New Zealand College of Midwives Incorporated v Attorney-General

[2024] NZHC 2252

NAMES OF GROUP MEMBERS AND COMMERCIALLY SENSITIVE INFORMATION SUBJECT TO CONFIDENTIALITY ORDERS AS PER MINUTE OF MCQUEEN J DATED 1 SEPTEMBER 2022.

THE COURT FILE IS NOT TO BE SEARCHED WITHOUT PERMISSION OF A HIGH COURT JUDGE

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2022-485-558

[2024] NZHC 2252

IN THE MATTER OF

a claim for breach of contract, equitable estoppel, restitution and under the New Zealand Bill of Rights Act 1990

BETWEEN

THE NEW ZEALAND COLLEGE OF MIDWIVES INCORPORATED

First Plaintiff

YVONNE MAREE HISKEMULLER
Second Plaintiff

FIONA MARY HERMANN
Third Plaintiff

AND

THE ATTORNEY-GENERAL

Defendant

On the Papers

Counsel:

R A Kirkness, K E Cornege, K Webster, N Udy & T Haradasa for the Plaintiffs

P H Courtney, S M Kinsler and C Sinclair for the Defendant

Judgment:

12 August 2024

JUDGMENT OF GWYN J

(Interlocutory application for an order enforcing disclosure orders)

THE NEW ZEALAND COLLEGE OF MIDWIVES INCORPORATED v THE ATTORNEY-GENERAL [2024] NZHC 2252 [12 August 2024]

Introduction

[1]    On 14 June 2024, I granted orders requiring further discovery by the defendant, including a direction that the defendant discover responses of the Ministry of Health’s Executive Leadership Team (ELT) to the October, November and December 2019 iterations of Budget bids (discovery order).1

[2]    The plaintiffs seek orders enforcing the discovery order. They say the defendant has discovered no documents recording a single response from the ELT to the October, November or December 2019 Budget bid iterations; such documents are likely to exist and the defendant has failed to take obvious steps to comply with the discovery order.

[3]    The application is opposed by the defendant, which says it has undertaken a reasonable search to comply with the discovery order and it would not be in the interests of justice for the Court to order further searches.

Law

[4]Rule 7.48 of the High Court Rules 2016 (Rules) provides:

7.48     Enforcement of interlocutory order

(1) If a party (the party in default) fails to comply with an interlocutory order or any requirement imposed by or under subpart 1 of Part 7 (case management), a Judge may, subject to any express provision of these rules, make any order that the Judge thinks just.

…

[5]In Kidd v van Heeren the Court of Appeal said:2

Rule 7.48 is wide in scope — the judge may make any order the judge thinks just. The examples listed are just that, they do not limit the type of order that can be made. The rule empowers a judge to strike out a pleading or enter judgment if, for example, a party persistently fails to comply with a discovery order…

1      New Zealand College of Midwives Inc v Attorney-General [2024] NZHC 1544 [judgment] at [55] and [99(b)].

2      Kidd v van Heeren [2019] NZCA 275 at [42] (emphasis in original).

[6]    Subclause (2) of r 7.48 sets out examples of orders that the Judge may make. Examples of such orders are contained in the judgment of Associate Judge Lester in Andrews v Lomax.3 There the orders included, for example, directing access to a Dropbox link.

[7]    Also relevant is r 8.14 which requires a party to make a reasonable search for documents within the scope of the discovery order. Subclause (2) states that:

What amounts to a reasonable search depends on the circumstances, including the following factors:

(a)the nature and complexity of the proceeding; and

(b)the number of documents involved; and

(c)the ease and cost of retrieving a document; and

(d)the significance of any document likely to be found; and

(e)the need for discovery to be proportionate to the subject matter of the proceeding.

[8]    In NSK Ltd v General Equipment Co Ltd, Associate Judge Doogue stated that the concept of proportionality “requires the court to balance the time and costs expended in making discovery against the potential value of that discovery.”4

[9]    That judgment also recorded that “[t]he court need only be satisfied that there is a reasonable probability, or a prima facie indication, that further documents exist.”5

Specific orders sought

[10]   In the intervening period between this application being filed and the plaintiffs’ submissions being filed, the plaintiffs say they indicated to the defendant that if it confirmed that emails for the relevant period had been reviewed and specific enquiries made of Kassandra Jane and Keriana Brooking, and this confirmed that there were no documents that exist recording the Ministry’s ELT responses to the October,

3      Andrews v Lomax [2022] NZHC 2244 at [28].

4      NSK Ltd v General Equipment Co Ltd [2015] NZHC 1979 at [21], citing Karam v Fairfax New Zealand Ltd [2012] NZHC 887 at [137]–[142].

5      NSK Ltd v General Equipment Co Ltd, above n 4, at [25].

November and December 2019 Budget bids, that would be sufficient from the plaintiffs’ perspective. The plaintiffs say the defendant has declined to do so.

[11]   The plaintiffs say it is not credible that there is not a single document that records the response of the ELT to the October, November and December 2019 Budget bid iterations, having regard to the detailed and technical nature of those documents, the evidence of Fergus Welsh (the Chief Financial Officer at the Ministry of Health at the time) about the ELT’s engagement with the Budget 2020 bid process and the evidence of Dr Jane, a Ministry official who prepared and revised the iterations of the Budget bids based on feedback that came from the ELT.

[12]   The plaintiffs submit that the iterations of the Budget bids are multi-page documents with detailed information and not the type of documents that lend themselves only to oral feedback.

