Monnery v Parsons
[2025] NZHC 2036
•23 July 2025
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2018-485-482
[2025] NZHC 2036
BETWEEN PAUL MARK MONNERY
First Plaintiff
PAUL MARK MONNERY and JULIE ANN MONNERY
Second Plaintiffs
AND
ANDREW GRAHAM PARSONS
First DefendantJOHN MURRAY CREIGHTON
Second Defendant Cont Over
Hearing: 16 July 2025 Appearances:
C R Carruthers KC/ R Fletcher for the First and Second Plaintiffs J D Haig for First and Sixth Defendants
No appearance for the other Defendants
Judgment:
23 July 2025
JUDGMENT OF ASSOCIATE JUDGE BRITTAIN
This judgment was delivered by me on 23 July 2025 at 4 pm.
Pursuant to Rule 11.5 of the High Court Rules.
…………………..
Registrar/Deputy Registrar
Solicitors/Counsel:
Woods Fletcher Associates, Wellington Macalister Mazengarb, Wellington
K3 Legal Ltd, Auckland
Claymore Partners, Auckland George Bogiatto, Auckland Port Nicholson Chambers
Colin Carruthers KC, Wellington
MONNERY v PARSONS [2025] NZHC 2036 [23 July 2025]
AND BRUCE GORDON COPELAND
Third Defendant
KURT BREDENBECH
Fourth DefendantMURRAY CHARLES PARSONS
Fifth DefendantPUSH DEVELOPMENTS LIMITED
Sixth DefendantSANDFIELD ASSOCIATES LIMITED
Seventh DefendantSANDFIELD VENTURES LIMITED
Eighth DefendantP K B INVESTMENTS LIMITED
Ninth Defendant
Introduction
[1] These proceedings are scheduled for a three-week trial commencing on 8 September 2025 (the September trial). The close of pleadings date has passed and any further interlocutory applications require the leave of the Court.
[2] The plaintiffs, Paul and Julie Monnery (the Monnerys), seek leave to apply for further discovery from the first defendant, Andrew Parsons, and the sixth defendant, Push Developments Ltd (Push), which is a company associated with Andrew Parsons (collectively referred to as Parsons). Parsons seek leave to apply for determination of three preliminary questions.
[3] On 4 July 2025, Associate Judge Skelton ordered that the applications for leave and the substantive interlocutory applications be heard together on 16 July 2025.1 The applications are determined in this judgment.
Background
[4] I adopt the background set out by Radich J in his judgment dated 23 May 2024 (dealing with an application for further discovery by the Monnerys):2
[5] Convendium Ltd was incorporated in 2005. It developed and marketed technology for operating cashless vending machines. A related company, Eftpos Vending Ltd was incorporated in 2013 and was involved in the overall business venture as a licensee for the cashless payment system.
[6] Initially, Mr Monnery was the sole director of the business and the person with day-to-day responsibility for its management. Mr and Mrs Monnery, as trustees of the Monnery Family Trust were the owners of the shares in Convendium and Eftpos Vending.
[7] The defendants all became involved with the business in various ways, as shareholders (directly and indirectly), directors, developers of software and investors.
[8] It is alleged in the proceeding that, in May 2015, some of the defendants took steps to remove Mr Monnery as a director of the business and to prevent him from having any ongoing involvement with it. Subsequently, it is said, steps were taken to cause the plaintiffs a loss of the value of their shares. Convendium was removed from the register in November 2017 and
1 Monnery v Parsons HC Wellington CIV-2018-485-482, 4 July 2025 (Minute of Associate Judge Skelton).
2 Monnery v Parsons [2024] NZHC 1298 at [5]–[8].
(following a brief restoration) was placed into liquidation in February 2019. Eftpos Vending was placed into liquidation in April 2018.
[5] The Monnerys’ original statement of claim alleged two economic torts: causing loss by unlawful means and, as an alternative, conspiracy to injure economic interests. The Monnerys’ latest pleading is the second amended statement of claim from December 2022 (the claim), seeking equitable compensation of approximately
$13.7 million.
[6] The claim is a comprehensive document, running to 35 pages. It contains the original causes of action, and adds three more:
(a)breach of confidence by the third and seventh defendants;
(b)breach of confidence by the first, second, fourth and fifth defendants; and
(c)breach of fiduciary duty by the second defendant.
