Commissioner of Police v Read
[2014] NZHC 1758
•28 July 2014
IN THE HIGH COURT OF NEW ZEALAND
TAURANGA REGISTRY
CIV-2011-470-1070
[2014] NZHC 1758
BETWEEN COMMISSIONER OF POLICE
Applicant
AND
GARY JOHN READ
First Respondent
AND
WILLIAM JAMES READ
Second Respondent
AND
KEVIN BARRY PARKINSON
Fourth Respondent
AND
PHILLIPA KAREN WILSON
Fifth Respondent
AND
R B A TRUSTEES LIMITED
Party served
Hearing: 22 May 2014 Appearances:
R W Jenson for Applicant
W T Nabney for First Respondent
A Speed for Fourth & Fifth RespondentsJudgment:
28 July 2014
JUDGMENT OF KEANE J
This judgment was delivered by me on 28 July 2014 at 4pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
COMMISSIONER OF POLICE v READ [2014] NZHC 1758 [28 July 2014]
Solicitors:
Crown Solicitor, Tauranga
[1] On 6 May 2013 Gary Read was sentenced in this Court to imprisonment for 11 years with a minimum term of five years, three months, for 70 offences of importing pseudoephedrine on a large scale over two years, and for lesser related offending.
[2] At the date of his sentence Mr Read’s assets had since 12 December 2011 been subject to restraining orders made under the Criminal Proceeds (Recovery) Act 2009 (CPRA); and amongst the properties restrained were two Tauranga properties, the title to which lay with RBA Trustees Limited, the corporate trustee of the GR Trust, Mr Read’s family trust. He and his children are discretionary beneficiaries.
[3] On 22 May 2013 the Commissioner applied for a profit forfeiture order, under the CPRA, in respect of Mr Read’s assets, extending to those two properties, and on 9 August 2013 obtained a further order under the CPRA authorising him to examine a director of RBA Trustees, Mr Bixley, and to obtain from Mr Bixley the records of the trust. On 21 August 2013 Mr Bixley was examined at the police station, Hamilton, and the examination made is recorded in a video recording and in a written transcript.
[4] On 5 November 2013 Phillipa Wilson, Gary Read’s partner, applied for two orders. The first, as to which there is no issue, was for an order appointing her the litigation guardian of their infant children, two of whom are named as respondents. The second was for an order requiring the Commissioner to discover the two forms of record made of Mr Bixley’s examination on 21 August 2013, the video and the transcript. That is the disputed application I have to resolve.
[5] In his notice opposing that application, dated 13 November 2013, the Commissioner contends that the recording and the transcript are documents attracting litigation privilege, under s 56 of the Evidence Act 2006, because they record an examination made of Mr Bixley, as a director of RBA Trustees, for the dominant purpose of preparing for the profit forfeiture application.
Three issues
[6] Three issues arise as a result, and the first is whether an examination made under compulsion, as a result of an order of this Court under s 107 of the CPRA, is as the Commissioner contends capable of being a ‘communication’ attracting litigation privilege under s 56(2)(a) of the Evidence Act 2006. Ms Wilson contends that it lies beyond the scope of the privilege, both at common law and under the statute.
[7] The second issue is whether, if an examination is capable of being a ‘communication’ under s 56(2)(a), this particular examination was, as the Commissioner contends, a ‘communication’ between himself, a party to the proceeding, and ‘any other person’, a non-party. Ms Wilson contends that, as at the dates of the order authorising the examination, and the examination itself, and her discovery application, RBA Trustees, as the registered owner of the two Tauranga properties then under restraint, and liable to forfeiture on the Commissioner’s application, was or needed to be a party. That the Commissioner had not joined it as a party was incidental.
[8] The third issue is whether the Commissioner may claim privilege for the examination records, when he accepts that Mr Read, as one discretionary beneficiary, and Ms Wilson, as litigation guardian for the others, are entitled to obtain from RBA Trustees any trust documents Mr Bixley produced, and any disclosures he made. Ms Wilson contends that is inconsistent with any privilege in the records made, and also constitutes a waiver.
