Kidd v Van Heeren
[2020] NZHC 2311
•4 September 2020
ORDER PROHIBITING PUBLICATION OF THE REASONS FOR JUDGMENT IN NEWS MEDIA OR ON THE INTERNET OR OTHER
PUBLICLY AVAILABLE DATABASE UNTIL HEARING OF SUBSTANTIVE PROCEEDING. PUBLICATION IN LAW REPORT OR LAW DIGEST PERMITTED.
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV 2014-404-000725
[2020] NZHC 2311
BETWEEN MICHAEL DAVID KIDD
Plaintiff
AND
ALEXANDER PIETER VAN HEEREN
Defendant
Hearing: 17 June and 16 July 2020 Appearances:
S Mills QC & B O’Callahan for the Plaintiff
M D O’Brien QC & S D Williams for the Defendant
Judgment:
4 September 2020
JUDGMENT OF BOHEMEN J
[Privilege Issues]
This judgment was delivered by me on 4 September 2020 at 4.30pm Pursuant to Rule 11.5 of the High Court Rules
…………………………
Registrar/Deputy Registrar
Solicitors:
K 3 Legal Limited
Fee Langstone, Auckland Chapman Tripp, Auckland
Counsel:
S Mills, QC, AucklandM D O’Brien QC, Auckland Ross Knight, Barrister, Auckland
KIDD v VAN HEEREN [2020] NZHC 2311 [4 September 2020]
Introduction
[1] This proceeding has a long history in the courts of South Africa and New Zealand. It concerns a dispute between the plaintiff, Michael Kidd, and the defendant, Alexander van Heeren, over the division of the assets of a partnership. The origins of the dispute go back nearly 30 years.
[2] After obtaining judgment against Mr van Heeren in South Africa,1 Mr Kidd applied in New Zealand for an accounting for his share of the partnership assets, based on the South African decision. In April 2015, Fogarty J directed that there be an accounting to determine Mr Kidd’s entitlement to the partnership assets and ordered Mr van Heeren, within one month of the date of the judgment, to pay USD 25 million into this Court, to file a complete list of all assets of the partnership and to disclose his knowledge of partnership assets that had been disposed of and were no longer under his control.2
[3] The accounting ordered by Fogarty J is finally to take place next year before Jagose J, who has been assigned to the proceeding.
[4] A major cause of the delay since Fogarty J’s decision in April 2015 was that, for a number of years, Mr van Heeren told this Court he could not comply with its orders because his assets were in trusts in Liechtenstein over which he had no control because he was only a beneficiary of the trusts. In September 2017, however, Mr van Heeren told the Court he had become aware he was the founder of at least one of the trusts and had effective control of that trust through his position as founder and through a mandate letter requiring a director of the trust to act on his instructions.
[5] Mr van Heeren has now provided information to the Court for the accounting. He has not paid the USD 25 million into Court as ordered by Fogarty J.
[6] Johanna Marie van Heeren-Hermans, Mr van Heeren’s former wife, who is also a beneficiary of the Liechtenstein trusts, has applied to join the proceeding as an
1 Kidd v van Heeren SGHC Johannesburg 2973/1998, 20 May 2013.
2 Kidd v van Heeren [2015] NZHC 517.
interested party before the accounting takes place. Mr Kidd opposes Ms van Heeren- Hermans’ application.
[7] In support of Mr Kidd’s opposition, witnesses for Mr Kidd filed correspondence and records of interrogation obtained during a criminal investigation in Liechtenstein into Mr van Heeren and a director and a lawyer for the Liechtenstein trusts.
[8] Mr van Heeren says the documents or, in some cases, the information in the documents, are privileged. Mr van Heeren’s counsel, Mr O’Brien, says Mr Kidd’s lawyers should have realised the documents were privileged and ought to have raised the matter with Mr van Heeren’s solicitors in accordance with the Lawyer Client Conduct Care Rules 2008 before the documents were filed in the New Zealand Court.
[9] The question of whether the documents are privileged was referred to me because it was considered discrete and because Mr O’Brien said some of the material in the documents was potentially so prejudicial that it should not be seen by Jagose J.
[10] In the event, the contest over the respective claims and denials of privilege ranged so broadly that I had to review a good deal of the history of the litigation to decide whether the correspondence is privileged and, in that connection, whether the correspondence is relevant.
[11] Through that review, it became apparent that there is nothing in the documents that would surprise anyone familiar with the dispute between the parties, in particular Jagose J, who has twice traversed the relevant background in other decisions in this proceeding.3
[12] The documents in dispute are of limited relevance to whether or not Ms van Heeren-Hermans should be joined as an interested party. Their real relevance is to whether Mr van Heeren has complied with directions of the New Zealand Court in the context of the main proceeding. I am satisfied that relevance to compliance with Court
3 Kidd v van Heeren [2017] NZHC 3199 at [8], [28]-[35]; Kidd v van Heeren [2019] NZHC 1761 at [4]-[14].
orders is an appropriate consideration when deciding whether the documents are privileged.
Origins of privilege hearing
[13] By without notice application dated 26 February 2020, Ms van Heeren- Hermans asked to be joined to the proceeding as an interested party. No affidavit was filed in support of the application but Ms van Heeren-Hermans’ counsel, Mr Knight, filed a memorandum dated 26 February 2020.
[14] By notice of opposition dated 31 March 2020, Mr Kidd said he opposed Ms van Heeren-Hermans’ application and filed affidavits by Mr Kidd and Bryan Cooper in support of his opposition.4
[15] The notice of opposition referred to communications involving, among others, a Netherlands law firm, the directors of the Gerda Foundation, a trust established in Liechtenstein at the instruction of Mr van Heeren, and beneficiaries of the Foundation. Mr Cooper exhibited the documents in his affidavit. He said the documents had been obtained by Mr Kidd’s Liechtenstein lawyers after the Liechtenstein Court of Justice had granted Mr Kidd’s application to review and take copies of documents on the Court’s file concerning a criminal investigation into the circumstances of a proceeding that Mr van Heeren had brought in Liechtenstein in relation to the Gerda Foundation.
[16] By email dated 1 April 2020, Mr O’Brien advised the Registrar that Mr Kidd’s notice of opposition and Mr Cooper’s affidavit referenced and exhibited what Mr O’Brien believed to be privileged communications, although he acknowledged that the documents might not be privileged. Mr O’Brien asked that his email be referred immediately to Jagose J but that the Judge refrain from reading the notice of opposition and affidavits until he had heard further from counsel.
[17] An exchange of memoranda followed between Mr Kidd’s counsel, Mr Mills and Mr O’Callahan, on the one hand and Mr O’Brien and Ms Williams on the other,
4 The affidavits filed originally were unsworn because Mr Kidd is resident in South Africa and Mr Cooper is resident in the United Kingdom. Affidavits sworn by Mr Kidd on 1 July 2020 and by Mr Cooper on 4 June 2002 were filed subsequently.
about whether the documents were privileged. No action was taken for a period because of the Level Four lockdown imposed by the Government to deal with the COVID-19 emergency.
[18] Because of the claimed sensitivity of some of the documents, the dispute over privilege was referred to me. I set down the questions of privilege for hearing on 17 June 2020.
[19] Mr O’Brien, on behalf of Mr van Heeren, applied for orders that the documents are privileged, directing Mr Kidd to destroy or return the documents, and directing the removal from the Court file of those documents and any other documents that refer to or rely on them. That application was in the context of Mr Kidd seeking to produce the documents in support of his opposition to Ms van Heeren-Hermans’ application to be joined as an interested party. In the course of the hearing, Mr Mills also applied on behalf of Mr Kidd to produce the documents as relevant to the substantive proceeding in case I should find they were not relevant to Ms van Heeren-Hermans’ application.
[20] Mr Knight advised that Ms van Heeren-Hermans would abide the Court’s decision and was granted leave not to appear.
[21] The hearing on 17 June 2020 could not be completed within the allocated time and a further hearing was held on 16 July 2020.
Summary history of litigation to date
[22] In a decision last year, the Court of Appeal conveniently summarised the early history of the New Zealand proceeding.5 The salient points of that summary and the judgments referred to in the summary are as follows:
(a)In his judgment of 14 April 2015, Fogarty J ordered Mr van Heeren to pay USD $25 million into Court and to file and serve a complete list of partnership assets and their estimated value.
5 Kidd v van Heeren [2019] NZCA 275, (2019) 24 PRNZ 596 at [9]-[20].
(b)For the next eight months, Mr van Heeren sought to vary or avoid those orders and filed affidavits to explain why he could not comply with the original and subsequent orders made by Fogarty J.
(c)One of the main reasons advanced by Mr van Heeren was that he and Ms van Heeren-Hermans had transferred much of their wealth to two foundations established in Liechtenstein, the Timbavati Foundation and the Gerda Foundation, over which he had no control and which he could not compel to provide the information required by the Court.
(d)Fogarty J declined Mr van Heeren’s applications to vary6 or stay7 his orders, and the Court of Appeal8 and the Supreme Court9 declined his appeals of Fogarty J’s decisions.
(e)In December 2015, Fogarty J heard an application from Mr Kidd that Mr van Heeren, who is resident in South Africa, be required to make himself available for cross examination. Fogarty J was satisfied that such an order was not appropriate, having regard to further information that Mr van Heeren had provided and to the fact that Mr van Heeren had applied to the Court of Justice in Liechtenstein for information from the Gerda Foundation (the information proceeding).10
[23] Fogarty J was sceptical about Mr van Heeren’s assertions that he had no control over the assets put into the two Foundations. In his decision of 31 August 2015, Fogarty J said:11
[35] Therefore this Court, being informed that a wealthy person has transferred assets to a trust or a foundation does not draw the inference that the wealthy person is giving his property away but, rather, draws the opposite: that he is seeking protection from any attachment of it. So the information in the affidavits from Mr van Heeren that he and his wife transferred progressively all of their assets to the Timbavati Foundation is an indication of seeking to make those assets more secure, rather than giving them away.
6 Kidd v van Heeren [2015] NZHC 2082.
7 Kidd v van Heeren [2015] NZHC 2455.
8 van Heeren v Kidd [2016] NZCA 401, [2017] 3 NZLR 141.
9 van Heeren v Kidd [2016] NZSC 163.10 Kidd v van Heeren [2015] NZHC 3250.
