BETWEEN FIRST NZ PROPERTIES LIMITED Plaintiff AND MICHAEL JOHN MILLAR First Defendant INVESTMENT SERVICES LIMITED Second Defendant PAUL JOHN MEPHAN Third Defendant
[2023] NZHC 3524
•6 December 2023
IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY
I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE
CIV-2020-442-62
[2023] NZHC 3524
UNDER the Companies Act 1993 IN THE MATTER OF
breaches of director’s duties and breaches of contract
BETWEEN
FIRST NZ PROPERTIES LIMITED
Plaintiff
AND
MICHAEL JOHN MILLAR
First Defendant
INVESTMENT SERVICES LIMITED
Second DefendantPAUL JOHN MEPHAN
Third Defendant
Continued…
On the Papers Counsel:
B M Nathan and N Laing for the Plaintiffs
M J Radich for the First and Second Defendants
R Fowler for the Third Defendant in CIV-2020-442-62/63Judgment:
6 December 2023
JUDGMENT OF GWYN J
(Access to Court documents)
Solicitors:
Duncan Cotterill, Nelson Radich Law, Blenheim
FIRST NZ PROPERTIES LTD v MILLAR [2023] NZHC 3524 [6 December 2023]
CIV-2020-442-63 BETWEEN
SPRINGS ROAD PROPERTY LIMITED
PlaintiffAND
MICHAEL JOHN MILLAR
First Defendant
INVESTMENT SERVICES LIMITED
Second DefendantPAUL JOHN MEPHAN
Third Defendant
CIV-2020-442-64 BETWEEN
SUPERSTORE PROPERTIES LIMITED
PlaintiffAND
MICHAEL JOHN MILLAR
First Defendant
INVESTMENT SERVICES LIMITED
Second Defendant
Background
[1] First NZ Properties Ltd, Springs Road Property Ltd and Superstore Properties Ltd (property companies) brought proceedings against Michael Millar, Investment Services Ltd and Paul Mephan in respect of fees arising from the provision of property and investment management services to the property companies (the FNP proceedings).
[2]The eight day hearing concluded on 12 May 2023 and I reserved my judgment.
[3] On 16 October 2023, Neil Tuffin, from Maat Consulting Limited (MCL), applied for access to the following documents under the Senior Courts (Access to Court Documents) Rules 2017 (Rules):
(a)The pleadings (including counter-claim);
(b)The parties’ opening and closing submissions;
(c)Briefs of evidence of witnesses of facts and experts;
(d)The notes of evidence; and
(e)The parties’ closing submissions.
Grounds of application
[4] There are two grounds on which Mr Tuffin supports his application to access the documents described above.
Reference to MCL in evidence
[5] Mr Tuffin is a director of MCL, a property management company. Mr Tuffin understands that MCL was featured in evidence in the proceeding and wants to understand how.
Information sought for other proceeding
[6] Second, Mr Tuffin wishes to interrogate the claims, defences and evidence in the FNP proceedings because they may be relevant to a separate proceeding in which he is a party. CNP Holdings Ltd, a company directed and beneficially owned by Craig Priscott, is suing MCL, Mr Tuffin and others in proceeding CIV-2023-404-6 (the CNP Proceedings).
[7] MCL is challenging the CNP proceedings as an abuse of process, alleging that Mr Priscott has a history of alleging mismanagement by directors or managers of property syndicates, and leveraging those allegations to acquire shares or secure agreements at opportunistic prices. MCL contends that the purpose of the CNP proceeding is to acquire MCL at an opportunistic value.
[8] Mr Tuffin believes this may have been the case in the FNP proceedings. He says that, in an affidavit affirmed by Mr Priscott in response to interrogatories in the CNP proceedings, Mr Priscott confirmed that he made a series of allegations against Michael Millar, Paul Mephan and Investment Services Limited — defendants in the FNP proceedings — and advised them that CNP intended to take derivative action. The affidavit also confirmed that CNP assisted First NZ Properties Ltd in the FNP proceedings. In parallel, Mr Tuffin refers to public records which, he says, show relevant information about the acquisition by Mr Priscott / the “Priscott interests” of controlling shares in First NZ Properties Ltd and Springs Road Property Ltd, and a minority stake in Superstore Properties Ltd.
[9] Mr Tuffin wishes to access the documents described above to determine whether it will shed light on Mr Priscott’s “alleged modus operandi”, which would assist MCL in its defence in the CNP proceedings.
Law of access to Court documents
[10]The documents are sought pursuant to the Rules.
