Dunajtschik v Garnham

[2024] NZHC 506

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2022-485-159

[2024] NZHC 506

BETWEEN

MARK DUNAJTSCHIK

First Plaintiff

DOROTHY MYRTLE SPOTSWOOD
Second Plaintiff

AND

MICHAEL ROBERT GARNHAM

First Defendant

BALLANTYNE BARKER HOLDINGS LIMITED

Second Defendant

MICHAEL BRIAN SPACKMAN in his

capacity as former trustee of the MIRO TRUST

Third Defendant

MGCG TRUSTEES LIMITED in its

capacity as current trustee of the MIRO TRUST

Fourth Defendant

Hearing:	4 March 2024
Appearances:	R L Pinny and D Qiu for Plaintiffs J L Verbiesen for Defendants
Judgment:	12 March 2024

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 12 March 2024 at 1.00 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:

DUNAJTSCHIK v GARNHAM [2024] NZHC 506 [12 March 2024]

[1]    The first plaintiff (Mr Dunajtschik) brings this proceeding to recover loans. The application before me arises from the defendants’ non-compliance with their discovery obligations. On 15 August 2023, the Court ordered tailored discovery in agreed categories.1 The defendants’ affidavit of documents sworn by the first defendant (Mr Garnham) on 30 November 2023 is incomplete in ways acknowledged by Mr Garhnam. Mr Dunajtschik considers there are also gaps in the discovery provided and, in some respects, a failure to discover any documents in agreed categories.

[2]    It is in the face of the defendants’ failure to provide the required discovery, and what he regards as a history of non-compliance  with the Court’s  directions, that   Mr Dunajtschik applies for particular discovery and for an unless order. The application is opposed by the defendants.

[3]    The  case  is  set  down  for  trial  commencing  15  July  2024,  and  from   Mr Dunajtschik’s perspective there is urgency to resolve the discovery issues and make required amendments to the timetable.

[4]The issues that arise on the application are the following:

(a)Is Mr Dunajtschik’s application premature because the pleadings are not yet finalised and/or because the defendants intend to file a further affidavit of documents?

(b)Have the defendants made a reasonable search for documents within the scope of the discovery order?

(c)Can the defendants withhold discovery in the agreed categories on the basis that the documents are not considered by them to be relevant to the matters in issue?

1      Dunajtschik v Garnham HC Wellington CIV-2022-485-159, 15 August 2023, Associate Judge Skelton (Minute).

(d)If so, has Mr Dunajtschik established reasonable grounds for a belief that the documents sought exist and are relevant to an issue?

(e)Is ordering particular discovery proportionate and appropriate?

(f)If the Court orders particular discovery, should it also make an unless order in terms sought by Mr Dunajtschik?

Some context

The parties

[5]    Mr Dunajtschik is a property investor at Wellington. The second plaintiff is his partner and also a property investor.

[6]    Mr Garnham is a solicitor at Wellington and also a businessman. He was at relevant times the solicitor for Mr Dunajtschik, and while acting in that capacity requested and took loans from Mr Dunajtschik.

[7]    BBHL  is  a  company  carrying  on  business  as   a  property  developer.   Mr Garnham and his wife were at all material times directors of BBHL.

[8]    The third and fourth defendants are the former and present trustees of the Miro Trust respectively. The Miro Trust is a family trust associated with Mr Garnham to whom some of the loans were paid.

The claim and defence

[9]    There are four causes of action in the amended statement of claim. The first cause of action has been resolved in favour of Mr Dunajtschik by an earlier judgment of the Court awarding him summary judgment.2 The judgment debt was paid after Mr Garnham abandoned an appeal at a late stage.

2      Dunajtschik v Garnham [2022] NZHC 2467.

[10]   The second cause of action, which is the primary cause of action, is broadly that in January 2019 certain existing loans made to Mr Garnham and BBHL were restructured into a new loan between Mr Dunajtschik and BBHL on terms that were varied from time to time. It is alleged that further advances were made to BBHL under the terms of the restructured loan in respect of which there is owing principal and accrued interest totalling around $6.5 million and that BBHL has failed to repay the debt despite demand.

[11]   The third cause of action is that under the terms of the restructured loan BBHL was to provide security over a property owned by BBHL at Wanaka and an order is sought that BBHL must execute a registrable mortgage over the property in favour of Mr Dunajtschik.

[12]   The fourth cause of action is that certain advances were paid into the bank account of the Miro Trust, and that in the event it is found the advances were not made to BBHL under the terms of the restructured  loan  then  they  are recoverable  by  Mr Dunajtschik from the Miro Trust as monies had been received.

[13]   The defendants’ position is that all the lending was to Mr Garnham personally, not to BBHL, and there is no security over any property owned by BBHL for repayment of the loans. Mr Garnham also says that the loans paid to the Miro Trust were advances by him to the Miro Trust and were treated as such.

The relevant procedural history

[14]   On 15 August 2023, Associate Judge Skelton made the tailored discovery order requiring discovery in the categories of documents which had been proposed in a plaintiffs’ counsel’s memorandum of 21 July 2023. The defendants were represented at the conference by a solicitor, Mr Pietras, who had also been counsel in the earlier summary judgment hearing.

[15]   It appears there is some doubt whether counsel received the minute Associate Judge Skelton issued following the conference, but one was prepared for distribution and there is no dispute as to the orders that were made. Relevantly, Associate

Judge Skelton’s minute records the terms of the discovery order were agreed. He said in his minute:

[4] The parties have agreed on tailored discovery.

…

[6] The parties shall provide tailored discovery pursuant to rr 8.8, 8.9 and

8.10 of the High Court Rules with affidavits and open documents exchanged by 10 October 2023. The agreed categories are set out in Schedule Two to the memorandum of counsel for the plaintiffs dated 21 July 2023. The listing and exchange protocol in pt 2 of sch 9 to the High Court Rules shall apply, unless varied by agreement between the parties.

[16]   The agreed categories of documents that were the subject of the discovery order are attached as Schedule A to this judgment.

[17]   The defendants did not provide discovery by 10 October 2023. The case came before Associate Judge Skelton for case management on 13 November 2023. In his minute of that conference the Judge noted the main issue for consideration was compliance by the defendants with the discovery order of 15 August 2023.3 He recorded that Ms Pinny expressed concern there was a “strategy of delay” by the defendants which was going to impact on the plaintiffs’ proper review of the defendants’ documents and the timetable that had been put in place for the trial.4 Counsel appearing for the defendants, Mr Dewar, denied there was a strategy of delay but acknowledged he was “stretched” in dealing with the proceeding and sought an additional four weeks for the defendants to complete discovery.5

[18]   Associate Judge Skelton directed the defendants to complete discovery in accordance with the discovery order and to provide open documents for inspection “at the latest by 1 December 2023”. He made consequential amendments to the timetable, and in response to a request by Ms Pinny for an unless order said:

[6]   I am not prepared to make an unless order against the defendants at   this stage. However, as I indicated during the telephone conference, if there is further non-compliance by the defendants with directions and timetable orders then consideration will be given to an unless order being made.

