Cain v Mettrick
[2019] NZHC 2563
•9 October 2019
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2018-409-000548
[2019] NZHC 2563
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, M G Colson and J Taylor for Plaintiffs W J Palmer and O Peers for First Defendant
G J Ryan for Second Defendant
Judgment:
9 October 2019
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
CAIN v METTRICK [2019] NZHC 2563 [9 October 2019]
This judgment was delivered by me at 11.00 am on 9 October 2019 pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date:
Introduction
[1] The plaintiffs are the liquidators of Stonewood Homes Ltd, Stonewood Homes New Zealand Ltd and Holmfirth Group Ltd. The defendants are former directors of the companies. The companies went into liquidation with large unsecured creditors’ claims. The plaintiffs are seeking damages alleging breaches of directors’ duties. The claims are defended. This judgment concerns two requests for access to court documents relating to this proceeding.
Allied Press
[2] The first request is made by Ms Debbie Porteous of Allied Press. She applies for access to the entire court file but “in particular a recent application by the defendants (we do not have further details of what the application is for).”
[3] The reason given for wanting access to the documents is because the second defendant, Mr Boult, is standing for election as Mayor of the Queenstown Lakes District Council and voters should have information about this proceeding made available to them.
Fairfax Media
[4] The second request is made by Mr Martin van Beynan of Fairfax Media. He refers to a decision of Mander J which concerned an application by Mr Boult that the plaintiffs disclose the identity of their litigation funder.1 Mr Beynan applies for access to documents identifying the litigation funder as well as further applications “filed by Mr Boult and affidavits supporting and opposing the applications.”
[5] The reasons given for wanting access to the documents are that the public have a legitimate interest in the identity of the litigation funder to scrutinise their interests and motivations and, referring to Mr Boult, because it is important that electors are fully informed on what is being alleged or claimed in litigation about election candidates.
1 Cain v Mettrick [2019] NZHC 802, [2019] NZAR 668.
[6]The requests were provided to the parties and are opposed by them all.
[7] As the requests share common aspects and raise similar issues it is convenient to deal with them together.
The relevant considerations
[8] Section 173(1) of the Senior Courts Act 2006 provides that any person may have access to court information of a senior court to the extent provided by, and in accordance with, rules of court. The relevant rules are the Senior Courts (Access to Court Documents) Rules 2017 (“the Rules”).
[9] Rule 8(1) gives every person a right to access the formal court record relating to a civil proceeding. This is a civil proceeding. The term “formal court record” is defined in r 4 and does not include the documents that the applicants wish to access. As the applicants wish to access documents that do not form part of the formal court record, the relevant provisions for present purposes are rr 11, 12 and 13.
[10] Rule 11(2) sets out the matters that a person applying for access must specify in their application, which include sufficient particulars of the document so that the Registrar may identify it and the reasons for asking for access to the document. The Registrar is required to give a copy of the request to the parties to the proceeding who may object by giving written notice setting out their grounds of objection to the Registrar. This is an informal procedure.2 So that the court may undertake the required balancing exercise of relevant considerations, the reasons for the request should be adequately expressed.3 The request is put before a Judge who may grant or refuse the request or grant it subject to conditions. There is also power for the Judge to refer the request to a Registrar for determination.
[11] Rule 12 sets out the matters that the court will consider in determining a request for access under r 11. The Judge is required to consider the nature of, and the reasons
2 Crimson Consulting Ltd v Berry [2018] NZCA 460 at [12].
3 R v ABC [2014] NZHC 8 at [11].
given for, the request and to consider the following matters in so far as they are relevant to the request or any objection to the request:
(a)the orderly and fair administration of justice:
(b)the right of a defendant in a criminal proceeding to a fair trial:
(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:
(g)whether a document to which the request relates is subject to any restriction under rule 7:
(h)any other matter that the Judge thinks appropriate.
[12] In addition, the Rules differentiate between three stages of proceedings and set three different approaches to the balancing process.4 Rule 13 provides:
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—
(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.
4 Crimson Consulting Ltd v Berry, above n 2, at [17].
Application of the principles
[13] The starting point must be the requests themselves. The applicants seek access to documents relating to “a recent application” and “further applications … filed by Mr Boult.” There are extant applications before the court meeting these descriptions. There is an application by Mr Boult to strike out the proceeding as an abuse of process (“the substantive application”) and related applications for the cross-examination of witnesses and production of documents at the hearing of the substantive application. I am proceeding on the basis that the applicants seek access to all documents relevant to these applications.
[14] The applicants’ principal reason for seeking access to the documents relates to Mr Boult’s candidacy for Mayor and the electors’ right to be informed about litigation in which he is involved. Mr van Beynen’s application also advances a wider public interest in significant litigation and the scrutinization of litigation funders’ interests and motivations. I accept that the requests are based on matters of legitimate public interest.
[15] Rule 12 lists the matters that must be considered when deciding requests of this type. There is no presumption in favour of disclosure of information,5 nor is there any hierarchy of the relevant factors to be considered by the court under r 12.6 A balancing of these considerations is required.
The orderly and fair administration of justice
[16]In Crimson Consulting Ltd v Berry, the Court of Appeal noted:7
The orderly and fair administration of justice in this context gives focus to the undesirability of interfering with access to justice through the courts by discouraging the filing of proceedings because of the fear of damaging or embarrassing publicity.
