Martin v Martin

[2024] NZHC 1399

IN THE HIGH COURT OF NEW ZEALAND MASTERTON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKAORIORI ROHE

CIV-2023-435-010

[2024] NZHC 1399

UNDER

the Trusts Act 2019 and the Inherent Jurisdiction of the High Court

IN THE MATTER OF

the Dyerville Trust

BETWEEN

JULIA MARIE MARTIN

Applicant

AND

ALISTAIR HENRY MARTIN

Respondent

On the papers:
Counsel:	S W H Fletcher and L Hansen for Applicant R C Laurenson and C D Batt for Respondent
Judgment:	30 May 2024

JUDGMENT OF GRAU J

[Recall of judgment]

[1]                 Counsel for Mr Martin takes issue with my costs judgment in this matter where I stated:1

Finally, I note that Alistair’s counsel inappropriately and unfairly discussed the substance of settlement discussions between the parties in submissions on the issue of costs, which further supports an order for increased costs. Alistair may wish to consider what this means for the payment of his own costs.

[2]                 Counsel for Mr Martin seeks amendment or removal of this paragraph, either by recalling the judgment or by the exercise of the Court’s inherent jurisdiction. The submission is that discussion of mediation/settlement in Mr Martin’s memorandum

1      Martin v Martin [Costs] [2024] NZHC 658 at [24].

MARTIN v MARTIN [2024] NZHC 1399 [30 May 2024]

was relevant to the consideration of costs when the Court had actively facilitated that process,2 and Mr Martin was not seeking costs himself, but rather sought that no costs be awarded or they be paused pending final determination. It is not a breach of privilege to discuss the fact of settlement discussions, and the contents of the discussions were not actually disclosed. It is in the interests of justice for the Court to know that it was Ms Martin who withdrew from the discussions, given settlement had been encouraged by Ellis J, and so was within the purview of the Court.

[3]                 Counsel for Ms Martin does not agree. She says there has been a clear breach of privilege, therefore there can be no change to the costs decision of the Court.

Discussion

[4]                 There are two ways to “edit” a judgment that has been published. The first is to recall the decision under r 11.9 of the High Court Rules 2016 (the HCR). The second is to correct an accidental slip or omission under the “slip rule” in r 11.10. I agree with the submission by Ms Martin’s counsel that the slip rule would not seem appropriate given there was no accidental or clerical error. The only option then is to recall the decision. For the reasons set out below, however, I do not agree recall is available in these circumstances.

[5]                 Under s 57(1) of the Evidence Act 2006, a party to mediation has privilege in respect of any communications with any other party to the dispute if the communication was intended to be confidential and was made in connection with an attempt to settle or mediate the dispute between the parties. Where privilege attaches, a party then has the right in a proceeding to refuse to disclose the communication, any information contained in it, and any opinion formed on its basis.3 However, the privilege applying to mediation or settlement discussions does not apply to:4

(a)the terms of an agreement settling the dispute; or

2      This is in reference to Ellis J allowing time for the parties to consider settlement before issuing her substantive decision on the interlocutory applications brought by the parties to which these costs relate; Martin v Martin [2024] NZHC 147 at [7]–[8].

3      Evidence Act 2006, s 53(1).

4      Evidence Act, s 57(3).

(b)evidence necessary to prove the existence of such an agreement in a proceeding in which the conclusion of such an agreement is in issue; or

(c)the use in a proceeding, solely for the purposes of an award of costs, of a written offer that—

(i)is expressly stated to be without prejudice except as to costs; and

(ii)relates to an issue in the proceeding; or

(d)the use in a proceeding of a communication or document made or prepared in connection with any settlement negotiations or mediation if the court considers that, in the interests of justice, the need for the communication or document to be disclosed in the proceeding outweighs the need for the privilege, taking into account the particular nature and benefit of the settlement negotiations or mediation.

