Catley v Waipa Corporation Limited HC Auckland CIV 2004-463-494
[2010] NZHC 2144
•16 November 2010
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2004-463-494
BETWEEN GARY HASWELL CATLEY Plaintiff
ANDWAIPA CORPORATION LIMITED First Defendant
ANDRED STAG TIMBER LIMITED Second Defendant
ANDWAIPA MILL LAND LIMITED Third Defendant
AND WAIPA PLANT & BUILDINGS LIMITED
Fourth Defendant
ANDWAIPA PROPERTY ESTATE LIMITED Fifth Defendant
ANDPHILLIP ARTHUR VERRY Sixth Defendant
ANDMARTIN PHILIP VERRY Seventh Defendant
ANDRED STAG WOOD PRODUCTS Eighth Defendant
ANDMARTIN PHILIP VERRY, HILTON RUSSELL VERRY, LYNDSEY ELEANOR VERRY, LOUISE JANE DINMORE AND CAROL ELIZABETH HOUSTON AS EXECUTORS IN THE ESTATE OF PHILLIP ARTHUR VERRY Sixth Defendants
ANDMARTIN PHILIP VERRY Seventh Defendant
ANDWAIPA CORPORATION LIMITED First Defendant
CATLEY V WAIPA CORPORATION LIMITED AND ORS HC AK CIV-2004-463-494 16 November 2010
ANDRED STAG TIMBER LIMITED Second Defendant
ANDGARY HASWELL CATLEY Plaintiff
ANDSUZANNE LYNETTE CATLEY Counterclaim Defendant
Hearing: 23 September 2010
Counsel: M C Black for the Plaintiff
C R Carruthers QC, B H Dickey and N J Small for the Defendants
Judgment: 16 November 2010 at 10 a.m.
JUDGMENT OF POTTER J
re defendants’ application for order to answer unanswered interrogatories
In accordance with r 11.5 High Court Rules
I direct the Registrar to endorse this judgment
with a delivery time of 10 a.m. on 16 November 2010.
Solicitors: Meredith Connell, P O Box 2213, Auckland 1140
Tompkins Wake, P O Box 258, Hamilton 3240
Copy to: C R Carruthers QC, P O Box 305, Wellington 6140
M C Black, P O Box 1984, Shortland Street, Auckland 1140
Introduction
[1] By application dated 6 August 2010 the defendants seek an order that the plaintiff and counterclaim defendant provide answers to ten interrogatories of the seventy five interrogatories addressed to the plaintiff. This follows a notice to answer interrogatories served on 22 December 2009 which requested answers to seventy five questions. The plaintiff has provided answers to all except ten of the interrogatories by notice served on 15 April 2010 and in the affidavit of Mr Catley sworn 28 July 2010.
[2] Attached to this judgment is a copy of the schedule of unanswered interrogatories which is attached to the defendants’ application. The schedule states the question, the plaintiff’s answer and the defendants’ response to the plaintiff’s answer. The defendants say that the questions are either:
a) Unanswered; b) Incomplete; c) Deficient;
d) Otherwise require further answering.
[3] Ten questions relate to the plaintiff’s knowledge of the reliability and veracity of Mr John Zwiers as a potential business partner prior to the joint venture between the plaintiff and the sixth and seventh defendants, Mr Phillip Verry (now deceased) and Mr Martin Verry for the purchase of the Waipa Mill, the plaintiff’s obligations (and any breaches of those obligations) to Mr Zwiers and any acknowledgment given by the plaintiff of those breaches in the settlement agreement reached between the plaintiff and Mr Zwiers. That settlement agreement is dated 23
December 2004 and is an annexure to the affidavit of Mr Catley sworn on 28 July
2010 in which he gave further answers to interrogatories.
[4] The plaintiff’s objections to answering the outstanding ten interrogatories are detailed in relation to each question but it is generally contended that the questions are:
a) Not relevant or not straightforward;
b) Seek to elicit disputed facts;
c) Relate back more than seven years and are oppressive;
d) Relate to privileged information;
e) Go to credit rather than seeking to elicit facts.
[5] This judgment is being issued contemporaneously with a judgment on the plaintiff’s application for inspection and further and better particulars. Reference to that judgment should be made for a brief summary of the background to these proceedings and a summary of the pleadings.
[6] I shall consider in turn each of the ten questions and the arguments advanced by the respective parties relating to the specific questions.
