Beverley v DC One H1 Limited

[2024] NZHC 3707

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2022-485-157

[2024] NZHC 3707

BETWEEN

ANTHONY AND WENDY BEVERLEY & ORS
Plaintiff

AND

DC ONE H1 LIMITED & ORS

Defendant

CIV-2023-485-47

BETWEEN

DRYLANDCARBON GP ONE LIMITED & ORS

Plaintiff

AND

WILLIAM JAMES WATERHOUSE LECKIE & ORS

Defendant

CIV-2024-485-152

BETWEEN

PHEASANT TAIL HOLDINGS LIMITED
Plaintiff

AND

ANTHONY MONTGOMERY BEVERLEY & ORS

Defendant

Hearing:

On the papers

Appearances:

M G Colson KC, K J Dobbs and M R M Gale for Plaintiffs (CIV- 2022-485-157 and CIV-2023-485-47) and for Defendants (CIV- 2024-485-152)

J B M Smith KC, A S Olney and O C Gascoigne for Defendants (CIV-2022-485-157 and CIV-2023-485-47) and for Plaintiff (CIV- 2024-485-152)

Judgment:

6 December 2024

ANTHONY AND WENDY BEVERLEY & ORS v DC ONE H1 LIMITED & ORS [2024] NZHC 3707 [6

December 2024]

JUDGMENT OF BOLDT J

[1]    This interlocutory application forms part of three complex proceedings that are being jointly case managed, and will eventually be tried together. It concerns 43 documents, listed as part of the defendants’ discovery, over which the defendants claim privilege. 1 In each case the plaintiffs apply to have the claim of privilege set aside and reassessed pursuant to r 8.25 of the High Court Rules 2016.2

[2]    On 11 October 2024, Radich J, who is responsible for the case management of the proceedings, directed that a Judge who is unconnected with the case should review the documents and the claims of privilege.3 Having done so, I consider most of the claims are properly made, but some are not.

Background

[3]    Justice Radich, in his decision consolidating the three proceedings, summarised the background:4

The underlying factual background

[4]    … Anthony Beverley, William Leckie and Christopher Morrison established a carbon afforestation fund to produce carbon credits for the fund’s investors (the Drylandcarbon venture).

[5]    They established Drylandcarbon GP One Ltd (the General Partner), Drylandcarbon One Management Ltd (the Manager) and DC One H1 Ltd (H1) for that purpose (together, the Drylandcarbon companies).

[6]    H1 is the holding company for the other Drylandcarbon companies and is owned as to 50 per cent by Mr and Mrs Beverley and as to 50 per cent by Pheasant Tail Holdings Ltd, a company in which Messrs Leckie and Morrison are directors and shareholders.

[7]    Messrs Leckie and Morrison established another fund, through Lewis Tucker Forest Partners Ltd, Lewis Tucker FP Investment Ltd, Forest Partners GP Ltd and Lewis Tucker FP Management Ltd (the Forest Partners venture)

1      “Defendants” is a shorthand reference to the defendants in CIV-2022-485-157 and CIV-2023-485- 47 and the plaintiffs in CIV-2024-485-152.

2      “Plaintiffs” is a shorthand reference to the plaintiffs in CIV-2022-385-157 and CIV-2023-485-47 and the defendants in CIV-2024-485-12.

3      Beverley v DC One H1 Ltd HC Wellington CIV-2022-485-157, 11 October 2024 (Minute of Radich J, Privilege claimed in discovered documents) [Radich J Minute] at [4]–[5].

4      Beverley v DC One H1 Ltd [2024] NZHC 1303.

with a similar purpose. It is alleged by the Beverleys that, in doing so, a corporate opportunity belonging to the Drylandcarbon companies was diverted.

The Beverley proceeding

[8]    The Beverley proceeding (CIV-2022-485-157) is a claim under s 174 of the Companies Act 1993. It is alleged that Messrs Leckie and Morrison, through H1, acted in an oppressive, discriminatory and prejudicial manner in diverting a business opportunity from the Drylandcarbon venture in establishing the Forest Partners venture and in removing Mr Beverley as a director from the Drylandcarbon companies.

[9]    The Beverleys seek declarations about Mr Beverley’s removal as a director of the Manager and General Partner, orders requiring the reinstatement of Mr Beverley as a director or the purchase of his interests or requiring the sale or receivership or liquidation of the Drylandcarbon companies, together with orders preventing Messrs Leckie and Morrison from proceeding with the Forest Partners venture.

