rule was required to be met by way of sworn evidence. To the extent that this submission suggested that regard could not be had, in addition to evidence, to the text of the legislation, in this case the relevant provisions of the Australian Consumer Law, and to submissions based on the text and evidence as available, that proposition is rejected. What matters is that the state of satisfaction be reached on the totality of the material before the Court. Undoubtedly, some factual matters will require evidence. However, the overall process is supported inevitably by inference and it is the ultimate state of satisfaction that matters.

72    While not perfect, there is no material deficiency in the present case in the manner in which evidence has been adduced and submissions made on Ms Poole’s behalf. Read beneficially as required, the evidence goes far enough. The facts in this case are relatively straightforward and it is difficult to envisage much more in the way of evidence of further factual material that could be adduced. The cases in which the Court has found that there is an insufficiency of evidence involved considerably greater complexity and real shortfalls in baseline evidence upon which the necessary conclusions could be grounded.

73    Consideration of whether Ms Poole’s application should be granted has been divided into four parts, reflecting the elements of r 7.23:

(1)    Rule 7.23(1)(a) – the prospective applicant’s reasonable belief as to the right to obtain relief in the Court from APT;

(2)    Rule 7.23(1)(b) – the prospective applicant has insufficient information following reasonable enquiries of APT;

(3)    Rule 7.23(1)(c) – the prospective applicant’s reasonable belief as to the existence of relevant documents that would assist making the decision to start proceedings; and

(4)    Rule 7.23(2) – the Court’s satisfaction as to the above and the discretion to make the order.

First issue: r 7.23(1)(a) – the right to obtain relief in the Court from APT

74    The first question, framed in terms of the interpretation of r 7.23(1)(a) above, is as follows:

Is there a belief held by or on behalf of Ms Poole, on reasonable grounds, that she may have the right to obtain relief in this Court from APT?

75    Senior counsel for APT submitted that the evidence filed on Ms Poole’s behalf failed to sufficiently articulate the right to relief that Ms Poole may have against APT. It was said that Mr Thomas’ affidavit was inadequate, insofar as it only identified that the Cancellation Term may be “voidable” under s 24 of the Australian Consumer Law and because it was insufficient for Ms Poole’s senior counsel to identify in oral and written submissions the further provisions of the legislation that might ultimately be relied on. However, as already considered, the Court was not so confined in satisfying itself that the requirements of the rule have been met.

76    The extent to which a right to relief against the prospective respondent must be articulated will depend on the facts in each case. By their terms, the requirements of r 7.23 are informed by and contingent upon the nature of the right to relief that is asserted may exist. The degree to which the prospective applicant’s possible right of relief needs to be identified for the purposes of r 7.23 will therefore depend on what is sufficient to enable the Court to assess the various elements. It is clear, however, that an applicant does not need to make out a prima facie case: EBOS at 540 [31] citing St George Bank at 154 [26(c)]. Nor must they establish every element of the cause of action. The Full Court in Optiver explained at 445-6 [48] that:

It was not incumbent upon [an applicant] to establish every element of the relevant causes of action, but a reasonable cause to believe that it “has or may have” the right to relief alleged. Of course, this is not to say that it is not necessary to examine the various elements of the potential cause of action that is sought to be relied upon to determine whether there is a reasonable cause to believe that each of the necessary elements exist (see Austrac Operations Pty Ltd v State of New South Wales (2003) ATPR 41-960 at [11]; Leighton Contractors Pty Limited v Page Kirkland Management Pty Limited [2006] FCA 288 at [5]; Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd (2007) 164 FCR 450 at [44]).

77    In the present case, I reject APT’s assertion that the prospective right to relief has been insufficiently identified. The nature of that right to relief is sufficiently clear on the face of Mr Thomas’ affidavit and in the annexed correspondence between the parties. No reasonable contention can be made that APT and the Court are not in a position to ascertain the right to relief that Ms Poole may have – being the claim that the Cancellation Term may be voidable under the Australian Consumer Law – and to assess whether there are reasonable grounds to support it.

