FEDERAL COURT OF AUSTRALIA

Zulic v CMC Markets Asia Pacific Pty Ltd (No 3) [2025] FCA 464

ORDERS

THE COURT ORDERS THAT:

1.    By 29 August 2025, the Respondent is to give verified discovery of:

(a)    the data described in categories 1(a), and 2 in the table at Annexure A to these Orders; and

(b)    documents responsive to categories 6(b), 7(a), 7(b) and 8(a)–(f) in the table at Annexure A to these Orders.

2.    Discovery by the Respondent is to be produced in a manner that is in accordance with the Electronic Exchange Protocol agreed between the parties.

3.    The amended interlocutory application otherwise be dismissed.

4.    The costs of the applicants’ interlocutory application dated 27 February 2025 and amended interlocutory application dated 30 April 2025 be costs in the cause.

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

Annexure A

Annexure B

Category 8 – Potential GM Witnesses

REASONS FOR JUDGMENT

JACKMAN J:

Introduction

1 This is an application by the applicants for further discovery to be given by the respondent. An earlier dispute concerning discovery was the subject of my judgment on 8 May 2023 in Zulic v CMC Markets Asia Pacific Pty Ltd [2023] FCA 469; (2023) 167 ACSR 106. In that judgment, I summarised the allegations made by the applicants at [3]–[9]. Substantial discovery has now been given by the respondent, comprising some 26,000 unique documents from a “review pool” of 1.7 million documents.

2 The applicants filed an interlocutory application on 27 February 2025 seeking further discovery, which was amended by way of an amended interlocutory application which I granted leave to file at the hearing. Some categories of discovery have been agreed between the parties and others were modified in the amended interlocutory application. Six categories remain in dispute.

3 I approach the disputed categories bearing in mind r 20.11 of the Federal Court Rules 2011 (Cth) (the Rules), to the effect 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. The rule reflects the overarching purpose of the civil practice and procedure provisions laid down by s 37M of the Federal Court of Australia Act 1976 (Cth). As the discovery which is sought is by way of categories, the orders sought are for other than standard discovery. Accordingly, r 20.15 of the Rules applies. Neither party has submitted that I should not apply any of the criteria for standard discovery mentioned in rr 20.14(1) and (2), which refer to discovery being of documents that are directly relevant to the issues raised by the pleadings or in the affidavits, meaning that the documents must meet at least one of the following criteria:

(a) the documents are those on which the party intends to rely;

(b)    the documents adversely affect the party’s own case;

(c)    the documents support another party’s case;

(d)    the documents adversely affect another party's case.

The discovery of documents is also confined to those which, after a reasonable search, the party is aware of, and which are, or have been in, the party’s control. The term “control” is defined as meaning possession, custody or power.

Category 1(a): Trading/loss data

4 Category 1(a) is as follows:

A copy of data, in the format of the Raw Data Sheet, containing the data in the fields set out in the Raw Data Sheet, for the period from 1 April 2016 to 30 April 2021.

(For the purposes of this category, “Raw Data Sheet” means the worksheet entitled “RAW DATA” in the excel spreadsheet discovered by the respondent with document identification number CMC.200.021.8924.)

5 The applicants seek to prove that the respondent engaged in a system of conduct or pattern of behaviour which was designed to induce group members to commence and continue trading in financial products, known as “contracts for difference” (CFDs), and binaries offered by the respondent, to increase their trading volume despite ongoing loss-making, to continue effecting the payment of fees, and encourage inactive customers to recommence trading. The applicants allege that from the beginning of the Relevant Period, being April 2011 to April 2021, the respondent knew or ought to have known that the significant majority (at least approximately 65%–72%) of retail investors lost money, or were likely to lose more money, trading the CFDs issued by the respondent than they won, and that from the time the respondent commenced offering binaries to retail investors, the respondent knew or ought to have known that the significant majority (approximately 80%) of retail investors lost money or were likely to lose more money on binaries trading than they won. The applicants submit that the likelihood of an inference of such a system of conduct or pattern of behaviour being drawn in their favour is enhanced by a higher number of individual instances being relied on in their evidence, as illustrated by the principles discussed in Australian Securities and Investments Commission v AGM Markets Pty Ltd (in liq) [2020] FCA 208; (2020) 380 ALR 27 at [387]–[392] (Beach J), and the evidence referred to in Australian Securities and Investments Commission v Union Standard International Group Pty Ltd (No 4) [2024] FCA 1481 at [153]–[157] (Wigney J).

