Bain v International Capital Markets Pty Ltd (No 3)

Bain v International Capital Markets Pty Ltd (No 3) is a Federal Court practice and procedure decision made during representative proceedings. The applicants, Nathaniel James Bain and Christopher Wyer, sought discovery orders against International Capital Markets Pty Ltd, known as ICM, and against Andrew Leon Budzinski. The application was dated 4 April 2025. The judgment was delivered by O'Bryan J on 6 June 2025.

This was not the final hearing of the claims. The court was not deciding whether the respondents had acted unlawfully. It was deciding what documents had to be produced so the proceeding could be resolved justly, quickly, inexpensively and efficiently. That distinction matters. A discovery ruling can still be commercially significant because it shows what parts of a business may be opened up to scrutiny before any final liability decision is made.

The extract does not set out the full underlying factual narrative in the way a final merits judgment usually would. So the safest public explanation is limited. What can be said confidently is that the proceeding concerns ICM's CFD business and a wide range of pleaded issues reflected in the annexed discovery categories. Those categories point to disputes about retail client onboarding, suitability testing, target market determinations, disclosure documents, pricing and spreads, leverage and margin settings, close-out and liquidation processes, inducements, marketing, complaints, compliance, governance, financial reporting and communications with regulators.

The annexure also shows that the applicants sought documents specifically about their own accounts and communications, as well as broader business-wide material. That is often how discovery fights develop in larger proceedings. One part focuses on the individual applicants. Another part focuses on the systems, policies, incentives and governance settings said to have shaped the conduct in issue.

The immediate dispute was over the scope and form of discovery. The applicants asked for non-standard discovery from ICM under the Federal Court Rules, or alternatively standard discovery, and standard discovery from Mr Budzinski. The court noted that the proposed categories were lengthy and complex, comprising 27 categories with many subcategories. That raised the usual questions about whether each category was necessary and whether standard discovery might be a more efficient way to capture relevant documents.

The judgment records that representative proceedings often involve a significant information disparity between applicants and respondents. In practical terms, that means the respondent business may hold most of the documents needed to understand how the relevant systems operated, what decisions were made, who knew what, and what internal concerns or reviews existed. That is one reason discovery can be central in this kind of case.

At the same time, the court recognised the other side of the problem. Discovery can be extremely burdensome and expensive. If categories are too broad, too vague or disconnected from the pleaded issues, they can impose unnecessary cost and delay. So the court had to balance access to relevant information against proportionality and efficiency.

ICM opposed at least some of the categories. The parties then engaged in a lengthy and productive conferral process. That point is important. Federal Court judges expect parties to narrow discovery disputes before asking the court to rule. Here, the conferral process significantly reduced the areas of disagreement. At the hearing on 21 May 2025, the judge made rulings on many categories, gave reasons orally during the hearing, and invited further conferral on a limited number of remaining categories. The parties then filed revised categories on 28 May 2025 showing what had been agreed, what had been resolved by rulings, and what still remained in dispute.

Mr Budzinski did not contest the making of an order that he give standard discovery. So the sharper contest was about ICM's category-based discovery and the timetable for production.

The legal issue in this judgment was narrow but important. The court had to decide whether discovery orders should be made, in what form, and on what timetable. The governing framework identified in the reasons included section 37M of the Federal Court of Australia Act 1976 (Cth) and the Federal Court Rules 2011 (Cth), including rules dealing with discovery applications and standard and non-standard discovery.

The court said the two touchstones for discovery are relevance and proportionality. Discovery will not be ordered unless it is necessary for the just resolution of the proceeding and proportionate in scope to the issues raised. That is a practical test, not a theoretical one. It asks whether the documents are likely to matter to the real issues in dispute and whether the burden of searching for and producing them is justified.

The judgment also shows that the court does not treat discovery as an automatic entitlement. Even in a representative proceeding with a clear information imbalance, the court still examines whether the categories are properly targeted. The length and complexity of the proposed categories in this case raised questions about necessity and whether standard discovery might be more efficient. But the court also recognised that category-based discovery can be appropriate where it better matches the pleaded issues.

Another practical point is that the reasons published here concern only the categories that remained in dispute after the hearing and further conferral. The judge had already ruled on many categories during the hearing itself, with those rulings recorded in the transcript rather than repeated in the written reasons. So this decision should not be read as a complete account of every discovery issue argued between the parties. It is the final written step in a larger procedural process.

Although the extract does not provide a full merits narrative, Annexure A is commercially revealing because it shows the kinds of documents the court accepted as proper subjects of discovery in this proceeding. The categories were not limited to customer contracts or a narrow set of transaction records. They extended across the operation of ICM's CFD business.

For the applicants themselves, the categories included account opening applications and forms, client suitability tests, account transfers and upgrades, statements, trade records, records of conditional orders, pricing records for the underlying reference asset at the time of each trade, periodic assessments or reviews, communications with the applicants, internal communications about them, and records of participation in non-trading services such as education tools.

At the business-wide level, the categories included reports, summaries and analyses about active and inactive accounts, client churn, client losses, close-outs, margin calls, the relationship between volatility and margin calls, the effect of marketing on revenue and trade volume, the use of CFDs for hedging, negative balance accounts and clients with significant or repeated losses. They also included client demographics and reports about the number of retail, sophisticated and wholesale clients, age, income, assets, occupation, education, nationality, funding methods and prior trading experience.

The annexure also reached into product governance and customer qualification. It sought final versions of policies and written processes about account application and client qualification, ongoing suitability monitoring, deactivation and reactivation of accounts, and the development and maintenance of the client suitability test. It also sought documents about target market determinations, review triggers, periodic reviews of whether clients remained within the target market, and policies addressing the risk that CFDs would be distributed outside the target market.