The Drylandcarbon proceeding

[10]    In November last year, the Court of Appeal upheld a decision of the High Court in which the Beverleys were granted leave under s 165 of the Companies Act to bring this proceeding on behalf of the Drylandcarbon companies. In broad terms, it alleges that Messrs Leckie and Morrison unlawfully misused company information and diverted a corporate opportunity belonging to the Drylandcarbon companies such as to breach statutory and fiduciary duties owed to the Drylandcarbon companies. Causes of action are advanced for a breach of the duty of good faith under s 131 of the Companies Act, misuse of corporate information under s 145, breach of the duty of loyalty in failing to act with due care, diligence and skill under s 137 and a breach of fiduciary duty in allegedly preferring their own interests to those of the Drylandcarbon companies.

[11]    It is said that the first to eighth defendants assisted in the process, dishonestly, and breached obligations of confidence. And it is alleged that Lewis Tucker and Company Ltd breached a management services agreement between it and the Manager. The Drylandcarbon companies seek damages, an account of profits and declarations as to a constructive trust.

The Pheasant Tail proceeding

[12]    Pheasant Tail Holdings, in which Messrs Leckie and Morrison are the shareholders and directors, allege that, in their carriage of the Drylandcarbon proceeding, the Beverleys have caused the affairs of the Drylandcarbon companies to be conducted in an oppressive and unfair manner in terms of    s 174 of the Companies Act.

[4]                Lewis Tucker and Company Ltd (Lewis Tucker) played an important role in the narrative. Lewis Tucker is an investment banking, funds management and corporate advisory firm owned by Messrs Leckie and Morrison. As Associate Judge Paulsen noted in an earlier decision, Drylandcarbon One Management was staffed, in

part, by secondees from Lewis Tucker.5 Lewis Tucker was also heavily involved in setting up the Forest Partners venture.

[5]                In or around December 2021, Mr Beverley became aware of a proposal to transfer all Drylandcarbon One Management’s staff to Lewis Tucker, including Mr Colin Jacobs.6 Mr Jacobs was originally employed as financial controller, but was later promoted to general manager, at Drylandcarbon One Management. For reasons discussed below, Mr Jacobs’ role is highly relevant to some of the claims of privilege the plaintiffs challenge. Mr Jacobs officially transferred to Lewis Tucker in April 2022.

Discovery

[6]                On 1 September 2023, Cooke J appointed Wilson Harle, a law firm independent of the proceedings, to conduct discovery on behalf of the plaintiff companies in the Drylandcarbon proceeding, and on behalf of H1in the Beverley proceeding.7

[7]                Wilson Harle undertook the discovery exercise in three tranches and provided the parties with inspection copies of the documents on 1 May, 31 May and 14 June 2024. As part of the third tranche, Wilson Harle proposed to quarantine some documents the defendants say are privileged. In a letter dated 14 June 2024, it said:

2. We have concluded that these communications were  either  not  privileged, or that any privilege in these communications was waived when the communications were shared with Mr Jacobs. The relevant documents will therefore be listed in Part 1 of Mr Leckie’s affidavit. That is because at the relevant time Mr Jacobs was an employee of the DrylandCarbon external manager, and the relevant lawyer / client relationship for any claim to privilege was between Messrs Leckie and Morrison (and/or Lewis Tucker entities) and their lawyers. As an employee of DrylandCarbon Mr Jacobs was not part of the client group, and did not have a joint or common interest in the subject matter of any legal advice contained within the communications.

…

5      Beverley v Drylandcarbon GP One Ltd [2022] NZHC 3606 at [15].

6 At [28].

7      Drylandcarbon GP One Ltd v Leckie [2023] NZHC 2439 at [19], [21] and [33].

5.While we  have been able to reach a conclusion on these documents  based on the content of the documents and available context, in the circumstances we consider it appropriate to afford the parties with the opportunity to consider our assessment and provide additional information prior to the documents being made available for inspection. We have therefore quarantined these documents and propose withholding them from inspection for 2 weeks (to Friday 28 June 2024), to allow a reasonable opportunity for that to occur. We invite the parties to discuss and reach a shared position with respect to whether any limited inspection will take place under which the parties will consider the documents while maintaining the ability to assert privilege.

[8]                The parties wrote to Wilson Harle setting out their respective views of the privilege being asserted, and about the role of Mr Jacobs and his connection to the defendants.

[9]                Wilson Harle made its final determination on 23 August 2024. It maintained the position it set out in its 14 June 2024 letter and observed, “[b]ased on the available information we reached the view that the Quarantined Documents were either not privileged or any privilege had been waived.” It indicated it would not disclose inspection copies pending an order of the Court, hence the present application.