3      Dunajtschik v Garnham HC Wellington CIV-2022-485-159, 13 November 2023, Associate Judge Skelton (Minute) at [2].

4 At [3].

5 At [4].

[19]   On 30 November 2023, Mr Garnham swore an affidavit of documents on behalf of himself and the second and fourth defendants. He acknowledged he was making the affidavit under the order for tailored discovery of 15 August 2023 and that he  understood  the  obligations  imposed  by  the  discovery  order.   Relevantly,    Mr Garnham said:

4.In order to fulfil these obligations, I have diligently searched for all documents required to be discovered under the Discovery Order, and I have taken the following particular steps:

(a)I undertook a search of my computer and my email inbox to source all documents relating to my dealings with the Plaintiff.

(b)I travelled to my former office where physical files still remain and undertook a physical search of those documents.

(c)I provided all such information to my solicitors for the purpose of preparation of a list of the relevant documents.

(d)I have instructed my solicitors to review documents and provide them in the list contained in a schedule in accordance with Rule 8.16 of the High Court Rules.

[20]   Mr Garnham acknowledged that the discovery provided was incomplete in certain respects, namely as follows:

7.I am aware of my continuing discovery obligations. In the time available to me in preparing this list I have not sourced all bank records recording deposits to bank accounts I control. I am preparing that at the present time and expect to provide a further list of those bank statements recording deposits to accounts under my control within the next ten working days. It is problematic as somer [sic] relevant accounts are closed and not accessible on line [sic]. I am presently in Wanaka and will only be able to find any such records on my return to Wellington.

8.I note in some documents there is reference to other emails that I have not been able to locate or recover from the Plaintiff and also reference to other documents such as an agreement for sale and purchase referred to in a caveat lodged by the Plaintiff’s lawyer. I will continue to try to locate these documents and will discover them appropriately if I am able to find them.

[21]   Ms Pinny identified significant gaps in the discovery provided beyond those acknowledged by Mr Garnham. She set them out in a memorandum to the Court dated 4 December 2023. It is not necessary to set out the full detail here. It is sufficient to note Ms Pinny’s summary as follows:

(a)The Affidavit records that Mr Garnham searched his computer and his emails but does not specify what searches have been carried out in order to comply with the Discovery Order. However, the documents produced indicate that the search criteria applied was materially inadequate.

(b)Mrs Garnham’s emails do not appear to have been searched for relevant documents and emails, notwithstanding that at all relevant times she was (and still is) a director of BBHL and a trustee of MGCG Trustee Limited.

(c)Entire categories of documents ordered to be discovered appear to have been ignored. No explanation is provided as to why the defendants have failed to provide for these documents.

(d)The defendants do not appear to have requested documents held by third parties, but which are still within their control, such as accountants and solicitors.

[22]   Ms Pinny also set out orders Mr Dunajtschik was seeking to enforce compliance by the defendants with their discovery obligations, which notably included an unless order, as follows:

28.[Mr Dunajtschik] therefore seeks the following orders:

(a)That the defendants must complete discovery and file a further affidavit of documents which complies in all respects with the Discovery Order and the defendants’ obligations under the High Court Rules by 15 December 2023.

(b)For the avoidance of doubt, but without limiting paragraph 28(a) above:

(i)The  defendants  must  carry  out   searches   on   Mrs Garnham’s computer and email mailbox for relevant documents.

(ii)Relevant documents is not limited to correspondence between [Mr Dunajtschik] and Mr Garnham but includes (without limitation):

(A)any documents between any of the defendants (including Mrs Garnham);

(B)any documents between the defendants and third parties (including banks and accountants); and

(C)trustee and/or director minutes and resolutions;

which respond to the categories of discovery documents.

(iii)The affidavit of documents must detail the searches carried   out    on    both    Mr    Garnham’s    and Mrs Garnham’s computers and email mailboxes including (but without limitation):

(A)the date range used for searches;

(B)if searches were carried out by reference to the parties to correspondence, the identity of those parties;

(C)if any keywords searches were used, a list of the keywords; and

(D)any other search parameters used to identify relevant emails.

(iv)Where the defendants are not providing any documents which respond to a particular category, the affidavit of documents must list the category for which no documents have been discovered and specify what specific searches were carried out for documents responding to that category.

(c)All open documents must be made available for inspection by 15 December 2023.

(d)The defendants must pay any adverse costs order on this application by 15 December 2023.

(e)If the defendants do not fully comply with the orders, their defences to the claims in the amended statement of claim are struck out.

[23]   The case came before Associate Judge Skelton again on 5 December 2023 when Mr Dewar said he needed time to consider Ms Pinny’s memorandum and respond to it. Mr Dewar acknowledged there were some categories of documents which had not  then  been  discovered  and  stated  they  would  be  discovered  by  15 December 2023.6 He also noted, as stated in Mr Garnham’s affidavit, that there were other documents which Mr Garnham was continuing to try to locate.

[24]   Associate Judge Skelton was not prepared to make an unless order at that stage, but made directions requiring Mr Dewar to respond to the steps Ms Pinny said the defendants must take to comply with the discovery order as follows:

6      Dunajtschik v Garnham HC Wellington CIV-2022-485-159, 5 December 2023, Associate Judge Skelton (Minute) at [5].

[7]        After hearing from counsel for the parties, directions are made as follows:

(a)Mr  Dewar is to respond to Ms Pinny’s memorandum dated  4 December 2023 by 5pm on 7 December 2023 including specifically addressing the matters in 28(b) of the memorandum, and whether the defendants can comply with those matters by way of a further affidavit of documents by 15 December 2023, or whether the defendants consider that any of those matters fall outside compliance with the discovery order;

(b)the defendants are to file and serve a further affidavit of documents taking into account Ms Pinny’s memorandum dated 4 December 2023 and Mr Dewar’s response to it  by 15 December 2023;

(c)the plaintiffs are to make any interlocutory application that they wish to make with regard to the defendants’ discovery by 29 January 2024;

…

[25]   On 7 December 2023, Mr Dewar wrote to Ms Pinny and did not raise any challenge to [28(b)] of Ms Pinny’s memorandum but said:

3.I have in  the  last  couple  of  days  made  contact  directly  with  Mrs Garnham to determine whether she holds documents independent of her husband. She is, as you know, convalescing from very serious illness/surgeries. She believes herself to have been copied into some emails but was not participant in lending decisions and it is highly unlikely that she is in possession of relevant documents. We note of course that she is not a party and under no discovery obligation herself but has been kind enough to agree to make a check and to respond in more detail to me and I am checking in again with her tomorrow.

4.I have also made contact with the accountant and am awaiting to hear back from him.

5.I am writing today as directed – I can’t yet confirm precisely what categories and documents (apart from the bank statements previously signalled) will be provided but will follow up and write to you again tomorrow.

