Evans v Six Gen Limited
[2024] NZHC 3944
•20 December 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-2656
[2024] NZHC 3944
BETWEEN BELINDA ANNE EVANS
Plaintiff
AND
SIX GEN LIMITED
First Defendant
KARL JASON EVANS and TELLIC LOUISE EVANS
Second DefendantsAND BETWEEN
AND
SIX GEN LIMITED
Counterclaim PlaintiffBELINDA ANNE EVANS
Counterclaim Defendant
Hearing: 8 November 2024 Appearances:
Carole G Smith for the Plaintiff and Counterclaim Defendant W G Manning and Georgia Bowker for the Defendants
and Counterclaim Plaintiff
Judgment:
20 December 2024
JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR
[Application for orders setting aside the defendants’ claim to privilege]
This judgment was delivered by me on 20 December 2024 at 12:00md
pursuant to Rule 11.5 of the High Court Rules
Solicitors:
…………………………. Registrar/Deputy Registrar
Mac & Co (Jan McNamara), Grey Lynn, Auckland, for the Plaintiff and Counterclaim Defendant Bell & Graham (Richard Smith), Matamata, for the Defendants and Counterclaim Plaintiff
Counsel:
Carole G Smith, FortyEightShortland Chambers, Auckland, for Plaintiff and Counterclaim Defendant W G Manning/G Bowker, Park Chambers, Auckland, for the Defendants and Counterclaim Plaintiff
EVANS v SIX GEN LIMITED [2024] NZHC 3944 [20 December 2024]
Introduction
[1] The applicant, Belinda Anne Evans (Belinda)1 applies to set aside or modify the defendants’ claim to privilege for a total of 18 documents.
Background
[2] The background to the substantive dispute has been set out in Tahana J’s judgment of 14 October 2024:2
Family dispute
[3] The parties and the two proposed witnesses are family who all live in separate dwellings on a 1144-hectare farm in the Coromandel (the Farm). The Farm has been owned by members of the family for six generations.
[4] The plaintiff wishes to remain living on the Farm and has filed a claim seeking an order that she has a registrable lease or in the alternative, an irrevocable licence to occupy. The plaintiff relies on alleged agreements between her and her parents who are directors of the family company that owned the Farm before selling it to the first defendant company which is owned by the plaintiff’s brother and sister-in-law (the second defendants).
[5] The defendants counterclaim arguing that as the Farm’s registered proprietor the first defendant is entitled to exclusive possession of the Farm. The defendants seek orders requiring the plaintiff to vacate the Farm.
Parties
[6] The relevant persons share the same family name, so for ease of reference I refer to them by their first names.
[7] The plaintiff, Belinda, is the daughter of the two proposed witnesses (Zane and Ngaire). The second defendants (Karl and Tellic) are the brother and sister-in-law of Belinda.
[8] Karl and Tellic are the shareholders and directors of the first defendant, Six Gen Ltd (Six Gen). Six Gen is the current owner of the Farm having purchased it on 6 September 2023 from a family company (N Evans & Co Ltd (Evans)). The trustees of the N Evans family trust (the Family Trust) own the shares in Evans. Zane and Ngaire are directors of Evans. Ngaire has been a director since May 2016.
1 Given of the commonality of surnames, first names are used in this judgment, no disrespect intended.
2 Evans v Six Gen Limited [2024] NZHC 2979.
Evans sells the Farm to Six Gen
[9] On 4 August 2023, Evans and Six Gen entered into a sale and purchase agreement for the Farm for a purchase price of $5,400,000 (the SPA). The SPA included a clause authorising Six Gen to reserve $150,000 from the purchase price to pay any costs or other expenses in taking steps to remove any tenant, lessee, or licensee from the Farm (the reservation clause).
[10] On 4 September 2023, Six Gen and Evans varied the SPA to remove the reservation clause. The variation provided that Six Gen will have no recourse against Evans for a failure to remove tenants, lessees or licensees and give vacant possession.
Notice to Belinda to vacate the Farm
[11] On 5 September 2023, Evans issued a notice to Belinda to vacate her house and remove her horses from the Farm.
[12] On 21 September 2023, the defendants wrote to Belinda requesting that she remove her horses from the Farm by 7 October 2023.
[13] On 20 October 2023, the defendants’ solicitors gave notice pursuant to the Property Law Act 2007 to terminate any licence to occupy held by Belinda.
[14] On 24 October 2023, the defendants issued a trespass notice to Belinda.
[15] On 6 November 2023, Belinda filed proceedings and sought an interim injunction to restrain the defendants from terminating or interfering with her access to, and possession of, the house and section on the Farm. By consent, the Court approved interim orders.
Alleged agreements between Belinda and Evans
[16] Belinda relies on two alleged agreements: one for the purchase of a horse trekking business and the other authorising her to occupy a house on the Farm.
[17] Belinda claims that in or around 2003, Zane and Ngaire offered to sell her the horse trekking business that was operating on the Farm and that she accepted that offer in around April 2004 (the Business Agreement). Belinda claims that the Business Agreement authorises her to graze the horses on specified parts of the Farm and to continue to operate the business for as long as she wishes to do so.
[18] Belinda also claims that in or around April 2004, her parents, on behalf of Evans, agreed that Evans would build a house on the Farm for Belinda and her family to live in and Belinda would pay rent to Evans (the House Agreement). Belinda claims that the House Agreement authorises her to remain living in the house until she or her children wish to leave.
[19] Belinda claims that since 2005, Evans had acknowledged that she may continue to operate the business and live in the House indefinitely.
Alleged representations
[20] Belinda relies on three alleged representations. The first, that she was entitled to access and use the Farm for the purpose of conducting the business for as long as she wished. The second, that her and her children would be entitled to exclusive occupation of the house and section until they choose to vacate. The third representation relates to two documents prepared in 2016: a memorandum of wishes signed by Ngaire and an email from Ngaire to Belinda noting that the termination clause for the grazing and land use agreement does not apply and Belinda and the kids can rent the house indefinitely.
Knowledge of defendants
[21] Belinda claims that when Six Gen entered into the SPA, Karl and Tellic knew about the alleged representations and Belinda’s reliance on them and the defendants are therefore estopped from denying the enforceability of the House Agreement and the Business Agreement.
Belinda’s application to set aside or modify the defendants’ claim to privilege
[3]Belinda seeks orders:
(a)requesting the defendants to provide initially to the court only unredacted copies of the documents the subject of her application in order to consider whether to make the order sought at b. below; and
(b)setting aside or modifying the defendants’ claim to privilege in respect of the documents the subject of this application.
[4]The grounds on which the orders are sought are:
Legal advice – solicitor/client privilege
Communications with Ms Flay
(a)The following documents listed in the defendants’ supplementary affidavit of documents sworn on 10 May 2024 are documents in respect of which the defendants claim solicitor/client privilege pursuant to s 54 Evidence Act 2006 (the Act) because they involve communications with Purnell lawyers:
D150, D156, D157, D159, D167, [D170], D172, D173, D175, D177, D184, D198 and D203.
NB: It is noted that the claim for legal advice privilege has been withdrawn by the defendants in respect of document D170 and accordingly this document is not dealt with further in this judgment.
(b)To the extent that the above communications are from Brenda Flay at Purnell lawyers (Ms Flay) to Ngaire’s email address [“email address redacted”] to Ms Flay from that email address, or emails from Ngaire to the second defendants (or one of them) paraphrasing such communications, such communications are not so privileged because:
(i)Purnell lawyers have only ever acted as solicitors to the trustees of the NZ Evans Family Trust (the Trust).
(ii)These communications were solely with Ngaire, and Ngaire has never been a trustee of the Trust.
(iii)These communications were not with Zane Evans (Zane) who was (and remains) a trustee of the Trust.
(iv)These communications were not with Karl Evans (Karl) who was a trustee of the Trust up until 6 July 2021.
(v)Alternatively, such communications were not made in the course of and for the purpose of the person requesting or obtaining professional legal services from the legal adviser or the legal adviser giving such services to the person.
Communications with Ms Martin
(c)The following documents listed in the defendants’ supplementary affidavit of documents are documents in respect of which the defendants claim solicitor/client privilege pursuant to s 54 of the Act because they involve communications with
Melissa Martin, a legal executive at Blackman Spargo (Ms Martin):
D199, D203
(d)The above communications are not privileged because a legal executive is not a legal adviser.
(e)The above communications are not privileged because the legal executive was not an authorised representative of a legal adviser.
(f)Alternatively, such communications were not made in the course of and for the purpose of the person requesting or obtaining professional legal services from the legal adviser (or authorised representative) or the legal adviser (or authorised representative) giving such services to the person.
Settlement privilege
(g)The following documents listed in the defendants’ supplementary affidavit of documents are documents in respect of which the defendants claim privilege for settlement negotiations pursuant to s 57 of the Act:
D156, D157, D159, D160, D167, [D170], D172, D173, D175, D177, D184, D186, D187, and [D198].
NB: It is noted that the claim for settlement privilege has been withdrawn by the defendants in respect of document D198 and accordingly this document is not dealt with further in this judgment.
(h)Such communications are not privileged pursuant to s 57 of the Act because the communications were not between persons or parties on opposite sides of the dispute so cannot have been made in connection with an attempt to settle the dispute.
(i)Alternatively, such communications are not so privileged pursuant to s 57 of the Act because they were not between persons or parties to the dispute, being:
(i)Communications between Ms Flay (who acts for the trustees of the Trust) and Ngaire (who was only a person or party to a dispute in her capacity as a director of N Evans & Co Limited (the Company) for whom Purnell lawyers did not act) (and in respect of D159 Tellic Evans (Tellic) for whom Purnell lawyers also did not act and who was not in any event a person or party to a dispute).
(ii)Communications between Ngaire and Karl and/or Tellic (Karl and/or Tellic not being persons or parties to a dispute as at the time of those communications).
(iii)Communications between Ms Flay at Purnell lawyers and Susan Anderson at Wynn Williams (who acted for Karl and who were not persons or parties to the dispute at the time of those communications).
(j)Alternatively, such communications are not so privileged pursuant to s 57 of the Act because either the communications were not made in an attempt to settle anything, or they were not made in an attempt to settle the dispute (the dispute being, at the time of those communications and currently, whether or not the applicant has the right to remain living and working on the farm).
Common interest privilege
(k)The following documents listed in the defendants’ supplementary affidavit of documents are documents in respect of which the defendants claim common interest privilege in respect of communications between Ngaire and Tellic:
D150,D156, D157, D159 (communication from Ms Flay to Ngaire and Tellic) D160, D167, [D170], D172, D173, D175, D177, D184, [D198], D199, D203.
(l)Such communications are not subject to common interest privilege because there is no underlying privilege attaching to these documents either under s 54 and/or s 57 of the Act.
(m)Alternatively, common interest privilege does not apply because there was no sufficient identity of interest in the subject matter of the information.
Litigation privilege
(n)The following document listed in the defendant’s supplementary affidavit of documents is a document in respect of which the defendants claim privilege pursuant to s 56 of the Act:
D206
(o)Such communication was not so privileged pursuant to s56 of the Act because the communication was not made for the dominant purpose of preparing for a proceeding being apprehended from Belinda.
The defendants’ opposition
[5] The defendants oppose the application on the grounds that the documents which are the subject of the application are privileged (being legal advice privilege, settlement privilege, litigation privilege or common interest privilege) as set out in the schedule to the notice of opposition.
Legal principles
[6]Rule 8.25 of the High Court Rules 2016 provides:
8.25 Challenge to privilege or confidentiality claim
(1) If a party challenges a claim to privilege or confidentiality made in an affidavit of documents, the party may apply to the court for an order setting aside or modifying the claim.
(2) In considering the application, a Judge may require the document under review to be produced to the Judge and may inspect it for the purpose of deciding the validity of the claim.
(3)The Judge may—
(a)set aside the claim to privilege or confidentiality; or
(b)modify the claim to privilege or confidentiality; or
(c)dismiss the application; or
(d)make any other order with respect to the document under review that the Judge thinks just.
[7]Section 54 of the Act relevantly provides:
54 Privilege for communications with legal advisers
(1)A person who requests or obtains professional legal services from a legal adviser has a privilege in respect of any communication between the person and the legal adviser if the communication was—
(a)intended to be confidential; and
(b)made in the course of and for the purpose of—
(i)the person requesting or obtaining professional legal services from the legal adviser; or
(ii)the legal adviser giving such services to the person.
…
[8] Section 54 of the Act refers to a legal adviser which is defined in s 51(1) of the Act as a lawyer, a registered patent attorney or an overseas practitioner. A lawyer in turn is defined as a person who holds a current practising certificate as a barrister or as a barrister and solicitor. Privilege applies to a communication between a person and a legal adviser if the communication was intended to be confidential and was made in the course of and for the purpose of professional legal services.
[9]Section 56 of the Act relevantly provides:
56Privilege for preparatory materials for proceedings
(1)Subsection (2) applies to a communication or information only if the communication or information is made, received, compiled, or prepared for the dominant purpose of preparing for a proceeding or an apprehended proceeding (the proceeding).
(2)A person (the party) who is, or on reasonable grounds contemplates becoming, a party to the proceeding has a privilege in respect of—
(a)a communication between the party and any other person:
(b)a communication between the party’s legal adviser and any other person:
(c)information compiled or prepared by the party or the party’s legal adviser:
(d)information compiled or prepared at the request of the party, or the party’s legal adviser, by any other person.
…
[10] It is common ground that a claim for privilege under the section accordingly requires:
(a)that at the date the document was prepared, litigation was reasonably apprehended; and
(b)that the document was prepared for the dominant purpose of preparing for litigation.
[11] Whether litigation is reasonably apprehended is a question of fact. The applicable test is an objective one of “whether a reasonable person in the position of the party in question, and possessed of the same information at that time, would have regarded the future commencement of litigation as probable”.3 There must be a “real
3 E Sport Yachting Ventures Ltd v Southern Spars HC Auckland CIV-2008-404-1120, 29 July 2011 at [21], citing Commerce Commission v Caltex New Zealand Ltd HC Auckland CL33/97, 6 October 1999 at 3; Public Trust v Hotchilly Ltd HC Wellington CIV-2009-485-704, 31 March 2010 at [20]; Guardian Royal Exchange Assurance of New Zealand Ltd v Stuart [1985] 1 NZLR 596 (CA) at 606 and Laurenson v Wellington City Corporation [1927] NZLR 510 (SC) at 511.
likelihood” of litigation.4 A “mere possibility” or “vague apprehension” that litigation could occur in the future is insufficient.5
[12]Section 57 of the Act relevantly provides:
57Privilege for settlement negotiations, mediation, or plea discussions
(1)A person who is a party to, or a mediator in, a dispute of a kind for which relief may be given in a civil proceeding has a privilege in respect of any communication between that person and any other person who is a party to the dispute if the communication—
(a)was intended to be confidential; and
(b)was made in connection with an attempt to settle or mediate the dispute between the persons.
(2)A person who is a party to a dispute of a kind for which relief may be given in a civil proceeding has a privilege in respect of a confidential document that the person has prepared, or caused to be prepared, in connection with an attempt to mediate the dispute or to negotiate a settlement of the dispute.
…
(3)This section does not apply to—
…
(d)the use in a proceeding of a communication or document made or prepared in connection with any settlement negotiations or mediation if the court considers that, in the interests of justice, the need for the communication or document to be disclosed in the proceeding outweighs the need for the privilege, taking into account the particular nature and benefit of the settlement negotiations or mediation.
[13]The protections afforded by privilege are set out in s 53 of the Act as follows:
53 Effect and protection of privilege
(1)A person who has a privilege conferred by any of sections 54 to 59 in respect of a communication or any information has the right to refuse to disclose in a proceeding—
4 Financial Markets Authority v Hotchin [2014] NZHC 2732 at [46], citing United States of America v Philip Morris (No 1) [2004] EWCA Civ 330.
5 Pernod Ricard New Zealand Ltd v Lion-Beer, Spirits & Wine (NZ) Ltd [2012] NZHC 2801at [30]– [33]; Financial Markets Authority v Hotchin, above n 4, at [46]; United States of America v Philip Morris (No 1), above n 4; E Sport Yachting Ventures Ltd v Southern Spars, above n 3, at [21].
(a)the communication; and
(b)the information, including any information contained in the communication; and
(c)any opinion formed by a person that is based on the communication or information.
…
(3)A person who has a privilege conferred by any of sections 54 to 59 and 64 in respect of a communication, information, opinion, or document may require that the communication, information, opinion, or document not be disclosed in a proceeding—
(a)by the person to whom the communication is made or the information is given, or by whom the opinion is given or the information or document is prepared or compiled; or
(b)by any other person who has come into possession of it with the authority of the person who has the privilege, in confidence and for purposes related to the circumstances that have given rise to the privilege.
…
Analysis
[14]The issues to be determined in this judgment are:
(a)Are the documents for which the defendants claim legal advice/solicitor-client privilege subject to such privilege? This issue applies to two sets of documents:
(i)communications involving Ms Flay at Purnell lawyers; and
(ii)communications involving Ms Martin of the law firm Blackman Spargo.
(b)Are the documents for which the defendants claim settlement privilege subject to such privilege?
(c)Are the documents for which the defendants claim litigation privilege subject to such privilege?
(d)Are the documents for which the defendants claim common interest privilege subject to such privilege?
[15]I deal with each category for which privilege is claimed in turn.
Legal advice/solicitor-client privilege
Communications between Ngaire and Ms Flay (11 documents)
[16] Ms Smith, for Belinda, accepts that up until around 19 May 2021, Ms Flay acted for the Company of which Zane and Ngaire are both directors, for Zane and Ngaire personally, and also acted for the Trust. Ms Smith also accepts that if Ms Flay was providing professional legal services to Ngaire in Ngaire’s capacity as a director of the Company before her retainer ceased in that regard, then those communications are likely to be privileged pursuant to s 54 of the Act.
[17] Four of the 11 documents were created before 19 May 2021, being D150, D156, D157 and D159. Ms Smith accepts that these documents would be subject to privilege under s 54 of the Act subject to:
(a)the communication not being intended to be confidential; and
(b)privilege being lost because it was waived.
[18] Having reviewed the four documents, I am of the view that they are communications for the provision of legal services by Ms Flay to Ngaire in her capacity as director of the Company.
[19] As to the remaining seven documents post-dated 19 May 2021 when Ms Flay ceased to act for the Company, Ms Smith submits that Ms Flay from that time on only acted for the trustees of the Trust, being Zane, N Evans Trustee Co Limited (of which Ms Flay was the sole director) and, up to 6 July 2021, Karl.
[20]Ms Smith submits that these communications were not privileged because:
(a)Ms Flay only ever acted as solicitor to the trustees of the Trust and these communications were solely with Ngaire, and Ngaire has never been a trustee of the Trust.
(b)The communications were not with Zane who was (and remains) a trustee of the Trust.
(c)The communications were not with Karl, who was a trustee of the Trust up until 6 July 2021.
(d)Alternatively, such communications were not made in the course of and for the purposes of the person requesting or obtaining professional legal services from a legal adviser, or the legal adviser giving such services to the person.
[21] Ms Smith submits that in order for the communications between Ngaire and Ms Flay to be protected by legal advice privilege, Zane would have to have authorised Ms Flay to provide legal services to him in his capacity as trustee of the Trust using Ngaire as an agent or authorised representative pursuant to s 51(4) of the Act. Ms Smith refers to Brandlines Limited v Central Forklift Group Limited where Associate Judge Gendall (as he then was) found an agency relationship existed where solicitors had specifically appointed third parties as their clients’ agents to protect privileged, communications between the agents and their solicitors. Associate Judge Gendall stated:6
[33] [I]t is clear from the New Zealand authorities cited to me that there are two requirements that must be fulfilled in this country: that the third party acted as an agent in communicating with the client’s solicitor; and that the communication was for the purpose of obtaining or providing legal advice.
[34] In addition, the third party must have been authorised to assume – and must have assumed – the role of the client in communicating the information to the solicitor. The third party must have acted as the man on the spot, as the client’s alter ego, and on its behalf. A third party does not qualify as an agent if it acted as an independent contractor.
…
6 Brandlines Limited v Central Forklift Group Limited HC Wellington CIV-2008-485-2803, 11 February 2011.
[22]Applying the Brandlines decision, Ms Smith submits that:
(a)Zane has not provided evidence as to who he authorised to do what. Ngaire does not provide details as to what the procedure was for her passing on legal advice from Ms Flay to Zane or the procedure for providing Zane’s response to Ms Flay.
(b)Some of the communications suggest that they were communications solely with Ngaire which may or may not have been passed on to Zane.
(c)Even if Ngaire was properly acting as Zane’s agent in relation to Trust matters, it is possible that Ngaire was not necessarily acting on Zane’s behalf, but rather she was acting independently of Zane.
(d)The documents D173, D175, D177 and D203, arguably are not communications for the purposes of obtaining or requesting Ms Flay’s services in relation to Trust matters.
[23] In response to Ms Smith’s argument, Mr Manning, for the defendants, submits that:
(a)In summary, at all material times until 19 May 2021, Ms Flay was acting for Zane and Ngaire personally, for the Company and for the Trust. As from 19 May 2021, Mr Spargo was retained to act for Zane and Ngaire personally and for the Company, but Ms Flay continued to act for the Trust.
(b)Having reviewed the relevant communications, Ms Flay has confirmed she was a party to the communications in her role as solicitor for the Company and/or the Trust.
(c)Ms Flay’s evidence is corroborated by the evidence of Ngaire and of Karl.
[24] Mr Manning submits that while Ms Flay was still acting for the Company and for Zane and Ngaire personally, the Company’s board consisted of Zane and Ngaire. Ngaire’s role in these communications was two-fold, first as director on the board and secondly as Zane’s authorised amanuensis in his capacity as fellow-director and as trustee of the Trust. He submits that acting in that manner Ngaire was not acting as Zane’s “man on the spot” or as his “alter ego” as Associate Judge Gendall put it in the Brandlines decision. Rather Ngaire was acting in consultation and with the authority of Zane.
[25] Part of Belinda’s challenge to the legal advice privilege asserted by the defendants is on the grounds that communications with Ms Flay and Ms Martin were to an email account of [email address redacted], which is Ngaire’s personal email account. In the case of D159, communications were to the account of [email address redacted], the personal email account of Tellic. Ms Smith’s position is that because Ms Flay’s communications were with the persons who were not her respective clients, the communications were not covered by legal advice privilege. In response, Mr Manning submits this approach is unrealistically pedantic and ignores the relationship between these clients:
(a)Zane and Ngaire were a married couple. Their communications to the outside world were all through one email account. While the emails were typed by Ngaire, they were shared and approved by Zane.
(b)Karl and Tellic are also a married couple. They too communicated with the outside world through a single email account and, like Zane and Ngaire, their emails were discussed and shared with each other.
(c)Throughout the period 3 March 2021 to 2 November 2023, Zane was one of the trustees of the Trust and had expressly authorised Ms Flay to communicate with him via the email account [email address redacted].
(d)Karl was also a trustee of the Trust from 5 May 2016 to 6 July 2021. He too had authorised Ms Flay to communicate with him in his capacity as trustee via the email account [email address redacted].
(e)At all material times, Ngaire and Zane were the two directors of the Company, Ngaire having been appointed on 27 May 2016.
(f)Ms Flay was a party to the first four communications in which legal advice privilege has been asserted (D150, D156, D157 and D159) in her capacity as lawyer for the Company and the Trust.
(g)In relation to the remaining communications for which legal advice privilege has been asserted, which post-dated Mr Spargo’s retainer on 19 May 2021. Ms Flay was a party to the communications in her capacity as solicitor for the Trust.
(h)Ms Martin’s communications via [email address redacted] (D199 and D203) was as the authorised representative of Mr Spargo, who at the time represented not only the Company but also Ngaire and Zane personally.
Confidentiality/Waiver
[26] Ms Smith submits that even if the communications between Ms Flay and Ngaire were subject to legal advice privilege, that privilege has been lost because the communications disseminated beyond the solicitor-client relationship. She submits that in order to attract privilege pursuant to s 54 of the Act, it must have been intended that the communications were confidential. She points to the following as evidence that the communications were shared either simultaneously or shortly after they were made with various third parties:
(a)Communications were forwarded by Ngaire to Tellic, either immediately after the communication between Ngaire and Ms Flay having taken place, or shortly thereafter.
(b)Emails from Ngaire to Tellic reported either on correspondence Ngaire had had with Ms Flay or a telephone conversation Ngaire had had with Ms Flay.
(c)One communication was sent by Ms Flay to Tellic in addition to Ngaire, and copied to Ms Anderson, Tellic’s solicitor.
(d)One communication was sent by Mr Flay to Mr Spargo and copied to Ngaire (and then the next email chain also copied to Ms Anderson).
[27] In response to the allegation that the communications were not intended to be confidential and therefore could not be the subject of legal advice privilege, Mr Manning submits that the sharing of communications by Ngaire with Karl and Tellic does not alter the confidential character of communications with the legal advisers. He submits that at all relevant times the sharing of such communications was the subject of common interest privilege (discussed later in the judgment).
[28] As an alternative to the argument that the relevant communications were not intended to be confidential, Ms Smith argues that the legal advice privilege was waived by Ngaire as Zane’s agent, pursuant to s 65 of the Act, which relevantly states:
65 Waiver
(1)A person who has a privilege conferred by any of sections 54 to 60 and 64 may waive that privilege either expressly or impliedly.
(2)A person who has a privilege waives the privilege if that person, or anyone with the authority of that person, voluntarily produces or discloses, or consents to the production or disclosure of, any significant part of the privileged communication, information, opinion, or document in circumstances that are inconsistent with a claim of confidentiality.
…
[29] Ms Smith submits that legal advice privilege has been waives in respect of any of the communications between Ms Flay and Ngaire, and the two communications sent by Ms Flay directly to Tellic as well as Ngaire. She submits there was no attempt in any of the communications to protect the confidentiality of the advice.
