Lewis v JPMorgan Chase Bank, N.A
[2017] NZHC 1780
•31 July 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2016-404-244 [2017] NZHC 1780
BETWEEN ROBERT WADE LEWIS
Plaintiff
AND
JPMORGAN CHASE BANK, N.A Defendant
Hearing: 17 July 2017 Appearances:
M W OʼBrien and C L Smith for Plaintiff
S L Maxfield for DefendantJudgment:
31 July 2017
JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE
This judgment was delivered by me on
31.07.17 at 3.30 pm, pursuant to
Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
\ LEWIS v JPMORGAN CHASE BANK, N.A [2017] NZHC 1780 [31 July 2017]
[1] The plaintiff, Mr Lewis, sues the defendant, JPMorgan Chase Bank, who was his employer during the period September 2008 to March 2010. He asserts in his claim that he was the CEO of the defendant for New Zealand. That claim is not denied. He further claims that, as a result of a restructuring of the defendant, it was proposed to disestablish Mr Lewis’s role as CEO and to terminate his employment. The defendant agrees that his employment was terminated and it further agrees that, in March 2010, the parties entered into an agreement to settle any claims arising out of the termination of employment. As part of the separation arrangements, the defendant agreed to issue an internal announcement within its organisation announcing the plaintiff’s departure due to its “restricting its operational footprint in New Zealand”. Essentially, this statement meant the plaintiff was leaving because of the restructure. The defendant also agreed not to make disparaging comments about Mr Lewis.
[2] The plaintiff claims that, subsequently in March 2010, he applied for positions at Westpac New Zealand Limited (“Westpac”). He stated in his CV, which he provided to Westpac, that he had been the CEO of the defendant. A personnel consulting firm that was assisting him advised him to contact the defendant’s reference service to ensure that the reference held relating to the plaintiff was “in order”.
[3] The key developments thereafter were that, on 18 March 2010, the plaintiff says he telephoned the HR service providers on what is called the Access HR 0800 number. This number was the number of the HR section of the defendant or the contracted service provider that managed HR issues. It is physically located in Mumbai, India. I will refer to the HR unit as “Access HR”. The plaintiff says that he spoke to an operator at Access HR who identified himself as “Bijoy”. The plaintiff pleads that Bijoy advised him that the defendant’s records did not record him as having been CEO of the New Zealand branch. The defendant denies this and also denies the following allegations that the plaintiff makes relating to the phone call to Access HR:
a) That the operator (presumably Bijoy) told him that the defendant’s
system did not record him as having been CEO;
b)That the plaintiff asked the operator what the operator would say if a prospective employer asked if Mr Lewis was the CEO, to which the operator advised that it would not be confirmed;
c) The plaintiff asked the operator what needed to happen for the records to be updated to accurately record his role;
d) The operator advised that the head of HR for Australia and New
Zealand was the only person who could authorise the change.
[4] I also note Mr Lewis alleges that he was advised by email on 29 March 2010 that a correction to the system had been made.
[5] The plaintiff alleges that, between 29 March 2010 and August 2010, Westpac approached Access HR for confirmation that Mr Lewis had been the defendant’s CEO of the New Zealand branch and that the defendant failed to confirm that Mr Lewis had been the defendant’s CEO.
[6] The defendant denies that it failed to confirm that the plaintiff was the CEO of the defendant’s New Zealand branch and says it has no record of providing any reference or information about the plaintiff to Westpac or any other prospective employer. It says the only calls the defendant has a record of receiving in relation to the defendant were from the defendant himself on 18 March 2010 and 3 September
2010.
[7] It is also pleaded by the plaintiff that, on 17 August 2010, Westpac emailed him and advised him that he had been unsuccessful in his application and effectively asked Mr Lewis to not apply for any future roles at Westpac. The defendant appears to accept in its pleadings that Westpac told the plaintiff that he had been unsuccessful in his application but the defendant does not accept the plaintiff was asked not to apply for any future roles at Westpac.
