GFD I LLP v Melview (Kawarau Falls Station) Investments Ltd (in rec)

[2012] NZHC 677

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2010-404-7701

BETWEEN  GFD I LLP Plaintiff

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

Defendant

CIV 2010-404-7702

AND BETWEEN            ALAN FALL Plaintiff

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

Defendant

CIV2009-404-6755 [2012] NZHC 677

AND BETWEEN            MELVIEW (KAWARAU FALLS STATION) INVESTMENTS LIMITED & ORS

Plaintiff

ANDPENINSULA ROAD LIMITED Defendant

Hearing:         On the papers

Judgment:      5 April 2012

JUDGMENT OF WINKELMANN J

GFD I LLP V MELVIEW (KAWARAU FALLS STATION) INVESTMENTS LIMITED (IN RECEIVERSHIP) HC AK CIV 2010-404-7701 [5 April 2012]

This judgment was delivered by me on 5 April 2012 at 2.00 pm pursuant to

Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

[1]      Glaister Ennor applies on behalf of 67 plaintiffs in proceedings (the Ho Kok Sun  proceeding)[1]   for  access  to  the  Court  files  in  three  proceedings  involving Melview (Kawarau Falls Station) Investments Ltd (in receivership), (Melview):

[1] Ho Kok Sun & Ors v Peninsula Road Limited & Ors CIV 2011-404-7991.

(a)       GFD I LLP v Melview (Kawarau Falls Station) Investments Ltd (in rec)

CIV-2010-404-7701

(b)      Alan Fall v Melview (Kawarau Falls Station) Investments Ltd (in rec) CIV-

2010-404-7702

(c)       Melview (Kawarau Falls Station) Investments Ltd (in rec) v Peninsula Road

Ltd CIV-2010-404-6755.

[2]      All three proceedings relate to difficulties which arose in connection with a major property development in Queenstown.

[3]      The third listed set of proceedings (the settled proceeding) has been settled. The other proceedings remain on foot and are referred to as the “Melview proceedings”.  The 67 plaintiffs apply for access to all three files in order to facilitate their own proceedings.

[4]      The plaintiffs in the Melview proceedings (GFD I LLP & Alan Fall) do not oppose the application.  Melview, the defendant in the Melview proceedings and the plaintiff in the settled proceeding, opposes the application.   Melview says that the disclosure sought is too broad and the applicants give no detail as to how each of the groups of documents sought, relate to the proceeding in question.  The two sets of proceedings that are still on foot have not been either heard or settled, and the one proceeding which has been resolved was settled on confidential terms.

[5]      The application is also opposed by BOS International (Australia) Ltd (BOSI).

BOSI’s involvement in these proceedings arises as follows.   The plaintiffs in the

Melview proceedings made an application for non-party discovery against BOSI. BOSI objects to the disclosure of the following documents:

(a)       The plaintiffs’ and defendants’ memoranda filed in advance of mention on the commercial list on 5 August 2011;

(b)      The minute of the Court following that mention;

(c)       Subsequent Court documents which refer to the memoranda, hearing or minute.

(d)      Any other documents placed on the Court file after 16 September relating to

BOSI or the application for non-party discovery.

[6]      The objection is made on the basis that allegations were made about BOSI’s role in the defendants’ failure to comply with its discovery obligations at the 5

August hearing.   BOSI disputes those allegations.   BOSI says that it would be inappropriate to disseminate documents when BOSI, as a non-party, has not been heard regarding the allegations made by the parties at that hearing (subsequently recorded in the Court minute).  Moreover, it says the documents are irrelevant to the substance of the Ho Kok Sun proceeding.

[7]      BOSI also contends that none of the documents with which it is concerned relate to substantive issues in the Melview proceedings: they concern matters of procedure only.   The documents would, therefore, not assist the orderly and fair administration  of  justice  in  the  Ho  Kok  Sun  proceeding.[2]     Furthermore,  no substantive  hearing  has  been  held  and  no  decision  issued  in  respect  of  the proceedings since 16 September 2011.   Finally, BOSI says that even during the

[2] Rule 3.16(a).

substantive hearing stage, a third party has no entitlement to documents other than

those relating to pleadings and evidence.

Relevant background

The Melview proceedings

[8]      The Melview proceedings arise out of the failure of the Kawarau Falls Station property development.   The development was to be a $1 billion luxury resort containing 13 different complexes supported by shared amenities.  In April and May

2007,  GFD  and Alan  Fall  signed  eight  agreements  for  sale  and  purchase  with Peninsula Road Limited, the company which had bought the land on which the development was to be built.  Peninsula Road later transferred the land in question to Melview, which undertook to Peninsula to perform its obligations under the agreements for sale and purchase.

[9]      Melview was placed in receivership in May 2009.   Its receivers made the decision to continue with the construction of some of the buildings in the development.   Following exchanges between the parties, GFD and Alan Fall purported to cancel the agreements for sale and purchase.  When Melview did not accept those cancellations the proceedings in question were initiated.