11 Above n 6.
These are real world presumptions which I have applied when scrutinising the evidence from Mr van Heeren that [he] has lost control of his assets.
[24] In his decision of 16 December 2015, Fogarty J said that key questions to be asked about the Gerda Foundation were:12
(a)Who is the “founder” of the Gerda Foundation?
(b)What is the relationship between Mr van Heeren and the “founder”, assuming Mr van Heeren is not the “founder”?
Fogarty J also said:13
[42] I observe that this Court continues to analyse the facts on the presumption that persons in control of valuable assets, which they believe they own, do not usually give them away or lose control of them. This does not mean that they have not been put into structures in an attempt to be beyond the reach of courts. However, usually, out of sight, there is a mechanism of control.
[25] Fogarty J recorded the 20 questions that Mr van Heeren had put to the Gerda Foundation in the information proceeding before the Liechtenstein court and formally made those questions and requests of this Court.14
Mr van Heeren’s affidavits
[26] In 2015, Mr van Heeren swore four affidavits in support of his applications to vary or stay Fogarty J’s orders and in further explanation of his efforts to comply with those orders.15 He annexed as exhibits to his affidavits correspondence between his lawyers in the Netherlands, de Breij Evers Boon, in particular, Stein van Thiel, and the directors of the Gerda Foundation, Christian Lamprecht and Peter van Langeveld, and Schwärzler Rechtsanwalte, the lawyers for the Gerda Foundation, in particular, Helmut Schwärzler.16
12 Above n 10, at [41].
13 Above n 10.
14 Ibid.
15 First and second affidavits, sworn on 6 May 2015; third affidavit sworn, on 27 July 2015; fourth affidavit, sworn on 8 November 2015.
16 Correspondence annexed as exhibits to Mr van Heeren’s first four affidavits as follows:
First Affidavit of 11 May 2015:
Letter of 6 May 2015 from van Thiel to Gerda Foundation.
[27] On the one side, the letters from Mr van Thiel sought the information required by the Court orders and, if the information could not be provided, explanations of why that was so. The letters did not describe the capacity in which Mr van Heeren was seeking the information. On the other side, the replies from the Directors of the Gerda Foundation and Dr Schwärzler interpreted the letters from de Breij Evers Boon as requests from Mr van Heeren in his capacity as beneficiary of the Gerda Foundation. That is apparent from the letter dated 3 July 2015 from Dr Lamprecht and Mr van Langeveld which, in its first substantive paragraph, stated:
We understand that your client is a party in legal proceedings in New Zealand. We also understand that you are writing to us in relation to the perceived beneficiary status of your client to the Gerda Foundation and that your client’s request for information is related to that perceived status.
[28] On the basis that Mr van Heeren had asked for information as a beneficiary of the Gerda Foundation, the Foundation declined to provide the information requested. Initially, the explanation was that beneficiaries had no right to the information under the statutes and by-laws of the Gerda Foundation. Later, the explanation was that the Board of the Foundation could provide the information only if it was in the interests of the Foundation and all of its beneficiaries, including Mr van Heeren’s former wife, who had not indicated whether she considered the disclosure would be in her interest.
[29] In his fourth affidavit sworn on 8 November 2015, Mr van Heeren said the Gerda Foundation and its Board members were working as quickly as possible to establish whether Ms van Heeren-Hermans’ consent would be forthcoming. He also said he had instructed lawyers in Liechtenstein to initiate proceedings against the
Third Affidavit of 27 July 2015:
Letter of 6 May 2015 from van Thiel to Gerda Foundation; Letter of 20 May 2015 from van Thiel to Gerda Foundation; Letter of 1 June 2015 from van Thiel to Gerda Foundation;
Letter of 3 July 2015 from Lamprecht and van Langeveld to van Thiel; Letter of 14 July 2015 from van Thiel to Schwärzler;
Letter of 22 July 2015 from Schwärzler to van Thiel.
Fourth Affidavit of 8 November 2015:
Letter of 3 September 2015 from van Thiel to Schwärzler;
Email of 9 September 2015 from Schwärzler to van Thiel and van Rens; Email of 25 September 2015 from van Rens to Schwärzler;
Email of 26 September 2015 from Schwärzler to van Rens; Letter of 12 October 2015 from van Thiel to Schwärzler; Letter of 14 October 2015 Schwärzler to van Thiel.
Gerda Foundation to compel them to provide the information sought, as had been suggested by Dr Schwärzler.
Liechtenstein court decisions in the information proceeding
[30] In February 2017, the Court of Justice in Liechtenstein rejected Mr van Heeren’s application for the information set out in the 20 questions Mr van Heeren had put to the Gerda Foundation.17
[31] Prior to its decision, the Court had directed the Gerda Foundation to disclose whether the founder of the Foundation was still alive. In its decision, the Court recorded that the founder was alive, although the name of the founder had not been disclosed to the Court. On that basis, the Court held that because, under the Gerda statutes, the founder had reserved the right to revoke the Foundation and was the ultimate beneficiary of the Foundation, Mr van Heeren’s information rights as beneficiary under s 9 of the Foundation Act 2008 of Liechtenstein did not apply.
[32] Mr van Heeren’s appeal of that decision to the Liechtenstein Court of Appeal was dismissed in a decision dated 18 May 2018.18
Mr van Heeren informs the Court he is the founder of the Gerda Foundation
[33] In his fifth affidavit sworn on 17 September 2017, Mr van Heeren advised the Court of the Liechtenstein decisions and provided translations of the decisions. Mr van Heeren said that on 9 March 2017 and 3 July 2017 his New Zealand lawyers had provided Mr Kidd’s New Zealand lawyers with copies of the Liechtenstein decisions.
[34] In his fifth affidavit, Mr van Heeren also informed the Court that Mr van Langeveld had died. Mr van Langeveld had been a member of the Netherlands law
17 van Heeren v Gerda Foundation (Court of Justice, Principality of Liechtenstein, 11 November 2016, 07 HG.2015.264 / ON 16).
18 van Heeren v Gerda Foundation (Court of Appeal, Principality of Liechtenstein, 18 May 2017, 07 HG.2015.264 / ON 24).
firm, Greenberg Traurig, and had been Mr van Heeren’s lawyer when the Gerda Foundation was established.19 Mr van Heeren said:
57. Following the death of Mr van Langeveld, changes in the legal team and references in the Liechtenstein judgments to the role of ‘Founder’ and enquiries made through my Dutch and Liechtenstein lawyers, matters have come to light which mean that some of the statements made in my earlier affidavits concerning the Gerda Foundation require clarification and in some cases correction.
[35] Mr van Heeren went on to say that he now understood he was the founder but had not been aware of this until recently and that it was his understanding that none of those who had been involved in the requests to the Gerda Foundation were aware of it either. He also said it was his understanding that as founder, Liechtenstein law would enable him to instruct the Foundation to share information about the Foundation with him and to revoke the Foundation.
[36] Mr van Heeren also said that he now understood that, as founder, he did have “a degree of control” over the Gerda Foundation and that at the time the Foundation had been established, Mr van Langeveld had arranged for Dr Lamprecht, the other Board member, to sign a mandate agreeing to follow the instructions of Mr van Heeren’s attorney. Mr van Heeren said he had recently obtained a copy of this mandate, which he annexed to his affidavit. He also said that if he had been aware of the letter at the time, he had forgotten and overlooked it.
[37] Although Mr van Heeren did not quote or refer to the language of the mandate letter, it is relevant to record that in the letter, which was dated 9 June 2009 and addressed to Professor Onno Ydema at Greenberg Traurig, Dr Lamprecht stated:
I herewith confirm that I have been appointed as a member of the Stiftungsrat of Gerda Foundation in my capacity of attorney, while Mr. Alexander P. van Heeren as the founder of the Gerda Foundation is my sole and ultimate client. In the Stiftungsrat I will decide according to your instructions in your capacity as attorney to Mr. Alexander P. van Heeren. In the event Mr. van Heeren choses [sic] to be represented by another attorney, I will follow his instructions.
19 In his ninth affidavit sworn on 8 June 2020, Mr van Heeren states that Mr van Langeveld died in October 2016.
[38] Mr van Heeren did not provide copies of any correspondence between his Netherlands lawyers and the Gerda Foundation regarding this change of position but stated that he was continuing “to seek clarification of the position affecting current issues” and would “take further steps to obtain the information earlier sought.”
[39] In his sixth affidavit, sworn on 21 December 2017, Mr van Heeren informed the Court that in October 2017 he had made a further request through his Netherlands lawyers for information from the Gerda Foundation and in December 2017 Dr Schwärzler had replied and provided copies of the Gerda Foundation by-laws and annual balance sheets of the Gerda Foundation. Mr van Heeren summarised the advice from Dr Schwärzler which, for present purposes, was that:
(a)The Gerda Foundation had been established in 2009 by Fidarco Treuhabdund Verwaltungs-Anstalt (Fidarco), an institution based in Liechtenstein, and Dr Lamprecht.
(b)While Mr van Heeren was not named as the Founder in the by-laws, he was deemed to be the Economic Founder because he made the initial contribution of 30,000 Swiss francs to establish the Foundation and he was the person on whose behalf the Foundation was established.
(c)Mr van Heeren was also deemed to be the ultimate beneficiary and the “protector” of the Foundation which gave him rights to receive information about the Foundation and to veto decisions of the Foundation, but he had never exercised those rights “if only because I was unaware of having these rights in the first place.” Mr van Heeren said that Mr van Langeveld had always advised him that he had no material rights vis-à-vis the Foundation
(d)As the protector of the Gerda Foundation, Mr van Heeren also comprised the advisory board to the Foundation, but that he had not exercised any rights in that capacity because he had been unaware of having them.
[40] Mr van Heeren exhibited copies of the relevant correspondence which, on this occasion, was between Greenberg Traurig (Mr Thomas van der Vliet) and Schwärzler Rechtsanwalte (Dr Schwärzler).20
Liechtenstein criminal investigation
[41] In July 2019, Mr Kidd filed a complaint with the Office of the Public Prosecutor in Liechtenstein in relation to Mr van Heeren’s application in the information proceeding. The complaint was that Mr van Heeren’s application and appeal were an abuse of process undertaken to obtain false evidence for use in the New Zealand proceeding. That is, that Mr van Heeren had sought to obtain a ruling about his rights as a discretionary beneficiary of the Gerda Foundation without disclosing that he was the founder, the sole member of the Advisory Board and that he had a mandate agreement with Dr Lamprecht which required Dr Lamprecht to follow Mr van Heeren’s instructions.
