Gold Star Invest Limited v v
[2020] NZHC 2848
•30 October 2020
UNTIL FURTHER ORDER OF THIS COURT THERE IS AN INTERIM ORDER PREVENTING THE PUBLICATION OF THE NAMES OF THE DEFENDANTS AND NON-PARTY PUBLIC OR MEDIA FROM HAVING
ACCESS TO THE COURT FILE OR ANY DOCUMENTS RELATING TO THE PROCEEDING HELD BY THE COURT WITHOUT THE MATTER BEING REFERRED TO A JUDGE FOR DIRECTION.
IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY
I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE
CIV-2019-442-023
[2020] NZHC 2848
BETWEEN GOLD STAR INVEST LIMITED
Plaintiff
AND
V
First Defendant
AND
W
Second Defendant
AND
C
Third Defendant
AND
H
Fourth Defendant
AND
P
Fifth Defendant
Hearing: 22-23 September 2020 Appearances:
C Griggs and C Kenworthy for the Plaintiff
J Anderson QC and D Kraitzick for the First Defendant S Curlett and H Bridgman for the Second Defendant
F Barton and R Norris for the Third Defendant
J Sumner and N Jirkowsky for the Fourth Defendant C Lawes for the Fifth Defendant
Judgment:
30 October 2020
JUDGMENT OF GRICE J (Non-publication applications)
GOLD STAR INVEST LIMITED v V [2020] NZHC 2848 [30 October 2020]
[1] The second, third and fourth defendant seek non-publication orders, in simple terms, on the grounds that they are professional advisors and that publication would have a detrimental effect on their reputation and that of the firms in which they practice.1
[2] The first and fifth defendants, while not separately pursuing non-publication orders, say that if the orders are granted they should also have the benefit of such orders. In any event it would be difficult, if not impossible, to impose effective non-publication orders in favour of only some of the defendants.
[3] The plaintiff opposes the applications for non-publication on the basis that there is no good reason to override the fundamental principle requiring open justice in this case.
Background
[4] The background to this matter is set out in an earlier judgment discharging a freezing order obtained by the plaintiff initially without notice.2 The third defendant made an application for non-publication at that stage. He was not a named respondent in the freezing order application, but his concern was that the issues ventilated in that application and any associated judgment would have the potential to impact on him.
[5] Following the third defendant’s application, a number of the other parties orally sought suppression orders at that stage. Their circumstances, I noted at the time, differed from those of the third defendant and it was not appropriate that they should piggyback on his application. I directed the other parties who sought name suppression or non-publication file formal applications, together with supporting affidavits.
1 Note: Judgment anonymised pursuant to interim order for non-publication of defendants’ names and access to Court file made in minute of Grice J dated 9 November 2020.
2 Gold Star Invest Ltd v V [2019] NZHC 3504 at [6]–[23].
[6] Counsel suggested an interim total non-publication order at that stage but I was not prepared to make an order in those terms. Following discussion with counsel an interim order in the following terms was made:3
[6] …
(a)Until further order of this Court there is an order preventing the public or media from having access to the court file or any documents relating to the proceedings held by the Court without the matter being referred to a Judge for direction.
(b)In any decision arising from the present application the names of the defendants and non-parties are not to be published pending further order of the Court.
Orders sought
[7] The relevant defendants seek orders that the general public not have access to the court file without leave of the Court. The non-publication would extend to judgments on interlocutory chambers matters.4
The principles
[8] The Senior Courts (Access to Court Documents) Rules 2017 (Rules) deal with the rights of parties to proceedings and the general public to access documents while they are in the custody and control of the court.5 A “court file” is defined in r 4 as “a collection of documents in the custody or control of the court …”.6 The formal court record is also defined and includes judgments, orders and minutes but does not include pleadings or affidavits.7
[9] The court retains the ultimate control as to how a court document is to be dealt with and who may access it. The court’s inherent jurisdiction is explicitly retained in r 5.
