Kawarau Village Holdings Ltd v Chi
[2015] NZHC 2387
•1 October 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2014-404-590 [2015] NZHC 2387
BETWEEN KAWARAU VILLAGE HOLDINGS LTD
Plaintiff
AND
DAVID YUEN SING CHI Defendant
Hearing: On the papers Appearances:
T B Fitzgerald for the Plaintiff
B D Gray QC and S D Williams for the DefendantJudgment:
1 October 2015
JUDGMENT OF MUIR J
(On application to access Court files)
This judgment was delivered by me on Thursday 1 October 2015at 12.30 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date:………………………….
Counsel:
B D Gray QC, Barrister, Auckland
S D Williams, Barrister, Auckland
Solicitors:
T B Fitzgerald, Bell Gully, Auckland
J Long, Lee Salmon Long, Auckland
M Singh, Glaister Ennor, Auckland
KAWARAU VILLAGE HOLDINGS LTD v CHI [2015] NZHC 2387 [1 October 2015]
Introduction
[1] The applicants apply under r 3.13 of the High Court Rules for access to the pleadings in relation to this proceeding. They are appellants in proceedings CA105/2015. They appeal against a decision of this Court in Sun v Peninsular Road Ltd (in rec and in liq), delivered by Gilbert J on 10 February 2015.1
[2] The application for access is opposed by the plaintiff in this proceeding. The defendant takes a neutral position.
Background
[3] This proceeding relates to the enforcement of an underwrite agreement entered into in 2006 between Peninsular Road Limited and a Singaporean company Austpac Investment Consultancy Limited. The defendant agreed to guarantee Austpac’s obligations under the agreement. Peninsular Road Limited’s interests under that agreement have now been assigned to the plaintiff.
[4] The relevant factual background is set out in the judgments of Associate Judge Bell and Gilbert J.2 I will not repeat what is said there. However, I note that both this proceeding and the applicants’ appeal relate to the same development, that is Kawarau Falls Station. The applicants in CA105/2015 signed agreements to purchase units in Lakeside West and Kingston West, two buildings that were constructed in stage 1 of a three stage development project. Both sets of proceedings
have as relevant background the failure to progress stages 2 and 3 of the development and the non-settlement of the sale and purchase agreements.
Submissions
[5] The overarching basis for the application is that this proceeding is said to relate in a sufficiently fundamental way, to the Sun v Peninsular Road Ltd (in rec
and in liq) appeal that it is in the interest of justice that access be granted.
1 Sun v Peninsula Road Ltd (in rec and in liq) [2015] NZHC 126.
2 Kawarau Village Holdings Ltd v Chi [2015] NZHC 1379 at [3]-[8]; Sun v Peninsula Road Ltd
(in rec and in liq), above n 1, at [1]-[8].
[6] The applicants refer to a similar application made by them for access to pleadings in respect of other related proceedings, which was successful.3 They also refer to the fact that the defendant in this proceeding likewise made a successful application for access to the same pleadings.4
[7] They submit that it would assist with the orderly and fair administration of justice if the applicants were aware of the issues and arguments raised in this proceeding and that no issues of privilege, confidentiality or privacy arise in respect of the pleadings sought.
[8] The plaintiff opposes the application on the grounds that:
(i)the High Court Rules do not provide any general right of access to the file at this stage of the proceeding;
(ii)it would not be in the interests of the orderly and fair administration of justice to allow access to the pleadings where the pleadings are still in a preliminary form and the defendant is still in the process of providing further particulars of substantive allegations made against it;
(iii)the defendant has foreshadowed that he may add third parties to the claim which could substantially alter the form and scope of the proceeding; and
(iv)The applicants do not adequately identify how the pleadings are relevant to their appeal and that they must be considered to be in a different category from applicants whose rights have not yet been determined (as with the applicants in the cases cited at footnotes 3 and
4). I infer that this is the principal basis of opposition.
3 GFD I LLP v Melview (Kawarau Falls Station) Investments Ltd (in Rec) [2012] NZHC 677, (2012) 21 PRNZ 125. The application was for access to the full file but was only granted in respect of the pleadings.