[8] The plaintiff pleads that a recruiter who was assisting him called an HR person at Westpac, who told the former that his application for the Senior Strategy role with Westpac had not been progressed “due to a significant and serious issue with his reference from the defendant, that significant and serious issue being that the defendant had not confirmed that he was its New Zealand CEO”. The defendant claims it has no knowledge of these conversations and that it denies that they occurred.
[9] The plaintiff then alleges that he made a call to Access HR and spoke to an operator who he asked whether anyone had made contact to enquire about him, the plaintiff. He claims that the defendant’s phone operator told him that the defendant had been contacted by a third party, to which the plaintiff had applied for employment with. The plaintiff said he asked the defendant’s phone operator if the defendant had confirmed he was the CEO of the New Zealand branch of the defendant. The plaintiff says that the defendant’s phone operator told him that the defendant’s computer system did not record Mr Lewis as CEO of its New Zealand branch. During the conversation, the operator advised that if he had been asked by a potential employer if Mr Lewis had been the CEO of the New Zealand branch, this would not have been confirmed. The plaintiff said he asked the defendant’s phone operator for the identity of the third party which had made the enquiry but the operator would not give him that information. The plaintiff said that he asked for the “error in the defendant’s system” to be corrected but the operator said that that could not be done by him. All of these conversations are denied by the defendant who says it has no knowledge of them.
[10] In his statement of claim, Mr Lewis states that the defendant refused to correct the internal system to properly show Mr Lewis as having been the New Zealand CEO. In answer to that, the defendant says that it added notes to the Access HR record to show that the plaintiff had held the roles of CEO of the New Zealand branch and “TS Sales Executive of New Zealand”. I note that no date is specified as to when this occurred. The defendant further says that, on 22 October 2010, it issued a written “statement of service” that included the fact that the plaintiff had been CEO and that this written statement of service was placed on the plaintiff’s personal file and the “reference team” were directed to it through Access HR. The plaintiff then
claims that the failure to correct its systems resulted in Mr Lewis being exited from the recruitment process with Westpac. I understand this to mean that it led to his not being employed by Westpac. The defendant says that it has no knowledge of the reason or reasons why Westpac did not employ him.
Causes of action
[11] The plaintiff asserts that the actions and omissions of the plaintiff amounted to an unlawful breach of the termination agreement as follows:
Particulars
(a) By failing to confirm to third parties that Mr Lewis was previously its CEO the defendant breached:
(i) clause 8 of the settlement agreement by not upholding the agreed announcement after it was made; and
(ii) clause 9 of the settlement agreement:
ABy discrediting Mr Lewis to Westpac given that Mr Lewis had represented to it that he had been CEO of its New Zealand branch;
B By not recording in its computer system that
Mr Lewis had been CEO of its New Zealand branch.
[12] All of these allegations are denied by the defendant.
[13] Mr Lewis then gives particulars of loss that he suffered allegedly as a result of having his application declined by Westpac. He says that it was very likely that he would have been offered employment with Westpac if satisfactory reference checks were carried out and that he would have earned a much higher salary than he actually ended up with in the position that he acquired at PwC in November 2010. He claims for these various losses and losses of reputation generally.
[14] His second cause of action is for injurious falsehood which he alleges was committed by the defendant by it inaccurately “failing to confirm that Mr Lewis was their former CEO”.
[15] The third cause of action pleads that various matters already discussed constituted a breach of a duty of care owed to the plaintiff and that, by its negligent misstatement, the defendant caused harm and loss to the plaintiff.
[16] A key consideration which affects the issues in this case is that the defendant admits that the plaintiff in fact was its CEO.
