Penley Limited v Attorney General
[2020] NZHC 2927
•6 November 2020
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2017-409-000431
[2020] NZHC 2927
BETWEEN PENLEY LIMITED
Plaintiff
AND
ATTORNEY GENERAL
First Defendant
AND
ELIOT SINCLAIR & PARTNERS
Second Defendant
Hearing: Determined on the papers Counsel
C A McVeigh QC for Plaintiff
A N Isac QC and K M Anderson for First Defendant J P Forsey for Second Defendant
Judgment:
6 November 2020
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
This judgment was delivered by me on 6 November 2020 at 12.00 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
PENLEY LTD v ATTORNEY GENERAL [2020] NZHC 2927 [6 November 2020]
Introduction
[1]On 2 October 2020, I issued a judgment on applications by the first defendant:1
(a)for leave to join a third party; and
(b)that the plaintiff (Penley) provide further discovery.
[2]The relevant facts are set out in that judgment.
[3] This further judgment concerns only documents in categories 3 and 4 of the first defendant’s application for further discovery. In respect of those categories the application was adjourned for further submissions, which I have received.
Category 3 – resource consents
Background
[4]The category 3 documents are described as:
Any earthworks or stormwater resource consents for the development which contain conditions relating to monitoring and inspections of the earthworks, as well as any sediment control plan, and all notes or records relating to site inspections required under any resource or building consents.
[5] Penley filed a second supplementary affidavit of documents shortly before the hearing of the first defendant’s application. The additional documents discovered included a resource consent for earthworks. It was not clear if the further discovery satisfied the first defendant’s application.
First defendant’s submissions
[6] The first defendant is still not satisfied Penley has complied with its discovery obligations. Specifically, it argues that no resource consent has been disclosed relating to extensive earthworks undertaken prior to the discovery of asbestos containing material.
1 Penley Ltd v Attorney-General [2020] NZHC 2601.
[7] The first defendant relies upon the affidavit of Paul Walker, a technical director with Tonkin and Taylor, who says:
In my experience, a substantial earthworks project as part of a subdivision would normally require a land use and earthworks consent, which would provide information on the manner in which the earthworks would be undertaken, and the conditions to be adhered to in carrying out that work. Conditions of consent also generally contain conditions about site monitoring for, amongst other things, the discovery of hazardous materials.
[8] However, the first defendant acknowledges the second defendant, by its counsel, has agreed to undertake further searches to identify any relevant resource consents and that there is at least the possibility the recently joined third party (Texco) has documents in this category in its control.
[9]The first defendant submits the practical way forward is:
(a)Penley be required to file an affidavit outlining the relevant steps taken to complete a reasonable search for category 3 documents, and confirming the only documents found are those now discovered; and
(b)the application be adjourned pending the completion of searches and discovery by the second defendant and Texco.
[10] Underlying the first defendant’s position is its view that Penley’s discovery affidavits are inadequate. The first defendant argues mere conclusory statements that Penley has undertaken a reasonable search do not comply with the High Court Rules 2016 and are insufficient as the parties and the Court are unable to form an independent view of the adequacy of Penley’s search.2
Penley’s submissions
[11] Penley submits it has fully complied with its discovery obligations. It rejects any criticism of its affidavits of documents. Penley submits it should not be required to provide any further affidavit in relation to discovery, nor to provide further evidence of the steps it has taken to identify discoverable material.
2 High Court Rules 2016, r 8.15(2).
Discussion
[12] In my earlier judgment, I referred to the relevant principles as set out in Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd3 and Lighter Quay Residents’
Society Inc v Waterfront Properties (2009) Ltd.4
[13] As noted, Penley has filed a second supplementary affidavit of documents disclosing further documents. In terms of the Assa Abloy test, what is now in issue is whether:
(a)there is credible evidence that still further documents in category 3 exist and are in Penley’s control; and
(b)I should order Penley to file a further affidavit detailing the steps taken to search for documents and confirming the only documents found are those now discovered.
[14] The first defendant has the onus to show there are grounds for belief that Penley’s discovery is incomplete albeit the threshold is not high.5 It appears that the first defendant relies primarily on two matters:
(a)the evidence of Paul Walker; and
(b)the alleged inadequacies in Penley’s affidavits of documents as to the searches taken to identify relevant documents.