[26]   Ms Pinny responded on 8 December 2023, expressing concern that the defendants were taking a very  narrow approach  to the discovery  categories, that  Mr Dewar’s advice that Mrs Garnham was not under a discovery obligation herself ignored that she was a director of BBHL, and that the discovery categories were not restricted to communications between Mr Garnham and the other defendants. She also

said she looked forward to a response from Mr Dewar to the matters in [28(b)] of her memorandum as required by Associate Judge Skelton.

[27]   On 15 December 2023, Mr Dewar wrote to Ms Pinny advising that the defendants would not be filing an affidavit of documents by 15 December 2023 as directed by Associate Judge Skelton, and:

2.Mr Garnham instructs that he has been unable to finalise the collection of the accounting information required to be provided and is in fact still in Wanaka. I am instructed that he does intend to provide material but has simply been unable to do so within the time available.

[28]On 18 December 2023, Ms Pinny responded as follows:

Your clients’ continued delay in providing discovery on this matter is causing [Mr Dunajtschik] prejudice. We had arranged for the further discovery documents to be viewed by Ms Qiu this week, before the summer break. This not only reflected the deadline for providing further discovery, but also reflects the timeframe for any further application relating to discovery and counsel’s limited availability in January.

[29]   Ms Pinny suggested that any documents then available should be provided as an interim tranche, with  further  documents  and  affidavit  to  follow,  to  enable  Mr Dunajtschik to advance inspection, notwithstanding that a further affidavit of documents had not been filed as directed.

[30]   Matters did not advance, and no further documents have been discovered by the defendants since 30 November 2023.

The plaintiffs’ application and the defendants’ opposition

[31]   The plaintiffs’ application for particular discovery and an unless order was filed on 29 January 2024 in accordance with the directions of Associate Judge Skelton of 5 December 2023.

[32]   The application is opposed by the defendants and their opposition is supported by an affidavit of Mr Garnham. In the main, Mr Garnham’s affidavit is a challenge to the factual basis of the plaintiffs’ primary claim that the loans are repayable by BBHL rather than him personally. He raises factual disputes that can only be resolved at trial.

[33]   Importantly for present purposes, Mr Garnham asserts that adequate discovery in certain categories has been, or will be, provided but makes it plain that there are documents in the agreed categories the defendants will not discover on the basis that he does not consider they are relevant to any issue.

[34]   There is much force in Ms Pinny’s submission that Mr Garnham’s assessment of the relevance of documents is not based on the pleadings but upon whether documents support his contention that he, and not BBHL, is the debtor. For instance, having set out at some length the position of BBHL and selected documents that support it, he says at [14] that BBHL “objects entirely to the Application to give any further discovery than that provided in my affidavit of documents”.

The relevant discovery principles

[35]   Under r 8.2(1) of the High Court Rules 2016, parties must cooperate to ensure discovery and inspection are proportionate and facilitated by agreement on practical arrangements. This obligation is reflected in other rules and in the listing and exchange protocol.7 Here, there was initially cooperation to the extent that counsel agreed both that tailored discovery was appropriate and the categories of documents to be discovered.

[36]   While standard discovery requires disclosure of documents of actual and direct relevance, tailored discovery may be ordered where the interests of justice require an order involving more or less discovery than standard discovery would involve.8

[37]In Pyne Gould Corporation Ltd v Bath Street Capital Ltd Katz J noted:9

… The rules provide for tailored discovery to be ordered when the interests of justice require an order involving either more or less discovery than standard discovery would involve. It necessarily follows that the relevance threshold for agreeing categories of documents for tailored discovery may be broader than the “direct relevance” test that applies to standard discovery (as reflected in the four classes of documents in r 8.7). For example, the parties could choose to formulate all or some categories with a wider test of relevance in mind (such as the Peruvian Guano test).

7      High Court Rules 2016, sch 9 cls 2(a) and 3(2)(ii).

8      High Court Rules, r 8.8.

9      Pyne Gould Corporation Ltd v Bath Street Capital Ltd [2020] NZHC 1247 at [16] (footnote omitted).

[38]Rule 8.10 provides:

8.10     Obligation of party ordered to make tailored discovery

Tailored discovery requires a party against whom it is ordered to disclose the documents that are or have been in that party’s control either in categories as indicated in clause 3(2) of Part 1 of Schedule 9 or under some other method of classification that facilitates the identification of particular documents.

[39]   Rule 8.14 sets out the extent to which parties are required to search for documents that are within the scope of a discovery order as follows:

8.14     Extent of search

(1)A party must make a reasonable search for documents within the scope of the discovery order.

(2)What amounts to a reasonable search depends on the circumstances, including the following factors:

(a)the nature and complexity of the proceeding; and

(b)the number of documents involved; and

(c)the ease and cost of retrieving a document; and

(d)the significance of any document likely to be found; and

(e)the need for discovery to be proportionate to the subject matter of the proceeding.

[40]   Rule 8.15 sets out the standard requirements for affidavits of documents. Importantly, a party must:10

…

(b)give particulars of the steps taken to fulfil those obligations; and

(c)state the categories or classes of documents that have not been searched, and the reason or reasons for not searching them; and

(d)list or otherwise identify the documents required to be discovered under the order in a schedule that complies with rule 8.16 and Part 2 of Schedule 9; …

[41]   Relevant in the present context also is r 8.17, which provides for the variation of a discovery order where compliance or attempted compliance with the terms of the

10     High Court Rules, r 8.15(2).

order has revealed a need for variation, or there has been a change of circumstances that justifies reconsideration, as follows:

8.17     Variation of discovery order

(1)Subject to rule 7.7, a party may apply for an order varying the terms of a discovery order.

(2)The variation may be granted by a Judge on the ground that—

(a)compliance or attempted compliance with the terms of the order has revealed a need for a variation; or

(b)there has been a change of circumstances that justifies reconsideration.

[42]   The plaintiffs’ application relies upon r 8.19, which allows a party to seek further discovery where it appears another party has not discovered documents that ought to have been discovered. As the authors of McGechan on Procedure note, it is “one of the ways of circumventing the conclusiveness rule applicable to discovery affidavits”.11

[43]Rule 8.19 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

11     Robert Osborne (ed) McGechan on Procedure (online ed, Thomson Reuters) at [HR8.19.01].

(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 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. In making the assessment whether to order further discovery the Court generally adopts the following four-stage approach to such applications as outlined in Assa Abloy New Zealand Ltd v Allegion (NZ) Ltd:12

(a)Are the documents sought relevant, and if so how important will they be?

(b)Are there grounds for belief that the documents sought exist? This will often be a matter of inference. How strong is that evidence?

(c)Is discovery proportionate, assessing proportionality in accordance with Part 1 of the Discovery Checklist in the High Court Rules?

(d)Weighing and balancing these matters, in the Court’s discretion applying r 8.19, is an order appropriate?

[45]   In Lighter Quay Residents’ Society Incorporated v Waterfront Properties (2009) Ltd, Katz J noted that in relation to an application under r 8.19 relevant principles are:13

(a)Existence of the document does not have to be established on the balance of probabilities on a “more likely than not” basis. A lower threshold is required, which may vary given the relevance of the documents and issues of proportionality.

