Jones v Llanhennock Trust Partnership
[2020] NZHC 1409
•22 June 2020
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2020-419-53
[2020] NZHC 1409
BETWEEN GREGORY JOHN JONES
Appellant
AND
LLANHENNOCK TRUST PARTNERSHIP
First Respondent
CAMBRIDGE VETERINARY SERVICES (1980) LIMITED
Second Respondent
VETERINARY PROFESSIONAL INSURANCE SOCIETY (INC)
Third Respondent
Hearing: 19 June 2020 Appearances:
Appellant in person
A Darroch for Second and Third Respondents
Judgment:
22 June 2020
INTERIM JUDGMENT OF LANG J
[on appeal against refusal to order discovery by non-parties]
This judgment was delivered by me on 22 June 2020 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date……………
Solicitors:
Darroch Forrest, Wellington Copy to:
Appellant
JONES v LLANHENNOCK TRUST PARTNERSHIP [2020] NZHC 1409 [22 June 2020]
[1] Mr Jones has been the owner of several thoroughbred horses. He engaged the first respondent, the Llanhennock Trust Partnership (the partnership), to provide breeding and agistment services for his horses. The partnership alleges Mr Jones now owes it the sum of approximately $180,000 by way of outstanding fees. It has filed a proceeding in the District Court to recover this sum.
[2] Mr Jones denies he owes anything to the partnership. He contends the partnership failed to act in good faith towards him and deliberately mistreated his horses with the intent of causing him financial and other harm. Mr Jones says the partnership was assisted in doing so by the first respondent, Cambridge Veterinary Services (1980) Limited (CVS). He has not joined CVS as a party to the proceeding but he sought non-party discovery against both CVS and its insurer, the Veterinary Profession Insurance Society (Inc) (VPI). The District Court made a discovery order against both CVS and VPI on 9 August 2019.
[3] CVS and VPI subsequently filed affidavits in compliance with the order but Mr Jones contended they did not comply with the rules relating to discovery and failed to list relevant documents. He then applied to the District Court for orders requiring both respondents to provide further discovery.
[4] In a judgment delivered on 28 November 2019, Judge R L B Spear dismissed Mr Jones’ application.1 Mr Jones appeals against that decision.
The Judge’s decision
[5] The Judge gave his reasons for declining Mr Jones’ application in the following paragraphs of his decision:2
[13] I am unable to avoid the conclusion that the approach adopted by Mr Jones in this respect is nothing more than a “fishing expedition”. His essential complaint is that the plaintiffs have effectively conspired with CVS to cause him harm through the ill-treatment or mistreatment of his horses. That is a serious allegation, particularly as it calls into question the professionalism of CVS and raises questions as to why anyone in the position of the plaintiff or CVS would have any reason for acting in this way.
1 Llanhennock Trust Partnership v Jones [2019] NZDC 23729.
2 Llanhennock Trust Partnership v Jones, above n 1.
[14] If Mr Jones’ real complaint is that the plaintiffs have been negligent in the care of his horses (as against setting out deliberately to harm them in some way), and additionally that CVS has similarly acted negligently in the care of any of Mr Jones’ horses, then Mr Jones needs to join CVS and particularise the negligence or indeed fraud if he maintains that assertion. However, it is not appropriate for him to endeavour to carry out investigative work through the non-party discovery process in respect of assertions that he is now making in his Statement of Defence without joining CVS to the proceeding.
[15] If CVS was joined to the proceeding, then Mr Jones would of course be entitled to interrogate them and subject them to other interlocutory processes to determine whether any of his suspicions or concerns have any validity. However, at this stage the non-parties maintain that they have made full discovery.
Non-compliance with the rules of discovery
CVS
[6] CVS filed an affidavit of documents verified by one of its partners, Mr Craig Lawrence. Mr Lawrence’s affidavit is as follows:
1.I am a Partner of Cambridge Veterinary Services (1980) Limited (Cambridge Equine Hospital). I provide this affidavit in response to the discovery order made by the Court on 9 August 2019. I understand the obligations imposed by the discovery order.