6 The Raw Data Sheet referred to in category 1(a) forms part of an excel spreadsheet which has been discovered by the respondent. The data contained in the Raw Data Sheet was extracted by the respondent from its systems to assist it in responding to a notice issued by ASIC under s 912C(1) of the Corporations Act 2001 (Cth) (Corporations Act). The Raw Data Sheet contains, for each Account and Customer ID, among other things, an annual summary of the profit or loss sustained on the account (both with and without factoring in fees) for the period 1 April 2016 to 31 March 2017. For example, the information relating to the second applicant in the Raw Data Sheet shows that he was classified as a retail customer, who traded both CFDs and binaries, the number of CFD trades he made, with a figure for total turnover and total losses when transaction fees are included, and a total profit if transaction fees are excluded. It also shows a figure for total rebates, and the number of binary trades made, with a figure for total turnover and for total losses, when transaction fees are included, and when they are excluded. The Raw Data Sheet provides the data required to calculate loss ratios across the respondent’s customer base for that financial year in relation to both CFDs and binaries. For example, the second worksheet of the Raw Data sheet shows that 77% of customers lost money trading CFDs and 83% of customers lost money trading binaries between 1 April 2016 and 30 March 2017. Further, the Raw Data Sheet enables the reader to isolate and consider separately the customers who fall within a particular category, such as “retail”, as distinct from “partner” or “institutional”. It appears that some 10,457 customers were classified as “retail” in the Raw Data Sheet for 1 April 2016 to 30 March 2017.

7 In addition to providing the data required to calculate loss ratios and pertaining to client classification, the Raw Data Sheet provides:

(a)    information on the significance of losses suffered for each customer, and therefore the trends in the occurrence of such losses across the entire customer cohort and across years; and

(b)    further relevant detail about each customer’s trading history, including (i) the division of the customer’s trading between CFDs and binaries; (ii) the number of trades of each kind; (iii) the amount paid in fees and the effect of those fees on the customer’s profitability; and (iv) the amount received by the customer in rebates, and the effect that has on the customer's profitability.

8 The applicants thus seek information, in the format of the Raw Data Sheet, to show trading by individual customers over a five-year period, and in particular the losses and profits of individual customers from time to time. The applicants intend to rely upon that information in support of their allegations as to a system of conduct or pattern of behaviour which was unconscionable. Further, in relation to their ‘suitability allegations’, which will be discussed below, the applicants contend that the Raw Data Sheet will enable them to identify customers (of whom there were apparently about 2,500) who failed the screening test when seeking to register on the respondent’s platform but went on to trade on the platform after acknowledging a further set of disclosures. The Raw Data Sheet is then said to be relevant in showing whether such customers traded at a profit or loss.

9 I accept that the Raw Data Sheet information is directly relevant to those facts in issue.

10 Although some aggregated data is already available to the applicants from the discovery of weekly trading reports, which show in bands corresponding to monetary ranges how much was won or lost each week and by how many customers, those reports do not descend to the level of individualised trading performance over time provided by the Raw Data Sheet. Accordingly, the applicants submit, and I accept, that they are justified in seeking further granularity by way of the kind of individualised information sought in category 1(a).

11 The respondent submits that the pleaded allegations are confined to the overall majority position of customers, rather than individualised positions. I do not accept that submission. The pleading does contain allegations as to a majority of customers suffering trading losses, but they do not confine the broader allegations as to a system of conduct or pattern of behaviour. The allegations as to a system of conduct or pattern of behaviour may be proved by inference from a sufficient number of individual instances to enable the inferences contended for to be drawn. It is neither necessary nor desirable for that evidence to be pleaded. In any event, generalised allegations as to the outcome for a majority of customers do not mean that the applicants are unable to prove the position of individuals who comprise that majority.

12 As to whether the category sought is overly burdensome, the respondent’s evidence indicates that there is only one person in Australia who is able to extract the relevant data to produce the Raw Data Sheet and will require three or four weeks to do so. Although the applicants have expressed scepticism as to that estimate, I accept the respondent’s evidence. As the person in question likely has other tasks to perform, it is not possible for him or her to devote a continuous block of three or four weeks to the exercise. I do not regard that as an overly burdensome task in light of the potentially probative value of the documents sought. Accordingly, in my view the applicants request for discovery of category 1(a) should be granted.