[15] I am satisfied that having filed its second supplementary affidavit of documents Penley has satisfied its discovery obligations in relation to the category 3 documents. I am not satisfied that there are grounds for belief that further documents sought by the first defendant exist and are in its control.
3 Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760, [2018] NZAR 600 at [14].
4 Lighter Quay Residents’ Society Inc v Waterfront Properties (2009) Ltd [2017] NZHC 818 at [16].
5 Penley Ltd v Attorney-General, above n 1, at [63].
[16] Penley says it has no further documents in this category. The second defendant, by its counsel, has indicated that any further category 3 documents were more likely to be in the second defendant’s control than in the control or possession of Penley. I understand no issue is taken with that.
[17] Another factor is that a large number of documents were put before me including reports of a technical nature, describing in detail work that was performed on the site. By way of example, the site validation report prepared by the second defendant in April 2017 identifies the resource consents pursuant to which the work was undertaken. I was not referred to any document referencing a resource consent that has not now been disclosed. I would expect that if such a resource consent was obtained it would be referred to in the documents before me.
[18] As to whether Penley should be ordered to file yet another affidavit, in its second supplementary affidavit of documents the deponent, Paul Williams, has responded directly to the evidence of Mr Walker and says:
In response to this the First Defendant has now filed the affidavit of Paul Edward Walker in which Mr Walker sets out various documents, or classes of documents, which he says ought to be within Penley’s control for the purpose of discovery in this litigation.
In order to fulfil its obligations, Penley has caused a detailed search for all documents required to be discovered under the discovery order and, in particular, the documents, or classes of documents, referred to in Mr Walker’s affidavit. Penley has diligently reviewed all of its potentially relevant hard copy and electronic files that are in its control. Penley, its officer and advisors have spent many hours in the discovery process from the compiling and swearing of the original affidavit of documents through to the present.
…
To the best of my knowledge and belief, this affidavit is correct in all respects and carries out the Plaintiff’s obligations under the order for standard discovery by Associate Judge Osborne in the first case management minute of 9 October 2018.
[19] Mr Williams’s evidence goes beyond a mere conclusory statement that Penley has made a reasonable search for documents. Penley has, in response to Mr Walker’s evidence, specifically searched for the category 3 (and category 4) documents. As a result it has identified and disclosed further documents. Mr Williams has also confirmed Penley has no other relevant documents.
[20] That is not to say there is no merit in the submissions the first defendant makes concerning the need for parties to specify the relevant steps taken to make reasonable searches for documents. It should be expected that in the case of electronic discovery parties will provide details including search terms used and limitations on their searches. However, the High Court Rules should be applied in a practical not a pedantic way. To require Penley to file a further affidavit would not provide any tangible benefit and is not in these circumstances consistent with the objectives of the rules to secure the just, speedy and inexpensive determination of the proceeding.6
[21] I am satisfied Penley has responded to the first defendant’s application and conducted further reasonable searches for the category 3 documents. I am also satisfied that should further documents in this category exist they are most likely held by the second defendant who has adopted a cooperative approach to discovery.
[22]I make no orders in respect of the category 3 documents.
Category 4 - damages
Background
[23]The category 4 documents were described as:
Documents relevant to establishing the quantum of damages sought (namely the cost of remediating the plaintiff’s property), including receipts, invoices, quotes, records of the disposal volumes or weights of soil or earth removed, records of the transport and landfill disposal rates, all professional fees relevant to the remediation.
[24] The first defendant made this request because it could not reconcile Penley’s damages claim with its discovery. I directed Penley to provide particulars of the amount claimed as well as identifying the discovered documents which support the claim.
[25]Penley has provided a schedule itemising the sums claimed which total
$1,596,575.44 (including GST). This is more than the sum claimed in the statement
6 High Court Rules, r 1.2.
of claim which, Penley says, is largely because the amount claimed was on a GST exclusive basis.
