RHH Limited v Anderson

[2018] NZHC 1926

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-2066

[2018] NZHC 1926

BETWEEN

RHH LIMITED

First Plaintiff

JOSEF CHRISTOPHER ROBERTS
Second Plaintiff

AND

SANDRINE ANDERSON
First Defendant

HELICE PROPERTIES LIMITED

Second Defendant

Hearing:	30 July 2018
Appearances:	K Davenport QC with P Devereux for the Plaintiffs R J Hollyman for Ms Miriam Roberts, a non-party
Judgment:	30 July 2018

ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL

Solicitors:

Corporate Counsel Ltd (Paul Devereux), Parnell, Auckland, for the Plaintiffs Grove Darlow & Partners (TJG Allan/SF Powrie), Auckland, for the Defendants Haigh Lyon (B Molloy), Auckland for Ms Miriam Roberts

Copy for:

Kate Davenport QC, Auckland, for the Plaintiffs Les Taylor QC, Wellington, for the Defendants

Robert J Hollyman, Auckland, for Ms Miriam Roberts, non-party

RHH LIMITED v ANDERSON [2018] NZHC 1926 [30 July 2018]

[1]                  The plaintiffs apply for an order for non-party discovery against Ms Miriam Roberts. They seek relevant documents including those relating to:

(a)a sale and any  subsequent  purchase  of  12 Springcombe  Road, St Heliers;

(b)any loan to the Sandrine Trust or Ms Anderson or any other related party; and

(c)any documents relating to RHH Limited, Helice Properties Limited, Willow Trust, Willow No. 2 Trust, and JCR Trust.

[2]                  The proceeding is about a property at 12 Springcombe Road, St Heliers. In 2003 the property belonged to the Sandrine Trust, a trust associated with the first defendant, a practising lawyer. Mr Roberts, the second plaintiff, his company, RHH Limited, and his wife, Ms Miriam Roberts, were clients of Ms Anderson. In September 2003, the Sandrine Trust sold the Springcombe Road to RHH Limited for $950,000. Settlement took place in October 2003 and RHH Limited took title.

[3]                  Shortly afterwards, there were discussions for Ms Anderson to buy the property back. The statement of claim says that a price of $1.1 million was agreed. The arrangements were unusual. Ms Anderson was to pay the price over time. A new company was incorporated, Helice Properties Ltd. At the start Mr Roberts was the sole director and shareholder. Helice Properties Ltd was the corporate trustee of the Willow Trust, which was established under a deed of 10 November 2003. The  beneficiaries  of  the  Trust  were  Mr  Roberts,  his  wife  Miriam,  Ms Anderson and others. Ms Anderson was the protector under the Trust Deed which gave her additional powers to remove trustees. The Springcombe Road property was transferred to Helice Properties Ltd later in November 2003. That company held the property as trustee of the Willow Trust.

[4]                  Ms Anderson maintains that she has paid for the property but the plaintiffs do not necessarily accept that. The plaintiffs say that between November 2003 and

July 2008 the property was managed as if it were their property. In July 2008,  Mr Roberts was removed as a director and shareholder of Helice Properties Ltd. Ms Gomes, an accountant who does accounting work for Ms Anderson, was appointed as sole director and shareholder of Helice Properties Ltd. In September 2008, Ms Anderson established the Willow Trust No. 2, and the assets of the original Willow Trust were resettled into the Willow Trust No. 2. Later in July 2014, the shares in Helice Properties Ltd held by Ms Gomez were transferred to Ms Anderson. She sold the property in 2015 for $2,870,000. The plaintiffs want her to account to them for the profit on the sale.

[5]                  The proceeding started in late 2017.   The close of pleadings date was    23 July 2018. It is set down for hearing for five days beginning 15 October 2018.

[6]                  During 2017, the lawyers acting for the plaintiffs wrote to Ms Roberts asking about any records she held. Ms Roberts is the former wife of Mr Roberts. Their relationship goes back to 1997. They married in 2003 and separated in 2010. Their marriage was dissolved in 2015. During their marriage, Ms Roberts did administrative work and financial management for the businesses of Mr Roberts, including RHH Limited. That came to an end in 2015 when Mr Roberts asked her to hand over all his records.

[7]                  The evidence of Mr Roberts and Ms Roberts seems to agree that she gave Ms van Remen, who does administrative work for Mr Roberts, hard copies and paper files in March 2015 and, in May 2015, a hard drive with information that had been electronically stored. The information is said to be personal, company and trust-related financial information. Ms Roberts says that she stopped doing any work for Mr Roberts from May 2015.

[8]                  Mr Roberts believes that she may still hold documents relating to his affairs. He believes that she is aligned with Ms Anderson and has been feeding her with documents and information which belong to him and are confidential to him. As evidence, he has attached to one of his affidavits a document which he says Ms Anderson has produced on discovery. He says that he does not have a copy of

the documents himself and he surmises that Ms Anderson must have got the document from Ms Roberts.

