Johnson v Johnson
[2021] NZHC 1369
•10 June 2021
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2018-485-000144
[2021] NZHC 1369
BETWEEN BRYAN EWART JOHNSON, DAVID HOUGHTON WALE AND
CHRISTOPHER DAN WILLIAM AS TRUSTEES OF THE ABEL TRUST
PlaintiffsAND
CRAIG BRYAN JOHNSON AND MARIA BERNADETTE JOHNSON
First Defendants
AND
LITTLE SCHOOL LIMITED
Second Defendant
AND
JOHNSON PRESCHOOL LIMITED
Third Defendant
Hearing: 10 May 2021 Appearances:
A S Butler for Defendant Maria Johnson
A R Galbraith QC and H L Stanford for Defendant Craig Johnson O Jaques – Counsel Appointed to Assist the Court relating to Johnson Preschool Limited
Judgment:
10 June 2021
JUDGMENT OF GENDALL J
This judgment was delivered by me on 10 June 2021 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
JOHNSON v JOHNSON [2021] NZHC 1369 [10 June 2021]
Introduction
[1] Craig Bryan Johnson (Mr Johnson) and Maria Bernadette Johnson (Ms Johnson) were married but separated in December 2014. As I understand it, they are now divorced.
[2] Proceedings have been issued in this Court regarding relationship property and related issues between them. Largely, these concern assets and claims relating to a number of entities in which they have been involved, including the Abel Trust (of whom the plaintiffs in this proceeding 144 are the trustees), Johnson Preschool Limited (the third defendant), Global Horticulture Limited (GHL), in which the parties hold certain shares, and other companies.
[3] The present proceeding 144 (the “Abel Trust proceeding”) is one of four proceedings in this Court involving issues generally related to the relationship property dispute of Mr Johnson and Ms Johnson. The other three proceedings are:
(a)CIV-2020-485-421 (“the Life Learning Aotearoa proceeding”);
(b)CIV-2020-485-417 (“the Simla Crescent proceeding”); and
(c)CIV-2021-485-118 (“the PRA proceeding”).
A substantive hearing, including all four of these proceedings, has been set down for eight days in this Court commencing on 8 November 2021.
[4] Numerous issues (whether relevant to the relationship property dispute or otherwise) have been raised over the last few years between Ms Johnson, Mr Johnson and others. Indeed, on 3 July 2020, in an earlier judgment in this Court related to an aspect of the proceeding involving these parties (the Abel Trust debt recovery proceeding), Associate Judge Johnson noted at para [2] that:1
…The scope of the proceeding has expanded. Why that has happened is not difficult to discern. Craig and Maria (the Johnsons) appear to be engaged in a no-holds-barred relationship property dispute in which their liabilities and
1 Johnson v Johnson [2020] 1563 at [2].
those of their businesses to the plaintiff trustees (of the Abel Trust) are relevant.
Associate Judge Johnston went on to describe the matter before him as an “interlocutory skirmish”. In my view, this aptly describes the present application as well.
[5] This is regrettable, and it seems too that other judicial officers have made similar comments. Remarking on this, Associate Judge Johnston in these proceedings has also hinted at what he described as a “proliferation of the litigation between these parties which seems to have been constant and must raise issues as to whether this was truly necessary.”2
[6] All this has spawned a huge amount of correspondence and communications between the parties, their legal advisers and others. As a product of this, it does appear the animosity level between Ms Johnson and Mr Johnson and also, unfortunately at times, between their legal advisers has been high.
[7] One result of the “no-holds barred” dispute here has been the present application before me filed on 29 January 2021 by Ms Johnson in this Court. In this application, she seeks orders and declarations against Mr Johnson and other parties (essentially his legal advisers) relating to what is said to be a breach of privilege and misrepresentation. Ms Johnson claims that Mr Johnson in an affidavit in this proceeding has breached privilege and made a false statement that has or may have misled the Court. Her application seeks declarations to that effect as well as declarations that various lawyers and counsel who acted for Mr Johnson breached their duty to the Court. They did this, she says, by not remedying the alleged breaches immediately after notice was given, they continued to advance allegations that had been made, and then relied on Ms Johnson’s necessary waiving of privilege. In her application Ms Johnson also seeks indemnity costs. The application, opposed by Mr Johnson and others targeted by Ms Johnson, was the subject of a one-day hearing before me on 10 May 2021.
