Federal Court of Australia

United Petroleum Pty Ltd v Bomma [2025] FCA 283

ORDERS

THE COURT ORDERS THAT:

1.    By 4.00 pm on 12 May 2025, the respondents give discovery of documents within the categories of documents referred to in the Schedule in accordance with r 20.17 of the Federal Court Rules 2011 (Cth), such discovery to be provided:

(a)    by reference to each of the criteria in r 20.14 of the Rules;

(b)    in the form of a List of Documents in accordance with r 20.17 of the Rules; and

(c)    in electronic format by way of an electronic document sharing platform.

2.    The respondents pay the applicant’s costs of this application.

3.    The proceeding be listed for a case management hearing at 2.15 pm on 6 June 2025.

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

REASONS FOR JUDGMENT

WHEELAHAN J:

1    The applicant has applied by interlocutory application for orders that the respondents give discovery of documents by reference to identified categories, and that the discovery be given before the parties are ordered to file their affidavit evidence for trial. Discovery of this nature is referred to in Part 20 of the Federal Court Rules 2011 (Cth) as non-standard discovery.

2    The respondents resist an order that any discovery be given before affidavit evidence is filed. In the alternative, the respondents dispute some but not all of the categories of documents that are sought.

Background

3    The applicant conducts a business involving the retail sale of fuel and other goods through a network of service stations across Australia under the name “United”. It operates about 400 of its service stations through commission agents.

4    It is a feature of this proceeding that the applicant’s causes of action are pleaded across three documents: an amended statement of claim; further particulars of the amended statement of claim; and a reply. Some of the causes of action are raised for the first time by way of reply. During the interlocutory hearing, the Court sought clarification of a number of aspects of the applicant’s case and counsel for the applicant obliged by assisting the Court to understand better the issues raised by the pleadings. For their part, while the respondents were critical of the state of the applicant’s pleadings, they have made no application to have them struck out. Indeed, the respondents consented to the applicant filing its amended statement of claim, raising no objection.

5    The following summary of the claims in the proceeding is high-level, being all that is required for the purpose of the adjudication of the applicant’s interlocutory application for discovery.

6    By its amended statement of claim, the applicant alleges that in the course of conducting its business it generated and maintained a body of information that was confidential. That information included –

(a)    the names and identities of its commission agents;

(b)    commercially sensitive pricing information; and

(c)    other commercially sensitive documents concerning the business affairs and operations of its business.

7    The applicant alleges that it entered into a commission agency agreement with the second respondent (Reliance) to which the first respondent (Mr Bomma) was also a party as guarantor. The agency agreement related to a service station in Cairns in Queensland. The applicant alleges that it terminated the agency agreement on 24 February 2024 on the ground of breach.

8    The applicant alleges that the agency agreement contained a number of terms that applied to the performance of the agreement by Reliance, including contractual obligations of confidentiality that applied to both Reliance and Mr Bomma. The applicant also alleges that its confidential information is protected in equity.

9    The claims made by the applicant include conduct that Mr Bomma is alleged to have engaged in towards other agents of the applicant that operated two other service stations located respectively at San Remo on Phillip Island, Victoria, and Claremont in Tasmania. The applicant alleges that Mr Bomma accessed and used the applicant’s confidential information to contact the agents operating those service stations, who were recently appointed, and that he made various threats to them and demands for money either himself, or through intermediaries, in combination with assurances that he would assist them in passing audits conducted by the applicant from time to time. The threats included that he would cause an increase in rent or a reduction in commission payable to the agents if the demands were not met.

10    The allegations in relation to the San Remo service station involve demands for money, a demand that documents be signed transferring a half interest in the corporate agent to Mr Bomma, threats of physical harm, other threats, and assault. The respondents dispute the allegations in relation to the San Remo service station and say that, in or about December 2023, Reliance and the agent for the service station reached a verbal agreement for a loan and investment by Reliance in order to enable the agent to acquire the site. The respondents allege that pursuant to the loan and investment agreement several sums were advanced to the agent, including from third parties, in amounts totalling $101,312. The respondents admit that between December 2023 and February 2024 Mr Bomma attended and telephoned the San Remo site on several occasions, and claim that these attendances related to the loan and investment agreement. In relation to the incident involving an alleged assault, the respondents allege that the assailant was acting in self-defence.