4 GFD I LLP v Melview (Kawarau Falls Station) Investments Ltd (in rec) [2012] NZHC 1796.
[9] Although abiding by the Court’s decision, the defendant makes several points. As the pleadings are not finalised, he suggests that the Court may consider it appropriate to defer access to the pleadings until the close of pleadings date. If access is granted, the defendant seeks a further condition, in addition to what is proposed by the applicants, in terms that the pleadings be marked “subject to amendment” to reflect that they are not yet in final form.
[10] I directed that the plaintiff’s memorandum in opposition be provided to the applicants and invited submissions in response. These were received on 28
September 2015. The submission addresses relevance to the appeal in terms I will discuss more fully later.
Relevant law
[11] In considering an application made under r 3.13, the relevant matters to be taken into account are provided under r 3.16:
3.16 Matters to be taken into account
In determining an application under rule 3.13, or a request for permission under rule 3.9, or the determination of an objection under that rule, the Judge or Registrar must consider the nature of, and the reasons for, the application or request and take into account each of the following matters that is relevant to the application, request, or objection:
(a) the orderly and fair administration of justice:
(b) the protection of confidentiality, privacy interests (including those of children and other vulnerable members of the community), and any privilege held by, or available to, any person:
(c) the principle of open justice, namely, encouraging fair and accurate reporting of, and comment on, court hearings and decisions:
(d) the freedom to seek, receive, and impart information:
(e) whether a document to which the application or request relates is subject to any restriction under rule 3.12: and
(f) any other matter that the Judge or Registrar thinks just.
[12] The factors in r 3.16 do not represent a hierarchy. The principle of open justice is not the paramount consideration and there is no presumption in favour of
disclosure. Instead, the r 3.16 factors are assessed and weighed against the request for access.5
[13] In addition to the six listed matters, r 3.16 requires the Court to consider the nature of and the reasons for the request. They form a background for the assessment of the relevant matters listed. It is widely recognised that “a Court will be less sympathetic to an application which does not have a recognisable and legitimate public or private purpose”.6
Discussion
Relevance of pleadings to the applicants’ appeal
[14] I accept that if the pleadings sought are relevant or potentially relevant to the applicants’ appeal, access would promote the orderly and fair administration of justice under r 3.16(a).
[15] The applicants, as plaintiffs in Sun v Peninsula Road Ltd (in rec and in liq) sought the return of their deposits. Gilbert J found against them, holding that the developer was ready, willing and able to settle when it served the settlement and cancellation notices. Therefore, the developer was entitled to cancel the agreements when the settlement notices were not complied with.
[16] In discussing the quantum of damages that the developer should be awarded on its counterclaim, Gilbert J noted the following:
[230] The plaintiffs pleaded three affirmative defences to Kawarau Village’s counterclaim. The first was that Kawarau Village has mitigated its loss by entering into the underwriting agreements and that any loss was caused by Austpac’s failure to settle, not by the plaintiffs. Mr Skelton did not press this defence strongly in his submissions, correctly so in my view. Kawarau Village has not recovered anything from Austpac or from Mr Yuen and there is no basis to make any deduction from the claim for this.
[231] The plaintiffs’ second affirmative defence is that Kawarau Village
has failed to take reasonable steps to recover its loss from Austpac and Mr
5 Schenker AG v Commerce Commission [2013] NZCA 114 at [20]-[23]; Commerce Commission v
Air New Zealand Ltd [2012] NZHC 271.
6 Commerce Commission v Air New Zealand Ltd at [30].
Yuen. Mr Skelton conceded that he was unable to support this defence based on the evidence. This was a proper concession. Kawarau Village has issued proceedings against Mr Yuen. In any event, a plaintiff is free to decide who to sue and is not obliged to seek compensation from other parties who may also be liable.
[17] Despite these comments, the applicants say that mitigation of damages “remains an issue relevant to [their] appeal”. And that “[A]s a claim by KVHL against Mr Yuen was a live issue in the applicants’ High Court proceeding, they are not precluded from raising this on appeal, and that it cannot therefore be said that the applicants now have no legitimate interest in a claim against Mr Yuen by KVHL or that the pleadings are no longer relevant to the applicants’ appeal”.