[42] As a result of that complaint, a criminal investigation was commenced, and an order granted by the Court of Justice to search the premises of Fidarco, where Dr Lamprecht’s offices were located and which also served as the representative office for the Gerda Foundation. A search by the Liechtenstein Criminal Police was carried out on 11 July 2019 and various documents were seized. On the application of the Gerda Foundation, the seized documents were placed under seal. An appeal against the search order was dismissed by the Liechtenstein Court of Appeal on 8 July 2019.21 Following the search, Dr Lamprecht and Dr Schwärzler were both interrogated before an investigating judge.
How the documents in dispute came to New Zealand
[43] Dr Matthias Niedermüller, Mr Kidd’s Liechtenstein counsel, applied on Mr Kidd’s behalf to inspect the Liechtenstein Court’s file in the criminal investigation.
20 That correspondence included:
(a)An email dated 23 October 2017 from Mr van der Vliet to Dr Schwärzler which asked for the history of the Gerda Foundation and for responses to 14 questions;
(b)A letter dated 13 December 2107 from Dr Schwärzler to Mr van der Vliet which gave a summary history of the Gerda Foundation and provided specific responses to the 14 questions.
21 Criminal Proceeding against Alexander van Heeren and others (Court of Appeal, Principality of Liechtenstein, 8 October 2019, ON 21, 14 UR.2019.234).
Mr van Heeren and the Gerda Foundation opposed the application but, by decision dated 11 February 2020, the Court granted Mr Kidd access to all documents on the Court file except those seized during the search of the Fidarco premises which remained sealed.22 No appeal was lodged against that decision.
[44] On 5 March 2020, Dr Niedermüller and a colleague inspected the Court file and requested and obtained copies of the documents on the file. These are the documents annexed to Mr Cooper’s affidavit and referred to in Mr Kidd’s notice of opposition.
[45] In an affidavit sworn on 19 May 2020 Dr Niedermüller exhibited copies of the documents, including English translations of documents that were originally in German. During the hearing, the documents were referred to by their exhibit numbers in Dr Niedermüller’s affidavit (for example, MEN1). Most documents were in Exhibit MEN8 and were identified by numbers handwritten onto the documents (for example, MEN8 Doc 1).
[46] No questions were raised by New Zealand counsel about the accuracy or reliability of the English translations of the German documents. In any event, certified translations of the decisions of the Liechtenstein courts concerning the search of the Fidarco premises and the interrogations of Dr Lamprecht and Dr Schwärzler were provided through Mr Kidd’s New Zealand solicitors.
[47] Dr Niedermüller says that in order to inspect a court file of a criminal investigation, an applicant must demonstrate an express legal interest and that one such reason is to assist an applicant to pursue a civil claim against the suspects or a third party. He says Mr Kidd’s application was granted on the basis that the files would enable Mr Kidd to pursue his claims against Mr van Heeren in New Zealand and in Liechtenstein.
22 Criminal Proceeding against Alexander van Heeren and others (Court of Justice, Principality of Liechtenstein, 11 February 2020, ON 54, 14 UR.2019.234).
Other evidence at the privilege hearing
[48] In addition to the affidavits filed by Mr Kidd, Mr Cooper, and Dr Niedermüller, and the affidavits filed earlier in the proceeding, there are affidavits from:
(a)Mr van Heeren, sworn on 8 June 2020, which was his ninth affidavit sworn in this proceeding;
(b)Debbie Wai Kapohe, Mr van Heeren’s companion, sworn on 8 June 2020; and
(c)Sebastian Auer, a partner in a Liechtenstein law firm, Gasser Partner, which has been instructed by Mr van Heeren in relation to the criminal complaint made by Mr Kidd, sworn on 4 June 2020 and 12 July 2020.
[49] In his affidavit, Mr van Heeren explains the progression of his Netherlands legal advisers from Mr van Langeveld at Greenberg Traurig until mid-2014, to Mr van Thiel of de Breij Evers Boon from mid-2014 to late 2016/early 2017, to Mr van der Vliet at Greenberg Traurig from late 2016. Mr van Heeren also lists and provides copies of correspondence between his lawyers and the Gerda Foundation between 6 May 2015 to 14 October 2015 and says he did not authorise Dr Schwärzler to provide any of the correspondence in MEN8.
[50] Mr van Heeren denies that he had “pretended” to try to obtain information from the Gerda Foundation as a beneficiary and also denies that he already had at that time the information his lawyers were seeking. He also confirms the account given by Ms Kapohe in her affidavit of a meeting with Mr van Langeveld in Amsterdam in September 2015.
[51] Mr van Heeren says he was not familiar with the details of how the foundations were structured or the positions he held in the foundations or what powers and rights he had to obtain information, that he had always been reliant on Mr van Langeveld, who had become very ill with cancer by 2015 and, as subsequently became apparent, was not a reliable source of accurate information. Mr van Heeren says that when he later became aware in 2017 that Liechtenstein law regarded him as the economic
founder he had filed his sixth affidavit correcting his earlier statement that he was not the founder.
[52] In her affidavit, Ms Kapohe refers to a meeting at which she was present and at which matters relevant to the New Zealand litigation were discussed. She says the meeting took place on 21 September 2015 at Greenberg Traurig’s offices in Amsterdam and was attended by “Alex” (Mr van Heeren), Mr van Langeveld, Mr van Thiel, Mr van der Vliet and a secretary from Greenberg Traurig. Ms Kapohe says Mr van Heeren relies on her to read documents to him and to write for him because he has dyslexia. She also says she made a contemporaneous file note of the meeting but does not provide a copy of the file note because it is privileged, and she has not been authorised by Mr van Heeren or the Timbavati or Gerda Foundations to waive privilege on their behalf.23
[53] Ms Kapohe says the purpose of the meeting was to obtain information from Mr van Langeveld who was obviously ill at the time. At paragraph 14 of her affidavit, Ms Kapohe says:
14.One of the questions put to Mr van Langeveld was whether Alex was the founder of the Gerda Foundation or equivalent. Mr van Langeveld said he was not. He was definite about this. I then asked who was the founder or settlor of the Gerda Foundation. Mr van Langeveld did not appear to know the answer and just said Erica would check. I typed his answer into the file note.
[54] In his first affidavit, Mr Auer says that under Liechtenstein law a decision to initiate a criminal proceeding is based largely on the complainant’s accusations, and that even a very slight suspicion is sufficient to initiate a preliminary investigation. Mr Auer also says the fact that preliminary judicial investigations are under way is not an indication that the Liechtenstein prosecution authorities consider Mr Kidd’s complaint to be substantiated or even that there is a strong case against Mr van Heeren and the others being investigated.
[55] Mr Auer also comments on whether Mr van Heeren was in a contested relationship with the Gerda Foundation in relation to the information proceeding and
23 Mr O’Brien offered to provide to the Court on a confidential basis the file note referred to by Ms Kapohe if the Court requested it.
on the operation of Liechtenstein law in determining the economic founder of Liechtenstein foundations. He says it is a peculiarity of Liechtenstein law that resulted in Mr van Heeren being the economic founder of the Gerda Foundation and that would not be readily understood by a lay person unfamiliar with Liechtenstein foundation law.
The documents Mr van Heeren says are privileged
[56] Mr van Heeren claims privilege in respect of only some of the documents exhibited to Dr Niedermüller’s affidavit. The scope of the claim narrowed during the hearing.
[57] Mr O’Brien says the documents over which privilege is claimed fall into four categories:
(a)Correspondence between Mr van Heeren’s Netherlands lawyers and the lawyer for the Gerda Foundation: MEN8 Doc 6, Doc 8, and Doc 10.
(b)Correspondence between the lawyer for the Gerda Foundation and beneficiaries of the Gerda Foundation: MEN8 Doc 1, Doc 2, Doc 3.
(c)Correspondence between the lawyer for the Gerda Foundation and members of the Board of the Foundation which includes privileged communications between Mr van Heeren’s lawyer and the lawyer for the Gerda Foundation: MEN8 Doc 9.
(d)The transcripts of the interrogations of Dr Lamprecht and Dr Schwärzler before the Liechtenstein District Court which include reference to and discussion of privileged communications: MEN9 and MEN10.
[58] For Mr van Heeren, Mr O’Brien and Ms Williams say the documents in [57](a) and (c) are subject to litigation privilege in accordance with s 56 of the Evidence Act 2006, the documents in [57](b) are subject to settlement negotiation privilege in
accordance with s 57 of the Evidence Act, and that the documents in [57](d) are subject to either litigation privilege or settlement negotiation privilege.
[59] For Mr Kidd, Mr Mills and Mr O’Callahan say either that no privilege exists or it has been waived. They also say that if privilege exists and has not been waived, any claim to privilege should be disallowed in accordance with s 67 of the Evidence Act because the communications concerned were made for a dishonest purpose.
Relevant law on privilege
[60] Under r 8.25 of the High Court Rules 2016, a party challenging a claim to privilege in an affidavit of documents may apply to the Court for an order setting aside of modifying the claim. In considering the claim, a Judge may inspect the documents under review for the purpose of deciding the validity of the claim. The Judge may set aside or modify the claim, dismiss the application or make such other order as the Judge thinks just.
[61] While the present dispute over privilege did not arise in the circumstances envisaged in the rule, the hearing proceeded on the basis of the rule.
[62] The relevant documents were all before the Court and counsel referred to their contents in submissions.
[63] There is no dispute between counsel that the claims to privilege are to be determined in accordance with Subpart 8 of the Evidence Act 2006 and established principles of common law. The relevant provisions of the Evidence Act are ss 51, 53, 56, 57, 65, 66 and 67.
Interpretation (s 51)
[64] It is clear from the definitions of “lawyer” and “overseas practitioner” in s 51(1) that “legal adviser”, as that term is used in Subpart 8, includes a qualified lawyer who provides legal advice in the Netherlands and Liechtenstein.