2.In the Schedule of this affidavit, I list all documents that would be discoverable if Cambridge Equine Hospital were a party to the current proceeding.
3.At Part 1, I list the discoverable documents that are not privileged or confidential.
4.At Part 2, I list the discoverable documents that are privileged, and the privilege category attached to those documents.
5.The other parties to the claim will have no discoverable documents in their possession or control which are not and have never been in the control of Cambridge Equine Hospital.
6.I have also sought further records of text messages from my mobile provider. These records are no longer in our possession or control because I have changed my phone during the relevant period. As of 30 August 2019, I have not received a response from my mobile provider.
7.As part of my search for documents, I have emailed my colleagues at Cambridge Equine Hospital asking them to search their records for any documents relating to the horses named by Mr Jones in his amended statement of defence dated 2 August 2019.
8.Some documents contain records pertaining to horses not named in the amended statement of defence. These details have been redacted to preserve confidentiality.
9.To the best of my knowledge and belief, this affidavit is correct in all respects and carries out my obligations under the discovery order.
[7] Rule 8.15 sets out the requirements of an affidavit of documents. It provides as follows:
8.15Affidavit of documents
(1)Each party must file and serve an affidavit of documents that complies with this rule, subject to any modifications or directions contained in a discovery order.
(2)In the affidavit of documents, the party must—
(a)refer to the discovery order under which the affidavit is made; and
(b)state that the party understands the party’s obligations under the order; and
(c)give particulars of the steps taken to fulfil those obligations; and
(d)state the categories or classes of documents that have not been searched, and the reason or reasons for not searching them; and
(e)list or otherwise identify the documents required to be discovered under the order in a schedule that complies with rule
8.16 and Part 2 of Schedule 9; and
(f)state any restrictions proposed to protect the claimed confidentiality of any document.
(3)The affidavit may be in form G 37.
(4)Each party must file and serve the affidavit of documents within such time as the court directs or, if no direction is made, within 20 working days after the date on which the discovery order is made.
[8] Mr Jones contends Mr Lawrence needed to expressly confirm he understands the nature of the allegations Mr Jones has made against the partnership and other parties from a legal perspective. He should also confirm that a reasonable search has been made for documents relevant to those allegations. He says Mr Lawrence’s affidavit in its current form does not cover those matters.
[9] Mr Lawrence’s affidavit was prepared by CVS’s solicitors. CVS has been represented throughout by competent counsel and I have no doubt they would have advised Mr Lawrence of the nature of Mr Jones’ claim against both the partnership and Mr Lawrence’s clinic. Furthermore, Mr Lawrence’s affidavit makes it clear that he has searched the records held by his clinic to locate all documents relating to treatment of horses belonging to Mr Jones. Mr Lawrence confirms he has also asked his colleagues at the clinic to search their records to locate documents relating to the treatment of the horses named in Mr Jones’ statement of defence. The manner in which the clinic treated Mr Jones’ horses lies at the heart of his claim relating to the clinic’s involvement in the alleged conspiracy with the partnership.
[10] I do not consider Mr Lawrence needed to amplify his understanding of the issues raised by the pleadings further than he did in his affidavit. I do not consider there is any substance in this ground of appeal.
VPI
[11] VPI initially filed an affidavit by its Chief Executive Officer, Ms Alpha Woolrich, dated 29 August 2019. The only document disclosed in that affidavit was the claim form CVS had lodged with VPI in relation to Mr Jones’ potential claim against CVS.
[12] Mr Jones considered Ms Woolrich’s affidavit did not satisfy the requirements of r 8.15. VPI then filed and served a second affidavit by Ms Woolrich dated 30 September 2019 in the following terms:
1.I am the Chief Executive Officer of the Veterinary Professional Insurance Society (VPIS).
2.My first affidavit, dated 29 August 2010, stated that VPIS received a claim from Cambridge Equine Hospital on 12 August 2018. This was an error. The claim was actually received on 12 September 2018. This is also the date of the claim form which Mr Lawrence has disclosed for Cambridge Equine Hospital.