[7] The claim of breach of confidence by Andrew Parsons is that he used software that was “part of the confidential information for Convendium’s sole use”. The pleadings allege that the confidential information belonged to Convendium and Paul Monnery.
[8] The proceedings have previously been set down for trial on two occasions. Both trials were adjourned. The latter was scheduled for July 2024. The Monnerys were due to serve their briefs of evidence by 19 February 2024. The Monnerys were late, serving nine briefs on 12 April 2024, a further brief on 17 April 2024, and a brief from their expert witness, Peter Simmons (Mr Simmons), on 19 April 2024.
[9] The defendants applied for the adjournment which was granted by Radich J.3 The Judge summarised the relevant procedural history:4
3 Monnery v Parsons [2024] NZHC 1123.
4 At [4]–[9] (footnote omitted).
[4] The proceeding has a long and troubled procedural history. It began in July 2018. By August 2020, and after a number of interlocutory steps, it was set down for a three-week trial to begin on 21 June 2021. However, in a minute of 2 March 2021, as a result of discovery issues raised by all parties, Associate Judge Johnston vacated the fixture. There was, as the Associate Judge put it, virtually no prospect of dealing with all discovery issues and getting the timetable on track such that to retain the fixture would almost inevitably operate unfairly insofar as one or more of the parties was concerned.
[5]It is of concern, then, that, three years later, a similar position emerges.
[6] The intervening period has been filled with opposed interlocutory matters, including on discovery and interlocutories, further security for costs, the appointment of an expert and recall.
[7] In early December 2022 a second amended statement of claim was filed. Later that month, a joint memorandum was filed for the defendants in which, among other things, timetable directions were proposed`. In a memorandum for the plaintiffs filed several days later, the proposed timetable was accepted.
[8] In a minute of 19 December 2022, Associate Judge Johnston made directions in accordance with the proposed timetable. Accordingly, timetabling orders were in place which provided that the close of pleadings date was 120 working days before the commencement of trial, that the plaintiffs were to serve their evidence and a list of the documents on which they rely 90 working days before trial, that the defendants were to serve their evidence and a list of the documents on which they rely by 50 working days before the trial, that a common bundle was to be filed by 30 working days before the trial and that the plaintiffs were to file a synopsis of their opening submissions and their chronology 10 working days before the trial.
[9] The three-week fixture beginning on 1 July 2024 was confirmed on 23 December 2022.
[10] Radich J was satisfied that the July 2024 trial should be adjourned, although it was finely balanced.5 He went on to say:6
[30] There is a further consideration under this head. Counsel for the defendants are concerned about aspects of the evidence that has been served for the plaintiffs. It raises, it is said, admissibility issues and the need for further discovery. I have scheduled time next Tuesday, 14 May to deal with the defendants’ outstanding discovery application and I indicated in my minute of 2 May 2024 that time could be made available during that hearing to deal also with new discovery and admissibility issues. However, counsel for the defendants make the fair point that there is little scope for the documents that would need to be filed in support of, and in opposition to, applications of that sort within the next few working days without causing
5 At [3].
6 At [30] (emphasis added).
prejudice here also. And those applications will need to be determined well in advance of a hearing.
[11] The trial was rescheduled to commence on 8 September 2025. The parties were on notice that any discovery applications would need to be resolved well before the trial. The Monnerys were directed to serve any additional briefs of evidence by 16 June 2025. The defendants were directed to serve their briefs of evidence by 27 June 2025.
[12] In 2024, Parsons sought further discovery of financial records of a business that the Monnerys had started after exiting Convendium. Parsons sought this discovery on the basis that money earned by the Monnerys from their new business venture, and the value of that business, should be taken into account if the Court is required to assess damages suffered by the Monnerys caused by the defendants. In a judgment dated 23 May 2024, Radich J ordered the Monnerys to provide the discovery.7
[13] A year later, in May 2025, the Monnerys made their application for further discovery from Parsons which is now before the Court. The Monnerys did not initially apply for leave to file the application, although leave is required. The Monnerys subsequently filed an application for leave in June 2025.