[30] In response to the waiver argument, Mr Manning’s position is that the disclosure of the communications to Telic and Karl is covered by common interest privilege.
Conclusion on legal advice privilege
[31] I am of the view that the 11 documents in respect of the defendants’ claim to legal advice privilege are subject to that privilege. The reasons for this view are:
(a)The context of the relationship between Ngaire and Zane as clients and Ms Flay as adviser is important. Ngaire and Zane were a couple and communicated with the outside world through the single email address. The same is true of Karl and Tellic, who were a married couple and communicated to the outside world through a single email address. In my view, Ms Flay’s evidence makes it clear that this arrangement was authorised by Zane in respect of communications between Ngaire and Ms Flay, and was authorised by Karl in respect of communications between Tellic, Ngaire and Ms Flay.
(b)The four documents, D150, D156, D157 and D159 were all created prior to 19 May 2021, when Ms Flay acted for the Company, Zane and Ngaire as its directors, Zane and Ngaire personally, and the Trust. Having reviewed these documents, I am satisfied that they are documents which were brought into existence for the purposes of obtaining legal advice from, or giving legal advice by, Ms Flay.
(c)Given the decision I reach later in this judgment that the common interest ground for privilege exists between Ngaire, Zane, Tellic and Karl, the fact that the communications with Ms Flay were communicated to Tellic and Karl did not mean that they were not intended to be confidential and did not amount to waiver of legal advice privilege.
(d)Ms Flay’s evidence establishes that Zane had authorised Ngaire, as the medium through which communications from him to Ms Flay as adviser were to be undertaken.
(e)As to communications between Ms Martin and Ngaire, the definition of “legal adviser” as set out in s 51 of the Act does not include a legal executive. While Ms Smith submits there is no evidence that Ms Martin was Mr Spargo’s authorised representative pursuant to s 51(4) of the Act, in my view it is common sense that a legal executive acting under the direction of a partner in the firm would be regarded as the partner’s authorised representative for the purposes of sending legal communications to clients. I am therefore satisfied that these two communications, D199 and D203 attract legal advice privilege.
Settlement privilege
[32] There are 11 documents in relation to which the defendants claim settlement privilege as set out in Schedule 2 of the defendants’ notice of opposition.
[33] Ms Smith submits that in relation to the documents which are email exchanges between Ngaire and Ms Flay (with no one else copied in), these cannot be construed as settlement negotiations because the communications are not between (or made on behalf of) parties to the dispute. She submits the following documents fall into this category: D156, D157, D175 (top two emails), D177 (top two emails) and D184 (last email).
[34] Ms Smith refers to two further documents, D159 and D160, which are communications involving Ms Flay but are also communicated to either Tellic and/or Ms Anderson in addition to Ngaire. She submits at this stage Tellic was not a party to the dispute, and Ms Anderson was acting for Karl and Tellic in a commercial capacity regarding the potential purchase by them of the Farm.
[35] She submits that any “offer” made, or considered being made by Karl and Tellic, was not made in connection with an attempt to settle the dispute, as it did not address the dispute (being whether Belinda was legally entitled to stay on the Farm or not).
[36] As to the further communications in this category, being D173, D175 and D177, these were emails which Ms Flay sent to Mr Spargo who acted for the Company. In one instance, it was also sent to Ngaire and copied to Ms Anderson. Ms Smith submits that these communications are unlikely to have been made in an attempt to settle the dispute, given that at the time, inter alia, the Company’s position was that Belinda needed to move her business off the Farm.
[37] In relation to the remaining communications in this category, being D167, D186 and D187, which are communications between Ngaire and Tellic, Ms Smith submits that even if these communications relate to an attempt at settlement, they do not attract settlement privilege because Karl and Tellic were not parties to the dispute.
[38] As to confidentiality and waiver, Ms Smith repeats her earlier submissions, and submits in relation to documents D160, D186 and D187 that these communications were not intended to be confidential and/or privilege was waived as they were shared with third parties.
[39] Mr Manning submits that the privilege under s 57 is wider than privilege accorded to without prejudice communications or negotiations between opposing parties to a dispute, or their legal representative. He submits it extends to communications between a person who is a party to the dispute and “any other party” to the dispute. He submits that privilege is wide enough to protect communications between “friendly” parties to the dispute, provided that the communications satisfy the requirements of s 57(1)(a) and (b).
[40] Mr Manning submits the language of this section is broad enough to encompass communication relating to a settlement meeting if they were “connected to” an attempt to settle a dispute. And broad enough to encompass negotiations which post-date a settlement meeting if the evidence is that the parties intended the cloak of privilege to extend that far. He submits this applies in the present case where the meeting of 17 June 2021 was adjourned to allow parties to explore other options, and it was impliedly agreed that communications following the meeting should also be without prejudice.
[41] Mr Manning submits that because of s 57 a person may be “a party to a dispute” if they have a substantial or material interest in the dispute and its resolution. It is not necessary for the purposes of the privilege that the person have a potential legal liability or alternatively be able to assert a legal right in respect of the subject matter of the dispute. He submits, privilege extends to confidential communications between “stakeholders” in the dispute in connection with an attempt to settle or mediate it and that this is consistent with the policy behind the privilege.