3.The Amended Statement of Defence filed by Mr Jones refers to a conspiracy between the Plaintiff and other parties to cause financial harm to him. I understand Mr Jones to say that VPIS is required to disclose any documents it holds which might be relevant to this allegation.
4.I confirm that VPIS does not have (either now or previously) any document which relates to a conspiracy to cause financial harm to Mr Jones apart from the Amended Statement of Defence.
[13] Mr Jones maintains this does not go far enough. He points out that Ms Woolrich is “a non-professional executive” and says the affidavit should be sworn by an officer of the organisation. That person should attest to all the requirements contained in r 8.15.
[14] I do not accept this submission. The rules do not require an affidavit of documents to be provided by an officer of an organisation such as VPI. In many cases the officers of an organisation will have considerably less knowledge about documents held by the organisation than those who are involved in the organisation’s day-to-day operation.
[15] The short point so far as VPI is concerned is that Ms Woolrich has confirmed VPI holds no other documents relevant to Mr Jones’ claim other than the claim form it received from CVS. This is not surprising given the fact that Mr Jones has not yet joined CVS as a party to the proceeding. During the hearing Mr Jones said VPI may hold further documents because he cannot discount the possibility that VPI is also a party to the conspiracy alleged in his statement of defence. I consider this prospect to be so remote that it should be disregarded for present purposes. VPI did not become involved in this matter until September 2018, when CVS notified it of the possibility of a claim by Mr Jones. There is nothing to suggest VPI has any involvement with CVS other than as its insurer. There is no reason to believe it would harbour any ill will towards Mr Jones. I do not consider there is any basis to suggest it may have been involved in the conspiracy alleged in the statement of defence.
[16] I consider Ms Woolrich’s affidavit to be sufficient for present purposes. There is no justification for requiring VPI to take any further steps.
Telephone records
[17] The relevance of these is that, in a letter dated 23 August 2018 to Mr Jones, Mr Lawrence referred to discussions he had held with professional colleagues regarding the treatment of the colt Adalia. Some of the persons with whom
Mr Lawrence discussed this issue were based overseas. CVS does not consider the records to be relevant to Mr Jones’ claim but has now provided Mr Jones with 160 pages of telephone records. It has n and then making them available for inspection by the applicant. It does not go further than that. If CVS was a party to the proceeding Mr Jones could now administer interrogatories requiring it to identify which calls in the records relate to Mr Lawrence’s discussions with colleagues about the colt. Mr Jones does not presently have the ability to seek that information because CVS is not a defendant.
Records relating to ultrasound examinations of other horses
[18] CVS has provided discovery of all documents relating to its treatment of the horses referred in Mr Jones’ statement of defence. Mr Jones contends CVS needs to go further. He says CVS is also required to search for and discover records relating to any ultrasound examinations his clinic has carried out on other animals presenting with similar symptoms to those displayed by his colt Adalia, namely a swollen hock. His argument on this point is that CVS neglected to use the recognised procedure of carrying out an ultrasound examination on the colt once X rays showed it did not have a bone injury. He says CVS should then have operated on the colt immediately so that it could be ready for the forthcoming sales at Karaka. Instead, he says CVS failed to carry out any ultrasound examination and did not operate on the colt for a period of nine weeks. This meant it could not be sold at the Karaka sales.
[19] Mr Jones submits the documents relating to the treatment of other animals having the same or similar injuries will be relevant to the claim he is making. He says the records are likely to show that CVS treated his colt differently to the manner in which it treated other animals displaying the same or similar symptoms.
[20] CVS resists this aspect of the application on the basis that the manner in which it treated other animals is irrelevant to the manner in which it treated Mr Jones’ colt. It also says Mr Jones should not put CVS to the time and expense of carrying out an analysis of its treatment of other animals. It is open to him to call expert evidence to show that the use of ultrasound is a standard investigatory method used by all
reasonable veterinarians once radiography shows that a bone injury is not the cause of swelling to a horse’s leg.
