Focus Construction Interiors Limited v Spaceworks Design Group Limited - [2018] NZHC 570

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2016-404-002609

[2018] NZHC 570

BETWEEN
FOCUS CONSTRUCTION INTERIORS LIMITED

Plaintiff

AND

SPACEWORKS DESIGN GROUP LIMITED

First Defendant

ELIZABETH MARY CHARLOTTE HINES (NEE WHALEY)

Second Defendant

Hearing: 8 February 2018

Appearances:

L Ponniah for Plaintiff

S S McMullan for Defendants

Judgment:

28 March 2018

JUDGMENT OF COURTNEY J

This judgment was delivered by Justice Courtney on 28 March 2018 at 4.00 pm
pursuant to R 11.5 of the High Court Rules Registrar / Deputy Registrar
Date ……………………..

FOCUS CONSTRUCTION INTERIORS LTD v SPACEWORKS DESIGN GROUP LTD [2018] NZHC 570 [28
March 2018]

Introduction

[1] The plaintiff, Focus Construction Interiors Ltd (Focus), seeks an order for particular discovery against the defendants, Spaceworks Design Group Ltd (Spaceworks) and Elizabeth Hines (née Whaley) (Ms Whaley). Initially, 16 categories of documents were sought. During the hearing of the application one, category 10, was abandoned.

[2] Rule 8.19 of the High Court Rules 2016 permits an order for particular discovery to be made if 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 one or more documents or a group of documents that should have been discovered.

[3] Katz J summarised the relevant principles under r 8.19 in Lighter Quay Residents’ Society Inc v Waterfront Properties (2009) Ltd as follows:1

(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.

(d)A four-stage approach is convenient:

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

(ii)What are the grounds, and what is the probative value of those grounds, for the belief that the document sought exist?

(iii)Is discovery proportionate?

(iv)Weighing and balancing these matters, is an order appropriate?

1 Lighter Quay Residents’ Society Inc v Waterfront Properties (2009) Ltd [2016] NZHC 818 at [16] (footnotes omitted).

[4] Of particular relevance in this case is the question of proportionality at stage three of the four-stage approach, which is to be assessed by “balancing the time and cost of discovery against the potential value of discovery. The concept of proportionality is said to reinforce the requirement that a discovery order ought not to be oppressive.”2

Background

[5] Focus is a construction company that specialises…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] NZHC 570
Decision Date: 28 March 2018

CaseChat Overview and Summary

The plaintiff, Focus Construction Interiors Limited, sought an order for particular discovery against the defendants, Spaceworks Design Group Limited and Elizabeth Hines (née Whaley). Focus sought 16 categories of documents, one of which was abandoned during the hearing. The defendants had already incurred expenses in excess of $60,000 for discovery. The court had to decide whether there were grounds for believing that the defendants had not discovered documents that should have been discovered. The court found that discovery of documents relating to out-of-Auckland "full projects" and projects where Spaceworks' involvement related to joinery and/or furniture supply was relevant and proportionate. The court did not find that discovery of pre-settlement documentation, financial documentation or documents relating to other contractors was necessary. The court also found that documents relating to the "Ironbank" project were outside the scope of the agreement as it was not a client project. The court ordered that the defendants file and serve an affidavit verifying whether certain documents were in their possession, custody or power. Costs were to lie where they fell.

Orders