11    In relation to the Claremont service station, the applicant alleges that in or about mid-February 2024 Mr Bomma directed the applicant’s then manager for Tasmania, Davy Ghai, to attend the service station. The applicants allege that, upon attending, Ms Ghai communicated to the director of the agent a demand made on behalf of Mr Bomma to pay a sum of money to Mr Bomma, or to Ms Ghai and another employee of the applicant, Sarthak Oza, and threatened to terminate the Claremont agency agreement if the demands were not met. The respondents deny that they directed Ms Ghai to attend the Claremont service station and say that Reliance had no involvement with the Claremont premises “in January 2024”. By way of further particulars of their defence, the respondents allege that Mr Bomma reached a verbal agreement with the agent for the Claremont service station to make an investment in the business and advanced sums under that agreement as directed by the director of the agent.

12    The applicant also claims that Mr Bomma or Reliance had “an interest, association or influence” over various other United service station agency arrangements that was not authorised by or otherwise disclosed to the applicant. Eight service stations are listed in the particulars of the amended statement of claim. A ninth is pleaded in the reply, which picks up an additional service station identified in the respondents’ further particulars of their defence. In their defence, the respondents claim that in seven of the eight instances, employees of United requested Mr Bomma to assist it in finding commission agents for the sites, which he did. The respondents claim that in six of the eight instances Mr Bomma invested monies with the agents in return for a fixed payment of $6,000 per month in the case of one site, and a share of the monthly net profit for the other sites, which was variously 20 per cent, 30 per cent, or in one case “20 to 30” per cent. In the eighth case, the respondents allege that Mr Bomma loaned the sum of $30,000 to the agent in return for a 50% shareholding, but that the relevant site never became operational. In the case of the ninth site, which was at Woree, the respondents allege that Mr Bomma had been the commission agent for the site until about March 2021, before a new agent entered into a commission agency agreement for the site, and that pursuant to a verbal arrangement with the new agent, Mr Bomma was entitled to receive 50 per cent of the monthly net profit for the site, which he received from March 2021 to late 2023.

13    The allegations in the respondents’ defence in relation to the various agreements or arrangements that are alleged are then pleaded back to the respondents in the applicant’s reply. Shortly stated, the applicant relies on the agreements or arrangements alleged by the respondents in support of further causes of action that are alleged in the reply. No objection has been taken by the respondents to the form of the reply.

14    The allegations in the amended statement of claim that Mr Bomma or Reliance had “an interest, association or influence” over various other United service station sites are associated with further claims that Mr Bomma “accessed or procured access to designated United email addresses for service station sites in relation to which neither he nor Reliance was the commission agent”. The relevant sites are identified in the particulars. In their defence, the respondents admit that Mr Bomma sent emails from one of the email addresses, and plead that the IP addresses for emails from the other sites were linked to an IP address associated with Mr Bomma. The applicant claims that access to the email addresses was for the purpose of business operations for the sites in which Mr Bomma was involved in breach of contractual and equitable obligations.

15    The applicant alleges that different combinations of all of the facts that are alleged give rise to an array of causes of action, namely –

(1)    breach of contractual and equitable obligations of confidence;

(2)    breach by Reliance of an equitable duty of good faith said to attach to it as an agent of the applicant;

(3)    breach by Mr Bomma (but not Reliance) of a fiduciary duty that it is alleged he owed the applicant;

(4)    contravention of s 18 of the Australian Consumer Law by engaging in misleading and deceptive conduct;

(5)    contravention of s 21 of the Australian Consumer Law by engaging in unconscionable conduct; and

(6)    the tort of interference with contractual relations, which counsel for the applicant clarified was the tort of inducing breach of contract.

16    The relief claimed by the applicant includes damages, equitable compensation, permanent injunctions, and an order directing Mr Bomma and Reliance to return any funds that they have received as a result of the claimed contraventions of the Australian Consumer Law.

The application for discovery

17    In the above circumstances, the applicant seeks discovery of documents by the respondents in several categories. The issues on which the parties joined were whether discovery should occur before affidavit evidence is filed, and if so, whether two of the eight categories of documents were too wide.

18    In general terms, the categories of documents that are sought by the applicant relate to –

(1)    the claimed oral agreements between the respondents and the agents for the various service station sites that are the subject of the respondents’ pleadings;

(2)    documents, including telephone records and call logs, relating to the claimed threats, assault, and demands alleged by the applicant in the amended statement of claim;

(3)    documents relating to the respondents’ claim in their defence that the applicant sought Mr Bomma’s assistance in locating commission agents;

(4)    bank statements relating to the various payments that the respondents allege in their defence and their further particulars; and

(5)    documents relating to the circumstances in which Mr Bomma requested or was provided with the identified email addresses of the service station sites that are in issue.

