Cron v Tucker
[2023] NZHC 3815
•20 December 2023
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2020-409-226
[2023] NZHC 3815
BETWEEN PENELOPE JEAN CRON, PHILIP SIMON MAUGER,
STEPHEN WARNER MAUGER and TIMOTHY JAMES MAUGER
PlaintiffsAND
SIMON MICHAEL TUCKER
First Defendant
AND
LOUISE CORANETTA HERMANSSON
Second Defendant
Hearing: 18 July 2023 Appearances:
F H Scrase for the Plaintiff
K W Clay and R Paul for the First Defendant T J Castle for the Second Defendant
Judgment:
20 December 2023
JUDGMENT OF HARLAND J
Introduction
[1] This judgment determines opposed applications by the first and second defendants for further discovery from the plaintiffs.
Background
[2] The proceedings relate to the estate of the late Mr Warner Mauger who, in January 2019, executed two deeds of gift, one for $550,000 to the first defendant and another for $485,000 to the second defendant. Both defendants were employed by Mr
CRON v TUCKER [2023] NZHC 3815 [20 December 2023]
Mauger in Rookwood Holdings Ltd (Rookwood), the vehicle through which Mr Mauger operated a highly successful contracting and property development business.
[3]The plaintiffs are Mr Mauger’s four adult children.
[4] There are three trusts which hold substantial assets, the Mauger Charitable Foundation, the Patricia Mauger Trust and the Warner Mauger Trust, the last two in respect of which the plaintiffs are beneficiaries.
[5] The first defendant was employed by Rookwood as general manager some time in 2009 and he was appointed a director of Rookwood on 2 March 2017. The second defendant was employed from 2011 by Rookwood as an office administrator. The defendants contend that both developed a very close relationship with the late Mr and Mrs Mauger and rendered what is described by their counsel as very significant business and personal services to them.
[6] In late 2017, Mr and Mrs Mauger moved into the Alpine View Retirement Village (Alpine View). Mrs Mauger died on 25 July 2018 and Mr Mauger moved into a single unit at Alpine View on 13 September 2018.
[7] As outlined above, the deeds of gift were executed by Mr Mauger in January 2019. The defendants contend that Mr Mauger sought to make the gifts without the knowledge of the plaintiffs.
[8] Prior to the gifts being made to the defendants, Mr Mauger sought legal advice about doing so from his lawyer, Mr Bull. In Mr Bull’s affidavit dated 19 March 2021, he deposed that when he met with Mr Mauger in December 2018, Mr Mauger expressly wished and instructed that the gifts were not to be disclosed to his children because he was very concerned about what their reaction may be. Mr Bull observed and determined that Mr Mauger had full insight into what he was doing. He said “…, he was alert; his radar was active”. However, out of an abundance of caution, he said to Mr Mauger that he wanted a doctor’s certificate as to his soundness of mind. He said “it was a normal precaution for me to take”.
[9] Mr Mauger also discussed the gifts with his longstanding close friends and advisor trustees, Mr McDonnell, Mr Cox and Mr King.
[10] There was however a report by Ms Jones, an occupational therapist and consultant psychiatrist, dated 16 October 2018 that recorded a formal diagnosis for Mr Mauger of Alzheimer’s and vascular dementia. On the date, Dr Chima issued a medical certificate to the effect that Mr Mauger was no longer safe to drive. Dr Chima also made a mental health referral for Mr Mauger on 29 November 2018. Dr Chima’s involvement in October/November 2018 was not related to the making of the gifts or Mr Bull’s request for an assessment and there is no evidence to suggest Mr Bull knew of the above assessments when he met with Mr Mauger in December 2018.
[11] On 20 December 2018, the deeds of gift were signed by Mr Mauger at a meeting with Mr Bull at Alpine View. They were held by Mr Bull pending the obtaining of the medical certificate from Dr Chima. On 21 December 2018, there was a transfer of $1,035,000 from Mr Mauger’s personal account to the trust account of the firm in which Mr Bull was a partner.
[12] On 7 January 2019, Mr Mauger attended Dr Chima’s medical centre and was issued with a certificate confirming he was of sound mind.
[13] On 15 January 2019, the gift to the first defendant was paid. The gift to the second defendant was paid on 21 January 2019.
[14] At the time the gifts were made, both defendants were employed by Rookwood.
[15] On 27 March 2019, Ms Cron, one of the plaintiffs, was appointed power of attorney in relation to Mr Mauger’s property. The next day she became aware of the gifting transactions.
[16]The plaintiffs did not approve of the gifts that had been made.
[17] The first defendant resigned as a director of Rookwood on 21 June 2019 due to health issues.
[18] On 2 July 2019, a letter was purportedly signed by Mr Mauger in relation to his gift to the first defendant. This responded to a request for such a letter from the first defendant’s lawyer who was acting for him in relation to his relationship property matters. The letter from the first defendant’s lawyer allegedly contains a forged signature.
[19]The second defendant resigned from Rookwood on 7 October 2019.