[9]                  During June 2017, Mr Roberts' lawyers wrote to Ms Roberts and her lawyer seeking clarification  whether she still held documents.   Her  lawyer wrote  on    1 August 2017 to say that paper copies of records had been uplifted and electronic copies were provided in March and May 2015. He explained that Ms Roberts had carried out an exhaustive search for documents, both in paper and electronic form, and confirmed that she held no documents or data relating to his affairs.

[10]              Mr Roberts' lawyers sought verification. They invited Ms Roberts to swear an affidavit which confirmed that she held no further documents and that she had not given information in the documents to anyone else.

[11]              In her affidavit in opposition Ms Roberts says that she has searched through her personal emails from 2003 to 2004 to check whether she has an email of the sort described by Mr Roberts. She says that she was careful to ensure that she provided everything that Ms van Remen would need. She does not, however, expressly state that she no longer has any documents belonging to Mr Roberts or RHH Limited.

[12]              Under r 8.21 of the High Court Rules the court can order a non-party to make an affidavit as to documents that may be relevant to issues in a proceeding. It is an exception to the rule that generally only parties to a proceeding are required to make discovery. The power under r 8.21 is discretionary. Normally the court has regard to the test for standard discovery under r 8.7. Case law has indicated that the court must be satisfied that an order for non-party discovery is necessary.

[13]              Inherently an order for non-party discovery is intrusive. Some non-parties are well equipped to provide documents; for example, banks required to provide bank statements and the like. In those cases non-party discovery proceeds smoothly. For other parties, however, requiring discovery can impose a burden.  In recognition of that burden the court requires that the non-party be paid their

actual and reasonable costs both on the application and on complying with any order that has been made.1

[14]              In opposition to the application Mr Hollyman submitted that discovery must be limited to documents relevant to a matter in issue.  He submitted  that  Ms Roberts could only be required to disclose documents which she would be required to disclose if she were a party to proceeding, and there were also issues of proportionality. He contended that the scope of category sought was over-broad. The applicant was fishing. The discovery was oppressive.

[15]              Ms Davenport noted that the application covered any correspondence, emails by Ms Roberts to the defendants, or any other documents concerning the matters in issue and submitted the emails with the defendants are likely to be within that category.

[16]              This case is different from the usual application for non-party discovery. In most cases of non-party discovery, the applicant is not ordinarily entitled to the documents for which it requires the non-party to discover. The non-party has control of the documents and, unless a discovery order is made, it cannot be required to hand the documents over to the party to the proceeding. There are however cases where a party is entitled to say to a non-party that they are entitled to documents under substantive rules that operate outside normal rules of procedure. As examples, under the Partnership Act, a partner is entitled to access to the books and accounts for a partnership and is entitled to have copies of books of account made available, even if there is no proceeding in prospect.2 Under the Companies Act, directors have a right to inspect records of the company.3 In some cases shareholders are entitled to inspect certain company records.4 Clients may inspect files of their solicitors. Information may be required to be disclosed under the principles of the Privacy Act.5 Someone invoking those substantive rules does not need to say that there is a proceeding on foot or that the documents are required

1      See r 8.22(3) of the High Court Rules.

2      Partnership Act 1908, s 27(i) (subject to agreement otherwise).

3      Companies Act 1993, s 191.

4      Companies Act, s 216.

5      Privacy Act 1993, s 6, Principle 6.

for a proceeding. Their request for documents cannot be defeated on grounds of irrelevance or lack of proportionality.

[17]              Mr Roberts is in that position. The records held by his former wife belong to him and he is entitled to them independently of any proceeding now pending. In that sense, the application for non-party discovery is simply a vehicle by which he can enforce the rights that he has independently of the proceeding to have access to records that belong to him.

[18]              The question then is whether there are additional documents held by his former wife that have not been handed over to him already. Ms Davenport accepts that there is no need for Ms Roberts to repeat the exercise in May 2015 when she handed over a hard drive with electronically-stored information. It seems plausible that she may continue to hold that information in electronic storage, but obviously no useful purpose would be served by requiring her to hand over the same information afresh. While Ms Roberts has given a partial answer, there is ground for doubt whether she still holds documents because she did not take up the invitation in 2017 to swear an affidavit making the matter clear. Mr Roberts can point to other communications which relate to his affairs, where the documents have not been in his control.

[19]              Accordingly, I require Ms Roberts to swear an affidavit. The affidavit does not require her to disclose documents and  information which she provided to   Mr Roberts in 2015. The affidavit is to address whether there are any other documents in her possession which she has not handed over to him. That may include documents within clauses (a), (b) and (c) in the schedule to the application. I also give a direction which goes beyond her substantive rights and relates only to a matter of procedural discovery. She is also to disclose any communications between herself and the defendants which relate to matters in issue in this proceeding. Ms Roberts is to provide the affidavit by 13 August 2018. Leave is reserved to apply for further directions. Ms Roberts is entitled to her actual and reasonable costs on the application and on the costs of complying with the order for discovery.

[20]              While I have made an order for an affidavit of documents to be provided, it is open to the parties to agree on less formal arrangements. That is, of course, a matter for agreement. I cannot direct it.

……………………………...

Associate Judge R M Bell