Cityside Asset Pty Ltd v 1 Solution Ltd - [2012] NZHC 3162

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ORDER PROHIBITING PUBLICATION OF THE NAME OF THE DEFENDANTS' SOLICITOR OR ANY IDENTIFYING PARTICULARS

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-4394 [2012] NZHC 3162

BETWEEN CITYSIDE ASSET PTY LIMITED First Plaintiff

ANDHAMWREX NOMINEES PTY LIMITED Second Plaintiff

ANDHIRE INTELLIGENCE INTERNATIONAL LIMITED Third Plaintiff

AND1 SOLUTION LIMITED First Defendant

Cont …

Hearing: 13 August 2012

Counsel: K M Quinn for the Plaintiffs
D O'Neill for the Defendants

Judgment: 19 November 2012

Reasons: 26 November 2012

REASONS FOR JUDGMENT OF WOODHOUSE J

This judgment was delivered by me on 26 November 2012 at 2:30 p.m. pursuant to r 11.5 of the High Court Rules 1985.

Registrar/Deputy Registrar
……………………………………

Counsel:
Mr K M Quinn, Barrister, Auckland Mr D O’Neill, Barrister, Hamilton Plaintiffs’ Instructing Solicitor:
Mr S Germann, Stewart Germann Law Office, Solicitors, Auckland

CITYSIDE ASSET PTY LIMITED V 1 SOLUTION LIMITED HC AK CIV-2011-404-4394 [19 November
2012]

Cont …

ANDGRANT MILES SANDERSON Second Defendant

ANDHIRE INTELLIGENCE LIMITED Third Defendant

ANDROBERT KENNEDY PRITCHARD Fourth Defendant

ANDBRYRE ANN PRITCHARD Fifth Defendant

[1] By judgment dated 19 June 2012 Associate Judge Faire made two orders of present relevance: (1) an order under s 67(1) of the Evidence Act 2006 disallowing a claim by the third, fourth and fifth defendants to solicitor-client privilege in respect of part of an email to the fourth defendant from the solicitor for the third, fourth and fifth defendants; and (2) a declaration that the remainder of the email is subject to solicitor-client privilege.

[2] The plaintiffs applied for review of the order numbered (2). In response, the third, fourth and fifth defendants applied for review of the order numbered (1).

[3] By formal judgment dated 19 November 2012 I dismissed the defendants’ application and granted the plaintiffs’ application. In consequence privilege was disallowed in respect of the email in its entirety. I did not provide reasons. These are my reasons.

The plaintiffs’ claims

[4] The third plaintiff owns a business system designed to facilitate the hiring of computer equipment. The first and second plaintiffs have licenses from the third plaintiff to grant franchises of the system. On this application it is unnecessary to distinguish between the plaintiffs and I will refer collectively to “the plaintiffs”.

[5] Franchises for commercial use of the system were granted by the plaintiffs to the third defendant. The fourth and fifth defendants (the Pritchards) are, and at material times were, the directors of the third defendant. The Pritchards provided guarantees and indemnities in respect of the obligations of Ambrose Ltd and the third defendant.

[6] The franchises came to an end in February 2010, when the third defendant gave notice that it would not be renewing the franchises. The plaintiffs allege, in broad terms, that the third defendant and the Pritchards have breached obligations owed to the plaintiffs as a consequence of continued dealings with the system in conjunction with the first and second defendants, following termination of the

franchise agreements. The…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2012] NZHC 3162
Decision Date: 26 November 2012

CaseChat Overview and Summary

The case of Cityside Asset Pty Ltd v 1 Solution Ltd involved the plaintiffs, who own a business system for hiring computer equipment, alleging that the defendants breached their obligations following the termination of franchise agreements. The defendants claimed that an email from their solicitor was protected by solicitor-client privilege. The plaintiffs sought to have the privilege disallowed under s 67(1) of the Evidence Act 2006 on the grounds of aiding an offence and a dishonest purpose. The Associate Judge had disallowed privilege only in respect of certain parts of the email, but the High Court found that privilege should be disallowed in respect of the entire email. The Court found that the email contained advice that would improperly interfere with, and possibly defeat, the plaintiffs' entitlement to discovery by destroying evidence. This was contrary to the defendants' obligation to preserve documents that are, or are reasonably likely to be, discoverable in the proceeding. The Court also found that the balance of the email contained material which was privileged but that the material provided a basis for the privilege attaching to it being removed because of some dishonest purpose. The Court concluded that the plaintiffs had established a prima facie case of dishonest purpose in the email, which was advice to assist in continuing and better perfecting intentional deception of the plaintiffs through dishonest concealment. The Court disallowed privilege under s 67(1) in respect of the entire email and ordered that the defendants pay the plaintiffs' costs. The Court also made an order prohibiting publication of the name of the defendants' solicitor, or any identifying particulars, in connection with this case.

Orders