Question 28
[7] The agreement referred to is the agreement dated 3 April 2003 about which Mr Catley provides an answer at paragraph 8 of his affidavit sworn 28 July 2010. In their counterclaim the defendants plead breaches of fiduciary duties by Mr Catley to the Verrys and allege at paragraph 34 that after Mr Phillip Verry became aware or the agreement between Mr Catley and Mr Zwiers dated 3 April 2003, Mr Catley represented to Mr Phillip Verry that he had been deceived by Mr Zwiers. The question relates directly to that pleading. It seeks an answer about a specific fact. I do not accept the submission for the plaintiff, referring to Elston v State Services
Commission (No 2),1 that it is unreasonable or oppressive to require Mr Catley to
1 Elston v State Services Commission (No 2) [1979] 1 NZLR 210 at 215.
recall what he said after the lapse of more than seven years. Each case will turn on its particular circumstances. The circumstances here are that Mr Catley commenced these proceedings in July 2004, there was no activity on the file between October
2004 and November 2008, at which point Mr Catley changed his solicitor and filed the second amended statement of claim. It does not sit well with Mr Catley to object to answering a question in relation to a fact within his knowledge on the basis of lapse of time, when the reason for the delay rests significantly with him.
[8] Question 28 is to be answered.
Question 29
[9] This question and questions 30 and 31 follow if Mr Catley’s answer to question 28 is in the affirmative. The question seeks to elicit a matter of fact, i.e. what were the lies Mr Zwiers told Mr Catley? I do not accept the plaintiff’s submissions that the question is too general, that the answer is unlikely to be helpful or that it relates to the evidence of another witness, Mr Zwiers (who, the plaintiff advises, will be a witness for the plaintiff at trial). The question seeks to elicit a matter of fact which is within the knowledge of the plaintiff.
[10] Question 29 is to be answered.
Question 30
[11] This question seeks to elicit a matter of fact within the knowledge of Mr Catley. The question needs to be read in the context of question 28 in that it relates to a period previous to “about July 2003”.
[12] Question 30 is to be answered.
[13] At paragraph 63 of the plaintiff’s statement of defence to the defendants’ counterclaim the plaintiff admits “that in the interests of resolving the litigation and in the interests of the mill, a settlement of Zwiers’ claim was effected”. The deed of settlement is annexed to the affidavit of Mr Catley sworn 28 July 2010. Mr Catley objects to answering the question on the ground that it calls for a privileged and confidential answer involving legal advice about the settlement of litigation with a third party, Mr Zwiers. I accept that to provide an answer to this question beyond the plaintiff’s pleading in the statement of defence to counterclaim is likely to involve privileged information, namely legal advice in relation to the settlement.
[14] Question 31 need not be answered.
Question 32
[15] This question and question 33 assume an answer in the negative to question
28. The question is straightforward and capable of reply by Mr Catley from his own knowledge. I do not apprehend that the word “lead” is critical to the question asked which is simply “... on what basis did you consider that you could proceed with Mr Phillip Verry’s bid for the acquisition of the mill?”
[16] Question 32 is to be answered.
Question 33
[17] I accept the plaintiff’s contention that whether or not he had “an enduring obligation” under the agreement with Mr Zwiers dated 3 April 2003 involves mixed questions of fact and law.
[18] Question 33 need not be answered.
[19] I accept that the meaning of “legal and equitable” obligations in the settlement deed dated 23 December 2004 involves questions of fact and law
[20] Question 37 need not be answered.
Questions 39, 40 and 41
[21] These questions follow from the answer to question 37 and accordingly need not be answered.
Costs
[22] Both parties have been partly successful in relation to this application. Costs will lie as they fall.
SCHEDULE OF UNANSWERED INTERROGATORIES
The Defendants maintain the following questions, as set out in the Notice to Answer interrogatories served 22 December 2009, are either unanswered, incomplete, deficient or otherwise require further answering. The Defendants in each case require the following questions to be answered:
Q28 When the sixth defendant was sent (by solicitors for Mr Zwiers) in about July
2003 the agreement referred to at Q27, did you say to the sixth defendant words to the effect that Mr Zwiers had lied to you, or otherwise communicate to the sixth defendant that you had been deceived?
ASee answer above (objection to Q27: seeking an answer to the contents of an existing document), including that the question seeks an answer of mixed fact and law. Nevertheless, sometime in about July 2003 Mr Verry and I believed that something may have been stated by Mr Zwiers to us which we were surprised about involving the cash flow of Orini and its creditors. There were also many discussions between us all about the Mill and Mr Zwiers’ interest in the Mill and in Orini. These included Mr P. Verry.