[17] The key matters which the plaintiff seeks to prove as part of its claim are the following. First, he needs to establish that he was the CEO of the defendant. This is relevant to the contractual claim because an inaccurate misstatement of what his position was with the defendant could amount to disparagement of them. If it was stated that he occupied a position inferior to that which he actually occupied, then that relevantly could be regarded as disparagement in terms of the termination contract that the parties entered into. As well, if he was the CEO, any description of the defendant as having held a role which was different from that of CEO could amount to the statement of an injurious falsehood. Secondly, he needs to establish that the defendant did in fact fail to portray to interested enquirers that the plaintiff had been the CEO of the defendant.
[18] The plaintiff seeks to establish the last matter by showing that there are arrangements which the defendant had in place by which, as an organisation, its responses to reference-type enquiries about the plaintiff were flawed. The particular flaws that the plaintiff alleges existed were that the records which the HR personnel were equipped with failed to state that he had been the CEO.
[19] The next matter that he needs to prove is that, as a result of the flawed records, the defendant had responded to an enquiry from Westpac as a potential employer in a way that did not support, or even contradicted, claims which the plaintiff had made to that organisation that he had been the CEO of the defendant.
[20] Finally, he must establish that, as a result of the foregoing matters, the plaintiff suffered loss.
[21] The first of the elements of the claim, namely that the plaintiff had been CEO, is not an issue in the case which he needs to prove because the defendant has admitted that he did in fact occupy the position of CEO.
[22] As I have indicated in the summary of the pleadings which the plaintiff has filed and to which the defendant has responded, the defendant does not appear to concede the remaining elements of the plaintiff’s claim. It will therefore be necessary for the plaintiff to prove those elements and he is entitled to discovery from the defendant to assist him in that task.
Applications for particular discovery
[23] The plaintiff seeks an order for particular discovery pursuant to r 8.19 of the High Court Rules (“HCR”) which provide that a court may make a further order for particular discovery after the proceeding has commenced where:
… it appears to a Judge, from evidence or from the nature or circumstances of the case or from any document filed in the proceeding, that there are grounds for believing that a party has not discovered 1 or more documents or a group of documents that should have been discovered …
[24] The correct application of the provisions of this rule was summarised by Asher J in the following terms in Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd.1 The Judge set out the four-stage test for considering discovery applications under r 8.19 of the HCR:
[14] …
(a) Are the documents sought relevant, and if so how important will they be?
(b) Are there grounds for belief that the documents sought exist?
This will often be a matter of inference. How strong is that evidence?
(c) Is discovery proportionate, assessing proportionality in accordance with Part 1 of the Discovery Checklist in the High Court Rules?
(d) Weighing and balancing these matters, in the Court’s
discretion applying r 8.19, is an order appropriate?
1 Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760.
[25] I will now consider the particular documents which the plaintiff seeks orders for particular discovery in regard to.
Category of documents 2(a)(i) and (ii)
[26] The first set of documents which are defined in paragraph 2(a)(i) are the following:
(i) The plaintiff’s direct dial telephone number (managed by ServCorp New Zealand Limited (‘Servcorp’)) used by him when employed as the CEO of the defendant’s New Zealand branch: 09 363 2757 (‘CEO landline’), including but not limited to the records of calls transferred by the CEO landline to another telephone number;
[27] These documents are phone records relating to the phone lines which the plaintiff used during the period when he was employed by the defendant, including a landline which he had the use of when he was occupying the position of CEO.
[28] I note that the phone calls in this category referred to the period when he was employed as the CEO of the defendant.
[29] There is little to no analysis of why the records in this category ought to have been discovered. The plaintiff has filed not one but two memoranda in support of its application. In the earlier of these, which was filed 29 March 2017, the submission is made that:
a.there is a dispute in evidence as to when and on how many occasions the plaintiff contacted the defendant’s Access HR team, and if Westpac New Zealand Limited contacted the defendant’s Access HR team on multiple occasions.
[30] I assume that the plaintiff asserts that, on the two occasions when he made the crucial alleged calls to Access HR, he did so by using the defendant’s telephone lines, even though he was no longer an employee of the defendant.