The application

[10]            The application was summarised in Radich J’s minute directing that the claims to privilege and confidentiality be examined by the Court:8

The positions of the parties

[13]      The arguments advanced by both parties are made in detail in their respective submissions. In broad terms, for the purposes of this introduction, the defendants claim privilege over two categories of documents: the “Leckie Morrison documents” and the “Forest Partners documents”.

The Leckie Morrison documents

[14]      There are two sets of issues in relation to these documents. The first is whether the defendants’ claim to litigation privilege over a number of them is sustainable. The defendants claim that privilege from February 2021 at which point it is said that litigation was reasonably apprehended.

[15]      The second relates to the defendants’ claim of privilege over material that was copied to Colin Jacobs. Mr Jacobs was at the relevant time the general manager of Drylandcarbon One Management Ltd. The plaintiffs do not accept

8      Radich J Minute, above n 3.

the defendants’ view that Mr Jacobs acted as an authorised agent of Messrs Morrison and Leckie and Pheasant Tail Holdings Ltd during the relevant time and are of the view that privilege was waived when he was copied in to or involved in communications between the defendants and their legal advisers.

Forest Partners’ documents

[16]      The defendants claim privilege over this set of documents as belonging to either Pheasant Tail Holdings or the Forest Partners Ltd Partnership arising from Buddle Findlay’s engagement in the establishment of, and their subsequent engagement for, the Forest Partners Ltd Partnership (that is to say, in broad terms, the second carbon afforestation fund). In the case of two documents, [without prejudice privilege] is claimed. The plaintiffs say that it is not clear that the communications were both prepared in connection with an attempt to settle or mediate a dispute and remain confidential to the party to the dispute.

Legal principles

Solicitor-client privilege

[11]            Privilege for communications with legal advisers, often described as solicitor-client privilege, is governed by s 54 of the Evidence Act 2006. It relevantly provides:

54 Privilege for communications with legal advisers

(1)A person who requests or obtains professional legal services from a legal adviser has a privilege in respect of any communication between the person and the legal adviser if the communication was—

(a)intended to be confidential; and

(b)made in the course of and for the purpose of—

(i)the person requesting or obtaining professional legal services from the legal adviser; or

(ii)the legal adviser giving such services to the person.

…

[12]            This privilege enables the free and candid exchange of information between legal advisers and clients.9 “Communication” is construed broadly; it is not confined to specific requests for legal advice and the advice given in response. It refers instead

9      See Wheeler v Le Marchant (1881) 17 Ch D 675 (CA); and R v Derby Magistrates Court ex p B [1996] 1 AC 487 (HL) at 507 and 508 cited with approval in B v Auckland District Law Society [2004] 1 NZLR 326 (PC) at 344.

to the “continuum of information passing between the two to keep each other informed so that advice may be sought and given as required”.10 Information of that kind could, for example, include factual narratives which would not usually be protected, as long as they form part of the necessary exchange required to obtain legal advice.11

[13]            It is well established that if a document is not privileged when created, the act of passing it to a solicitor will not transform it into a privileged document. There are limited exceptions. For example, in Simunovich Fisheries Ltd v Television New Zealand Ltd, the Court of Appeal ruled that a series of draft television scripts sent to solicitors were legally privileged.12 The Court noted that the information did not attract privilege simply because it was sent to lawyers as “an adjunct to a communication in which advice was sought or given.”13 Rather, it was privileged because, in the circumstances, disclosure of the scripts would reveal the content of the privileged communication.14

[14]            In addition to the exception in Simunovich Fisheries, privilege may attach where a particular collation or selection of a group of documents, which may not ordinarily be privileged, might disclose legal advice.15

[15]            These exceptions are narrowly applied. The case law shows that the purpose for which the document was created must be examined carefully; the decisive question is usually whether it was brought into existence in connection with obtaining or providing legal advice.

Litigation privilege

[16]            Privilege for preparatory materials for proceedings, commonly known as litigation privilege, is governed by s 56 of the Evidence Act. It relevantly provides:

10     Commerce Commission v Caltex New Zealand Ltd HC Auckland CL33/97, 10 December 1998 at

4. See also Kupe Group Ltd v Seamar Holdings Ltd [1993] 3 NZLR (HC); and Gowing & Co Lawyers v Police [2013] NZHC 2177, [2018] NZAR 255 at [19].

11     Commerce Commission v Caltex New Zealand Ltd, above n 10, at 4 citing Balabel v Air-India

[1998] Ch 317, [1998] 2 All ER 246 (CA) at 256.