Right of privilege holder to non-disclosure (s 53)
[65] Section 53(1) provides that a person who has a privilege conferred by any of ss 54 to 59 in respect of a communication or any information has the right to refuse to disclose in a proceeding the communication, the information and any opinion formed by a person that is based on that information.
When litigation privilege arises (s 56)
[66] Section 56(1) and (2) codify the common law rule on privilege that communications made and information prepared for the purposes of litigation are privileged. They provide that a person who is a party to a proceeding has a privilege in respect of:
(a)communications between that party and the party’s legal adviser;
(b)communications between the party and any other person;
(c)communications between the party’s legal adviser and any other person;
(d)any information compiled or prepared by the party or the party’s legal adviser; and
(e)any information compiled or prepared by any other person at the request of the party or the party’s legal adviser,
if the communication is made or received, or the information was compiled or prepared, for the dominant purpose of preparing for the proceeding.
[67] As the Privy Council reaffirmed in B v Auckland District Law Society, privilege is more than an ordinary rule of evidence, limited in its application to the facts of a
particular case. It is a fundamental condition on which the administration of justice rests.24
Settlement privilege (s 57)
[68] Section 57(1) provides that a party to a dispute for which relief may be given in a civil proceeding has a privilege in respect of any communication between that party and another party to the dispute if the communication was intended to be confidential and was made in connection with an attempt to settle the dispute.
[69] Section 57(2) provides that a party to a dispute for which relief may be given in a civil proceeding has a privilege in respect of any confidential document that that person has prepared or caused to be prepared in connection with an attempt to settle the dispute.
Waiver (s 65)
[70] Section 65(1) confirms that privilege may be waived either expressly or impliedly.
[71] Section 65(2) provides that privilege is waived if the holder of the privilege, or any person with the authority of the holder of the privilege:
… voluntarily produces or discloses, or consents to the production or disclosure of, any significant part of the privileged communication, information, opinion, or document in circumstances that are inconsistent with a claim of confidentiality.
[72] Section 65(3)(a) provides that privilege is waived if the person holding the privilege acts so as to put the privileged communication, information, opinion or document in issue in the proceeding.
[73] Section 65(4) provides that privilege is not waived if a privileged communication or privileged information is disclosed and the disclosure occurred involuntarily or mistakenly or otherwise without the consent of the privilege holder.
24 B v Auckland District Law Society [2003] UKPC 38, [2004] 1 NZLR 326 at 37, citing Lord Taylor of Gosforth CJ in R v Derby Magistrates’ Court ex p B [1996] 1 AC 487 (HL).
[74] Section 65(5) provides that settlement privilege can be waived only by all of those who have that privilege.
Joint privilege holders (s 66)
[75] Section 66(1) provides that a person who jointly holds with some other person a privilege conferred by any of ss 54 to 60 and 64 in respect of a communication, information or document is entitled to assert that privilege against third parties and is not restricted by those sections from having access to the privileged matter.
Power to disallow privilege (s 67)
[76] Section 67(1) provides that a Judge must disallow a claim for privilege conferred by any of ss 54 to 59 in respect of a communication or information if satisfied there is a prima facie case that the communication was made or received, or the information was compiled or prepared, for a dishonest purpose.
[77] Despite the mandatory terms in which the section is cast, it has been held that a very high threshold applies in order to establish a dishonest purpose and that fraud, sham or trickery must be established to meet that threshold.25
Analysis of the documents and the claims to privilege
Preliminary questions
[78] It is convenient to deal first with two questions that apply to all of the documents for which privilege is claimed:
(a)Has privilege been lost because the documents were provided voluntarily by Dr Schwärzler in the course of his interrogation before the Liechtenstein Court of Justice?
(b)Is it relevant that the documents may not be privileged under the laws of Liechtenstein?
25 Red Bull GMBH v Manhaas Industries Ltd HC Wellington CIV-2010-485-1866, 29 July 2011 (Kós J) at [40]; Rollex Group (2010) Ltd v Chaffers Group Ltd [2012] NZHC 1332, (2012) 22 PRNZ 21 at [33]-[35].
[79] As to the first question, the privilege holders have not authorised the disclosure of the documents. Most of the documents are communications between Mr van Heeren’s legal advisers and the Gerda Foundation or its legal adviser. They concern the rights and interests of Mr van Heeren and, in some cases, the rights and interests of Ms van Heeren-Hermans, in relation to the Gerda Foundation. To the extent there is a privilege in the documents, therefore, the privilege holders are Mr van Heeren and Ms van Heeren-Herman. There is no suggestion that either Mr van Heeren or Ms van Heeren-Hermans authorised the disclosure of the documents. Indeed, in his ninth affidavit Mr van Heeren confirms that he did not authorise Dr Schwärzler to provide this correspondence to the Liechtenstein Court.
[80] In accordance with ss 65(2) and (4) of the Evidence Act, therefore, to the extent the documents are privileged, that privilege has not been waived by the privilege holders as a result of Dr Schwärzler providing the documents to the Liechtenstein Court.
[81] As to the second question, the Privy Council confirmed in B v Auckland District Law Society that New Zealand law on privilege will continue to follow English law unless and until the senior appellate Courts of New Zealand choose to depart from English law.26 It is appropriate, therefore, to follow the approach in Bourns Inc v Raychem Corp, where the English Court of Appeal confirmed that, in accordance with established principles of conflicts of laws, the lex fori (the law of the forum) determines which rules of privilege apply:27
… The fact that under foreign law the document is not privileged or that the privilege that existed is deemed to have been waived is irrelevant. The crucial consideration is whether the document and its information remain confidential in the sense that it is not available for use. If it is, the privilege in this country can be claimed and that claim, if properly made, will be enforced.
[82] The forum in this case is New Zealand. It follows that New Zealand rules on privilege apply, whether or not the documents are privileged in Liechtenstein, and whether or not, if the documents are privileged in Liechtenstein, the privilege has been waived.
26 Above n 2, at 55.
27 Bourns Inc v Raychem Corp (no. 3) [1999] 3 All ER 154 (CA) at 167.
Emails between Dr Schwärzler and de Breij Evers Boon (MEN8, Doc 6)
[83] The emails, dated between 3 and 7 September 2015, were exchanged between Dr Schwärzler on the one side and Mr van Thiel and Ms Maud van Rens of de Breij Evers Boon on the other side. They concerned the timing and venue of a meeting between Dr Schwärzler and the lawyers from de Breij Evers Boon following Mr van Thiel’s letter dated 3 September 2015 to Dr Schwärzler. In that letter, Mr van Thiel asked a series of questions about the Timbavati and Gerda Foundations.
[84] In an email dated 5 September 2015, Mr van Thiel said Mr van Heeren was intending to file a further affidavit later that month and that a critical element of the affidavit would be whether the Gerda Foundation would assist in the request to answer the New Zealand Court’s questions. Mr van Thiel said the meeting was so critical for Mr van Heeren that he would gladly travel to Liechtenstein for the purpose. Dr Schwärzler suggested a meeting at his firm’s offices in Zurich or at the airport in Zurich. Subsequently, the Netherlands lawyers said they could not travel to Zurich at short notice and the meeting took place by telephone conference on 8 September 2015.
[85] Mr O’Brien says the emails were clearly written for the dominant purpose of litigation and are therefore privileged. Mr Mills says any privilege in the emails has been waived because they are part of a chain of correspondence, some of which has already been produced to the Court.
Discussion
[86] The emails in MEN8 Doc 6 were written during the period covered by the correspondence listed and provided by Mr van Heeren in his ninth affidavit. The emails are communications between Mr van Heeren’s legal adviser and another person for the dominant purpose of arranging a meeting in order to prepare Mr van Heeren’s responses to the orders made in the New Zealand proceeding. As such, they are privileged in accordance with s 56 of the Evidence Act.
[87] The documents listed by Mr van Heeren in his ninth affidavit are also privileged under s 56 because they are communications between Mr van Heeren’s legal adviser and another person for the dominant purpose of preparing Mr van
Heeren’s responses to the orders made in the New Zealand proceeding. However, all of those documents have already been provided to this Court with his first, third and fourth affidavits.28 Mr van Heeren has, therefore, already waived his privilege in the documents, notwithstanding the limitation he sought to put on their use in his ninth affidavit.
[88] The question is whether that waiver should be taken as extending to the emails to arrange a meeting that appear to have led to at least two of the documents in respect of which privilege has been waived; the letter of 14 October 2015 from Mr van Thiel to Dr Schwärzler, which refers to the conference call of 8 September 2015 and the outcome of that call, and Dr Schwärzler’s reply of 14 October 2015.
[89] As Mr O’Brien submits, just because Mr van Heeren has waived privilege with respect to some communications does not mean he has waived privilege to all communications between Mr van Thiel and the Gerda Foundation. That point was made by Kós J in McGuire v Wellington Standards Committee (No 1).29
[90] In Ophthalmological Society of New Zealand Inc v Commerce Commission, the Court of Appeal considered the consequences of partial disclosure of privileged advice in relation to a claim for maintaining the privilege with respect to other advice and said:30
In the end … it is the Court’s objective judgment as to the consistency of the conduct with maintaining the privilege which must be assessed in all the circumstances. That requires close analysis of the particular context: what is the issue in relation to the privilege; how does the evidence relate to that issue and is there inconsistency that could lead to injustice of the privilege is upheld.
[91] In McGuire, after citing the above passage from Ophthalmological Society, Kós J said: 31
The following points are, I think, relevant to consideration of the extent to which other parties are entitled to reach when there has been a partial waiver of privilege. … The first question concerns relevance. How is the further material relevant to matters truly in issue in the proceeding? That requires a
28 See n 19 above.
29 McGuire v Wellington Standards Committee (No 1) [2014] NZHC 1159 at [23].
30 Ophthalmological Society of New Zealand Inc v Commerce Commission [2003] 2 NZLR 145 (CA) at [30].
31 Above n 29, at [27].
robust assessment of the pleadings, and what evidence legitimately may be admitted on the issues in the case. … The material (and yet-undisclosed further material) is quite often irrelevant to what is really in issue. The second question concerns consequence. Assuming relevance, what injustice may arise if the remaining privilege is preserved, and the further material is not produced or adduced? Only by weighing those two questions in the entire context of the proceeding can the Court decide whether it is necessary in the interests of justice to direct that further material be produced, and be admissible at trial. Because only if it is necessary to avoid real injustice should privilege beyond what has already been disclosed be held to have been waived. And then, the extent of production or admission will be restricted to what is necessary adequately to ameliorate that injustice.