19    The applicant advanced five reasons why the Court should make an order for discovery prior to the filing of evidence. The first reason was a claimed information asymmetry. The applicant submitted that the nature of the conduct alleged against the respondents was such that it was concealed from the applicant. In relation to the various loan and investment arrangements alleged by the respondents, the applicant submitted that it should have the opportunity to interrogate the respondents’ documents relating to those arrangements prior to filing its evidence. The second reason was that discovery before evidence would avoid the risk of fragmentation, which would likely occur if the applicant was ordered to file its affidavit evidence before discovery and result in evidence being filed in a piecemeal fashion. The third reason was that the prospects of an early settlement in this proceeding would likely be enhanced by an order for discovery before evidence, as the discovery may give the parties an opportunity to appraise the strength of their respective cases before costs were incurred in the preparation of affidavit evidence. The fourth reason was the prospect of amendments to the pleadings, which might be better informed if discovery were to take place sooner rather than later. The fifth reason was the prospect that this proceeding might be consolidated with another proceeding (VID1147 of 2024) that the applicant has commenced against three former employees whom the applicant alleges were involved with Mr Bomma in at least some of the events giving rise to this proceeding.

20    For their part, the respondents resisted making discovery on five grounds.

21    First, the respondents were critical of the state of the applicant’s pleadings, submitting that wrongful conduct had not been properly identified and particularised, that there was an absence of a causal connection between the conduct alleged and loss, and that in some instances alleged loss was not pleaded at all. Other criticisms included: the failure to allege specific information said to be confidential; uncertainty as to how various allegations are linked to a misuse of generic confidential information; and that the applicant’s pleading that the respondents had “an interest, association or influence” over various other United service station sites was vague and obscure. Several criticisms were also directed to the applicant’s pleading of claimed loss and relief. The respondents submitted that the applicant should make any amendments to its pleadings forthwith, and before discovery is ordered.

22    Secondly, the respondents submitted that the applicant’s claimed “information asymmetry” was no answer to an improperly pleaded case. The respondents emphasised their submission that the claimed unlawful conduct of the respondents had not been properly identified. The respondents submitted that it was no answer to say that the respondents know their own misconduct when it had not been properly identified for them. The respondents submitted that on the state of the pleadings it was open to the Court to infer that the applicant’s case was somewhat speculative, and that the discovery was sought to establish what, if any, viable causes of action existed.

23    Thirdly, the respondents submitted that evidence would limit the ambit of discovery. The respondents submitted that it was troubling that the applicant had submitted that if the applicant was ordered to file its evidence without the benefit of discovery, then it would require an extended timetable to do so. The respondents submitted that, having commenced the proceeding, the applicant should have all the evidence available to it to substantiate its claims, at least at a prima facie level. In relation to the applicant’s submission that it should be able to interrogate any relevant documents relating to alleged loan and investment agreements, the respondents submitted that this formed no part of the applicant’s pleaded case, but had been pleaded by way of defence to the applicant’s obscure claims about unauthorised “interest, association or influence”. The respondents submitted that the preferable course was that there should be a proper closure of pleadings, followed by lay evidence, that would then limit the ambit of discovery.

24    Fourthly, in response to the applicant’s submission that discovery might facilitate an early settlement, the respondents submitted that the prospect of settlement was not a factor that should have any significant weight, in circumstances where the applicant had not properly identified the case to which the documents are said to be relevant.

25    Finally, the respondents submitted that no weight should be given to the prospect that there might be some overlap between this proceeding and proceeding VID1147/2024. The respondents submitted that the suggested overlap is tangential at best, and that currently there was no application that the proceedings be consolidated or heard together, and that the suggested overlap was not a principled reason to order discovery before evidence.

Discovery should be made by the respondents before evidence

26    The principles to be applied to the determination of this procedural application are not in doubt. Any discretionary decision to order discovery must be exercised in a way that best promotes the overarching purpose and its objectives as provided for by s 37M(1) and (2) of the Federal Court of Australia Act 1976 (Cth). In addition, the discretion is to be informed by the policy underlying r 20.11 of the Federal Court Rules, which provides that a party must not apply for 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, reflecting the language of s 37M(1)(b) of the Act.

27    In relation to judicial guidance as to the application of the principles, I was referred to a number of cases where, in different circumstances, judges have ordered, or have declined to order, discovery before evidence. It is unnecessary to consider these decisions, because it is not appropriate to reason from the facts and circumstances of one case to another, particularly in relation to a discretionary decision relating to practice and procedure. Having said that, I will make three points.

