Reynolds v Calvert - [2014] NZHC 1663

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CIV-2012-412-000910 [2014] NZHC 1663

BETWEEN GRANT BRUCE REYNOLDS as liquidator of JAMES DEVELOPMENTS LIMITED (in liquidation)
Plaintiff

ANDHILARY JANE CALVERT and HGW TRUSTEES LIMITED as Trustees of Frongopolus Trust of Dunedin
First Defendants

ANDCHRIS JAMES Second Defendant

Hearing: 13 June and 7 July 2014 (By way of telephone conference) Appearances: A C Sorrell for Plaintiff on 13 June 2014
M J McCartney QC for Plaintiff on 7 July 2014
M R Sherwood King for Defendants

Judgment: 15 July 2014

JUDGMENT OF DUNNINGHAM J

[1] This is an application by the plaintiff for orders:

(a) that the Court inspect certain documents in the first defendants’ fourth affidavit of documents;

(b) that the Court inspect certain documents in the second defendant’s

first affidavit of documents;

(c) following inspection that, unless the first defendants file a compliant affidavit of documents and give inspection, their defence is struck out
and judgment sealed;

REYNOLDS v CALVERT and ANOR [2014] NZHC 1663 [15 July 2014]

(d)following inspection, that the second defendant files a compliant affidavit of documents and gives inspection; and

(e) that solicitor/client costs are awarded.

[2] The essence of the plaintiff’s application is that, despite a protracted discovery process requiring Court orders for the defendants to provide further and better discovery, the further lists provided incorrectly claim litigation privilege in respect of some of the documents on the basis they are:

Communications and information made, received, compiled or prepared for the dominant purpose of preparing for a proceeding or an apprehended proceeding, being communications between the party and other persons and communications between the party’s legal adviser and other persons in information compiled and prepared by the party or the party’s legal adviser and information compiled or prepared at the request of the party, or the party’s legal adviser, by other persons.

[3] The plaintiff says the defendants’ verified list of documents1 contain, in part

2, the following types of documents which cannot be the subject of litigation privilege:

(a) correspondence between the legal advisers for the plaintiff and the legal advisers for the defendant;

(b) documents filed in Court;

(c) correspondence with the Court; and

(d)correspondence between persons who are not a party in the proceeding and other persons.

[4] The plaintiff does not request the Court inspect the documents listed in categories (a), (b) and (c) above, but considers that the defendants should be required
to list such documents in part 1, not part 2, of their verified list of documents.

1 Although the application refers to separate lists of documents, the only relevant list on the Court
file is a global document described as “Defendants’ Fourth Verified List of Documents”, dated
26 February 2014, but received by the Court in early April 2014. It appears to contain all the relevant documents numbered in the Schedules to the application.

[5] However, the plaintiff does request the Court inspect documents which fall into category (d) and which the plaintiff has listed in Schedules A…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] NZHC 1663
Decision Date: 15 July 2014

CaseChat Overview and Summary

The case of Reynolds v Calvert was an application by the plaintiff, the liquidator of James Developments Limited, for orders relating to the inspection of certain documents in the defendants' affidavits of documents. The plaintiff argued that the defendants' claim of litigation privilege in respect of some of the documents was incorrect. The defendants, Hilary Jane Calvert and HGW Trustees Limited as Trustees of Frongopolus Trust of Dunedin, and Chris James, were being sued to recover $740,000 plus interest in the liquidation of James Developments Limited. The plaintiff claimed that the sum was lent by the company to the first defendants but was wrongfully recorded in the accounts as loans to the second defendant and another entity, and repaid to them prior to the liquidation of the company in July 2009. The plaintiff sought inspection of the documents to determine if litigation privilege was properly claimed. The court found that litigation privilege could be claimed from 31 May 2012 when the liquidator wrote to the first defendants seeking repayment of the $740,000. However, the court also found that some documents did not attract privilege, such as communications with the Central Otago District Council and the ASB Bank. The court determined that a large number of the documents were privileged because Mr Broad was an authorised representative of the defendants, and the documents and information compiled by him, or received or sent by him from or to the defendants' legal team, were covered primarily by legal privilege but also by litigation privilege. The court directed the defendants to provide the plaintiff with a compliant verified list of documents identifying the basis of privilege claimed for each Part 2 document and placing non-privileged documents from Mr Broad's file in Part 1 of the list, by 31 July 2014. Costs were reserved.

Orders