The first defendant’s submissions
[26] The first defendant identifies what it considers to be deficiencies in what Penley has provided as follows:
(a)several invoices provided in discovery do not appear to be part of Penley’s damages claim;
(b)Texco’s invoice 14886 dated 30 June 2016 is for a sum of $2,533.18 (including GST) rather than in the sum of $233.19 as sought by Penley;
(c)several invoices issued by the second defendant refer to spreadsheets which are not attached;
(d)invoices for Texco’s progress claims #10 to #17 refer to payment certificates from the second defendant which have not been discovered; and
(e)it is not clear whether the plaintiff is seeking damages exclusive or inclusive of GST.
[27] Again, on the basis that it seeks a practical resolution, the first defendant says the way forward is:
(a)Penley be required to file an affidavit outlining the relevant steps taken to complete a reasonable search of documents listed in category 4 and confirm the only documents found as a result of its searches are those discovered;
(b)Penley should file an amended statement of claim specifying the nature, particulars and amount of special damages sought in accordance with High Court Rules 5.33;
(c)counsel shall liaise with the second defendant for further particulars in relation to the invoices issued; and
(d)the application for discovery of documents listed in category 4 be adjourned pending the completion of discovery by the second defendant and Texco.
Penley’s submissions
[28] Penley says it has complied with its discovery obligations and in all but two cases the costs particularised are supported by discovered documents. The exceptions are two invoices it has not been able to locate. It has previously discovered documents relevant to the disposal rates of contaminated material but does not have records of the volumes or weights of soil removed or records of the transport rates. Penley is confident the second defendant will have complete records of such matters.
[29] Penley says it should not be ordered to provide further particulars of its claim. The first defendant has not, it says, sought particulars of damages claimed by it and, while Penley has no objection to providing particulars, the first defendant should follow the procedure in r 5.21(1) High Court Rules and serve a notice of the particulars sought.
The second defendant’s submissions
[30] I have also received a memorandum on behalf of the second defendant which notes:
(a)one of the invoices that Penley has not been able to locate has been discovered by the second defendant;
(b)the second defendant has discovered documents relating to soil removed and transport rates relevant to Penley’s damages claim.
Discussion
[31] I am satisfied that Penley has substantially complied with its discovery obligations in respect of category 4 documents. As noted above, its second supplementary affidavit of documents confirms that since this application was filed it has searched for the further documents referred to in Mr Walker’s affidavit. It has now provided invoices for all of the sums that are claimed as damages except in two minor respects. For the same reasons I gave in relation to the category 3 documents, I do not consider it necessary or appropriate (at least at this juncture) to order Penley to file yet a further affidavit.
[32] However, Penley has been unable to locate two invoices (although one has been discovered by the second defendant) and some of the invoices Penley relies on do not have the relevant spreadsheets or payment certificates attached. The first defendant is entitled to those documents. The first defendant suggests, as a practical way forward, I should adjourn this application and it will liaise with the second defendant in relation to these matters. I consider that is appropriate.
[33] It is not appropriate that I order Penley to file an amended statement of claim or provide further particulars of its claim. That is not the application before me. Penley is correct that the procedures in the Rules for obtaining further particulars should be followed.
Result
[34] I dismiss the application in respect to the category 3 documents on the basis I am satisfied Penley has now complied with its discovery obligations.
[35] I adjourn the application in respect of the category 4 documents expecting that with the second defendant’s cooperation any invoices/spreadsheets and payment certificates Penley has not discovered will be provided without further recourse to the Court.
[36] The application in relation to the category 4 documents may be brought on at the request of the first defendant.
[37] I reserved costs pending resolution of the matters set out in this judgment. Counsel ask to be heard in relation to costs. I direct counsel to confer and attempt to reach agreement on costs. This should include whether it might be appropriate to simply reserve costs at this stage. If agreement cannot be reached, I will receive memoranda. They are to be filed within 21 days, with a further 7 days for any replies.
[38] This case is without a future date. I direct that there shall be a further telephone conference at 3pm on 7 December 2020. Counsel are to confer prior to the conference and file preferably a joint memorandum by no later than 3 December 2012 to address the schedule 5 High Court Rules matters.
O G Paulsen Associate Judge
Solicitors:
C A McVeigh QC, Barrister, Christchurch Crown Law Office, Wellington
Duncan Cotterill, Christchurch
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