Federal Court of Australia
Zulic v CMC Markets Asia Pacific Pty Ltd (No 2) [2023] FCA 692
ORDERS
First Applicant BOON CHEE (KEVIN) Second Applicant | ||
AND: | CMC MARKETS ASIA PACIFIC PTY LTD ACN 100 058 213 Respondent | |
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. Order 1 of the Orders made by Justice Jackman on 9 May 2023 (May Orders), is varied so that the Respondent is to give discovery of the categories of documents in Annexure A of the May Orders (except for category 30 in Annexure A and category B1 of Annexure B, the production of which remains pursuant to Order 3(a) of the May Orders) in tranches on the following dates (with verification to be given with the final tranche):
Tranche | Categories | Discovered by |
2 | 1(1), 1(2), 2(1), 3(1), 3(2), 3(3), 5, 6(1), 7(1), 8(a), 10, 16(1), 20(1), 24(1) • Plus all discoverable documents already identified and reviewed from other categories by the date of production. The parties acknowledge that these documents will be the subject of targeted searches, but there is still the possibility that when the complete review of the custodians' emails is undertaken, further responsive documents may be identified. | 1 December 2023
|
3 | All discoverable documents already identified and reviewed from other categories by the date of production. | 1 March 2024 |
4 | Documents from all remaining categories and any documents from tranches which have been discovered since those tranches were served. | 28 June 2024 |
2. The Respondent has leave to seek a variation in the dates for Order 1 if security for costs and/or payment in advance for some or all of the estimated costs of discovery in an amount and form acceptable to the Respondent has not been provided by 20 July 2023.
3. Order 2 of the May Orders is varied so that the Applicants are to give discovery of the categories in Annexure C of the May Orders (except for categories 1,3,4,5 and 8 of Annexure C, the production of which remains pursuant to Order 3(b) of the May Orders) by the following date(s) (with verification to be given with the final tranche):
Tranche | Categories | Discovered by |
2 | • 2, 9, 11, 12 17 | 7 September 2023 |
3 | • 6, 7, 10, 13, 18 | 7 November 2023 |
4. Discovery by both parties is to be produced in a manner that is in accordance with the Electronic Exchange Protocol agreed between the parties.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
JACKMAN J
1 On 8 May 2023, I ruled on various disputed categories of discovery in Zulic v CMC Markets Asia Pacific Pty Ltd [2023] FCA 469. The following day, I made orders consistently with those reasons. As to the timing of discovery, I directed that by 20 June 2023, the parties were to send to my Associate agreed, or alternatively competing, orders and short written submissions. Those orders extended to the terms of an electronic discovery protocol and the terms of a confidentiality undertaking, and those two matters have been agreed between the parties. The parties have been unable to reach agreement on the timetable for discovery by the parties.
2 The applicants propose a regime whereby discovery will be given in five tranches, culminating in the completion of discovery by the respondent by 17 February 2024. Discovery by the applicants would be completed by 7 November 2023.
3 The respondent also proposes that discovery be given by way of tranches, with the entire process being completed by 28 June 2024, a difference of a little over four months from the timetable proposed by the applicants. The respondent does not oppose the proposed timetable in relation to discovery by the applicants.
4 The submissions put forward by the applicants depend to a large extent on matters which are outside their knowledge, and turn on arguments as to what might reasonably be expected to be the nature of the task of discovery by the respondent. In relation to those matters, the respondent is in a superior position, given that the documents in question are the respondent’s documents, and the task of discovery will depend upon the manner in which those documents have been stored, and on how the respondent, in consultation with its legal representatives, intends to go about the task of discovery in an efficient manner.
5 The respondent opposes the applicants’ proposal for five tranches of partial discovery relating to various sub-categories of documents by February 2024 on the following grounds. First, the respondent contends that requiring production of specified categories in a specific order will impact the ability of the respondent to plan and adapt its discovery process and resources so that the discovery task can be completed as efficiently as possible, including by minimising the prospect of documents having to be reviewed more than once as the respondent progresses through the tranches. Second, the respondent is unable to say what, if any, proportion of a sub-category could be produced by the dates nominated by the applicants, and accordingly it is impossible to say that the earlier tranches of discovery would be sufficiently useful to warrant the additional and significant burden being placed on the respondent and its legal representatives to produce them. Third, the respondent submits that production by way of five tranches will markedly reduce the efficiency of the discovery exercise as a whole because the production of each tranche will require the diversion of resources from the ongoing review to focus on quality control in respect of the tranche being produced. Fourth, a number of particular difficulties are referred to in relation to the applicants’ proposed second tranche. In particular, the respondent submits that it should not be required to mobilise significant legal resources in the discovery exercise until it has received appropriate security for its estimated costs, or payment in advance for some or all of the estimated costs of discovery, being the subject matter of the application foreshadowed by the respondent pursuant to s 43(3)(h)(i) or (ii) of the Federal Court of Australia Act 1976 (Cth). That application is due to be filed and served by 20 July 2023, if it is to be pursued.
6 In my opinion, those submissions provide a compelling basis for the adoption of the timetable proposed by the respondent. While the difference of about four months between the rival timetables is significant, it must be seen in the overall context of the litigation as a whole, which is complex and will necessarily be lengthy. I regard it as being in the interests of both parties for the discovery exercise to be conducted in as cost-effective a way as possible, and the prospect of that being achieved seems to me to be enhanced under the respondent’s proposal.
7 The orders proposed by the applicants also include an order that the parties confer as soon as possible, and ongoing, on: (a) search terms to be used in respect of each category; (b) mailbox and other document depositories to be used in respect of each category; and (c) use and training of discovery technology. The respondent has engaged a highly experienced firm of litigation lawyers, and I have no reason to doubt their ability to determine how best to satisfy their discovery obligations, as quickly, cheaply and efficiently as possible. I do not see that the exercise to be undertaken by CMC Markets Asia Pacific Pty Ltd in conjunction with its legal representatives would be improved by an obligation to consult with the applicants in relation to the detailed approach to be taken. There has already been a very substantial degree of conferral between the parties, and I am confident that such conferral will continue in circumstances where it may be appropriate.
8 The respondent also seeks an order giving it leave to seek a variation in the dates for discovery if security for costs or payment in advance for costs of discovery has not been provided by 20 July 2023. The proposed order should not be read as assuming that such an application will succeed. If no application for security for costs or advance payment is made, or if it is not successful, the order would simply fall away. However, it seems to me that such an order is appropriate in light of the respondent’s foreshadowed application, in order to deal with the possible scenario in which such an application is successful.
9 Accordingly, I make the orders sought by the respondent in the draft orders which appear as Annexure A to the respondent’s written submissions of 20 June 2023.
I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackman. |
Associate:
