Harvey v Friends of the Laura Fergusson Trust Incorporated
[2022] NZHC 1661
•14 July 2022
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-2234
[2022] NZHC 1661
BETWEEN THOMAS WALTER HARVEY
First Applicant
THE FRIENDS OF THE LAURA FERGUSSON TRUST INCORPORATED
Second ApplicantVICTORIA MARY CARTER
Third ApplicantAND
LAURA FERGUSSON TRUST INCORPORATED
Respondent
CIV-2021-404-2249 BETWEEN
LAURA FERGUSSON TRUST INCORPORATED
ApplicantAND
ATTORNEY-GENERAL
Respondent
Hearing: On the papers Appearances:
P J Dale QC for Applicants
A Galbraith QC, B A Keown and D M Scholes for Respondent
Judgment:
14 July 2022
JUDGMENT OF HINTON J
This judgment was delivered by me on 14 July 2022 at 11:00 am, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date: ………………………
HARVEY v LAURA FERGUSSON TRUST INCORPORATED [2022] NZHC 1661 [14 July 2022]
[1] This judgment concerns an application for particular discovery by the applicants, of documents relating to membership applications made to the respondent, the Laura Fergusson Trust.
[2] The background to the substantive claim is set out in more detail in my judgment of 28 February 2022.1 In short, the relevant cause of action in the present originating application is that the Laura Fergusson Trust has acted in breach of contract by acting in bad faith in declining the membership applications of Victoria Mary Carter, Norman John Carter, Timothy James Lofts and Jane Carrigan, and by adopting a strategy of declining any applicants that it considered disagreed or might disagree with the Board’s current policies and/or were likely to vote against re-election of the existing Board members.2 The hearing of the originating application is set down for 23 March 2023.
[3]The applicants request the following documentation so far as remains relevant:
(i)Board or internal documents dealing with membership policies, in particular relating to new members, and the criteria for deciding who was a suitable member and who was not.
(ii)Any Board or internal documents in respect of the introduction of a policy of using questionnaires and interviews to screen potential members.
(iii)Correspondence, documents and/or internal memoranda in relation to the unsuccessful applications for membership by Mr and Mrs Carter, Mr Lofts and Ms Carrigan.
(iv)Correspondence, documents and/or internal memoranda (including notes of interview and recommendation to the Board) for other unsuccessful applications from January 2021 to the present time, limited to those 79 applications where questionnaires were completed.
1 Malthus v Laura Fergusson Trust Inc [2022] NZHC 407.
2 As amended in the amended originating application dated 21 April 2022.
(v)Internal documents/Board notes dealing with the reasons for refusal of unsuccessful applicants, limited to those 79 that completed the questionnaire.
[4] The respondents have agreed to provide “all materials considered by the Board in relation to each of the four declined applicants that form the basis of the Board’s decision together with Board minutes and papers documenting relevant decisions”. It says this encompasses (i) to (iii) above.
[5] Originally the applicants’ document request was much wider than at [3] above. In particular it related to all applications (something in the order of 200–300) made in the relevant period (between January 2021 and the present). They now seek documents for only the 79 who completed the questionnaire introduced by the Board as part of the application process. The applicants have also abandoned their application for the following: copies of questionnaires and documents relating to successful applications for membership in the period from January 2021 to the present time and documents evidencing voting on “applications for joinder” in the period from January 2021 to the present time.3
[6] As to the documents in categories (iv) and (v) above, there are three key issues raised by the Board:
(a)whether the application should be confined to the four named applicants in the pleadings or whether it should extend to other unsuccessful applications;
(b)whether the application is unduly onerous; and
(c)whether privacy concerns can be adequately addressed.
3 Applicant’s reply submissions dated 23 May 2022.
Submissions
[7] Mr Dale QC, for the applicants, says that given the number of declined applications and the importance of the issue, the materials relating to all declined applications should be discovered. As noted, he now recognises that this should be limited to those that had completed the required questionnaire and accepts that applications that were abandoned are not relevant or insufficiently relevant.