2 Associate Judge Johnston, Minute of 11 December 2020 in these proceedings at [15].
[8] At the commencement of this hearing Mr Jaques, as counsel who was appointed to assist the Court relating in particular to Johnson Preschool Limited, appeared and sought a declaration as to whether his attendance at the hearing was required. Mr Jaques indicated he had no wish to continue to be present at the hearing but would remain if requested. At the outset I thanked him for his attendance and, given other counsel said he was not required, I indicated he was excused, whereupon he withdrew.
Ms Johnson’s application
[9] Ms Johnson’s 29 January 2021 application is detailed. Specifically, it seeks the following orders and declarations from this Court:
(a)A declaration that the passage in Craig’s affidavit dated 12 February 2020, set out in the appendix below (the Statement), breached Maria’s privilege pursuant to s 53(1) and s 57 of the Evidence Act 2006 in that it referred to and relied on privileged information;
(b)A declaration that the Statement was false and misled or may have misled the Court, in the following respects:
(i)That the matters in the email of 22 November 2019 including without prejudice material, not seen then by the Court, supported the conclusion that there was “demanding by menace”, when that is not so;
(ii)That the without prejudice part of that email addressed relationship property issues, when it did not do so as it only addressed the GHNZ issues;
(iii)That it supported the inference that “all of Maria’s claims are part of the relationship property dispute between the two of us”, when that is not so and the later dispute was not mentioned.
(c)Declarations that:
(i)The 22 November 2019 email provides no grounds to allege demanding by menace or other improper, unethical or unlawful action, including acting with lack of fides, male fide and in bad faith, by Maria and her lawyers;
(ii)Craig had a duty to promptly remedy and remove the said breach of privilege and the said misleading and false statements;
(iii)Craig refused to do so even after the breaches were notified to him;
(iv)In view of the adverse inferences from the Statement without seeing the without prejudice material, Maria had no option but to waive privilege as to that material, an outcome forced by Craig’s said breaches;
(d)Declarations that Craig Stevens and Tiho Mijatov (Craig’s counsel) and Chris Ritchie (Craig’s first solicitor) have breached their duty to the Court by being party to the said breaches by Craig as to privilege, misleading and false statements to the Court and not seeking to remedy those breaches promptly after notice thereof (leading to Maria having no choice but to waive privilege);
(e)Declarations that Craig’s counsel and Rachel Taylor (Craig’s second solicitor) have breached their duty to the Court by:
(i)not seeking to remedy those breaches promptly after notice thereof (leading to Maria having no choice but to waive privilege);
(ii)instead, continuing to advance and rely on the allegations reflected in the Statement which were false, misleading and in breach of privilege;
(iii)relying upon the position forced by Maria having to wave privilege, including by way of submissions to the Court.
(f)Craig’s first and second solicitor and Craig’s counsel are sanctioned for the breaches stated at (d) and (e) above;
(g)Maria may use Craig’s said affidavit in the proceeding to be filed in Court by Maria against Craig seeking, inter alia, relief as to the related alleged breaches by Craig) (the Injunction Proceeding);
(h)The documents filed and to be filed in Court in this proceeding and discovered documents in this proceeding may be used in:
(i)the Injunction Proceeding;
(ii)the proceeding to be brought by Maria against Simon Tyler and five others (the Warehousing Proceeding);
(iii)the proceeding to be brought by Maria under s 178 Companies Act (the s 178 Proceeding);
(iv)and vice versa.
(i)This application is heard with the application for interim injunction in the Injunction Proceeding;
(j)Craig’s first solicitor and second solicitor and Craig’s counsel pay Maria’s indemnity costs or uplifted costs of and incidental [to] this application and of all attendances caused by the said alleged breach of privilege and false and misleading statements (together the indemnity costs), and/or Craig pays same;
(k)Quantum of indemnity costs to be agreed if possible by the lawyers and/or Craig within 14 days, absent which they are to be determined by the Court following memoranda filed by Maria within 21 days, in response 7 days thereafter and in reply by Maria 3 days thereafter.
[10] The “Statement” claimed to breach privilege here, (being the passage in Mr Johnson’s affidavit referred to at [9](a) above), was set out in the appendix to Ms Johnson’s application as follows:
Extract from Craig’s affidavit dated 12 February 2020
“Correspondence from Maria’s lawyer to the trustees of the Abel Trust, myself and their and my lawyers on 22 November 2019 stated that “a complaint will be lodged against them with the Takeovers Panel” and that “all GHNZ shareholders will be written to”. In the same correspondence, Maria’s lawyer went on to deal with our matrimonial dispute on a without prejudice basis. I have been advised that the combination of these matters as set out in that email amounts to demanding with menace. I invite Maria to waive privilege and allow the email, in its entirety, to be put before the court so that the court can consider if all of Maria’s claims are part of the relationship property dispute between the two of us.”