78    I am satisfied that Mr Thomas is authorised to act on Ms Poole’s behalf and holds the belief, as deposed to in his affidavit, that Ms Poole may have the right to obtain relief in the Court from APT under s 24 of the Australian Consumer Law. The more substantial question that follows is whether that belief is reasonably held. That is, whether the proven facts and circumstances of the case are “sufficient to induce that state of mind in a reasonable person”. In my opinion they are.

79    At a high level of generality, the ultimate relief that might be sought in relation to unfair contract terms within the meaning of s 23 of the Australian Consumer Law may be a declaration pursuant to s 250 that such a term is unfair and a mandatory injunction directed, in effect, to undoing reliance on the term pursuant to s 232(1) having regard to the terms of s 232(3).

80    The critical question in the circumstances of this case is whether or not there is sufficient material before the court to induce in the mind of a reasonable person a belief as to a right to obtain a declaration and thereby a mandatory injunction upon the basis of the Cancellation Term being “unfair” within the meaning of s 24(1) for the purposes of s 23(1). It did not seem to be in dispute that the term was part of a “standard form contract” given that there was no dispute that it was prepared by or on behalf of APT without any prior discussion and negotiation with Ms Poole. She was afforded no opportunity to negotiate the term or any other term of the contract that she entered into with APT via its agent. The term was drafted with the apparent intention that it be of general commercial application and did not take into account the specific characteristics of any individual customer, such as Ms Poole. In effect, the term was offered on a “take it or leave it” basis, such that, apart from not entering into the contract at all, APT held all of the bargaining power relating to the transaction and, in particular, the Cancellation Term.

81    Attention therefore turns to the definition of “unfair” in s 24(1) for the purposes of s 23(1)(a). As already discussed, the relevant issue is whether or not the Cancellation Term was reasonably necessary in order to protect the legitimate interests of APT, who was undoubtedly advantaged by that term.

82    The evidence before the Court is sufficient to ground the submission made on Ms Poole’s behalf to the effect that, in the event of cancellation within 60 days of the date of departure, APT would become entitled to the entire sum paid under the contract without any reciprocal obligation to provide any of the services bargained for, or to provide any refund in the event that Ms Poole’s booking, or any part of it, could be resold to a third party. As provided for by the Cancellation Term, the entire sum of Ms Poole’s booking was retained by APT and a refund refused.

83    The proven circumstances are ample to induce in the state in the mind of a reasonable person a belief that Ms Poole may have a right to obtain relief as to at least some part of the booking price paid of $31,620. Implicit in that conclusion is an inference that such a blanket cancellation term may not have been reasonably necessary to protect APT’s interests in circumstances where it is possible, if not likely, that not all of that sum would reflect the actual loss finally suffered by APT by reason of the late cancellation. That question, however, ultimately depends upon the unknown circumstances of APT, including its contractual rights and obligations to overseas service providers whose services make up the totality of the Booking.

84    It follows that Ms Poole has established the existence of a belief held on her behalf on reasonable grounds that she may have the right to obtain relief in this Court from APT.

Second issue: r 7.23(1)(b) – sufficiency of information following reasonable enquiries

85    The second question is as follows:

Has Ms Poole established that, after making reasonable enquiries, she does not have sufficient information to decide whether to start proceedings to obtain relief?

86    The position advanced on Ms Poole’s behalf is that, in essence, APT’s refusal to answer the requests made in writing in July and August 2016 has left Ms Poole with nowhere else to go. While Ms Poole’s legal representatives hold the belief that the Cancellation Term may be voidable under s 24 of the Australian Consumer Law, they do not know whether APT is likely to be able to establish that the clause is reasonably necessary to protect its legitimate interests.