Disclosure and product design were also in scope. The categories covered documents created for developing, implementing or changing product disclosure statements, the financial services guide, account terms and target market determinations. They also covered policies about trading order types, pricing and spread methodologies, manual overrides of automatic pricing, leverage settings, user guides explaining leverage changes, margin and close-out mechanics, negative balances, debt recovery, fees and costs, inducements, rebates and credits, marketing strategy, credit card funding, hedging policies, website and platform design, and user guides for trading platforms and demo accounts.

Customer communications and internal incentives were another major theme. The categories included newsletters, webinars, podcasts, blogs, communications with prospective clients, demo account holders, inactive or dormant clients and clients requesting closure, automated communications, call scripts, live chat scripts, staff guidance, key performance indicators, remuneration and incentive schemes, and opt-out settings for marketing communications.

Complaints, compliance and governance were also squarely in view. The annexure sought complaint analyses, complaint handling policies, regulatory materials, communications with ASIC, the ACCC, FOS and AFCA, internal and external compliance reviews, audits, advice from external risk and compliance experts, business-wide risk assessments and risk registers, board agendas, board packs, board minutes, risk committee materials, organisational charts and financial statements. Finally, it sought documents concerning Mr Budzinski's role, knowledge and involvement in management, regulatory obligations and the matters alleged in the consolidated statement of claim.

For businesses, the message is straightforward. In a regulated dispute, discovery can become a detailed examination of how the business actually operated, what it knew, what it measured, what it told customers, what it told regulators, and what its board and senior management were told internally.

The court made discovery orders against both respondents. First, ICM was ordered to give discovery of documents within category 25, described as Board Documents, by 9 July 2025. Second, ICM was ordered to give discovery of a first tranche of documents falling within the balance of the categories in Annexure A by 6 October 2025. Third, ICM was ordered to give discovery of a second and final tranche of documents falling within the balance of the categories by 8 December 2025.

The orders specified the scope of ICM's obligation. ICM had to give discovery of documents of which, after a reasonable search, it was aware and that were, or had been, within its control within the meaning of the Federal Court Rules. That wording matters because discovery is not limited to documents physically sitting in one folder or one inbox. It turns on awareness after a reasonable search and on control as defined by the rules.

Mr Budzinski was ordered to give standard discovery by 6 October 2025. Both respondents were required to give discovery by serving a verified list of documents and producing the documents identified in that list in electronic format, excluding documents over which privilege was claimed. The costs of the applicants' interlocutory application were ordered to be costs in the cause, meaning the costs question was left to follow the overall outcome of the proceeding.

Just as importantly, the judgment remained strictly procedural. It did not decide whether the pleaded allegations were made out. It did not determine whether the respondents had breached any statutory or other legal obligations. It decided only that discovery should be given in the form and timetable ordered.

For business owners and in-house teams, this case is best read as a reminder that litigation risk often becomes document risk. If a dispute concerns a regulated product or service, the relevant evidence may sit across many parts of the business: customer onboarding, product design, pricing, marketing, complaints, compliance, finance, governance and regulator engagement. A court may permit discovery into all of those areas if they are tied to the pleaded issues and proportionate to the case.

The decision also shows that courts expect practical cooperation. The parties here engaged in lengthy conferral and narrowed many disputes before the judge ruled. That is not just procedural etiquette. It can materially affect cost, timing and credibility. A party that simply says a request is too broad without engaging in refinement may struggle. A party that can explain where documents sit, what systems are involved, what the search burden is, and what narrower categories would still capture the real issues is in a much stronger position.

Another practical lesson is that internal governance records matter. Board packs, risk committee materials, compliance reviews and regulator communications can become central in litigation because they may show what the business knew, what risks it identified, what controls it adopted and whether concerns were escalated. Businesses sometimes focus heavily on customer-facing documents and neglect the discoverability of internal governance material. This case is a reminder not to do that.

It also highlights the importance of communication discipline. The annexure expressly referred to internal communications, including emails and messaging platforms such as Microsoft Teams, Zoom and Skype, as well as recordings, transcripts, notes and records. If substantive decisions are made through scattered channels without proper retention controls, discovery becomes harder, more expensive and more dangerous.

Finally, staged discovery is worth noting. The court did not require everything at once. It ordered board documents first, then split the remaining production into two tranches. That is a practical model businesses may see in larger disputes. It can reduce immediate burden, but it also means the organisation needs a clear plan for preservation, collection, review and production over time.

The interlocutory application for discovery was dated 4 April 2025. The hearing on disputed categories took place on 21 May 2025. After further conferral requested by the court, the parties filed revised categories on 28 May 2025. The judgment and orders were made on 6 June 2025.

The production timetable set by the court required ICM to produce category 25 board documents by 9 July 2025, then a first tranche of the remaining categories by 6 October 2025, and a second and final tranche by 8 December 2025. Mr Budzinski's standard discovery was also due by 6 October 2025.

As a public explainer, this page should be read as covering a procedural step in an ongoing or broader proceeding rather than a final outcome on the substantive claims.

This page is based on the Federal Court judgment in Bain v International Capital Markets Pty Ltd (No 3) [2025] FCA 599 and the orders and Annexure A reproduced with that judgment. The judgment clearly supports the procedural nature of the decision, the parties involved, the hearing and order dates, the discovery framework applied, the fact of substantial conferral, and the staged discovery orders made.

The extract does not provide a full merits narrative of the underlying claims. For that reason, this page does not attempt to describe the substantive allegations in detail beyond what is apparent from the annexed categories and the court's procedural reasons. Readers should not treat this decision as a ruling on liability, legality or final relief.