[17] I am of the view that publication of allegations and counter-allegations being made by the parties in the applications presently before the court would not be
5 Schenker AG v Commerce Commission [2013] NZCA 114 at [36].
6 Crimson Consulting Ltd v Berry, above n 2, at [32].
7 Crimson Consulting Ltd v Berry, above n 2, at [36].
conducive to the orderly and fair administration of justice. The affidavits are, in some cases, lengthy and contain contentious evidence. The admissibility of much of the evidence is challenged. The court will be required to resolve the factual disputes and make rulings as to the admissibility of the evidence. The public interest will not be advanced by allowing non-parties access to evidence which may be incorrect and/or inadmissible with the risk that it is released and reported as fact before being subject to the scrutiny of the court.
[18] There are two additional concerns. First, an indication has been given by counsel that they may seek non-publication orders in respect of certain evidence. Such orders would be rendered nugatory if access to the documents has been given.
[19] Second, exhibited documents, notably the plaintiffs’ litigation funding agreement, have been provided in confidence pursuant to orders of the court and are subject to implied undertakings and restriction on their use other than for this proceeding.8 It would be unfair to the parties in those circumstances that access be given to them at this stage.
The right to bring a defence in civil proceedings without disclosure of commercially sensitive information
[20] The affidavits contain what I regard as confidential and commercially sensitive information. As an example, there is a good deal of evidence concerning the business model of the litigation funder. I perceive that the business interests of the litigation funder and associated entities could be damaged by disclosure of this information.
The protection of confidentiality and privacy interests
[21] The affidavits contain transcripts of conversations with a non-party recorded, apparently, without her knowledge or consent. There are also copies of private text messages with that non-party. There is detailed evidence concerning the business affairs of another non-party. These non-parties have no direct interest in this litigation.
8 Dotcom v Attorney-General [2014] NZHC 1343 at [49], High Court Rules 2016, r 8.30.
Disclosure of private communications with them or information concerning their personal affairs would be a significant and unwarranted intrusion upon their privacy.
The principle of open justice
[22] The principle of open justice is engaged but does not create any presumption of disclosure. In considering the level of emphasis to be given to this principle the rationale underlying it must be considered. In Erceg v Erceg, the Supreme Court stated:9
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 the courts. … The principle means not only that judicial proceedings should be held in open court, accessible by the public, but also that media representatives should be free to provide fair and accurate reports of what occurs in the court. Given the reality that few members of the public will be able to attend particular hearings, the media carry an important responsibility in this respect.
(footnotes omitted)
[23] The media has a vital role in disseminating to the public information about judicial proceedings and decisions of the court.10 But, as has been recognised in r 13(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. The principle of open justice does not cease to work simply because the proceeding is at a pre-trial stage, but it will enjoy less weight at the pre- trial stage in the face of countervailing interests.
[24]In BNZ Investments Ltd v Commissioner of Inland Revenue, Wild J stated:11
If the documents in question have not been adduced in evidence, or have not been read by the Court at some other (ie non-evidentiary) stage, the moral impetus behind “open justice” does not apply, because the material never entered the public domain.
9 Erceg v Erceg [2016] NZSC 135, [2017] 1 NZLR 310 at [2].
10 Rice v Heaney [2014] NZHC 1311, (2014) 22 PRNZ 159 at [19].
11 BNZ Investments Ltd v Commissioner of Inland Revenue (2009) 20 PRNZ 311, (2010) 24 NZTC 23,997 (HC) at [33].
[25] The applications to which the applicants seek access have not been heard and there are no decisions of the court in relation to them upon which the media can report. Whilst the public has an interest in knowing generally what type of business is being conducted in the courts, that is not a matter that can be given great weight in the present context.12
Freedom to seek, receive and impart information
[26] I note the view expressed by Ellis J in Rice v Heaney that this principle overlaps with the principle of open justice and might be thought to be subject to the same qualifications.13 She said:
That point is reinforced in the present case by the fact that the courts have said that when determining the weight to be given to this right, the nature and reason for the access request is important. As Asher J stated in Commerce Commission v Air New Zealand Ltd, this freedom “does not exist in a vacuum” but rather “requires a consideration of the reason for the request”.14
[27] Relevant in the present case, whilst the applicants assert the right of electors to know what is being alleged against Mr Boult that information is already in the public domain as the court has previously granted media access to the statements of claim and defence. The applications presently before the court do not deal directly with the substantive issues arising in the proceeding.
Balancing the considerations
[28] The principle of open justice and the applicants’ right to seek, receive and impart information are to be balanced against the orderly and fair administration of justice and rights of privacy and confidentiality. At this pre-trial stage the matters supporting granting access to the documents are not strong and are outweighed by the other matters that I have considered.
12 Crimson Consulting Ltd v Berry, above n 2.
13 Rice v Heaney, above n 10, at [20].
14 Commerce Commission v Air New Zealand Ltd [2012] NZHC 271 at [33].
Result
[29] In the circumstances access to the applications and affidavits filed in support and opposition to them is declined.
O G Paulsen Associate Judge
Solicitors:
Wynn Williams, Christchurch Buddle Findlay, Christchurch White Fox & Jones, Christchurch
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