Downey v Quirk
[2023] NZHC 1181
•16 May 2023
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2018-409-000737
[2023] NZHC 1181
IN THE MATTER of the estate of PETER EDWARD CULMER READ BETWEEN
RICHARD WILLIAM DOWNEY and
TRUST GROUP LIMITED as the trustees of ST JOHN’S TRUST
PlaintiffsAND
TREVOR KINRED QUIRK as trustee and executor of the estate of PETER EDWARD CULMER READ
Defendant
Hearing: 12 May 2023 Appearances:
R J Lynn for Plaintiffs
H D P van Schreven and J D Kaye for Defendant
Judgment:
16 May 2023
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
This judgment was delivered by me on 16 May 2023 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
DOWNEY v QUIRK [2023] NZHC 1181 [16 May 2023]
[1] This judgment concerns the latest skirmish between these parties over discovery issues.
[2] By way of background, I need only go back as far as my judgment of 15 October 2021 concerning an application by the plaintiffs that the defendant remedy defects in his discovery affidavit, for particular discovery and for inspection of documents.1 As recorded in the judgment, most of the issues on that application were resolved by the making of consent orders. In response to the orders made, the defendant filed two further discovery affidavits dated 29 October 2021 and 15 December 2021.
[3] The plaintiffs consider the defendant continues to fail to comply with his discovery obligations. On 2 September 2022, the plaintiffs filed a further application seeking, amongst other things, compliance with the consent orders in several respects. That application came on for hearing before me on 27 September 2022 but I was advised that it had been resolved and further consent orders would be sought by memorandum. That did not occur and the plaintiffs’ application has been referred back to me for hearing.
[4] When the application was heard on 12 May 2023 it appeared that, again, most matters could be resolved on a cooperative basis. Following the hearing, counsel filed a memorandum seeking further consent orders. However, some issues remain outstanding.
The consent orders
[5] The application identifies the orders from my judgment of 15 October 2021 that are in issue, which are at [19]–[21] of the judgment as follows:
[19] By 16 December 2021, the defendant shall file and serve an amended affidavit of documents in substitution for its affidavit of 17 March 2021 that complies with r 8.15 and the Protocol. As requested by counsel, I also order the affidavit shall list (to the extent that they have not already been listed in accordance with the High Court Rules) the documents that are the subject of the agreements recorded below as well as all relevant documents that the defendant has identified from Mr Read’s computer hard drive, and include editable Excel spreadsheets as provided for in counsels’ agreement.
1 Downey v Quirk [2021] NZHC 2778.
[20]By consent, orders are made that within 10 working days:
…
(b)The defendant is to provide by way of discovery a copy of the email dated 16 April 2018 that is referred to in paragraph 22(a) of Mr Quirk’s affidavit of 9 September 2021;
(c)The defendant is to inquire of Samantha Read whether she holds copies of any correspondence between 7 February 2017 and 30 April 2017 between her and the defendant that relate to the NZI Document discussed in paragraph 24(c) of Mr Downey’s first affidavit exhibited as BOD 0439–0466; and if so to request Ms Read to provide copies of any such documents to the defendant and through the defendant to the plaintiffs by way of discovery;
…
(e)That the undisputed orders sought at 1(b)i–vi. of the plaintiffs’ application are made, being provision by the defendant of copies of the following documents:
(i)All attachments to the document discovered as TQ.1464;
(ii)All attachments to the document discovered as TQ.1637;
(iii)Any responses to the document discovered as TQ.1640;
(iv)All attachments to the document discovered as TQ.1662 (other than TQ.1663);
(v)All attachments to the document discovered as TQ.1937;
(vi)All attachments to the document discovered as TQ.1939.
[21]The parties further agree and I order by consent:
…
(b)Within five working days the defendant will confirm whether it has complete files (including all electronic and pre-existing hardcopy documents) of Wynn Williams; Rodney Harrison QC; and White Fox & Jones, and, should it not, it will request copies of these. The defendant consents to providing these files to the plaintiffs. Plaintiffs’ counsel consents to collecting all such files from the defendant’s office.