[14] The Monnerys’ application for further discovery from Parsons triggered Parsons to review their position in the proceedings, and to file their application in late May 2025 for leave to apply for the determination of preliminary questions.
[15] The defendants served some of their briefs of evidence in June 2025. Some briefs are outstanding but are expected to be served shortly.
[16] In early July 2025, the Monnerys and Parsons sought leave by consent for both interlocutory applications to proceed. On 4 July 2025, Associate Judge Skelton declined to grant leave by consent given the lateness of the applications and the
7 Monnery v Parsons [2024] NZHC 1298.
looming September trial.8 The applications for leave, and the substantive interlocutory applications, were set down for hearing on 16 July 2025.
Legal principles — leave to file an interlocutory application after close of pleadings
[17]An applicant for leave must surmount three formidable hurdles:9
(a)the order sought will be in the interests of justice;
(b)it will not significantly prejudice the other parties; and
(c)it will not cause significant delay.
[18] The closer the application is made to trial, the more formidable those hurdles become.10
Preliminary questions
[19] Parsons seeks determination of three proposed preliminary questions prior to the September trial (the questions):
(a)whether the plaintiffs have standing to bring claims based on breach of confidence or misuse of confidential information in circumstances where they have no or no sufficient interest in the information the first and sixth defendants are alleged to have used, where the alleged confidential information was that of Convendium or Eftpos Vending;
(b)whether the plaintiffs can pursue claims in respect of economic interests deriving from their position as director and/or shareholders of Convendium and/or Eftpos Vending in circumstances where the alleged
8 Monnery v Parsons HC Wellington CIV-2018- 485-482, 4 July 2025 (Minute of Associate Judge Skelton).
9 Elders Pastoral Ltd v Marr (1987) 2 PRNZ 383 (CA) at 385.
10 For examples of cases where proximity to trial has been a factor against granting leave, see Affordable Housing Ltd v Body Corporate 396511 [2023] NZHC 3015; and Talley’s Group Ltd v Biomex Trustees Ltd [2023] NZHC 1732.
losses would properly accrue to Convendium and/or Eftpos Vending and would therefore constitute reflective loss; and
(c)what information, if any, comprises the “Confidential Information” for the purposes of the claim.
Legal principles – preliminary questions
[20]Rule 10.15 of the High Court Rules 2016 (HCR) provides:
10.15 Orders for decision
The court may, whether or not the decision will dispose of the proceeding, make orders for—
(a)the decision of any question separately from any other question, before, at, or after any trial or further trial in the proceeding; and
(b)the formulation of the question for decision and, if thought necessary, the statement of a case.
[21] In determining whether it is appropriate to determine separate questions, the Court will generally consider five questions:11
(a)Will there be difficult demarcation questions between those issues to be addressed at the first trial and those left for the second?
(b)Will the separate question bring the proceedings to an end?
(c)What potential timesaving does the separate question offer?
(d)How will appeals be dealt with?
(e)Are there any other practical considerations tending one way or the other?
[22] Overall, the Court has a broad discretion as to whether to order determination of separate questions. The starting presumption is that all matters in issue should be
11 Haden v Attorney-General (2011) 22 PRNZ 1 (HC) at [50].
determined in one trial because this is normally the most efficient manner for dealing with proceedings. The burden, therefore, rests on the applicant to show there are good reasons for the determination of separate questions.12
[23] The Monnerys do not dispute that the questions properly arise from the pleadings. The issue is when and how these questions should be addressed by the parties and the Court.
The parties’ substantive arguments on the answers to the questions
[24] It is helpful to begin with a basic understanding of the substantive arguments that the parties intend to advance when the questions are determined, whether that be in the form of preliminary questions or at the September trial.
[25]Parsons argues that:
(a)A party may not bring an action for breach of confidence without being entitled to the obligation of confidence that they allege. The alleged confidential information relied on by the Monnerys belongs to Convendium and only Convendium has standing to sue.