12     Simunovich Fisheries Ltd v Television New Zealand Ltd [2008] NZCA 350.

13 At [169].

14     At [165] and [169].

15     See Gowing & Co Lawyers v Police, above n 10, at [19].

56       Privilege for preparatory materials for proceedings

(1)Subsection (2) applies to a communication or information only if the communication or information is made, received, compiled, or prepared for the dominant purpose of preparing for a proceeding or an apprehended proceeding (the proceeding).

(2)A person (the party) who is, or on reasonable grounds contemplates becoming, a party to the proceeding has a privilege in respect of—

(a)a communication between the party and any other person:

(b)a communication between the party’s legal adviser and any other person:

(c)information compiled or prepared by the party or the party’s legal adviser:

(d)information compiled or prepared at the request of the party, or the party’s legal adviser, by any other person.

…

[17]            In Guardian Royal Exchange Assurance of New Zealand Ltd v Stuart, the Court described the dominant purpose test as follows:16

… when litigation is in progress or reasonably apprehended, a report or other document obtained by a party or his legal adviser should be privileged from inspection or production in evidence if the dominant purpose of its preparation is to enable the legal adviser to conduct or advise regarding the litigation.

[18]            The dominant purpose test will not be met, for example, where the document is prepared for two or more equally important purposes (even if one was litigation).17

[19]            The point at which litigation is “reasonably apprehended” is a question of fact. It is to be determined by assessing what the relevant party actually contemplated, and the reasonableness of that contemplation.18

16 Guardian Royal Exchange Assurance of New Zealand Ltd v Stuart [1985] 1 NZLR 596 (CA) at 602.

17 See Minister of Education v H Construction North Island Ltd [2017] NZHC 3147 at [7] citing Dinsdale v Commissioner of Inland Revenue (1997) 11 PRNZ 325 (CA) at 326; and Minister of Education v James Hardie New Zealand [2019] NZHC 3487 at [10]–[11].

18 Attorney-General v Seven Electrical Ltd HC Wellington CP251/00, 14 November 2001 at [9]; and

Commerce Commission v Caltex New Zealand Ltd, above n 10, at 4.

Without prejudice privilege

[20]            Section 57(2) of the Evidence Act provides that a party to a civil proceeding may claim privilege over a confidential document prepared in connection with an attempt to mediate the dispute or negotiate a settlement. Privilege does not attach only to settlement offers, but may include communications and documents such as mediation papers.19 The privilege is held by the person who prepared the document.20

Waiver of privilege and agency

[21]            A privilege holder may waive privilege either expressly or impliedly. Privilege will be waived if the holder voluntarily (and not mistakenly) produces or discloses a significant part of the communication in a manner which is inconsistent with a claim of confidentiality.21

[22]            Disclosure or production to an agent or authorised representative of the privilege holder does not constitute waiver.22 Whether a recipient of privileged information was acting as the privilege holder’s agent is a question of fact. In Robert v Foxton Equities Ltd, Kós J observed:23

[35]   To act as an agent, “[i]t is not sufficient … that the third party passes on information to the client’s solicitor for the purpose of enabling legal advice to be given”. The third party must go further and have “assumed, the role … client” in communicating the information to the solicitor. It must have acted as the client’s “man on the spot”. Importantly, where a third party has collected information for solicitors in the course of “performing a task that ordinarily would have been undertaken by the client itself” as opposed to a task normally performed by an independent contractor, it is not necessary that the third party have “the capacity to instruct and/or receive legal advice from the solicitors in question on the client’s ‘behalf’”.

…

[40] Given that privilege is now codified in the Evidence Act 2006, it is important to focus on the words of the statute. They support the view that to be an agent for the purposes of privilege, a person must be given authority to communicate with the solicitor to obtain legal advice, and actually do so.

19     Minister of Education v Reidy McKenzie Limited [2015] NZHC 1555, [2015] NZCCLR at [46].

20     PricewaterhouseCoopers v Zag Ltd [2023] NZHC 1470 at [22].

21     Evidence Act 2006, s 65.

22     Section 51(4).

23     Robert v Foxton Equities Ltd [2014] NZHC 726, [2015] NZAR 1351.

General observations

[23]            I make two general observations. The first concerns the role of Mr Jacobs. As noted, the defendants say Mr Jacobs was acting as the authorised representative, or agent, of Messrs Leckie and Morrison when included in communications over which privilege is claimed. Wilson Harle, in its assessment of the documents, observed that Mr Jacobs was using his Drylandcarbon email address to send and receive the communications, and considered he was therefore not acting as agent for Messrs Leckie and Morrison, or the associated defendant companies. The firm determined that when the defendants disclosed information to Mr Jacobs, they waived privilege. I disagree.