(c)Within five working days the defendant will make (or if it cannot make, to take all steps available to it to get relevant entities to make) a request or requests under the Privacy Act 2020 to EQC and to IAG for copies of all documents held on
their files in respect of the Insurance Proceedings and underlying claims. The defendant is to provide copies of all documents provided by EQC and IAG in response to such requests to the plaintiffs immediately on receiving the same. The parties are agreed that these documents do not need to be reviewed for the purposes of being incorporated within any further discovery affidavit that is sworn.
The application
[6] The plaintiffs’ application is a complex document that is not easy to understand, not least because of the impenetrable numbering system adopted. However, Mr Lynn prepared for the hearing a roadmap of the plaintiffs’ position that is both commendably thorough and to the point. I intend to use that as the basis for the structure of this judgment.
Orders sought at 1.a.1.1-4
[7] The plaintiffs take objection to the defendant’s affidavits of documents which they say do not comply with the High Court Rules and the listing protocol in pt 2 sch 9 of the Rules. The defendant accepts that an amended list of documents should be filed and counsel have agreed on the terms of an appropriate consent order requiring this. It is set out at the end of this judgment.
[8] There are, however, several outstanding issues concerning the scope of the defendant’s disclosure. One issue concerns the hard drive from Mr Read’s computer, which is referred to several times in my 15 October 2021 judgment.2 Mr Downey considers that not all relevant documents from the hard drive may have been disclosed and he requests an evidential image of the hard drive be provided to his computer expert, which he considers was the intent of the order made at [21(a)] of my judgment of 15 October 2021.
[9] The defendant’s position is that he has disclosed all relevant documents from the hard drive and provided that information to Mr Downey’s IT expert. The defendant is prepared to provide direct access to the preserved data of the hard drive to Mr Downey’s IT expert but Mr van Schreven was not clear about what that might
2 See for instance at [13], [15] and [21(a)].
involve. Following the hearing, counsel have agreed on the terms of a consent order which will allow the parties to explore the manner in which full access to the hard drive can be provided to Mr Downey’s expert.
[10] Mr Lynn, however, says that Mr Downey’s concerns about the scope of the defendant’s disclosure extend beyond the hard drive. Several of the issues that he raises (para 3 of the roadmap document) are dealt with elsewhere in this judgment. However, I must deal with two categories of documents at this juncture.
[11] First, Mr Lynn refers to bank and trust account statements concerning transactions that are in issue in the proceeding (such as the settlement of insurance claims) that he says have not been disclosed. These are not specifically identified, but I understand Mr van Schreven to accept that trust account records held by the defendant showing the receipt of money to or for the credit of Mr Read’s estate would be disclosed. I will require counsel to confer further in respect of this matter, and reserve leave to come back to the Court in the event agreement is not reached as to what trust or bank account statements are to be disclosed.
[12] Next, Mr Lynn refers to further categories of documents which are set out at para 26 of schedule 2 to a letter from Mr Downey’s lawyers to the defendant’s lawyers dated 19 August 2022. Mr Lynn advises that Mr Downey seeks particular discovery in respect of these categories of documents.
[13] A party may seek particular discovery against another party after the proceeding has commenced under r 8.19 of the High Court Rules. The key issue in applications under r 8.19 tends to be whether there are grounds for believing a party has not discovered documents that should have been discovered. The courts generally adopt a four-stage approach to such applications, as outlined in Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd.3 That requires the Court to consider not only whether there are grounds for belief that the documents sought exist but also the degree to which they are relevant and whether ordering further discovery is proportionate.
3 Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760, [2018] NZAR 600 at [14].
[14] While Mr Downey’s concern that documents in these categories have not been disclosed was raised between solicitors in correspondence, I do not accept that they have been fairly put in issue in the application before me. They appear to have been raised as something of an afterthought in the preparation of submissions. Further, several of the categories concern documents that Mr Downey expected to see on the files of White Fox & Jones, which I am advised by counsel the defendant uplifted (both the hardcopy and electronic files) and disclosed. Mr Downey’s speculations as to what he would expect to find on the files are not adequate grounds for a belief that such documents exist. Furthermore, the documents are in most cases, at best, of peripheral relevance and in several instances irrelevant to any matter in issue. I make no orders in respect of them.