The underlying central issue
[9] Central to the second and third of these issues is the status of RBA Trustees in this proceeding, at the dates of the examination order and of the examination itself; an issue that RBA Trustees itself set out to clarify soon after the examination.
[10] On 23 September 2013 RBA Trustees filed a memorandum stating that it had been served by the Commissioner with the restraining order, dated 16 May 2012, and the profit forfeiture application, dated 22 May 2013, but not all related documents. It
asked a direction that this be remedied within seven days. Only then would it be in a position to respond to the profit forfeiture application.
[11] RBA Trustees also said it had been served with a copy of the examination order, dated 9 August 2013; the order with which by then Mr Bixley, as a director and shareholder, had complied. It contended that under s 107(4) the Commissioner should either have returned the documents Mr Bixley produced or provided him with copies. It applied for directions that the Commissioner remedy that omission within seven days, and within that time also give discovery of any recording or transcript of Mr Bixley’s examination.
[12] On 7 October 2013 RBA Trustees asked for directions as to whether it needed, on behalf of the beneficiaries, to defend the Commissioner’s forfeiture application as it related to the two Tauranga properties. It also applied for an order that its costs be met out of the trust estate.
[13] On 21 October 2013 the Commissioner filed a notice of opposition to the order for application for discovery, contending that RBA Trustees did not need to take any active part. Mr Read, the settlor of the trust and the children, by their litigation guardian, were opposing the application in their own right.
[14] The Commissioner also asserted that RBA Trustees was not entitled to discovery of the examination records. It was not a party to the proceeding, and the records of examination were privileged within s 56(2)(a). The Commissioner also asserted that RBA Trustees had no need to obtain discovery, because Mr Bixley was entitled to disclose to it whatever he had disclosed and whatever he had produced at the examination.
[15] On 11 December 2013, Andrews J recorded that RBA Trustees would abide the decision of the Court, and that Mr Read, as settlor of the trust, had removed RBA Trustees as trustee and substituted a named person. The Commissioner noted that the restraining orders would need to be varied, and that this would call for an application.
[16] Andrews J directed that any outstanding issues relating to RBA Trustees were to be dealt with at the fixture before me on 22 May 2014. On that date, RBA Trustees did not pursue its own discovery application. Nor did the Commissioner apply to have the restraining orders varied. RBA Trustees remains, presumably, the registered proprietor of the two Tauranga properties.
Duty of discovery
[17] Ms Wilson’s application for discovery, which I have now to resolve, is to be decided on the premise that an application for a profit forfeiture order, like one for a restraining order, is a civil proceeding1. Subject to any viable claim of privilege, the Commissioner as applicant must make initial disclosure2, and standard discovery3; and, if required, tailored discovery4 and particular discovery.5
[18] The duty to make standard discovery requires the Commissioner to disclose any documents within his control, or on which he relies, or which adversely affect his case or that of another party. A tailored order before trial requiring more than that may be made ‘when the interests of justice require’; and, because the duty to discover is continuing,6 particular discovery may be required where there are grounds for believing that still more ought to be discovered.
[19] Conversely, the Commissioner may withhold any communication, or related information or opinion, attracting privilege under the Evidence Act 20067, and the Commissioner claims litigation privilege under s 56, contending that the records of the examination are ‘preparatory materials for proceedings’, even if the documents produced and disclosures made do not themselves attract privilege. Rule 8.25 entitles Ms Wilson, as the party seeking discovery, to apply for an order setting that claim aside.
1 Criminal Proceeds (Recovery) Act 2009, s 10(1)(a),(d).
2 High Court Rules 8.4.
3 Rule 8.7.
4 Rule 8.8.
5 Rule 8.19.
6 Rule 8.18.
7 Evidence Act 2006 , s 53(1).
Section 56 privilege claim
[20] The Commissioner claims privilege under s 56 for the examination records, on the ground that they are, or are an indispensible aspect of, ‘preparatory materials for proceedings’, under 56(1), in that they are records of:
… a communication or information … made, received, compiled, or prepared for the dominant purpose of preparing for a proceeding or an apprehended proceeding.