[24]            I do not consider the email address has particular relevance to the assessment. The use of the Drylandcarbon email address is explained in Mr Jacobs’ affidavit; most communications with Mr Jacobs occurred during work hours, when he was using that address. It was simply a practical and efficient way of communicating with him. A review of the communications shows Mr Jacobs was, to use the words of Kós J, the defendants’ “man on the spot”. The communications make it clear he was closely aligned with the defendants, and that his role was to provide the solicitors with accurate information about the issues on which Messrs Leckie and Morrison were seeking advice. The advice was also important to Mr Jacobs himself.

[25]            There are several privileged communications which demonstrate Mr Jacobs was acting as the defendants’ agent and/or authorised representative. I am satisfied privilege was not waived when communications were disclosed to him.

[26]            The second observation concerns communications with Buddle Findlay. These documents were the most difficult to assess because of the evolving nature of the firm’s relationship with Drylandcarbon and later Forest Partners. The firm also acted for Lewis Tucker and Pheasant Tail Holdings Limited (PTHL). I discuss these communications in more detail below, but I note for now that in 2021 and early 2022, while the firm was advising Drylandcarbon, it was also advising Messrs Leckie, Morrison and Jacobs about the establishment of Forest Partners. It was formally retained by the new venture once it was set up. In other words, it was effectively

advising everyone, though it also appears clear it did not anticipate the subsequent conflict between the two operations. The documents appear to indicate Buddle Findlay regarded Forest Partners as a venture which would complement Drylandcarbon.

DRY03.10850

[27]            This document is an  email dated 24 February  2021 from  Mr Morrison to  Mr Jacobs, copying in Mr Leckie and Messrs Leckie and Morrison’s then-legal advisers, Morrison Mallett. The email also forwarded an email from Morrison Mallett to Messrs Leckie and Morrison. The defendants assert litigation privilege and solicitor-client privilege, but Wilson Harle considered the privilege was waived when the email was forwarded to Mr Jacobs.

[28]            For the reasons set out above, I do not agree. In light of my conclusion that Mr Jacobs was acting as Messrs Leckie and Morrison’s authorised agent, his involvement in the chain of communications did not amount to a waiver. In any event, the document does not appear relevant.

DRY03.10818–DRY0.310825

[29]            These documents comprise two emails and a number of attachments. The emails were sent by Messrs Leckie and Morrison to Morrison Mallett on 23 February 2021. The defendants say litigation was reasonably contemplated by then, and assert both solicitor-client and litigation privilege over all documents. Wilson Harle did not consider the documents privileged and formed the view, even if they were, that privilege was waived when they were disclosed to Mr Jacobs.

[30]            The two emails, DRY03.10818 and DRY03.10822, are straightforward. They were communications with legal advisers, and I do not consider Mr Jacobs’ inclusion constituted a waiver. Solicitor-client privilege attaches (though the emails themselves contain nothing of relevance).

[31]            The attachments are different. The defendants argue that privilege attaches because the dominant purpose of sending the material to Morrison Mallett was to

obtain legal advice. As noted above, however, a document that is not privileged when created does not become privileged merely because it is later passed to a legal adviser. None of the narrow exceptions to that rule apply. Disclosure will not reveal any request for legal advice or any legal advice that was eventually received. The attachments do not attract solicitor-client privilege.

[32]            I am also satisfied the attachments do not attract litigation privilege. They were not created for the dominant purpose of preparing for apprehended litigation. There were plainly difficulties within Drylandcarbon at the time the documents were created; several were prepared as aides memoir, with a view to documenting the deterioration in  the  relationship  between  Messrs  Leckie  and  Morrison,  on  one  hand,  and  Mr Beverley on the other. Another document was described as a “structure and culture review” of Drylandcarbon. I agree with Wilson Harle; the attachments are not privileged and are discoverable.

DRY03.10956–DRY03.10959

[33]            This bundle of documents comprises two emails dated 2 March 2021, and several attachments.  The  emails  were  between  Mr  Morrison  and  Mr  Jacobs.  Mr Leckie  and Morrison Mallett  were copied into Mr Morrison’s email but only  Mr Leckie was copied into Mr Jacobs’ reply. The defendants assert solicitor-client privilege and/or litigation privilege. Wilson Harle considered the communications were not privileged and, if they had been, that privilege was waived when they were sent to Mr Jacobs.

[34]            I am satisfied solicitor-client privilege attaches to Mr Morrison’s email, DRY03.10956, and was not waived by the inclusion of Mr Jacobs among the recipients. It does not, in any event, appear relevant.

