Capital + Merchant Finance Limited (in receivership and in liquidation) v Hammond

[2013] NZHC 2121

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-007534 [2013] NZHC 2121

BETWEEN  CAPITAL + MERCHANT FINANCE LIMITED (IN RECEIVERSHIP AND IN LIQUIDATION)

Plaintiff

ANDSTACE HAMMOND Defendant

Hearing:                   On the papers

Counsel:                  V Heine for Plaintiff

PJ Napier for Defendant

Judgment:                21 August 2013

JUDGMENT OF ASHER J (Application to obtain access to Court documents)

This judgment was delivered by me on Wednesday, 21 August 2013 at 1.00 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Chapman Tripp, Wellington.

Keegan Alexander, Auckland.

Copy to:

Fairfax Media, Auckland.

CAPITAL + MERCHANT FINANCE LTD (IN RECEIVERSHIP AND IN LIQUIDATION) v STACE HAMMOND [2013] NZHC 2121 [21 August 2013]

Introduction

[1]      On 11 June 2013 a reporter, Tim Hunter of Fairfax Media, made a request for access to the statement of claim and statement of defence in this proceeding under r 3.13  of  the  High  Court  Rules.    The  defendant,  Stace  Hammond,  opposes  his application and submits that it should be declined.

[2]      In written submissions Mr Napier, for Stace Hammond, observed that the reputation  of  a  law  firm  is  of  the  utmost  importance.    The  existence  of  the proceeding has already caused harm for Stace Hammond, with their work being called into question in public, as well as reluctance from clients to the firm. There has also been reluctance from other solicitors to refer work to the defendant and rumours and misconceptions being circulated in the community.  It is submitted that the release of the statement of claim and statement of defence will compound the damage.

[3]      There is also concern that the parties’ obligations in progressing to trial will be diverted by publicity at such an early stage, and that the full strength of the defence  is  not  adequately  shown  in  the  statement  of  defence.    The  untested allegations in the statement of claim could cause irreparable harm to the defendant. It is also submitted that the complexity of the proceeding makes it difficult to report objectively and accurately, and that the fact of public interest is not in itself enough.

[4]      In response, Fairfax Media submitted that there is a legitimate public interest in the case. It submits that investors may be affected by and have an interest in the actions  of  the  receiver,  and  other  investors  more  generally  may  be  interested. Further, it submits that the public are entitled to know the details of the claim.

Approach

[5]      Rule 3.16 of the High Court Rules provides that in determining an application under r 3.13, the following matters must be taken into consideration:

(a)   the orderly and fair administration of justice:

(b)   the protection of confidentiality, privacy interests (including those of children and other vulnerable members of the community), and any privilege held by, or available to, any person:

(c)   the principle of open justice, namely, encouraging fair and accurate reporting of, and comment on, court hearings and decisions:

(d)   the freedom to seek, receive, and impart information:

(e)   whether  a  document  to  which  the  application  or  request  relates  is subject to any restriction under rule 3.12:

(f)   any other matter that the Judge or Registrar thinks just.

[6]      Mr Napier relied on the following extract from Commerce Commission v Air

New Zealand Ltd:[1]

[1] Commerce Commission v Air New Zealand Ltd [2012] NZHC 271 at [29], approved in Schenker

AG v Commerce Commission [2013] NZCA 114.

I conclude that open justice is not the paramount consideration in the new access regime. As has been observed, it is a principle and not a freestanding right.  It is just one of the matters to be taken into account, and there is no presumption in favour of disclosure.  In this regard I respectfully prefer the reasoning of Mallon J in Chapman to that of Wild J in BNZ Investments Ltd, and agree with the observation in McGechan that the r 3.16 factors “do not represent a hierarchy”.

(footnotes omitted)

[7]      The  plaintiff  through  the  liquidators  does  not  oppose  any  search  of  the pleadings.

Analysis

[8]      Journalists of Fairfax Media are “members of the media” as defined by the Criminal Procedure Act 2011[2]  and have a legitimate interest as the surrogate of the public in publishing details of court proceedings.   The principle of open justice therefore works in favour of access.

[2] Criminal Procedure Act 2011, s 198(2).

[9]      Stace Hammond has no particular privacy interest or vulnerability.   It is a professional firm operating in the commercial arena.   It cannot claim particular interest in confidentiality or privacy beyond that of any commercial person who

would rather not have adverse allegations concerning it published.

[10]     The reality is that the fact Stace Hammond is being sued is already in the marketplace.  It is difficult to see how the provision of details of the claim will have a marked additional adverse effect.   The claim is detailed and alleges contractual breach and tortious negligence.  It asserts that Stace Hammond committed errors in its work.  There is nothing scurrilous or abusive in the way in which the claim is pleaded.  Indeed, it is pleaded in an entirely professional way.  Any approved search will also involve the search of the statement of defence which is full, denies a number of the allegations, and sets out the firm’s affirmative defence of contributory negligence.

[11]     The  pleadings  are  sober,  professionally  prepared  documents  which  are properly lacking in scurrilous allegations or indeed unnecessary adjectives.  They are the sort of proceedings that can be expected when there are contested allegations of error made by one commercial party against another.

[12]     Given that the fact of the claim is already out there, I am unable to see any additional significant detriment to Stace Hammond in the publication of the detail. Indeed, the publication of the detail will give the informed reader a better perspective of the nature of the allegations, and could well take some of the sting out of the bald fact that Stace Hammond is being sued.

[13]     I  also  reject  the  suggestion  that  the  position  is  similar  to  that  of  the defendants in Commerce Commission v Air New Zealand Ltd, where substantial resources would have had to be devoted by busy parties to go through documents to delete confidential material.  No such issue arises here as it is not suggested a culling of confidential material is required.

Conclusion

[14]     Fairfax Media has a legitimate interest in searching the file in the manner proposed, and the principle of open justice supports its position.   There are no particular factors that stand in the way of publication and indeed, in my assessment, Stace  Hammond’s  position  in  the  marketplace  is  unlikely  to  be  significantly worsened  following publication.   The plain  fact  is  Stace Hammond  faces  court proceedings that are undoubtedly unwelcome, and that those proceedings are in the

public eye.  In due course there will be a public hearing in which the details of the claim will be traversed in any event.

[15]     I am prepared to grant the request.

Result

[16]     The request of Fairfax Media to inspect and take copies of the statement of claim and statement of defence filed in this proceeding is granted.

……………………………..

Asher J