(b)While there is a presumption that affidavits of documents filed are conclusive, an application under r 8.19 is a proper way to circumvent the conclusiveness rule. The party seeking further discovery has to establish that the existing affidavit of documents is incomplete.

(c)Whether a document “should have been discovered” should be determined by reference to the “adverse documents” test in r 8.7, or any stricter test imposed under tailored discovery pursuant to r 8.8.

The matters raised in opposition to the orders sought

[46]Ms Verbiesen advances submissions that:

12     Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760, [2018] NZAR 600 at [14].

13     Lighter Quay Residents’ Society Incorporated v Waterfront Properties (2009) Ltd [2017] NZHC 818 at [16] (footnotes omitted).

(a)the application is premature because the pleadings will be amended, and a further affidavit of documents will be filed by the defendants;

(b)the application is fundamentally misconceived because the documents sought are not relevant;

(c)the orders sought are not justified as the defendants’ affidavit of documents is presumed to be conclusive;

(d)it has not been established there has been non-compliance with the discovery order as there is nothing to refute Mr Garnham’s evidence that the defendants have disclosed, or will shortly disclose, all documents to which the plaintiffs are entitled; and

(e)an unless order cannot be made when the defendants are not in default of a court order, or in circumstances where there can be doubt as to whether the defendants have sufficiently complied with their discovery obligations.

[47] I have identified the issues as I see them at [4] above, which encompass all the matters raised by Ms Verbiesen for the defendants. I will deal with those issues under the headings below.

Is the application premature?

[48]   Ms Verbiesen submits the relevance of documents for discovery purposes is to assessed against the pleadings and therefore the pleadings must first be settled.14 She argues the pleadings are not settled but are a “moving feast”. This is because the first cause of action in the amended statement of claim is to be removed, there is presently an application before the Court by Mr Dunajtschik to join new parties, and the defendants have expressed their intention to file an amended defence raising new set-offs.

14     Relying on Chatfield & Co Ltd v Commissioner of Inland Revenue [2016] NZCA 614; ASB Bank Ltd v Commissioner of Inland Revenue [2014] NZHC 2184.

[49]   I do not accept Ms Verbiesen’s submissions. It is almost invariably the case that parties will amend their pleadings during the lifetime of a proceeding, and often after discovery. The possibility pleadings may be amended is not justification for a party to refuse to comply with a court order that discovery be provided. If an amendment to the pleadings means further discovery is required, the parties have a continuing obligation to provide it.15 If a party considers amendments to the pleadings require variation to an existing discovery order, they may apply under r 8.17. No such application has been made in this case and there has been no change of circumstances that could justify the making of such an order.

[50]   Mr Dunajtschik’s intention to remove his first cause of action is a red herring. The cause of action has remained only because Mr Garnham filed an appeal from the entry of summary judgment against him. The appeal is no longer extant. The removal of the cause of action has no discovery implications.

[51]   Further, Ms Verbiesen did not explain how, if the pleadings are amended in any of the ways the parties have proposed, that will result in a need for significant further discovery. I am satisfied it will not, and Ms Pinny has confirmed any further discovery that may be sought if Mr Dunajtschik’s application to join further parties is granted will be limited to just a few documents.

[52]   It was also submitted this application is premature because Mr Garnham has said that a further affidavit of documents will be provided. The argument advanced is that until that further affidavit is filed Mr Dunajtschik and the Court cannot fairly conclude that the defendants’ discovery is deficient.

[53]   I do not accept this argument either. The defendants’ affidavit of documents of 30 November  2023  was  incomplete  and  acknowledged  to  be  so.  Although Mr Garnham said further discovery would be provided, no further documents have been disclosed since 30 November 2023. There is no explanation for that. Most importantly, it is clear that any further discovery will not be provided in terms of the tailored discovery order as the defendants are refusing to discover documents in the agreed categories they do not consider relevant.

15     High Court Rules, r 8.18(1).

[54]   Finally, it cannot be contended that Mr Dunajtschik has acted prematurely when this application was made in compliance with Associate Judge Skelton’s direction of 5 December 2023 that any application in regard to the defendants’ discovery be filed by 29 January 2024.16

Have the defendants made a reasonable search for documents within the scope of the discovery order?

[55]   The nature of the obligation under r 8.14 to make a reasonable search for documents within the scope of a discovery order was discussed by Katz J in Pyne Gould Corporation Ltd v Bath Street Capital Ltd.17 There, Bath Street applied for further discovery. The primary issue was whether there were grounds for believing Pyne Gould had not discovered documents that should have been discovered under an order for tailored discovery in agreed categories.18 The first issue Katz J addressed was whether Pyne Gould had failed to comply with its obligation to make a reasonable search for documents within the scope of the tailored discovery order.

[56]   Katz J noted the requirements of r 8.14 and said that what is required for a reasonable search is “context-specific”.19 The case before her was a major commercial proceeding assigned to the Commercial Panel seeking damages of $22 million. She considered that in such circumstances “a reasonable and proportionate search required the parties to make significant efforts to locate documents within the tailored discovery categories”.20 She noted that whilst individuals involved in the transactions may be the persons best placed to search for and locate hard copy documents, external IT support may well have been appropriate to facilitate the search for relevant documents. She noted also that if electronic or other documents had been lost due to the passage of time an explanation should be provided for that, and if documents are said to no longer be recoverable the party must explain why they are not recoverable and what steps have been taken to recover them.21

16     Dunajtschik v Garnham, above n 6, at [7(c)].

17     Pyne Gould Corporation Ltd v Bath Street Capital Ltd, above n 9.

18 At [22].

19 At [30].

20 At [30].

21 At [31].

[57]   Katz J considered the process undertaken by Pyne Gould fell significantly short of what was required for a reasonable and proportionate search:22

… Appropriate key word searches should have been conducted across all relevant hard drives or other repositories of electronic documents (including the hard drives associated with all persons who may have created, received or accessed relevant documents). If Pyne Gould did not have internal IT experts with the necessary forensic computing skills, external consultants should have been engaged. The key words and phrases used for searching should ideally have been agreed between the parties. They should have been comprehensive enough to capture the majority of potentially relevant documents.

[58]   This case is not a complex commercial case of the kind Katz J was dealing with, the amount at issue is significantly smaller and the number of documents that will need to be searched for and discovered will be far fewer. Even taking all of that into account, the defendants have not made a reasonable search for documents that are within the scope of the discovery order.

[59] Mr Garnham deposes at paragraphs 4(a) and (b) of the defendants’ affidavit of documents to having taken just two steps to search for documents required to be discovered. I have set them out at [19] above. In her memorandum to the Court of 4 December 2023, Ms Pinny identified just some of the reasons why the searches undertaken by Mr Garnham were insufficient. The concerns are identified in [21] and

[22] above.