(b)Relying on Prudential Assurance Co Ltd v Newman Industries Ltd (No 2),13 a shareholder cannot claim against a defendant for diminution in value of their shareholding resulting from loss suffered by the company, caused by a wrong done to the company by the defendant (the reflective loss principle).14 This remains the case even if the defendant’s conduct also included the commission of a wrong against the shareholder and even if the company has not brought proceedings. Much of the Monnerys’ claimed loss could only accrue to Convendium or Eftpos Vending and is not recoverable by the Monnerys.
12 Kennedy v Body Corporate 82981 [2024] NZHC 913 at [9].
13 Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982] 1 Ch 204 (EWCA).
14 At 222–223
(c)Regarding the third question, it will elicit particulars of the confidential information at the heart of the Monnerys’ claim.
[26]The Monnerys argue that:
(a)The requirement of the first cause of action is that the Monnerys had an economic interest in Convendium and Eftpos Vending: the first plaintiff by virtue of his employment and the agreement to pay him; and the second plaintiffs by virtue of their shareholding in each company.
(b)For the first two causes of action, which are economic torts, the Monnerys do not need a proprietary interest in the intellectual property of Convendium or Eftpos Vending (although such an interest is pleaded later in the claim).
(c)The requirement of unlawful means is satisfied because Parsons have utilised the confidential information and intellectual property of Convendium and Eftpos Vending for Parsons’ personal benefit and not for the benefit of those companies and their shareholders.
(d)Relying on the Court of Appeal’s decision in Christensen v Scott,15 and a decision of the Supreme Court of the United Kingdom in Marex Financial Ltd v Sevilleja,16 the reflective loss principle does not apply to the facts of this case.
[27] As I made clear to counsel during the hearing, I do not consider that it is appropriate for this Court to express even a preliminary view on the merits of the substantive arguments advanced by the parties in respect of the questions. Those questions are going to be dealt with substantively in a few weeks’ time by a Court fully appraised of the relevant evidence, whether that be as preliminary questions or at the September trial. I proceed on the basis that the questions are arguable.
15 Christensen v Scott [1996] 1 NZLR 273 (CA).
16 Marex Financial Ltd v Sevilleja [2020] UKSC 31.
Parsons’ arguments in favour of determining the questions before the September trial
[28] Parsons submit that all three questions are capable of clear demarcation. Standing is capable of binary resolution and is a critical precondition to enable the Monnerys to bring any claims derived from any alleged breach of duty.
[29] Parsons acknowledge that determination of the questions will not bring the proceedings to an end, but submit that the scope of the proceedings would be significantly narrowed if the first and second questions were answered in their favour: if the first question is answered in their favour, only an argument that the defendants breached their fiduciary obligations to Convendium could be advanced at trial; and if the second question is answered in their favour, only Mr Monnery’s claim for loss of income could continue. The remaining issues for trial could be dealt with in a matter of days instead of the three weeks scheduled.
[30] Parsons submit that, if determination of the questions is ordered, a condition could be imposed that any appeal from the determination of the questions is stayed until determination of all other issues at trial.
[31] As for practical considerations, Parsons say the main issue is finding a hearing date. They submit that one day would be sufficient with evidence by affidavit only.
Analysis
[32] There would be a subsequent trial regardless of how the questions are answered. I do not accept that the questions are clearly demarcated from matters that would remain to be determined at the second trial, irrespective of the answers to the questions.
[33] The first two questions, relating to standing and reflective loss, are each predicated as based on assumed circumstances — the legal question is posed based on assumed facts. That would require the Court to first make findings of fact, before then determining the legal questions arising from standing and any bar on claiming reflective loss.
[34] The third question regarding the confidential information is largely a factual enquiry. The Court would need to determine the confidential information possessed by Convendium and Eftpos Vending, and the confidential information possessed by Paul Monnery, if any. The factual matrix includes long and convoluted dealings between the various parties. The Court would need to make comprehensive findings of fact to determine the confidentiality question.
[35] Therefore, a hearing of the questions would require the parties to adduce significant narrative evidence. I do not accept that affidavit evidence would be appropriate, particularly where the parties have already served briefs of evidence. Even if evidence was by affidavit, the starting point is that cross-examination would be available. Parsons’ submission that the entire hearing could be dealt with in one day is unrealistic.
[36] The second trial, even if truncated, would run the risk of the same factual matters being traversed for a second time, with the potential for inconsistent findings of fact. New briefs would need to be prepared, irrespective of the answers to the questions.