[11] For completeness, it is useful also to set out the grounds Ms Johnson specified and relied upon in her application:
2.The grounds on which each order is sought are as follows:
(a)The Statement is privileged pursuant to s 57(1) even though it was the instigating without prejudice communication and did not contain any information from Craig;
(b)No exception in s 57 is applicable. In particular, s 57(3)(d) does not apply as:
(i)The Statement was disclosed without Craig first, as required, obtaining an order enabling disclosure pursuant to s 57(3)(d);
(ii)In any event, Craig, upon whom the onus lies, could not establish that, quoting s 57(3)(d), “in the interests of justice, the need for the communication or document to be disclosed in the proceeding outweighs the need for the privilege, taking into account the particular nature and benefit of the settlement negotiations or mediation.”
(iii)As without prejudice privilege is important to protect, the authorities confirm that privilege is overridden in only exceptional cases where, materially, “unambiguous impropriety” can be shown;
(c)Maria waived privilege in the without prejudice part of the email but only for the proceeding itself. (The orders as to sharing documents between proceedings extend this beyond but only to those proceedings). She had no choice to do so, particularly given that Craig’s affidavit was misleading and false and wrong. Not to do so left the inference that what he said was correct and that Maria had demanded by menace;
(d)Craig’s first solicitor was replaced by Craig’s second solicitor as solicitor on the record during 2020;
(e)Despite numerous endeavours to have Craig, Craig’s counsel and his solicitors (briefly as to the first solicitor) they have refused to withdraw the assertion and continue to make the assertion both in this proceeding and beyond, most recently in December 2020 and January 2021. They have failed or refused to address reasons given, and the responses and justifications over time have changed back and forward. In particular, Craig’s lawyers have never addressed the reasons given for Craig initially as to why the Statement was wrong.
(f)Maria withdrew from a mediation with Craig given her fear that Craig and his lawyers would again breach without prejudice privilege.
(g)As recently as this month, Craig’s second lawyer and Craig’s counsel have restated that “You are aware of our position and I am instructed that the email was referred to in Court by Mr Stevens as, in our opinion, demanding with menace. As a consequence privilege does not attach.”
(h)This is not just a matter of old history. This is an appropriate case for the declaration sought even though “the cat is out of the bag” in this proceeding. The problems keep continuing and escalating including beyond this proceeding.
(i)The without prejudice provisions in the Evidence Act apply only to use of evidence in proceedings, and thus the Act does not apply breach of privilege and misrepresentation such as in the last paragraph. In that regard, it is necessary to rely upon common law without prejudice privilege, equitable duty of confidentiality and the Fair Trading Act (FTA). On the other hand, this application is governed by the Evidence Act, the Rules and the inherent jurisdiction of the Court, and only the FTA beyond that materially applies to what happens in the proceeding. There is no carve out from s 9 FTA as to conduct in proceedings. Thus this application and the application for an interim injunction in the Injunction Proceeding ought to be heard together, with the Injunction Proceeding addressing matters outside the Court, other than the FTA which overlaps into the Court process;
(j)Demanding by menace is a particularly serious allegation to make of Maria and her lawyers, which includes connotations of criminal conduct, illegal conduct and/or unethical conduct (demanding by menace for example historically being a formulation of the offence of blackmail);
(k)The Statement, including in combination with the open part of the email, does not justify alleging demanding by menace or any other inappropriate conduct including acting with lack of fides, male fides and in bad faith (given that the “lack of fides” assertion is based on what is said in the Statement).
(l)Craig and his solicitors and counsel have failed or refused to correct and remedy the breaches notwithstanding notice, and they had a duty to so correct and remedy;
(m)Given that overlapping problems continue both in and out of this proceeding, this is an appropriate case in which to make the sought declarations;
(n)Craig’s solicitors and counsel have breached their duty to the Court leading to liability for costs (and/or there ought be liability under Part 14 HCR);
(o)The Court has inherent jurisdiction to discipline and sanction lawyers as officers of the Court;
(p)“Counsel must not mislead the Court, he must not lend himself to casting aspersions on the other party or witnesses for which there is no sufficient basis in the information...The same public duty applies when drawing pleading or conducting subsequent stages in a case…”. “[C]ounsel do not have carte blanche to behave in any way they please and to make scandalous allegations against others which are without any foundation. Counsel must conduct themselves so as to meet their obligations as officers of the Court and their ethical obligations under the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2009.
