Background
The Capital Markets Company Limited, known as Capco, sought preliminary discovery under r 5.3 of the Uniform Civil Procedure Rules 2005 (NSW). Capco’s former senior employee, Paul Sommerin, left the company in March 2025 and began working for the competing NTT Data group in June 2025. Eleven other Capco employees subsequently left for NTT Data by 11 August 2025.
Capco was considering a contractual claim against Sommerin for allegedly breaching post-employment restrictions and tort claims against NTT Australia Pty Ltd and recruiter William Katsaros for allegedly inducing breaches. Sommerin’s agreements with Capco were governed by Hong Kong law and contained clauses giving Hong Kong courts exclusive jurisdiction. The defendants relied on those clauses and also argued that Capco had not satisfied the requirements for preliminary discovery.
The Court’s Holding
Scruby J ordered all three defendants to provide preliminary discovery. The Court rejected the contention that the Hong Kong exclusive-jurisdiction provisions required the discovery application itself to be stayed or dismissed. The application was an interlocutory procedure for determining whether Capco should bring substantive proceedings, rather than an adjudication of the parties’ underlying contractual or tortious rights.
The Court was satisfied that Capco may be entitled to bring the contemplated claims, had made reasonable inquiries but still lacked sufficient information to decide whether to sue, and had shown that the defendants may possess documents capable of assisting that decision. The requested categories were not impermissibly broad or disproportionate, and no defendant established that compliance would be burdensome or oppressive.
The defendants were given 28 days to produce the specified documents. Capco was ordered to pay their compliance costs, while the parties were directed to make further written submissions about the remaining costs question.
Key Takeaways
- An exclusive-jurisdiction clause covering substantive disputes does not necessarily extend to a preliminary-discovery application that determines no underlying rights or liabilities.
- Preliminary discovery may encompass documents bearing on interdependent claims against several prospective defendants, including evidence relevant to both an alleged contractual breach and the alleged inducement of that breach.
- Document categories are not objectionable merely because they may uncover evidence that weakens the applicant’s contemplated case; such evidence can still assist the decision whether to commence proceedings.
Why It Matters
The decision distinguishes an application to investigate whether a viable claim exists from proceedings that finally resolve that claim. International contractual parties should therefore not assume that selecting a foreign court for substantive disputes automatically prevents an Australian court from granting local procedural assistance.
For employers investigating coordinated recruitment or employee solicitation, the ruling also illustrates the evidence needed under UCPR r 5.3 and confirms that discovery can reach communications, recruitment arrangements, employment offers and records concerning the prospective defendants’ knowledge of post-employment restraints.