[31] The position of the defendant is to simply assert that the information about the telephone numbers in question is irrelevant. In his affidavit in reply, the plaintiff put forward some evidence explaining the relevance of these telephone numbers and the call data associated with them. He said:
However I believe they are relevant as they will show that the defendant’s AccessHR Answer Key records are not a comprehensive list of who has contacted, and being contacted by, AccessHR.
[32] It may be that these various expressions, including “Answer Key”, have significance to the parties involved in this dispute because of their knowledge of the background. Regrettably, background information which would enable the court to understand this material was not forthcoming.
[33] The court can, however, conclude that if the correct approach to assessing the adequacy of discovery is by considering what a standard discovery order would require, then the purpose and relevance of the documents as described above in the quotation at paragraph [31] does not establish that these records ought to have been made available as part of a standard discovery order. The question of whether the Access HR Answer Key records are or are not comprehensive is a question which has secondary importance only, if any. This information might have been relevant had the court made a tailored discovery order which reflected the approach to discovery that was once standard and which was established by the Compagnie
Financiére du Pacifique v Peruvian Guano Co authority.2
[34] I do not consider that an order for particular discovery in respect of the classes of documents in these categories would be justified.
[35] The application for orders in this category is declined.
Category 2(a)(iii)
[36] This category is concerned with the defendant’s HR records.
[37] Included in the group of documents which the plaintiff seeks to have discovered are the telephone records of the defendant’s Access HR documents for the period post-termination of the plaintiff’s employment. On their face, these documents could have considerable relevance. They extend not just to documents which might confirm that the plaintiff called the operators on two different
occasions. The defendant denies that it provided information about the plaintiff to
2 Compagnie Financiere du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 (CA) at 63.
any potential employer, including Westpac. The documents which are sought could also, potentially, reveal whether Westpac actually did make a call inquiring about the plaintiff as a prospective employee during this period.
[38] I am satisfied that there is some evidence to suggest that the documents in question do exist. The plaintiff does not need to establish on the balance of probabilities that that is the case. The discussions that he says he had with operators working as part of the Access HR service, if true, are indeed suggestive that:
a) a third party did in fact seek job reference information concerning the plaintiff from the Access HR service;
b)the response from that service was, based upon the material which formed part of the personnel file of the plaintiff, that he had not occupied the position of CEO.
[39] The next issue concerns the degree of difficulty or practicality that would be experienced by the defendant in complying with any discovery order.
[40] The position which the defendant takes is that it is highly unlikely that a call from Westpac could be located.
[41] Given that it is the defendant which puts forward the objection that it would be very difficult to locate a call made by Westpac, it is for the defendant to point to some material – whether evidence which it has produced or otherwise – which would justify the court taking the view that what would otherwise be relevant documents ought not to be ordered to be discovered.
[42] Some evidence has been put forward. The defendant has established that Access HR handles some 200,000 enquiries per month. That evidence has not been contradicted. Over a period of some months, hundreds of thousands of phone calls would need to be checked in order to find a relevant call from Westpac. A particular difficulty is that it is not known what the incoming caller’s number was. The plaintiff suggests that this difficulty could be circumvented by setting sorting criteria
which limited any search to calls originating from New Zealand. However, the defendant says in response, essentially, that this cannot be accomplished automatically and that it would be necessary to check all the calls coming into Access HR in order to locate those which originate from New Zealand. In any case, it is the contention of the defendant that a call from Westpac would not necessarily appear in the records of Access HR as having originated from New Zealand. While it is not entirely clear to me, I gather that this is a submission that if someone from Westpac (or an HR agency acting on its behalf) wanted to make an enquiry by telephone, the call may pass from Westpac to a New Zealand number and then be transferred to an international number which would be the number reflected as the originating phone number at Access HR.
[43] If the scenario referred to in the preceding paragraph is correct, then it would seem to be the case that attempting to filter calls by limiting the category to those originating from a New Zealand telephone number would not have the desired effect.