3 Gold Star Invest Ltd v V HC Wellington CIV-2019-442-00023, 31 October 2019 at [6].
4 Pursuant to the discretion in r 7.35 of the High Court Rules 2016.
5 Senior Courts (Access to Court Documents) Rules 2017, r 3.
6 Rule 4.
7 Rule 4.
[10] The Rules provide that “[e]very person has the right to access the formal court record relating to a civil proceeding”.8 The parties to the proceedings and their lawyers have a general right to inspect the court file and all documents relating to the proceeding under the supervision of the Registrar and subject to any contrary direction given by the Judge.9
[11] A person not entitled access to a document relating to a proceeding under rr 8 or 9 applies for access under rr 11, 12 and 13. In essence:
(a)when determining a request for access under r 11, the judge “must consider the nature of, and the reasons, for the request” and take into account the matters in r 12; and
(b)the relevant matters to be considered, as set out at r 12, are:10
(a)the orderly and fair administration of justice:
(b)the right of a defendant in a criminal proceeding to a fair trial:
(c)the right to bring and defend civil proceedings without the disclosure of any more information about the private lives of individuals, or matters that are commercially sensitive, than is necessary to satisfy the principle of open justice:
(d)the protection of other confidentiality and privacy interests (including those of children and other vulnerable members of the community) and any privilege held by, or available to, any person:
(e)the principle of open justice (including the encouragement of fair and accurate reporting of, and comment on, court hearings and decisions):
(f)the freedom to seek, receive, and impart information:
(g)whether a document to which the request relates is subject to any restriction under rule 7:
(h)any other matter that the Judge thinks appropriate.
8 Senior Courts (Access to Court Documents) Rules 2017, r 8.
9 Rule 9.
10 Rule 12.
[12] This is therefore a balancing exercise. The stage of the proceedings is also relevant. Rule 13 provides that before the substantive hearing, “the protection of confidentiality and privacy interests and the orderly and fair administration of justice may require that access to documents be limited”.
[13] Therefore, the general regime gives open justice greater weight during the substantive hearing. Before the substantive hearing, privacy interests and the orderly administration of justice are given greater weight. Those principles reflect the approach that had been developed by the courts under the previous regime.11 None of the r 12 factors have primacy; there is no hierarchy of consideration.12
[14] The third defendant cited the Court of Appeal’s comments in Crimson Consulting Limited v Berry when it observed:13
[14] … However, we note that, whilst the predecessor to r 12 had always provided that the protection of confidentiality and privacy interests were relevant, r 12(c) specifically sets out the right to bring and defend civil proceedings without the disclosure of any more information about the private lives of individuals, or matters that are commercially sensitive, than is necessary to satisfy the principle of open justice.
[15] The third defendant also cites Rice v Heaney.14 That case involved a dispute between partners in a legal firm and the dissolution of their partnership. It appears the documents for which the media sought access on the court file were commercially sensitive and included serious and embarrassing allegations about the defendants’ behaviour. The court refused to grant access because at that early stage the disclosure would be contrary to the fair and orderly administration of justice and the defendants’ privacy and confidentiality interests if the allegations in the claim were aired publicly.15 Among the materials sought to be viewed were the revenue and earnings of the firm and its former partners, the terms of the partnership agreement and lease and contents of private correspondence between the parties.16
11 Andrew Beck and others McGechan on Procedure (loose-leaf ed, Brookers, updated to 18 March 2020) at [SCD13.01].
12 Commissioner of Police v Li [2018] NZHC 1566 at [24]; citing Greymouth Petroleum Holdings Ltd v Empresa Nacional del Petróleo [2017] NZCA 490, [2017] NZAR 1617 at [21]; and Commissioner of Police v Chan [2019] NZHC 1864 at [8].
13 Crimson Consulting Limited v Berry [2018] NZCA 460, [2019] NZAR 30 at [14].
14 Rice v Heaney [2014] NZHC 1311, (2014) 22 PRNZ 159.
15 At [12].
16 At [11].
[16] The Judge also noted that it was a very early stage in the proceedings, the allegations had been untested and the airing of those allegations would likely be an unfair and unwarranted diversion for the parties. The Court found that publication would potentially inflame the relationship between the partners in a way that was likely to “diminish any prospect of them reaching an extra-judicial resolution of the proceedings”.17
[17] It was common ground that the Supreme Court in Erceg v Erceg articulated the test for the making of the non-publication order.18 In that case the Supreme Court said:
[13] As we have noted, we declined to make the orders sought. We accept that the courts are able to make orders to protect confidential information in civil proceedings in the exercise of their inherent powers. The need to protect trade secrets or commercially sensitive information, the value of which would be significantly reduced or lost if publicised, are obvious examples of situations where such orders may be justified. However, the courts have declined to make non-publication or confidentiality orders simply because the publicity associated with particular legal proceedings may, from the perspective of one or other party, be embarrassing (because, for example, it reveals that a person is under financial pressure) or unwelcome (because, for example, it involves the public airing of what are seen as private family matters). This has been put on the basis that the party seeking to justify a confidentiality order will have to show specific adverse consequences that are exceptional, and effects such as those just mentioned do not meet this standard. We prefer to say that the party seeking the order must show specific adverse consequences that are sufficient to justify an exception to the fundamental rule, but agree that the standard is a high one.