[20] By 3 November 2019, Mr Mauger was assessed by Dr Peebles as having dementia of at least moderate severity. He did not have the capacity to make significant financial and welfare decisions.
[21] The first defendant was suspended from his role on 4 December 2019 for paying personal invoices from Rookwood and his employment was terminated on 20 December 2019.
[22] Proceedings have been issued by the plaintiffs in relation to the gifts to the first and second defendants. The original statement of claim asserted unconscionable conduct on behalf of the defendants. An amended statement of claim was filed on 15 December 2022 adding lack of capacity as a new cause of action. Statements of defence have been filed to the amended statement of claim. These were filed after the applications I am dealing with in this judgment.
The applications and notices of opposition
[23] The defendants’ applications are for standard and particular discovery. The defendants seek orders that:
(a) the plaintiffs jointly and/or severally file and serve an affidavit (or affidavits) of documents which are relevant to the cause(s) of action by way of standard discovery; and
(b) without limiting the documents to be referenced in the affidavit (or affidavits) in order (a), that the affidavit (or affidavits) address certain documents set out in the application.
[24] The documents listed in the application for particular discovery are grouped in categories related, in the main, to the people to whom or entities to which they are said to relate.
[25] The affidavits of documents referred to for both standard and particular discovery seek that the deponent or deponents outline:
(a) the documents that are or have been in the plaintiffs’ or any one of the plaintiffs’ control; and
(b) if the documents are no longer in the plaintiffs’ control, then they state when, to the best of their knowledge and belief, each document ceased to be in their control and the persons who, to the best of their knowledge and belief, now have control of each document.
[26] The defendants request that the affidavits be filed and served within 14 days of the date of this judgment.
[27] Although I will return to this shortly, the applications are made relying on rr 8.7, 8.15, 8.19, 8.27 and 9.43 of the High Court Rules 2016 (HCR), s 26 of the Evidence Act 2006 and Prattley Enterprises Ltd v Vero Insurance Ltd.1
[28] The first defendant and the second defendant each filed an affidavit supporting their respective applications for further discovery. I will address parts of these affidavits where they are relevant in my analysis.
[29] The plaintiffs oppose the applications for particular and general discovery. The notices of opposition filed in respect of each defendant’s application mirror one another and were made in reliance upon rr 8.2, 8.7,8.15, 8.16, 8.19 and 8.24 of the HCR, as well as Australian Mutual Providence Society v Architectural Windows Ltd and New Zealand Rail Ltd v Port Marlborough NZ Ltd.2 No affidavit was filed in support of either notice of opposition.
1 Prattley Enterprises Ltd v Vero Insurance Ltd [2016] NZCA 67, [2016] NZLR 750.
2 Australian Mutual Providence Society v Architectural Windows Ltd [1986] 2 NZLR 190, (1986) 2 PRNZ 510; and New Zealand Rail Ltd v Port Marlborough NZ Ltd [1993] 2 NZLR 641.
[30] The notices of opposition included two schedules setting out the specific grounds for opposition in relation to the applications for further discovery. The specific grounds of opposition will be traversed later in my analysis. However, it is also important to note that both the defendants’ applications and the plaintiffs’ opposition to it preceded the filing of the amended statement of claim and the defendants’ statements of defence to it. This is important because the defendants contend that the issues in respect of which particular discovery is required have been crystalised by the filing of the amended pleadings.
Have the plaintiffs made standard discovery as required by HCR 8.7?
[31] A party’s obligations in relation to standard discovery are set out in r 8.7. Only documents of actual and direct relevance assessed by reference to the pleadings are covered by the rule.3 A party is not required to disclose documents that are no more than background.4 A party’s discovery obligations are further curtailed by considerations of cooperation and proportionality.5
[32] The defendants seek an order from the Court that the plaintiffs jointly and/or severally file an affidavit of documents by way of standard discovery. In fact, Ms Cron has filed an affidavit of documents, but the defendants contend it is not sufficient and the Court should order that the plaintiffs jointly and/or severally file a further affidavit of documents.
[33] The parties originally agreed to orders for standard discovery being made as outlined in their joint memorandum dated 29 July 2020 and an order for discovery was made by Associate Judge Lester on 29 July 2020.
[34] A case management conference was held before Dunningham J on 22 August 2022. An issue was raised about the plaintiffs’ affidavit of documents as Ms Cron had filed it in her capacity as a litigation guardian on behalf of the late Mr Mauger.
3 Robert Osborne and others McGechan on Procedure (online ed, Thomson Reuters) at [HR8.7.01(1)]; and New Zealand Rail Ltd v Port Marlborough NZ Ltd, above n 2, at 644, cited with approval in West Harbour Holdings Ltd (in liq) v Tamihere [2014] NZHC 716 at [15]-[16].