Category 2: Suitability data

13 Category 2 seeks the following:

A copy of the following data for each financial year of the Relevant Period [as defined in the Amended Statement of Claim]: Year; Month; Business Date; Pxinsname or Application ID; Trading_Account_ID; Customer_ID; Person_ID; Identity_ID; Profit_Centre; Appropriateness_Status; Appropriateness_Reason; Agreed_To_Proceed; Acceptance_Of_Assessment; App_Status; Withdraw_Or_Reject_Reason; and Type.

14 The applicants make a number of allegations concerning the respondent failing to adequately assess customers’ suitability for trading and continued trading in CFDs or binaries. The data sought in category 2 is said by the applicants to relate to those issues because it is directed to assessing:

(a)    the number of customers whom the respondent itself determined were not suitable to trade CFDs and binaries, but were nevertheless permitted to open an account after acknowledging a risk warning;

(b)    the number of customers who applied for an account multiple times after failing the suitability assessment and, after multiple attempts, were permitted to open one; and

(c)    relevant information about the status of applications and the reasons for an applicant’s rejection or withdrawal from the application process.

15 Further, the applicants submit that suitability data for the period 1 April 2016 to 30 March 2021, in combination with the data obtained from the Raw Data Sheet as sought in category 1(a), will facilitate an analysis of those clients who failed the suitability assessment but who were still permitted to trade, and went on to make significant losses. The applicants wish to be able to link the two data sets by way of Account and Customer IDs, that being reflected in the form of data sought by categories 1(a) and 2.

16 The applicants acknowledge that they have received discovery of some material that contains data of the kind sought by them in category 2. For example, they refer to a contemporaneous spreadsheet created on about 3 June 2015, listing customers by trading account and customer ID, who failed the suitability assessment in the period March 2013 to June 2015, being a total of 2,490 customers in that period. However, the applicants point out that this data is only for a limited period and is incomplete in certain respects.

17 I accept that the documents sought by way of category 2 are relevant to the matters identified by the applicants. Contrary to the respondent’s submission, the allegations are not confined to deficiencies in the process, as such, of assessing applications. Those processes were the subject of category 20 of the initial discovery in 2023, but those documents do not extend to showing the respondent’s actual responses to potential customers who did not pass the respondent’s assessment of suitability. That is a matter which can, itself, also bear on an alleged failure to assess suitability, irrespective of what the policy documents themselves say.

18 As to the applicants’ intention to link the information from category 2 with that obtained from category 1(a) to see how group members who failed the testing but still proceeded to trade actually performed in their trading, the respondent submits that in order to be of probative value, one would need to know more about the individual circumstances of those customers to draw any link between their trading results and the respondent’s processes for assessing suitability. The respondent therefore submits that this category should be limited to a nominated set of sample group members. In my view, the extent to which the documents sought by category 2 turn out to be of probative value may well depend on what the material actually shows, and how stark it appears to be, one way or the other. Even if the respondent’s submission turns out to be well-founded, that the material sought in category 2 will not in itself be of substantial probative value, it may well be that that material, in conjunction with other material, may provide a significant step towards the applicants establishing their case, even if the category 2 material is not a self-sufficient one.

19 The respondent also points out that category 2 is sought for a 10-year period, in contrast to category 1(a) which is sought for a 5-year period. However, I do not regard that difference as a valid objection to the width of category 2. A longer period for category 2 is justified by the scenario where a customer may have failed the testing, but opened an account before 1 April 2016, and then traded after 1 April 2016 as revealed by the Raw Data Sheet information sought in category 1(a).

20 The respondent’s evidence is that the exercise of giving discovery in response to category 2 would take a combined total of 8 days. I do not regard that as overly burdensome given the relevance of the material sought. Accordingly, I regard category 2 as an appropriate category for discovery.

