Auckland Trotting Club Incorporated v Lane Neave
[2024] NZHC 924
•24 April 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-2011
[2024] NZHC 924
BETWEEN AUCKLAND TROTTING CLUB INCORPORATED
PlaintiffAND
LANE NEAVE
First Defendant
VERO LIABILITY INSURANCE
LIMITED as insurer of N-Compass Limited (in liquidation)
Second Defendant
VERO LIABILITY INSURANCE
LIMITED as insurer of Max Russell Consultancy Limited
Third Defendant
WHITE ASSOCIATES LIMITED
Fourth Defendant
Hearing: On the papers Counsel:
M C Black for Plaintiff
A C Challis and J Stafford for First Defendant J N Bierre and L G Cox for Second Defendant I Rosic and Y Lee for Third Defendant
M J Russell and M J Dennett for Fourth Defendant
Judgment:
24 April 2024
JUDGMENT OF O’GORMAN J
This judgment was delivered by me on 24 April 2024 at 4 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
…………………………………
AUCKLAND TROTTING CLUB INCORPORATED v LANE NEAVE [2024] NZHC 924 [24 April 2024]
[1] Lindsay Francis & Mangan have applied on behalf of their clients to access the Court file in this proceeding (the applicants). Their clients are Mr Petrou and other defendants in CIV-2022-404-1110 Auckland Trotting Club Inc v Canam Group Ltd (now Medway Ltd) (Insolvency Proceeding), who are non-parties to this proceeding.
The Insolvency Proceeding
[2] The Insolvency Proceeding has been brought against Mr Petrou as a director of Canam Construction Ltd (now Tribola767 Ltd) (CCL), along with two other directors and associated companies (including the parent company of CCL). The causes of action in the Insolvency Proceeding concern alleged breaches of directors’ duties, pooling or contribution orders under s 271 of the Companies Act 1993, and challenges to disposals and dispositions under ss 344–350 of the Property Law Act 2007. The claim by Auckland Trotting Club Incorporated (ATC) is for loss suffered in respect of a construction project, which is the subject of both the Insolvency Proceeding and this proceeding.
Common background facts
[3] ATC owns and operates a venue for horse racing in Alexandra Park in Epsom, Auckland. ATC decided to develop a large apartment complex on its land, containing residential apartments, retail space and basement car parking. Under a written consultancy agreement entered into in early 2014, ATC engaged N-Compass Ltd (N-Compass) to provide project management services for the design, construction, and commissioning of the development. ATC entered into agreements with Max Russell Consultancy Ltd (Max Russell) and White Associates for engineering and quantity surveying services respectively.
[4] On 16 October 2015, ATC accepted a tender submitted by CCL for the construction of the complex. On 23 October 2015, ATC and CCL signed a construction contract prepared by ATC’s construction solicitors, Lane Neave. Clause 11.6 of the special conditions of contract under sch 2 required that CCL provide ATC with a guarantee from its parent company, Canam Group Ltd, in the form prescribed by the contract, with that document to be provided within five working days of the date of acceptance of tender.
[5] The project was fraught with difficulties and disputes arose, culminating in N-Compass leaving the project and ATC cancelling the construction contract. One of N-Compass’s responsibilities was to administer the construction contract. Despite the contractual entitlement under cl 11.6 of the special conditions, the guarantee from Canam Group Ltd was not obtained.
[6] ATC and CCL had the disputed issues between them determined by an arbitration, in which the arbitrator awarded ATC over $85 million (over three substantive awards issued between May 2021 and March 2022). However, before the final award was made, CCL was placed into voluntary liquidation.
This proceeding
[7] On or about 20 October 2021, ATC commenced this proceeding alleging that Lane Neave, N-Compass (in liquidation), Max Russell and White Associates were responsible for the project proceeding without the guarantee being obtained from the parent, Canam Group Ltd. ATC subsequently brought an application seeking leave to join Vero Liability Insurance Ltd (Vero), on the grounds that N-Compass had a professional indemnity insurance policy issued by Vero. In a judgment dated 31 August 2022, Associate Judge Gardiner granted leave for ATC to join Vero on the grounds that the claim was arguable (despite an insolvency exclusion in the policy terms).1
[8] In a minute dated 30 March 2023, Associate Judge Brittain gave timetable directions for the completion of discovery, the filing of interlocutories, and the allocation of a case management conference after 30 November 2023. That conference was scheduled for 5 December 2023, but was adjourned to allow settlement discussions to take place. A notice of discontinuance was subsequently filed on 20 December 2023, with no issue as to costs.
1 Auckland Trotting Club Inc v Lane Neave [2022] NZHC 2208.
[9] In the Insolvency Proceeding, the Court granted orders permitting ATC to use and discover specified documents (financial accounts and restructuring information) in the present proceeding, subject to counsel addressing issues of confidentiality.2
[10] As recorded in the subsequent minute of Associate Judge Brittain dated 30 March 2023, the directions made in this proceeding about the plaintiff’s intention to discover documents from the Insolvency Proceeding were not intended to abrogate from the duty under r 8.30 (consent of the discovering parties was anticipated).