(q)Craig’s solicitors and counsel have, inter alia, claimed the later waiver of privilege means there are no breaches when that is not the case.
(r)The implied undertaking as to use of material filed in Court (and the undertaking in the Rules as to discovered documents) requires leave to use it in other proceedings. The Courts have thus far made overlapping orders in the various overlapping proceedings.
(s)In the following affidavits:
(i)Craig’s dated 12 February 2020;
(ii)Hannah Stanford dated 6 May 2020;
(iii)Maria’s dated 11 June 2020 and 2 February 2021;
(t)Memoranda of Counsel for the hearing of the derivative action application dated 10 June 2020 for Maria and in response for Craig;
(u)Documents to be filed in the forthcoming Injunction Proceedings including an affidavit from Maria and grounds stated as to the application for interim injunction.
(Footnotes omitted)
Notice of opposition by Mr Johnson
[12] On 5 February 2021, Mr Johnson filed a notice of opposition to the present application. In opposing the making of any of the orders sought he set out the following grounds:
(a)There is no basis to make the declarations because they all arise out of an email dated 22 November 2019 sent by M B Johnson’s solicitors [Mr Michael Wigley] in circumstances where:
(i)The dispute is in substance a request for an evidential ruling on the admissibility of the email, which renders the orders sought unnecessary. The matter could be determined at the commencement of the eight day fixture scheduled for this matter in November 2021 so the application should be dismissed and determined accordingly.
(ii)The email is not privileged as it is not correspondence as between solicitor and client. Any privilege that might have attached was expressly and unambiguously waived, in writing by the applicant’s solicitor and thereafter produced and referred to.
(iii)Without prejudice protection does not attach to the email. It was not made in connection with an attempt to settle or mediate the dispute. The email constitutes demanding by menaces: an improper attempt to extort money from various persons including the respondent. This unlawful purpose deprives the communication of any protection that it might otherwise justify.
(b)There was no breach of duty to the Court or otherwise, by the respondent, his solicitors or counsel, in or out of Court at any time.
(c)There is no basis for costs to be ordered against solicitors or counsel personally.
The 22 November 2019 email
[13] As the present application does centre on the correspondence contained in a 22 November 2019 email sent from Mr Wigley, counsel for Ms Johnson, it is also useful to set out this email in full:
From: Michael Wigley <[email protected]>
Sent: Friday, 22 November 2019 8:13 p.m.
To: [email protected]; Marlo Greenhough [email protected]>; [email protected]; [email protected]
Cc: [email protected]; Marlo Greenhough <[email protected]>
Subject: FW:GHNZ
Dear all,
I am writing to Craig Johnson as JIML director, David Wale and Bryan Johnson as directors of JCL and David Wale personally. I have copied in the lawyers acting for Messrs Johnson in their personal capacities so that dots are joined.
No response having been received from JIML, JCL and Mr Wale (a) a complaint will be lodged against them with the Takeovers Panel and (b) all GHNZ shareholders will be written to, in both cases with a copy of our long letter and memo, confirmation JIML, JCL and Mr Wale have not responded. This includes as to the allegations on which Maria reserved her position to enable you to respond. As there is a robust case to answer, the lack of explanation by JIML, JCL and Mr Wale is telling, in the context of the consequences for Mr Wale, JCL and JIML of our client taking this action. Maria can assume that there is nothing to be said that exonerates them.
As some parties have been given until later this week to address some issues, this action won’t be taken until after Thursday. You may respond by then, but it is assumed JIML, JCL and Mr Wale will not elect to do so.
The rest of this email is without prejudice, Maria seeks a dollar resolution of all her issues, wherever the funds come from, but once the Panel has been written to and the shareholders written to, the matter then becomes very different from that point of view, including that, particularly as to notifying the Panel seeking them to take civil action for GHNZ and the shareholders, for example, that triggers an inevitable path from which there is not likely to be a turning back.
There is a number of addressees of our letter, with some electing to allow things to play out at this stage, and others responding more substantively. Settlement likely requires collaboration to achieve that. We are happy to participate, aware of the challenges of multiple parties addressing that.
I am saying this to be clear as to the objectives and opportunities here, so that the narrow window is not lost. I remain firmly instructed to proceed as foreshadowed absent resolution or material from parties showing there is no claim. Maria won’t allow material delay as to discussions too.