[11] Rules 8(1) and (4) of the Rules provide every person has a right to access the “formal court record” relating to a civil proceeding, which includes judgments, orders and minutes by a Judge.
[12] As for other information, under r 12, the Court must consider the nature of, and the reasons for a request. Rule 12 requires that the Court also, where relevant, take into account:
(a)the orderly and fair administration of justice:
…
(c)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:
(d)the protection of other confidentiality and privacy interests (including those of children and other vulnerable members of the community) and any privilege held by, or available to, any person:
(e)the principle of open justice (including the encouragement of fair and accurate reporting of, and comment on, court hearings and decisions):
(f)the freedom to seek, receive, and impart information:
…
(h) any other matter that the Judge thinks appropriate.
[13] There is no presumption of disclosure and no hierarchy between the r 12 factors.1
[14] The Court must then weigh the nature of and reasons for the request articulated under r 12 against the mandatory countervailing factors of the protection of confidentiality and privacy interests and the orderly and fair administration of justice under r 13. The approach to be taken by the Court during this exercise is mandated by the stage the proceeding has reached. Rule 13 provides:
13 Approach to balancing matters considered
In applying rule 12, the Judge must have regard to the following:
(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—
1 Crimson Consulting Ltd v Berry [2018] NZCA 460, (2018) 25 PRNZ 447 at [32].
(i)greater weight than at other stages of the proceeding; and
(ii)greater weight in relation to documents relied on in the hearing than other documents:
(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; but
(ii)the protection of confidentiality and privacy interests has greater weight than would be the case during the substantive hearing.
[15] Rule 4 defines the substantive hearing, in the civil context, as including the post-hearing and pre-judgment period. The current application was made after trial but before the substantive judgment has been issued, and therefore falls under r 13(b).
[16] Under r 13(b), during the substantive hearing, open justice has greater weight than at other stages of the proceeding, and greater weight in relation to documents relied on in the hearing, than other documents. The Court of Appeal has stated:2
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.
[17]The Supreme Court in Erceg v Erceg stated:3
The principle of open justice is fundamental to the common law system of civil and criminal justice. It is a principle of constitutional importance, and has been described as “an almost priceless inheritance”. The principle’s underlying rationale is that transparency of court proceedings maintains public confidence in the administration of justice by guarding against arbitrariness or partiality, and suspicion of arbitrariness or partiality, on the part of courts. Open justice “imposes a certain self-discipline on all who are engaged in the adjudicatory process — parties, witnesses, counsel, Court officers and Judges”.
[18] Rule 13(b) does not create a presumption of disclosure, but rather affords open justice a higher priority at that stage of the proceedings.4
2 Greymouth Petroleum Holdings Ltd v Empresa Nacional Del Petróleo [2017] NZCA 490, [2017] NZAR 1617 at [25].
3 Erceg v Erceg [2016] NZSC 135, [2017] 1 NZLR 310 at [2] (footnotes omitted).
4 New Zealand Animal Law Assoc v Attorney-General [2020] NZHC 2376 at [9].
[19]As Palmer J noted in Electrix Ltd v Fletcher Construction Co Ltd:5
The freedom to seek, receive and impart information, a mandatory relevant consideration under r 12(f), is also guaranteed by s 14 of the New Zealand Bill of Rights Act 1990… Because, under s 3, the Bill of Rights governs judicial decision-making, the guarantee means freedom of expression is not only a mandatory relevant consideration but a requirement with which the Judge’s decision must be consistent.6
[20] The Court of Appeal in Schenker AG and Schenker (NZ) Ltd v Commerce Commission (applying the predecessor to the Act) stated that the fate of each application ultimately depends on its context.7 Some specificity in the applicant’s reasons for requesting access may be required to justify granting the order.8 The applicant had made a comprehensive application for access to Court documents, some of which were of a confidential nature. The stated purpose was that the applicant “may have suffered loss as a result of the alleged conduct in these proceedings”, with no further detail given about its interest in the documents, including whether or not the applicant was contemplating parallel proceedings.9 In the High Court,10 Asher J had considered the stated purpose to be “underwhelming” and unlikely to assist in a claim for loss in other jurisdictions.11 The Court of Appeal upheld the decision of High Court, commenting that the reasons advanced by the applicant were “broadly cast and vague”,12 and that specificity is required to justify granting an order for access.