[44] I acknowledge that the state of the evidence which has been put before the court requires a certain degree of reticence in coming to conclusions about what the position actually is. The position which counsel for the defendant described, which is about the inability to limit search criteria to calls originating from New Zealand, does not appear to be supported by the evidence put forward on behalf of the defendant, namely that of Mr Tang. On the other hand, there is no dispute on the part of the plaintiff that Access HR handles the number of telephone enquiries which the defendant says that it does. Nor is there any evidence that it would be practically possible to sort those calls by reference to those originating from New Zealand as a means of reducing the scale of the task involved in searching for calls originating from New Zealand.
[45] Overall, I consider that there are real reasons to suppose that it would be burdensome and costly for the defendant to be subject to an order that it provide details about any call/s originating from Westpac and enquiring about the reference of the plaintiff. On the grounds of proportionality, therefore, I consider that the
application made in paragraph 2(a)(iii) ought to be dismissed and there will be an order accordingly.
Category 2(b), (c) and (d)
[46] The first of these categories is concerned with any emails between Damien Costello and the Reserve Bank of New Zealand in 2009 referencing the plaintiff. The second is concerned with correspondence between the defendant and the Reserve Bank of New Zealand between 1 January 2007 and 31 December 2010.
[47] Before discussing these categories, it is necessary to make reference to the basis upon which the plaintiff contends that they are relevant documents that ought to have been discovered.
The “Chevron” dispute
[48] It would appear that while the plaintiff was employed by the defendant, a dispute arose between him and other employees of the defendant group including, I understand, those employed in the Australian operations of the defendant. The dispute arose during a period in 2009 when the plaintiff was functioning as the CEO of the defendant. It concerned a difference of opinion with other employees of the defendant arising from the circumstances in which a new customer of the defendant in New Zealand, Chevron, was subject to the imposition of certain penalties which arguably came about as the result of breach of duty on the part of the defendant. Apparently, the plaintiff took the view that a fault in the systems of the defendant had caused or contributed to Chevron having to pay the penalty. His view was that, therefore, there should be a moratorium on “migrating” further new clients to the New Zealand business. This apparently led to a disagreement between himself and both Tony O’Neil and Adam Everett, who were also employees of the defendant.
[49] The evidence establishes that there was a conflict about who had the appropriate level of authority to determine whether or not there should be a moratorium, as the plaintiff believed, or whether the company ought to continue the recruitment of new clients.
[50] It would appear that the views of the plaintiff that it was his responsibility did not prevail.
[51] The question of whose authority decisions of this kind lay within, I understand, was formally and prescriptively recorded in company documents. Those documents were held on the plaintiff’s computer server/s. The plaintiff asserts that Messrs O’Neil and Everett took steps to alter what had been the previous position by removing this area of discretion from the stated authority of the plaintiff. The plaintiff states that he “believes Mr O’Neil went further [than simply removing him as an approver of the business proposal and making him a reviewer] and actually removed my title of CEO from the defendant’s computer system, replacing it with himself”.
[52] The defendant denies that the plaintiff’s CEO title was recorded in its system and then removed. In respect of the policy concerning the induction of new clients in New Zealand, it says the plaintiff was changed from being an “approver” to being a “reviewer” of the proposal. It says further that the computer system relevant to business proposals was different to the HR system which would contain position titles.
[53] It is the belief of the plaintiff that the Chevron saga gave rise to an ambiguity about his position, which created difficulties for the HR section of the defendant company.
[54] The plaintiff has produced email evidence which provide some support for his views about these matters. In particular, the Australian-based HR manager stated the following in an email exchanged with a number of employees on the topic of the profile of the plaintiff and the company:
This is a big problem and the reason that [the plaintiff] is suing us… We need to find a way for the team to use the CEO title as a starting point… Can you figure out how we might achieve this…
[55] That email which is from Ms Simpson was dated 8 September 2010. Ms Wong, to whom it was addressed, responded later that day:
Do you want the details changed in Profile?