[10]     The Ho Kok Sun proceedings also relate to the sale of Kawarau Falls Station Development in Queenstown.  The plaintiffs in that proceeding (the applicant in the current instance) entered into agreements to purchase units in Stage 1, relying on representations made that Stage 2 and Stage 3 would be subsequently completed, providing communal resort facilities which would add value to all the units.  At the heart of the Ho Kok Sun proceeding, says counsel for those plaintiffs, is the enforceability or otherwise of agreements for sale and purchase of the units in Stage

1 of the development.  The pleaded matters included breaches of s 9 and s 14 of the Fair Trading Act 1986, and s 27(1) Securities Act 1978.   These, they say, are the same or similar issues to those involved in the Melview and settled proceedings.

Relevant principles

[11]     Subpart 2 of Part 3 of the High Court Rules, as amended by the High Court

(Access to Documents) Amendment Rules 2009 governs this application.

[12]     Rule 3.9 governs access to court documents during the “substantive hearing stage” of a proceeding.  This period is regarded as the “open justice” stage of the proceeding because the matter is being tried in public.  In this phase access is limited to “any pleadings, reference, notice or application filed in the Court”, and evidence admitted for the purpose of the hearing, including any transcript of oral hearings.

[13]     Rule 3.9 does not apply as none of the proceedings have yet reached the substantive hearing stage. The applicable rule is 3.13.  Rule 3.13 provides:

3.13Applications for permission to access documents, court file, or formal court record other than at hearing stage

(1)       This rule applies whenever the permission of the court is necessary under these rules and is sought to access a document, court file, or any part of the formal court record, except where access may be sought under rule 3.9.

(2)       An application under this rule is made informally to the Registrar by a letter that—

(a)      identifies the document, court file, or part of the formal court record that the applicant seeks to access; and

(b)      gives the reasons for the application.

(3)       The application is heard and determined by a Judge or, if a Judge directs the Registrar to do so, by the Registrar.

(4)       On receipt of an application made in accordance with subclause (2), the Judge or Registrar may direct that the person file an interlocutory application or originating application.

(5)       The applicant must give notice of the application to any person who is, in the opinion of the Judge or Registrar, adversely affected by the application.

(6)       The Judge or Registrar may dispense with the giving of notice under subclause (5) if it would be impracticable to require notice to be given.

(7)       The Judge or Registrar may deal with an application on the papers, at an oral hearing, or in any other manner the Judge or Registrar considers just.

[14]     Rule 3.16 is also relevant. That rule provides:

3.16     Matters to be taken into account

In determining an application under rule 3.13, or a request for permission under rule 3.9, or the determination of an objection under that rule, the Judge or Registrar must consider the nature of, and the reasons for, the application or request and take into account each of the following matters that is relevant to the application, request, or objection:

(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.

[15]     In Commerce Commission v Air New Zealand,[3] the application for access was by a non-party seeking to obtain information relevant to its own litigation.   In his decision, Asher J adopted the approach described by Mallon J in Chapman v P,[4] holding that, whilst some of the six matters specified in r 3.16 may be more relevant to a particular application before the Court than others, the wording of the rule indicated that no single factor was paramount, they were all to be weighed in the balancing.[5]   Asher J noted the importance of the particular reasons for which access was sought and concluded that “[i]nevitably a Court will be less sympathetic to an application which does not have a recognisable and legitimate public or private

purpose.”[6]

[3] Commerce Commission v Air New Zealand Ltd [2012] NZHC 271.

[4] Chapman v P (2009) 20 PRNZ 330 (HC).

[5] Commerce Commission at [27].

[6] At [30].

[16]     This application is made prior to the substantive hearing phase. Therefore the principle of open justice, relating as it does to the fair and accurate reporting of Court hearings, has much less force in this application than privacy considerations. In this case the applicants seek access to the entire contents of the Court file – far wider access than would be permitted at the substantive hearing phase.  Yet they do not show any legitimate interest in the contents of the file beyond the pleadings. Parties file applications at an interlocutory stage and typically make various allegations  in  memoranda  and  affidavits.    Some  of  those  allegations  are  not responded to by parties in the full confidence that when a matter gets to a substantive hearing, issues which remain relevant can be fully addressed and an appropriate focus brought to bear upon the critical factual and legal issues.

[17]     For  these  reasons  absent  good  reason  being  shown  for  access  to  the documents filed in connection with the procedural phase of the Melview and settled proceedings, I am satisfied that such access should not be granted.

[18]     Melview has raised, as an additional ground of objection, confidentiality in respect of the settled proceedings.  However it has not shown any reason why the confidentiality concerns raised in respect of the settled proceedings should extend to prevent access to the pleadings in that proceeding.

[19]     Accordingly the applicants may have access to the pleadings in the three sets of proceedings. Access to other documents on the files is refused.

Winkelmann J

Solicitors:

Glaister Ennor, Auckland  [email protected] [email protected]

MinterEllison Rudd Watts, Auckland –        [email protected] [email protected]

Meredith Connell, Auckland  [email protected]
Chapman Tripp, Auckland  [email protected]