[37] The reality is that the questions go to the heart of the Monnerys’ claim. The questions are not discrete and demarcated in a way that eliminates the potential for a cross-over of factual findings between the trial of the questions and the subsequent trial of all remaining issues.
[38] As at the date of this judgment, the trial is approximately six weeks away. The Registry would be required to find several days’ hearing time for the questions with a sufficient lead-in time to allow for an exchange of evidence and written submissions beforehand. The Court would then be expected to produce a judgment sufficiently in advance of the September trial so that all other preparation for that trial could proceed in an orderly fashion. Again, that is unrealistic.
[39] This is not the first time that a group of the defendants has applied for determination of preliminary questions. In May 2021, the third, seventh and eighth defendants applied for preliminary determination of the following question:
Is there a substantial similarity between: (i) the core protectable expression of the software used by Convendium Limited and (ii) the core protectable expression of the software used by the sixth defendant, Push Developments Limited?
[40] The substance of that question is similar to the substance of the third question that Parsons now pursue. The application by the third, seventh and eighth defendants was not pursued. I mention it because it shows that the parties were considering whether preliminary questions were appropriate four years ago.
[41] There is no explanation for Parsons’ delay in applying for determination of preliminary questions. The issues of standing and reflective loss which underpin the application have been well understood since at least the decisions, on applications for discovery, of Associate Judge Johnston in 2021,17 and Associate Judge Lester in 2022.18
[42] The legal arguments regarding standing and the recovery of reflective loss are nuanced. The authorities require careful consideration. The Court should determine and apply the legal principles in the full context that will be provided by the September trial.
[43] In my view, an attempt to determine the questions, or some variation of them, prior to the September trial would cause significant prejudice to the Monnerys and put the September trial in jeopardy.
[44] I am satisfied, by a wide margin, that this is not a suitable case for a grant of leave to Parsons to make an interlocutory application for the determination of preliminary questions. For the same reasons, I would also decline the substantive application for the determination of preliminary questions.
17 Monnery v Parsons [2021] NZHC 2854 at [25], [28] and [43(b)].
18 Monnery v Parsons [2022] NZHC 2401 at [26]–[29].
The further discovery
The documents sought
[45] The Monnerys seek financial records for entities associated with Parsons: Eftpos Vending, Push, Eftpos Pay Ltd, Super Dry Laundromats Ltd and any “other entities associated with the Parsons’ entities which conduct a similar business”.
[46]The documents sought are:
(a)financial statements for each entity for the years ending 31 March 2015 to 31 March 2024;
(b)records of the number of “payment terminals” placed by each entity in that period; and
(c)records of the number of “vending machines” placed by each entity in that period.
[47] The Monnerys submit that the financial statements can be provided without any restrictions as to confidentiality, and confidentiality in respect of the other records can be dealt with by limiting inspection to Mr Simmons, with all copies of the documents to be returned by Mr Simmons once he has completed his updating evidence.
The history of discovery applications by the Monnerys
[48] In a judgment dated 26 October 2021, Associate Judge Johnston declined an application by the Monnerys for discovery of financial information by Parsons, including financial statements and documents relevant to the operation of the technology alleged to include Convendium’s confidential information and associated intellectual property.19
19 Monnery v Parsons, above n 17.
[49] The Monnerys were dissatisfied with Associate Judge Johnston’s decision and applied for the judgment to be recalled or for leave to appeal. Those applications were declined by Associate Judge Lester in a judgment dated 19 September 2022.20
[50] I will refer to the relevant parts of the judgments because Parsons argues that the discovery now sought was declined by Associate Judge Johnston in 2021.
[51] Associate Judge Johnston recorded the defendants’ argument on the Monnerys’ standing, as part of his reasoning that led him to conclude the documents sought were not relevant:21
[25] The defendants all contend that the plaintiffs will not be able to succeed in any such claim, not least because in their former capacities as shareholders in Convendium and the company’s director, the plaintiffs have no basis for asserting any proprietary interest in the company’s intellectual property and thus no standing to sue in respect of the alleged usurpation of the same.