Orders sought at 1.a.ii
[15] This relates to [21](c) of the judgment of 15 October 2021 and to the making of Privacy Act requests to insuers. Those requests have been made but Mr Downey is not satisfied with them. Counsel have agreed on a way forward and a consent order will be made that Mr Downey draft further Privacy Act requests to be submitted on a joint basis.
Orders sought at 1.a.iii
[16] This relates to [20(b)] of the judgment of 15 October 2021. The defendant was ordered to disclose an email of 16 April 2018 from the defendant to Karen Welsford. In an affidavit of 29 October 2021, the defendant disclosed an email from him to Mr Downey dated 26 April 2018 acknowledging an email from Mr Downey dated 16 April 2018 (but in fact referring to a letter of that date). The defendant deposed that he holds no other emails dated 16 April 2018 relating to this matter. In his later affidavit of 15 December 2021, the defendant deposed:
I have complied with paragraph [20(b)] of the Discovery Order by searching my emails and I confirm I do not hold the requisite email.
[17] The order I have previously made was premised on the belief that an email of 16 April 2018 existed, but I am satisfied by the defendant’s affidavits that it does not. While Mr Downey’s position is that the Court ordered the defendant to disclose the
email and not simply make a search for it, the defendant cannot disclose that which does not exist. There will be no orders made in respect of this aspect of the application.
Orders sought at 1.a.iv
[18] This relates to [20(c)] of my judgment of 15 October 2021, where I ordered the defendant to make an enquiry of Samantha Read whether she had certain correspondence. The defendant made a request of Ms Read who advised that she had no such documents. Mr Downey is not satisfied with the request which he says did not reflect the spirit of what the Court ordered. Counsel have agreed that a further request will be made of Ms Read on the terms set out below.
Orders sought at 1.a.v
[19] This relates to [21(b)] of my judgment of 15 October 2021, where I directed the defendant to confirm whether he had the complete files from certain third parties, including Rodney Harrison KC, and to request copies of further documents if he did not, which were to be provided to Mr Downey. Such a request was made of Dr Harrison and it appears that he has electronic communications which have not been disclosed, and, perhaps, some correspondence with Mr Read that has not survived the destruction of Mr Read’s hard drive.
[20] Once again, counsel have agreed on a way forward which will be set out in the orders made below. In the event that Dr Harrison does not provide further documents, there is the potential for further applications to be made, and the parties may refer back to the Court by memoranda for further directions should that occur.
Orders sought at 1.a.vi
[21] This relates in part only to [20(e)] of my judgment of 15 October 2021, but also to attachments said to be missing from other documents disclosed by the defendant. Counsel agree that the way forward is for the documents concerned to be provided to Mr Downey in their native format, and a consent order will be made to that effect.
Orders sought at 1.e
[22] This paragraph of the application is a catchall provision where Mr Downey seeks further orders as the Court thinks just. Mr Lynn raised three matters under this heading.
[23] First, he submitted that because of the defaults by the defendant with his discovery obligations, the plaintiff may have difficulty preparing for trial in the time available and the hearing may have to be adjourned. There is no application presently before me to adjourn the hearing. If one was made I would expect that it would be referred to the trial Judge. I need say no more about that.
[24] The next matter concerns what are described as anticipatory non-party orders. It is said that if the Court considers Mr Downey should apply for non-party discovery orders against third parties to obtain disclosure of documents that are the subject of this application, then directions ought to be made that the defendant meet the costs of the plaintiffs and the non-parties with respect to those applications. I cannot anticipate what non-party discovery applications may be made or what the result of them might be. It would be wrong for me to give any indication as to where costs will lie on such applications in the event that they are made.