87    Senior counsel for APT advanced a number of reasons why the Court should not be satisfied that Ms Poole does not have sufficient information to make the decision to commence proceedings, including the fact that the potential claim is a “reverse onus case” and that other claimants have issued these kinds of proceedings against APT without the need for preliminary discovery. Further, it appeared to be suggested that the prospective applicant has already made her decision on whether to commence proceedings, a conclusion which is ostensibly evident on the face of the unequivocal assertions in Mr Tuite’s 22 July 2016 letter to APT that the Cancellation Term is unfair within the meaning of the Australian Consumer Law.

88    The point about Mr Tuite’s letter is rejected. Read as a whole, the letter expresses no more than a prima facie conclusion as to unfairness, making it clear by the use of “improbable” that the liability of APT to lose all of the Booking fee was uncertain. The overall tenor of the letter was directed to addressing that uncertainty.

89    The “reverse onus case” argument relied upon by APT is in substance, if not in form, a “bare pleadable case” argument. It advances the proposition that Ms Poole has sufficient information to inform her decision to commence proceedings, because she may rely in any claim that is brought on the reversal of onus provision in s 24(4) of the Australian Consumer Law. That provision has the effect that, once an applicant asserts that a term is unfair, that term is presumed not to be reasonably necessary to protect the legitimate interests of the party who would be advantaged by the term, unless that party proves otherwise. In essence, APT submits that there is therefore no obstacle to Ms Poole’s decision to commence proceedings.

90    APT’s argument overlooks the policy standing behind r 7.23 (as stated in relation to the prior O 15 r 6 and applied to the current rule) to the effect that “even where there is a reasonable cause to believe that a person may have a right to relief, nevertheless that person may need information to know whether the cost and risk of litigation is worthwhile”: see Optiver at 443 [36]. In the present case, there is a clear need for Ms Poole to consider the cost and risk of litigation. Such litigation will not be worthwhile if bringing a case relying upon the reversal of onus simply results in APT being readily able to establish that the full amount of the Booking price is in fact a true reflection of its loss, including by reason of downstream contractual obligations and perhaps administrative and other costs associated with the cancellation. It is APT’s degree of financial exposure which will inform the question of whether the Cancellation Term was necessary to protect APT's legitimate financial interests, including perhaps whether such a blanket cancellation policy entailed any genuine pre-estimate of APT’s prospective loss in the event of cancellation. It was documents directed to those very matters that were sought by Ms Poole in the correspondence in evidence before the Court. And it is information on those matters which APT declined to provide.

91    For these reasons I accept that Ms Poole has established that, after making reasonable enquiries of APT through her lawyers, she does not have sufficient information to decide whether to start proceedings to obtain relief in respect of the Cancellation Term.

Third issue: r 7.23(1)(c) – the existence of documents relevant to the right to obtain relief

92    The third question, framed in terms of the interpretation of r 7.23(1)(c) above, is as follows:

Is there a belief held by or on behalf of the Ms Poole, on reasonable grounds, that APT has, or is likely to have, in its control documents directly relevant to the right to obtain relief and that those documents would assist in making the decision to start proceedings?

93    There was no evidence before the Court to suggest that APT does not have documents of the kind sought. APT's position was set out in the 8 August 2016 email from Ms Charleston, the relevant portions of which have been reproduced at [26] above. Those portions of the email indicated that bookings are made a long time in advance and that the late cancellation deprived APT of any “realistic” opportunity to resell any part of that package and “simply allowed APT to avoid the loss” arising from the late cancellation. In particular, the email indicated that APT was “not prepared to go to the expense and effort of providing further documents”, asserting that there did not appear to be any cause of action available to Ms Poole and that she might not have taken steps to mitigate her loss. Importantly, and of relevance to the need to assess the risks and costs of litigation, the email concluded, in a portion not reproduced above, by warning that if proceedings were commenced the email would be produced on the question of costs.

