Federal Court of Australia

Pan v Hampton Accelerate Pty Ltd [2023] FCA 46

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application filed by the applicant on 25 November 2022 is dismissed to the extent that the applicant seeks discovery of documents described in category 1 (d) of the Annexure thereto.

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

REASONS FOR JUDGMENT

COLLIER J:

introduction

1    Before the Court is an interlocutory application for discovery filed on 25 November 2022 by the applicant, Ms Miner Pan, seeking discovery of a number of categories of documents from the first, second and fourth respondents.

2    At the hearing, the parties resolved a number of the categories of documents sought by the applicant. Materially, the only category that remains in dispute is as follows:

1.    Performance of the Services

…

(d)    Any bill of costs, timesheets or similar documents recording the tasks undertaken by the First or Second Respondents (including their employees or agents) in providing the Applicant with services in relation to her attempts to obtain a subclass 132 visa.

RELEVANT BACKGROUND

3    By originating application filed on 12 April 2022 the applicant sought the following relief:

(1)    An order that the First and Fourth Respondent pay damages to the Applicant pursuant to s236 of the Australian Consumer Law, being Sch 2 to the Competition and Consumer Act 2010 (Cth) in the amount of $385,000

(2)    Alternatively, an order that the First Respondent pay to the Applicant restitution in the amount of $385,000.00 as money paid under a void contract;

(3)    Orders pursuant to s237 and s242 of the Australian Consumer Law, declaring the following agreements void:

(a)    The Services Agreement (Visa and Venture Capital Services) between the Applicant and the First Respondent dated 15 January 2020; and

(b)    The Subscription Agreement between the Applicant and the Second and Third Respondent dated 23 March 2020;

(4)    Interest; and

(5)    Costs of the proceeding.

4    Both parties filed concise statements in the proceedings.

5    The applicant is a Chinese national who resides in Australia, has obtained a number of tertiary degrees from Australian universities, and in late 2019 was the holder of a student visa (subclass 500).

6    The applicant claimed that she was interested in applying for a visa under the Migration Act 1958 (Cth) which would permit her to reside in Australia on a permanent basis, and in pursuit of this objective she was introduced to Ms Winnie Ou (who at that time was the Business Development Manager of the first respondent). The applicant further claimed that Ms Ou showed her a PowerPoint presentation concerning a program offered by the first respondent intended to assist visa applicants seeking a Business Talent (Permanent) visa subclass 132, and that if the applicant engaged the first respondent and did not secure a visa, the fee she paid would be refunded. The applicant claimed that other executives of the first respondent (namely Mr Sean Lim and Mr Tom Chan) made similar assurances at a meeting in Sydney she attended.

7    The applicant claimed that she was presented with a draft contract entitled “Services Agreement (Visa and Venture Capital Services), and that she signed the contract on 20 January 2020. The applicant claimed that the agreement provided for the provision of two kinds of services, namely:

    “Matter 1” relating to the application for a subclass 132 visa for a fee of $15,000 including GST; and

    “Matter 2” relating to the establishment and organisation of a venture capital project and proposed business for a fee of $685,000 including GST.

8    The applicant claimed that the agreement did not provide for the result of a failure of a nomination by a state or territory government to nominate Ms Pan, such that she was not invited to lodge an application.

9    It is not in dispute that on 31 January 2020 the applicant paid the first respondent the sum of $215,000.

10    The applicant claimed that on 22 March 2020 the first respondent caused the third respondent to be incorporated. She claimed that on the following day she executed a document entitled “Subscription Agreement” between herself, the first respondent and the second respondent, which required the applicant and the second respondent to invest in the third respondent. In particular, the applicant claimed that she was to pay $500,000 at the commencement of the business. The applicant claimed that Ms Ou sent her a business plan for the third respondent envisioning a digital concierge service for residential rental home operators such as Air Bnb hosts), reliant on artificial intelligence and developed in conjunction with the University of Adelaide.

11    The applicant claimed that she had no input into the business plan, no experience in the residential hospitality industry and no experience with software development or artificial intelligence.

12    The applicant claimed that she paid the first respondent $85,000 on 22 April 2020.

13    The applicant claimed that she was instructed by the first respondent prior to meeting with representatives of Immigration SA, which meeting took place on 30 September 2020. On 15 November 2020 Immigration SA invited the applicant to lodge a state nomination application for the subclass 132 visa, and the applicant submitted that the first respondent lodged the document the same day.

14    The applicant claimed that she paid the first respondent $85,000 on 1 March 2021, and state nomination application was refused on 16 April 2021.

15    The applicant claimed further that:

    The first respondent refused her requests for a refund; and

    The fourth respondent was the architect of the scheme put into place by the first respondent.