Category 3: Approach to hedging

21 Category 3 deals with the approach to hedging by the respondent in the following terms:

A copy of all documents which were created, sent or received by the Hedging

Custodians during the Relevant Period which refer or

relate to:

(A)    the use of a “C Book”:

(i)     as described in an email from Peter Cruddas to others (including Ryan O’Doherty) dated 21 December 2011 (CMC.200.107.8157); and/or

(ii)    as described in the CS Confidential “Back Office Workbook” dated 9 October 2014 (CMC.103.005.6331) at pages 31 to 32;

(AA)     in respect of the following risk book allocations: TOXIC; FLOW; RN1; RN2; RN3; RN4; RN5 (Risk Book Allocations):

(i)     any criteria by which the Respondent’s clients were allocated to one or more of the Risk Book Allocations; and/or:

(ii)     any policy, procedure, instruction or guidance setting out the approach to hedging (or not hedging, or only partially hedging) one or more of the Risk Book Allocations;

(D)    any decisions relating to changes in approach or strategy as to:

(i)     whether to not hedge (or only partially hedge) trading by the Respondent’s clients (whether or not those clients are described as “C Book”; and whether or not that decision was made by the Respondent, or by CMC Markets UK plc following it assuming the risk of the trading by the Respondent’s clients, or by another entity within the corporate group of which the Respondent forms part), but not including individual changes to the trading limits, stop loss limits, take profit limits or other similar limits; and/or

(ii)     the criteria for the allocation of the Respondent’s clients to any particular Risk Book Allocation.

For the purposes of this category, “Hedging Custodians” means Peter Cruddas, Matthew Lewis (for any newly agreed search terms only), and the 3 CMC APAC employees employed during the Relevant Period with the title Dealer or Quantitative Dealer referred to in the affidavit of Georgina Farrant dated 24 March 2025.

22 The applicants have drawn my attention to a document entitled “CSC003 Backoffice Version 1.2”, dated 11 May 2007, which refers to various categories of customers. Those in “A Book” had historically made relatively large profits in trading, and hedges were thus implemented for their individual trades in order to reduce risk and avoid exposure to companies within the CMC Group. Most customers were said to be “B Book”, who were hedged collectively, as they sometimes profit from trades but at other times, make losses. A small number of clients were labelled as “C Book”, and were not hedged at all, as they appeared most frequently to lose money. The labels and nomenclature changed over time, as is picked up in para (AA) of category 3.

23 The applicants say that their key concerns are twofold:

(a)    the applicants wish to identify what policies were in place in respect of hedging and how those policies changed over time; and

(b)    the applicants wish to establish what criteria were applied in putting customers into the “C Book”, or its counterpart(s) under later labelling.

24 The first of those concerns may be readily disposed of, as it appears to have been captured already by category 17 of the initial discovery categories ordered on 9 May 2023.

25 As to the second of the key concerns, while I accept that that concern is relevant to the issues in the case, the difficulty with the category arises from the fact that the respondent’s customers’ trades are hedged via a back-to-back trade with CMC Markets UK plc (UK parent), and, on the evidence, the risk is managed at the group level by the respondent’s UK parent. It thus appears to be the UK parent which decides which risks should be hedged and how customers should be classified for that purpose. It appears to me that the overwhelming likelihood is that any relevant documents showing the criteria which are applied in putting customers into the “C Book” (or its later counterparts) and the use of the “C Book” (or its counterparts) will not be within the possession, custody or power of the respondent, but will be within the control of its UK parent.

26 Category 3 is limited to documents which were created, sent or received by the “Hedging Custodians”. One of those is Lord Cruddas, whose position is dealt with below in relation to category 6(a). The other “Hedging Custodians” are Mr Lewis (who was the CEO of the respondent), and three relatively junior employees of the respondent. Mr Lewis’s mailbox contains about 1.1 million items including attachments. The three employees appear to have been involved in preparing and sending emails setting out daily positions on net hedges, but not in deciding who should be included in the “C Book”, or its counterparts. Their combined mailbox size is about 1.3 million emails (or 2 million documents including attachments). Given the evidence that the hedging of risks was managed by the UK parent, the prospect of any relevant documents emerging from discovery by the respondent of documents created, sent or received by Mr Lewis, or any of those three junior employees, appears to me too speculative and remote to justify the substantial exercise in reviewing a very large number of documents for this category, even in its narrowed terms. Accordingly, I do not regard an order for discovery of category 3 as facilitating the just resolution of the proceeding as quickly, inexpensively and efficiently as possible, and thus refuse this discovery request.