Maria will also consider settling with individual parties separately. Regards
Michael
My analysis
[14] At the outset, it is important to note as all parties accept that, despite the application before me, Ms Johnson, through Mr Wigley, has now formally waived any privilege originally claimed with respect to those paragraphs 4, 5, 6 and 7 (“the privilege claim material”) of Mr Wigley’s emailed letter outlined at [13] above. As I see it, this must mean that the initial declaration sought by Ms Johnson in her application is largely otiose. By withdrawing her claim for privilege over the privilege claim material (so far as this and related proceedings are concerned), Ms Johnson effectively abandons for practical purposes what was a request for an evidential ruling on the admissibility of this portion of Mr Wigley’s email. I agree with Mr Galbraith, counsel for Mr Johnson, that this actually renders a significant number of the declarations sought here as unnecessary. Real questions arise, therefore, as to whether any useful purpose is served in the ongoing dispute between Ms Johnson and Mr Johnson in continuing arguments on alleged breach of privilege and related matters. They will not assist in resolving the principal issue driving matters between these parties, which is their overall relationship breakdown and property disputes.
[15] This must beg the obvious question as to what is hoped to be achieved by the current matter remaining before the Court at this point. Notwithstanding this, the hearing before me of Ms Johnson’s opposed application continued on 10 May 2021. It occupied almost one full day. For completeness, therefore, I will make some brief comment, first, about the privilege claim material and s 57(1) of the Evidence Act 2006, secondly, the related complaint by Ms Johnson over the Statement being what was said to be the offending passage in Mr Johnson’s 12 February 2020 affidavit and, thirdly, about subsequent events.
Privilege claim – s 57 Evidence Act 2006
[16]Section 57(1) Evidence Act 2006 states:
57Privilege for settlement negotiations, mediation, or plea discussions
(1)A person who is a party to, or a mediator in, a dispute of a kind for which relief may be given in a civil proceeding has a privilege in respect of any communication between that
person and any other person who is a party to the dispute if the communication—
(a)was intended to be confidential; and
(b)was made in connection with an attempt to settle or mediate the dispute between the persons.
[17] Here, the claimed privilege statement in Mr Wigley’s 22 November 2020 email at first glance would seem to be a communication from Mr Wigley intended to be confidential and made in connection with an attempt to settle a dispute involving Ms Johnson. That dispute, as I have noted, relates essentially to her relationship property dispute with Mr Johnson. It also has involved however a range of peripheral matters including issues over companies in which the parties hold shares and the Abel Trust.
[18] For present purposes, I start from the proposition that the communication in question was privileged in terms of s 57(1) of the Evidence Act 2006 and that without prejudice protection remains. Indeed, in his inviting Ms Johnson to waive privilege and allow the email to be put before the Court in its entirety, as Mr Johnson did in his 12 February 2020 affidavit noted at [10] above, it might be said he accepted at that point that the communication in question was privileged. Despite this, and given the fact that Mr Johnson now contends this portion of the email constituted “demanding by menaces” as he claims it was an improper attempt to extort money from various persons, including him, I will turn briefly to consider this breach of privilege claim. And, in any event, given that any privilege claimed has now been waived by Ms Johnson, I will give this matter only a cursory consideration. This will necessarily include Mr Johnson’s contention that the email included an unlawful purpose, which deprived it of any protection it might otherwise justify. If these matters remain of some relevance in the parties’ November 2021 substantive hearing which is fast approaching, then they can be determined for all purposes at the commencement of that 8 day fixture. As I understand it, that fixture has been scheduled for some time.
[19] On this privilege claim aspect I will address only briefly the lengthy arguments advanced before me. These include suggestions at a general level from Mr Galbraith that, in the overall context in which Mr Wigley’s 22 November 2019 communication was sent, no privilege should attach to any portion of the email and, in any event, these
issues became irrelevant subsequently when the privilege claim was waived. Before me, Mr Galbraith went on to maintain that this issue of claimed privilege is one which should simply have gone away shortly after 22 April 2020. To an extent I agree. Instead, as Mr Galbraith complains, it was a matter raised continually by Ms Johnson’s legal advisers, and their responses increased regularly to include what Mr Galbraith says are unsubstantiated allegations of actual malice on the part of Mr Johnson and his advisers. All this, and attendant complaints from Mr Wigley made regularly in response, in my view, can only be seen ultimately as both unfortunate and unhelpful in resolving sensitivities held by all parties in this matter.