[60]   In my view, there is nothing to suggest that Mr Garnham has meaningfully applied his mind to where documents that are discoverable would be held and by whom. He has limited electronic searches to just his own computer without saying how be conducted such searches. Keyword searches should have been applied across all repositories of electronic documents and ideally by someone with expertise to conduct such searches. Mr Garnham does not say what physical files were searched or who they belong to, nor whether physical files other than those at his former office may have discoverable documents. Mr Garnham has not made any enquires of third parties who may hold documents within the defendants’ control that must be discovered, such as banks, accountants and solicitors. Importantly, he has plainly not searched for documents within the agreed categories that he considers are not relevant.

22 At [32].

[61]   Further, as I have noted, the defendants’ counsel was given an opportunity by Associate Judge Skelton to respond to Ms Pinny’s criticisms of the sufficiency of the searches Mr Garnham said he undertook. Not only were no challenges raised, but  Mr Dewar wrote to Ms Pinny stating that enquiries had been made of Mrs Garnham and an accountant as to whether they were in possession of discoverable documents. Mr Dewar has never advised the outcome of those enquiries, and I do not accept    Ms Verbiesen’s submission that it should be inferred there are no further documents.

[62]   The defendants have not conducted a reasonable search for documents within the scope of the discovery order.

Can the defendants withhold discovery of documents in the agreed categories on the basis they do not consider them relevant?

[63]   Ms Verbiesen argues that in assessing whether there has been compliance with a tailored discovery order the touchstone is whether disclosure is required in the interests of justice and not “the lower standard of relevance applicable to standard discovery”. Nevertheless, both Mr Garnham and Ms Verbiesen in her submissions justify the defendants’ failure to disclose documents in the agreed discovery categories on the basis they are not relevant. The issue is whether the defendants are entitled to do so.

[64]   In Pyne Gould Corporation Ltd v Bath Street Capital Ltd, Pyne Gould did not discover documents in some of the agreed tailored discovery categories. It took the position, as do the defendants here, that it was entitled to apply an overarching relevance filter “pursuant to which not only individual documents within a category, but entire categories, may be assessed as irrelevant and therefore not discovered”.23 Katz J held that Pyne Gould was required to give discovery in the agreed categories unless the parties had agreed that an additional relevance filter may be applied to a particular category.24 She said:

[43] … The overall scheme of the rules envisage that parties will (and should) turn their minds to issues of relevance at the time the relevant categories are negotiated. The rules do not appear to envisage a secondary relevance filter being applied to agreed categories. Ideally, the categories

23     Pyne Gould Corporation Ltd v Bath Street Capital Ltd, above n 9, at [10].

24 At [52].

should be carefully formulated to capture only documents the parties agree are relevant (albeit it is open to the parties to take a broader view of relevance than they would for standard discovery). The cost and efficiency gains associated with tailored discovery may be lost if this is not done and significant disputes about relevance arise later, as has occurred in this case.

[65]   Katz J did accept there may be cases where the parties have not sufficiently turned their mind to issues of relevance when the discovery categories were formulated, or it may be apparent that categories are drafted intending that a second relevance filter would be applied by the parties, such as where a category is described extremely broadly.25 However, in the case before her the discovery categories were agreed by both parties and envisaged the documents falling within the identified categories were relevant. She further noted:

[50]      … it was open to the parties to make their own assessment of relevance at the time they agreed the discovery categories, provided that the agreed categories have some degree of connection to, or relationship with, the issues in the case. Direct relevance is not required (albeit I note that Bath’s position is that the documents are directly relevant, in any event).

[51]      In my view, the parties’ agreement provides strong evidence that the documents falling within the agreed categories are relevant. The categories were carefully negotiated by experienced lawyers over an extended period and do not appear to be overly broad on their face. The categories have been drafted with care and precision. Although Pyne Gould now wishes to confine the issues in the proceeding within a narrow ambit, Bath intends to defend the proceeding (and advance its counterclaim) on a significantly broader basis. It is entitled to do so. …

[66]   Similarly, in Hagaman v Hagaman tailored discovery had been ordered, but the defendants made redactions to some documents in a category requiring discovery of “All minutes for all meetings of the Naciemento Trust trustees” and omitted some minutes entirely on the basis the material was not relevant.26 Associate Judge Lester referred to Pyne Gould Corporation Ltd v Bath Street Capital Ltd, and noted that the parties were represented by leading commercial law firms and senior barristers, the categories of tailored discovery were negotiated over an extended period and carefully addressed, and many of the agreed categories of discovery referred to documents related to a topic. He noted also that the tailored discovery in respect of the category

25 At [44].

26     Hagaman v Hagaman [2021] NZHC 2594.

in issue was by consent and there was no application to vary the consent orders.27 He summarised the position as:

[16]      Accordingly, I am not convinced the redacted material would not be relevant. The redactions are disallowed because, in short, the defendants agreed as part of tailored discovery to disclose all of the minutes. The act of agreeing to the categories determined relevance.

[17]      Mr Weston QC, counsel for the first respondents, submitted that on this approach, all of a document would become relevant even if only one line was within tailored discovery. That is not the effect of denying the defendants the ability to redact. In tailored discovery the parties are free to agree to the applicable relevance threshold when agreeing categories for discovery. Tailored discovery may in fact involve more discovery than standard discovery. If the document is within a class of tailored discovery defined simply by reference to a category then that is what the parties have agreed to discover. If, in Mr Weston’s example, there is one line in a document that means it falls within a category of discovery then the whole of that document is discoverable because it is within the category. The discovery of such a document does not render the remainder of the document relevant to a matter in issue as submitted by Mr Weston. In a case such as this proceeding, the entire document is to be disclosed as that is what has been agreed and ordered.

(footnote omitted)

[67]   Applied to this case, the tailored discovery categories have been carefully drafted by Mr Dunajtschik’s counsel and were provided to the defendants’ counsel on 8 July 2023, well before the case management conference on 25 July 2023 when the tailored discovery order was made.28 This is not a case where the terms of the tailored discovery order were proposed at, or only shortly before, the case management conference and without providing the defendants an opportunity to fully consider them. Throughout this proceeding the defendants have been legally represented, and the order for tailored discovery was made without opposition. It can reasonably be inferred that counsel turned their minds to the relevance of documents within the categories before agreeing to the making of the discovery order. There is certainly no evidence before me to the contrary.

[68]   Also, no submissions were made to me that the tailored discovery categories are in overly broad terms so as to indicate an intention that a second relevance filter

27 At [12].

28 Memorandum of plaintiffs’ counsel for case management conference dated 21 July 2023 at [13].

would be applied by the parties, and I can see no basis for such an argument to be advanced.

[69]   Finally, I again note that no challenge was made to the terms of the discovery order when Associate Judge Skelton allowed for that in his minute of 5 December 2023, and no application to vary the terms of the order has been made since either.

[70]   For those reasons, I find the defendants are required to give discovery of all documents in the agreed categories.

Are the documents sought relevant and do they exist?