16    The applicant sought the sum of $385,000 from the first and fourth respondents.

submissions

17    In support of her application for discovery the applicant submitted, as follows:

    Generally, the respondents take an unduly narrow view of the case and consequently the proper scope of discovery;

    In relation to category 1(d), the applicant’s concise statement at para [15] alleges

15.    Ms Pan had no input into the business plan, no experience in the residential hospitality industry and no experience with software development or artificial intelligence.

    In their Concise Statement in response, the respondents say:

15.    With respect to paragraph 15 of the Concise Statement, the Relevant Respondents:

(a)    say the First Respondent assisted Ms Pan with the preparation of the Business Plan;

(b)    say that:

(i)    Ms Pan discussed with the employees of the First Respondent what business she would like to create and the Business Plan was prepared in conjunction with those instructions and discussions; and

(ii)    it was a term of the Services Agreement that the First Respondent would assist Ms Pan to prepare a business proposal.

(c)    otherwise, does not admit the balance of paragraph 15 of the Concise Statement.

    The applicant submitted that her case is that she was assisted by the respondents with the preparation of the relevant business plan, that the respondent’s timesheets and similar material will likely reveal the extent of that assistance, and that they are relevant to the substantive matter.

18    The respondents submitted, in summary, as follows:

    In relation to category 1(d), the material sought is not directly relevant to the issues raised in the parties pleadings;

    The discovery would amount to a disproportionate burden on the respondent, particularly given the applicant’s description of the work undertaken by the respondent’s representatives;

    The parties have agreed that the respondents would provide discovery of documents in the following category:

2(c)    All Communications recording or identifying any input, comments or instructions by the Applicant in relation to the Business Plan.

The respondents submitted that this category would encapsulate the material sought in category 1 (d).

consideration

19    Relevantly the Federal Court Rules 2011 (Cth) provide as follows:

20.13 Application for discovery

(1)     A party may apply to the Court for an order that another party to the proceeding give discovery.

(2)     The application must state:

(a)     whether the party is seeking standard discovery; or

(b)     the proposed scope of the discovery.

(3)     An application may not be made until 14 days after all respondents have filed:

(a)     a defence; or

(b)    an affidavit in response to the affidavit accompanying the originating application.

(4)     The Court may order that discovery be given by an electronic means.

(5)     If a party who is required to give discovery wants an order under paragraph 43(3)(h) of the Act, the party must file an affidavit stating:

(a)     the orders sought; and

(b)     the party's calculation of the cost of making discovery; and

(c)     why the orders should be made.

Note:    Section 43 of the Act provides for the Court or a Judge to do any of the following in relation to discovery:

(i)     order the party requesting discovery to pay in advance for some or all of the estimated cost of discovery;

(ii)     order the party requesting discovery to give security for the payment of the cost of discovery;

(iii)     make an order specifying the maximum cost that may be recovered for giving discovery or taking inspection.

…

20.15: Non-standard and more extensive discovery

(1)    A party seeking an order for discovery (other than standard discovery) must identify the following:

(a)     any criteria mentioned in rules 20.14(1) and (2) that should not apply;

(b)     any other criteria that should apply;

(c)     whether the party seeks the use of categories of documents in the list of documents;

(d)     whether discovery should be given in an electronic format;

(e)     whether discovery should be given in accordance with a discovery plan.

(2)     An application by a party under sub rule (1) must be accompanied by the following:

(a)     if categories of documents are sought--a list of the proposed categories; and

(b)     if discovery is sought by an electronic format--the proposed format; and

(c)     if a discovery plan is sought to be used--a draft of the discovery plan.

(3)     An application by a party seeking more extensive discovery than is required under rule 20.14 must be accompanied by an affidavit stating why the order should be made.

(4)     For this Division:

"category of documents" includes documents, or a bundle of documents, of the same or a similar type of character.

Note:     A discovery plan is a plan that has regard to the issues in dispute and the likely number, nature and significance of the documents discoverable in relation to those issues--see the Court's Practice Note CM6, 'Electronic Technology in Litigation'.

…

20.17: List of documents

(1)     A list of documents must be in accordance with Form 38.

(2)     The list must describe:

(a)     each category of documents in the party's control sufficiently to identify the category but not necessarily the particular document; and

(b)     each document that has been, but is no longer in the party's control, a statement of when the document was last in the party's control and what became of it; and

(c)     each document in the party's control for which privilege from production is claimed and the grounds of the privilege.

(3)     A party may apply to the Court, before or after the list of documents has been served, for an order:

(a) about the use of categories in the list; or

(b) that a more detailed list of documents be provided; or

(c) that each document in a category be separately described.