Category 4: Instant messaging records

27 Category 4 seeks discovery in the following terms:

Records of all chat messages from Microsoft Teams and Microsoft Lync (later rebranded to ‘Skype for Business’) in the period 1 June 2016 to 30 April 2021 between two or more of the following individuals:

(A)    Matthew Lewis and any one or more of Sian Menzies, Ashley Glover, Catherine Gallagher, Paul Casey, Chris Fulton, Chris Smith, Dione Marshall;

(B)    Paul Casey and any one or more of Sian Menzies, Catherine Gallagher, Chris Fulton, Dione Marshall;

(C)    Chris Fulton and any one or more of Sian Menzies, Ashley Glover, Catherine Gallagher, Dione Marshall;

(D)    Dione Marshall and any one or more of Catherine Gallagher, Sian Menzies, Ashley Glover;

(E)    Peter Cruddas and any one or more of Matthew Lewis, Chris Fulton, Paul Casey,

which refer or relate to:

1.    the provision of rebates, inducements and other incentives to trade to CMC’s clients or prospective clients;

2.    the marketing of CMC’s products;

3.    the demographics of CMC’s clients and/or prospective clients;

4.    the CMC Group’s hedging policies and practices;

5.    CMC’s client qualification processes;

6.    CMC’s consideration of Australian and overseas regulatory materials;

7.    any dealings with ASIC, ACCC, FOS or AFCA;

8.    the known or anticipated risks of CFDs and binaries, or their suitability for retail clients;

9.    CMC’s practices for communicating with its clients or potential clients; and/or

10.    client complaints.

28 The applicants submit that this category is sought in circumstances where it is now apparent to them that the respondent’s employees use chat functionality, but they observe that hardly any chat records have been discovered in the initial discovery. The applicants say that, during the conferral process for the initial discovery, they did not understand there to be instant messages in the materials to which search terms were proposed to be applied. The applicants say that they have concerns about:

(a)    the use of search terms to filter instant messaging records to identify relevant conversations for discovery in this proceeding, in that they say that instant messaging is typically a less formal method of communication than email, and thus one might expect abbreviations or shorthand to be used in instant messages, which limits the usefulness of search terms in this context; and

(b)    the way in which instant messaging records were reviewed for relevance, in that the applicants say that they cannot be sure that the instant messaging records in any one conversation were reviewed by one person in chronological order such that the meaning of a full conversation could be understood, nor can they be sure that the conversation giving context to a single message in a “chat” has been discovered.

29 The applicants say that, in order to confine the work required to respond to the proposed category, the instant messages now sought are limited in that:

(a)    they are directed to five individuals only, and only to messages by those individuals with a small number of others;

(b)    they are directed to specific topics only; and

(c)    they are limited to the period from 1 June 2016 to 30 April 2021.

30 The applicants made clear in oral argument that they do not want search terms to be used for chat messages. Accordingly, all of the chat messages which respond to the ten topics between the nominated people will have to be read and reviewed by natural persons.

31 The respondent submits that there is no deficiency which has been established in the discovery to date, and thus the concerns expressed by the applicants are speculative. The respondent submits that the likely explanation for the few instances of such messaging being discovered is that instant messaging was only rarely used in relation to matters concerning the initial discovery categories. Further, the respondent submits that it would be a highly burdensome exercise for the respondent to re-perform discovery for ten new categories, even with the limitation by way of the nominated persons. The evidence indicates that the pool of documents is approximately 95,000 messages and attachments, and it is not possible to say at this stage how many must be reviewed as reflecting the topics identified in category 4.

32 In my view, the applicants have not demonstrated a sufficient basis to justify such a burdensome exercise. Accordingly, I do not regard it as appropriate to order discovery of category 4.

Category 6(a): Lord Cruddas

33 Category 6(a) seeks the following:

Documents in the mailbox and personal folders of Peter Cruddas (including emails and email attachments) dated during the Relevant Period that are:

(A)     responsive to any of the search terms previously run over the Cruddas Document Set (as identified in paragraph 5(b) of Baker McKenzie’s letter dated 26 March 2024); and

(B)     responsive to:

(i)     one or more of the discovery categories in Annexure A to the orders of 9 May 2023 (save for any requirement for the document to be sent, received or created by a specific director or officer); and/or

(ii)    categories 3 and 4 of this Application.

