Contractors Bonding Ltd v Waterhouse

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA200/2011
[2012] NZCA 399

BETWEEN  CONTRACTORS BONDING LIMITED
Appellant

AND  GODFREY WATERHOUSE
First Respondent

AND  ROBERT JOHN WATERHOUSE
Second Respondent

Hearing:         10 July 2012

Court:             Ellen France, Harrison and White JJ

Counsel:         R E Harrison QC for Appellant
S A Grant for Respondents

Judgment:      31 August 2012 at 10 am

JUDGMENT OF THE COURT

AThe appeal is allowed.  The respondents must provide the appellant with a redacted copy of their agreement with the litigation funder revealing the information set out at [67] in the reasons within 10 working days.  Any issues of privilege arising must be the subject of an application to the High Court within the 10 working day period.  Filing of such an application will stay the disclosure requirement pending further order of the High Court.  Any application by the appellant arising out of disclosure of the funding agreement must be made to the High Court within 10 working days of receipt of the redacted funding agreement.

BThe proceeding in the High Court is stayed pending disclosure of the redacted version of the agreement or further order of that Court.

C        The respondents must pay the appellant costs for a standard appeal on a band A basis plus usual disbursements. 

DThe costs award in the High Court is quashed.  Costs in that Court are to be re-visited in light of the outcome in this Court.

____________________________________________________________________

REASONS OF THE COURT

(Given by Ellen France J)

Table of Contents

Para No
Introduction  [1]
Background  [2]
The High Court judgment  [10]
The issues on appeal  [17]
The competing contentions  [20]
The Australian and English authorities  [27]
     Campbells Cash and Carry v Fostif  [28]
     Jeffery & Katauskas v SST Consulting  [32]
     Martell v Consett Iron  [39]
     Abraham v Thompson [41]
     Stocznia Gdanska [45]
     Conclusion  [46]
This Court’s decision in Saunders v Houghton  [47]
Our evaluation  [56]
What is required?  [63]
     Disclosure of some details of the funding arrangements  [67]
     Beyond disclosure?  [73]
Results in this case  [77]
Costs  [80]        

Introduction

1. This is an appeal from a decision of Allan J declining to stay proceedings pending disclosure by the respondents, Godfrey Waterhouse and Robert Waterhouse, to the appellant, Contractors Bonding Ltd, of their agreement with an independent litigation funder.[1]  The appeal raises issues about the courts’ role in non-representative actions when a party’s legal costs are being met by a litigation funder.  The role of the court in relation to litigation funding has been considered previously by this Court in Saunders v Houghton but only in the context of a representative action.[2]

Background

[1]      Waterhouse v Contractors Bonding Ltd HC Auckland CIV-2010-404-3074, 13 December 2010.

[2]      Saunders v Houghton [2009] NZCA 610, [2010] 3 NZLR 331.

1. The factual narrative and details of the respondents’ claim are set out in full in Allan J’s judgment.[3]  For present purposes we need only summarise that description.

   [3]      At [2]–[10].

2. The respondents formerly engaged in…