[35]            The two attachments — draft restructuring proposals for Drylandcarbon prepared by Lewis Tucker and numbered DRY03.10957 and DRY03.10959 — are not privileged. I am satisfied nothing in the documents would reveal solicitor-client communications or any legal advice.

[36]            Litigation privilege does not attach. It is clear neither document was prepared for the dominant purpose of assisting in apprehended litigation.

[37]            While Mr Jacobs’ email (DRY03.10958) did not copy Morrison Mallett in, it was written in reply to a privileged communication, and may reveal the contents of the privileged communication to which it responds. It is of little, if any, relevance in any event.

DRY03.12144–DRY03.12152

[38]            These nine documents comprise an email chain between Mr Morrison, Mr Leckie, Mr Jacobs, Morrison Mallett and a barrister, Mr Adrian Olney. The defendants assert solicitor-client and/or litigation privilege. Wilson Harle considered the documents were privileged, but that privilege was waived when Mr Jacobs was copied in.

[39]            The communications are privileged. Messrs Morrison and Leckie were seeking legal advice and Morrison Mallett provided advice. I am satisfied Mr Jacobs was acting as their authorised representative and his inclusion in the emails did not constitute a waiver. It is not necessary to comment on whether the documents may also be subject to litigation privilege.

DRY03.12466

[40]            This is an email from Morrison Mallett to Mr Jacobs. The defendants assert solicitor-client privilege. Wilson Harle did not consider it privileged because the email was to Mr Jacobs, and not to Mr Morrison or Mr Leckie. For the reasons already discussed I do not agree. Mr Jacobs was Messrs Leckie and Morrison’s agent, and the email is subject to solicitor-client privilege.

DRY03.13576

[41]            This is an email from Mr Leckie to Mr Jacobs forwarding correspondence between Mr Leckie, Mr Morrison and Morrison Mallett. Wilson Harle considered the otherwise clear solicitor-client privilege had been waived because the document was

passed to Mr Jacobs. Given the latter’s role as authorised agent, privilege was not waived, and the email is privileged.

DRY03.11778 and DRY03.11779

[42]            These documents are an email and attachment Mr Morrison sent Messrs Leckie and Jacobs on 14 April 2021. The defendants assert without prejudice privilege under s 57(2) of the Evidence Act. The document was a “mediation statement” by Messrs Morrison and Leckie in preparation for a mediation with Mr and Mrs Beverley the following week. The mediation sought to address the general deterioration in the parties’ relationship. The terms of settlement, and the lead up to the mediation, are set out in more detail in the decision of Associate Judge Paulsen.24

[43]            Wilson Harle agreed the documents were subject to without prejudice privilege and considered the privilege is held by PTHL. The defendants  disagree  with  Wilson Harle about the identity of the privilege holder, and say the privilege is held by Messrs Morrison and Leckie. While the question may be academic, I agree with the defendants. PTHL is not mentioned in the document, nor was it a party to the mediation. Although the solicitors who prepared the document were retained by PTHL, they were also retained Messrs Morrison and Leckie as principals of the company. It is clear the document was prepared for Messrs Morrison and Leckie, not PTHL.

DRY03.12465–DRY03.1248625

[44]            These documents contain an email chain between Mr Jacobs and Morrison Mallett. The defendants assert solicitor-client privilege and/or litigation privilege. Wilson Harle did not consider them privileged as they were communications with a non-client. In light of my conclusion about Mr Jacobs’s status as an authorised agent, I do not agree.

[45]            These documents are a part of the same email chain as DRY03.12466. They are subject to solicitor-client privilege (held by Mr Morrison, Mr Leckie and PTHL).

24     Beverley v Drylandcarbon GP One Ltd, above n 5.

25 Excluding DRY03.12466, which dealt with separately above at [40].

DRY03.12927

[46]            This is one of the documents over which Lewis Tucker and Forest Partners assert solicitor-client privilege. It is an internal Buddle Findlay communication; the material part comprises notes of a meeting on 21 October 2021 between solicitors in the firm and Messrs Jacobs and Leckie. The defendants claim solicitor-client privilege, and say it is held by Lewis Tucker and Forest Partners.

[47]            It is clear the meeting discussed Forest Partners and Drylandcarbon. Wilson Harle considered the document privileged, but concluded the privilege belongs to Drylandcarbon.

[48]            The meeting occurred before Forest Partners was established and well before it retained Buddle Findlay (in April 2022). It also occurred before PTHL engaged Buddle Findlay to set up Forest Partners. It is not clear when Lewis Tucker instructed Buddle Findlay in connection with Forest Partners, though the defendants say that had occurred by the time of the meeting.