[92] Mr O’Brien says the issue in dispute on the pleadings is the accounting between Mr van Heeren and Mr Kidd and the emails have no relevance or consequence to that issue or to Ms van Heeren-Hermans’ application to be joined as an interested party, which was the context in which they were produced. Mr O’Brien agrees that, ostensibly, the emails are about where and how to have a meeting and that disclosure of the messages would be unlikely to be of concern to Mr van Heeren. However, Mr van Heeren maintains his claim to privilege in the documents.
[93] Mr Mills submits that the emails are relevant and consequential because they show Dr Schwärzler and Dr Lamprecht had offered to meet in person in Zurich with Mr van Thiel and Ms van Rens and to bring with them “the total file of the foundation”. Mr Mills says this information contradicts what Mr van Heeren said in his fourth affidavit where he stated, in relation to the telephone conference on 8 September 2015, that even if Ms van Heeren-Hermans’ consent could be obtained, it would take time to collate relevant information and provide a substantive response. Mr Mills says that bears directly on Ms van Heeren-Hermans’ application.
[94] Secondly, Mr Mills says the emails relate generally to Mr van Heeren’s compliance with Fogarty J’s orders and, more generally, to Mr van Heeren’s credibility which, Mr Mills says, is likely to be an issue in the accounting that is to take place before Jagose J. Mr Mills also says it would lead to unfairness if the emails are not disclosed because, in his submission, they support an inference that Mr van Heeren’s Netherlands lawyers were deliberately reluctant to have the full information about the Gerda Foundation put before them and, in particular, did not want to a discussion about whether Mr van Heeren had rights in the Gerda Foundation beyond his rights as beneficiary.
[95]I do not accept Mr Mills’ submissions on these documents.
[96] It is not apparent that Mr van Heeren was even aware of the emails. It is quite possible that Mr van Thiel did not include such operational matters in his reports to Mr van Heeren. There is also no obvious connection between those messages and what Mr van Heeren said in his fifth affidavit about the timeliness of a substantive response. Mr van Heeren’s comments about timeliness related to the Gerda Board completing its decision-making processes, not the collation of information.
[97] In addition, as far as knowledge of Mr van Heeren’s rights in relation to the Gerda Foundation is concerned, the evidence is that the inquires of Mr van Thiel and de Breij Evers Boon were not limited to Mr van Heeren’s position as beneficiary. The letter Mr van Thiel sent to Mr Schwärzler on 3 September 2015 and which led to the proposal for a meeting, then telephone conference, asked a series of specific and open questions, including “who was or were the founder(s) or equivalent of the Gerda Foundation”.
[98] To the extent there were people ‘in the know’ about the full range of Mr van Heeren’s rights and powers, the evidence strongly suggests that Mr van Thiel was not one of them. He became Mr van Heeren’s lawyer as the New Zealand proceeding began. We do not know how extensively he was briefed by Mr van Heeren, Greenberg Traurig or the Gerda Foundation when he started acting for Mr van Heeren.
[99] Of Mr van Heeren’s advisers and the Gerda Foundation, the ones who can be presumed to know of Mr van Heeren’s other capacities and powers in relation to the Foundation are Mr van Langeveld, who set up the Foundation and was on its Board, Professor Ydema of Greenberg Traurig, who was the recipient of the mandate letter of 9 June 2009, Dr Lamprecht, the signatory of the mandate letter and who was also on the Foundation Board, and Dr Schwärzler, who admitted his knowledge of the mandate letter during his interrogation before the Liechtenstein Court of Justice. Mr van Heeren said in his fifth affidavit, in a statement I consider was drafted with some care, it was his understanding that none of those who had been involved in the requests to the Gerda Foundation were aware that he was the Founder. I consider that statement
to be a reference to Mr van Thiel who had made all the requests to the Gerda Foundation up to that point.
[100] In those circumstances, I do not consider there is any proper basis for inferring an ulterior motive on the part of Mr van Thiel in his decision to opt for a telephone conference with Dr Schwärzler and Dr Lamprecht rather flying to Zurich for the day to have an in-person meeting.
[101] Accordingly, I am not persuaded that the emails in MEN8 Doc 6 are either relevant or of consequence. They may or may not be innocuous, and their disclosure may or may not be harmful to Mr van Heeren, but they are privileged and that privilege has not been waived. I do not consider that the disclosure of the other correspondence between Mr van Thiel and Dr Schwärzler at about the same time is inconsistent with a claim for continued confidentiality in respect of these emails. They were not part of the sequence of disclosed advice. They were operational messages about setting up a meeting.
[102] It follows that I do not consider that there is a prima facie case that the emails were made or received for a dishonest purpose such as to require me to disallow the claim for privilege in the emails in accordance with s 67 of the Evidence Act.
Correspondence between Dr Schwärzler and beneficiaries of the Gerda Foundation (MEN8 Doc 1, Doc 2, Doc 3)
[103]These documents consist of:
(a)A letter dated 14 January 2016 from Dr Schwärzler to Ms van Heeren- Hermans (Doc 3);
(b)Ms van Heeren-Hermans’ email dated 7 March 2016 in reply to Dr Schwärzler’s letter (Doc 2);
(c)A letter dated 10 February 2016 from Dr Schwärzler addressed to both Mr van Heeren and Ms van Heeren-Hermans (Doc 1).
[104] Mr O’Brien says Docs 2 and 3 are part of a chain of correspondence that attracts privilege under s 57 of the Act. Mr Mills says neither document is a settlement proposal. He also says Doc 1 proposes a “privileged meeting” and this does not amount to a settlement proposal.
[105] I do not accept that Doc 3 and Doc 2 are part of a larger chain of privileged communications. While Doc 1 comes between Docs 3 and 2 in time, it is not referred to in Doc 2, the last in time of the three documents. Nor does Doc 1 refer to Doc 3, which is the first in time. For these reasons, I consider that Docs 2 and 3 fall for consideration quite separately from Doc 1.
[106] The communications in Doc 3 and Doc 2 are between Dr Schwärzler, as lawyer for the Gerda Foundation, and Ms van Heeren-Hermans, as a beneficiary of the Foundation. In Doc 3, Dr Schwärzler referred to the information proceeding initiated by Mr van Heeren. He asked Ms van Heeren-Hermans whether disclosure of the information as sought by Mr van Heeren would be in her interests. He observed that if Ms van Heeren-Hermans approved of full disclosure, the costs of the information proceeding would be avoided.
[107] In Doc 2, Ms van Heeren-Hermans stated that she was not in a position to determine whether or not the disclosure of information as sought would be in her interests and said she did not give her approval to a full disclosure.
[108] Dr Schwärzler’s letter and Ms van Heeren-Hermans’ reply were written in relation to the information proceeding in Liechtenstein, not the New Zealand proceeding. To the extent there was a dispute in relation to the Liechtenstein proceeding, the dispute was between Mr van Heeren and the Gerda Foundation.
[109] Neither Mr van Heeren nor the Foundation was in dispute with Ms van Heeren- Hermans. Ms van Heeren-Hermans was not a party to the information proceeding, even if she may have had an interest in the outcome of the proceeding, including in the Foundation avoiding the litigation costs involved. The question asked of Ms van Heeren-Hermans was whether she would give her consent to a disclosure of information. Her right to consent or withhold her consent was not in dispute. No
question had arisen for which relief could have been given in a civil proceeding. Accordingly, s 57 of the Evidence Act does not apply.
[110] It follows that neither Dr Schwärzler’s letter (MEN8 Doc 3) nor Ms van Heeren-Hermans’ reply (MEN8 Doc 2) is privileged.
[111] In Doc 1, Dr Schwärzler wrote to both Mr van Heeren and Ms van Heeren- Hermans in their capacities as beneficiaries of the Gerda and Timbavati Foundations. He referred to Mr van Heeren’s request for information regarding the two Foundations and suggested a meeting with all beneficiaries and advisors and said it was the interest of the foundations and their beneficiaries to hold an out of court settlement discussion on a privileged basis.
[112] The proposed parties to the discussion included the Gerda Foundation and Mr van Heeren, the two parties to the information proceeding. It is clear that the proposed meeting and, I infer, the letter proposing the meeting, were intended to be confidential. The proposed meeting was with a view to settling Mr van Heeren’s requests for information. That must have included settling the information proceeding brought by Mr van Heeren against the Gerda Foundation.
[113] Even if Mr van Heeren and the Gerda Foundation were not in an adversarial relationship in the context of the information proceeding, they were engaged in a civil proceeding in order to resolve a legal issue. It follows that, whether or not Ms van Heeren-Hermans and the Timbavati Foundation were parties to a dispute between Mr van Heeren and the Gerda Foundation, Doc 1 was:
(a)A communication between the two parties to a proceeding before the Liechtenstein court, namely Mr van Heeren and the Gerda Foundation;
(b)Intended to be confidential; and
(c)Made in connection with an attempt to settle the proceeding.
[114] Accordingly, Dr Schwärzler’s letter in MEN8 Doc 1 is privileged in accordance with s 57 of the Evidence Act.
Correspondence between Dr Schwärzler and Mr van der Vliet (MEN 8 Doc 8 and Doc 10)
[115]These documents comprise:
(a)A letter dated 18 April 2017 from Mr van der Vliet of Greenberg Traurig to Dr Schwärzler (MEN8, Doc 8); and
(b)A letter dated 24 August 2017 from Dr Schwärzler to Mr van der Vliet (MEN8, Doc 10).
[116] Doc 8 advised of Mr van Heeren’s intention to provide a further affidavit to inform the Court of his relationship with the Gerda Foundation:
… in the light of matters that had become apparent to him recently, so as to ensure that this relationship with the foundation, as Mr van Heeren currently understands it to be, is properly understood by all parties to the proceeding and the court.
[117]The letter went on to state that Mr van Heeren’s affidavit would also:
… end the concerns raised by you in your letter to me of April 5, 2017 … and address concerns raised by Mr van Heeren and his New Zealand counsel, including those in the letter of Fee Langstone of March 29, 2017.
[118] The letter also responded to a request for an assessment of the prospects of Mr Kidd’s claims against Mr van Heeren.