[8] Mr Galbraith QC, for the respondent, points out that the cause of action is being heard as an originating application and in my judgment of 28 February 2022 it was said that discovery and factual dispute would be limited. He says discovery of documents outside of what the Trust has agreed to is going beyond that limited scope and criticises it as overly “forensic”.
[9] He says the pleaded claim only specifically refers to the four named people. They are the “only pleaded manifestation” of the Board’s alleged strategy of declining applications and as such discovery relating only to those four applications (as well as general policy/process documents) should be sufficient to fairly dispose of the pleaded claim. Further the offered discovery addresses categories (i) to (iii) above.
[10] Mr Galbraith points out none of the membership applicants outside the four named have given an affidavit or are otherwise before the Court, apart from a Ms McMillan. They may not even be aware of the proceedings.
[11] Mr Galbraith submits that the burden of the discovery will be significant. The Trust is operating with minimal staff (three members) who are already occupied with an unrelated regulatory request for documents.
[12] He says that the broader discovery will expose private and personal information of the additional individuals to the applicants, the Court and potentially the public without their consent. Application materials contain highly sensitive and personal information such as names, address, bank details, personal background and interests. Discovery may also reveal other documents that comment on specific applicants and their personal circumstances. Redaction could not be accurately achieved without compromising the accuracy or completeness of the record and would
result in cost, delay and burden. In reply Mr Dale responds that any privacy issues can be addressed by seeking consent or by redaction, and on an interim basis undertakings can be given.
[13] The respondent argues that if this discovery application is allowed then it will have to apply for discovery from the applicants. To do otherwise with this level of discovery would be procedurally unfair. In reply Mr Dale responds that this is not a relevant consideration and if the Trust considers it is entitled to information it should make its own application to be considered on the merits.
Discussion
[14] The Trust says the discovery it has offered to provide meets the claim. However, as the Trust itself notes, the fourth cause of action claims that not only did the Trust act in breach of contract by declining the four specified applications, it “adopted a strategy of declining any applications” that may have challenged the Board’s position. Clearly documentation relating to wider declined applications is relevant to that claim.
[15] The applicants have responsibly recognised, in response to Mr O’Brien’s affidavit, that requiring documentation relating to applicants who failed to complete the application process would not be relevant to their claim. They have since limited their application to the 79 individuals who completed the questionnaire but were declined since January 2021. This is a much lower burden than the two or three hundred applications that Mr O’Brien referred to in his affidavit.
[16] The privacy concerns raised by the Trust may be somewhat overstated. Upon my review of the handful of questionnaires attached to Ms Carter’s affidavit, none contain addresses or bank details nor does the template request this information. In Mr O’Brien’s affidavit it is stated that bank details are on record only for those that mistakenly paid the membership fee in advance and needed to be refunded.
[17] Nonetheless I consider this point can be circumvented by the applicants obtaining signed consent from the 79 people that the documents can be provided to them for purposes of this proceeding. My understanding is that the applicants already
have most of the relevant contact details. To the extent not, the Trust is to provide them.
[18] I do not consider the end result will be onerous, especially with the much lower numbers involved. My reference earlier to discovery being “limited” remains valid. I will allow 40 working days for discovery. If further time is required the parties can hopefully make arrangements between themselves. There is ample time between now and the hearing. The costs of discovery will be one of the issues to be resolved.
Result
[19]I order discovery of the documents set out at [3] above within 40 working days.
[20] The applicants are to obtain written consent from each membership applicant before receiving documents relating specifically to that person’s membership application.
[21] As was the case with my previous judgment I consider that issues of costs should be left until the substantive resolution of this matter. Accordingly, costs are reserved.
Hinton J
Solicitors:
TGT Legal, Auckland Bell Gully, Auckland
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