Leeds v Richards

[2016] NZHC 2248

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2016-404-140 [2016] NZHC 2248

UNDER

the Insolvency (Cross-border) Act 2006

BETWEEN

MICHAEL THOMAS LEEDS AND NICHOLAS STEWART WOOD Applicants

AND

MURRAY RICHARDS First Respondent

STEINDLE WILLIAMS LEGAL LIMITED

Second Respondent

Hearing:	22 September 2016
Counsel:	S Bisley for Applicants M Richards, in person, First Respondent Appearance on behalf of Second Respondent excused
Judgment:	23 September 2016

JUDGMENT OF HEATH J

This judgment was delivered by me on 23 September 2016 at 10am pursuant to

Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Buddle Findlay, Auckland
Copy to:

M Richards, First Respondent

LEEDS AND WOOD v RICHARDS [2016] NZHC 2248 [23 September 2016]

[1]      Mr Leeds and Mr Wood are trustees of the bankrupt estate of Mr Murray Richards.   He was adjudged bankrupt by order of the High Court of Justice of England and Wales on 19 December 2014.   On 5 February 2015, Mr Leeds and Mr Wood were appointed as joint trustees.

[2]      On 18 November 2015, the County Court at Croydon, exercising jurisdiction in bankruptcy, made an order asking that this Court act in aid of and be auxiliary to the English bankruptcy.  The purpose of the order was to enable the joint trustees to obtain access to information held by a firm of solicitors in New Zealand who were believed to have been instructed by Mr Richards.  Any legal professional privilege that vested in Mr Richards has passed to his joint trustees by operation of law.  That

includes situations in which he and another hold a joint privilege.1

[3]      As a result of previous orders of this Court, Mr Steindle, of the firm of solicitors in issue, filed an affidavit in which he listed various “matters that [he believed] are covered by the terms of” the orders and directions given on 17 August and 7 September 2016.  Mr Steindle confirmed that Steindle Williams Legal Ltd held documents in relation to those matters.  A list of the “matters” was set out in Exhibit “A” to his affidavit.

[4]      Mr Richards is currently challenging his order of adjudication in England, and a later order which suspended time running in respect of the period in which he would have expected to receive an automatic discharge from his bankruptcy.  The orders are challenged  on  grounds of jurisdiction; Mr Richards says  he was  not domiciled  in  England  and  Wales  at  the  time  the  orders  were  made.    He  also challenges the appropriateness of the appointment of the trustees, due to conflict of interest.

[5]      I told Mr Richards that I was not prepared to embark upon a review of the validity of the orders made in England.  After hearing from Mr Bisley, for Messrs

Leeds and Wood, and Mr Richards on 22 September 2016, I indicated the nature of

1      Wong v Official Assignee [1997] NZFLR 300 (HC), applying Re Konigsberg (A bankrupt)

[1989] 3 All ER 289 (ChD).

orders I intended to make and said that I would issue a judgment today recording them.   Full reasons for my orders will be given as soon as time permits, as a transparent exposition of them may be helpful to the English Court when it considers the applications before it.

[6]      Pursuant  to  s 8  of  the  Insolvency  (Cross-border) Act  2006,  I  make  the following orders to assist the joint trustees at the request of the County Court at Croydon:

(a)      I appoint Mr Michael Whale, Barrister and Solicitor of Auckland, as an independent solicitor to review all files held by Steindle Williams Legal Ltd (whether in paper based or electronic form), and any trust account records independent of them, and determine whether they are matters   in   respect   of   which   the   joint   trustees   may   exercise Mr Richards’ powers to waive legal professional privilege.

(b)Mr Whale and Mr Steindle shall confer and Mr Steindle shall arrange for all  files and  other  paper based  or  electronic  documents  to  be delivered to Mr Whale’s office at a time to be agreed.  Mr Whale may discuss any relevant issues with Mr Steindle in forming a view on questions of privilege.

(c)       Mr Whale shall prepare a report for the Court, to be filed on or before

25 November 2016 which shall:

(i)Identify  the  documents  or  other  information  in  respect  of which the joint trustees are entitled to waive privilege held by Mr Richards and to obtain copies of them.

(ii)Identify those documents or other information in respect of which another entity (or entities) holds privilege and which the joint trustees are not entitled to obtain.

(iii)Identify those documents and information in respect of which the joint trustees ability to waive privilege is in doubt, with a brief summary of the issues to be resolved before a determination on that issue can be made.

(iv)Make such recommendations as he thinks fit with regard to the procedure to be followed to resolve outstanding issues, and to indicate whether he considers there is any impediment to providing  a  copy  of  his  report  to  both  Mr  Bisley  and Mr Richards.

(d)Leave is reserved to Mr Whale to apply for further directions, on notice to both the joint trustees and Mr Richards.

(e)      This   order  shall   lie  in   Court   unsealed  until   such  time  as   a memorandum  has  been  signed  by both  Mr  Bisley and  Mr Whale confirming that acceptable arrangements have been entered into for fees incurred by Mr Whale to be paid by the joint trustees, in relation to the inquiries and reporting that he is required to undertake pursuant to this order.2     Leave to apply is reserved in the event of further direction on this issue being required.

(f)      All  questions  of  costs  in  relation  to  attendances  undertaken  by Steindle Williams Legal Ltd to comply with orders of the Court and to participate in the proceeding as second respondent are reserved.   A timetable to resolve any outstanding issues shall be fixed at the next call.

(g)      In the event that Mr Richards’ application to annul his bankruptcy is

successful, leave is reserved to him to apply to rescind this order,

2      I record that in an order made by the County Court at Croydon on 3 November 2015, pursuant to which the Letter of Request was issued that the joint trustees undertook to pay as an expense of the bankruptcy reasonable costs incurred by Mr Richards in complying with the Letter of Request, up to a sum of £7,500.  As no funds are payable to Mr Richards at this time, I would expect at least that sum to be available to meet Mr Whale’s costs and disbursements.

subject to any questions of costs that remain in issue involving either

Mr Whale or Steindle Williams Legal Ltd.

(h)Mr Whale shall confer with Mr Bisley over the documents filed in this proceeding which he requires before embarking on his tasks and they shall be provided to Mr Whale at no cost.

(i)As between the joint trustees and Mr Richards, all questions of costs are reserved.

(j)The Registrar shall allocate a hearing before me at 9am on the first available date  after 5  December 2016  for further directions  to  be made.  Counsel for the joint trustees and Mr Richards personally shall file memoranda no later than 4pm on 1 December 2016 setting out the orders that they seek.

[7]      I record that the affidavit provided by Mr Steindle pursuant to Hinton J’s

order3  of 7 September 2016 was opened by me in the course of the hearing and copies were made available to both Mr Bisley and Mr Richards.

P R Heath J

Delivered at 10am on 23 September 2016

3      Leeds and Wood v Richards [2016] NZHC 2118, at para [22](a) and (b).