[21]Rule 8.14 of the District Courts Rules 2014 provides as follows:
8.14 Extent of search
(1)A party must make a reasonable search for documents within the scope of the discovery order.
(2)What amounts to a reasonable search depends on the circumstances, including the following factors:
(a)the nature and complexity of the proceeding; and
(b)the number of documents involved; and
(c)the ease and cost of retrieving a document; and
(d)the significance of any document likely to be found; and
(e)the need for discovery to be proportionate to the subject matter of the proceeding.
[22] Mr Jones refers me in this context to observations made by Associate Judge Osborne (as he then was) in Westpac New Zealand Ltd v Adams.3 In that case the Associate Judge observed:
[27] The principles which I adopt are these:
…
(c)Questions of relevance are to be decided on the basis of the pleadings in the case.
(d)The process of discovery and inspection is to ensure proportionality to the subject matter of the proceeding. In considering a non-party discovery order, the Court may have regard to the tests under r 8.7 for standard discovery (the adverse documents regime) and for tailored discovery under r 8.8 (where “the interests of justice” require tailoring of discovery).
(e)While the new discovery regime was in part designed to overcome the “virtually unlimited range of potentially relevant (and therefore discoverable) documents” which the Peruvian Guano test tended to produce, the Peruvian Guano approach may still form the basis of a discovery order if the Court finds it appropriate in the new discovery climate.
3 Westpac New Zealand Ltd v Adams [2013] NZHC 3113.
(footnotes omitted)
[23] The Judge plainly regarded this aspect of the application as amounting to a fishing expedition in which Mr Jones is seeking to obtain information that would allow him to join CVS as a party to his counterclaim. However, I understand the logic of Mr Jones’ argument on this point. If CVS treated his colt differently to the manner in which it routinely treated other horses showing the same or similar symptoms, it would obviously strengthen his claim that CVS did not treat the colt Adalia in good faith.
[24] I also accept it is not strictly necessary for Mr Jones to join CVS as a party to the proceeding to advance this argument. It is sufficient for him to allege the partnership acted in concert with CVS to deliberately deny his horses appropriate treatment. As the Judge observed, however, the allegations Mr Jones makes are extremely serious. They are probably the most serious forms of misconduct that could be alleged against bodies such as CVS and the partnership. As an experienced barrister Mr Jones will be well aware of the likely financial and professional consequences he will face if his claims are ultimately held to be baseless.
[25] Although I accept the documents satisfy the test of relevance I consider issues of proportionality are likely to arise. Logic suggests it may be a difficult and time- consuming task for CVS to examine its records to identify documents relating to the treatment of yearling colts suffering from a swollen hock where radiography has not revealed any underlying bone injury. Furthermore, Mr Jones does not contend CVS should be required to provide the information he seeks for any particular period. He says it will initially be for CVS to decide the period for which it chooses to supply relevant information. If he is not satisfied with the period CVS chooses, he can seek further discovery. I consider this approach would be unsatisfactory, if not unworkable. CVS needs to know with some certainty the period during which it must search its records.
[26] I therefore direct CVS to provide a further affidavit within 14 days of the date of this judgment setting out the likely time, effort and cost required to identify and list the documents Mr Jones seeks. The affidavit should be based on the need to identify and list documents created between January 2017 and December 2018 in relation to
the treatment of yearling colts presenting with the same symptoms as those shown by the colt Adalia. The affidavit should also set out the procedure CVS would use to identify such documents and any difficulties this is likely to present.
Result
[27] The appeal fails in relation to all issues other than that relating to the treatment of other colts presenting with the same or similar symptoms to that of the colt Adalia. Once CVS has filed and served its affidavit dealing with that issue Mr Jones will have seven days to make submissions regarding the orders (if any) that I should make as a result. CVS will then have seven days within which to respond to Mr Jones’ submissions and he will have seven days to reply. I will then deal with the issue on the papers. Costs will be determined once the final outcome of the appeal is known.
Lang J
2