HHP Society Incorporated v Aiqiong
[2025] NZHC 122
•11 February 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-001898
[2025] NZHC 122
BETWEEN HHP SOCIETY INCORPORATED
Plaintiff
AND
WANG AIQIONG
First Defendant
HU WENBIN
Second Defendant
Hearing: 10 February 2025 Appearances:
D J Pine / H Sutcliffe for the Plaintiff D K Wilson for the Defendants
Judgment:
11 February 2025
JUDGMENT OF ASSOCIATE JUDGE COGSWELL
This judgment was delivered by me on 11 February 2025 at 3.30 p.m. pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date.......................................
Solicitors:
Clendon Webb, Auckland Henry Feng Lawyer, Auckland
D J Pine/H Sutcliffe, Auckland D K Wilson, Auckland
HHP SOCIETY INC v WANG [2025] NZHC 122 [11 February 2025]
Introduction
[1] The plaintiff seeks summary judgment on two causes of action against the first and second defendants, breach of confidence and breach of fiduciary duty.
[2] The claims arise from the release by the first and second defendants of confidential information held by the plaintiff about its members. The defendants admit making this disclosure.
[3] On 13 September 2023 the Court granted interlocutory injunction orders against the defendants. The plaintiff now seeks to have those orders made permanent.
[4] The defendants seek to resist summary judgment due to unlawful conduct allegedly carried out by members of the plaintiff, which they say means that the plaintiff should be disentitled to a permanent injunction on the grounds that the plaintiff does not come to this Court with clean hands. For the reasons set out below, that argument is not accepted.
Background
[5] The plaintiff is an incorporated society registered in New Zealand, and operates as a charitable organisation promoting, it says, the practice of “Daren” or “People First”. The plaintiff maintains a confidential register of members containing personal details of approximately 1,000 persons both in New Zealand and China. Those details include the names, addresses, email addresses and other details of the members.
[6]The defendants were long-standing members of the plaintiff.
[7] They previously held positions of responsibility at the plaintiff. The first defendant was responsible for handling the plaintiff’s communications with members in regions outside New Zealand. The second defendant assisted in managing the plaintiff’s finances, including payment processing. Both of these roles gave the defendants “unfettered access to the [Membership] register”.
[8]The defendants’ membership of the plaintiff ceased in October 2022.
[9] Following the end of their membership, the defendants forwarded the plaintiff’s membership list to both Chinese and New Zealand government agencies. They admit having done so. The reason given was that they believed that the plaintiff had engaged in activities that “should be investigated”.
[10] Whatever the defendants’ intention was in releasing that information, it does not change the obligation to keep the information confidential. There were no legitimate reasons for the defendants to release the private information of the plaintiff’s members to anyone following the end of their relationship with the plaintiff.
[11] The plaintiff says that the disclosure of this information may have the effect of jeopardising the safety of the plaintiff’s members as a result of potential harassment, detention or persecution by the Chinese government. I do not need to and do not make findings on that point.
[12] This case concerns a simple proposition, the defendants gained access to private and confidential information about the plaintiff’s members, and they did so in circumstances where they were under an obligation to keep that information confidential. They had no entitlement to release it to any party outside of the plaintiff, no matter the purpose.
Approach to summary judgment
[13] The High Court may grant summary judgment under r 12.2 of the High Court Rules if the plaintiff satisfies the Court that the defendant has no defence to any cause of action in the statement of claim.
[14] That expression was examined by the Court of Appeal in Pemberton v Chappell, where the Court held:1
At the end of the day rule [12.2] requires that the plaintiff “satisfies the Court that a defendant has no real defence”. In this context the words “no defence” have reference to the absence of any real question to be tried. That notion has been expressed in a variety of ways, as for example, no bona fide defence, no reasonable ground of defence, no fairly arguable defence…
1 Pemberton v Chappell [1987] 1 NZLR 1.
[15] The Court is able to take a robust approach to conflicts of evidence, but in this case, the release of the information is admitted by the defendants. The only issue is whether there was some justification for that or whether there is some disentitling conduct on the part of the plaintiff. I find that there was no justification for the defendants’ actions, nor any disentitling conduct.
The Plaintiff’s claims
[16]The plaintiff advances two causes of action:
(a)breach of confidence on the basis that the defendants obtained confidential membership information through their roles with the plaintiff and wrongly disclosed that information; and
(b)breach of fiduciary duty on the basis that the defendants held positions within the plaintiff which created fiduciary obligations to the plaintiff and its members which they breached through their unauthorised retention and intentional disclosure of confidential information.
