In Bunting v Buchanan, the applicant shareholders sought discovery ahead of a hearing of their substantive application which involved the level of costs charged by two liquidators as a consequence of a drawn-out liquidation.
Under Part 8 of the High Court Rules there is no specific provision for discovery in relation to originating applications. Prior to the introduction of the High Court Amendment Rule (No. 2) 2011, the Court had discretion as to whether to order discovery for cases on the swift track. The distinction between standard and swift track cases has been removed by the amendment and the Court is now required to make an order, unless satisfied that the case can be justly disposed of without any discovery. Associate Judge Abbott found that the agreement reached between the parties was an appropriate application of the approach for tailored discovery. He ordered the respondent liquidator to make his files available for inspection by the applicant shareholders and to provide samples of time records from other work for comparison.
In relation to the issue of privilege, Associate Judge Abbott considered that the liquidator may have an entitlement to privilege separate from the company. On this basis he held that the liquidator must be able to make a claim for privilege and the shareholders must have a corresponding entitlement to challenge that claim.
Associate Judge Abbott concluded that the proper approach was to treat the costs of the discovery as part of the costs of liquidation, subject to review as part of the substantive application.
See court decision here