Grey District Council v Banks

[2015] NZHC 615

IN THE HIGH COURT OF NEW ZEALAND GREYMOUTH REGISTRY

CIV-2012-418-000005 [2015] NZHC 615

UNDER

the Property Law Act 2007

BETWEEN

GREY DISTRICT COUNCIL Applicant

AND

DOUGLAS BANKS First Respondent

CHRISTINE SANDRA BANKS Second Respondent

Hearing:	24 March 2015
Appearances:	J Shackleton and J Pannett for the Applicant Mrs C S Banks, in person, on behalf of the Respondents
Judgment:	31 March 2015

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1]      This is an application for further discovery in relation to two documents.

[2]      The Court issued a judgment in this proceeding on 19 June 2013.  It issued a second judgment on 5 September 2013 in relation to costs.  Mr and Mrs Banks have appealed the costs judgment to the Court of Appeal.   The appeal will be heard in July.

[3]      For the purpose of arguing their appeal, Mr and Mrs Banks make application for discovery of two further documents:

(a)     an affidavit sworn by Mr P G Pretorius, the Chief Executive of the Grey

District Council (the Council), dated 9 August 2002.   This document

GREY DISTRICT COUNCIL v BANKS [2015] NZHC 615 [31 March 2015]

was sworn and filed for the purposes of a separate proceeding between the same parties; and

(b)     an internal report of the Council titled “Blaketown Leases – a way

forward” dated 10 August 2009.

[4]      Mr and Mrs Banks initially approached the Court of Appeal seeking an order that the Council provide these documents to them for this purpose.  According to Mr and Mrs Banks, the response of the Court of Appeal, through the Registrar, was that application should be made to the High Court pursuant to a reservation of leave at the time discovery orders were made, prior to the trial in this court.  Mr and Mrs Banks have applied accordingly.

[5]      The Council opposes the making of the orders sought by Mr and Mrs Banks on three grounds:

(a)     The affidavit of Mr Pretorius is already in the case on appeal before the

Court of Appeal.

(b)This court is functus officio having delivered final judgment on all aspects of this case.

(c)     The Council report is privileged.

[6]      By the time this case was argued, the differences between the Council and Mr and Mrs Banks in relation to the affidavit of Mr Pretorius had been resolved. The affidavit is in the case on appeal, though subject to an objection as to admissibility. On 26 February the solicitors for the Council advised Mr and Mrs Banks that the Council was prepared to withdraw its objection as to admissibility.   Mr and Mrs Banks were invited to indicate that that would be acceptable, so this part of the application would not require preparation and presentation.  That indication was not given until the beginning of the hearing before me.  Leaving aside questions of costs, no further issue arises in relation to this document.

[7]      Therefore, only issues (b) and (c) remain for determination.

Is this Court functus officio?

[8]      Before trial of this proceeding, procedural orders were made by Chisholm J

on 15 February 2012.  In a Minute issued that day he directed:

[6]   There will be tailored discovery.  By 12 March 2012 the applicant is to discover:

(a)     documents upon which it relies; (b) adverse documents;

(c)     all documents that are relevant to the validity or otherwise of the seven year rent provision in the current renewal.

For the sale (sic) of clarification I record that (c) only refers to the respondents’ lease, unless the leases of other parties are directly relevant to that issue. If necessary, further orders concerning discovery can be made.

[9]      Mr and Mrs Banks rely on the final sentence of this passage.

[10]     Mr Shackleton  says  that  despite the response  of the Court  of Appeal  in relation to Mr and Mrs Banks’ request for an order that the Council produce the internal report in question, this Court has no jurisdiction to order further discovery because  it  is  now  functus  officio.    He  notes  that  the  Court  has  issued  a  final judgment, and that judgment is under appeal to the Court of Appeal.

[11]     In Russell v Klinac, the Court said:1

[15]  It is clear that a common law rule exists that once a Court has made an order, and an appeal has been lodged against that order, the Court becomes functus officio and is therefore unable to take further action in relation to the matter.   Authority for this proposition is found in Pacific Homes Ltd (In Liquidation) v Consolidated Joineries Ltd (1996) 9 PRNZ 331 and in Horowhenua County v Nash (No. 2) [1968] NZLR 632.

[12]     That is the position here.  This Court is functus officio.  As a result, it cannot make a further order by way of discovery.   The indication by Chisholm J only applied as long as this Court was seized of this matter and does not subsist beyond

that point.

1      Russell v Klinac HC Whangarei AP 18/01, 11 December 2001.

[13]     For this reason the Court cannot make the order now sought by Mr and Mrs

Banks.

Discovery of the internal report

[14]     In case I am wrong in the conclusion just stated, I consider whether the

Council was obliged to disclose the report.  The report in issue is dated 10 August

2009.  It was prepared by a Council officer after the Council received written advice from its solicitors in relation to leases of property at Blaketown, Greymouth which are in issue in this proceeding.   The report was prepared for presentation to councillors at a Council meeting.

