E-Trans International Finance Ltd v Kiwibank Ltd

[2015] NZHC 2164

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-000694 [2015] NZHC 2164

BETWEEN

E-TRANS INTERNATIONAL FINANCE

LIMITED Plaintiff

AND

KIWIBANK LIMITED Defendant

Hearing:	3 September 2015
Counsel:	JA Farmer QC and KM Moon for Plaintiff AS Butler for Defendant FC Deliu for non-party BN Global Trading Ltd
Judgment:	8 September 2015

JUDGMENT OF ASHER J

This judgment was delivered by me on Tuesday, 8 September 2015 at 3pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:

Forest Harrison, Auckland.

Russell McVeagh, Wellington. JA Farmer QC, Auckland.

FC Deliu, Auckland.

E-TRANS INTERNATIONAL FINANCE LTD v KIWIBANK LTD [2015] NZHC 2164 [8 September 2015]

Introduction

[1]      A non-party, BN Global Trading Limited (Global), seeks access to court documents in this file under r 3.13 of the High Court Rules.   The application is opposed by the plaintiff E-Trans International Ltd (E-Trans) and the defendant Kiwibank Ltd (Kiwibank).

[2]      E-Trans is a foreign exchange dealer and a remitter of foreign currency. Kiwibank has been its banker since 2004.   Kiwibank proposes to close E-Trans accounts because a foreign exchange business such as that of E-Trans poses too great a risk and burden under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act).

[3]      In this proceeding E-Trans claims that the closure is a breach of Kiwibank’s contractual obligations, has the effect of substantially lessening competition, and is a breach  of  Kiwibank’s  statutory  duties  under  the Act.    Kiwibank  disputes  these allegations.  The background and the issues are covered in more detail in a judgment

of Peters J.1   In that judgment she granted E-Trans an interim injunction restraining

Kiwibank from closing any of the bank accounts, pending trial.

[4]      The applicant Global has no direct interest in the issues or parties in this proceeding.  It has a foreign exchange business that it recently purchased, and claims in different proceedings in this Court against the vendor Broadtrust Group Ltd and its principal (the Global proceedings), that there were misrepresentations by, and breaches of warranty. It seeks access to the file in this proceeding because evidence that has been adduced in the interim injunction application by way of affidavit, can assist in the case which it is pursuing against its vendor.

[5]      The application is covered by r 3 of the High Court Rules.   It is common ground r 3.13 applies as this is an application for permission to access documents at a stage of the hearing that is other than the hearing stage.  The present proceeding is at the pre-hearing stage.   Rule 3.16 sets out the matters to be considered in all

applications.  A Judge must consider the nature of and reasons for the application, and take into account the matters set out being:

(a)   the orderly and fair administration of justice:

(b)   the protection of confidentiality, privacy interests (including those of children and other vulnerable members of the community), and any privilege held by, or available to, any person:

(c)   the principle of open justice, namely, encouraging fair and accurate reporting of, and comment on, court hearings and decisions:

(d)   the freedom to seek, receive, and impart information:

(e)   whether  a  document  to  which  the  application  or  request  relates  is subject to any restriction under rule 3.12:

(f)   any other matter that the Judge or Registrar thinks just.

[6]      The starting point of an access to documents application is a clear statement of the reasons for the application, and an analysis of those reasons against the factors set out in r 3.16.  A short statement was so provided.   Mr Deliu who appears for Global expanded on the reasons for the request in submissions.

[7]     It is a specific pleading in the Global proceedings that there was a misrepresentation by the vendor and a mistake by Global as to the future opening of bank accounts for foreign exchange businesses.   I found the Global statement of claim hard to follow and contradictory at times, and Mr Butler and Mr Farmer questioned whether there was a relevant common issue.  I am prepared to adopt a liberal  approach  to  the  meaning  of  the  pleadings,  acknowledging  the  ability to amend.  I will accept for the purposes of this proceeding that it is a relevant issue in the  Global  proceedings  whether  the  vendors  failed  to  inform  Global  that  New Zealand banks had ceased opening new bank accounts for foreign exchange businesses or would not do so in the future.

The conflicting positions

[8]      Mr Deliu relies on the first matter referred to in r 3.16, the orderly and fair administration of justice, in support of the application.2  As I understand it, he claims

that the provisions of access to relevant documents in this file will facilitate the orderly and fair administration of justice in the Global proceedings.

[9]      In his written submissions he referred also to the principle of open justice, and suggested that there was some public interest in the litigation, and the freedom to seek,  receive  and  impart  information.     His  client  is  prepared  to  provide  an undertaking not to use any confidential information that is disclosed.

[10]     Mr  Farmer  and  Mr  Butler  did  not  accept  that  there  was  any  particular usefulness in the information.  In any event, any such relevance was outweighed by a number of factors, in particular that Global was a competitor of E-Trans and that in the material on the file there was considerable detail about how E-Trans traded and its particular exclusive methods, and this would be of assistance to a competitor.  It was emphasised that the proceedings were at an interlocutory stage and that the material on the court file was untested.   The proposal that open justice was of relevance was specifically contested, given the private nature of this litigation, and the private nature of the request.

Analysis

[11]     It is well established that the matters set out in r 3.16 are not in any particular hierarchy.3    The relevance and weight that will be placed upon each of the r 3.16 matters will depend on the reasons for the application, and the context of the proceeding in question.4     There is no presumption of access, although access to documents is more readily granted during the substantive hearing stage.5

[12]     This is not a case like Commerce Commission v Air New Zealand where a competitor was seeking access and it was difficult to discern any legitimate reason for the request.6    I accept that it could assist the fair and orderly administration of justice to order access to a file which contains documents of relevance to proving a

cause of action in another file.  Mr Deliu has made it clear that his client is quite

3      Schenker AG v Commerce Commission [2013] NZCA 114.

4      Commerce Commission v Air New Zealand [2012] NZHC 271 at [27]–[29], and Schenker AG v

Commerce Commission, above n 3, at [37]–[42].