[21] In the High Court decision in Schenker AG, Asher J also held that the principle of open justice encourages the fair and accurate reporting of and comment on hearings and decisions, and is relevant to media organisations and commentators but has little relevance to a non-party pursuing a commercial purpose.13 The Court of Appeal upheld that comment, but observed that it might not necessarily follow that the principle will always have limited applicability to a non-party request, or that the class
5 Electrix Ltd v Fletcher Construction Co Ltd [2019] NZHC 2678 at [5].
6 Eurekly Ltd v Crimson Consulting Ltd [2019] NZHC 792 at [5].
7 Schenker AG and Schenker (NZ) Ltd v Commerce Commission [2013] NZCA 114, [2015] NZAR 1561 [Schenker AG] at [2].
8 At [34].
9 At [6] and [33].
10 Commerce Commission v Air New Zealand Ltd [2012] NZHC 271.
11 At [37].
12 Schenker AG, above n 7, at [33].
13 At [31].
of non-parties covered by this principle should be limited to the media and commentators.14
[22] In New Zealand Animal Law Assoc v Attorney-General, the High Court held that the principle of open justice carries less weight when the applicant is a private organisation pursuing its own purposes, rather than a journalist or media organisation.15
[23] In Cullen Group Ltd v Commissioner of Inland Revenue,16 access was sought to documents for the purpose of considering related proceedings in England. Media had been granted access during the hearing and no confidentiality issues had been raised at the time.17 In that application, the information was sought for the purpose of enforcing a judgment of the High Court of England and Wales (where freezing and disclosure orders had subsequently been granted). The hearing was heard in open court, with the media present, and the media had been granted access to court documents without opposition from any parties. The New Zealand High Court was satisfied that the documents sought might contain information relevant to that purpose, and that granting the orders contributed to the orderly and fair administration of justice.18 The Judge stated that the applicant’s freedom to seek and receive information (recognised in r 12(f)) was concomitant to the principle of open justice. Those factors were reinforced by the undertaking by the applicant that it would not use the documents obtained under the order for any other purpose, without leave of the Court.19 The application was granted.
Discussion
[24]The factors weighing in favour of granting the application are as follows.
[25] First, the application contains sufficient detail — more than in Schenker AG — to allow the Court to gain a broad understanding of the purpose for which the
14 At [38].
15 New Zealand Animal Law Assoc v Attorney-General, above n 4, at [21].
16 Cullen Group Ltd v Commissioner of Inland Revenue [2018] NZHC 3238.
17 At [22]–[23].
18 At [24]–[25].
19 At [25].
documents are sought. The Court of Appeal in Greymouth Petroleum Holdings Ltd v Empresa accepted that “it is a reasonable and legitimate purpose to seek documents relevant to a parallel proceeding”.20
[26] Second, the hearing was held in public over several weeks. The documents sought by the applicant were presented in open court.
[27] Third, access has previously been granted to the same documents now sought by the applicant. On 3 May 2023, I granted an application by Victoria Young from BusinessDesk to access the documents described above.21 Subsequently, on 8 May 2023, I granted applications by CNP LP Holdco Ltd and William Mace of National Business Review to access the same documents.22 It appears that Mr Priscott is associated with both CNP LP Holdco Ltd and CNP Holdings Ltd which is involved in the litigation against MCL, as referred to in Mr Tuffin’s application.
[28] No confidentiality issues were raised by the parties in the context of the BusinessDesk application.23 Nor is any objection raised to this application: the defendants consent to the application and the plaintiffs take no position on it.
[29] On the other hand, as in Schenker AG and New Zealand Animal Law Assoc, the applicant is a private individual, pursuing his own purposes, not a journalist or media organisation. The principle of open justice therefore has less weight.
[30] The applicant is searching for Mr Priscott’s modus operandi. The fact that an applicant may be “fishing” — looking for rather than at the object of its interest — does not of itself disqualify the request,24 but nor can granting the request be characterised as directly contributing to the orderly and fair administration of justice, as in Cullen Group, where the documents were sought to assist in enforcing a judgment
20 Greymouth Petroleum Holdings Ltd, above n 2, at [36]; citing Commerce Commission v Air New Zealand, above n 10, at [49].
21 First NZ Properties v Millar [2023] NZHC 1031 at [18].
22 First NZ Properties v Millar HC Nelson CIV-2020-442-62, CIV-2020-442-63, CIV-2020-442-64, 8 May 2023 (Minute of Gwyn J).
23 At [14].
24 Fuji Xerox New Zealand Ltd v Whittaker [2018] NZHC 1043 at [17].
of the High Court of England and Wales against the plaintiff in the proceedings in which the documents were sought.
Result
[31]On balance, I conclude that it is appropriate to grant the application.
[32]The applicant is entitled to copies of the documents sought in the application.
Gwyn J
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