[18] In R & M v Commissioner of Inland Revenue,19 Paterson J recognised that there may be circumstances where the effect on a business is exceptional enough to lead to a suppression order. He said:20
[6] Openness of Court proceedings, including publication of parties’ names, is now an essential part of the process. It is only in exceptional circumstances that this Court is prepared to make orders of the type sought. As noted in Gibson v A-G (1999) 13 PRNZ 12, the Court should only sparingly use its inherent jurisdiction to suppress names. It is stated in McGechan on Procedure, Wellington, Brookers, 1988 at para HR66.12 that the mere fact that evidence given in Court might affect a party’s business is not by itself a sufficient consideration. To justify an order, the Court would have to be convinced that the party would otherwise be effectively prevented from having his or her day in Court. I do not necessarily agree with the
17 Rice v Heaney, above n 14, at [17].
18 Erceg v Erceg [2016] NZSC 135, [2017] 1 NZLR 310 at [13] (footnotes omitted).
19 R & M v Commissioner of Inland Revenue (2003) 17 PRNZ 28 (HC).
20 At [6].
unrestricted nature of these comments as there may be circumstances where the effect on a business is exceptional enough to lead to a suppression order. However, I accept, in general terms, the principle.
[19] In that case the confidentiality was sought on the basis that the taxpayer was seeking to complete a payment arrangement with the Commissioner that would maximise the recovery available to the Commissioner. The concern was that if the taxpayer was named, there were likely to be adverse effects on the business of the applicant’s company. It was apparently undisputed that the trading ability of the company and its income would probably be adversely affected if there were publicity. The Court took the view that there was a likelihood the relief sought by the taxpayers in the judicial review proceedings would not be available to them if there was publicity about the proceedings because of that adverse effect. It was not the adverse effects on the business of the applicant’s company in itself that was put forward as the main reason in support of the application but rather, the applicant’s ability to complete the payment arrangement if there was publicity about the proceedings.21
[20] In those circumstances the Judge found that on balance there should be orders of the type sought by the applicants. He found the relief they sought in the review proceedings might be rendered nugatory if there was publicity about the amounts owed to the Commissioner. While the amounts were owing, the Judge found that in the circumstances suppression was appropriate.
[21]In this case the relevant defendants submitted, in general terms, the following:
(a)The allegations made against them are serious.
(b)They have not had an opportunity to respond to the allegations.
(c)The evidence proffered by the plaintiff in support of the maintenance of freezing orders at an earlier proceeding was viewed by the court as not strong.22
21 R and M v Commissioner of Inland Revenue, above n 19, at [7] and [9].
22 Gold Star Invest Ltd v V [2019] NZHV 3504.
(d)The tort of unlawful means conspiracy is a developing area of the law. The particulars, as pleaded, are insufficient to properly inform the defendants of the factual basis of the claims.
(e)It is an early stage of the proceeding. There is a suggestion that one or more defendants may apply to strike out the proceedings following the provision of particulars.
(f)The allegations are more than simply embarrassing or unwelcome. The consequences of publication are likely to cause substantial and potentially irreparable reputational harm for not only themselves personally but a third party, their firms and the other partners involved in those firms (in the case of some of the defendants).
[22] The plaintiff on the other hand opposing the non-publication orders says the general expectation of open justice weighs against the reputational interests of the defendants. It says that potential embarrassment or damage to a defendant’s reputation will usually not be enough to displace the principle of open justice.23 The plaintiff further says that the defendants will have the ability to rebut, with evidence, any allegation that they deny. It adds that allegations of serious impropriety by persons in commercial or professional partnerships and other undertakings are not uncommon in the context of civil proceedings. There is nothing exceptional about the position of the professional defendants or their firms which warrant the unusual step of placing a limit on the principle of open justice.
[23] In this case, the third defendant is in a reputable commercial [REDACTED] firm. He has filed evidence in support of his application for non-publication from its managing partner. This sets out in some detail the damaging consequences for the firm and the third defendant, as well as the possible effects on its substantial commercial [REDACTED] practice with an international presence.
[24] The evidence in support of the application by the third defendant emphasises the good reputation of both the third defendant and the firm and its partners, the fact
23 Erceg v Erceg, above n 18, at [21].
that honesty, integrity and trust are central to the firm and that the reputational damage, given the seriousness of the allegations and their propensity to cause “potentially irreparable reputation damage”, cannot be overstated.