34 Lord Cruddas resides and works in the UK and is employed by CMC Markets UK plc. Lord Cruddas is the founder of the CMC Group, being the corporate group of which the respondent forms part. He was a director and the Executive Chairman of the UK parent company (until 27 March 2013), and a director and Chief Executive Officer of that company thereafter. He has been, and remains, a non-executive director of the respondent.

35 The applicants have drawn my attention to correspondence in which Lord Cruddas indicates that he is not prepared, voluntarily, to give access to the respondent to review his emails and does not propose to do so himself.

36 The applicants rely on the principle (which is accepted by the respondent) that a company has control of emails (and other documents) sent and received by its own director, acting in that capacity: Re Kavia Holdings Pty Ltd (Administrators appointed) (Receivers and Managers appointed) [2013] NSWSC 1269 at [44] (Bergin CJ in Eq); BSO Network Inc v EMClarity Pty Ltd [2020] QSC 186 at [20] (Brown J). The latter case also provides authority for the proposition that where a person is acting in dual or multiple roles, a document will be within the control of each entity for which the person is acting, if it is in the control of that person. The applicants accepted during oral argument that category 6(a) must be limited to documents sent, received or held by Lord Cruddas in his capacity as a director of the respondent, irrespective of whether he was also acting in another capacity (which I refer to below as the Qualification).

37 The applicants acknowledge that the respondent has already given discovery of documents falling within the initial categories of discovery from what is referred to as the Cruddas Document Set. The respondent’s solicitor describes the process undertaken as follows:

(a)    the respondent identified the custodians who were most likely to have exchanged emails with Lord Cruddas, being six Key Custodians (being directors, former directors or heads within CMC at the relevant time) and another eight custodians from the ranks of senior executives or directors of the respondent, the compliance department’s shared mailbox, and an additional 71 mailboxes belonging to employees. Searches were then conducted over those custodians’ mailboxes to identify emails sent to or from Lord Cruddas, including those merely copied or blind copied to him. The results of the searches of those 86 mailboxes are described as the Cruddas Document Set;

(b)    the respondent then ran 540 of the agreed search terms over the Cruddas Document Set; and

(c)    discovered any documents from the search results that fell within one of the discovery categories ordered on 9 May 2023.

38 That process resulted in 218 emails being discovered where Lord Cruddas was sent, copied to or received the final email in a chain. In addition, a further 185 emails were identified where Lord Cruddas was included on an initial or interim email in the chain, but not the final email in the chain.

39 Evidence is also given by the respondent’s solicitor on information and belief from Lord Cruddas that:

(a)    the vast majority of the emails that he sent or received during the Relevant Period were sent or received in his capacity as the director and Executive Chairman of the UK parent or as its Chief Executive Officer; and

(b)    in the ordinary course, emails that he sent or received in his capacity as a director of the respondent were copied to other directors or senior executives of the respondent.

40 In my view, the applicants have not demonstrated any deficiency in discovery, but merely a suspicion that not all relevant emails involving Lord Cruddas (and satisfying the Qualification) have been discovered. The evidence indicates that Lord Cruddas’s mailbox and personal drive contain about a million documents over the 10-year Relevant Period. It is not known how many documents would need to be reviewed once the search terms have been applied to that large body of emails. That review, however, would have to be conducted not only against the existing discovery categories, but also to ascertain whether particular emails satisfy the Qualification. That would be a very substantial task, particularly as the Qualification is likely to involve factual questions which are not straightforward, and which may require substantial amounts of time on the part of Lord Cruddas himself.

41 In my view, the prospect of that exercise yielding significant probative material which has not already been discovered by way of the Cruddas Document Set is too remote to justify the time and expense involved. Accordingly, I reject category 6(a).

42 For the same reason, I reject the applicants’ alternative application for a Sabre order directly against Lord Cruddas, modelled on the order made in Sabre Corporation Pty Ltd v Russ Kalvin’s Hair Care Co (1993) 46 FCR 428 (Lockhart J).

43 In the further alternative, the applicants seek leave to issue a subpoena to Lord Cruddas. Without deciding whether such a subpoena could be issued in principle to a person residing in the United Kingdom, I would reject the application for the discretionary reasons already given for refusing the order for discovery.

