Buxton v Xero Limited

[2022] NZCA 100

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

 CA140/2021
 [2022] NZCA 100

BETWEEN	KRISTINA LOUISE BUXTON First Appellant AFB TREASURY LIMITED Second Appellant SPINACH DESIGN LIMITED Third Appellant
AND	XERO LIMITED Respondent

Hearing:	30 September 2021 (further materials received on 1 November 2021)
Court:	Goddard, Woolford and Mander JJ
Counsel:	J Moss and S L Austin for Appellants S J Leslie for Respondent
Judgment:	31 March 2022 at 11.00 am

JUDGMENT OF THE COURT

A        The appeal is allowed. 

B The cross-appeal is allowed.

CThe order made in the High Court striking out the appellants’ proceedings is set aside, and replaced with an order entering summary judgment for the defendant, Xero Ltd, in those proceedings.

DThe appellants must pay costs to the respondent for a standard appeal on a band A basis, with usual disbursements.

____________________________________________________________________

Table of Contents

Para No

Introduction

Background

Section 171 requests to Xero seeking access to records of AFB and Spinach
Examination of Mr Henderson and pre-examination ruling
Ms Buxton complains to Xero about the disclosures

The appellants’ breach of privacy proceedings

The appellants file proceedings for breach of privacy
Xero applies for strike out/summary judgment
The appellants oppose Xero’s applications

High Court judgment

The issues before this Court

Appellants’ submissions on appeal

Xero’s arguments on appeal

Discussion

The elements of the tort of invasion of privacy
Are the proceedings an abuse of process?
Should summary judgment be entered for Xero?

Result

REASONS OF THE COURT

(Given by Goddard J)

Introduction

1. Mr Henderson was a prominent property developer.  His businesses encountered difficulties, and between November 2010 and January 2017 he was bankrupt.  The Official Assignee undertook investigations into Mr Henderson’s affairs.  She formed the view that while he was a bankrupt Mr Henderson was exercising control over, and conducting dealings through, a number of companies including AFB Treasury Limited (AFB), the second appellant, and Spinach Design Limited (Spinach), the third appellant.  The sole director of both these companies at the relevant time was Ms Buxton, the first appellant, who is married to Mr Henderson.

2. Xero Ltd, the respondent, is a cloud-based accounting software company that provides online services to small business customers. 

3. Section 171 of the Insolvency Act 2006 provides that the Official Assignee may, by notice in writing, require any person to deliver to her “any document relating to the bankrupt’s property, conduct, or dealings in that person’s possession or under that person’s control”.  The Official Assignee issued three s 171 notices to Xero seeking access to financial information held on Xero’s system concerning AFB and Spinach, which the Official Assignee believed were Xero customers.  AFB was a Xero customer.  Spinach was not.  In response to those notices, Xero provided electronic files to the Official Assignee which contained extensive information about transactions recorded by its customer AFB using Xero’s accounting software (the information). 

4. The appellants accept that some of the information provided by Xero to the Official Assignee arguably related to Mr Henderson’s conduct or dealings.  But they…