[56] Ms Simpson replied:
It is not his official title it is his regulatory title so I prefer not to unless this is the only way to guarantee that any reference request is correct
[57] It is to be noted that this exchange occurred after the point where a dispute had apparently arisen between the plaintiff and the defendant and after he had left the employment of the defendant.
[58] The argument about the induction of new clients needs to be kept in context. The dispute itself is of no inherent importance in regard to the current claim which the plaintiff has brought. His being overridden in regard to the new client policy may provide some indirect support for the view that he was not genuinely being treated as the CEO. I say that it may provide such support because given that the defendant is part of an international group, there may be areas in respect of which there were reservations about authority, even of the country CEO, so that the ultimate responsibility to make some decisions relating to the national territory resided elsewhere rather than with the CEO.
[59] To summarise, the argument that the plaintiff puts forward seems to involve the following logical steps:
a) There was a limitation placed upon the authority of the plaintiff with regard to a particular operating policy in New Zealand;
b)Such a limitation reduced the authority of the plaintiff so that it was no longer the authority that one would expect to reside with the CEO for New Zealand;
c) The documentation of the change of authority would have included a revision of the title of the plaintiff so that his titular position was no longer that of CEO; and
d)The cumulative effect of these changes found its way into his personnel file, with the effect that when Westpac made enquiries about his status in the company, the inevitable response was that he was not the CEO.
[60] In my view, there are several tenuous links in this chain of reasoning. It does not justify the conclusion that there are adverse documents in existence, thus providing the court with the jurisdiction to make an order for particular discovery. Even if that conclusion is wrong, such logical weight as these propositions have established no more than that there might be a chain of enquiry arising from these matters which the plaintiff could profitably pursue.
[61] Reverting to category 2(b), it is, as I have already noted, concerned with the emails between Mr Costello and the Reserve Bank of New Zealand in 2009.
[62] The date range for the request means that it falls at the approximate time when the defendant says that there was a change to the definition of the plaintiff’s authority, from the person having authority to make the changes about the new clients being inaugurated to transferring that authority elsewhere but without any change to the overall description of the plaintiff as the CEO.
[63] It would seem to be counterintuitive that if, as the plaintiff says, it was necessary for the defendant to have a New Zealand resident CEO as part of the conditions of it obtaining a banking license in New Zealand, that it would have had any communications with the Reserve Bank of New Zealand which would resile from the earlier position that the defendant took, which was that the plaintiff would be the resident CEO.
[64] In summary, even though there may have been some changes to the particular authorities of the plaintiff in 2009, there is no basis upon which the court could state that it would appear there were documents in this category that assist the case of the plaintiff. To the contrary, the context in which it occurs would point in the opposite direction.
[65] Further, there is sworn evidence from the defendant’s employees that there was no change to the recorded status of the plaintiff as the CEO and such changes as were made, were only for the purpose of downgrading his status to “reviewer” in regard to the policy of inauguration of new clients.
Paragraph 2(c)
[66] This category of documents is concerned with the governance structure the plaintiff and another employee of the defendant presented on behalf of the defendant to the Bank of New Zealand.
[67] There is no basis that I am able to discern for concluding that there are adverse documents falling within this category.
[68] The defendant accepts that the plaintiff was the CEO. It is not suggested that the governance structure was shown to Westpac and that its effect might have been to suggest that the plaintiff was not in fact the CEO. This category of documents in my assessment is irrelevant.
Category 2(d)
[69] This category concerns correspondence between the defendant and the Reserve Bank of New Zealand between 1 January 2007 and 31 December 2010. I am unable to accept that the court should conclude that there are grounds for supposing that these documents include adverse documents. Further, I accept the evidence of the defendant that the task of attempting to sort these documents would be a major one requiring the review of the email records of more than 200,000 employees over a four year period.