[119] Doc 10 is not a response to Doc 8 although it refers to Doc 8. It began by referring to another letter from Mr van der Vliet dated 6 August 2017 to “the directors of the underlying entities of the structure” which remained unanswered. The letter then referred to concerns of the directors of the Gerda and Timbavati Boards that Mr van Heeren had filed in the New Zealand proceeding the Liechtenstein Courts’ decisions in the information proceeding without fully disclosing his rights and position in the “Liechtenstein structure”.32 It expressed a concern that Mr van Heeren’s
32 In formal terms, it appears Mr van Heeren provided copies of the Liechtenstein courts’ decisions with his fifth affidavit, i.e. at the same time as he informed the Court that he was the founder of the Gerda Foundation, even if copies of the decisions had been provided to Mr Kidd’s solicitors at earlier dates. However, that detail is not relevant to whether the documents in MEN8, Doc 8 and Doc 10 are privileged.
New Zealand counsel may also not have been fully aware of Mr van Heeren’s rights in the structure.
[120] The letter proposed a video-conference with Mr van Heeren’s New Zealand counsel, Mr van der Vliet, and a lawyer representing Ms van Heeren-Hermans, and included a proposed agenda. The letter sought:
… written confirmation of the client’s New Zealand counsels that they are fully aware of the client’s rights and positions in the Liechtenstein Foundations and especially of his right to revoke the Gerda Foundation, which grants him comprehensive control over Gerda Foundation and the assets held by Gerda.
[121] The letter also requested confirmation that Mr van Heeren’s position and rights would be fully disclosed to the New Zealand courts in due course and offered to provide a draft affidavit for that purpose or to review any affidavit prepared by others.
[122] Mr O’Brien submits that Mr van der Vliet’s letter of 18 April 2017 is a privileged communication because its purpose was to update Dr Schwärzler on the New Zealand proceeding in which the Gerda Foundation and Mr van Heeren had a common interest and it has not been voluntarily disclosed by Mr van Heeren. Mr O’Brien also submits that it cannot reasonably be asserted that Mr van Heeren has waived privilege in the letter because he has neither asserted reliance on the letter not sought to inject the substance of the letter by putting it in issue in the New Zealand proceeding.
[123] Mr O’Brien makes similar submissions with respect to Doc 10 which he says, has no relevance to Ms van Hereen-Hermans’ application to be joined as an interested party. Mr O’Brien also says the purpose of Doc 10 solely concerned the New Zealand litigation, including compliance with the Court’s restraining orders.
[124] Mr Mills submits that Doc 8 is not privileged because it was not prepared for the dominant purpose of preparing for a proceeding. Mr Mills says the letter is a response by Mr van der Vliet to concerns raised by Dr Schwärzler in a letter of 5 April 2017 to Mr van der Vliet and to Dr Schwärzler’s request for information on the status of the New Zealand proceeding. Mr Mills submits that the letter was not in connection with preparation for the New Zealand proceeding. Mr Mills also says that Doc 10 is
not privileged because it contains expressions of concern by Dr Schwärzler about the fact that the Liechtenstein decisions in the information proceeding had been put before the New Zealand courts without disclosing the full picture of Mr van Heeren’s rights and powers under the Gerda Foundation.
[125] Mr Mills says that even if the documents were privileged, that privilege has been waived by Mr van Heeren as a consequence of his production of other correspondence between Dr Schwärzler and Mr van Heeren’s Netherlands lawyers which convey only a selective account of the advice that Mr van Heeren received from the Netherlands and Liechtenstein about his rights and powers in relation to the Gerda Foundation.
[126] Mr Mills says that Docs 8 and 10, and also Doc 9 which is discussed below, show that once the existence of the founder had been raised in the information proceeding, the directors of the Gerda Foundation Board and Dr Schwärzler became increasingly concerned that Mr van Heeren had not disclosed to the New Zealand Court the true situation about his rights and powers with regard to the Gerda Foundation and took strong steps to ensure that appropriate disclosure was made. Mr Mills submits that, in accordance with the principle of collateral waiver, because Mr van Heeren waived privilege over a good number of letters between the Gerda Foundation and his Netherlands lawyers in order to demonstrate he was acting in accordance with legal advice and was doing all he could to comply with Fogarty J’s orders, he cannot fail to disclose other advice from the same quarters that casts a rather different light on matters.
[127] Mr Mills also notes that after receiving Docs 8 and 10 from Dr Niedermüller, K3 Legal, Mr Kidd’s New Zealand solicitors wrote to Fee Langstone, Mr van Heeren’s New Zealand solicitors, asking for copies of Fee Langstone’s letter of 28 March 2017 and Dr Schwärzler’s letter of 5 April 2017 to Greenberg Traurig which were referred in Doc 8. Mr Mills says K3 Legal did not receive a reply to their letter. Mr Mills seeks an order that those documents be disclosed to Mr Kidd.
[128] Mr Mills says Docs 8 and 10 are also relevant because they bear on the extent to which Mr van Heeren complied with Fogarty J’s orders and therefore to the Court’s
assessment of the reliability of other disclosures that Mr van Heeren has made in preparation for the accounting to take place before Jagose J next year. Mr O’Brien says in response that it is well established that discovery will not be ordered if the purpose of discovery is to challenge the creditworthiness of a witness, and refers to the decision of the UK Court of Appeal in Thorpe v Chief Constable of the Greater Manchester Police.33
Discussion
[129] Under s 56 of the Evidence Act, Mr van Heeren has a privilege in a communication between Mr van der Vliet, his legal adviser, and Mr Schwärzler, where the communication is made or received for the dominant purpose of preparing for the New Zealand proceeding.
[130] Doc 8 begins by informing Dr Schwärzler of Mr van Heeren’s intention to provide a further affidavit to inform the Court of his relationship with the Gerda Foundation. It also responds to concerns raised in letters from Dr Schwärzler and Fee Langstone and responds to Dr Schwärzler’s request for an update on the New Zealand proceeding. It is apparent, therefore, that the dominant purpose of Doc 8 was preparation for the New Zealand proceeding, even if the letter was responding to questions raised by others in relation to the proceeding. Accordingly, Doc 8 is privileged, subject to the question of waiver.
[131] Doc 10 is clearly privileged. It was written to inform the position Mr van Heeren should take in filing a further affidavit in the New Zealand proceeding. It includes an offer to prepare a draft of that affidavit.
[132] The question is whether the privilege in the documents has been waived. Mr O’Brien’s submissions focus on Mr van Heeren’s actions in relation to the individual communications. Mr Mills’ submissions address Mr van Heeren’s actions in relation to the body of correspondence he received from his Netherlands lawyers and the Gerda Foundation and in respect of which Mr van Heeren has waived privilege by exhibiting the correspondence in his various affidavits.
33 Thorpe v Chief Constable of the Greater Manchester Police [1989] 1 WLR 665 (CA).
[133] In McGuire,34 Kós J observed that if a “significant part” of the privileged information is disclosed, the balance of that material is susceptible to being required to be disclosed but cautioned that it does not follow from the unqualified disclosure of part of the chain of communication that the entirety of communication between client and counsel, from the day of their first acquaintance, must be produced. Kós J also referred to Shannon v Shannon where the Court of Appeal had made the important observation that the effect of s 65(3)(a) is narrower than it might seem:35
The paragraph talks about putting the privileged communication in issue. This is not the same thing as putting a matter in issue which cannot fairly be assessed without reference to the relevant legal advice.
[134] It was after that analysis that Kós J went on to identify the questions of relevance and consequence as set out at [91] above.
[135] As Mr O’Brien says, Mr van Heeren did not put Docs 8 or 10 in issue. He has not referred to those documents or exhibited them in his various affidavits. However, Mr van Heeren has put in issue a significant number of privileged communications between his Netherlands lawyers and the Gerda Foundation: the 12 communications exhibited in his first, third, and fourth affidavits and the two communications exhibited in his sixth affidavit. All of those communications concerned Mr van Heeren’s ability to obtain information from the Gerda Foundation in order to comply with Fogarty J’s orders and, in that regard, Mr van Heeren’s position and powers in relation to the Gerda Foundation.
[136] Apart from the second affidavit (which was contemporaneous with the first affidavit), between April 2015, when Fogarty J’s original orders were made, and December 2017, when Mr van Heeren swore his sixth affidavit to which he exhibited Dr Schwärzler’s letter of 13 December 2017 setting out the history of the Gerda Foundation, the only affidavit sworn by Mr van Heeren that did not exhibit correspondence between Mr van Heeren’s Netherlands lawyers and the Gerda Foundation was the fifth affidavit sworn in September 2017. Given the practice
34 Above n 29 at [23].
35 Shannon v Shannon [2005] 3 NZLR 757 (CA) at [47].
followed in the first, third, fourth and sixth affidavits, the absence of accompanying advice with the fifth affidavit is significant.
[137] The absence is even more significant when it was in the fifth affidavit that Mr van Heeren disclosed for the first time that he was the founder of the Gerda Foundation and had control of the Foundation, the matters canvassed in the correspondence exhibited with the other affidavits.
[138] Doc 8 was written between the handing down of the decision of the Court of Justice on 8 February 2017 and the decision of the Court of Appeal dated 18 May 2017. Doc 10 was written after the Court of Appeal had handed down its decision. They were both written in the period covered by Mr van Heeren’s fifth affidavit. They were both relevant to the content of that affidavit.
[139] As discussed in Bankim Thanki’s “The Law of Privilege”, many reported cases about privilege involve a situation where one party has introduced some privileged material in the course of proceedings and the other side argues that other privileged material must be produced as a result.36 Thanki points out that it is clear from the authorities that privilege is waived only when the original “anchor” material is both relied on by the privilege holder in support of its case and deployed in Court. As Thanki goes on to discuss, the rationale for waiver of collateral material is one of fairness: by seeing only the material in respect of which there is a direct waiver, the Court may have only an incomplete picture of the events in question.
[140] In Nea Karteria Maritime Co Ltd v Atlantic & Great Lakes Steamship Corp (No 2), Mustill J said:37
Where a party is deploying in court material which would otherwise be privileged, the opposite party and the court must have an opportunity of satisfying themselves that what the party has chosen to release from privilege represents the whole of the material relevant to the issue in question. To allow an individual item to be plucked out of context would be to risk injustice through its real weight or meaning being misunderstood.