[25] Finally, it is submitted that, given the history of the defendant’s failure to comply with his discovery obligations, I should make an unless order under r 7.48(2)(a) to the effect that the defendant’s defence shall be struck out in the event of further non-compliance with the Court’s directions. It is submitted that it would be difficult to see a clearer example of ongoing non-compliance by a party than has occurred in this case.
[26] In SM v LFDB the Court of Appeal set out the principles that should guide the making of an unless order.4 It was recognised the Court may respond to a breach of a procedural order by making any order a Judge thinks just, including the making of an unless order. But it was also held that an unless order is “an order of last resort”.
4 SM v LFDB [2014] NZCA 326, [2014] 3 NZLR 494 at [29].
Generally, unless orders will not be made for breach of procedural orders, except where a party has repeatedly and flagrantly chosen not to obey the Court’s orders.
[27] I do not consider that there is any basis to make an unless order in the circumstances of this case. This application proceeded substantially on the basis that the defendant had failed to comply with the directions made in the 15 December 2021 judgment. Whilst I accept that in certain respects that was the case, I do not believe that there was any intention to breach the orders and, in the main, there were differences of view as to whether there had been compliance or not. I also take little from the fact that counsel have agreed to certain consent orders being made, which is not, in my view, an acknowledgement by the defendant that he failed to comply with my earlier orders. Rather, the defendant has demonstrated a willingness to attempt to accommodate Mr Downey’s requirements, notwithstanding he does not accept that they are reasonable or necessary. An unless order will not be made.
Result
[28]The directions I make are as follows: –
(a)The defendant shall file an amended affidavit of documents which complies in all respects with the High Court Rules and listing protocols and counsels’ agreement dated 31 August 2020 relating to discovery and such affidavit shall:
(i)list documents in chronological order;
(ii)ensure that the naming and identification of documents is consistent with prior affidavits of documents and to the intent that such documents would be searchable on a consistent basis; and
(iii)ensure the same consistency will apply in respect to the listing and identification of any parent document.
(b)The defendant shall contact its IT expert, Paul Black, to ascertain whether he can, and if so on what basis, provide full access to the
preserved data of the hard drive from Mr Read’s computer to the plaintiffs’ IT expert.
(c)Counsel shall confer in respect of any trust account or bank account statements that the defendant may hold relating to transactions that are in issue in this proceeding and attempt to agree on the disclosure of such statements.
(d)The defendant shall contact Dr Harrison KC to endeavour to have him provide his copies of any further hard copy and/or electronic files/documents that he holds relating to his acting as counsel for Mr Read and related parties.
(e)The plaintiff shall draft any further Privacy Act requests to EQC and/or IAG which the defendant shall submit on a joint basis to those entities and with the request to direct responses to both the plaintiffs and the defendant.
(f)The defendant shall make enquiries of Samantha Read as to whether she holds copies of any correspondence between 7 February 2017 and 30 April 2017 between her and the defendant that relates to the NZI document referred to in paragraph 24(c) of Mr Downey’s first affidavit exhibited as BOD0439-0466; and if so, to request Ms Read to provide copies of any such documents to the defendant and through the defendant to the plaintiffs by way of discovery from her email address
… .
(g)The defendant shall provide to the plaintiffs in native format the emails and attachments identified by reference to documents identified with the prefix “TQ” and the following numbers:
(i) 1464;
(ii) 1637;
(iii) 1640;
(iv) 1662;
(v) 1664;
(vi) 1668;
(vii)1673;
(viii)1939.
(h)In the event of any disagreement as to the implementation of these directions, or the need for further directions as may be required relating to discovery issues, leave is reserved to the parties to refer back to the Court by way of memoranda on three days’ notice.
[29] The parties agree that costs ought to be reserved, albeit that Mr Downey also seeks a direction from the Court that he was the successful party. It appears to me that the merits of this application did not point in one direction and it is obvious from this judgment and the consent orders that were agreed that this application should never have been necessary. I am in no position to decide where the responsibility for that lies. Costs will be reserved.
O G Paulsen Associate Judge
Solicitors:
GCA Lawyers, Christchurch Clark Boyce, Christchurch
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