[25] The third defendant also points to the reputation of the [REDACTED] profession generally as being an issue. I do not consider that is a strong argument on its own. It is the effects of publicity on the particular defendant and relevant third parties, in the circumstances of this case, that requires consideration.
[26] The second defendant is an [REDACTED]. He similarly points to the reputational damage that will occur to him and his firm.
[27] Both the first and second defendants point out the importance to them of maintaining their and their firms’ reputation for honesty and high standards and make similar submissions to those of the third defendant.
[28] The fourth defendant operates a [REDACTED] business. He says publication would have a detrimental effect on him and his international business.
[29] The defendants also seek non-publication of particulars of hearings in chambers and interlocutory applications and decisions, seeking this Court exercise its discretion under r 7.35 of the High Court Rules 2016. This provides that “[p]articulars of the hearing in chambers of an interlocutory application or of the decision or both
… may be published unless a Judge or Registrar, exercising jurisdiction in chambers, otherwise directs”.24
[30] The third defendant cites Smith v Claims Resolution Service Ltd in support of its application.25 Gendall J cited the Court of Appeal decision in Greymouth Petroleum Holdings Ltd26 as follows: 27
Prior to the hearing there is no guarantee the case will go to hearing at all. Therefore open justice has less weight. The parties are entitled to the protection of confidentiality and privacy within reasonable limits, given that
24 High Court Rules 2016, r 7.35.
25 Smith v Claims Resolution Service Ltd [2018] NZHC 3180.
26 Greymouth Petroleum Holdings Ltd v Empresa Nacional del Petróleo, above n 12, at [25].
27 Smith v Claims Resolution Service Ltd, above n 25, at [7].
they have not at that point aired the dispute in public. After the substantive hearing the need for public scrutiny diminishes in importance as time moves on. Parties are entitled to expect that the need for open justice has been met by full access during the substantive hearing stage, and that personal information not part of the formal court record or the decision will be given greater protection as the years go by. This is particularly so in a civil case as distinct from a criminal case where these considerations, while relevant, may have less weight because of the particular public interest in criminal prosecutions.
[31] That decision was concerned with an application by the media to film, take photographs, and make sound recordings of the pre-trial hearings under the “In-Court Media Coverage Guidelines 2016”. Therefore, the Court was concerned with the coverage proposed. The Court noted there had been no cases in New Zealand to date where televised or recorded coverage of an interlocutory applications in chambers had been permitted.28
Analysis
[32] The defendants make points favouring non-publication, particularly as this is an early stage of the proceedings. I have expressed reservations as to the merits (bearing in mind that it was at an early stage of the proceedings) and there have been orders for better particulars, as the statement of claim did not properly particularise the basis for the serious allegations made.
[33] On the other hand, the fundamental principle is of open justice, these are allegations relating to commercial dealings and do not involve commercially sensitive material or personal disputes, as was the case in Rice v Heaney.
[34] While the allegations made could well affect the reputation of the relevant defendants, at the same time they are made in a context of transactions carried out by the defendants in the course of their ordinary professional services. There would be little difference between the possible reputational damage to the defendants, or their firms, and that which many other [REDACTED] and professionals would face in similar circumstances. The evidence does not support an exceptional situation such as, for instance, was present in R & M v Commissioner of Inland Revenue.29
28 Smith v Claims Resolution Service Ltd, above n 25, at [8].
29 R & M v Commissioner of Inland Revenue, above n 19.
[35] Allegations of this nature are regularly made against professionals, as are claims of negligence and other claims based on the shortcomings of professionals. I do not consider that there are any particular circumstances that justify an exception to the fundamental rule in this case.
[36] Nevertheless, this is an early stage of the proceedings so I consider it is appropriate that there should be some limitations placed on access to the court files. The decisions on the interlocutory applications should be published. However, any other documents on the court file should not be available to the general public without a specific direction by a judge. A notation to that effect should be placed on the Court file.
[37]I make orders in those terms accordingly.
Costs
[38] If the parties are unable to agree on costs, any cost application may be made by memoranda filed within 10 working days of this judgment with a response within a further five working days and any reply within a further three working days.
Grice J
Solicitors:
Mahony Horner Lawyers, Wellington for Plaintiff Wilson Harle, Auckland for First Defendant
Robertsons, Auckland for Second Defendant Anderson Lloyd, Christchurch for Third Defendant
Ford Sumner Lawyers, Wellington for Fourth Defendant Knapps Lawyers, Nelson for Fifth Defendant
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