4 RHH Ltd v Anderson (No 2) [2018] NZHC 2032 at [12].
5 High Court Rules 2016, r 8.2(1).
[35] In her discussion about this issue, Dunningham J noted that counsel for the defendants were technically correct that the affidavit of documents had not been sworn on behalf of the current plaintiffs. However, she noted that, as the pleadings had not changed, there was no obvious reason to consider that the scope of discovery had changed. The Judge also noted that ongoing discovery had been provided and further relevant documents had been identified, and she observed:
The defendants have done no more than suggest it is possible that the individual plaintiffs have additional documents which Penelope Cron was not aware of when she swore the original affidavit of documents.
[36] Because the defendants were technically correct, the Judge made a direction as follows:
[14] The following timetabling directions are made:
…
(b) the current plaintiffs are to file an affidavit (or affidavits) of documents by 19 September 2022 which may, to the extent it replicates the affidavit of documents already filed by Penelope Cron, simply confirm and adopt that affidavit;
…
[37] Ms Cron’s affidavit of documents was then filed, including 12 further documents which were set out in the schedule attached to it.
[38] The defendants submit that this affidavit of documents was not filed by the plaintiffs as directed by the Court because, although it states to be on behalf of all plaintiffs and that Ms Cron has made enquiries and the plaintiffs have no further relevant documents within their control that are discoverable, there is no explanation provided about the nature of the enquiries she made. Mr Clay submits it is not sufficient that there simply be an affidavit said to be sworn on behalf of all plaintiffs because, although that was considered a possibility by the Judge, she did not give a direction in those terms.
[39] I am not persuaded that Dunningham J’s order requires each of the current plaintiffs to file an affidavit of documents. Her order, in my view, is clear that the plaintiffs were to file an affidavit (namely, by one of them) or affidavits (by some or
all of them) of documents. In other words, the direction left open the option of one of the plaintiffs filing the affidavit of documents on behalf of all of them. Dunningham J’s direction complies with the usual practice that parties in a proceeding who form a group and have a common interest can authorise one member to swear the discovery affidavit on behalf of the group, but it enables an alternative if it is necessary. 6
[40] However, it is not unreasonable to require the affidavit of documents to provide some explanation about the nature of the enquiries made with each of the other plaintiffs and their response to it. Rule 8.14(1) of the HCR provides that a party must make a reasonable search for documents within the scope of the discovery order. What constitutes a reasonable search is context-specific, but the complexity of the proceeding, the number of documents involved, the ease and cost of retrieving them and their significance will all be relevant, having regard also to proportionality.7 A bare assertion that the documents were not recoverable is insufficient.8 Where it is claimed that documents are not recoverable, an explanation should be provided so as to explain they are not recoverable and what steps have been taken to recover them.9 For example, in RHH Ltd v Anderson, a party explained that the lack of documents prior to a particular date was due to her changing computer servers. That party was ordered to provide an affidavit deposing whether she had backed up the documents when she changed servers, whether she still had access to those materials, whether she had served them and whether any relevant documents were available in order to satisfy the requirements of a “reasonable search” pursuant to r 8.14.10
[41] Although the facts in this case are different, in my view, the principle articulated in it is indistinguishable. Without an explanation of the nature of enquiries made with the other plaintiffs, it cannot be determined whether the documents requested are truly recoverable or not, or whether the individual plaintiffs may be in control of or have access to particular documents that the others are not or do not. A bare assertion that enquiries have been made is in my view insufficient.
6 McGechan on Procedure, above n 3, at [HCR 8.21].
7 High Court Rules, above n 5, r 8.14(2).
8 Weir v Eini [2020] NZHC 465 at n 3.
9 Pyne Gould Corporation Ltd v Bath Street Capital Ltd [2020] NZHC 1247 at [31].
10 RHH Ltd v Anderson, above n 4, at [36].
[42] To the extent I have outlined, the defendants’ application in relation to standard discovery succeeds but to a very limited extent.
Should the plaintiffs be ordered to provide particular discovery?
[43] The defendants’ applications for particular discovery are governed by r 8.19 of the HCR, which provides:
8.19Order for particular discovery against party after proceeding commenced
If at any stage of the proceeding it appears to a Judge, from evidence or from the nature or circumstances of the case or from any document filed in the proceeding, that there are grounds for believing that a party has not discovered 1 or more documents or a group of documents that should have been discovered, the Judge may order that party—
(a) to file an affidavit stating—
(i)whether the documents are or have been in the party’s control; and
(ii)if they have been but are no longer in the party’s control, the party’s best knowledge and belief as to when the documents ceased to be in the party’s control and who now has control of them; and
(b) to serve the affidavit on the other party or parties; and
(c) if the documents are in the person’s control, to make those documents available for inspection, in accordance with rule 8.27, to the other party or parties.
[44] The onus is on the defendants to establish that the affidavit of documents is incomplete.11 They must establish grounds for their belief that the documents and/or groups of documents sought are relevant, material, exist and are within the plaintiffs’ control.12 The grounds for their belief may be founded in affidavit evidence, pleadings and/or may be based on the circumstances of the case. In this case, Mr Tucker and Ms Hermansson have filed affidavits in support of the application by the defendants.