[11] Affidavits of documents were filed and served in this proceeding before it was discontinued.
Legal principles
[12] Access to the Court file in a civil proceeding is governed by the Senior Courts (Access to Court Documents) Rules 2017, particularly r 8 (general rights of public, including access to formal court record), r 9 (general right of parties to proceedings), r 11 (accessing documents not covered by general rights) and r 12 (matters to be considered).
[13] For documents not searchable as of right under rr 8 and 9, relevant considerations include:
(a)the orderly and fair administration of justice: r 12(a);
(b)the right to bring and defend civil proceedings without the disclosure of any more information about the private lives of individuals, or matters that are commercially sensitive, than is necessary to satisfy the principle of open justice: r 12(c);
2 Minute of Associate Judge Andrew dated 17 November 2022 at [19]. As noted in Laura O’Gorman (ed) Sim’s Court Practice (online ed, LexisNexis) at [HCR8.30.1], the Court can grant leave for use of documents obtained through discovery for another purpose (such as another proceeding): Croser v Focus Genetics Ltd Partnership (2548500) [2019] NZHC 2995, so long as this will not occasion injustice to the person giving discovery: Hunter Grain Ltd v Price HC Tauranga CIV-2008-470-192, 3 August 2010.
(c)the protection of other confidentiality and privacy interests and any privilege held by, or available to, any person: r 12(d);
(d)the principle of open justice (including the encouragement of fair and accurate reporting of, and comment on, court hearings and decisions): r 12(e);
(e)the freedom to see, receive and impart information: r 12(f); and
(f)any other matter that the Judge thinks appropriate: r 12(h).
[14] There is no presumption in favour of disclosing information.3 The balancing exercise also depends on the particular stage of the proceedings:
(a)Before the substantive hearing, the protection of confidentiality and privacy interests and the orderly and fair administration of justice may require that access to documents be limited.
(b)During the substantive hearing, open justice has greater weight than at other stages of the proceeding and in relation to documents relied on in the hearing than other documents: r 13(b)(i) and (ii).
(c)After the substantive hearing:
(i)open justice has greater weight in relation to documents that have been relied on in a determination than other documents: r 13(c)(i); but
(ii)the protection of confidentiality and privacy interests has greater weight than would be the case during the substantive hearing: r 13(c)(ii).
3 Schenker AG v Commerce Commission [2013] NZCA 114, [2015] NZAR 1561.
[15] The reason for these three different stages was discussed by the Court of Appeal in Greymouth Petroleum Holdings Ltd v Empresa Nacional Del Petróleo:4
These divisions reflect that during the substantive hearing open justice has greater weight, in particular in relation to documents admitted in evidence. When a court is engaged in hearing a dispute its workings, including documents referred to or relied on, should be open to full scrutiny by all members of the public, unless there are particular and strong reasons to the contrary. The public should be able to follow and understand the hearing process. However, prior to and after the substantive hearing, the importance of public scrutiny is less, as the court is not hearing and resolving the dispute. Prior to the hearing there is no guarantee the case will go to hearing at all. Therefore open justice has less weight. The parties are entitled to the protection of confidentiality and privacy within reasonable limits, given that they have not at that point aired the dispute in public. After the substantive hearing the need for public scrutiny diminishes in importance as time moves on.
Application and opposition
[16]The applicants seek access to the following documents:
(a)A register or index of documents filed in the proceeding.
(b)Any minute, judgment, order and/or reasons given by a judge.
(c)The pleadings (being statements of claim, statements of defence and replies, together with any pleadings on any counterclaims).
(d)Any interlocutory applications and affidavit(s) in support (or reply).
(e)Any notice of opposition to any interlocutory application and affidavit(s) in support (or reply).
[17] The applicants say they seek access to understand and defend the claims against them commenced by ATC in the Insolvency Proceeding. There are currently outstanding interlocutory applications between the parties in that proceeding, including the scope of ATC’s discovery. The applicants want to see whether the documents in the present proceeding are at odds with ATC’s position in the
4 Greymouth Petroleum Holdings Ltd v Empresa Nacional Del Petróleo [2017] NZCA 490, [2017] NZAR 1617 at [25].
Insolvency Proceeding. In particular, they want to understand what enquiries were made by ATC, and what advice it received from its professional advisors as to the existence or provision of the parent company guarantee. ATC’s knowledge (and related timing) is also relevant to potential limitation defences under the Fair Trading Act 1986.
[18] The application for access to the Court file is opposed by Lane Neave. They say the documents are sought for the purposes of the Insolvency Proceeding, not for reasons of open justice and/or participation (given that this proceeding settled and was discontinued before any substantive determination).
[19] Lane Neave observes that ATC is a party in both proceedings and therefore in possession of all the documents on the Court file. If any of those documents are relevant to the issues to be determined in the Insolvency Proceeding, then Lane Neave submits the appropriate course is for them to be discovered by ATC pursuant to any discovery orders made in that proceeding. Seeking to gain access to documents and information via rr 11 and 12 would circumvent the orthodox procedures available under the High Court Rules, including interrogatories. Lane Neave submits this would be contrary to the orderly and fair administration of justice.
[20] ATC also opposes the application. It supports and endorses Lane Neave’s position. ATC emphasises the importance of the comprehensive and confidential settlement that was reached by the parties in this proceeding and, as a result, the fact that allegations and defences advanced were not tested at trial. ATC says it is in the interests of all parties in this proceeding for the application to be declined.
Analysis
[21] Under r 8(1) of the Senior Courts (Access to Court Documents) Rules, every person has the right to access the formal court record relating to a civil proceeding.
[22]Under r 4, the “formal court record” is defined as:
formal court record means any of the following kept in a registry of the court:
(a)a register or an index:
(b)a published list that gives notice of a hearing:
(c)a document that—
(i)may be accessed under an enactment other than these rules; or
(ii)constitutes notice of its contents to the public:
(d)a judgment, an order, or a minute of the court, including any record of the reasons given by a Judge:
(e)the permanent court record under Part 7 of the Criminal Procedure Rules 2012:
(f)the rolls of barristers and solicitors kept under section 56 of the Lawyers and Conveyancers Act 2006 or any former corresponding enactment
[23]Accordingly, the applicants are entitled under r 8(1) to:
(a)a register or index of documents filed in the proceeding; and
(b)any minute, judgment, order and/or reasons given by a judge.
[24] For the balance of the documents, principles of open justice are not engaged, because the documents are sought for private purposes.
[25] The documents relate to interlocutory steps, in a proceeding that did not reach a substantive hearing. For that stage, privacy interests and the orderly and fair administration of justice may require access to documents be limited. As stated in GFD I LPP v Melview (Kawarau Falls Station) Investments Ltd (In Rec):5
5 GFD I LPP v Melview (Kawarau Falls Station) Investments Ltd (In Rec) [2012] NZHC 677 at [16]–[17].
Parties file applications at an interlocutory stage and typically make various allegations in memoranda and affidavits. Some of those allegations are not responded to by parties in the full confidence that when a matter gets to a substantive hearing, issues which remain relevant can be fully addressed and an appropriate focus brought to bear upon the critical factual and legal issues.
For these reasons, absent good reason being shown for access to the documents filed in connection with the procedural phase of the Melview and settled proceedings, I am satisfied that such access should not be granted.
[26] Similarly, applications for access to affidavits brought at the pre-trial stage will often be declined in circumstances where they contain “untested and unanswered allegations and could give an unbalanced impression of the issues and facts involved in the proceeding”.6
[27] I accept the applicants have a good reason for wanting to review the documents, if they are relevant to the substantive issues for determination in the Insolvency Proceeding. However, the applicants already have that opportunity, through discovery by ATC (a party to both proceedings). In A2 Corp Ltd v Fonterra Co-operative Group Ltd, an application to access the Court file made by a non-party who had commenced trademark proceedings against A2 Corp Ltd was declined.7 Even if the requested documents were relevant, the Court observed there may be other routes available by which those documents could be obtained. Edwards J considered “a cautious approach is warranted where an access application is effectively used as a means of obtaining production or discovery of documents for a proceeding.”8
[28] There is no basis for believing that ATC has not complied, or would not comply, with its proper discovery obligations, or that it would be untruthful about the facts to the extent they relate to pre-trial documents on the Court file in this proceeding. In my view, the orthodox procedures for discovery and evidence in the Insolvency Proceeding provide a more suitable avenue for determining the facts and any disputed issues that may arise (such as irrelevance, admissibility, confidentiality, and privilege), consistent with the orderly and fair administration of justice.
6 Sellman v Slater [2021] NZHC 752 at [55], referencing Commissioner of Police v Doyle [2017] NZHC 3049 at [17] per Palmer J; and GFD I LPP v Melview (Kawarau Falls Station) Investments Ltd (In Rec), above n 5.
7 A2 Corp Ltd v Fonterra Co-operative Group Ltd [2018] NZHC 3073.
8 At [15].
Result
[29]Under r 8(1), the applicants are entitled under to have access to:
(a)the register or index of documents filed in the proceeding; and
(b)any minute, judgment, order and/or reasons given by a judge.
[30]Otherwise, the application is declined.
O’Gorman J
Solicitors/Counsel: Dawson Harford, Auckland McElroys, Auckland Morgan Coakle, Auckland Gilbert Walker, Auckland Kennedys, Auckland
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