94    APT does not suggest that the documents sought do not exist. In fact, its own evidence points to the contrary. In her affidavit, Ms Nogare stated that APT’s arrangements with its suppliers are of a nature that is commercially sensitive, that APT was not in a position to disclose such arrangements, and that it was “industry standard” to keep pricing details, including terms and conditions with suppliers “strictly confidential”, as divulgence of such materials to third-parties might adversely affect APT’s relationships with its suppliers. While APT’s evidence does point to a need for confidentiality in the event that such documents were produced, it tends positively to establish that such documents do exist, rather than that they do not.

95    A more substantial issue raised on behalf of APT was whether classes (b), (c) and (d) of the documents sought had a sufficient nexus to Ms Poole’s right to relief due to issues of timing of those documents and of contract formation. It was submitted that the appropriate point in time to assess unfairness of the Cancellation Term was at the time of contract formation, being the time of the Booking in October 2015 (or possibly even as late as 20 December 2015, although less likely). To that end, those documents in classes (b), (c) and (d) which may have come into existence after the Booking – such as documents pertaining to downstream contractual arrangements, correspondence with suppliers following the cancellation, and documents recording any attempts by APT at mitigation – were said to be irrelevant to the question of unfairness of the Cancellation Term.

96    There are two problems in accepting APT's arguments as to the asserted irrelevance of any post-contractual arrangements that were made for the purposes of giving effect to the Booking. First, these arguments carry an unwarranted assumption that each on-booking is the start of an entirely new contractual arrangement with the downstream suppliers, rather than the application of existing contractual arrangements to the Booking in the present case. The former is inherently unlikely and indeed is contrary to the tenor of Ms Nogare’s affidavit, which refers to arrangements, pricing details, and terms and conditions that suggest the existence of an ongoing relationship with suppliers.

97    Secondly, irrespective of whether the on-booking constitutes application of an existing contractual arrangement or the creation of an entirely new post-contract arrangement with a supplier, there is ample room for such post-contractual arrangements to be relied upon to measure and assess whether the Cancellation Term, which imposed a 100% cancellation fee, was reasonably necessary in order to protect the legitimate interests of APT. While the assessment must be carried out at the time of the Booking, such arrangements may be at least objective evidence of APT’s likely, in the sense of predictable, future circumstances at that time. In a case such as this, the best measure of what could and should have happened is likely to be what in fact did happen, even though it occurred at a later point in time. It is artificial therefore to draw a line in the sand at the point of contract formation and assume that subsequent contractual arrangements will be irrelevant to the assessment of fairness in the relevant sense, including by way of mitigation by way of re-sale as an aspect of the necessity of having a fixed 100% cancellation fee applying up to 60 days prior to travel.

98    APT also submitted that the scope of the preliminary discovery sought is inappropriate because it is in the nature of general discovery and resembles “trawling” in its breadth. This submission is rejected. The totality of the evidence in this case makes it clear that the live issue standing in the path of making a decision to commence proceedings is whether there will be a complete answer to Ms Poole’s case on the question of the necessity of a 100% cancellation fee provision. That depends upon information which is uniquely in the hands of APT. A prudent decision as to whether or not to commence proceedings, falling well short of any certainty of outcome, depends upon the answer to that particular question. I reject the submission on behalf of APT that preliminary discovery as sought in this case is a trawling exercise. Ms Poole seeks a confined category of documents, referable to a particular question that has been established as a live issue in the dispute. There does not appear to be any doubt that those documents exist in some form or another. In those circumstances, it is difficult even to characterise Ms Poole’s application as a fishing expedition, which would nonetheless be permitted, let alone an exercise in trawling.

99    It follows that there is a belief held on behalf of Ms Poole on reasonable grounds that APT is likely to have on its control documents directly relevant to the right to obtain relief and that those documents would assist in making the decision to start proceedings.

Fourth issue: r 7.23(2) – the Court’s discretion to make the order

100    The final question is whether it is appropriate for the Court to exercise its discretion to make the order, the Court being satisfied as to the prior three issues being resolved in Ms Poole’s favour.