[6]                 Counsel for Mr Martin relies on the decision of Asher J in Consolidated Alloys (NZ) Ltd v Edging Systems (NZ) Ltd to support her argument that the fact of settlement discussions will not breach privilege.5 In that case, admission of the fact of a “will say” statement was allowed, but not its content. Justice Asher held that the common law has distinguished between the substance of communications and aspects of form.6 Privilege does not mean that the Court cannot refer to “peripheral or extraneous aspects of the communication that are independent facts and not part of the documents’ substance”.7

[7]                 On its face this might support Mr Martin’s counsel’s position. But read in context, Asher J was clear that the purpose behind the rules of privilege is to protect admissions against interest in settlement negotiations should the matter go to trial. If these admissions could later be used against a party, parties could not be frank with each other.8

[8]                 In the present case, it may be so that the “substance” of discussions was not included at length, however the initial costs memorandum nevertheless twice quoted an undoubtedly privileged communication from Ms Martin’s lawyer that Ms Martin

5      Consolidated Alloys (NZ) Ltd v Edging Systems (NZ) Ltd [2012] NZHC 2818, (2012) 21 PRNZ 306.

6 At [16].

7 At [16].

8      At [15] and [17].

was not wanting to participate in mediation “at this time”. I remain of the view that it was inappropriate to include this quote in order to advance Mr Martin’s position as to costs. The tenor of the memorandum was that it is Ms Martin’s “fault” that costs was an issue in the first place, because she decided not to mediate, and had decided to pull out at a “late” stage when the terms of mediation and mediator had essentially been agreed.

[9]                 I consider the costs memorandum went too far. And I consider my view is supported by the case law, which does give a degree of latitude around what the Court can find is privileged (or not) in the context of mediation.

[10]             For example, in Smith v Shaw, Fitzgerald J opined that it is the “interests of justice” enquiry in s 57(3)(d) that “no doubt envisages a broad and flexible approach on the facts of any given case”.9

[11]             It is apparent that the focus of the enquiry into whether privilege should apply to communications produced in the course of mediation depends on what outcome is required by the policy underlying the without prejudice rule. The Court of Appeal explained this in Sheppard Industries Ltd v Specialized Bicycle Components Ltd:10

In each of the [examples] just identified, the policy underlying the without prejudice rule is reinforced rather than undermined by the admission of the evidence. This is because the evidence goes either to whether there was a genuine settlement agreement or to its meaning—it does not go to the parties’ positions in the mediation on the merits of the underlying dispute, which is what that the rule seeks to protect.

[12]               I also note an observation by Gordon J that family trust disputes do not “deserv[e] less protection from a privilege perspective than a commercial dispute”.11

9      Smith v Shaw [2020] NZHC 238, [2020] 3 NZLR 661 at [46]; Fitzgerald J did not waive the privilege applying to documents relating to a “without prejudice save as to costs” offer that had been made by one of the parties to resolve family proceedings.

10 Sheppard Industries Ltd v Specialized Bicycle Components Inc [2011] NZCA 346, [2011] 3 NZLR 620 at [42]; the Court of Appeal held that Sheppard was entitled to argue that the parties did reach an oral agreement at mediation and so was entitled to lead evidence of what occurred at the mediation to support that contention (at [45]). This case also lists a number of common law exceptions to the privilege (which supplement s 57(3) of the Evidence Act) at [24]–[27] that do not apply here.

11 Gibbs v Windmeyer [2021] NZHC 2582 at [87].

[13]             Allowing parties to mediation or settlement to disclose who pulled out of mediation and at what stage in the process they did so in order to advance their own claims as to costs strikes me as a most unattractive proposition. It might drive people into mediation, or keep them there when they were unable to agree, where it is contrary to their interests. I consider it would go against the general tenor of mediation discussions being confidential to allow one party to point the finger at another as the reason mediation discussions did not work out. In other words, it would “offend the purpose of the privilege”.12

[14]             Additionally, I observe that challenges to factual or legal findings are not grounds of recall; they are matters for appeal. I do not find any other “special reason” to grant a recall of the decision.13 This category is a narrow one and often reserved for circumstances where the Court has failed to address a material issue, or where the Judge’s orders do not reflect the Judge’s findings.14 Nor do I consider that recall applies to situations where the Court has made no error of fact or law, but has simply expressed an opinion on a situation that one of the parties does not agree with. Again, issues of fact or law are issues for an appeal.15

Grau J

Solicitors:

Maxwell Law Limited, Wellington for Applicant Batt Law, Masterton for Respondent

12 New Zealand Institute of Chartered Accountants v Clarke [2009] 3 NZLR 264 (HC) at [45].

13 The other two reasons for granting a recall would be if there has been an amendment to the relevant statute or regulation or a new judicial decision of relevance and high authority, or where counsel have failed to direct the Court’s attention to a legislative provision of plain relevance; Horowhenua County v Nash (No 2) [1968] NZLR 632 (SC) at 633.

14 See Jessica Gorman and others (eds) McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HCR11.9.01].

15 Zhang v Yu [2020] NZCA 592 at [9].