McNaughton v McNaughton

[2021] NZHC 2109

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE

CIV-2021-454-33

[2021] NZHC 2109

BETWEEN

RICHARD MCNAUGHTON

Plaintiff

AND

JANET MCNAUGHTON

First Defendant

JAMES MCNAUGHTON

Second Defendant

CIV-2021-435-1

BETWEEN

RICHARD MCNAUGHTON

Plaintiff

AND

RODNEY MILLER, AARON SLIGHT, RIGG ZSCHOKKE LTD, GARY KAY and TAVERNER KEYS & CO

Defendants

On the papers
Counsel:	Plaintiff self-represented D Bleier for Mr Miller
Judgment:	13 August 2021

JUDGMENT OF CULL J

[Access to Court documents

[1]Mr Miller seeks access to the court file in the McNaughton v McNaughton

proceedings, as intituled above.

MCNAUGHTON v MCNAUGHTON [2021] NZHC 2109 [13 August 2021]

[2]    Mr McNaughton has commenced proceedings against Mr Miller and four others, McNaughton v Miller,1 alleging the misrepresentation of a now severely insolvent plumbing and roofing business sold to him in 2017. He pursues damages of

$6.4 million dollars.

[3]    Mr Miller seeks security for costs of $130,000.00. This application is scheduled to be heard on 15 September 2021. Mr McNaughton opposes the application. If his claim is unsuccessful, Mr McNaughton submits that he will be able to pay the costs of the defendant, relying on an equitable interest he holds in 48a Pownall Street, a property owned by his parents. He says this property is being held for him on trust, and that his interest in the property is worth approximately

$500,000.00. Counsel for Mr Miller has been provided with a notice of the caveat lodged by Mr McNaughton and his wife against the title of 48a Pownall Street.

[4]    However, Mr McNaughton has filed proceedings against his parents regarding 48a Pownall Street, being the McNaughton v McNaughton proceeding and court file, to which Mr Miller now seeks access.

[5]Mr Miller requests access to all documents that make up the court file in the

McNaughton v McNaughton proceeding, including, but not limited to any:

(a)statement of claim (or any other initiating document);

(b)statement of defence (or notice of opposition);

(c)affidavits in support, lists of documents for initial disclosure; and

(d)any memoranda filed or any court minutes.

[6]    Currently, only two documents have been filed, being Mr McNaughton’s statement of claim and the plaintiff’s list of documents.

[7]    Mr Bleier, Counsel for Mr Miller, submits these documents are required to sufficiently test Mr McNaughton’s claims of solvency as part of his opposition to security for costs.

1      McNaughton v Miller CIV-2021-435-1.

[8]    This is opposed by Mr McNaughton on two grounds. First, he contends that the proceeding is a family dispute and is thus an inherently private matter to which Mr Miller should not have access. Second, he argues that Mr Miller has sufficient information concerning the dispute anyway. In an email sent to Counsel for Mr Miller, Mr McNaughton wrote:

My parents acquired 48a Pownall Street with the intent of realising equity so I could pursue your client and others in a High Court proceeding. Iain Shepherd, Jessica Kellow, Gavin Hodder and others will be able to confirm this for you as my parents were quite clear with what their intent was. I am seeking Part 18 determinations in the Palmerston North High Court. The property will be completed within the near future, as it is about 60% complete and has substantial equity in it and is a $1m home. [My wife] and I have also [lodged] a caveat on the title as you know.

[9]    Mr McNaughton has provided a copy of the statement of claim to Mr Bleier by email, on condition that it was for Counsel only and would not be shared with   Mr Miller himself. This condition could not be agreed to, and the email was deleted accordingly. Mr Bleier argues that it is unfair for Mr McNaughton to contend the applicant has received adequate information, when the terms that were imposed on the provision of that information made the document of no use.

Access to Documents

[10]   The Senior Court (Access to Court Documents) Rules 2017 provides that every person has a general right of access to the formal Court record relating to a civil proceeding.2 This includes any court minutes, as sought by Mr Miller, although I note that no minutes have yet been issued regarding this matter.3 However, the formal Court record does not comprise the additional material Mr Miller seeks. In these circumstances, r 11 applies.  The Court must determine whether to grant or refuse  Mr Miller’s request, in whole or in part, or grant it subject to conditions, or refer the application to a Registrar for determination.4

[11]   The Court must consider the nature of, and the reasons for, the request and take into account the following relevant factors:5

2      Senior Courts (Access to Court Documents) Rules 2017, r 8(1).

3      Rule 4.

4      Rule 11(7).

5      Rule 12.

(a)     the orderly and fair administration of justice:

…

(c)     the right to bring and defend civil proceedings without the disclosure of any more information about the private lives of individuals, or matters that are commercially sensitive, than is necessary to satisfy the principle of open justice:

(d)     the protection of other confidentiality and privacy interests (including those of children and other vulnerable members of the community) and any privilege held by, or available to, any person:

(e)     the principle of open justice (including the encouragement of fair and accurate reporting of, and comment on, court hearings and decisions):

(f)   the freedom to seek, receive, and impart information:

…

(h) any other matter that the Judge thinks appropriate.

[12]   No one factor takes primacy over another. All relevant factors must be balanced against each other, with the weight to be given to each factor being a matter of evaluation.6

[13]   Mr McNaughton has the right to bring civil proceedings against his parents, while also protecting the privacy and confidentiality interests of his family, and preventing the disclosure of commercially sensitive matters as  far  as  possible.  Rule 13(a) provides that where an application has been brought before the substantive hearing of the proceeding, such as in this case, privacy and confidentiality concerns as well as the principle of orderly and fair administration of justice (with a particular focus on the risk of discouraging parties from accessing justice due to the fear of negative publicity)7 may require that access to documents be limited. Open justice has less weight prior to hearing when there is no guarantee the case will go to hearing at all.8

[14]   However, there is a direct link between this proceeding and Mr Miller’s application for security for costs. 48a Pownall Street was purchased by

6      Crimson Consulting Ltd v Berry [2018] NZCA 460, (2018) 25 PRNZ 447 at [16] and [32].

7 At [36].

8      Greymouth Petroleum Holdings Ltd v Empresa Nacional De Petróleo [2017] NZCA 490, [2017] NZAR 1617 at [25].

Mr McNaughton’s parents with the purpose of providing funds for Mr McNaughton’s claims against Mr Miller. I have read the material available in the McNaughton v McNaughton file. I consider the proceeding is directly relevant to Mr McNaughton’s opposition to the security for costs application and the ability for Mr McNaughton to pay Mr Miller’s legal fees in the event his claim is unsuccessful.   In my view,       Mr Miller should have access to this information and be able to put it before the Judge determining this application.

[15]   The seminal connection between these proceedings, in conjunction with the freedom to seek and receive information and the principle of open justice, render it appropriate for Mr Miller to have some access to the court file. However, considering the need to maintain privacy and confidentiality to the extent possible, particularly prior to the substantive hearing, I confine Mr Miller’s access to the following documents only: the statement of claim and any statement of defence or notice of opposition filed. This provides the applicant with sufficient information to satisfy the principle of open justice and provides the necessary context to Mr McNaughton’s claim of an equitable interest in 48a Pownall Street, without disclosing unnecessary details about the private lives of Mr McNaughton’s family.

Result

[16]   The application for access to court documents is granted in part. Mr Miller may access the statement of claim filed by Mr McNaughton and any statement of defence or notice of opposition that may be filed. His application with regard to the remainder of the court file is declined.

Cull J

Solicitors:

Gawith Burridge, Masterton for Mr Miller