[26] In the context of an interlocutory application such as this, the Court must strike a balance between allowing itself to be drawn too deeply into the merits of the case and ignoring obvious barriers for an applicant. As a rule, that balance is struck by extending to the applicant a reasonable but not unbridled degree of latitude in the sense that the Court accepts that a plaintiff must be allowed to develop its case.
[27] However, the difficulty in this case is fundamental. As currently pleaded, the plaintiffs do not assert that they are the owners, or part-owners, or otherwise have any proprietary interest, in the intellectual property concerned, and nor, as far as I can see, is there anything in the affidavit evidence that would support such an assertion. Indeed, it is hard to see how these could be given the company structure.
[28] That being so, I am unable to see how any party other than Convendium (or its liquidators), can have standing to pursue remedies in relation to the usurpation of its intellectual property.
[29] In those circumstances, the conclusion that, on the current pleadings, the additional documentation being sought from the first and sixth defendants is irrelevant appears to me to be unavoidable.
[30] That really brings me full circle to the plaintiffs’ position. I do not doubt that it is their intention to replead their case. But, in my view, before the Court could be justified in putting the first and sixth defendants to the difficulty and cost of providing further discovery — which may possibly include seeking documentation from persons or entities with which they have previously been associated — there must at least be a pleading on the basis of
20 Monnery v Parsons, above n 18.
21 Monnery v Parsons, above n 17.
which the plaintiffs can say that the documentation is relevant. Otherwise, the discovery process is being used in an attempt to unearth a cause of action.
[52] Associate Judge Lester summarised Associate Judge Johnston’s findings as follows:22
[8] Given Associate Judge Johnston concluded the Monnerys did not have standing to pursue their claim, he concluded that the additional documentation they sought was irrelevant. Essentially, the Court accepted the defendants’ arguments the Monnerys have no basis for asserting any proprietary interest in Convendium’s intellectual property and thus no standing to seek damages based on an account for profits made by the defendants from intellectual property the Monnerys did not own.
[53] Associate Judge Lester then recorded the theory of the case for the Monnerys, as advanced by their counsel, Mr Carruthers KC:
[10] In respect of the second cause of action, conspiracy to injure economic interests, the Monnerys focus on the damage the defendants’ misuse of the intellectual property and asserted conspiracy to exclude/dilute their economic interest in Convendium has caused them.
[11] Mr Carruthers submits the Monnerys in their respective capacities had an economic interest in Convendium; Mr Monnery by virtue of his employment and then Mr and Mrs Monnery by virtue of their shareholding. Mr Carruthers submits it is sufficient that the Monnerys have an economic interest in Convendium harmed by unlawful means by the defendants.
[12] Mr Carruthers submits unlawful means is established by the defendants using the intellectual property of Convendium not for its benefit but for their own. Mr Carruthers recognised the requirement that the defendants intended to cause loss to the Monnerys through the unlawful means and he submits that is demonstrated through the pleaded actions of the defendants.
[13] As to the second economic tort, it has the additional requirement of conspiracy which Mr Carruthers says is no more than an agreement between the defendants to injure the interests of the Monnerys.
[54] Associate Judge Lester concluded that Associate Judge Johnston had not misunderstood the case before him, warranting either recall or leave to appeal,23 based on the following reasoning:24
[26] Accordingly, the Judge decided the application for discovery on the basis that the documents sought by the Monnerys could not be relevant to the
22 Monnery v Parsons, above n 18.
23 At [33].
24 (Footnote omitted).
type of damages the Monnerys could claim — that is, quantum rather than liability.
[27] The starting point of the Monnerys claim is that Convendium was the owner of the intellectual property. The unlawful means relied on by the Monnerys for the economic tort is the defendants unlawfully taking and using that intellectual property. The immediate victim of that wrong is Convendium. The Monnerys, by their economic tort claims say the harm done to Convendium was also intended to harm them. However, the profits Convendium could have made from being able to continue to trade its intellectual property or to sell it would always belong to Convendium. The value of the Monnerys’ shares (one of the quantified categories of loss) cannot be equated with any loss of profits suffered by Convendium. That is because first, a shareholder has no ownership interest in the assets of their company and second, to the extent the profits might flow through to a dividend, such cannot be equated with the value of the loss of profit.