36 Bankim Thanki and others The Law of Privilege (3rd ed, Oxford University Press, Oxford, 2018) at 5.35.
37 Nea Karteria Maritime Co Ltd v Atlantic & Great Lakes Steamship Corporation (No 2) [1981] Com LR 138, 139 (QBD).
[141] The principle in Nea Karteria Maritime was applied by Katz J in Capital + Market Finance Ltd v Perpetual Trust Ltd38 and Downs J in Robert Jones Holdings Ltd v McCullagh.39 In Capital + Merchant Finance, Katz J stated:40
This principle, sometimes known as the “cherry-picking rule”, aims to prevent a party from presenting the court with a selective view of the relevant evidence. This will occur if a party is able to waive privilege in relation to helpful portions of evidence, while hiding behind privilege in order to avoid disclosing other parts of evidence that are potentially unhelpful. In such circumstances, privilege is waived in relation to all the material relevant to the issue in question, as there would otherwise be a risk of injustice as to the real weight or meaning of the document or evidence that has been disclosed. Where collateral waiver applies, a party will be required to disclose any further privileged material that is relevant to the same issue for which the privileged material was deployed.
[142] In Robert Jones Holdings, Downs J observed that, “One does not police cherry picking by harvesting the entire crop.”41 Both Katz J and Downs J emphasised the need to limit the waiver to privileged communications relevant to the same discrete factual proposition in relation to which the disclosed privileged communications were deployed. That was because the question in both cases was whether privilege had been waived generally as a result by witnesses referring to a narrow range of privileged communications.
[143] The situation in the present case is very different from those in Capital + Merchant Finance and in Robert Jones Holdings. Here, most of the communications between Mr van Heeren’s Netherlands legal advisers and the Gerda Trust and its lawyer that took place over the period when Mr van Heeren’s position and powers in relation to the Gerda Trust were in issue have been disclosed and relied on to support Mr van Heeren’s contentions that he could not could not comply with Fogarty J’s orders. That is a considerable quantity of “anchor” material on which Mr van Heeren has relied in support of his case and deployed in Court. Only a narrow range of communications that took place within that period has not been disclosed. It was those communications that took place when the most significant developments occurred.
38 Capital + Merchant Finance Ltd v Perpetual Trust Ltd [2015] NZHC 1233.
39 Robert Jones Holdings Ltd v McCullagh [2016] NZHC 2529.
40 Above n 36, at [29].
41 Above n 37, at [68].
[144] I consider there is a real risk of unfairness and injustice if Mr van Heeren is able to deploy a series of communications to buttress his contentions that he had done all he could do to comply with the New Zealand Court’s orders while claiming privilege over communications that cast a different light on Mr van Heeren’s actions. The contents of the documents, in particular Doc 10, raise serious questions about the timeliness and accuracy of the information that Mr van Heeren put before the New Zealand Court in response to Fogarty J’s orders.
[145] For these reasons, I am satisfied that Mr van Heeren has waived privilege in Docs 8 and 10 as a consequence of putting in issue other communications that bear on the same issues as those in Docs 8 and 10.
[146] For the same reasons, I am satisfied that Mr van Heeren has waived privilege with respect to Dr Schwärzler’s letter of 5 April 2017 to Mr van der Vliet which is referred to in Doc 8 and in Doc 10. It is another letter in the exchange of correspondence between Mr van Heeren’s Netherlands legal advisers and the Gerda Foundation and should be disclosed.
[147] The same conclusion does not apply to the letter dated 28 or 29 March 2017 from Fee Langstone which is also referred to in both Doc 8 and in Doc 10. On the evidence before me, Mr van Heeren has not put in issue any correspondence between Fee Langstone and Mr van Heeren’s Netherlands legal advisers or the Gerda Foundation.
[148] Even if, as Mr Mills, disclosure of Docs 8 and 10 is relevant to the credibility of Mr van Heeren’s evidence more generally, that does not constitute a bar to the operation of the rules of evidence with respect to waiver of privilege. While, as Neil LJ said in Thorpe v Chief Constable of Greater Manchester Police, there is a long- standing practice not to order discovery which is directed solely to credit, that is not the case here. Here, a claim to privilege is being denied because of waiver. Issues of credit may arise as a consequence, but that is not unusual when a claim to privilege is denied and production of a document ordered. In the present case, there is the additional consideration of whether Mr van Heeren has complied with Court orders. I am satisfied that that consideration establishes the relevance and consequence of the
documents, even if they may be of limited relevance to Ms van Heeren-Hermans’ application to be joined as an interested party.
Correspondence between the lawyer for the Gerda Foundation and members of the Board of the Foundation (MEN8, Doc 9)
[149] Doc 9 comprises an email dated 26 July 2017 between Dr Schwärzler and the then current Directors of the Gerda Foundation, Dr Lamprecht and Claudia Schaedler- Bissig, and a reply the same day from Dr Lamprecht to Dr Schwärzler. The heading of the emails was “AW: Gerda / Timbavati – Conference Call with Thomas van der Vliet dated 27 July 2017”. The emails are in German, but an English translation has been provided by Dr Niedermüller.
[150] In his email, Dr Schwärzler reports on the conference call he had had earlier that day with Mr van der Vliet. The first part of the email discusses developments in a related proceeding in New Zealand. Mr O’Brien and Mr Mills agree that the discussion concerned compliance with restraining orders made in that proceeding. The second part of the email expresses Dr Schwärzler’s concerns about the filing in the New Zealand proceeding of the decisions of the Liechtenstein Courts in the information proceeding.
[151] The concerns expressed in the email are similar to those conveyed to Mr van der Vliet in Doc 10 but with more emphatic language about the implications of that step. It also reported on a discussion with Mr van der Vliet about information that had come to light on Greenberg Traurig’s files concerning Ms van Heeren-Hermans’ knowledge of Gerda Foundation arrangements and the implications of that for “the previously planned strategy of having the by-laws of Gerda challenged by the spouse.”
[152] In his brief reply, Dr Lamprecht comments on one aspect of the first part of Dr Lamprecht’s email and says he shares Dr Schwärzler’s opinion regarding the provision of the Liechtenstein decisions to the New Zealand Court.
[153] Mr O’Brien says the subject matter of the emails is the New Zealand proceeding in which Mr van Heeren and the Gerda Foundation have a common interest. He says Mr van Heeren claims privilege on the basis that Doc 9 is an internal
Foundation communication in which Dr Schwärzler is reporting on obviously privileged discussions between Dr Schwärzler and Mr van der Vliet. Mr O’Brien says there has been no waiver of privilege because there has been no voluntary disclosure by Mr van Heeren and Mr van Heeren has not asserted reliance on the document or put the document in issue in the New Zealand proceeding.
[154] Mr Mills says Doc 9 was not prepared in preparation for a proceeding and so is not privileged. Mr Mills also says Doc 9 is relevant because it will enable the Court to draw inferences about the credibility of Mr van Heeren’s statements about the advice he had received from his Netherlands lawyers and the Gerda Foundation.
Discussion
[155] Doc 9 was a communication between Dr Schwärzler, the lawyer for the Gerda Foundation, and the Directors of the Gerda Foundation. At a primary level, therefore, the Gerda Foundation is the privilege holder in the document. There is no explicit statement by the Gerda Foundation that it has waived its privilege. However, the fact that Dr Schwärzler made the document available to the Liechtenstein Court of Justice and the Gerda Foundation has not asserted its privilege in the document in this proceeding is indirect evidence that the Gerda Foundation has waived its privilege.
[156] In any event, Mr van Heeren’s claim is that he holds privilege in the document. Having regard to s 56(2) of the Evidence Act, the document is not a communication between Mr van Heeren and any other person, or a communication between Mr van Heeren’s legal adviser and any other person. It does, however, contain information prepared by Mr van Heeren’s legal adviser (Mr van der Vliet) and information prepared by another person (the Gerda Foundation) at the request of Mr van der Vliet. Accordingly, it is privileged, provided I am satisfied the information was prepared for the dominant purpose of preparing for a legal proceeding.
[157] I am satisfied the document was prepared for the dominant purpose of preparing for two legal proceedings in New Zealand; the related proceeding in which the restraining orders were made and the present proceeding. A discussion about compliance with restraining orders entails preparing for next steps if non-compliance should be alleged. The discussion about the filing of the decisions of the Liechtenstein
information proceeding in the New Zealand proceeding included a discussion about what should done as a consequence of that filing.
[158] Accordingly, I am satisfied that Doc 9 is privileged. I am also satisfied that that privilege has not been waived. Unlike Doc 10, which discusses the same issue discussed in the second part of Doc 9, Mr van Heeren has not put Doc 9 in issue by way of collateral waiver through his waiver of privilege in the other correspondence between Mr van Heeren’s Netherlands legal advisers and the Gerda Foundation. Mr van Heeren waived privilege in relation Doc 10 because he put those communications in issue and not because he put in issue the substance of the communications. That is the distinction noted by the Court of Appeal in Shannon v Shannon, and commented on by Kós J in McGuire, as noted above at [133].
[159] There remains the question of whether s 67 of the Evidence Act applies. That requires consideration of whether the privileged information in the emails was prepared for a dishonest purpose.
[160] As far the related proceeding is concerned, there is nothing in the emails or any other evidence to suggest there was any “fraud, sham or trickery” afoot of the kind held to be necessary by Goff J in Crescent Farm (Sidcup Sports) Ltd v Sterling Offices Ltd42 and by Kós J in Red Bull GMBH v Manhaas Industries Ltd43 and Rollex Group (2020) Ltd v Chaffers Group Ltd.44
[161] The issue is more complex with regard to the second part of Dr Schwärzler’s email in Doc 9. That relates to the use in the New Zealand proceeding of the decisions of the Liechtenstein courts in the information proceeding and also refers to a perceived inability to implement “the previously planned strategy of having the by-laws of Gerda challenged by the spouse” and a request by Mr van der Vliet for the Gerda Foundation to consider an amendment to the Gerda statutes as a consequence.
[162] Although this was not his primary submission, Mr Mills invited me to infer from this email, as well as MEN8 Doc 10 and the decisions of the Liechtenstein courts
42 Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd [1972] Ch 553 (ChD) at 565.