(4)     The list of documents must be verified by an affidavit sworn in accordance with rule 20.22.

Note: Control is defined in the Dictionary.

20    Principles relevant to an application for discovery are well established, and set out by Mansfield J in Alliance Craton Explorer Pty Ltd v Quasar Resources Pty Ltd (No 4) [2013] FCA 1044 at [33] as follows:

33.     The court should not make an order for discovery unless the making of the order sought will facilitate the just resolution of the proceeding as quickly, inexpensively and efficiently as possible: r 20.11 of the Rules, and see Alanco Australia Pty Ltd v Higgins (No 2) [2011] FCA 1063 at [7] (Alanco); Coca-Cola Company v Pepsico Inc [2011] FCA 1069 at [33]; and Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 2) (2011) 212 IR 313 at [21]. This principle reflects the overarching purpose of civil practice and procedure of the court stated in s 37M of the Federal Court of Australia Act 1976 (Cth) (the FCA Act). The court controls the discovery process in part to ensure that the parties “are not crippled with the cost and delay of that process”: Alanco at [7]. It will not order discovery as a matter of course, even where the parties consent, unless discovery is necessary for the determination of issues in the proceeding. An applicant for an order for discovery bears the onus of satisfying the court that the documents sought are necessary: Trade Practices Commission v CC (NSW) Pty Ltd (No 4) (1995) 58 FCR 426 per Lindgren J at 436.

21    I also note more recent observations of Abraham J in Rivas v The Republic of Chile [2020] FCA 737:

40.    The Court will not order discovery as a matter of course unless discovery is necessary for the determination of issues in the proceeding, and an applicant for an order for discovery bears the onus of satisfying the Court that the documents sought are necessary: Alliance Craton Explorer Pty Ltd v Quasar Resources Pty Ltd (No 4) [2013] FCA 1044 at [33] per Mansfield J citing Trade Practices Commission v CC (New South Wales) Pty Ltd (No 4) [1995] FCA 1418; (1995) 58 FCR 426 at 436 per Lindgren J.

41.    The principles that are relevant to an order for discovery in an application for judicial review are as summarised in Carmody v MacKellar [1996] FCA 791; (1996) 68 FCR 265 (Carmody) at 280 per Merkel J, as follows:

The following principles may now be taken to be well established by the decisions of the Court in Melbourne Home of Ford v Trade Practices Commission [1979] FCA 15; (1979) 36 FLR 450, W.A. Pines Pty Ltd v Bannerman [1980] FCA 79; (1980) 41 FLR 175 and Australian Securities Commission v Somerville (1994) 51 FCR 38:

1.    the Court has a discretionary power to order discovery in proceedings for the review of an administrative decision;

2.    the proper exercise of the power depends upon the nature of the case and the stage of the proceedings at which discovery is sought;

3.    if a proceeding or claims in it are essentially speculative in nature the Court will not order discovery in order to assist the applicant in a fishing exercise;

4.    the evidence or material which will be required to establish that the proceeding or particular claims in it are not essentially speculative will vary with the nature and circumstances of the particular case;

5.    if there is not the slightest evidence or there is no other material to support the bare allegations made in the proceeding, then as a general rule, an order for discovery ought not to be made.

These principles were accepted by the Full Court (Dowsett, Jacobson and Greenwood JJ) in Jilani v Wilhelm [2005] FCAFC 269; (2005) 148 FCR 255 at [108].

22    Noting that the applicant bears the onus of satisfying the Court that the discovery of documents sought in category 1 (d) is necessary for resolution of this case, I am not prepared to order non-standard discovery in those terms. In particular:

    Given that the respondents are private companies and an individual – rather than, for example, law firms or accounting practices – it is entirely unclear to me how there would be any “bills of costs, timesheets or similar documents” prepared by any of them recording described tasks, as sought in category 1 (d);

    I am satisfied that category 2 (c), as agreed by the parties, being communications recording or identifying any input, comments or instructions by the applicant in relation to the Business Plan, encompasses the documents sought in category 1 (d), such that a further order in terms of category 1 (d) is unnecessary for determination of issues in the proceeding;

    Put another way, although the applicant submits that the objective of the applicant in seeking the documents in category 1 (d) is to reveal the extent of the work undertaken by the respondents and their agents in preparing the Business Plan, category 2 (c) appears directed to the same objective; and

    I am not persuaded that an additional order in terms of category 1 (d) would be necessary for the just and expeditious resolution of the proceeding.

conclusion

23    The interlocutory application is dismissed to the extent that the applicant seeks discovery of documents described in category 1 (d) of the Annexure.

24    I will hear the parties in respect of costs.

Associate:

Dated:    2 February 2023