[45] The plaintiffs have also provided affidavits in support of their application. This includes from Ms Jackman, the accountant for Rookwood, who deposed of her close
11 McCullagh v Robt Jones Holdings Ltd [2015] NZHC 1462 at [7].
12 Assa Abloy NZ Ltd v Allegion (NZ) Ltd [2015] NZHC 2760 at [9] and [12]; McCullagh v Robt Jones Holdings Ltd, above n 11, at [35].
working relationship with Mr and Mrs Mauger and her observations regarding their attitude “careful” attitude towards distribution of their money, as well as Mr Tucker’s influence on Mr Mauger.
[46] The documents sought must be described with some specificity. Broad descriptions “such as accounting and other records” have been held to be insufficient.13
[47] In relation to whether the documents sought are within the defendants’ control, HCR 1.3 defines “control” to mean the possession of a document, the right to possess the document or the right to inspect or copy the document.14 In this case, issues of control arise in relation to some of the documents sought.
[48] Finally, once the relevance, existence and control of the documents sought have been established, the Court still retains a residual discretion as to whether to make an order for particular discovery.15 In this regard, the proportionality of the discovery order sought is a relevant consideration.16
[49] I agree with the summary provided by Fitzgerald J in Minister of Education v James Hardie New Zealand Ltd about the considerations that are involved in the proportionality assessment, which I now set out:17
(a) The concept of proportionality is central to tailored discovery.
(b) The starting point for tailored discovery is an assessment of the issues for determination (which will be determined by the pleadings).
(c) An assessment of proportionality will need to take into account the chances of finding relevant documents and “their degree of relevance”, which must then be balanced against the cost (and I would add, other logistical implications) of carrying out the discovery process.
(d) Broader considerations such as the amounts in issue, the parties’ respective resources and delay to the proceedings may also be relevant, but as in many very large scale commercial proceedings, these factors are unlikely to be determinative.
13 Australian Mutual Providence Society v Architectural Windows Ltd, above n 2, at 521.
14 McGechan on Procedure, above n 3, HCR 8.7.02(2).
15 Robert v Foxton Equities Ltd [2015] NZAR 135 at [8](e).
16 Southland Building Society v Barlow Justice Ltd [2013] NZHC 1125 at [17].
17 Minister of Education v James Hardie New Zealand Ltd [2019] NZHC 245 at [50], citing
Commerce Commission v Cathay Pacific Airways Ltd [2012] NZHC 726 at [18].
(e) Where there is no specific evidence of the potential cost (or, I would add, other practical implications) involved in giving the discovery sought, Judges may take into account their own experience and understanding of what is practical without detailed affidavit evidence.
(f) In any complex tailored discovery exercise, there must always be a measure of “give and take” between the parties.
(footnotes omitted)
Issues arising from the pleadings
[50] As to the necessity for the issues arising on the pleadings to be identified and for the documents sought to be assessed as to their relevance in relation to those issues,18 Mr Clay referred to the issues as they were outlined in an earlier joint memorandum of counsel as:
(a) whether at any relevant time Mr Mauger was suffering from a qualifying disability;
(b) if he was, whether one or other of the defendants knew or ought to have known of such qualifying disability;
(c) whether Mr Mauger received independent legal advice at the time the gifts were made;
(d) whether at the time Mr Mauger made the gifts he was certified as being of sound mind by an independent medical practitioner and whether or not any certification was procured by false statements made by the second defendant (which is denied) to the medical practitioner;
(e) whether one or either of the defendants actively procured (which they both deny) Mr Mauger entering into the respective deeds of gift; and
(f) whether it would be unconscionable for the defendants to each retain the payments they received.
18 Intercity Group (NZ) Ltd v Naked Bus NZ Ltd [2013] NZHC 1054.
[51] The relevant principles relating to unconscionability were set out by Arnold J in Gustav & Co Ltd v MacField.19 As well as the matters referred to and agreed by the parties as the issues in relation to the pleadings, Mr Clay submitted that unconscionability also requires the Court to consider all the circumstances surrounding the gifting, including other gifting arrangements made, the amount of the gifting in the context of the wealth of both Mr Mauger and the Trust, the steps Mr Mauger took to ensure that the plaintiffs were not aware he was making these gifts to the defendants, and the nature of his relationships with the plaintiffs.
[52] As well, the new cause of action (lack of capacity), Mr Clay submitted, relates to the health of Mr Mauger and so documents, including notes by his caregivers while he was under their care, are also relevant.
[53] I will assess these matters with specific reference to the groupings/categories of documents sought.
The documents sought and analysis
[54] The defendants seek discovery of some 30 documents. The nature of these documents can be categorised broadly as medical and health related files, communications between one or more of the plaintiffs with each other or trustees, and trust documents.