[20] But, turning now to briefly address Ms Johnson’s privilege claim, the general basis here for asserted settlement privilege is public interest and/or express or implied consent.3 The rationale for this and the attendant public policy considerations are essentially to exclude evidence of settlement negotiations including admissions against the interest of a party, in order to encourage the opportunity for both parties to compromise their dispute. Fundamental to these aspects is that the communication for which privilege is claimed is made on a privileged occasion in a genuine attempt to achieve settlement.
[21] The Courts however will not apply privilege to communications which have some purpose beyond settlement including what has been described as the “opening shot” in negotiations which may be seen as lacking a settlement character. By way of example, where the opening shot is merely an assertion of a person’s claim and nothing more than that, then prima facie it is not protected. Further, in situations where there are wide ranging settlement negotiations being undertaken between disputing parties, the Courts may deny privilege where there is a high degree of impropriety.4 In Bradbury v Westpac Banking Corporation the Court of Appeal stated:5
“83 …A letter [protected otherwise by the without prejudice privilege now embodied in s 57 of the Evidence Act 2006] containing a threat will be characterised not as making an offer the law will protect but as unlawful conduct in respect of which it will grant relief.
3 Evidence Act 2006, s 57(3); Sheppard Industries Ltd v Specialised Bicycle Components Inc [2011] NZCA 346.
4 Unilever PLC v The Procter & Gamble Co [2000] [1WLR 2436]; Bradbury v Westpac Banking Corporation [2009] NZCA 234.
5 Bradbury v Westpac Banking Corporation [2009] NZCA 234.
[22] In the present case, Mr Wigley’s 22 November 2019 email was sent to Mr Johnson, his father Mr Bryan Johnson and Mr David Wale who are directors of the third defendant Johnson Preschool Limited, and various counsel involved. So far as “opening shot” arguments advanced on behalf of Mr Johnson are concerned, I accept there is some strength in Mr Galbraith’s contention that the circumstances of this email do not attract the Unilever case privilege. There is nothing before me to indicate there was any consent express or implied between the parties involved of entering into settlement negotiations. The terms of Mr Johnson’s email communication did not suggest any compromise of arguable but differing positions. Nor was there any hint of admissions against interest made. Read overall in the context of Mr Wigley’s “long letter”, which this email threatened to circulate to company shareholders in GHL and the Takeovers Panel, there is a reasonable argument as I see it that this constituted a threat to cause significant damage to a range of parties unless Ms Johnson achieves what is described as “a dollar resolution of all of her issues, wherever the funds come from.”
[23] On these aspects Mr Butler for Ms Johnson properly emphasised that this material exception to the existence of privilege applies only where there is:
“Unambiguous impropriety and this threshold is high because of the important value attached to the privilege and protection it affords.”6
[24] Mr Butler contended here that even if Mr Wrigley’s email was improper, it fell well short of the required standard of impropriety. Therefore he contends privilege clearly existed in this case and was breached.
[25] Mr Butler went on to argue that declarations such as those sought here can be granted where they serve some useful purpose.7 He said a declaration is needed because Mr Johnson failed to properly respond to correspondence to explain why there was a breach of privilege and misrepresentation on his part in his offending affidavit, until he was written to in June 2020. Instead, Ms Johnson’s position is that Mr Johnson and his advisers escalated the situation. They did this Ms Johnson says by repeating several more claims that she had demanded by menace such that it was verging on
6 Birkenfield v Kendall (2008) NZCA 531 at [41]–[42].
7 Above n 6, at [42].
extortion, and also that she had showed bad faith. These problems, according to Mr Butler, continue and warrant the making of the declarations sought.
[26] In response Mr Galbraith suggests Mr Wigley’s 22 November 2019 email was not issued on a settlement basis to compromise Ms Johnson’s position in any way. Nor could it be said that it contained any statements that risked prejudice to her. As I see the position, first, there is some substance in these arguments advanced by Mr Galbraith. Secondly, I accept too the suggestion this communication at best had the character of an “opening shot”, in that it was addressed not only to Mr Johnson but also to a range of peripheral parties and given too that it merely asserted by way of a claim for money what Ms Johnson might otherwise do. Generally, in my view it tended to lack any overall settlement character.
[27] In my judgment there is also some force in the argument that this email did intentionally contain an explicit and collateral “threat” otherwise to cause harm, by lodging a complaint against individuals with the Takeovers Panel and by widely circulating a detailed communication to all shareholders in GHL. In context, the bald unilateral proposition in the email might be seen as one of “pay or else”. In my view, if there had been a public interest in the comments expressed in the letter requiring a reference to the Takeovers Panel, then it was to report the matter to the Panel and not to seek payments from the parties to whom the email was addressed. But having said that, on reflection at this point, to a degree it might perhaps be thought unfortunate that Mr Johnson and his advisers decided to escalate the label chosen for this “threat” to that of “demanding by menaces”, a reasonably serious allegation. But that is now by the by. Questions over whether all this did actually comprise a “threat”, and if so its final nature and impact, are factual matters for the Trial Judge (if thought to be relevant), after proper testing and consideration of all the evidence.