[28] As the Monnerys have calculated other heads of loss, this was not an exceptional case where damages might be calculated on an account of profits or restitutionary basis.
[29] In reply, Mr Carruthers submitted that the law may recognise a loss of profits as a measure of damages for economic torts, but the case before Associate Judge Johnston was not run on that basis.
[30] There is no evidence from an expert share valuer that access to (say) the first year of trading of the defendants with the benefit of the intellectual property would be relevant to the valuation of the shares in Convendium as it, for example, might indicate the income Convendium could have achieved from the intellectual property.
[31] Mr Chisnall submitted that in fact Convendium had been trading with the intellectual property for a number of years so the value of its shares could be calculated from Convendium’s own trading history.
[32] Accordingly, this was not a case of the Judge dismissing the application for discovery on the grounds that the Monnerys’ cause of action was itself untenable. The fundamental difficulty identified by the Judge was that the Monnerys could not quantify their own loss based on loss suffered by Convendium. Nor was there any other explanation as to how the documents sought were relevant to the Monnerys’ claim. The only relevance asserted was in relation to the quantification of the Monnerys’ loss on an account of profits basis.
[55] The theory of the case advanced by Mr Carruthers at the time was essentially the same as it is now. However, as Mr Carruthers submits, the pleadings in respect of quantum have changed. The Monnerys no longer seek an account of profits. They argue that the documents sought are relevant to establish the diminution in value of their economic interests as a result of Parsons’ tortious conduct. They rely on the evidence of Mr Simmons to establish that the documents are relevant for that purpose.
[56] I do not consider that the decision of Associate Judge Johnston renders the current application an abuse of process.
Legal principles — further discovery
[57]The application against Parsons relies on r 8.19 of the HCR, which provides:
8.19 Order for particular discovery against party after proceeding commenced
If at any stage of the proceeding 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, the Judge may order that party—
(a)to file an affidavit stating—
(i)whether the documents are or have been in the party’s control; and
(ii)if they have been but are no longer in the party’s control, the party’s best knowledge and belief as to when the documents ceased to be in the party’s control and who now has control of them; and
(b)to serve the affidavit on the other party or parties; and
(c)if the documents are in the person’s control, to make those documents available for inspection, in accordance with rule 8.27, to the other party or parties.
[58]There are four matters to consider on an application for further discovery:25
(a)Are the documents sought relevant and, if so, how important will they be?
(b)Are there grounds to believe the documents exist? This will often be a matter of inference. How strong is the evidence?
(c)Is the discovery sought proportionate, balancing the time and cost of discovery against its potential value?
25 Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760, [2018] NZAR 600 at [14].
(d)Weighing and balancing these matters, should the Court exercise its discretion under r 8.19 of the HCR and order further discovery?
[59]The key factor in this case is relevancy.
The Monnerys’ argument
[60] The Monnerys submit that it is in the interests of justice to grant leave for the late interlocutory application because the documents sought are relevant. The documents relate to quantum. Mr Simmons was engaged by the Monnerys to provide his opinion on the value of their shares in Convendium and Eftpos Vending as at 30 November 2014 (the valuation date). The Monnerys submit the discovery is necessary to allow Mr Simmons to complete his evidence on their loss.
[61] As explained in his brief, Mr Simmons’ opinions have certain limitations. He says that there were subsequent streams of income available to Convendium and Eftpos Vending that would affect their value as at the valuation date. He says that he does not have access to the relevant financial information for a number of companies, grouped as “the Parsons’ interests”, which he requires to assess the impact of the subsequent income streams.
[62] The Monnerys submit that Parsons have been on notice since 2021 that their financial information was sought, and the particular documents now sought were foreshadowed in Mr Simmons’ brief.
[63] The Monnerys say there would be no prejudice to Parsons if leave and a late discovery order are granted because the provision of the information sought by Mr Simmons is simply a mechanical exercise. They say there would be no significant delay in the proceedings because Mr Simmons would be able to provide an updated brief in five to 10 working days after receipt of the information. The Monnerys submit that the additional work required of Parsons will not be significant given that Mr Simmons has already set out his methodology for calculating damages. Preparation for trial would not be unduly interfered with.