[55] The plaintiffs oppose the applications for further discovery on the following grounds:
(a) the documents sought are within the second defendant’s control and have not been discovered by the second defendant;20
(b) the second defendant has not provided any evidence that there are “grounds for a belief that such document or class of document exists”;21
19 Gustav & Co Ltd v MacField [2007] NZCA 2005 – appealed on an unrelated point to the Supreme Court [2008] 2 NZLR 735.
20 McGechan on Procedure, above n 3, at [HR8.7.02(2)].
21 Australian Mutual Provident Society, above n 2, at 197.
(c) the request lacks particulars and does not identify any further discoverable documents/class of documents beyond those already discovered;22
(d) the plaintiffs have already discovered the document or class of documents sought;
(e) the documents sought are not actually or directly relevant, assessed by reference to the pleadings;23 and
(f) the plaintiffs neither possess, nor have a right to possess, inspect or copy the documents or class of documents sought, and they are therefore not within the plaintiffs’ control.24
First defendant’s application
[56] I have decided to grant Mr Tucker’s application for particular discovery in relation to some of the documents. I set out my reasons for doing so below.
Alpine View file
[57] In my view, the grounds for relevance in relation to this file have been established. Mr Mauger’s capacity and whether he was suffering from a qualifying disability are key issues in this proceeding. By 3 November 2019, Dr Peebles assessed Mr Mauger as having dementia of at least moderate severity and as not having the capacity to make significant financial decisions. The file includes a psychiatric review and is likely to also contain records from staff at the retirement village over the period leading up to and at the time the gifts were made. Their observations about Mr Mauger’s state of mind and behaviour is relevant.
[58] Ms Cron has control of the Alpine View file as stated in her affidavit dated 19 May 2021. If she no longer has the file in her control then, at the very least, in order to satisfy the reasonable search requirements pursuant to r 8.14 of the HCR, she must provide an explanation of why this is and whether she is unable to access it now.
22 McGechan on Procedure, above n 3, at [HR8.19.03(3)]; and Australian Mutual Provident Society, above n 2, at 200-202.
23 McGechan on Procedure, at [HR8.7.01(1)].
24 McGechan on Procedure, at [HR8.7.02(2)].
[59] While I acknowledge the defendants’ request is somewhat broad because it seeks discovery of an entire file without specifics provided other than mentioning that Mr Mauger underwent a psychiatric review at Alpine View, it is not so broad as to indiscriminately encapsulate documents which may be entirely irrelevant.
Counsellor’s file
[60] For the same reasons that apply to the Alpine View file, I am satisfied that the first defendant has established relevance in relation to the counsellor’s file. Some people, including Ms Jackman who deposed that she was shocked when she found out about the gifts, particularly the amount, considered the gifts to be completely out of character for Mr Mauger. Mr Mauger attended grief counselling following his wife’s death. At the time he made the gifts, Mr Mauger was in the later stages of his life when it is both common and normal to consider what one may wish to do with their assets. Although grief affects people in different ways and can cause some to act in an atypical manner, it does not necessarily follow that this means that person lacks capacity to make significant financial decisions. Discussions Mr Mauger had with the counsellor may provide greater insight into his mental capacity and general state of mind.
[61]I grant Mr Tucker’s application for discovery of this file.
Physiotherapist’s file
[62] Unlike the other files relating to Mr Mauger’s health, I do not consider the physiotherapist’s file has the same, if any, relevance. This file will relate to Mr Mauger’s physical health whereas the alleged qualifying disability is to do with his mental health.
[63]The application for discovery of this file is dismissed.
Accountant’s file - Minutes of the Warner Mauger Trust, the Patsy Mauger Trust and
the Mauger Charity Foundation
[64] The accountant’s file could be relevant if, as Mr Tucker deposed, it records Mr Mauger’s wish for his children not to be involved in the business or receive payments
due to their lack of involvement in his and Mrs Mauger’s lives “as children and commercially”, because the defendants contend, similarly, he did not want his children to know about the gifts.
[65] Mr Mauger also spoke to many people expressing this same view, including Mr Bull, Mr McDonnell, Mr Cox and Mr King. Mr Bull in his affidavit dated 19 March deposed that Mr Mauger expressly instructed him that the gifts were not to be disclosed to his children because he was very concerned about what their reaction may be. Consistent with this is the fact that Ms Cron did not become aware of the gifting transactions until 28 March 2019, after the gifts had been made and when she was appointed power of attorney in relation to her father’s property.
[66] On one view, the files could be relevant but, because Mr Mauger spoke to multiple people expressing this view, which has been confirmed in affidavits outlined above, the relevance of any records of similar comments being made may be lessened. The defendants may be wanting to establish a pattern of similar behaviour but the claim in these proceedings relates to a specific time and two transactions. As deposed by Mr Tucker himself, the gift transactions this claim is concerned with were not Trust matters. The relevance of this file is therefore limited and indirect, compared to the direct evidence provided by Mr Bull’s affidavit as to Mr Mauger’s wishes regarding the involvement of his children in respect of these gifts.
[67] I am not persuaded that there is sufficient relevance established to justify these files being discovered.
[68]The application for discovery of these files is dismissed.