[28] Notwithstanding this, it is useful here that I express my preliminary view on this issue before me which I now do.
[29]As I see it, the better view on all of these matters is:
(a)Although part of the 22 November 2019 email was expressed to be without prejudice, that email did not compromise Ms Johnson’s position nor did it contain statements that risked prejudice to her;
(b)instead, it contained by way of a unilateral statement an explicit threat to cause what can only be seen as significant harm unless moneys were paid to Ms Johnson;
(c)this explicit threat meant that what is accepted as a high threshold of unambiguous impropriety is reached here;
(d)section 57 of the Evidence Act does not apply and there is therefore no defensible privilege attaching to the email in question;
(e)because no such privilege exists here there is no foundation to the claim of an alleged breach by Mr Johnson or his advisers;
[30] Conversely, it might be noted also that, even had the position been different and there had been privilege attaching, this was subsequently waived by Ms Johnson for her own reasons. Therefore, I fail to see how at this point there have been any significantly adverse consequences to her overall position.
[31] On this aspect, the Court of Appeal in Birkenfield v Kendall8 has also commented:
“… if a declaration will still serve some purpose, then the Court will be favourably disposed to granting declaratory relief. If, however, the declaration would serve no purpose the Court might well take the view that it was unreasonable for the claimant to continue with the action and in these circumstances refuse to grant declaratory relief.”
[32] In all the present circumstances, I need to add that in any event I find also that there would have been nothing to be gained from a Court declaration relating to the privilege matter as requested by Ms Johnson. No evidence was before me that making such a declaration would mitigate or prevent ongoing problems between these parties.
8 Above n 6, at [42].
Such a declaration as I see it would at most have been a pyrrhic victory. There is no value in the Court providing such a declaration.
[33] The application by Ms Johnson for a declaration relating to the alleged breach of privilege issue as outlined at [9](a) above is refused.
Allegedly offending passage from Mr Johnson’s affidavit
[34] I turn now to briefly consider the second aspect noted, above relating to the “Statement” involving the allegedly offending passage from Mr Johnson’s 12 February 2020 affidavit.
[35] The essential complaint Ms Johnson makes regarding the “Statement” relates to the comment by Mr Johnson that “I have been advised that the combination of these matters as set out in that email amounts to demanding with menace.” Ms Johnson seeks in her application a declaration that this statement is false and misleading. This is on the basis she says that no material of any kind is before the Court to support the conclusion there was “demanding by menace” on her part, and further, that nothing in Mr Wigley’s 22 November 2019 letter supported the inference that “all of Maria’s claims are part of the relationship property dispute between the two of us”. Ms Johnson’s application thus seeks additional declarations against Mr Johnson and also a range of his legal advisers as I outline at [9](b)–(e) above.
[36] These declarations essentially seek orders first, that Mr Wigley’s 22 November 2019 email provides no grounds to allege demanding by menace or any other improper, unethical or unlawful action by Ms Johnson and her advisers, secondly, that obligations existed on the part of Mr Johnson and his legal advisers to promptly remedy what are said to be their misleading and false statements, and thirdly, given this has not occurred, Mr Johnson’s various legal advisers have breached their duty to the Court and should be sanctioned.
[37] Turning to the Statement itself, it is useful to repeat the first sentence which reads:
Correspondence from Maria’s lawyer to the trustees of the Abel Trust, myself and their and my lawyers on 22 November 2019 stated that “a complaint will
be lodged against them with the Takeovers Panel” and that “all GHNZ shareholders will be written to”.
This sentence, as I see it, is simply a factual statement as to what was said in the email. It is accurate and unobjectionable.
[38]The next sentence reads:
“[i]n the same correspondence, Maria’s lawyer went on to deal with our matrimonial dispute on a without prejudice basis”.
This sentence is also objected to. In my view however, statements in the last four paragraphs of Mr Wigley’s 22 November 2019 email, (labelled without prejudice) which specify: “Maria seeks a dollar resolution of all her issues wherever the funds come from” (emphasis added) and “settlement likely requires collaboration to achieve that”, given the overall objective of the parties to resolve what is a significant relationship property dispute, might provide some support to Mr Johnson’s claim that this email was addressing, at least in part, that matrimonial dispute.