Category 2(e)
[70] This category is concerned with documents:
… Evidencing, or relating to the removal of the plaintiff’s title as CEO from any of the defendant’s computer systems…
[71] I have substantially dealt with this issue earlier in the section of the judgment
that was concerned with the discussion of the “Chevron” dispute. I do not consider
there would be any profit in embarking upon a further discussion of what, if any, inferences are able to be drawn from the redrawing of the plaintiff’s lines of authority to ascertain whether there is any ground for supposing that adverse documents which could assist the plaintiff’s case came into existence as part of this process.
[72] The defendant denies that it ever declined to confirm to Westpac that the plaintiff was the CEO. The fact that there are records within the company which would confirm that the defendant itself did not regard the plaintiff as the CEO is at least consistent with the expression of the view that he was not the CEO. In combination with other matters of evidence, it may enable the plaintiff to prove on the balance of probabilities that the defendant stated that the plaintiff was not the CEO when any third parties made enquiries about his status.
[73] However, the specific documents which the plaintiff relies upon, being the O’Neil/Everett communications, may nonetheless not be appropriate documents in regard to which an order for particular discovery ought to be made. The first point is that such documents do not logically have the effect of proving that the defendant disavowed the plaintiff as its CEO. As I have indicated, it could be that it was not necessarily inconsistent with his standing as CEO in New Zealand that employees from other parts of the organisation would make decisions about whether the company in New Zealand should take on new clients in the face of uncertainties about the robustness of the company’s systems. Further, there is the evidence that the formal descriptions of authority in regard to particular transactions (whether the plaintiff was “an approver” rather than “a reviewer”) did not militate against the plaintiff being still regarded as the overall CEO of the company and described as such in its relevant records. On that view of matters, the concerns which the O’Neil/Everett communications reflected may have simply coloured their view of whether reservations about the role of the plaintiff in regard to the induction of new clients might affect the overall perception of his status as CEO. The important point is that they understood the need for the defendant to observe its obligation to describe him as CEO.
[74] I consider that the documents which the plaintiff seeks to obtain discovery of in this category amount to “train of enquiry” documents rather than adverse documents in terms of r 8.7 of the HCR. I decline to make an order for particular discovery in regard to those documents.
Application against Westpac for non-party discovery
[75] Both the plaintiff and the defendant seek orders requiring Westpac to provide non-party discovery.
[76] The plaintiff, for his part, seeks an order that Westpac provide the following categories of documents:
2.The applicant seeks discovery of all documents, including originals and copies (including those stored on a computer) of correspondence, e-mails, memoranda, file notes, spreadsheets, minutes, and any other documents concerning the matters at issue in this proceeding, in particular Mr Lewis’ unsuccessful job application with Westpac in 2010, including but not limited to:
a Westpac’s call logs to the defendant between March and
September 2010;
bcorrespondence between Westpac and the defendant relating to Mr Lewis; and
cAny document relevant to the referees provided by Mr Lewis, including but not limited to, correspondence and file notes.
[77] The defendant seeks the following categories of documents by way of a non- party order for discovery:
(i) Documents relating to the plaintiff’s application for the position of Senior Manager, Strategy & innovation at Westpac New Zealand Limited (the Job) in March 2010;
(ii) Documents concerning whether or not Westpac New Zealand
Limited sought, or obtained, information from the defendant between 29 March 2010 and August 2010 as to whether or not the
plaintiff had been the defendant’s CEO of the New Zealand branch,
in respect of the plaintiff’s application for the Job (a Reference),
and;
(iii) If there are documents confirming that a Reference was sought or obtained, documents relating to:
(A) the Reference received; and
(B) whether the Reference resulted in the plaintiff being exited from the recruitment process for the job
[78] The relevance of Westpac’s documents is as follows. As already indicated in this judgment, the plaintiff claims that the defendant breached its obligations to him by responding to a reference enquiry from Westpac in a way which amounted to, amongst other things, a breach of the contractual obligations which it owed to the plaintiff. In particular, the plaintiff asserts that the defendant informed Westpac that the plaintiff had not been its CEO in New Zealand. The plaintiff claims that this was untrue information and that its communication to Westpac caused him to be unsuccessful in his job application. One can understand why the alleged provision of wrong information would have had that result. It may have been of importance to Westpac that the person they sought to employ should have held a CEO type position and it may have considered that those without such experience were not appropriate appointees. Alternatively, Westpac as a potential employer, would be likely to be unfavourably impressed by an apparent claim to have held a position which the plaintiff never held. Such a matter would reflect upon his honesty.