Accountant’s file - Minutes of Rookwood Holdings Ltd
[69] Mr Tucker’s work performance is not disputed by the parties, nor is it disputed that he received bonuses and performance payments over and above his salary. While Ms Jackman refers to these in her affidavit, comparing them to the gifts made, the fact they would not qualify for tax deductions and her belief that this would be out of character for Mr Mauger who was “always very careful with money”, she does not question Mr Tucker’s or Ms Hermansson’s performance.
[70] I am not persuaded this file is relevant to the issues involved in this claim. The application for discovery of this file is dismissed.
Medical file (Marshlands Road Medical Centre)
[71] The plaintiffs submitted the only relevant document in this file has already been discovered and is included in a table of documents under “WM.19”. This is recorded as a medical file dated 24 April 2018 by Dr McKenzie, received by Ms Cron. If further documents from this medical centre are likely to be relevant, they would need to relate to Mr Mauger’s health in 2019. Mr Tucker must establish a basis for the existence of such files. He has not done.
[72]The application for discovery of this file is dismissed.
Letter of instruction with Ms James, invoices and the peer review
[73] The application for discovery of Ms James’ invoices for the work she carried out has been withdrawn by the first defendant, but he still seeks particular discovery of her letter of instruction/s and peer review.
[74] Ms James is an expert witness for the plaintiffs. She is a senior document examiner for the New Zealand Police and provided a document examination report in relation to the signature of Mr Mauger (alleged to have been forged) on the letter dated 2 July 2019.
[75] Ms James’ letter of instruction and engagement is privileged. In Prattley Enterprises, the Court of Appeal emphasised that the requirements in cl 3(a)-(g) in sch 4 of the HCR are fundamental and “allow the opposing party and the court to evaluate the expert’s expertise and opinion, initially for admissibility and ultimately for weight”.25 The clauses do not refer to letters of instruction, but require the materials relied upon and the facts and assumptions on which the expert’s opinions are based. Prattley Enterprises did not specifically address whether letters of instruction were discoverable, but it has been observed in commentary that “letters of instruction
25 Prattley Enterprises Ltd v Vero Insurance New Zealand Ltd above n 1, at [101].
should be disclosed and are amenable to orders for disclosure. This is only one means of ensuring the issues and facts and assumptions relied upon are clearly set out”.26
[76] However, the text also states that whether letters of instruction should be discovered depends on whether a waiver of privilege has been directly or indirectly provided. If instructions are disclosed, then it is likely they must be disclosed in full.27 There are no decisions in New Zealand determining this issue, namely whether letters of instruction are discoverable, and the position is therefore uncertain.
[77] In Equiticorp Industries Group Ltd (in statutory management) v Hawkins (No 2), the High Court considered whether a copy of a solicitor’s report prepared for the plaintiffs should be produced.28 The report was privileged communication between solicitor and client and had been referred to “far beyond a bare reference” in affidavits.29 The issue then was whether privilege had been waived, with the Court holding waiver may be implied on the basis of fairness,30 and whether the document has been selectively disclosed.31 The Court emphasised that it should be reluctant to break down the protection of privilege, but found the selective use of the document in that case (a report) introduced unfairness and therefore the plaintiffs had waived their privilege in respect of the report “however unwittingly”.32
[78] Section 65 of the Evidence Act 2006 is also engaged on questions of waiver, which provides:
65 Waiver
(1) A person who has a privilege conferred by any of sections 54 to 60 and 64 may waive that privilege either expressly or impliedly.
(2) A person who has a privilege waives the privilege if that person, or anyone with the authority of that person, voluntarily produces or discloses, or consents to the production or disclosure of, any significant
26 John Katz QC, Expert Evidence in Civil Proceedings (online ed, Thomson Reuters) at [27.C.34.6], citing Prattley Enterprises, above n 1.
27 Expert Evidence in Civil Proceedings, above n 26, at [27.C.34.6].
28 Equiticorp Industries Group Ltd (in statutory management) v Hawkins (No 2) [1990] 2 NZLR 175.
29 At 10.
30 At 8-9, citing Attorney-General for the Northern Territory v Maurice & Ors (1986) 69 ALR 31.
31 At 11.
32 At 15-16.
part of the privileged communication, information, opinion, or document in circumstances that are inconsistent with a claim of confidentiality.
(3) A person who has a privilege waives the privilege if the person—
(a)acts so as to put the privileged communication, information, opinion, or document in issue in a proceeding; or
(b)institutes a civil proceeding against a person who is in possession of the privileged communication, information, opinion, or document the effect of which is to put the privileged matter in issue in the proceeding.
…
[79] The main point in issue is whether s 65(3)(a) applies in this case. In Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (No 2), a decision of the Federal Court of Australia, it was held the calling of an expert itself does not amount to disclosure of the substance of the instructions.33 In Expert Evidence in Civil Proceedings, the author observed “if the evidence refers to the instructions, and addresses material in those instructions, then there will likely be a waiver” for the purposes of s 65.34 Tirango was applied in the Supreme Court of New South Wales in ML Ubase Holdings Co Ltd v Trigem Computer Inc, where it was held the privilege of service and tender of an expert’s report brief was waived only to the “extent that those communications are associated documents reasonably necessary to an understanding of the report”.35 In these cases the courts held that letters of instruction from solicitor’s to a party’s expert were discoverable.