[71]   It follows from what I have said above that it is unnecessary for me to decide whether Mr Dunajtschik has established reasonable grounds for a belief that the documents sought are both relevant to an issue and exist. Those issues have already been decided by the parties in the act of agreeing to the tailored discovery order. I would add that it is also my view that documents in the agreed categories will be relevant to the issues between the parties raised in the pleadings. While the categories are broad in their scope, it was open to the parties to agree to discovery on those terms.

[72]   Ms Verbeisen argued that where the defendants have filed an affidavit of documents, Mr Dunajtschik must establish that the existing affidavit is incomplete.29 She submits there is no cogent justification to refute Mr Garnham’s position that the affidavit filed, and the further affidavit to be filed, will disclose all documents to which Mr Dunajtschik is entitled.

[73]   For the reasons I have already given, I do not accept that submission. The defendants’ affidavit  of  documents  was  acknowledged  to  be  incomplete,  and  Mr Garnham has made it clear that any further affidavit will also not comply with the terms of the discovery order.

29     McCullagh v Robt Jones Holdings Ltd [2015] NZHC 1462, (2015) 22 PRNZ 615 at [7], citing

Jones v Monte Video Gas Co (1880) 5 QBD 556 (CA).

Is ordering particular discovery proportionate and appropriate?

[74]   Beyond the argument that documents in the agreed categories are not relevant to a matter in issue (which I have rejected), the defendants have not made any submission that requiring particular discovery would not be proportionate.

[75]   This is not a complex case but the amount at stake is substantial. While there are 23 agreed discovery categories, they have been defined so that the process of searching for and discovering documents in them should not be unduly burdensome.

Should the Court make an unless order in terms sought by the plaintiffs?

[76]Rule 7.48 of the High Court Rules relevantly provides:

7.48     Enforcement of interlocutory order

(1)If a party (the party in default) fails to comply with an interlocutory order or any requirement imposed by or under subpart 1 of Part 7 (case management), a Judge may, subject to any express provision of these rules, make any order that the Judge thinks just.

(2)The Judge may, for example, order—

(a)that any pleading of the party in default be struck out in whole or in part:

(b)that judgment be sealed:

(c)that the proceeding be stayed in whole or in part:

(d)that the party in default be [fined, ordered to do community work, or committed to prison under section 16 of the Contempt of Court Act 2019]:

(e)if any property in dispute is in the possession or control of the party in default, that the property be sequestered:

(f)that any fund in dispute be paid into court:

(g)the appointment of a receiver of any property or of any fund in dispute.

…

[77]   Although not mentioned, under r 7.48(2) the Court may make an unless order the purpose of which is to enforce compliance with the Court’s orders and ensure the efficient conduct of proceedings.30

[78]   Ms Pinny referred me to Kent Sing Trading Company Ltd v JNJ Holdings Ltd, where the Court recognised the hierarchy of orders that may be made in the exercise of discretion to enforce a party’s obligation of disclosure, the three main options being:31

(a)an extension of time within which the defaulting party must comply;

(b)an extension of time under an unless or conditional order, spelling out the consequences of the failure to comply, including a strike-out of the case of the defaulting party; and

(c)an immediate order striking out the statement of claim or defence of the defaulting party.

[79]   The Court also noted that it is open to find a party that has deliberately failed to provide disclosure to be in contempt, but ordinarily the appropriate sanction for failure to comply with a disclosure order is a strike-out (if the threshold for that is met), together with an adverse costs order.32

[80]   The leading case, however, is SM v LFDB.33 There the Court of Appeal recognised that an unless order is an order of last resort, only to be made where there is a history of failure by a party to comply with earlier orders. Relevantly, the Court also said:

[27]      Case management plainly matters to the immediate parties in any given case. It matters to litigants in other cases too, because it affects the time their cases will take to come to trial and influences their expectations of the Court; expectations matter because they influence the settlements in which the majority of civil proceedings end. And it matters to potential litigants — the public at large — because they should feel confident that the Court can try cases fairly, quickly and efficiently. From the perspective of a judge dealing with any given case, all these interests are relevant; all form part of the interests of justice.

30     McGechan on Procedure, above n 11, at [HR7.48.01(3)].

31     Kent Sing Trading Company Ltd v JNJ Holdings Ltd [2019] NZCA 388 at [43].

32 At [45].

33     SM v LFDB [2014] NZCA 326, [2014] 3 NZLR 494.

[28]      Obedience is the foundation upon which the Rules operate. From time to time the Court encounters a party who chooses not to obey, seeking perhaps to avoid accountability to the other party or to secure an unfair settlement. In such a case the interests of justice require that the Court do whatever is necessary to enforce obedience to its orders.

(footnotes omitted)

[81]   The plaintiffs seek an unless order to compel compliance by the defendants with the discovery order. The terms of the unless order sought are set out in the notice of application as:

(c)If the defendants fail to:

(i)file and serve the further affidavit of documents; and/or

(ii)provide further discovered documents to the first plaintiff for inspection;

by such date ordered by the Court, the defendants’ statement of defence and counterclaim will be struck out.

[82]   Ms Pinny argues that an unless order is required because of the history of non-compliance by the defendants with orders of the Court, including the discovery order. She  says  the  defendants  failed  to  comply  with  the  discovery  order  by  10 October 2023 as originally ordered and then, when granted further time to give discovery, filed an incomplete affidavit of documents. Even Mr Garnham acknowledged further discovery is required but  it  has  never  been  forthcoming.  Ms Pinny submits the parties have already lost five months due to the defendants’ failure to comply with the discovery order and are now faced with the difficult prospect of a trial commencing in just four months’ time without full discovery. She says further significant delay will cause prejudice to Mr Dunajtschik’s preparation for trial and possibly also result  in  the  trial  having  to  be  adjourned.  It  is  said  that  as Mr Dunajtschik is 86 years old he is unable to commit long periods of time to trial preparation so it is important there are no further delays.

[83]   Ms Verbiesen argues that an unless order cannot possibly be justified because there has not been non-compliance with the discovery order. Furthermore, she submits to the extent it is argued the defendants have not given proper discovery, they were entitled to take the position they have in response to this application. Ms Verbiesen says that if the Court ultimately does not accept the defendants’ position, then they are

entitled to more time to provide any further discovery required of them without the making of an unless order. She argues that to compromise irretrievably a party’s right to a merits judgment for failure to meet some procedural obligation is a serious step that should be taken only when necessary.34 The position of the defendants is clearly summarised as:

The circumstances of this case do not rise anywhere near the level of contumelious conduct that would justify dangling the sword of Damocles over the Defendants. It is respectfully submitted that the use of such threats in plainly premature circumstances should be discouraged in the strongest terms.

[84]   Ms Verbiesen also submits that an unless order should not be made because it is well established that such an order is self-executing and therefore must be clear as to its terms. She argues there can be no way of determining objectively whether the defendants will have sufficiently complied with any order the Court may make on this application.

[85]   The circumstances of this case justify the making of an unless order. The submission that the defendants have not failed to comply with the discovery order is incorrect. The discovery order has been breached in the manner Ms Pinny identified. I also accept Ms Pinny’s submission that Mr Garnham is an experienced solicitor (and the person controlling the second and fourth defendants) and must be well aware of his obligations to the Court and the prejudice delays and incomplete discovery will have on Mr Dunajtschik.