[79] Westpac has agreed to abide by the decision of the Court.
[80] The present application is governed by the provisions of r 8.21 of the HCR, which provides:
(1) This rule applies if it appears to a Judge that a person who is not a party to a proceeding may be or may have been in the control of 1 or more documents or a group of documents that the person would have had to discover if the person were a party to the proceeding.
(2) The Judge may, on application, order the person—
(a) to file an affidavit stating—
(i) whether the documents are or have been in
the person’s control; and
(ii) if the documents have been but are no longer in the person’s control, the person’s best knowledge and belief as to when the documents ceased to be in the person’s control and who now has control of them; and
(b) to serve the affidavit on a party or parties specified in the order; and
(c) if the documents are in the control of the person, to make those documents available for inspection, in accordance with rule 8.27, to the party or parties specified in the order.
(3) An application for an order under subclause (2) must be made on notice to the person and to every other party who has filed an address for service.
[81] In the recent case of Taylor v Asteron Life,3 Associate Judge Smith referred to the leading case of Vector Gas Contracts Ltd v Contact Energy Ltd4 and summarised the principles identified in relation to r 8.21 of the HCR as follows:
[104] Kós J identified the following principles:
(1) The power to make an order under r 8.21 is discretionary, and the Court does not make any assessment of ultimate admissibility. The test is whether the documents are required to assist the parties to advance or defend their cases.
(2) The approach taken by the Court should be broadly consistent with that taken to the issue of subpoenas to produce documents at trial.
(3) A non-party discovery order will only be made if it is necessary in that other sources of evidence are unlikely to be sufficient because they are materially incomplete or unreliable and also that the documents sought may make a real difference and are not merely marginal.
(4) Under r 8.21 the Court’s role is to determine whether the material would be discoverable by the non-party if they were in fact a party to the proceeding. The test is simply the relevant discovery test applicable to a party, based primarily on the adverse documents regime. Excursions on trains of inquiry should be rare where non-parties are being compelled to embark.
[82] In his judgment in Vector Gas Contracts Ltd, Kós J in the course of considering whether an applicant under r 8.21 had to show that the discovery sought was necessary – a question he answered in the affirmative – remarked:
[30] … In my view it remains implicit in r 8.21 that the non-party discovery order be necessary, so that the discretion should be exercised. That is to say, without limitation, other sources of evidence are unlikely to be sufficient because they are materially
3 Taylor v Asteron Life [2017] NZHC 871 at [104].
4 Vector Gas Contracts Ltd v Contact Energy Ltd [2014] NZHC 3171, [2015] 2 NZLR 670.
incomplete or unreliable. And that the documents sought may make a real difference, and are not merely marginal.
[83] In my view, the comment quoted provides helpful guidance on the circumstances in which non-party discovery under HCR 8.21 ought to be ordered.
[84] I consider that the orders which both applicants have sought lie within the scope of r 8.21 of the HCR and there will be orders as sought.
Conclusion
[85] I consider that, after the relevant discovery from Westpac takes place, a case management conference would be helpful to review the case generally, including discovery. The Court’s intention would be to hear from the parties concerning the following matters:
a) there needs to be any supplementation of the existing discovery order by, if that is desirable, a further tailored discovery order;
b) to review that the mandatory requirements of Part 1, Schedule 9 of the HCR
have been complied with.
[86] The plaintiff is to advise the court once non-party discovery has been completed and the registrar is thereafter to make arrangements for the further case management a conference. Because I have dealt with the discovery applications to date, efficiency would be assisted by scheduling the additional conference before
me.
J.P. Doogue
Associate Judge
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