[80] Based on the material provided to me, I am not satisfied that there is sufficient to establish a waiver of privilege. I am not therefore satisfied that I need to further address whether the letters of instruction should be discovered.
[81] In respect of the peer review of Ms James’ report, the first defendant has not established grounds for a belief that such a document exists. There is nothing in either Ms James’ report or her affidavit that references a written peer review having been produced. The onus is on the defendants to show that such a written document exists,
33 Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (No 2) (1998) 83 FCR 391.
34 Expert Evidence in Civil Proceedings, above n 26, at [27.C.34.6].
35 ML Ubase Holdings Co Ltd v Trigem Computer Inc [2007] NSWSC 859, (2007) 69 NSWLR 577 at [45].
and they have not done so. The defendants’ application for discovery in this respect is declined.
[82] The defendants seek the original signed document that forms the basis of the plaintiffs’ allegation of forgery. In a report by Ms James, para 4.4 states:
Without the original of the questioned document including the signatures it is not possible to determine whether either or both of the signatures (and the handwriting associated with the witness signature) have been manipulated or transferred onto the document using some form of ‘cut and paste’ technique.
[83] At para 5.2, Ms James’ wrote, “if the original of the questioned document can be located it is recommended that it be forwarded for physical evidence examination”.
[84] The onus of establishing that the document exists is on the defendants. They have not done so. The defendants’ application for discovery of this document is dismissed.
Two deeds of gift and authorisation
[85] The plaintiffs initially opposed the discovery of these documents however, since then, 13 further documents have been provided to the defendants including the two deed of gift letters. The documents are able to be discovered electronically and physically accessed at Rhodes & Co, the solicitor for the plaintiffs, offices.
Letters of instructions to Dr Young and Mr Nixon
[86] Dr Young is a registered psychiatrist who provides expert evidence relating to Mr Mauger’s mental capacity, which raises the question of relevance as to Mr Mauger’s state of mind when making the gift transactions. Mr Nixon is a technical support specialist who has given expert evidence in relation to the authenticity of the date stamps on some computer document files. Both have filed affidavits.
[87] The plaintiffs oppose the application for discovery on the grounds that this group of documents is subject to litigation privilege, because all communications with both Dr Young and Mr Nixon have been for the dominant purpose of preparing for this proceeding.
[88]I accept the plaintiff’s claim of privilege is well-founded.
[89] But, in any event, any expert evidence from these witnesses will be circulated prior to trial and will be the subject of timetabling directions. If there are opposing expert opinions on any of the matters to be called at trial, then the conferencing of experts may be directed. In any expert brief or report, the expert concerned will refer to the documents and/or research upon which they rely for the purposes of forming their opinion. These documents will therefore be available to any expert called by the defendants to contradict the plaintiff’s evidence. As well, any expert evidence provided on these topics will outline the parameters of the opinion provided; in other words, they will outline the questions they have been asked to address by way of their expert opinion. For this reason as well, I consider the letters of instruction to be irrelevant at this stage of the proceeding.
[90]The application for discovery of these documents is dismissed.
Two files: “Gift Letter.docx” and “Deed of Gift Letter.pdf”
[91]The parties have agreed that these two documents should be discovered.
Documents about Ms Jackman’s concerns at para 20 of her affidavit
[92] In her affidavit sworn 21 May 2021, Ms Jackman deposed that her immediate reaction to finding out about the gifts from Ms Cron was “shock and disbelief”. She deposed at para 20 that:
Then, as I reflected, I became uneasy as to how this might have happened. I had become wary of [Mr Tucker] and his influence over [Mr Mauger]. He had been progressively excluding me from my traditional role. I also felt [Mr Warner] had been ingratiating himself towards [Mr and Mrs Mauger] in a way that I would regard as unnatural. I would not be surprised if the gifting had been an objective for some time.
[93] Ms Jackman went on to explain why she found the gifts to be “most unusual and out of character for Mr Mauger”. In summary, her reasons were:
(a) Mr Mauger was always very careful with money and would typically not agree to potential beneficiary distributions promoted by his wife at trust
meetings. Mrs Mauger would then need to spend time and effort to get such proposals over the line.
(b) Charitable donations are tax deductible. Both Mr and Mrs Mauger would make such donations, as well as donations made through the Mauger Charitable Foundation and claim them to be deductible. By way of contrast, the gifts made are not tax deductible.
(c) To Ms Jackman’s knowledge, gifts of cash were never made by either Mr or Mrs Mauger.
(d) Ms Jackman was shocked at the amount of the gifts as they were well in excess of most donations that had previously been made. Each December, Mr Mauger would advise her of the bonuses to be paid to specific employees.
(e) It was not usual for Mr Mauger to fail to inform Ms Jackman of such things.