[86]   Ms Verbiesen’s  submission  that  the  defendants  are  entitled  to  dispute  Mr Dunajtschik’s view as to the scope of their discovery obligations would have more heft had the defendants challenged the terms of the discovery order sooner or when given the opportunity to do so by Associate Judge Skelton, or applied to vary the order. They did none of that. Their failure to do so must be viewed in light of what I accept was a clear  direction  given  to  the  defendants  by  Associate  Judge  Skelton  on  13 November 2023 as to the need for full compliance with their discovery obligations and his willingness to consider the making of an unless order if they did not.

34     Parlane v Hayes [2015] NZCA 341 at [31]; Elvidge v ASB Bank Ltd [2015] NZHC 44 at [201]– [205]; McGechan on Procedure, above n 11, at [HR7.48.02(1)].

[87]   I accept Mr Dunajtschik is prejudiced by the delays that have occurred. The pre-trial directions have already been varied twice due to the defendants’ failure to provide discovery.35 Further substantial delays will almost certainly put the trial in jeopardy. I accept also that such prejudice may well be greater than is usually the case given Mr Dunajtschik’s age. Further, during the period of delay Mr Dunajtschik is not receiving repayment and use of the advances that were made and from which both Mr Garnham and BBHL benefitted.

[88]   I also do not accept Ms Verbiesen’s submission that an unless order is not appropriate for alleged non-compliance with a discovery order. Clearly the making of such an order must be a proportionate response to the default that has occurred, and the terms of the order carefully worded to avoid injustice, but such orders are not unusual in cases such as this.36

[89]   Ultimately, I must stand back and consider whether it is just to make an unless order at this stage having regard to the public interest in the efficient administration of justice; the prejudice that has been, and will be, suffered by Mr Dunajtschik as a result of the defendants’ non-compliance with the discovery order; and any injustice that the defendants may suffer. I am so satisfied.

Result

[90]Mr Dunajtschik’s application is successful.

[91]I make the following orders:

(a)The defendants are to file and serve a further affidavit of documents within 15 working days of the date of this judgment specifying:

(i)whether the documents described in Schedule A are or have been in the defendants’ control

35     Dunajtschik v Garnham, above n 3, and Dunajtschik v Garnham HC Wellington CIV-2022-485- 159, 27 February 2024, Associate Judge Skelton (Minute).

36     See for instance Mahasivam v Thuraisingham [2023] NZHC 3418.

(ii)if they have been but are no longer in the defendants’ control, the defendants’ best knowledge and belief as to when the documents ceased to be in the defendants’ control and who now has control of them; and

(iii)the searches undertaken by the defendants to locate relevant documents, including (but without limitation) details of the searches carried out on both Michael Garnham’s  and  Caroline Garnham’s email mailboxes, including:

1.   the date range used for searches;

2.   if searches were carried out by reference to the parties to correspondence, the identify of those parties;

3.   if any keyword searches were used, a list of the keywords; and

4.   any other search parameters used to identify relevant emails.

(b)The defendants are to provide open documents listed in that further affidavit to Mr Dunajtschik for inspection within 15 working days of the date of this judgment.

(c)If the defendants fail to:

(i)file and serve the further affidavit of documents in accordance with order (a) above; and/or

(ii)provide further discovered documents to the first plaintiff for inspection in accordance with order (b) above;

within 15 working days of the date of this judgment, the defendants’ statement of defence and counterclaim will be struck out and the

defendants will be debarred from taking any further part in this proceeding.

(d)I amend the existing timetable so that the close of pleadings date is to now be the later of:

(i)12 April 2023; or

(ii)10 working days after the additional documents are provided to Mr Dunajtschik for inspection pursuant to order (b) above.

(e)Leave is granted to Mr Dunajtschik to apply to the Court for further directions following the production of the additional documents.

[92]   Mr Dunajtschik is entitled to costs on this application against the first, second and fourth defendants. Ordinarily scale 2B costs would be appropriate on an application like this but Mr Dunajtschik has sought an uplift of 50 per cent on scale costs. I am not in a position to make a decision to what extent an uplift on scale costs is appropriate on what is before me. Counsel are to confer and if they cannot agree on costs in light of the findings made in this judgment, Mr Dunajtschik may apply for increased costs by memorandum within 21 days and the defendants shall have seven days to respond. Memoranda shall be no longer than six pages.

O G Paulsen Associate Judge

Solicitors:

Macalister Mazengarb, Wellington

Thomas Dewar Sziranyi Letts, Lower Hutt

SCHEDULE A

Discovery categories

Except as provided below, this schedule adopts the same defined terms as that in the Amended Statement of Claim.

The following further defined terms have been adopted:

(a)The Initial Advances refers to either or both (as the context requires) of the advances made by Mr Dunajtschik to any of the defendants:

·     on or about 8 March 2018 of $150,000; and

·     on or about 25 July 2018 of $150,000.

(b)The Nguyen Advance refers to the  advance  by  Hong  Nguyen  to  either Mr Garnham or Ballantyne Barker Holdings Limited of $130,000.

(c)The Further Advances refers to the advances made by Mr Dunajtschik to any of the defendants between February 2019 and May 2021 inclusive (together and individually, the Further Advances).

(d)The Advances refers to the Initial Advances, the Nguyen Advance and the Further Advances (individually and together).

Initial Advances

1.Any documents which record or otherwise relate to:

(a)discussions and/or negotiations between Mr Dunajtschik and any of the defendants (including if those discussions involved third parties);

(b)the defendants’ discussions (including if those discussions involved third parties); and

(c)                  the defendants’ considerations internally; regarding any of the following:

(d)the request for the Initial Advances;

(e)the intended purpose of the Initial Advances;

(f)the terms on which the Initial Advances were made, including but without limitation terms as to:

(i)the identity of the debtor;

(ii)repayment; and

(iii)interest payable;

(g)repayment or proposed repayment of the Initial Advances, including, but without limitation:

(i)the likely timeframe for repayment of the Initial Advances;

(ii)any requests for further time to repay the Initial Advances;

(iii)delays to repayment;

(iv)the likely source of funds for repayment; and

(v)how the Initial Advances were ultimately applied.

2.Any documents which record or otherwise indicate the debtor for each of the Initial Advances including, but without limitation, any bank statements showing which of the defendants ultimately received the benefit of each of the Initial Advances.

January 2019 restructuring

3.Any documents which record or otherwise relate to:

(a)discussions and/or negotiations between Mr Dunajtschik and any of the defendants (including if those discussions involved third parties);

(b)the defendants’ discussions (including if those discussions involved third parties); and

(c)                  the defendants’ considerations internally; regarding any of the following:

(d)                  requests  by  any  of  the  defendants   for   further   lending   from  Mr Dunajtschik;

(e)a possible restructuring of and/or variation to the terms of any of the Advances provided by Mr Dunajtschik in early 2019; and

(f)the provision or possible provision of security for any of the Advances provided by Mr Dunajtschik in early 2019.