[21] The Commissioner contends that the two forms of record are privileged under s 56(2)(a) because they are of a ‘communication between the party and any other person’. (For this purpose the Commissioner claims to have been a party, acting by his delegate at the examination, and Mr Bixley, as a director of RBA Trustees, to have been a non-party, within the category ‘any other person’.) Alternatively, they may be records, privileged under s 56(2)(d), of ‘information compiled or prepared at the request of the party … by any other person.’
First issue – examination under compulsion
[22] The first issue, whether records of disclosures made or documents produced under compulsion at an examination under s 107 of the CPRA are beyond a claim of litigation privilege, is not answered explicitly by s 56, which makes no distinction between voluntary and compulsory communications. Nor was I referred to any case at common law, which s 56 reflects, suggesting that records made of compulsory communications are foreign to the privilege.
[23] The most that can be said, suggesting that such an examination might be foreign to the privilege, is that while in this instance it was made to advance an application for a profit forfeiture order, a civil proceeding, the examination itself is a criminal process. In Commissioner of Police v Burgess, the Court of Appeal described it as ‘an investigative measure available to a law enforcement agency allowing intrusion by the state into the privacy of the person subject to it.’8
8 Commissioner of Police v Burgess [2012] NZCA 436 at [28].
[24] Despite that, I do not accept that a ‘communication’ under a s 107 order does lie beyond the privilege. In Jeffries v Privacy Commissioner 9, where the issue was whether an unsolicited non- party communication to a lawyer concerning a case could attract the privilege, the Supreme Court held that as long as it was for the necessary dominant purpose, it came within the privilege ‘irrespective of source’.10 The non- party’s purpose was not determinative.11
[25] There too, the Court made clear that the privilege lies with the party to the proceeding. A communication to the party is as privileged as any to his or her lawyer. What a non-party discloses to the Commissioner’s delegate, another police officer, could qualify. Moreover, the coercive character of the examination is recognised and catered for by the CPRA itself.
[26] The CPRA protects an examinee, who makes disclosures under compulsion, by giving him or her immunity from any resulting liability at criminal or civil law.12 Conversely, it also prohibits the examinee from disclosing that the order exists, or has been given effect, to anyone except those expressly identified: the Commissioner, any authorised police officer, anyone who has to know of the order in order to be able to give it effect, and the examinee’s own lawyer. Wider disclosure is an offence.13
[27] These two features of the CPRA, especially the second, are consistent with a correlative right in the Commissioner to litigation privilege for whatever is disclosed or produced during an examination; and the only other exception to the confidentiality of an examination that the CPRA allows is also consistent with such privilege. Section 153(5), speaking of an examination order as a ‘search order’, says:
Nothing in subsections (1) – (4) prevents the disclosure of the existence or operation of a search order in connection with, or in the course of, proceedings before a Court.
9 Jeffries v Privacy Commissioner [2010] NZSC 99.
10 At [20].
11 Adams Criminal Law HR 8.25.07(i).
12 Criminal Proceeds (Recovery) Act 2009.
13 Section 154.
It cannot be inconsistent with the privilege that the fact of the examination, and the result, may be disclosed in any proceeding where it is relevant, most especially any proceeding under the CPRA itself.
[28] Where, then, the examinee is a true non- party, the Commissioner must be entitled be claim privilege, under s 56, as to the content of the examination and, derivatively, as to any record of it. But, as the Commissioner recognises if only implicitly, that is not the position in this case.
Second issue – RBA Trust status
[29] The second issue, whether Mr Bixley’s disclosures to the examining officer were by a non-party to a party for the purpose of s 56 of the Evidence Act 2006, turns on whether as at the date of the examination order and the examination itself the Commissioner had rightly treated RBA Trustees as undeserving of respondent status.