43 Above n 25, at [40].
44 Above n 25, at [32].
concerning the search of the Fidarco premises, that there is sufficient basis for the Court to conclude that the Liechtenstein proceeding was a sham and that Mr van Heeren had allowed that sham to extend to the New Zealand proceeding by filing the Liechtenstein decisions without disclosing that he had much more extensive rights to information as the founder of the Foundation and through the mandate letter of 9 June 2009.
[163] I accept that the evidence establishes that there are serious questions about the extent of Mr van Heeren’s knowledge of his powers in relation to the Gerda Foundation at the time he brought the information proceeding. Despite what Mr van Langeveld may have said at a meeting in Amsterdam in September 2015, despite what Mr van Heeren says in his ninth and earlier affidavits that he did not pay attention to the details of the Foundations and left these matters to his advisers, and despite what Mr Auer says about the operation of Liechtenstein law with respect to the economic founder of Liechtenstein foundations, I consider it inherently unlikely that Mr van Heeren has not known throughout the course of this proceeding that he had and could exercise effective control over the Gerda Foundation.
[164] How that control was achieved and could be exercised may not have registered with Mr van Heeren, but I consider it likely that the fact of effective control would have been known to him. I base that conclusion, in particular, on the real-world presumptions referred to by Fogarty J at [35] of the judgment he gave in August 2015 and again at [42] of the judgment he gave in October 2015, and which are quoted earlier in this decision,45 and the mandate letter of 9 June 2009 which identified Mr van Heeren as the founder of the Gerda Foundation and which bound Dr Lamprecht to act on Mr van Heeren’s instruction. That letter was clearly an important feature of the Liechtenstein structure and its consequences, if not the mechanism itself, would have been unlikely to have been forgotten.
[165] However, I accept that I should be cautious, as Mr O’Brien urged me to be, in making findings of credibility and veracity on the basis of untested affidavit evidence.
45 See [23]-[24] above.
[166] In addition, for the purposes of deciding whether s 67 applies to the second part of Dr Schwärzler’s email in Doc 9, I do not need to decide whether Mr van Heeren has been less than straightforward in his responses to the Court in relation to the implementation of Fogarty J’s orders. Nor do I need to decide whether the Liechtenstein information proceeding was a sham, as alleged by Mr Kidd in the criminal complaint in Liechtenstein. In any event, that issue is now before the Liechtenstein courts.
[167] In Rollex Group (2020), Kós J reviewed the scope of the common law exception to privilege based on dishonest purpose as it has developed in New Zealand and other jurisdictions and considered how s 67(1) should be applied in that regard. He confirmed that a very high threshold applies before the exception will be made out because of the importance of maintaining a litigant’s right of access to legal advisers.46 Importantly, for present purposes, Kós J also confirmed that, only exceptionally, where the right of access is abused so as to assist in an act of dishonesty, will the privilege be set aside.47 He concluded that at common law, it is apparent that the privileged advice has to be part of the instrumentation of the illegal purpose for it to lose its ordinary protection.48 He applied that approach to the facts of the case before him and concluded that the plaintiffs had not shown a prima facie case that the emails at issue in that case had been sent for a dishonest purpose.49
[168] Applying the approach in Rollex Group (2020) to the present case, it is apparent that the privileged information discussed by Dr Schwärzler with Mr van der Vliet was not prepared for a dishonest purpose. To the contrary, the email shows that Dr Schwärzler had expressed to Mr van der Vliet and then to the Directors of the Gerda Foundation Board members his concern at Mr van Heeren’s actions and how they may be viewed at New Zealand law. The emails do not suggest that Dr Schwärzler was seeking to assist or to be part of the instrumentation of an illegal purpose in expressing those concerns.
46 Above n 25, at [31]-[45].
47 At [35].
48 At [45].
49 At [51].
[169] I consider the same conclusion applies to the discussion about the strategy of having the spouse challenge the by-laws. Whether or not there was such a strategy, and whether or not Mr van der Vliet’s request that the Gerda Board consider amending its statutes was appropriate, Dr Schwärzler’s response showed that he had no intention of pursuing any such suggestion until the situation in New Zealand had been clarified.
[170] For these reasons, I am satisfied that s 67 of the Evidence Act does not apply to MEN8, Doc 9. As a consequence, MEN8 Doc 9 is privileged.
Interrogations of Dr Lamprecht and Dr Schwärzler before the Liechtenstein Court of Justice (MEN9 and MEN10)
[171] Mr O’Brien says the interrogations of Dr Lamprecht and Dr Schwärzler were not voluntary and cannot give rise to a waiver of any privilege Mr van Heeren may have in the proceedings. Mr O’Brien also says the transcripts of the interrogations are not relevant to Ms van Heeren-Hermans’ application to be joined as an interested party.
[172] Mr O’Brien does not say there is any privileged information in the transcript of the interrogation of Dr Schwärzler. It is apparent from the transcript that there is none.
[173] While there is a reference to the settlement discussion involving the beneficiaries of the Gerda Foundation, the content of that discussion is not disclosed other than Ms van Heeren-Hermans’ unwillingness to consent to the disclosure of Gerda Foundation information. As discussed above, Ms van Heeren-Hermans was not a party to any dispute with the Foundation so that information is not privileged. In any event, it has already been disclosed.
[174] Dr Lamprecht is asked to comment on various letters written between the Gerda Foundation, including Dr Schwärzler, and Mr van Heeren’s Netherlands legal advisers. Those letters have been disclosed by Mr van Heeren in his various affidavits.
[175] Accordingly, the transcript of the interrogation of Dr Lamprecht in MEN9 is not privileged.
[176] Mr O’Brien says the transcript of the interrogation of Dr Schwärzler includes reference to privileged information. Mr O’Brien acknowledges that Mr van Heeren is not the privilege holder in relation to the advice that Dr Schwärzler provided to the Gerda Foundation but says Mr van Heeren is a joint privilege holder with the Foundation in relation to the discussion of the Foundation’s attempts to settle the information proceeding, and that privileged communications between Dr Schwärzler and Mr van Heeren’s Netherlands attorneys are discussed and recorded in the transcript.
[177] There is some reference in the transcript to the Foundation’s attempts to settle the information proceeding but they are only references: the request for Ms van Heeren-Hermans’ consent to disclosure of Gerda Foundation information, the attempt to find “an amicable solution”, and a later attempt to reach an agreement with the beneficiaries, the denial of the claim for information. Those references by Dr Schwärzler do not amount to communications for the purposes of s 57(1) of the Evidence Act. Nor does the transcript constitute a confidential document for the purposes of s 57(2) of the Act. It was not prepared in connection with an attempt to settle the dispute.
[178] The references to and discussion of communications between Dr Schwärzler and Mr van Heeren’s Netherlands attorneys are all in relation to communications that Mr van Heeren has disclosed in exhibits to his affidavits, so Mr van Heeren’s privilege in those communications has been waived.
[179] Accordingly, Mr van Heeren does not have a privilege in the transcript of the interrogation of Dr Schwärzler in MEN10.
Result
[180]I dismiss Mr van Heeren’s claim to privilege in the following documents:
(a)MEN8 Doc 2: email dated 7 March 2016 from Ms van Heeren-Hermans to Dr Schwärzler;
(b)MEN8 Doc 3, letter dated 14 January 2016 from Dr Schwärzler to Ms van Heeren-Hermans;
(c)MEN8 Doc 8: letter dated 18 April 2017 from Mr van der Vliet to Dr Schwärzler;
(d)MEN8 Doc 10: letter dated 24 August 2017 from Dr Schwärzler to Mr van der Vliet;
(e)MEN9: transcript of interrogation of Dr Lamprecht before the Liechtenstein District Court on 8 January 2020; and
(f)MEN9: transcript of interrogation of Dr Schwärzler before the Liechtenstein District Court on 13 January 2020.
[181] I order Mr van Heeren to disclose to Mr Kidd the letter dated 5 April 2017 from Dr Schwärzler to Mr van der Vliet that is referred to in MEN 8 Doc 8 and MEN8 Doc 10.
[182]I uphold Mr van Heeren’s claim to privilege in the following documents:
(a)MEN8 Doc 1: letter dated 10 February 2016 from Dr Schwärzler to Mr van Heeren and Ms van Heeren-Hermans;
(b)MEN8 Doc 6: emails dated between 3 and 7 September 2015 between Dr Schwärzler and Mr van Thiel and Ms Maud van Rens of de Breij Evers Boon; and
(c)MEN8 Doc 9: email dated 26 July 2017 from Dr Schwärzler to Dr Lamprecht and Ms Schaedler-Bissig, and the reply the same day from Dr Lamprecht to Dr Schwärzler.
[183] While I have upheld three of the claims to privilege asserted by Mr van Heeren, two of the claims are in relation to documents of limited consequence – a
series of emails over arrangements for a meeting, and a letter proposing a meeting for the purposes of settling the information proceeding.
[184] The only significant document that I have held to be privileged is the email exchange between Dr Schwärzler and the Directors of the Gerda Foundation. However, much of the information of consequence in that exchange is also disclosed in the letter in MEN8, Doc 10 in relation to which I have held that Mr van Heeren has waived privilege.
[185] For these reasons, I consider that the criticisms made of Mr Kidd’s solicitors in filing the privileged material without first consulting the solicitors for Mr Kidd in accordance with the Lawyer Client Conduct Care Rules 2008 were not warranted.
[186] Because the privileged documents were obtained pursuant to an order of the Liechtenstein court and contain little of consequence, or little more than is disclosed in documents that are not privileged, I see no purpose in requiring that the privileged documents be destroyed or returned to Mr Kidd or that they be removed from the Court file.
Costs
[187] Mr Kidd has been substantially successful in defending Mr van Heeren’s claims to privilege in documents exhibited to the affidavits of Mr Cooper and Dr Niedermüller and is therefore entitled to costs on a 2B basis.
[188] I encourage counsel to resolve costs without the need for further intervention by the Court. If they are not able to do so, they may file memoranda of no more than five pages.
Suppression order
[189] Issues of Mr van Heeren’s credibility are referred to in this judgment. Because the evidence on those issues has yet to be tested, I make an order prohibiting publication of the reasons for this judgment in the news media or on the internet or
other publicly available data base until the hearing of the accounting that is to take place before Jagose J next year.
G J van Bohemen J
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