[13]   The plaintiffs refer to Mr Welsh’s evidence which, the plaintiffs say, makes clear that the Ministry ELT was engaging with detailed written materials, including Budget bid iterations with budgetary implications, long lists of potential initiatives, in the context of preparing briefing materials for Ministers. This underscores that the ELT was unlikely to be relying on oral feedback on initiatives that it wished to see revised.

[14]   As discussed in the judgment, Dr Jane’s evidence for the defendant is that early iterations of the 2020 Budget bid she prepared in accordance with Ms Brooking’s instructions in October and November 2019 “failed to make it through the Ministry Executive Leadership Team (ELT) and peer review processes.” Dr Jane’s evidence is that in December 2019 a further iteration of the bid was made and approved by the Ministry’s ELT. She records that the Budget bid was submitted to Treasury in December 2019.

[15]   No documents showing the October 2019, November 2019, or December 2019 iterations of the 2020 Budget bid or the responses of the Ministry’s ELT to those iterations have been disclosed by the defendant.

[16]   Counsel for the plaintiffs accept from Dr Jane’s affidavit filed in opposition to this application that the feedback she received on the Budget bids was explained during a conversation and she was not supplied with any written documentation. She has confirmed in her affidavit that the instructions she was given by Ms Brooking were not in writing.

[17]The specific orders now sought by the plaintiffs are as follows:

(a)To make specific enquiries of Fergus Welsh, Clare Perry, Keriana Brooking and Ashley Bloomfield, asking them to confirm whether he or she is aware of the existence of any documents, including any emails, recording any responses from the ELT to the October, November and December 2019 iterations of the Budget bids. If that witness is aware of any such documents, where those documents are likely to be held.

(b)If these responses suggest that further searches should be made by the defendant to locate and discover those documents or emails, those searches should be made.

(c)To file and serve an affidavit setting out the enquiries made, the responses to those enquiries, whether the defendant carried out any further searches and what the results of those searches were.

(d)Costs.

Steps taken by the defendant

[18]   Counsel for the defendant say that the defendant has diligently searched those repositories which are likely to contain relevant material. Any further searches are likely to add additional cost, without a high likelihood of generating further relevant documents.

[19]   The affidavit from Philip Knipe, the Chief Legal Advisor at the Ministry, in response to this application is that:

(a)In the course of preparing the defendant’s briefs of evidence he arranged for checks to be made of ELT materials, involving a basic word search across the ELT archived database for “NZCOM” and “maternity”.

(b)In response to the particular discovery order, the Ministry searched the following repositories:

(i)The folder of the Executive Leadership Team – ELT – and ELT Subcommittees Patengi Archives database relating to October– December 2019.

(ii)The Ministry’s Strategy, Policy and Legislation Directorate Sharepoint databases for maternity and child and youth, using keywords “new spending” plus “maternity 2019”.

[20]   Mr Knipe’s evidence explains why, in his view, searches of email accounts are not appropriate: mailboxes are a repository to receive and send email, not to manage or store emails. Email accounts are not maintained for staff once they have left the Ministry. In accordance with the Ministry’s Knowledge Management policy, staff are required to save emails and other documents required for the Ministry’s Public Records Act obligations within the Ministry’s filing system. Unless special arrangements have been made, email accounts of staff are deleted 90 days after they have left the Ministry.

[21]   Mr Knipe deposes that during the course of preparing evidence for the defendant, all of the five defence witnesses named in the plaintiffs’ interlocutory application were asked about their document management approach to ensure that the documents would have been captured within the existing tailored discovery searches and were provided with copies of relevant material including emails they had sent, to review. He says that where a witness advised of a potential document which had not been captured in the initial tranche of discovery, further searches were undertaken and that document was provided.

Discussion

[22]   As I recorded in the judgment,6 the Budget bids, and the responses of the Ministry’s ELT to each of the iterations, are relevant to the claim as pleaded and should be disclosed. The information as to who made decisions not to progress a Budget bid and when, is relevant and potentially significant, and is not directly addressed in the defendant’s briefs of evidence.

[23]   The significance of the information sought is that, as Dr Jane’s evidence records, she was instructed to draft the first iteration of the Budget bid to request:7

… the full funding difference between what the Ministry was currently paying to LMC midwives and what the PwC modelling spreadsheet (the output of the contract extension with PwC) had indicated might be necessary, if PwC’s advice about what they considered a fair and reasonable service price for LMC midwives was accepted in the Budget process.

[24]   I do not understand the defendant to submit that no such documents in the category directed to be provided exist. Rather the response is that any further searches or inquiries for such documents would be disproportionate.

[25]   I am not satisfied that the defendant has made a reasonable search for the documents in question. While the defendant has undertaken further global searches of its databases since the discovery order, there is no evidence it has discussed the discovery order with the named individuals, other than Dr Jane. System searches are necessary and important but not sufficient. Information technology systems are not infallible and individuals’ use of the systems may be inconsistent.

[26]   Dr Bloomfield was a member of the Ministry’s ELT and received the October, November and December 2019 iterations of the Budget bids. Ms Perry gave advice and recommendations to the ELT. Ms Brooking gave the instructions to Dr Jane to prepare the October and November 2019 iterations of the Budget bid. Mr Welsh was the Chief Financial Officer at the Ministry at the time.

6      Judgment, above n 1, at [55].

7      Brief of evidence of Kassandra Jane (30 April 2024) at [10.7].

[27]   I do not accept the defendant’s submission that it would be disproportionate to make specific inquiries of that handful of named individuals. Indeed it is not clear to me why that obvious step has not already been taken.

Orders

[28]I make the orders sought by the plaintiffs.

Costs

[29]The plaintiffs are entitled to costs on this application on a 2B basis.

Gwyn J

Solicitors:

Tompkins Wake, Hamilton Meredith Connell, Wellington