ResponseThe answer is non-responsive to the question. The question is capable of answering from the plaintiff’s direct knowledge.
Q29If yes to Q28, what were the lies Mr Zwiers told you, or what was the deceit of Mr Zwiers?
AObjection as question is vexatious and involves a mixed question of fact and law of which I am not competent to determine, including whether in fact there were “lies or deceit”. However, the Sixth Defendant did his own due diligence and enquiries about Mr Zwiers and at Mr Zwiers request. Further, upon Mr Verry’s due diligence of Mr Zwiers, Mr Verry continued to be involved with Mr Zwiers.
ResponseThe question is not objectionable as it asks as to certain facts. The answer is non-responsive to the question. Dependent on the answers to Q28 and Q29 the question is answerable from the direct knowledge of the plaintiff.
Q30If yes to Q28, why hadn’t you told the sixth defendant of those lies or deceit previously?
A Not applicable, see answers above.
ResponseThe question is not objectionable. Dependent on the answers to Q28, Q29 and Q39 the question is answerable by the plaintiff from his direct knowledge.
Q31If yes to Q28, why did you not rely on that as a defence to Mr Zwier’s subsequent proceeding against you, instead of entering into a settlement agreement with him?
AObjection to answer on ground of relevance and also calls for a privileged answer involving legal advice resulting in a settlement of litigation with a third party.
ResponseThe question is not objectionable. Dependent on the answers to Q28, Q29, Q30 and Q39 the question is answerable by the plaintiff from his direct knowledge.
Q32If no to Q28, on what basis did you consider that you could proceed with the sixth defendant’s lead bid for the acquisition of the Mill?
ANot applicable, see answers above. The question(s) also call for a speculative answer and the assumption that the Sixth Defendant in fact had the “lead bid” for the Mill.
ResponseThe question is not objectionable. Dependent on the answers to Q28, Q29, Q30, Q31 and Q39 the question is answerable by the plaintiff from his direct knowledge.
Q33If no to Q28, why did you not notify the sixth defendant that you had an enduring obligation, resulting from the agreement referred to in Q27, to not join the sixth defendant’s lead bid?
ASee answers above and the question also seeks answer to an existing document and an answer of mixed law and fact. The answer is also objected to on the ground of legal privilege. Further, the Sixth Defendant was aware of the terms of the agreement with Mr Zwiers and Mr Verry also signed the confidentiality agreement.
ResponseThe question is not objectionable as it asks (dependent on earlier answers) why the plaintiff did not do certain act(s). The question is answerable by the plaintiff from his direct knowledge.
Q37 The settlement agreement with Mr Zwiers which you signed on or about 23
December 2004 acknowledged that you were in breach of your “legal and
equitable obligations to Mr Zwiers”. Did that breach include the breach of the agreement referred to at Q27?
AObjection as the question is about the content of an existing document and also involves a mixed question of fact and law. The contents of the Deed are also self evidence. The date of the agreement needs to be confirmed, but it is understood to have occurred later than 23 December 2004.
ResponseThe question is not objectionable as it asks the plaintiff of his contemporaneous understanding of a settlement with a third party. The question is answerable from the plaintiff’s direct knowledge.
Q39If no to Q37, what were the other legal or equitable obligations that you admitted having breached?
A See answers above and question and objection also on grounds of privilege.
Further, the question is argumentative and asks for an answer of mixed law and fact, which is objected to.
ResponseThe question is not objectionable it asks the plaintiff of certain facts that gave rise to a consequence. The question (dependent on the answer to question Q37 may be answered from the plaintiff’s direct knowledge.
Q40If no to Q37, did you inform the sixth defendant of those other breaches of legal and equitable obligations?
AObjection to answer, refer to same answer above, including that question seeks an answer to a question involving mixed law and fact.
ResponseThe question is not objectionable it asks whether the plaintiff did a certain act. The question (dependent on the answer to Q37 may be answered from the plaintiff’s direct knowledge.
Q41If no to Q37 and yes to Q40, at what date/place did you do so, and in what terms?
A Not applicable, refer to answers above
ResponseThe question is not objectionable it asks whether the plaintiff did a certain act. The question (dependent on the answer to Q37 and Q40) may be answered from the plaintiff’s direct knowledge.
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