5      High Court Rules, r 3.9.

6      Commerce Commission v Air New Zealand, above n 4.

prepared to accept stringent confidentiality restrictions and does not seek general access to the file.  I accept that there is a legitimate reason for Global’s request, not connected  to  obtaining  a  competitive  advantage  or  some  other  impermissible purpose.

[13]     However, it is far from clear that the file will contain information of greater relevance than that already disclosed in the interim injunction judgment and freely available  to  Global.    Kiwibank’s  position  in  refusing to  make  banking  services available  is  already  a  matter  of  record,  and  it  seems  likely  that  any  relevant additional material that might be found on the file would be hearsay.  It is far from clear that there is material on the files that will be useable in the Global proceedings, or that it would take Global’s state of knowledge any further than it is at present. The case for access is weaker than where an applicant party to different proceedings seeks highly relevant material which contradicts the evidence of a deponent in those other proceedings.   Therefore, while r 3.16(a) applies, it does not present an overwhelming case for access.

[14]     Mr Deliu  relied  on  the  decision  in  Chen  v Chen7   where inspection  was allowed by a party involved in other proceedings.  However, in that case there was commonality of a party, and there was material and an affidavit by that party that could be relevant to cross-examination in the other proceedings.  There is nothing like that degree of direct relevance here.

[15]     The stage of litigation is relevant.  The absence of detailed scrutiny of a file by non-parties pre-trial allows the parties to litigation to file documents without fear of immediate disclosure as they often move to a settlement.   Even if they do not move to settlement, they have the ability to answer allegations and refine assertions as the case progresses, so that access is more likely to present a fair picture of the

issues.8

7      Chen v Chen HC Auckland CIV-2015-404-000281, 23 June 2015 [Minute of Keane J].

8      Commerce Commission v Air New Zealand, above n 4, and Sanofi-Aventis Deutschland GMBH v

AFT Pharmaceuticals [2012] NZHC 1051 at [7].

[16]     I turn to the protection of confidentiality, and privacy interests.9    There is confidential information on the file.  Global is a competitor of the plaintiff E-Trans. E-Trans has disclosed in its affidavits material about its mode of carrying out business, which has unique features.   Unrestricted access could advantage a competitor, and would be inappropriate for this reason.  Mr Deliu argues, however, that restricted access could still be granted to redacted documents, and I accept that it would be possible for the parties to go through the file and provide edited versions of documents.

[17]     There is a further factor which weighs against ordering access.  The task of going through the file and carrying out a process of redaction will be an onerous one. In this context it does not seem fair to require the parties to this proceeding who will be stretched already in preparing for the pending hearing, to have to spend time and incur costs in going through a process of redaction.  Mr Deliu says that Global would meet such costs, but that does not cure the inconvenience and distraction of such a process.   I am not satisfied that a call for confidential information is a reasonable requirement of parties to litigation at a pre-trial stage.  It was a reason for denying access in Schenker AG v Commerce Commission although the difficulty and cost of the exercise in that case was much greater than would appear to be the case in the

present.10

[18]     As to open justice,11  there is no indication of particular public interest in either the E-Trans or the Global proceedings and the applicant is not a member of the media.  There is nothing to indicate that the principle of open justice in the sense of encouraging fair and accurate reporting of, and comment on court hearings and decisions, would be furthered by granting access.  In this regard it is to be noted that there is already a full interim injunction judgment available to the public which fully sets out the background and issues in this proceeding.

[19]     It is also relevant to open justice, that this proceeding has been given a priority for hearing, and is set down to proceed on 16 November 2015.  At that point

evidence will be adduced in open court and the material that is in the affidavits

9      High Court Rules, r 3.16(b).

10     Schenker AG v Commerce Commission, above n 3.

11     High Court Rules, r 3.16(c)

presently on the court file, and the exhibits will be referred to in open court.  The pending hearing also reflects on whether an order now will materially assist the freedom to seek, receive or impart information.  If the case proceeds the information in question will soon be in the public domain.

[20]     The case is set down for six days.  Mr Deliu makes the fair point that it would be harsh on a party that seeks a specific and confined piece of information to have to sit through a lengthy court case to obtain that information.   However there is a practical  way  through  that.    I  have  no  doubt  that  Global  could  find  out  by approaching the parties when the evidence that they are interested in is to be heard, or  indeed  learn  that  if  someone  attended  the  openings.    If  the  parties  to  this proceeding did not co-operate with a reasonable request on the part of Global as to when the evidence it was interested in would be called, then that might well be a factor prompting a Court to grant access to the file during the hearing.

[21]   The Global proceedings have not yet had their first case management conference, and it can be assumed that the hearing will not take place until well into next year at the earliest.  Global loses nothing by having to wait until November.

[22]     I observe also that a litigant seeking access to another court file to obtain relevant   documents,   must   also   consider   alternative   remedies   like   non-party discovery, and the subpoena duces tecum, before putting parties to the expense of an access to court documents application.

[23]     When I balance these factors, and in particular the pending trial of this case compared to the early stage of the Global proceedings, the balance comes down very clearly against granting access.  Such an order would be premature, and in my view oppressive.

Result

[24]     The application for access to the court records is declined.   This does not preclude a further application later in the proceedings.

[25]   A party who unsuccessfully seeks access, puts the parties involved to unnecessary expense, then the usual rule that costs follow the event applies.   The applicant Global must pay the costs of E-Trans and Kiwibank on a 2B basis, together with reasonable disbursements.

……………………………..

Asher J