Cain v Mettrick

[2020] NZHC 545

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-000548

[2020] NZHC 545

UNDER

the Companies Act 1993

IN THE MATTER

of an application under section 301 of the Act

BETWEEN

R J CAIN and R G LOGAN as liquidators of Stonewood Homes Limited (in Receivership and Liquidation)

First Plaintiffs

AND

R J CAIN and R G LOGAN as liquidators of Stonewood Homes New Zealand Limited (in Receivership and Liquidation)

Second Plaintiffs

AND

R J CAIN and R G LOGAN as liquidators of Holmfirth Group Limited (in Receivership

and Liquidation) Third Plaintiffs

AND

B A METTRICK

First Defendant

AND

J BOULT

Second Defendant

Hearing:

Determined on the papers

Counsel:

J W A Johnson and M G Colson for Plaintiffs W J Palmer and O Peers for First Defendant

A Galbraith QC and G J Ryan for Second Defendant

Judgment:

18 March 2020

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

[Re In-Court Media Coverage]

CAIN & LOGAN v METTRICK & BOULT [2020] NZHC 545 [18 March 2020]

This judgment was delivered by me on 18 March 2020 at 11.00 am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

The request

[1]    The plaintiffs, who are the liquidators of Stonewood Homes Ltd, Stonewood Homes New Zealand Ltd and Holmfirth Group Ltd, claimed damages from the defendants who are former directors of the companies for alleged breaches of directors’ duties. The second defendant has applied for a stay of the proceeding on the ground that it is an abuse of process. That application is to be heard on 23 March 2020.

[2]    Allied Press has made a request to film, take photos and make sound recordings of the hearing under the In-court Media Coverage Guidelines 2016 (the Guidelines). The plaintiffs and the second defendant oppose the request. The first defendant will abide the decision of the court.

High Court Rules

[3]There are several relevant rules in the High Court Rules 2016.

[4]Rule 1.3 defines “hearing in chambers” as:

… a hearing that takes place in circumstances in which the general public is not admitted, except with leave of the Judge, and includes any conference held under these rules.

[5]    Rule 1.3 provides that an “interlocutory application means an application made in accordance with rule 7.19 or 7.41.” “Interlocutory order” is defined as including an order or direction of the court that concerns a matter of procedure or grants some relief ancillary to that claimed in a pleading.1 Rule 7.34(1) provides that “[a]n interlocutory application for which a hearing is required must be heard in chambers unless a Judge otherwise directs.”

[6]Rule 7.35 provides:

Particulars of the hearing in chambers of an interlocutory application or of the decision or both (including the reasons for the decision) may be published unless a Judge or Registrar, exercising jurisdiction in chambers, otherwise directs.

1      High Court Rules 2016, r 1.3.

The In-court Media Coverage Guidelines

[7]    Allied Press confirms that it will abide by the Guidelines and requests that the standard conditions set out in Schedules 1 – 5 apply.

[8]    Subject to the court exercising its discretion to the contrary,2 the provisions in the schedules to the Guidelines prohibit the filming, audio recording and taking of photographs of matters heard in chambers.3

The court’s approach

[9]    The approach the court takes to requests to film, photograph or record interlocutory hearings has been discussed recently in a series of cases.4 I adopt as the correct expression of principle the comments of Gendall J in Smith v Claims Resolution Service Ltd:5

[6]   I consider this is the appropriate outcome here. I say that given the nature of interlocutory proceedings. Interlocutory proceedings without more are generally heard in Chambers in circumstances not open to the general public except with the leave of the Judge. However, r 7.35 provides that the particulars of a hearing in Chambers of an interlocutory application and the decision, including reasons, may be published unless a Judge or Registrar directs otherwise. Generally, this is sufficient to meet the principles of open justice. As noted by Williams J in Sagapolu v Commonwealth Securities Ltd, the rules give an indication that the hearing of interlocutory applications should not be publicly broadcast unless there are good reasons for so doing. At the preliminary stage, principles of privacy and confidentiality have greater weight than at a substantive hearing.

[7]   This view is also reflected by the approach taken to the granting of media access to Court documents under the Senior Courts (Access to Court Documents) Rules 2017. The Court of Appeal recently stated in that context:

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. Parties are entitled to expect that the need for open justice has been met by full access during the substantive hearing stage, and that personal information not part of the formal court record or the decision will be given greater protection as the years go by. This is particularly so in a civil case as

2 In-court Media Coverage Guidelines 2016 at [4].

3      Schedule 1, cl 4; sch 2, cl 3 and sch 3, cl 1.

4      Smith v Claims Resolution Service Ltd [2018] NZHC 3180. See also Thompson v Invercargill City Council [2020] NZHC 13; and Scott v ANZ Bank New Zealand Ltd [2020] NZHC 338.

5      Smith v Claims Resolution Service Ltd, above n 4, at [6] – [8].

distinct from a criminal case where these considerations, while relevant, may have less weight because of the particular public interest in criminal prosecutions.

[8]   I consider that the present Applications could only be granted here with regard to the present interlocutory hearing where there are clear and compelling reasons why the public interest requires such coverage. There are no such reasons in this case. It is somewhat indicative that, as far as I am aware, to date there appear to have been no cases in New Zealand where televised or recorded coverage of an interlocutory application in chambers matter has been permitted. Given the nature of the allegations against the defendants, which might be seen at one level to do damage to their respective reputations and businesses, principles of privacy are important here.

Discussion

[10]   The second defendant’s application for a stay is an interlocutory application and any orders made on the application will be interlocutory orders. The hearing will take place in chambers, in which case the general public is not to be admitted except with leave of the Judge. There has been no suggestion that the general public will be admitted to the scheduled hearing.

[11]   The High Court Rules recognise the right of the media to be present during a hearing in chambers unless the court orders otherwise and under r 7.35 the decision, including reasons, may be published unless the Judge or Registrar otherwise directs. In these ways the principle of open justice can be recognised with a hearing proceeding in chambers.6

[12]   The Guidelines are clear that the filming, taking of photographs and audio recording of matters heard in chambers will not usually be allowed. The present request can only be granted if there is some compelling reason why the public interest requires coverage of the hearing. There has been no such reason advanced and in its absence the request cannot be granted.

[13]   Furthermore, there are good reasons why the request should not be granted. I have noted previously in this proceeding that matters raised include confidential and commercially sensitive information and also impinge on the privacy interests of non- parties. The potential for the disclosure of private communications and information

6      Thompson v Invercargill City Council, above n 4.

concerning the personal affairs of non-parties is a most important factor which weighs heavily against granting the request sought.

Result

[14]I find the request should not be granted and it is declined.

O G Paulsen Associate Judge

Solicitors:

Wynn Williams, Christchurch Buddle Findlay, Christchurch

White Fox & Jones, Christchurch