101    Senior counsel for Ms Poole submitted that this was not a case where the Court should exercise its discretion to refuse relief, emphasising that the Court should be reluctant to do so when the requirements of the rule are made out. The following statement of the Full Court in Optiver at 445 [45] was referred to:

There normally will be little scope for refusal of relief where the requirements of O 15A, r 6 have been met. The remedy is beneficial and should not be refused, save for good cause …

102    Once the first three issues above were resolved in favour of Ms Poole, the residual discretion to refuse relief in this case was almost entirely illusory. There remains a serious issue as to maintenance of confidentiality for the reasons set out in Ms Nogare’s affidavit, referred to above. Nonetheless, this Court routinely deals with highly confidential information, with high degrees of sensitivity and there is no reason to suppose that this cannot be done in the present case. With able and highly qualified representatives on both sides, the parties should be able to agree on a regime which adequately protects APT's commercial interests without the need for any further adjudication. However, such adjudication can be provided if agreement cannot be reached.

Conclusion on ordering preliminary discovery

103    An order for preliminary discovery in respect of the categories of documents sought by Ms Poole should be granted, but subject to a confidentiality regime of the kind referred to above.

Costs

104    The choices presented for the costs aspect of this application and of the reasonable expenses and any related reasonable costs of giving preliminary discovery may be distilled to the following:

(1)    If no order is made as to costs, then the costs of this application follow the event, because the application, which is interlocutory in substance, was successful after a contested hearing: r 40.04(a). Neither party contended for that outcome. It does not address the reasonable expenses and any related reasonable costs of giving preliminary discovery, and in all the circumstances would not be a just outcome if proceedings were not commenced, and probably would not be a just outcome if proceedings were commenced and did not succeed.

(2)    The substance of APT’s position, namely that Ms Poole pay APT’s costs of the application (although I note now that this would be despite the application being opposed unsuccessfully), with the addition of provision for the reasonable expenses and any related reasonable costs of giving preliminary discovery which was not specifically addressed by APT.

(3)    The substance of Ms Poole’s position, with the addition of provision for the reasonable expenses and any related reasonable costs of giving preliminary discovery which was not specifically addressed by Ms Poole, namely that:

(a)    if proceedings are commenced within a reasonable time after the preliminary discovery process is completed, then the costs of costs of and incidental to the application and the reasonable expenses and any related reasonable costs of giving preliminary discovery be costs in the cause;

(b)    if proceeding are not commenced within a reasonable time after the preliminary discovery process is completed, then Ms Poole pay APT’s costs of and incidental to the application and the reasonable expenses and any related reasonable costs of giving preliminary discovery.

105    In all the circumstances, the appropriate order is that proposed by Ms Poole, with the adjustments incorporated above. The reasonable time referred to in (3) above was suggested in written submissions for Ms Poole to be 12 months, revised downwards to three months at the hearing. Even this revised time is too long for making a decision and commencing proceedings, given that no more is initially needed than an originating application, although a statement of claim would probably have to follow soon after. A reasonable time would be 60 days from the date upon which the preliminary discovery process is completed, which would probably be sufficient time for both an application and statement of claim. Accordingly the order as to costs should be to the effect that:

(1)    if proceedings are commenced within 60 days of the preliminary discovery process being completed, then the costs of costs of and incidental to this application and the reasonable expenses and any related reasonable costs of giving preliminary discovery be costs in the cause;

(2)    if proceeding are not commenced within 60 days of the preliminary discovery process being completed, then Ms Poole pay APT’s costs of and incidental to this application and APT’s reasonable expenses and any related reasonable costs of giving preliminary discovery.

Orders

106    The parties are to provide either agreed or competing draft orders to give effect to these reasons within 14 days of the date of this judgment, or such further time as may be directed having regard to the likely need for a confidentiality regime, including as to the terms of the preliminary discovery order and as to costs.

Associate:

Dated:    28 April 2017