[42]In applying his analysis of s 57 to the present instance, Mr Manning submits:
(a)A without prejudice settlement meeting was held on 17 June 2021. It was attended by Zane and Ngaire, Karl and Tellic, Belinda, Matthew (their brother), and legal representatives for all the parties, including Ms Anderson representing Karl and Tellic. The initiative for the meeting had been an email from Belinda’s counsel to Ms Flay, raising a claim of estoppel and proposing a meeting to resolve the dispute.
(b)The meeting was unsuccessful. However, the parties agreed to adjourn it for a period of three months to allow options for settlement to be explored further (the three month period is disputed by Belinda, who claims it was adjourned for one month).
(c)The meeting was held following the assertion of an estoppel claim on behalf of Belinda. It was held expressly on a without prejudice basis, and the presence of the parties’ lawyers at the meeting demonstrates an appreciation that litigation was a distinct possibility.
(d)Although they were not owners of the Farm at the time, the presence of Karl and Tellic (and their lawyer) at the meeting demonstrated their personal interest in the dispute and its resolution, and recognition by the other parties that Karl and Tellic were also “stakeholders” in the dispute.
[43] Mr Manning submits that documents D156, D157, D159, D160 and D167 all predated the without prejudice meeting and were made in connection with Belinda’s initiative to explore a possible resolution of the dispute. He submits they were part of a continuum of communications made for that purpose.
[44] In relation to documents D173, D175 and D177, Mr Manning submits that these followed on from the unsuccessful settlement meeting and were communications between Zane and Ngaire, Karl and Tellic, and their respective legal advisors, addressing the Waikawau initiative (which was a proposal for Belinda to shift her trekking operations and horses and the house she was occupying to a property at Waikawau which was owned by Zane and Ngaire personally).
[45] Mr Manning refers to document D184, which contains communications between Zane and Ngaire, Karl and Tellic and Ms Flay addressing the proposal attached to the letter from Belinda’s counsel of 10 December 2021 regarding Belinda moving her horse trekking business elsewhere from the Farm. He notes that documents D186 and D187 consists of a letter to Belinda from Zane and Ngaire setting out a proposal to resolve the dispute. These documents were shared with Karl and Tellic and their feedback was sought. He submits that all these documents are subject to settlement privilege.
Conclusion – settlement privilege
[46] Mr Manning is unable to cite any direct authority for the wider interpretation of s 57 he is proposing. As indirect support for his proposition, he refers to the decision of Morgan v Whanganui College Board of Trustees where the Court of Appeal observed:7
The word “dispute” is not a term of art; its use was not meant to be exclusive. And, as noted, “negotiations” or the broader term “difference” will suffice. None of these phrases warrant a narrow construction where something has arisen between the parties which must be resolved, and they have expressly agreed their communications should be protected for that purpose.
7 Morgan v Whanganui College Board of Trustees [2014] NZCA 340, [2014] 3 NZLR 713 at [17].
[47] I am of the view that settlement privilege does not apply to the documents for which it is claimed by the defendants. There is no authority for the wider interpretation proposed by Mr Manning that s 57 can apply to communications between “stakeholders” or “friendly parties” regarding potential settlement. In addition, this proposition is contrary to the plain meaning of s 57 which states “any communication between the person and any other person who is a party to the dispute”.
Litigation privilege
[48] The defendants claim litigation privilege in respect of one document, D206. This is an email from Tellic to Ngaire dated 2 November 2023 with the subject line, “Karl and Tellic’s Belinda Evans issues”. The proceedings were issued by Belinda on 6 November 2023.
[49] Ms Smith submits that at the date of the relevant document there was no evidence that Tellic contemplated becoming a party to the proceeding at that point. She points to a letter to Bell & Graham dated 3 November 2023 attached to Belinda’s affidavit asking for undertakings and whether they were authorised to accept service. She submits prior to this letter there was an email exchange with lawyers on 30 October 2023 which made no mention of proceedings. She submits that even if proceedings were reasonably apprehended, document D206 was not an email sent by Tellic to Ngaire for the dominant purpose of preparing the apprehended proceeding, but to canvas ongoing issues regarding Belinda’s presence on the Farm.
[50]With reference to the document D206, Mr Manning submits:
(a)The protection afforded by s 56 is not confined to communications between a party and that party’s legal advisor.
(b)At the time the communication occurred, on 2 November 2023, a proceeding was apprehended as:
(i)The claim that Belinda’s interests were protected by estoppel had been made from at least early March 2021.
(ii)The settlement meeting on 17 June 2021 was held on a without prejudice basis, implying the existence of a substantial dispute which the parties apprehended could end up before the courts.
(iii)In October 2021, the correspondence being exchanged between the parties’ legal representatives left little doubt about the imminence and likelihood of court proceedings.
(c)While litigation was a reasonable prospect as at 2 November 2023, it was not known who would be a party to the litigation. Although the Company (and through it the Trust, Zane and Ngaire) no longer owned the Farm, there was a distinct prospect they too would be named as parties to any claim Belinda might bring.
[51] Mr Manning submits that the chronological narrative of events following settlement of the sale of the Farm to Six Gen Limited, covering the period between 21 September 2023 and 1 November 2023 was a document prepared by Tellic for the dominant purpose of the proceeding which was apprehended, and was intended to be confidential.
Conclusion on litigation privilege
[52] I am satisfied that at the time D206 was created by Tellic, litigation was clearly apprehended given the correspondence between the legal representatives. Given the nature of the document, being a chronology of events, it was clearly prepared by Tellic to assist Ngaire and Zane in relation to the apprehended litigation, and therefore prepared for the dominant purpose of those proceedings.
