MacDonald v Somerset Smith Partners

[2015] NZHC 421

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2013-441-356 [2015] NZHC 421

BETWEEN

DONALD OWEN MACDONALD, JUDITH MARY MACDONALD, JOHN LAURENCE ARMSTRONG AND WAYNE HENRY HANNA

Plaintiffs

AND

SOMERSET SMITH PARTNERS Defendants

Hearing:	On the papers
Judgment:	10 March 2015

JUDGMENT OF CLIFFORD J

[1]      The National Business Review (NBR) applies for copies of the statements of claim  and  the  defence  in  these  proceedings,  in  which  the  plaintiffs  sue  the defendants, their former financial advisers, for money they lost on finance company investments.

[2]      On  12  December  2014  NBR  published  an  article  backgrounding  the

plaintiffs’ claim against the defendants.

[3]      The plaintiffs’ claim against the defendants has not yet gone to trial. A strike- out application made by the defendants was heard by Associate Judge Smith in chambers on 24 February 2015.  Judgment on that application is outstanding.

[4]      Subpart 2 of Part 3 of the High Court Rules provides for access to Court documents.  There is a public right of access at all times to what is known as the formal Court record.  Statements of claim and statements of defence are not part of the formal Court record.  During the hearing of a civil claim, and until the close of

the 20th working day after the Court has given judgment on the claim, there is also a

MACDONALD v SOMERSET SMITH PARTNERS [2015] NZHC 421 [10 March 2015]

right of general access to a wide range of documents relating to the case, including statements of claim and statements of defence.  Where, as here, the hearing has not begun, there is no general right of access to statements of claim and statements of defence.

[5]      Rather, HR 3.13 provides that, in those circumstances, a written application may be made to the Registrar for access to documents on a Court file.  Notice of that application is required to be given to any person who is, in the opinion of the Judge or Registrar, adversely affected by the application.  Such an application is considered either by a Judge or the Registrar on the papers, at an oral hearing, or in any other manner the Judge or Registrar considers just.  HR 3.14 provides that the Judge or Registrar may refuse an application, or grant it in whole or in part with or without conditions.

[6]      NBR’s application has been put before me, as Duty Judge.  I consider it just that I deal with the matter on the papers.  The plaintiffs and defendants have both been notified of the application.  The plaintiffs do not object to the application being granted: the defendants do.

[7]      The defendants say that they have a significant, private, commercial interest in what may or may not be published, particularly given the strike-out application they have made and the grounds upon which that application was based.  They say further that, to the extent there is any public interest engaged in this litigation, fair and accurate reporting of the Associate Judge’s decision on their strike-out application (which was heard on 24 February 2015) will be more than sufficient to meet that interest.

[8]      The general principles behind these rules balance the public nature of Court proceedings and, particularly in civil cases, the fact that before the case proceeds to trial the documents that have been filed in Court in preparation for a public hearing often contain private information.  Here the fact that the plaintiffs consent to the release of the document indicates they do not have privacy concerns as regards any of the information contained in the pleadings.   When considering the contents of

those  documents  I  should,  therefore,  look  at  them  principally  in  terms  of  the

defendants’, essentially commercial, privacy interests.

[9]      Applying these principles, I acknowledge the public interest that would exist in a trial between investors and their financial advisers relating to losses incurred on finance company investments.   That trial, however, has not begun.   Moreover, in terms of the defendants’ application for strike-out and, if that is declined, the possibility of confidential settlement, I am not persuaded that, at this point, the public interest requires NBR to have copies of the statements of claim and defence. Associate Judge Smith will, in releasing his judgment on the strike-out application, no doubt record the background to that application.   One of the principles upon which a strike-out application is decided is that the facts, as pleaded, are taken as being true.  Reporting of Associate Judge Smith’s decision will, therefore, provide a public record of relevant matters.  That judgment will form part of the formal Court record, and be available to NBR accordingly.

[10]     I therefore decline NBR’s application.

“Clifford J”

Solicitors:

LeeSalmonLong, Auckland for plaintiffs.

Sainsbury Logan & Williams, Napier for defendants.