MetalWorks NZ Limited v Hawthorndale Estate Limited

[2023] NZHC 1487

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2023-419-070

[2023] NZHC 1487

BETWEEN

METALWORKS NZ LIMITED

Plaintiff

AND

HAWTHORNDALE ESTATE LIMITED

Defendant

Hearing:	On the papers
Counsel:	A C Kelland for Plaintiff G P Davis for Defendant
Judgment:	14 June 2023

JUDGMENT OF DUNNINGHAM J

This judgment was delivered by me on 14 June 2023 at 3.45 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

[1]    The Court is in receipt of an application for access to Court documents in respect of an application to liquidate a company. The application is made by a journalist, Mr Nicholas Pointon, working for the publication National Business Review.

METALWORKS NZ LIMITED v HAWTHORNDALE ESTATE LIMITED [2023] NZHC 1487 [14 June 2023]

[2]    Access is sought on the grounds that the application to liquidate Hawthorndale Estate “is in the public interest”. Mr Pointon goes on to say:

Comments on social media about the company’s trading business, Morgan + Stone, indicate the company has not completed work it was contracted to do so for some time now. These customers and the public ought to know there is an application to have the company placed into liquidation.

[3]    Mr Pointon also notes that the director of the defendant company had a three-year ban imposed on him from being a director in 2010 and also says that one of the company’s shareholders is currently bankrupt and was sentenced to 12 months’ home detention in 2015 for failing to pay almost $400,000 in PAYE deductions.

The parties’ views

[4]    The plaintiff does not oppose the application for access, but the defendant does. Mr Davis, counsel for the defendant, sets out in a memorandum the grounds for opposing the application. First, he notes that the application has been fully resolved between the parties, with the debt having been paid in full and the issue of costs settled by  agreement.   Furthermore,  when  the  matter  was  called  at  the  hearing  on    25 May 2023, following advertising of the application, no other creditors appeared in support and applied to be substituted as plaintiffs. The proceeding was subsequently discontinued on the papers by consent.

[5]    Mr Davis also says that the application incorrectly asserts that the defendant company trades as Morgan + Stone. He says while the company Morgan + Stone Pool and Landscape Construction has the same director, it is a separate company from the defendant company.1 He also asserts that the other background matters referred to in the application are not relevant to the defendant company’s current business.

[6]    Mr Davis asserts that disclosure of the documents is likely to unfairly prejudice the defendant, Mr and Mrs Lascelles, and the Morgan + Stone business, saying “it appears from the Application that they will be used for reporting that is not fair or accurate”.

1      However, I note there is no such company listed on the companies register and the defendant company’s assertion in this regard would need to be vertified.

[7]    For all these reasons, the defendant says there is no public interest in the documents sought, nor any other good reason for their disclosure.

Discussion

[8]    The application is to be determined under the Senior Courts (Access to Court Documents) Rules 2017 (Access Rules). Rule 12 sets out a range of matters which are to be taken into account in determining a request for access under r 11 to the extent that they are relevant to the request or any objection to the request. Relevantly, these include:

(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 privates 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 …:

(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:

…

[9]    In the present case, the documentation available on the Court file is limited given the early resolution of the proceeding. Importantly, as the matter never proceeded to a substantive hearing, the principle of open justice carries less weight than would otherwise be the case.2 That said, an application to liquidate a company does not obviously engage confidentiality or privacy interests, particularly where, as here, the application has been publicly advertised. There remains, though, the consideration that parties ought to be incentivised to resolve matters, including applications to liquidate a company, before a substantive hearing and, if they do so, they should expect greater protection of the details of the claim than would be the case if the matter was heard and determined in open Court and where the allegations have been tested.

2      Senior Courts (Access to Court Documents) Rules 2017, r 13.

[10]   In my view, however, a statement of claim in a proceeding for putting a company into liquidation has a more public element to it than other civil proceedings, particularly when the application has been advertised and where the advertisement confirms that the statement of claim and verifying affidavit may be inspected at the Registry of the Court or at the plaintiff’s address for service. The fact the defendant company faced those allegations and allowed them to be made public through the advertising process sets this proceeding apart from other civil claims. The public has some interest in knowing that a debt claim against a company proceeded to that stage.

[11]   For this reason, I am prepared to grant access to the statement of claim and verifying affidavit. I see no point in providing access to any other document as they are administrative in nature and reveal no more about the claim. However, I place the following condition on publication of any information contained in them. In any article produced, it must be made clear that the application has been fully resolved between the parties and the proceeding was discontinued by consent and that, despite the application having been advertised, no other creditors appeared in support.

[12]   The aim of this condition is to ensure that any reporting is fair and accurate, consistent with r 12(e) of the Access Rules.

[13]Accordingly, the application is granted on the terms set out in [11] above.

Solicitors:

Malley & Co., Christchurch

Shaun Cottrell Law, Christchurch

Copy To:

G Davis, Barrister, Christchurch N Pointon, NBR