[49]            I agree with Wilson Harle. The meeting discussed the proposed Forest Partners venture but also Drylandcarbon, for whom Buddle Findlay continued to act. There was reference to an additional fees discount for Drylandcarbon and Forest Partners “given the volume of work we’re getting”. There can be no suggestion the notes contained advice about the new venture which was meant to be kept confidential from Drylandcarbon; Buddle Findlay would have been deeply conflicted if that were the case. At the time of the discussion, it acted for Drylandcarbon, and Forest Partners did not exist.

[50]            Accordingly, I agree the defendants are not entitled to assert privilege in the document, at least against Drylandcarbon. The document is discoverable.

DRY03.13024 and DRY03.13038

[51]            The same conclusion applies to these documents, which consist of emails, dated 8 and 9 November 2021, between Buddle Findlay and Mr Leckie with Mr Jacobs copied in.

[52]            The defendants say the emails are privileged, and that the privilege is held Lewis Tucker and PHTL. But Drylandcarbon was discussed extensively, and the emails concern the possibility of a further fees reduction for both Drylandcarbon and Forest Partners in light of the additional business the latter venture would provide for the firm. Drylandcarbon was Buddle Findlay’s client. The emails appear to be of little, if any, relevance, but it is clear Drylandcarbon has at least as strong a claim to the privilege as the defendants.

DRY03.13847 and DRY03.1849

[53]            These documents are in the same category. They are communications between Mr  Leckie  and  Buddle  Findlay  spanning  the  period  between  29  March  and     1 April 2022. The firm was helping draft two new Service Level Agreements, one between Lewis Tucker and Drylandcarbon, the other between Lewis Tucker and Forest Partners. Wilson Harle determined the communications were privileged and that the privilege belonged exclusively to Forest Partners. I agree the documents are privileged, but not that the privilege is exclusively held by Forest Partners.

[54]            Both documents contain a lengthy email chain. At the beginning of the chain, Mr Jacobs noted he was seeking advice from Buddle Findlay about the new Lewis Tucker-Drylandcarbon SLA “in its capacity as legal advisor for Drylandcarbon”. The subject line throughout the exchange — with the exception of the last two emails in the chain — was “Drylandcarbon and Lewis Tucker SLA”.

[55]            The subject heading of the final two emails, still attaching the remainder of the chain, changed to “Re: Forest Partners and Lewis Tucker SLA”. Buddle Findlay suggested a clause in “the equivalent SLA for Forest Partners” should be different from the corresponding clause in the Drylandcarbon agreement. There can be no suggestion the emails, or the agreements being prepared, were meant to be kept confidential from Drylandcarbon. Once again, the relevance of the emails is questionable, but given Buddle Findlay’s ongoing role as Drylandcarbon’s solicitors,

and the fact the communications engaged Drylandcarbon’s interests, Forest Partners is not entitled to assert privilege over them, at least against Drylandcarbon.26

DRY03.14038

[56]            This is a communication from Buddle Findlay to PTHL dated 30 April 2022. The defendants assert solicitor-client privilege, and say the privilege holder is PTHL. I agree. The document does not mention Drylandcarbon and concerns matters on which PTHL had instructed Buddle Findlay.

DRY03.14117-DRY03.14120

[57]            These documents contain an email chain dated 18 May 2022 between Buddle Findlay, Lewis Tucker and third-party solicitors. They concern a transaction Forest Partners was undertaking. The defendants claim solicitor-client privilege. Wilson Harle agreed the documents were privileged but considered privilege was waived as Mr Jacobs had been copied in on his Drylandcarbon email address.

[58]            By May 2022, Mr Jacobs had moved from Drylandcarbon to Lewis Tucker. It is clear he still had access to his Drylandcarbon email address, as he wrote one of the emails in the chain using that address. The defendants say that although Mr Jacobs was deliberately copied in, it was a mistake to do so using the Drylandcarbon address. Accordingly, they say the privilege was not waived.

[59]            I agree. The communications are clearly privileged and the privilege belongs to Forest Partners. I also agree the use of Mr Jacobs’ Drylandcarbon address was an obvious error. There was no deliberate waiver.

DRY03.14125–DRY03.14127

[60]            These documents comprise communications (including attachments) between Lewis Tucker and Buddle Findlay dated 19 May 2022. They are of little relevance, and concern technical steps involved in setting Forest Partners up. The defendants

26     The communications would likely be privileged against production to an unrelated third party, but there is no privilege as between Drylandcarbon, Forest Partners and Lewis Tucker.

claim solicitor-client privilege and say the privilege belongs to Forest Partners. I agree.