[30] It is true that as at those dates RBA Trustees was not literally a party, as defined by s 4 of the Evidence Act 2006, a ‘party to …(the) proceeding’ whether, as s 4 continues to say, a ‘proceeding’ is understood as ‘a proceeding conducted by a Court’ or as ‘any interlocutory or other application to a Court connected with that proceeding’. The issue is whether RBA Trustees should then have been a party.
[31] That issue is whether, as Rule 4.1 contemplates, RBA Trustees was within one or the two categories of person recognised to require or deserve party status, ‘persons whose presence before the Court is necessary to justly determine the issues arising’, or ‘persons who ought to be bound by any judgment given’. As rule 4.3(1) says, those deserving or requiring defendant status are those in respect of whom ‘it is alleged there is a right to relief in respect of, or arising out of, the same transaction, …’.
[32] The fact that RBA Trustees was a corporate trustee, holding the two properties on behalf of those beneficially entitled, does not alter the analysis. Rule 4.23(1) confirms that trustees ‘may sue and be sued on behalf of, or as representing, the property or estate of which they are trustees’ and there is no need to join those beneficially interested.
[33] As at the dates of the order for examination and the examination itself, RBA Trustees did have standing in the proceeding under the CPRA itself. Whether or not it was heard on the making of the restraining order, it was then entitled to be heard as ‘any person who holds an interest in the proposed restrained property (including, if applicable, the respondent)’.14 On the same principle it had a right to be served with and a right to be heard on the application for a profit forfeiture order.15 If it was not heard at that time it was entitled within six months of any order made to apply for relief.16
[34] That being so, I conclude the examination did not constitute a ‘communication’ between a party and a non-party. The Commissioner, by his delegate as one party, spoke to an officer of RBA Trustees, which had a right also to be a party. On that basis alone the privilege cannot apply.
Third issue – status of bare records and waiver
[35] The third issue is whether the Commissioner can claim litigation privilege in respect of the records of the examination if he has not claimed privilege in respect of the contents of the examination. The Commissioner’s second ground for opposing the application is expressed in this way in the notice of opposition:
Mr Bixley as trustee of the trust is in a position to provide the applicant (on behalf of her children) all the relevant information he gave to the Commissioner during the relevant communication(s) and to adduce evidence to that effect, should he so desire.
[36] In Chrisford v Haszard & Treadwell,17 which concerned disclosure of a tape recording of a conversation with a non-party, the Court of Appeal held that a recording of a non-privileged conversation, without more, could not of itself be privileged:18
A tape recording is no more than an electronic replica of a discussion that has taken place. It is not in any way confidential and, save as a record of a non privileged discussion, has nothing to do with preparing for the litigation. There is no ‘seal’ of confidence or secrecy to guard against where the opposite party is a participant in the communication. The policy in favour of allowing
14 CPRA s 23(1).
15 Section 45(1), s 46(c).
16 Section 62.
17 In Chrisford v Haszard & Treadwell CA63/00, 1 June 2000.
18 At [14].
a party to prepare the case was about revealing the effect of the advice, or materials for the brief, can have no application where the ‘materials’ are the opposite party’s own statements, or statements made in his or her presence.
[37] That apart, it is also arguable that if the Commissioner disclaims any privilege in the substance of the examination he has waived any privilege in the record of the examination, under s 65 of the Evidence Act 2006. He has waived any interest in the only ‘significant part’ of the examination.
Conclusion
[38] There may be instances in which the Commissioner is able to claim s 56 litigation privilege in the content and record of a compulsory examination under s 107 of the CPRA.
[39] In this instance, the Commissioner cannot claim s 56 any privilege because RBA Trustees, the subject of the examination, was entitled to be a party to the Commissioner’s application for forfeiture, for the purpose of which the examination was made. The fact that the Commissioner does not claim privilege for the substance of the examination is also fatal to any privilege in the records made, either because privilege in the record can only derive from privilege in the substance, or because the Commissioner has waived privilege in the substance.
[40] I grant Ms Wilson’s application for discovery in respect of the record of the examination. She is entitled to costs under scale 2B in respect of this application, and costs as fixed by the Registrar.
P.J. Keane J
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