[53]Accordingly, in my view, litigation privilege attaches to document D206.
Common interest privilege
[54] It is common ground that common interest privilege only arises in relation to those documents in respect of which the court finds that the defendants have privilege (whether pursuant to s 54 or s 57 of the Act).
[55] The defendants claim common interest privilege in relation to the emails which Ngaire shared with Tellic and Karl the earlier correspondence she had with Ms Flay, being documents D150, D156, D157, D160, D167, D172, D175, D177 and D184.
[56] Ms Smith submits that these communications cannot have been relevant to Karl or Tellic, who were not trustees of the Trust, nor directors of the Company which owned the Farm. She submits any interests Karl and Tellic may have had, at the time these communications took place in running and/or potentially purchasing the Farm were not relevant to communications regarding the Trust.
[57] Ms Smith submits that the communications were merely Ngaire forwarding information to Tellic to keep her up to date with where things were at regarding Belinda leaving the Farm. She submits there was no common interest between Ngaire and Tellic sufficient to give rise to privilege for communications between the two. She submits there was no sufficient identity of interest in matters concerning the Trust.
[58] Having traversed the description by the Supreme Court of common interest in Lambie Trustee Ltd v Addleman,8 Mr Manning notes the description of Wylie J in the decision of Fresh Direct Ltd v J M Batten and Associates, and refers to the point made in that judgment that common interests must be identical, or if not identical, then closely related.9
[59]Mr Manning submits:
(a)From 2018, Karl and Tellic shared with Zane and Ngaire the common goal of achieving resolution of Belinda’s claims in respect of the Farm, so that Zane and Ngaire could hand over the running of the Farm to Karl and Tellic.
(b)By 2020, the reason for their common interest had evolved, and was no longer premised on Karl and Tellic taking over the running of the Farm, but focused on the purchase of the Farm.
8 Lambie Trustee Ltd v Addleman [2021] NZSC 54, [2021] 1 NZLR 307.
9 Lambie Trustee Ltd v Addleman (2009) 20 PRNZ 126 at [62].
(c)Until settlement of the sale of the Farm on 6 September 2023, that common interest was constant through the relevant period of the communications which have been challenged by Belinda.
[60] Mr Manning submits the interests of Zane and Ngaire on the one hand, and Karl and Tellic on the other, were not identical as Zane and Ngaire via the Company and Trust owned the Farm and wanted to sell it, and Karl and Tellic wanted to buy it. He submits although their interests were not identical, that they were “closely related”, which is sufficient to find the claim of common interest privilege.
[61] With respect to documents D203 and D206, which post-date settlement of the sale of the Farm, Mr Manning submits although ownership of the Farm had by that date passed to Karl and Tellic, the common interest with Zane and Ngaire remained. Belinda’s claims in the Farm were unresolved, and at that time there was a distinct prospect that if Belinda issued proceedings, not only would Karl and Tellic be named as defendants, but so too would Zane and Ngaire.
Conclusion on common interest privilege
[62] I am of the view that common interest privilege extends to the documents in respect of which it is claimed by the defendants. It is clear that Zane and Ngaire on the one hand, and Karl and Tellic on the other hand, had a common interest in resolving Belinda’s claims in respect of the Farm. Initially, the common interest was to allow Karl and Tellic to take over the running of the Farm from Ngaire and Zane and then latterly, after the Farm was sold, the issue relating to Belinda’s claims was still a live one in which all the parties had an interest in resolving. In my view, Karl and Tellic’s interest and Ngaire and Zane’s interests were closely related.
Result
[63]As a result of the conclusions I have reached at [31], [46], [47], [52], [53], and
[62] , the following documents are subject to the following privileges:
(a)D 150: legal advice privilege / common interest privilege;
(b)D 156: legal advice privilege / common interest privilege;
(c)D 157: legal advice privilege / common interest privilege;
(d)D 159: legal advice privilege / common interest privilege;
(e)D 160: not privileged;
(f)D 167: legal advice privilege / common interest privilege;
(g)D 172: legal advice privilege / common interest privilege;
(h)D 173: legal advice privilege;
(i)D 175: legal advice privilege / common interest privilege;
(j)D 177: legal advice privilege / common interest privilege;
(k)D 184: legal advice privilege / common interest privilege;
(l)D 186: not privileged;
(m)D 187: not privileged;
(n)D 199: legal advice privilege / common interest privilege;
(o)D 203: legal advice privilege / common interest privilege; and
(p)D 206: litigation privilege.
Orders
[64]I make the following orders:
(a)Belinda’s application to set aside the defendants’ claim to privilege is dismissed in respect of all the documents listed in [63] except for
documents D160, D186 and D 187, in respect of which the defendants’ claim of settlement privilege is set aside.
(b)Belinda’s application has largely been unsuccessful. Counsel are directed to endeavour to agree costs and failing agreement being reached within a period of 30 working days from the date of this judgment, counsel for the defendants will file a memorandum as to costs (not to exceed five pages) within 5 working days after the expiry of the 20 working day period, and counsel for Belinda will file a memorandum (not to exceed five pages) in response within 5 working days of receipt of counsel for the defendants’ memorandum. A decision as to cost will then be made on the papers.
…………………………….. Associate Judge Taylor
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