28    First, one of the purposes of discovery is the production of documents that might assist the other party in the preparation and proof of its case. This purpose is reflected in the scope of standard discovery provided for by r 20.14(1) and (2) of the Federal Court Rules. The present application is for non-standard discovery to which the criteria in r 20.14(1) and (2) may apply: see r 20.15(1). The extent to which a party may make allegations in a pleading, particulars of which are dependent on discovery, will vary. An allegation in a pleading must be based upon a belief on reasonable grounds that the factual material already available provides a proper basis to do so: see r 64 of the Legal Profession Uniform Conduct (Barristers) Rules 2015; r 21.3 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015; and r 16.01(c) of the Federal Court Rules. Subject to compliance with these obligations and the obligation in s 37N of the Federal Court of Australia Act to act consistently with the overarching purpose, it is open to a party to augment pleadings after having obtained discovery: see Australian Broadcasting Corporation v Chau Chak Wing [2019] FCAFC 125; 271 FCR 632 at [139]-[140].

29    Secondly, in this Court there is no assumption that discovery should ordinarily follow evidence. That is the position in the Equity Division of the Supreme Court of New South Wales: see Practice Note SC Eq 11 at [4]. But it is not the position in this Court, and any such prima facie position would not be consistent with the considerations that I have referred to above that control the exercise of the Court’s discretion in making procedural orders, and would not be consistent with the flexible approach to discovery that is promoted by Part 10 of this Court’s Central Practice Note: National Court Framework and Case Management (CPN-1).

30    Thirdly, the relevant principles and judicial guidance were carefully reviewed by Rangiah J in Construction, Forestry, Maritime, Mining and Energy Union v Os Mcap Pty Ltd [2020] FCA 1435 at [12]-[30], concluding with his Honour’s reference to “the necessity for the appropriate procedure to be tailored to the particular circumstances of the particular case”, which I respectfully adopt.

31    On this interlocutory application, I do not give any weight to the respondents’ submission that the applicant’s pleadings are not satisfactory as a reason for refusing to make the order for discovery at this stage. Whatever criticisms might be levelled at the applicant’s pleadings, the respondent has not sought to have them struck out. As to the prospect that the applicant might apply to amend its pleadings, this does not favour one side or the other. The non-standard discovery that is sought might lead to the applicant augmenting or refining its existing case, which would fall within a legitimate use of discovered documents.

32    The respondents placed much emphasis on a submission that because the respondents had pleaded in their defence the various agreements or arrangements in respect of which discovery was sought by the applicant, the respondents will have to produce any relevant documents as part of their affidavit evidence, and that there would be double handling if the documents had to be discovered also. I do not find this submission persuasive. As I have mentioned, the applicant has pleaded back to the respondents the agreements in support of causes of action that the applicant maintains. The applicant will have the onus to prove the facts giving rise to those agreements. It is unrealistic to think that the respondents will inevitably prepare a careful evidentiary case in aid of the applicant’s causes of action, and they are not required to do so. The agreements alleged in the respondents’ defence and their further particulars are likely to be peculiarly within their knowledge, and discovery of documents relating to them should be given before the applicant is required to file its evidence.

33    In relation to the documents relating to the claimed threats, assault, and demands alleged by the applicant in the amended statement of claim, the same reasoning applies. It is unrealistic to think that in a case like this the respondents will bring forward a complete documentary record relating to those issues as part of their evidentiary case. The same considerations apply to the other issues reflected in the discovery categories sought, namely the communications with the applicant’s former managers that are alleged by the respondents, the bank statements, and documents relating to the circumstances in which Mr Bomma used the identified email addresses.

34    I give no weight to the suggestion that discovery before evidence may promote settlement, or to the prospect that this proceeding might be consolidated with proceeding VID1147/2024. Those considerations are speculative and have no bearing on my decision.

35    For all the above reasons, the applicant should have the benefit of discovery by the respondent of any documents within the categories sought in aid of the preparation of its evidentiary case.

36    As to the formulation of the categories, in the event that the Court determined that there should be discovery, the formulations of categories numbered 1 to 6 were agreed. Counsel for the applicant proposed some variations to the two categories that were not agreed. The first variation was that “banking records” should be substituted by “bank statements”, and that change should be made. The second variation was to substitute for the phrase “circumstances in which [Mr] Bomma requested, or was provided, access to email addresses” for the identified services stations, the phrase, “the manner by which and reasons for which Mr Bomma requested, or was provided, access to email addresses”. The change in language was said by counsel for the applicant to meet an objection made on behalf of the respondents. But having heard the respondents’ further objection to the reformulated description, I consider that the original formulation is clearer and less liable to result in oppression. The category should be expressed in the form as initially drafted.

Conclusion

37    I will make orders substantially in the terms sought in the interlocutory application. I will hear the parties on the time within which discovery should be made, and on costs.

Associate:

Dated:    31 March 2025