[15]     The minutes of the Council meeting at which the report was presented record a resolution that the Council exclude the public from the meeting on the grounds contained in s 48(1) of the Local Government Official Information and Meetings Act

1987 (LGOIMA).  The particular reason given by the Council for taking this step is that  there  was  good  reason  to  withhold  the  proceedings  from  the  public  under s 7(2)(a) and (i) of LGOIMA.

[16]     The argument for Mr and Mrs Banks can be summarised thus:

•    If the report is subject to legal professional privilege, and the Council believed it to be so at that time, reference should have been made to s 7(2)(g) which provides for the withholding of information which is necessary to maintain legal professional privilege.   Rather, the Council sought to withhold the information on the basis of protecting the privacy of natural persons, s 7(2)(a), and enabling it to carry on negotiations without prejudice or disadvantage, s 7(2)(i).

•    Having not claimed legal professional privilege for it at the time it was presented to the meeting, the Council cannot do so later.

•    The  report  was  presented  to  a  democratically  elected  body  and  it  is therefore for the Council, not the Chief Executive Officer, to determine whether the document was privileged.  The Council passed the resolution

to which I have referred. and in that circumstance, the Chief Executive cannot now claim privilege on a different basis.

•    In any event, privilege has been waived because parts of the document have been released to Mr and Mrs Banks.   This followed a process by which Mr and Mrs Banks pursued release of the report through the Ombudsman.    After  some  time  the  Council  was  directed  to  provide Mr and Mrs Banks with a redacted copy, and it did so.

[17]     The  Council’s  position  is  that  the  entire  report  is  privileged,  as  it  was produced following the receipt of legal advice and contains specific references to that advice for consideration by the Council in the context of the rest of the report. Whilst,  as  I  understand  it,  the  Council  does  not  resile  from  the  reasons  for withholding access to the document from the public under LGOIMA and maintains that  the  grounds  given  were  and  are  appropriate,  nonetheless,  it  says  legal professional privilege applied to the document from the outset.  It seems implicit in this position that reference could have been made to s 7(2)(g) but the fact that it was not is not relevant to the issue now before the Court.

[18]     I have formed the view that the document is privileged in its entirety for the following reasons.  First, it was produced after the Council received legal advice on the issues which remain the subject of this proceeding and issues relating to other leaseholders in the Blaketown area.  It was produced for the purpose of conveying that advice, in the context of the then current disputes, to the Council.  It is, by its nature, privileged.

[19]     Secondly, the fact that no reference was made to s 7(2)(g) in the reasons for not permitting the public to be present when the document was discussed does not alter this position.  The grounds recorded in the minutes of the Council meeting did not include reference to legal professional privilege, and they could and possibly should have, but the fact that this was not referred to in the minuted reasons for exclusion does not affect the validity of that privilege.

[20]     Thirdly, the Council has consistently and repeatedly claimed privilege for the document from the time it was first mentioned.  Counsel for the Council took me to various  memoranda  and  the  judgment  of  the  Court  on  costs  which  record  this position.  At no point has the Council taken any step which might be construed as waiver of privilege.

[21]     Fourthly, the provision of a redacted copy is not a waiver of privilege in the material which was not redacted.  Quite the reverse.  I am informed, and accept, that the reason for the redaction was in order to maintain the privilege asserted.

[22]     Fifthly, the minutes of the meeting on which Mr and Mrs Banks rely record a decision taken under LGOIMA for the purposes of confidentiality.  They are not a statement of the Council’s definitive position in relation to assertion of privilege.  I therefore reject the submission that, as the Council did not decide to withhold the document under s 7(2)(g), the Chief Executive cannot do so later.  Further, there is no evidence to suggest that the Chief Executive has acted outside his authority.  Nor, for that matter, is there any evidence that the decision to claim privilege is a decision of the Chief Executive, not the Council.  There is no evidence to suggest any lack of unity between the Council and its officers on this issue.

[23]     For completeness,  I record that Mr Shackleton  made available to me an unredacted copy of the report.  This followed from Mrs Banks having identified for me four places in the redacted version where material had been removed, apart from two other places where the surrounding sentences of the report make it clear that the legal advice received by the Council was being summarised.  Her position was that the  Court  should  not  accept  the  Council’s  assurance  that  these  passages  also contained privileged materials.  My inspection of the document satisfied me that the redacted  passages  either  contained  material  which  was  directly  related  to  the summary of legal advice contained elsewhere in the report, or in one case contained contextual material which should, in my opinion, be covered also by the privilege.

[24]     For these reasons the application by Mr and Mrs Banks for discovery of the entire report and disclosure of an unredacted copy is dismissed.

Outcome

[25]     The Council has succeeded and, as discussed at the hearing, is entitled to costs.             Mr  and  Mrs  Banks  will  pay  to  the  Council  costs  on  a  2B  basis  plus

disbursements fixed by the Registrar.

J G Matthews

Associate Judge

Solicitors:

Simpson Grierson, Wellington for Applicant. Mrs C S Banks (in person) for Respondents.