Breach of confidence
[17] The defendants breached confidentiality by the unauthorised dissemination of the plaintiff’s members’ details. There are three elements to establish an obligation of confidence:
(a)the information in question must be of a confidential nature;
(b)the information must have been imparted in circumstances importing an obligation of confidence; and
(c)the defendant must be about to make or have made unauthorised use or disclosure of the information.2
2 AB Consolidated Ltd v Europe Strength Food Co Pty Ltd [1978] 2 NZLR 515 at 520.
[18] The plaintiff cites AB Consolidated Ltd v Europe Strength Food Co Pty Ltd as authority for the relatively low qualification threshold for a breach of confidence to occur. AB Consolidated Ltd provides that:
(a)an obligation to respect confidence is not limited to cases where the parties are in a contractual relationship; and
(b)the law on the subject does not depend on any implied contract. It depends on the broad principle of equity that “he who has received information in confidence shall not take unfair advantage of it. He must not make use of it to the prejudice of him who gave it without obtaining his consent”.3
[19] In the present case, members providing their contact and other detailed information to the plaintiff were entitled to expect that information to be protected by the plaintiff, only used for the purposes for which it was disclosed to it and not disclosed to non-parties.4
[20] As the plaintiff submits, the defendants only obtained access to the information through their positions of trust held with the plaintiff. That right of access ceased upon termination of their membership.
[21]I find that the information in this case:
(a)had the necessary quality of confidence;
(b)was imparted to the defendants in circumstances implying an obligation of confidence; and
(c)there was unauthorised use or disclosure of the information to the detriment of the plaintiff.
3 Ibid at 520.
4 Privacy Act 2020, section 22, Information Privacy Principles 5, 10, 11 & 12.
[22] There is actual loss or damage suffered by the plaintiff as a result of its members’ details being disseminated in breach of the duties of confidence the defendants were imposed with. That wrongful dissemination potentially exposes the plaintiff to claims by members relating to that unauthorised disclosure.
[23] The Privacy Act 2020 acts to protect an individual’s right to privacy of personal information. Breach of the Information Privacy Principles (IPP) can result in investigations and proceedings against a person that breaches those Principles.
Breach of fiduciary duty
[24] The plaintiff submits that the defendants were subjected to a fiduciary relationship not based on its inherent nature, for example, the fiduciary relationship that arises between solicitor and client or trustee and beneficiary, but because particular aspects of the relationship had that quality.
[25] The plaintiff refers to the case Frame v Smith,5 where it was held that the following factors indicate the existence of a fiduciary relationship:
(a)the fiduciary has scope for the exercise of some discretion or power;
(b)the fiduciary can unilaterally exercise that power or discretion so as to effect the beneficiary’s legal or practical interest; and
(c)the beneficiary is particularly vulnerable to, or at the mercy of the fiduciary holding the discretion or power.
[26] Each of these criteria are met in the current case. I find that there is a fiduciary relationship between the defendants and the plaintiff arising from their access to the private and confidential information provided to the plaintiff by its members.
[27] This obligation extends to the members of the plaintiff, as their interests are represented by the plaintiff. The members of the plaintiff were entitled to expect that
5 Frame v Smith [1987] 2 SCR 99.
their private confidential information would be protected, and not disclosed in an unauthorised way by the defendants, who only gained access to that information as a result of their trusted roles inside the plaintiff.
[28]As the plaintiff points out:
(a)the defendants held positions of significant responsibility within the plaintiff, giving them unrestricted access to confidential member information;
(b)those members were vulnerable to the misuse of their personal information for purposes other than those related to their membership of the plaintiff;
(c)the relationship between the plaintiff and its members, the defendants, was one of trust, particularly that the defendants had unrestricted access to that confidential information.
[29] It is clearly a breach of the fiduciary obligations that were owed by the defendants to the plaintiff for them to retain confidential information, refuse to return it when required, and to disclose it to governmental authorities.
[30] It is no defence to the straightforward imposition of obligations they owed by way of confidence and fiduciary duty to allege that some unspecified conduct of the plaintiff required investigation by “government authorities”. This does not legitimise the unauthorised disclosure of the information by the defendants to non-parties.
The Defendants’ position
[31]The defendants admit the disclosure.