[18] They also say that there may be other matters raised in the pleadings which could assist them in their appeal and that their inability to specify these at this stage does not detract from the fair administration interests which arise out of the common factual background.
[19] No copy of the Notice of Appeal was provided but I accept that, whether the mitigation point referred to in [230] of Gilbert J’s judgment is currently being pursued or not, it could be pursued by way of an amended Notice or there could conceivably be an application to adduce further evidence.
[20] There is undoubtedly an element of common ground between the proceedings and orderly and fair administration favours an opportunity to examine consistency in terms of the allegations in them. I accept also that the applicants may, on appeal, wish to challenge Gilbert J’s findings on the first affirmative defence to the counterclaim, irrespective of how strongly his Honour perceived that argument to have been advanced at trial or the apparent strength of his reasons for rejecting it.
[21] It is correct that the applicants made a similar application in 2012 seeking access to the court files in three related proceedings arising out of this development. In GFD I LLP v Melview (Kawarau Falls Station) Investments Ltd (in Rec), Winkelmann J allowed the applicants access to the pleadings in such proceedings. The Judge noted that the application was made prior to the substantive hearing
phase, and therefore the principle of open justice had less force than in the context of a r 3.9 application.7
[22] The defendant in these proceedings then sought access to the pleadings on the same three files on the basis that they were needed to assist in what was then anticipated litigation between him and the plaintiff. That application was granted by Potter J.8
[23] I accept the plaintiff ’s point that the applicants are in a different position to that of the prior applicants in the two cases cited. In 2012 the disputes of the prior applicants had yet to be determined. However, I see no material difference between access to pleadings in the context of an anticipated hearing, on the one hand, and in the context of an appeal on the other, provided the pleadings are relevant or potentially relevant to the appeal, as I find.
Pleadings are not in final form/Possible addition of third parties
[24] Both plaintiff and defendant accept that the pleadings are not in a final form and are likely to be amended following discovery. I see no inherent problem with allowing access to pleadings in such circumstances. There is always the prospect that pleadings will be amended prior to the setting down date (and beyond where leave is appropriately granted). The applicants are well aware that allegations made in pleadings may be subject to such amendment and are unproven until judgment is issued.
[25] Likewise the possibility of third party claims does not seem to me to count against the application.
Balancing the factors
[26] The factors in favour of allowing access in this case are the orderly and fair administration of justice and the freedom to seek, receive and impart information.9
7 GFD I LLP v Melview (Kawarau Falls Station) Investments Ltd (in Rec), above n 3, at [16].
8 GFD I LLP v Melview (Kawarau Falls Station) Investments Ltd (in rec), above n 4.
9 Affirmed in s 14 of the New Zealand Bill of Rights Act 1990.
The principle of open justice, targeted at encouraging fair and accurate reporting of court hearings and decisions has little relevance to an application by private parties as opposed to media organisations and commentators.10 Weighted against these factors are the plaintiff ’s and defendant’s privacy interests and their claim to the protection of any confidential or privileged information under r 3.16(b). However, such considerations can be adequately addressed by appropriate conditions of access.11
[27] Balancing the competing interests, I consider that access to the pleadings should be granted but subject to the conditions as set out below:
(a) Any copies of the pleadings in this proceeding are to remain confidential to the applicants, their solicitors, their counsel and any other officer of the Court who may be assisting the applicants in their appeal proceeding Sun v Peninsular Road Limited CA105/2015;
(b)Access to the pleadings will be available following the expiration of seven working days from the date of this judgment on access, unless within that period the plaintiff and defendant file in Court and serve on the applicants memoranda identifying any specific matters in the pleadings which require the protection of confidentiality, or privacy interests of or in relation to the plaintiff and defendant. If any memoranda are filed, this decision allowing access will not take effect until the Court has considered and ruled on issues raised by the plaintiff and defendant; and
(c) The pleadings to be disclosed are to be marked by a watermark or
banner stating “subject to amendment” to reflect that they are not yet
in their final form.
Muir J
10 See Commerce Commission v Air New Zealand Ltd, above n 5, at [31].
11 See Crown Asset Management Ltd v Nattrass [2015] NZHC 1435 at [20].