DRY04.02329

[61]            The final document  is  an  email  from  Mr Leckie to  Buddle Findlay  dated 3 May 2022. Mr Leckie discussed matters connected with setting up Forest Partners. The defendants assert solicitor-client privilege, and suggest the privilege belongs to PTHL. I agree the document is privileged. I consider the privilege belongs to Forest Partners, but nothing turns on that.

Result

[62]            I have summarised my ruling below. All documents listed as privileged are subject to solicitor-client privilege unless otherwise stated.

[63]            The documents listed between subparagraphs (ee) and (ii) are described as “not privileged” even though they contain communications with solicitors for the purpose of giving and receiving legal advice. The “not privileged” designation indicates they are not privileged as between the parties to these proceedings; they would likely be protected from disclosure to a third party.

[64]I rule as follows:

(a)DRY03.10818: Privileged (privilege held by Messrs Leckie and Morrison and PTHL).

(b)DRY 03.10819: Not privileged.

(c)DRY 03.10820: Not privileged.

(d)DRY03.10822: Privileged (Messrs Leckie and Morrison and PTHL).

(e)DRY 03.10823: Not privileged.

(f)DRY 03.10824: Not privileged.

(g)	DRY 03.10825: Not privileged.
(h)	DRY03.10850: Privileged (Messrs Leckie and Morrison and PTHL).
(i)	DRY03.10956: Privileged (Messrs Leckie and Morrison and PTHL).
(j)	DRY 03.10957: Not privileged.
(k)	DRY03.10958: Privileged (Messrs Leckie and Morrison and PTHL).
(l)	DRY 03.10959: Not privileged.
(m)	DRY03.11778: Privileged (without prejudice privilege held by Messrs Leckie and Morrison).
(n)	DRY03.11779: Privileged (without prejudice privilege held by Messrs Leckie and Morrison).
(o)	DRY03.12144: Privileged (Messrs Leckie and Morrison and PTHL)
(p)	DRY03.12145: Privileged (Messrs Leckie and Morrison and PTHL)
(q)	DRY03.12146: Privileged (Messrs Leckie and Morrison and PTHL).
(r)	DRY03.12147: Privileged (Messrs Leckie and Morrison and PTHL).
(s)	DRY03.12148: Privileged (Messrs Leckie and Morrison and PTHL).
(t)	DRY03.12149: Privileged (Messrs Leckie and Morrison and PTHL).
(u)	DRY03.12150: Privileged (Messrs Leckie and Morrison and PTHL).
(v)	DRY03.12151: Privileged (Messrs Leckie and Morrison and PTHL).
(w)	DRY03.12152: Privileged (Messrs Leckie and Morrison and PTHL).

(x)DRY03.12466: Privileged (Messrs Leckie and Morrison and PTHL).

(y)DRY03.13576: Privileged (Messrs Leckie and Morrison and PTHL).

(z)                  DRY03.12465: Privileged (Messrs Leckie and Morrison and PTHL). (aa) DRY03.12467: Privileged (Messrs Leckie and Morrison and PTHL). (bb) DRY03.12484: Privileged (Messrs Leckie and Morrison and PTHL). (cc) DRY03.12485: Privileged (Messrs Leckie and Morrison and PTHL). (dd) DRY03.12486: Privileged (Messrs Leckie and Morrison and PTHL). (ee) DRY03.12927: Not privileged.

(ff) DRY03.13024: Not privileged. (gg) DRY03.13038: Not privileged. (hh)     DRY03.13847: Not privileged.

(ii)       DRY03.13849: Not privileged.

(jj) DRY03.14038: Privileged (PTHL).

(kk) DRY03.14117: Privileged (Forest Partners). (ll) DRY03.14119: Privileged (Forest Partners). (mm) DRY03.14120: Privileged (Forest Partners). (nn) DRY03.14125: Privileged (Forest Partners). (oo) DRY03.14126: Privileged (Forest Partners).

(pp)     DRY03.14127: Privileged (Forest Partners).

(qq)     DRY04.02329: Privileged (Forest Partners).

Costs

[65]            Both parties seek costs. By my calculation, the plaintiffs have succeeded in setting aside around 28 per cent of the defendants’ claims of privilege. If parties still wish to seek costs, and cannot agree, they should file a memoranda of no more than 10 pages (including a costs schedule). The plaintiffs are to file their memorandum within 10 working days after delivery of this judgment, and the defendants may respond within a further 10 working days.

Boldt J

Solicitors:

Mallett Partners, Wellington for Defendants Bell Gully, Wellington for Plaintiffs

Solicitors: