Bannock v Monaco Management Limited

[2016] NZHC 2088

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2013-409-1701 [2016] NZHC 2088

BETWEEN

MICHAEL WILLIAM BANNOCK AND

ANNE MARGARET BANNOCK AND OXFORD STREET TRUSTEES (2010) LIMITED AND THE OTHER PLAINTIFFS LISTED IN SCHEDULE 1

TO THE STATEMENT OF CLAIM Plaintiffs

AND

MONACO MANAGEMENT LIMITED First Defendant

AND

MONACO VILLAGE LIMITED (IN LIQUIDATION AND RECEIVERSHIP) Second Defendant

AND

SCOTT PATRICK SANDERS Third Defendant

Hearing:	1 September  2016
Appearances:	P G Skelton QC and S M Thompson for Plaintiffs Q M Hay and A D Marsh for First and Third Defendants
Judgment:	1 September 2016

RULING NO. 3 OF DUNNINGHAM J WITNESS EXCLUSION

[1]      The defendants have applied for an order excluding all witnesses including the plaintiffs, from the hearing when other plaintiffs are giving evidence in advance of them and also an order excluding provision of the transcript to them in advance of giving their evidence.

[2]      This  is  opposed  on  the  basis  that  the  plaintiffs  are  all  parties  to  the proceedings  and  there  is  a  presumption  that  a  party  should  be  able  to  be  in

BANNOCK, BANNOCK AND OXFORD STREET TRUSTEES (2010) LIMITED AND THE OTHER PLAINTIFFS LISTED IN SCHEDULE 1 v MONACO MANAGEMENT LIMITED [2016] NZHC 2088 [1 September 2016]

attendance  throughout  the  hearing  and  there  are  no  circumstances  here  which displace that presumption.

[3]      Here, there are 38 plaintiffs.   The witnesses sought to be excluded include either the purchasers themselves, whether in their own right or as trustees of a trust, or the directors of a purchasing company.  In the circumstances, I consider it proper to treat all such witnesses as parties to the proceeding.

[4]      In support of this application, Mr Marsh has argued that, in effect, there are

38 individual claims and the entitlement of the plaintiffs is really just to attend their hearing, so there is no prejudice to them if they are not able to sit in on the evidence of the other parties.  He also argues that there will be commonality between some groups of plaintiffs and if they sit in and hear the lines of questioning that are given to one group of plaintiff, then they will have a “heads up”, on the lines of questions that they will be asked.  Mr Marsh also says that there are some issues of credibility and reliability which need to be tested in cross-examination and those are best done with the other parties who will be witnesses excluded.

[5]      The relevant principles applying were outlined in my judgment in Reynolds v Calvert.1    In that judgment I adopted the approach of Heath J in Robinson Crothall Ltd and Snap On Inc,2 where, after referring to a decision from the Court of Appeal in British Columbia, he said:

In the New Zealand environment I have described I prefer, both as a matter of principle and practice, the approach of O’Halloran JA in Sissons to that of Sydney Smith JA.  I agree with O’Halloran JA that the right of a party to be in attendance throughout a trial should be regarded as a fundamental right.  It should only be interfered with for good and sufficient reasons.  The Court can, in its discretion, make an order excluding a party where it is necessary to  do  so  to  ensure  a  fair  trial  to  another  party  or  where,  because  of exceptional circumstances, it is necessary to clear the Court.

[6]      In  determining  when  it  would  be  in  the  interests  of  justice  to  exclude witnesses who are also parties, I consider this might be warranted in circumstances

such  as  arose  in  Maruha  Corporation  v Amatal  Corporation,3   where  Priestly J

1      Reynolds v Calvert [2014] NZHC 1975.

2      Robinson Crothall Ltd and Snap On Inc (2002) 16 PRNZ 430 (HC).

3      Maruha Corporation v Amatal Corporation (2004) 17 PRNZ 67 (HC).

observed   there   were   serious   allegations   of   deceit,   misrepresentation   and concealment.   In that case he held that the interests of justice were served by excluding all witnesses even if they were parties, while related witnesses were being cross-examined.

[7]      However, I observed that, as a general rule in civil trials, where briefs of evidence have been exchanged in advance, there was no obvious reason to displace the presumption that the parties can be present throughout the proceedings.  In such cases, the evidence to be given in support of the allegations and the defences to those allegations is committed to writing in advance and the areas where a conflict of evidence arises are known in advance.  There is less scope therefore, for witnesses to face questions in cross-examination which were not anticipated in any event, or for evidence to be given which the other parties had not expected.  Unless critical issues arise as to the credibility and reliability of evidence likely to be given, I consider that in the usual run of civil cases under the current case management system, there is no reason to exclude witnesses who are also parties.

[8]      In the present case, the issues which are in dispute largely turn on the legal interpretation of factual matters as to the circumstances in which the Monaco Resort accommodation units were offered and purchased and which is supported by an extensive trail of documentary evidence.   For example, the issues include whether the offer of accommodation units subject to the Cottage Leases were offers of securities as defined in the Securities Act 1978, whether the exception in s 5(1)(b) of the Security Act applies to exempt the defendants from compliance, and whether s 6 of the Securities Act 1978 applies to prevent subsequent purchasers from seeking relief.

[9]      In my view, these are all matters which will largely turn on legal arguments as the factual evidence is generally not in dispute and is supported by documentary evidence.   Where it is contested, it does not turn on challenges to the witness’ credibility and reliability to such an extent that the plaintiffs’ right to be present throughout the proceedings is displaced.   I also note that while, as Mr Marsh has said, there are individual cases here and there are differences between the claims that the various  groups of plaintiffs advance,  this  is  still  a common  case,  involving

common issues, and I do think there is a right for the parties to be present throughout the hearing.

[10]     I therefore consider this is a case, where the right of the plaintiffs to be present throughout the proceedings should prevail in the interests of justice, and the defendants’ application for an order excluding them is declined.

[11]     An order is however made in the terms sought in relation to Mr Gepp, who is a witness, not a plaintiff.

Solicitors:

P G Skelton QC, Barrister, Auckland

Q M Hay, Barrister, Wellington

GCA Lawyers, Christchurch

Saunders Robinson Brown, Christchurch