Analysis
[64]In Mr Simmons’ brief, he states that:
Although I have access to the relevant financial figures of Speed Queen, there has been no disclosure of the relevant financial information for Eftpos Vending (under the Parsons management), Push or Eftpos Pay Limited.
Accordingly, it has not been possible to build a financial model of these income streams to enable me to assess their impact on value.
[65]Despite that qualification:
(a)Mr Simmons’ brief produced his report on the value of Convendium and Eftpos Vending using a discount of cashflow methodology; and
(b)the Monnerys did not request further discovery of financial information of Push, Eftpos Vending or Eftpos Pay and any “other company or entity operating the technology in issue” until 4 February 2025.
[66] On 14 February 2025, by email between counsel, Parsons confirmed that they did not agree to provide the further discovery requested.
[67] The third, seventh and eight defendants have served their expert’s brief in reply to Mr Simmons’ evidence from April 2024.
[68] There is no satisfactory explanation for the full extent of the Monnerys’ delay in seeking further discovery after receiving Mr Simmons’ report in April 2024. Radich J had signalled in May 2024 that any new discovery issues would need to be determined well in advance of the new trial date.26
[69] I am not persuaded that the discovery can be practically dealt with before the commencement of the September trial. The scope of the discovery exercise is not clear from the available evidence. It could require a significant trawl for source accounting records to confirm the number of machines in play by each of the Parsons
26 Monnery v Parsons, above n 3, at [30].
entities during the relevant period of nine years. Even if completed under urgency, I would expect the discovery exercise to take two to three weeks.
[70] The Monnerys’ suggestion that Mr Simmons will be able to complete updated evidence within two weeks of receiving the further discovery assumes that he will receive all the documents that he considers he needs.
[71] Given the long history of discovery disputes, there is a significant risk that issues would arise with provision of the further discovery. For example, Parsons may claim confidentiality in respect of some or all records. A proposal has been made to deal with confidentiality in respect of the source accounting records, but not the financial statements. The Court might be called upon to intervene to settle terms of confidentiality. That will absorb more time.
[72] The Monnerys may be prepared to commit to two weeks for updating evidence, but there is no such commitment from the defendants. Depending on the scope of the discovery exercise, and the complexity of any updating evidence from Mr Simmons, the expert engaged by the third, seventh and eight defendants may well request several weeks to respond.
[73] I am speculating, however, I do so to demonstrate the potential for the pre-trial preparation to be compromised resulting in an application for an adjournment of the September trial by one or more of the parties.
[74] The discovery exercise and its potential consequences will serve as a significant distraction to the parties in the lead up to the September trial. Like Parsons, the Monnerys have left their run too late.
[75] I have considered the prejudice that might arise for the Monnerys if they are denied the discovery. Two points occur to me:
(a)When the defendants applied for an adjournment of the July 2024 trial, the Monnerys opposed the application. The Monnerys were ready and willing to proceed with the July 2024 trial on the basis of the existing
expert evidence of Mr Simmons, which had already been served. There was no suggestion that further discovery or evidence from Mr Simmons was required.
(b)The Monnerys plead for damages or an inquiry into damages. If the Monnerys succeed with their claim and the trial judge is unable to deal with damages based on Mr Simmons’ existing evidence, even applying a broad brush, then it will be open to the Court to order an inquiry into damages.
[76] I am satisfied that any prejudice that might occur to the Monnerys from a denial of the discovery sought is outweighed by the prejudice that will occur to all defendants if the applications are granted, and the risk to all parties of a further adjournment of the September trial.
[77] The interests of justice are best served by all parties focusing on the September trial and dealing with all issues at that trial based on the existing pre-trial timetable.
Orders
[78] The plaintiffs’ application for leave to file an interlocutory application and the application for further discovery are declined.
[79] The first and sixth defendants’ application for leave to file an interlocutory application and the interlocutory application for the determination of preliminary questions are declined.
Costs
[80] My preliminary view is that costs should lie where they fall. Both parties have been unsuccessful. If the parties cannot agree costs, then:
(a)each party may file and serve written submissions on costs, of no more than five pages, by 8 August 2025;
(b)there is no right of reply; and
(c)I will determine costs on the papers.
Associate Judge Brittain
0
9
1