CSL Limited v Chow

[2021] NZHC 1904

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-503

[2021] NZHC 1904

BETWEEN

CSL LIMITED

Plaintiff

AND

JOHN CHOW (YA YU CHOW) and MICHAEL CHOW (KA MING CHOW) as

trustees of the John Chow Investment Trust and the Michael Chow Investment Trust Defendants

Hearing:	26 July 2021
Appearances:	P J Napier for the Plaintiff S Moore for the Defendants
Judgment:	27 July 2021

JUDGMENT OF POWELL J

[Application to exclude evidence on the grounds of privilege and/or confidentiality]

This judgment was delivered by me on 27 July 2021 at 11 am pursuant to R 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

CSL LIMITED v CHOW [2021] NZHC 1904 [27 July 2021]

[1]                  The plaintiff, CSL Limited, has sought summary judgment from the defendants on issues regarding implementation of a share option deed. The summary judgment is set down for hearing on 28 July 2021.

[2]                  An issue has arisen with regard to the admissibility of two documents put forward by Brent John Gilchrist in an affidavit in reply filed on behalf of the plaintiff. There is no dispute that up until February 2020 Mr Gilchrist had worked for the defendants and appears to have retained two documents relevant to the current dispute:

(a)Minutes of a meeting between two solicitors, one of the defendants and Mr Gilchrist that  took  place  at  Russell  McVeagh,  solicitors,  on  26 January 2018 (“the Russell McVeagh minutes”); and

(b)An internal memorandum prepared by Mr Gilchrist for the defendants on 8 February 2018 with regard to the share option (“the Gilchrist memorandum”).

The position of the parties

[3]                  Mr Moore, on behalf of the defendants, submits that the Russell McVeagh minutes were privileged in terms of ss 53 and 54 of the Evidence Act 2006 and that privilege has not been waived. With regard to the Gilchrist memorandum, Mr Moore submits that the document is confidential and should be excluded in terms of s 69 of the Evidence Act.

[4]                  Mr Napier, for the plaintiff, submits that because the Russell McVeagh minutes have come into the hands of a third party, privilege has been lost irrespective of whether privilege was formally waived. Conversely, in Mr Napier’s submission, the Gilchrist memorandum was clearly discoverable and there is no basis for preventing disclosure in terms of s 69 of the Evidence Act.

Discussion

[5]                  Dealing first with the Russell McVeagh minutes, I am satisfied that the minutes are clearly privileged and that that privilege has not been waived. In terms of s 54(1)

of the Evidence Act, the Russell McVeagh minutes were clearly a communication between the defendants and their legal advisor which was intended to be confidential and made in the course of and for the purpose of the defendants requesting or obtaining professional legal services. Thus, pursuant to s 53(3), the defendants are entitled to require that those minutes “not be disclosed in a proceeding … by any other person who has come into possession of it with the authority of the person who has the privilege, in confidence and for the purposes related to the circumstances that have given rise to the privilege”.

[6]                  Mr Gilchrist clearly comes into the category of “any other person” for the purposes of s 53(3). He obtained the privileged document by virtue of his then-role with the defendants but clearly had no authority to waive privilege on behalf of the defendants let alone to release that document to a third party, the plaintiff in this case. In such circumstances, it is difficult to see how the privilege thereby attaching could have become lost in terms of the cases referred to by Mr Napier.1 Instead I have no hesitation in concluding that the Russell McVeagh minutes must be excluded when the summary judgment application is heard.

[7]                  The position is different  with  regard  to  the  Gilchrist  memorandum.  As Mr Moore accepted, the memorandum is not privileged and it is in fact difficult to see that it holds any particular confidentiality. Instead there can be no doubt the memorandum is both clearly relevant and discoverable in the proceeding. In such circumstances, I have difficulty in seeing how the discretion provided in s 69(2) of the Evidence Act to exclude confidential documents could apply in this case, let alone that any of the criteria in s 69(3) would provide a basis for excluding the memorandum in any event. I therefore conclude that the Gilchrist memorandum is admissible and should not be excused from Mr Gilchrist’s affidavit.

Decision

[8]                  The defendants’ application is allowed in part. The Russell McVeagh minutes are to be excluded prior to the hearing on 28 July 2021. The application is otherwise

1      Corporate Group Holdings Ltd v Corporate Resources Group Ltd [1991] 1 NZLR 115 and Hart v Bankfield Farm Ltd HC Timaru CIV-2008-476-000072, 21 May 2008.

dismissed. Counsel are to work  together to  arrange for an  amended  affidavit of  Mr Gilchrist, excluding the Russell McVeagh minutes, to be put before the Judge dealing with the summary judgment application

[9]                  As each party has achieved a measure of success, I accept Mr Napier’s submission that costs appropriately lie where they fall on this application.

Powell J