GDF I LLP v Melview (Kawarau Falls Station) Investments Limited (in receivership) no.2

[2012] NZHC 1706

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-7701 [2012] NZHC 1706

BETWEEN  GDF I LLP Plaintiff

ANDMELVIEW (KAWARAU FALLS STATION) INVESTMENTS LIMITED (IN RECEIVERSHIP)

Defendant

CIV-2010-404-7702

BETWEEN  ALAN FALL Plaintiff

ANDMELVIEW (KAWARAU FALLS STATION) INVESTMENTS LIMITED (IN RECEIVERSHIP)

Defendant

Hearing:         On the papers

Counsel:         NT Davies and NMH Whittington for Plaintiff

NG Colson and J Cochrane for Defendant

Judgment:      16 July 2012

JUDGMENT (NO 2) OF RODNEY HANSEN J

This judgment was delivered by me on 16 July 2012 at 2.00 p.m., pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date: ………………………….

Solicitors:           Meredith Connell, P O Box 218, Auckland for Plaintiff

(Email:  [email protected])

Bell Gully, P O Box 1291, Wellington 6140 for Defendant

GDF I LLP V MELVIEW (KAWARAU FALLS STATION) INVESTMENTS LIMITED (IN RECEIVERSHIP) HC AK CIV-2010-404-7701 [16 July 2012]

(Email:  [email protected])

Introduction

[1]      In my judgment of 22 June I made rulings on issues that had arisen in relation to the discovery of the defendant (MKFSI).  They resolved most of the outstanding issues.  I am, however, asked to rule on a disputed claim of privilege made in respect of two remaining categories of documents. They are:

(a)     Documents containing legal advice by a solicitor, Mr Warwick Goldsmith, employed by Melview Developments Limited (MDS), in respect of which solicitor-client privilege is claimed; and

(b)A memorandum from Mr Nigel McKenna to KordaMentha, in respect of which litigation privilege is claimed.

Legal advice by Mr Goldsmith

[2]      Mr Goldsmith was formerly a partner at the Dunedin firm of Anderson Lloyd, specialising in resource management law.  He was employed by MDL, which was the ultimate parent company of MKFSI.1   Mr Colson has advised that Mr Goldsmith gave  legal  advice  recorded  in  17  documents,  typically  memoranda  on  MDS letterhead written post-receivership to the solicitors then acting for MKFSI, Minter Ellison, and/or KordaMentha who are conducting the receivership of MKFSI.  MDL continued to be involved in the Kawarau Falls Station development following the appointment of the receivers.

[3]      Mr Colson, counsel for MKFSI, has advised that the memoranda largely deal with resource consent matters and that he considers them to be privileged.  Counsel for the plaintiffs queries whether MKFSI is entitled to claim privilege.  They point out   that   the   question   of   ownership   of   the   documents   remains   unresolved. Mr Goldsmith was employed by MDL and there is nothing to show that after the

receivership, he was engaged directly to provide legal advice exclusively to MKFSI.

1 See judgment of 22 June 2012 at [37].

In the absence of evidence explaining Mr Goldsmith’s role, counsel submit it cannot be concluded that MKFSI has a right to claim privilege over the documents.  In the circumstances, counsel for the plaintiffs submit that the most appropriate way of resolving the issue is for the Court simply to review the documents in light of the discovery judgment and to make a ruling.

[4]      It is not clear to me how inspection of the documents would enable me to resolve the issue.  There is no reason to question the advice of counsel for MKFSI that the documents contain legal advice and that privilege has properly been claimed. I would not inspect the documents for the purpose of verifying that information and I cannot see how inspection will assist me to resolve the issue of whether MKFSI is entitled to assert privilege in respect of the documents.  That is a question of fact on which the contents of the documents are unlikely to shed any light.   I decline to inspect the documents or to order that they be produced for inspection.

McKenna memorandum

[5]      The memorandum of Mr McKenna was written on 2 September 2009 to Mr Alan Garrett of KordaMentha.  Mr Colson, for MKFSI, says that, although these proceedings   were   not   issued   until   November   2010,   having   reviewed   the memorandum he considers litigation privilege has been claimed appropriately.  He refers to the pleadings to show that issues between the parties regarding the status of the sale and purchase agreements2 had generated correspondence from mid-2009.

[6]      Counsel   for   the   plaintiffs   question   whether   the   memorandum   could constitute, for the purpose of s 56 of the Evidence Act 2006, “a communication made, received compiled or prepared for the dominant purpose of preparing for a proceeding or an apprehended proceeding”.   It is submitted that the surrounding documentation provided in discovery from MKFSI does not suggest that is likely to be the case.  Counsel refer to correspondence between Mr Garrett and Mr McKenna during the days preceding the despatch of the memorandum which suggest that the

subject matter of the memorandum would have concerned the possible cancellation

2 ` Previous judgment at [5].

of the Westin operating agreement.3   If so, it is argued that it should be subject to the same waiver of privilege as was provided by MKFSI over Starwood documents.4

Further, it is said that any apprehended proceeding at that stage would have involved Starwood and MKFSI and it is accordingly arguable that the privilege is spent.  It is submitted that, in the circumstances, it is unlikely that Mr McKenna would have been providing advice for the dominant purpose of assisting MKFSI to prepare for these proceedings.

[7]      These are persuasive considerations to which I have not had a response from the defendant.  In the circumstances, I consider it appropriate for the document to be made  available  to  me  for  inspection,  together  with  a  memorandum  of  further

submissions from the defendant in reply.

3 Previous judgment at [15].

4 Previous judgment at [33].