Category 8: Group member documents

44 Category 8 seeks the following:

8 (a) Trading data

A copy of data, in the format of the spreadsheet CMC.102.002.0625, containing the sheets and data in the fields set out in CMC.102.002.0625, for the Potential GM Witnesses [as defined in Annexure B]

8(b) Telephone call recordings and records

i) A summary of CMC’s telephone calls with the Potential GM Witnesses in the format of CMC.018.003.0031

ii) Recordings of any telephone calls between CMC’s employees and/or agents and the Potential GM Witnesses

8(c) Application and suitability assessment

i) Application forms completed by the Potential GM Witnesses to open a CFD trading account with CMC

ii) a screenshot of the “knowledge & experience” tab within CMC’s internal customer relationship management (CRM) software for each application completed by the Potential GM Witnesses

8(d) Customer Value Summary

A screenshot of the top portion of the “value” tab (being the portion shown in CMC.102.002.0393) within CMC’s CRM software for the Potential GM Witnesses

8(e) Interaction history

A spreadsheet recording the interactions between CMC and the Potential GM Witnesses in the form of CMC.102.002.0616

8(f) Email summary

A spreadsheet recording the email correspondence between CMC and the Potential GM Witnesses in the form of CMC.102.004.7453

45 The applicants are presently contemplating calling 15 nominated group members (in addition to the two applicants) at the initial trial, as part of their evidence on liability as to the existence of a system of conduct or pattern of behaviour which was unconscionable. They thus seek the documents in category 8 relating to the individual positions of those 15 potential witnesses. I accept that the documents sought by category 8 are relevant to the pleaded issues, particularly in light of the general observations above as to the prospects of inferences being drawn favourably to the applicants being enhanced if the applicants are able to demonstrate a sufficiently large number of individual instances as the basis of the inferences which they seek.

46 The applicants have not, as yet, sought to have the 15 potential group member witnesses appointed as “sample group members”, and they may or may not decide to take that step in the future. The respondent submits that discovery of documents relating to the individualised positions of those 15 potential group member witnesses cannot be ordered unless and until they are formally appointed, either as applicants or as sample group members. I was not taken to any authority which requires such formal appointments as a condition of an order for individualised discovery of this nature, and I do not regard such a formal appointment as necessary in order to justify the discovery sought. The respondent also submitted that there is a risk that the 15 potential group member witnesses will have to give evidence twice, unless their whole claims are bought forward at the initial trial, including questions of causation and quantification of loss. There is much to be said for that position, and I will give further consideration to that matter when the time comes for deciding on the proper scope of the initial hearing.

47 I do not regard the respondent’s evidence as to the burden of complying with category 8 as sufficient to outweigh the likely probative significance of the documents sought. Accordingly, in my view, it is appropriate to order discovery in accordance with category 8.

Costs

48 The parties were commendably able to reach agreement on some of the aspects of the application of further discovery. As to the categories which were in dispute, each party has achieved a roughly equal measure of success. In those circumstances, the appropriate order for costs is that the costs of the application for further discovery be costs in the cause.

Potential application for security for costs

49 The respondent seeks a further order to the effect that it be given leave to seek a variation for the date for compliance with the order for further discovery (namely, 29 August 2025) if by 30 May 2025 security for costs for the estimated costs of that discovery, as well as costs incurred since 14 October 2024, in an amount and form acceptable to the respondent has not been provided. The date of 29 August 2025 is the date proposed by the respondent (and not opposed by the applicants) by which the respondent says that it will be able to comply with the order.

50 To date, security for costs has been provided consensually by the applicants, in a total amount of about $4.6 million. The respondent says that it does not have the benefit of security for costs incurred after 14 October 2024, but I do not have the benefit of sufficient material to assess whether the security provided to date is adequate.

51 Now that the categories for further discovery have been decided, it should be possible for the respondents to quantify any (interim) amount for further security and seek agreement with the applicants. If an agreement cannot be reached in the next four weeks, the parties may approach my associate for a hearing date for an application for security for costs. I would then expect the parties to agree on the steps required to prepare that application. Any variation to the date of 29 August 2025 for compliance with the order for further discovery can be debated in the light of the outcome of the security for costs application.

Associate:

Dated:    9 May 2025