4.All documents which record or otherwise indicate:

(a)the terms of any change to the lending arrangements in or around early 2019; and

(b)the provision of any security for any of the Advances in early 2019.

The advance from Hong Nguyen

5.Any documents which record or otherwise relate to:

(a)the advance from Hong Nguyen of $130,000 (the Nguyen Advance) to any of the defendants; and

(b)the terms of the Nugyen Advance.

6.Any documents which record or otherwise relate to:

(a)the assignment of  the  Nguyen  Advance  from  Hong  Nguyen  to  Mr Dunajtschik;

(b)any of defendants’ knowledge of that assignment; and

(c)whether the parties treated the Nguyen Advance as a loan owing to Mr Dunajtschik by any of the defendants at any time.

Further Advances

7.Any documents which record or otherwise relate to:

(a)discussions and/or negotiations between Mr Dunajtschik and any of the defendants (including if those discussions involved third parties); and

(b)the defendants’ discussions (including if those discussions involved third parties); and

(c)                  the defendants’ considerations internally; regarding any of the following:

(d)requests by any of the defendants for any advances or financial assistance from Mr Dunajtschik between January 2019 and the commencement of the proceedings;

(e)any of the Further Advances;

(f)the intended purpose of any of the Further Advances;

(g)whether any security could be provided for any of the Further Advances;

(h)the terms on which any of the Further Advances were made, including but without limitation to terms as to:

(i)the identity of the debtor;

(ii)repayment;

(iii)interest payable; and

(iv)any security for any of the Further Advances.

(i)repayment or the proposed repayment of any of the Further Advances, including, but without limitation:

(i)any demand for repayment of the Further Advances;

(ii)the likely timeframe for repayment of the Further Advances;

(iii)any requests for further time to repay the Further Advances;

(iv)delays to repayment; and

(v)the likely source of funds for repayment;

(j)how any and all of the Further Advances were ultimately applied by the defendants.

8.Any documents which record or otherwise indicate the debtor for each of the Further Advances including, but without limitation, any bank statements

showing which of the defendants ultimately received the benefit of each of the Further Advances.

Trust Payments

9.Any documents which record or otherwise relate to:

(a)discussions and/or negotiations between Mr Dunajtschik and any of the defendants (including if those discussions involved third parties); and

(b)the defendants’ discussions (including if those discussions involved third parties); and

(c)                  the defendants’ considerations internally; regarding any of the following:

(d)the payments made by Mr Dunajtschik into the bank account in the name of the Miro Trust between February 2020 and May 2021 (inclusive) (the Trust Payments);

(e)the terms on which the Trust Payments were made, including, but without limitation to terms as to:

(i)the identity of the debtor;

(ii)repayment:

(iii)interest payable; and

(iv)any security for the Trust Payments;

(f)the terms and/or understanding on which the Miro Trust received the Trust Payments;

(g)how each of the Trust Payments were ultimately applied by the Miro Trust;

(h)whether, following receipt of each of the Trust Payments, the Miro Trust paid any monies to, or for the benefit of, Ballantyne Barker Holdings Limited;

(i)repayment or proposed repayment of the Trust Payments, including, but without limitation:

(i)any demand for repayment of the Trust Payments;

(ii)the likely timeframe for repayment of the Trust Payments;

(iii)any requests for further time to repay the Trust Payments;

(iv)delays to repayment; and

(v)the likely source of funds for repayment.

Trust Documents

10.The Trust Deed for the Miro Trust and any amendments to the Trust Deed.

11.The Deed of Retirement of Michael Brian Spackman as a Trustee of the Miro Trust.

12.The Deed of Appointment of MGCG Trustees Limited as a Trustee of the Miro Trust.

Security arrangements

13.To the extent not already captured above, any documents which record or otherwise relate to:

(a)discussions and negotiations between Mr Dunajtschik and any of the defendants (including if those discussions involved third parties);

(b)the defendants’ discussions (including if those discussions involved third parties); and

(c)                  the defendants’ considerations internally; regarding any of the following:

(d)any security being offered by, or provided by, any of the defendants or their related parties for any lending provided by Mr Dunajtschik to any of the defendants; and

(e)the nature and terms of any security provided for any of the Advances.

14.Any documents recording the security arrangements securing any or all of the Advances.

Repayments and interest payments

15.Any documents which record or otherwise relate to any repayments of any of the Advances by any of the defendants.

16.Any documents which record any interest payments made in respect of any of the Advances after 14 October 2019.

17.To the extent not already addressed above, any documents which record or otherwise relate to:

(a)discussions between Mr Dunajtschik and any of the defendants (including if those discussions involved third parties); and

(b)the defendants’ discussions (including if those discussions involved third parties); and

(c)the defendants’ considerations internally;

regarding repayment of any of the Advances, including, but without limitation:

(d)any demands for repayment of any or all of the Advances;

(e)the likely timeframe for repayment of any or all of the Advances; and

(f)the likely source of funds for repayment of any or all of the Advances.

Accounting documents

18.Any documents recording or otherwise relating to the defendants’ accounting treatment of any of the Advances including but without limitation:

(a)all correspondence between the defendants and their accountants or financial advisers pertaining to any of the Advances and any interest payments made in respect of those Advances;

(b)financial statements and management accounts of each of the defendants for the financial years ended March 2018 to the current date;

(c)copies of journals and general ledger accounts showing all accounting entries relating to any of the Advances and any interest paid in respect of those Advances;

(d)any internal file notes, memorandum, advice to any of the defendants and advice/information provided by any of the defendants to their accountants and/or financial advisers as to how any of the Advances or interest payments made in respect of those Advances should be accounted for in the financial records of any of the defendants.

The BBHL subdivision

19.Any documents recording or otherwise relating to any discussions between any of the defendants and any adviser or financier regarding funding or proposed funding for the BBHL subdivision, which record or otherwise refer to the Advances.

20.The sale and purchase agreements relating to the sale of lots 1, 2, 4, 5 and 9 of Deposited Plan 554564 by BBHL in 2021.

21.Settlement statements or equivalent documents showing:

(a)dates and quantum of consideration relating to the sale by BBHL of each of lots 1, 2, 4, 5 and 9 of Deposited Plan 554564; and

(b)how the sale proceeds of each of those sales was applied by BBHL.

22.To the extent not already covered above, any documents recording or relating to:

(a)security interests held in the land owned by BBHL relating to the subdivision between 2017 to the present time;

(b)the amounts owing by BBHL to Property Funding Securities Limited at the time of each of the sales of lots 1, 2, 4, 5, and 9 above; and

(c)the amounts paid to Property Funding Securities Limited from the sale proceeds of each of those sales.

23.Any documents which record or otherwise relate to discussions and negotiations between any of the defendants and Property Funding Securities Limited (including if those discussions involved third parties) regarding the possibility of paying some of the net sale proceeds of lots 1, 2, 4, 5, and 9 to Mr Dunajtschik.