Arnaout v Arnaout [2019] NSWSC 565

Arnaout v Arnaout [2019] NSWSC 565

The plaintiff satisfied the low threshold under UCPR r 5.3 because he may have arguable claims against the first and third defendants arising from the buy-out of his Iris Group interest while suffering severe depression, he had made reasonable inquiries including obtaining forensic accounting advice, and he still lacked documents bearing on the value of the Iris Group and on what documents the prospective defendants held at the time of the Implementation Agreement. Those documents may assist him to decide whether to commence proceedings. However, because the discovery could give the plaintiff a forensic advantage before pleadings in complex commercial litigation, the orders should be...

Jurisdiction
Australia
Judgment Date
17 May 2019
Procedural Posture
Application for Preliminary Discovery Under Rule 5.3 of the Uniform Civil Procedure Rules 2005 NSW / Second Further Amended Summons; Reasons for Judgment and Addendum Making Preliminary Discovery and Costs Orders
Outcome
Preliminary discovery ordered against the first and third defendants on conditions; claim against the second defendant had settled; plaintiff ordered to pay defendants' costs of the second further amended summons on the ordinary basis with reservation concerning future costs recovery.
Legal Topics
['preliminary Discovery' 'prospective Defendant Discovery' 'sufficiency of Information to Decide Whether to Commence Proceedings' 'unconscionable Conduct' 'breach of Fiduciary Duty' 'misleading or Deceptive Conduct' 'valuation of Business Interests' 'costs']
['civil Procedure' 'equity' 'commercial Law'] ['preliminary Discovery' 'prospective Defendant Discovery' 'sufficiency of Information to Decide Whether to Commence Proceedings' 'unconscionable Conduct' 'breach of Fiduciary Duty' 'misleading or Deceptive Conduct' 'valuation of Business Interests' 'costs']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Application for Preliminary Discovery Under Rule 5.3 of the Uniform Civil Procedure Rules 2005 NSW / Second Further Amended Summons; Reasons for Judgment and Addendum Making Preliminary Discovery and Costs Orders

Legal Issues

  1. 1 ['Whether the plaintiff may be entitled to make claims for relief against the first and third defendants but, despite reasonable inquiries, is unable to obtain sufficient information to decide whether to commence proceedings.' 'Whether the first and third defendants may have or have had possession of documents assisting determination of whether the plaintiff is entitled to make such claims.' 'Whether inspection of those documents would assist the plaintiff to decide whether to commence proceedings.' 'Whether preliminary discovery should be ordered subject to conditions addressing fairness, case management, security and costs.']

Ratio Decidendi

The plaintiff satisfied the low threshold under UCPR r 5.3 because he may have arguable claims against the first and third defendants arising from the buy-out of his Iris Group interest while suffering severe depression, he had made reasonable inquiries including obtaining forensic accounting advice, and he still lacked documents bearing on the value of the Iris Group and on what documents the prospective defendants held at the time of the Implementation Agreement. Those documents may assist him to decide whether to commence proceedings. However, because the discovery could give the plaintiff a forensic advantage before pleadings in complex commercial litigation, the orders should be...

Court Disposition

Preliminary discovery ordered against the first and third defendants on conditions; claim against the second defendant had settled; plaintiff ordered to pay defendants' costs of the second further amended summons on the ordinary basis with reservation concerning future costs recovery.

Orders

  • ['Upon conditions, the first defendant must serve a verified list of documents in the categories identified in Schedule A to the second further amended summons within 21 days after the plaintiff complies with the security order.' 'The first defendant must make non-privileged documents available for inspection no...