[32] They attempt to resist the entry of summary judgment on the basis that certain persons who are members of the plaintiff undertook unlawful actions against their property and persons. They say that the plaintiff does not seek the injunction with clean hands and so summary judgment should be declined.
[33] This defence is not a defence to the simple proposition set out in the summary judgment application. The information was confidential, it was wrongly released to non-parties without authority.
[34] Whatever is the case regarding the alleged conduct of other members of the plaintiff, I find that that conduct does not provide a defence.
[35] The alleged actions of members of the plaintiff cannot be attributed to the plaintiff. It is a separate legal entity. It denies involvement. There is no independent evidence that the plaintiff authorised or directed the conduct.
[36] The Court in Equiticorp Industries Group Ltd v The Crown6 held that while the directors of Equiticorp and its subsidiaries had engaged in breaches of fiduciary duties and breach of statute, the companies had not been participants in the fraudulent schemes. The Court held that the principle of agency that principals (the companies) are affected by any notice or knowledge which their agents possess (the directors), is “subject to an exception where the agent is acting in fraud of the principal.” The clean hands plea failed as “the dishonest and illegal conduct of the directors cannot be attributed to the plaintiff companies.”
[37] The same position applies in this case. The alleged illegal conduct of members of the plaintiff cannot be attributed to the plaintiff. There is no credible evidence of the plaintiff’s involvement.
[38]The defence of a lack of clean hands fails.
[39] The defendants also say that there was evidence filed for the interim injunction application that was ruled confidential by Order of the Court that they have not seen. The open evidence in support of the plaintiff’s application for summary judgment and the defendants’ admission as to the disclosure of the information by them is adequate to dispose of the issue before the Court on summary judgment. The defendants have the information before them necessary to defend this claim. There is no defence to it.
6 Equiticorp Industries Group Ltd v The Crown [1988] 2 NZLR 481.
Summary judgment granted
[40]It is inarguable in this case that:
(a)the key fact, being the unauthorised dissemination of the confidential information, is admitted by the defendants;
(b)the defendants were under legal obligations of confidence and fiduciary duty owed to the plaintiff not to disseminate information in an unauthorised way to non-parties, being persons with no proper interest in the information;
(c)the defendants have raised no reasonably arguable defence to the admitted unauthorised dissemination of the information;
(d)the members had a reasonable expectation that their confidential private information would be protected by the plaintiff and the wrongful release of the information potentially exposes the plaintiff to loss.
[41] For the reasons set out above, I find that the defendants have no reasonably arguable defence to the plaintiff’s claims.
[42] Accordingly, the Court grants summary judgment on both of the plaintiff’s claims.
The terms of the judgment are:
1.Judgment is granted on both causes of action.
2.The Court grants a permanent injunction against the first and second defendants in the following terms:
(a) the first defendant Wang Aiqiong is restrained from disseminating to any person via any medium, any records, documentation or information possessed by or available to her and
having come into her possession or availability on account of her membership of HHP Society Incorporated and/or any position of responsibility she held with or on behalf of HHP Society Incorporated, including (but not limited to) the Registrar of Members of HHP Society Incorporated;
(b) the first defendant Wang Aiqiong must hand over to HHP Society Incorporated all physical records, documents and/or information relating to the membership and financial information of HHP Society Incorporated;
(c) the first defendant Wang Aiqiong must destroy or delete all electronic records, documents and/or information relating to the membership and financial information of HHP Society Incorporated;
(d) the second defendant Hu Wenbin is restrained from disseminating to any person via any medium, any records, documentation or information possessed by or available to him and having come into his possession or availability on account of his membership of HHP Society Incorporated and/or any position of responsibility he held with or on behalf of HHP Society Incorporated, including (but not limited to) the Register of Members of HHP Society Incorporated;
(e) the second defendant Hu Wenbin must hand over to HHP Society Incorporated all physical records, documents and/or information relating to the membership and financial information of HHP Society Incorporated;
(f) the second defendant Hu Wenbin must destroy or delete all electronic records, documents and/or information relating to the membership and financial information of HHP Society Incorporated.
3.Leave is granted to the parties to apply to vary the terms of the injunction.
4.The plaintiff is entitled to costs.
[43] Should the parties be unable to agree costs, then the parties may sequentially file memoranda as to costs of no more than 5 pages, with the defendant to file its memorandum 5 working days following service of the plaintiff’s memorandum. Costs will be determined on the papers.
Associate Judge Cogswell
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