Dobson v Milloy

[2013] NZHC 1408

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2012-463-000403 [2013] NZHC 1408

BETWEEN  KERRY BRYAN DOBSON Plaintiff

ANDHUGH MILLOY and HELEN RUTH MILLOY as Trustees of the HUGH MILLOY FAMILY TRUST

First Defendants

HUGH MILLOY and HELEN RUTH MILLOY as Trustees of the HELEN MILLOY FAMILY TRUST

Second Defendants

Hearing:                   12 June 2013

Appearances:           G Stringer for the Plaintiff

A Ross and Ms Gibbs for the Defendants

Judgment:                13 June 2013

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on

13.06.13 at 4:30pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

K B DOBSON v H MILLOY and H R MILLOY & Ors [2013] NZHC 1408 [13 June 2013]

[1]      This matter was adjourned for hearing upon the defendants’ two applications for further discovery, one of those seeking discovery from the plaintiff, and the other seeking discovery against a non party.

[2]      The factual background is complex.  Two factual issues are identified by the pleading, namely:

(a)       The first concerns the basis upon which the plaintiff, the defendants, and a Mr Reid shared guarantee obligations.

(b)      This second concerns the defendants’ counterclaim involving a sum of

$183,000 which the defendants plead they may be entitled to – in part. Proof of a claim to that part would be relevant to the question of what each party owes in fulfilment of guarantee obligations.

[3]      The issues raised by the discovery applications focus on the second of the factual issues I have just described.  What the defendants want are documents that explain the flow of money from the demise of a company in the outcome of which the said sum of $183,000 was paid to the plaintiff.   It is agreed that  Mr Reid instructed solicitors to pay the funds to the plaintiff.   The plaintiff has provided evidence of payment of the funds to him.  The defendants say that what is missing is evidence of where the payment went thereafter.  In short it seems the purpose of the defendants’ enquiry is to enable it to clarify its own position of a potential claim for a part of those funds.  The plaintiff resists the application.  He says it is not disputed that he did not receive the money for himself but rather he received it on behalf of Mr Reid.  He disputes therefore any responsibility to account for the money beyond his having received it.

[4]      The purpose of the discovery application against the non party Mr Reid is to obtain access to documents that the plaintiff clearly does not have and which Mr Reid should have.

[5]      Mr  Reid  is  not  represented  today.    Commonly  a  Court  will  consider  a discovery application against a non party on a without notice basis but providing that

any order for compliance is accompanied by a requirement to meet the reasonable costs associated therewith.

[6]      As against him the plaintiff opposes the discovery application on the basis that a company of Mr Reid’s had a security interest in the company which folded and Mr Reid’s company was entitled to receipt of the payment of $183,000 paid to the plaintiff.  From the plaintiffs point of view its responsibilities for discovery do not extent any further than they have already complied with.  Mr Stringer submits that the plaintiff has already gone to great lengths to provide the discovery it has.  Also the plaintiff is frustrated by perceptions of pleading inadequacies on behalf of the defendants.  The plaintiff says it is not disputed that the funds were not received by the plaintiff personally.  Therefore any requirement for further discovery should be confined to an application affecting Mr Reid alone.

Decision

[7]      The plaintiff has received funds on behalf of Mr Reid.  The defendant claims an interest in those funds and it may be relevant in that outcome to have information regarding disposition of the funds received by the plaintiff.

[8]      It appears that any information gleaned in this enquiry will unlikely add anything at all to that the Court orders to be delivers by Mr Reid.  Nevertheless there is an element of relevancy which supports an order for discovery from the plaintiff in the terms sought.

Orders

[9]      As against John Anthony Reid the Court orders that within 14 days of this order being made, and served upon Mr Reid, he produce for inspection and permit the parties to take a copy of full and unredacted copies of the documents in his possession, custody and control and relating to any recipient(s) of the payment of

$183,561.21 from the MRW Technology Trust and the Tara Trust into the plaintiff’s personal account as described in paragraph 33 of the affidavit of Hugh Milloy sworn on 23 August 2012.

[10]     In connection with the application for further discovery of the plaintiff the Court orders that the plaintiff by way of affidavit to be filed and served within 14 days give discovery of documents relating to any recipient(s) of the payment referred to in paragraph 33 of Hugh Milloy’s affidavit of 23 August 2012.

[11]     Any order for the payment of the reasonable costs of Mr Reid in complying with these orders, is reserved.

[12]     Costs in relation to the application for discovery against the plaintiff, are ordered to lie where they fall.

Other Orders

[13]     Within 10 working days of receipt of the discovery ordered to be delivered to them, the defendants shall file their repleading of their statement of defence and counterclaim.

[14]     The close of pleadings date will be fixed as at 15 days after the defendants have filed their repleading.

Associate Judge Christiansen