Reosteel Holdings Pty Ltd v AonAri PT10 Pty Ltd

Category: Procedural rulings

Parties: Reosteel Holdings Pty Ltd (First Plaintiff/Applicant)
Reosteel Pty Ltd (Second Plaintiff/Applicant)
AonAri PT10 Pty Ltd (Defendant/Respondent)

Representation: Counsel:
F Di Lizia (Plaintiffs/Applicants)
S Wells (Defendant/Respondent)
Solicitors:
Madison Marcus (Plaintiffs/Applicants)
Lazarus Legal (Defendants/Respondent)

File Number(s): 2023/00302526

Publication restriction: Nil

JUDGMENT

1. HIS HONOUR: By their notice of motion filed on 20 March 2026, the plaintiffs seek to set aside two notices to produce issued to them by the defendant on 27 February 2026. The notices have been issued in the context of the defendant’s application for security for costs which is listed for hearing on 17 April 2026. An earlier application for security for costs was rejected by Faulkner J on 15 May 2025: see Reosteel Holdings Pty Ltd v AonAri PT10 Pty Ltd. That judgment has for some reason not been uploaded to Caselaw, but I take it that the decision is well known to the parties and a familiarity with it is assumed for present purposes.

2. The defendant’s notices to produce are in identical terms except to the extent that they are directed to the different plaintiffs. They ask for the production of documents described as follows:

“You are required to produce the following documents or things to the Court:

1. Financial statements of Reosteel Holdings Pty Ltd [and Reosteel Pty Ltd], including profit and loss statements and balance sheets, for the financial years ended 30 June 2024 and 30 June 2025. ‘Financial Statements’ includes any record documenting the financial activity of an entity prepared in the usual course of preparing a corporation’s accounts, including income statements and balance sheets.

2. Tax returns lodged by Reosteel Holdings Pty Ltd [and Reosteel Pty Ltd] in respect of the financial years ended 30 June 2024 and 30 June 2025.

3. Management accounts, including profit and loss statements and balance sheets prepared for Reosteel Holdings Pty Ltd [and Reosteel Pty Ltd] at any time during the period 1 July 2025 to the date of this notice to produce.

4. Documents recording assets and/or liabilities of Reosteel Holdings Pty Ltd [and Reosteel Pty Ltd] at any point in time during the period 1 July 2025 to date.

5. Documents within paragraphs 1 – 4 in relation to any trust of which Reosteel Holdings Pty Ltd [and Reosteel Pty Ltd are] trustee.

6. Copies of the bank statements of bank accounts held in the name of Reosteel Holdings Pty Ltd [and Reosteel Pty Ltd] for the period 1 July 2025 to the date of this notice to produce.”

3. In support of the application, the plaintiffs read the affidavit of Johnathon de la Hoyde sworn on 17 March 2026. The burden of the plaintiffs’ objections to the notices to produce appear from that affidavit to be the following.

4. The first category of document is said to be ambiguous. “Financial statements” is not defined with adequate precision. By way of a non-exhaustive example, that expression potentially includes any record documenting the financial activity of an entity prepared in the usual course of preparing a corporation’s accounts. Given the extremely broad nature of this definition, the plaintiffs contend that the potential number of documents that may be responsive to this request could be substantial.

5. Category 3 is also said to be ambiguous. “Management accounts” is not defined at all. In addition, management accounts include profit and loss statements and balance sheets but does not otherwise limit or restrict what the defendant is seeking to have produced. Moreover, the defendant seeks management accounts prepared at any time during the period 1 July 2025 to date. This is criticised as an extremely broad request, and compliance with a request to produce documents in response to this category would be unduly burdensome for the plaintiffs.

6. Category 4 is described as vague and unduly burdensome in circumstances where it does not specify a particular document but requires the plaintiffs instead to look through all of their documents and form a view as to whether they “record” something in particular. In addition, the request is for any assets and/or liabilities at any point in time during the period 1 July 2025 to date, which the plaintiffs maintain is also unduly burdensome.

7. The plaintiffs relied upon these same objections with respect to category 5.

8. Mr de la Hoyde’s affidavit did not refer to category 2, dealing with bank statements. However, Mr Di Lizia of counsel who appeared for the plaintiffs submitted that the temporal range of bank statements that is sought was too extensive and that only the most recent bank statements could have any relevance to the foreshadowed security for costs application.

9. As a general response to the notices to produce, Mr Di Lizia maintained that the decision of Faulkner J referred to earlier effectively foreclosed the defendant’s entitlement to seek security for costs in any event so that there was accordingly no legitimate forensic purpose to which the notices to produce could be said to be directed. In that respect, he referred in particular to paragraphs [29] and [30] of his Honour’s judgment. Mr Di Lizia maintained that the foreshadowed security for costs application was doomed to fail as it amounted to an attempt to relitigate the matters that Faulkner J has already decided and that there had not been since then any material change of circumstances to warrant this Court revisiting the matter.

10. The defendant read the affidavit of Barry Neil Lazarus affirmed on 13 February 2026. That affidavit is extensive and deals with several interrelated topics. Relevantly for present purposes, however, is the fact that Mr Lazarus, who was not cross-examined, deposed to the fact that the defendant’s anticipated costs in defending the proceedings, although not entirely as the result of amendments to the plaintiffs’ case, had increased significantly since the security for costs application rejected by Faulkner J. Mr Lazarus’ expectation was that those costs up to the conclusion of the hearing were likely to be in the order of $2,327,566.00 after the application of a discount of 70%. That is a significant change in circumstances. The plaintiffs did not tender evidence or rely upon a contrary opinion to suggest Mr Lazarus’ calculations were erroneous or unreasonable.

11. It is important at this stage to observe that, unlike Faulkner J, who was dealing with an application for security for costs, I am asked only to rule upon the validity of notices to produce certain material that the defendant contends is, or may be, relevant for use in its attempt to demonstrate that the requirements of UCPR 42.21 and/or s 1335 of the Corporations Act 2001 can be satisfied. The question of whether or not the anticipated application, listed for hearing on 17 April 2026, succeeds or fails is only relevant for my decision to the extent that there appears to be a legitimate basis upon which, or with respect to which, the documents sought in the notices to produce should be made available.

12. I consider that the defendant is entitled to apply again for an order for security for costs upon the basis of the matters to which Mr Lazarus has deposed. I make no comment about the currently contested outcome of that application.

13. In my opinion, the terms of categories 1, 2, 3 and 6 of the notices to produce are unexceptionable and do not impose onerous or illegitimately non-specific obligations upon the plaintiffs that prevent or unreasonably hinder their ability to understand what is sought. They are not unclear or unduly burdensome. These categories should not be set aside.

14. Categories 4 and 5 are different. The request for “documents recording assets and/or liabilities” is entirely non-specific, is too wide and creates an unreasonable burden upon the plaintiffs to determine or assess from all of the documents that may be in their custody, possession or control, apart from those in categories 1, 2, 3 and 6, whether there is any reference, however small or insignificant it may be, to assets and/or liabilities. Category 4 should be set aside.

15. Category 5 should also be set aside. The words “in relation to any trust” are vague and meaningless in the context of these notices to produce. If the defendant seeks the production of documents that show or tend to demonstrate that the plaintiffs or either of them are trustees or hold assets in any capacity for or on behalf or other entities, they should frame their requests in a proper form.

16. In the circumstances, I make the following orders:

17. Set aside categories 4 and 5 of the defendant’s notices to produce issued on 27 February 2026.

18. Otherwise dismiss the plaintiffs’ notice of motion filed 20 March 2026.

19. Order that the costs of the motion be reserved.

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