[39]And, in the following sentence, Mr Johnson states:
I have been advised that the combination of these matters as set out in that email amounts to demanding with menace.
It is presumed again that this is a factual statement in that it represents the advice Mr Johnson has received, presumably from his legal advisers. At one level it could simply be said, Mr Johnson is outlining advice he has received and nothing more. At another level, it might be seen as an allegation against Ms Johnson. Ultimately the 22 November 2019 email in its entirety will be before this Court at the substantive 8 November 2021 hearing involving Mr and Ms Johnson. It is for the Judge there to make of these matters what she or he will, assuming in any event that they may be seen as relevant to issues before the Court.
[40] Apart from Ms Johnson’s present application, and the repeated communications in particular from Mr Wigley denying the demanding with menace claims, and requesting retractions, as I understand it, others have chosen to take this matter no further. No police complaints have been lodged, nor professional complaints made.
[41] And lastly, as I have noted above, Ms Johnson, has chosen now to waive her claim to privilege. The entire email will be before the Court at the substantive hearing. As I have said, if the Court at that time thinks these issues might be relevant and need addressing, they will be matters to be determined then. I see no useful point in proceeding with any further exploration of these issues at this point, other than to say that I have seen nothing in the voluminous material put before the Court to date to suggest the Court has been misled or that advisers may have breached their respective duties to the Court.
[42] Overall then, it will be apparent that I do not intend to make any affirmative ruling or comment on Ms Johnson’s claim and the declarations sought that the 22 November 2019 email provides no grounds to allege demanding by menace (or other improper action), on her part and on the part of her legal advisers and the related declarations and sanctions sought as outlined at [36] above. Her application for those declarations also fails.
Subsequent events
[43] As I have noted at [3] above, this proceeding 144 is one of at least four proceedings filed in this Court relating to Ms Johnson and Mr Johnson, and issues concerning their relationship property dispute. As I understand the position, two additional sets of proceedings are signalled as likely to be issued by Ms Johnson at this point.
[44] The substantive hearing for all these proceedings is set down to commence in this Court on 8 November 2021. It is scheduled to occupy eight sitting days.
[45] Matters which are relevant to this forthcoming hearing clearly need to be progressed.
[46] Before me Mr Galbraith has described the current application as unnecessary and wasteful.
[47] Mr Butler in turn has submitted to me that prior to the filing of this application by Ms Johnson, there were multiple invitations made on her behalf by Mr Wigley to
“let things lie” with regard to this privilege question, and to deal with issues in a collegial way. Unfortunately, he added, this did not happen.
[48] Be that as it may, it seems to me that the lengthy and convoluted litigation in which Ms Johnson and Mr Johnson have become embroiled to date, has been made more complex (rightly or wrongly) by a range of what can perhaps be regarded as potentially peripheral issues to their underlying relationship property dispute, including the present application. That relationship property dispute needs to be finally resolved. The November 2021 hearing date in this Court will hopefully bring to a head what matters are relevant to the real issues between these parties. In the meantime, energy should be directed to this end.
Results
[49]For all the reasons I have outlined above:
·The declarations sought by Ms Johnson in her Application as outlined at para [9](a), (b), (c), (d) and (e) above are refused;
·The sanction orders sought at para [9](f) above are also refused;
·No orders are made as sought at paras [9](g), (h) and (i) above; and
·Costs as sought by Ms Johnson at paras [9](j) and (k) above are refused, (given as I note below it seems to me at this point that, as the successful party, costs should be awarded to Mr Johnson here).
Costs
[50] Mr Johnson has effectively succeeded in opposing Ms Johnson’s present application and I see no reason why he should not be entitled to costs in the usual way. I heard no submissions on costs from counsel at the hearing of this matter however.
[51]Costs are reserved, therefore.
[52] Counsel for the parties are encouraged to liaise with a view to endeavouring to resolve the question of costs between themselves. In the event that this cannot be achieved, counsel may file memoranda on the issue of costs on a sequential basis and these are to be referred to me. A decision on costs will then be issued based on those memoranda and all the material then before the Court.
……………………………………
Gendall J
Solicitors:
Lane Neave, Wellington
DLA Piper New Zealand, Wellington Wigley and Company, Wellington
Copies to:
A S Butler, Barrister, Wellington
R Fowler QC, Barrister, Wellington O Jaques, Barrister, Wellington
A R Galbraith QC, Barrister, Auckland
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