[94] There is nothing in Ms Jackman’s affidavit that suggests there are documents recording her concerns. As well, in my view, the defendants’ application is too broad. The application for discovery of these documents is dismissed.
Invoices from Nexia New Zealand to Rookwood Holdings Ltd
[95] Ms Jackman worked closely with Mr Mauger and, as stated in her affidavit, “became [Mr Mauger’s] day to day financial advisor and his sounding board”. Ms Jackman’s services both with Rookwood and Mr Mauger are not at issue in this proceeding. The defendants have not established relevance and, accordingly, the application for discovery of these documents is dismissed.
Emails between Ms Cron and Mr Bull as referenced in his affidavit
[96] Five emails between Mr Bull and Ms Cron have already been disclosed to the defendants. Mr Bull’s affidavit referred to “a number of emails” from March-April 2019. There is no evidence to suggest there are additional emails yet to be disclosed. The application for discovery of these documents is dismissed.
Documents relating to the Police referral for investigation referenced by Ms Cron in
her affidavit
[97] The amended statement of claim records that, in a letter dated 2 July 2019 produced by Mr Tucker and created by Ms Hermansson, Mr Mauger’s signature is forged. However, it is not clear whether the Police investigation concerned that allegation.
[98] Ms Cron deposed in her affidavit dated 9 June 2021 that the unauthorised expenditure and payment of bonuses by the defendants had been referred to the Police for investigation. This suggests the defendants are mistaken in their claim that the investigation related to the forgery allegations. In the absence of any further information about relevant, the application for discovery of these documents is dismissed.
Second defendant’s application
[99] Both Ms Hermansson’s application and supporting affidavit were brief. She deposed:
(a) She believes Ms Cron and Timothy Mauger exchanged email communications in or about September 2019, before Mr Mauger died, referring to the defendants and Mr Bull, and wanting to go through their email accounts at Rookwood.
(b) She believes there are many other emails between the plaintiffs that are relevant to this proceeding.
[100] Ms Hermansson has not established grounds for her belief that the documents exist or of their relevance, nor, in some instances, that the plaintiffs have control of any such documents.
[101]Specifically:
(a) Ms Hermansson’s employment contract/s from 2011-2018 — the plaintiffs have not located this document in further searches and Taylor Shaw has confirmed there are no prior employment agreements held on their file.
(b) A copy of Mr Mauger’s driving test results — both parties have submitted that the Travis Road Medical Centre have control of this file. An application for third party discovery could be made for any such documents but, relevantly, would first need to be established.
(c) Medical notes and records — these documents have already been discovered and, if additional documents are sought, then more particularity is required. In this respect, the request for documents regarding the medication Mr Mauger was prescribed by Shirley Medical at Timothy Mauger’s request is sufficiently particular, however, I accept this file is not within the plaintiffs’ control.
(d) Emails from Ms Cron to Dr Chima — these documents have already been discovered by the plaintiffs and the request for documents “at any other time” have not been proven to exist and the request lacks particularity.
(e) Copy of Dr Chima’s Montreal Cognitive Assessment report dated 24 April 2018 — given that the date of this document and the one already provided by the plaintiffs by Dr McKenzie are identical, it may be that this document has already been discovered. But, it is reasonable to require the plaintiffs to make further enquiries about this and I so direct.
(f) Correspondence with Dr Young — I have covered this in para [86]-[90] above.
(g) Copies of medical certificates given to the plaintiffs in or about March- April 2019 — the plaintiffs dispute these documents exist, noting that no medical certificate was obtained when Mr Mauger executed his powers of attorney in 2019. Without grounds for a belief such documents exist, an order for the discovery of them cannot be made.
(h) Communications between the plaintiffs and trustees — these documents have already been discovered by the plaintiffs, with further discovery made on 1 November 2022.
(i) Details of the Mauger Charitable Foundation and trusts’ assets — the relevance of these documents has not been established and any relevance inferred would not outweigh the cost and practical implications that would be incurred for their discovery. I also refer to my remarks at [64]-[68] above.
(j) Copies of the trustee resolutions, financial statements and accounts of the trusts and Mauger Charitable Foundation — for the same reasons as at (i), I decline to make an order for the discovery of these documents.
Result
[102] Regrettably this judgment has taken far too long to issue for various reasons. Events have overtaken the timetabling directions Mr Clay sought and are now to be addressed following Osborne J’s minute of 11 December 2023. There has been a further case management conference directed to take place before Osborne J at 0.30 am on 8 March 2024.
[103] The applications are granted and dismissed to the extent outlined in this judgment.
[104] Any discovery matters required to be addressed by this judgment must be attended to by the plaintiffs by 9 February 2024.
[105] Costs should follow the event. The defendants have had limited success. Contemporaneous memoranda addressing costs are to be filed and served by 9 February 2024. Any response is to be filed contemporaneously by 23 February 2024.
Harland J
Solicitors:
Rhodes & Co., Christchurch
K Clay, Barrister, ChristchurchTimothy Castle, Barrister, Wellington.
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