Rice v Heaney

[2014] NZHC 1311

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-000063 [2014] NZHC 1311

BETWEEN

HELEN MARIA RICE

Plaintiff

AND

DAVID JONATHAN HEANEY QC First Defendant

SUSAN ANNE THODEY Second Defendant

Hearing:	On the papers
Appearances:	J R Billington QC for the Plaintiff M G Ring QC for the Defendants
Judgment:	11 June 2014

RESERVED JUDGMENT OF ELLIS J

This judgment was delivered by me on Wednesday 11 June 2014 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:………………………….

Counsel/Solicitors:

J R Billington QC, Barrister, Auckland

M G Ring QC, Barrister, Auckland

RICE v HEANEY QC [2014] NZHC 1311 [11 June 2014]

[1]      National Business Review (NBR) seeks access to the court file in relation to these proceedings which, in general terms, are concerned with matters consequential upon the dissolution of the partnership between the plaintiff and the defendants.  In particular, NBR seeks to view the statement of claim, statement of defence and “any other court minutes” relating to the case. There is at present only one minute on the file.

[2]      The reasons given by NBR in support of its request are that:1

To review the court file will enable the full and accurate reporting of the case. The case involves a dispute between David Heaney, partner at Heaney &

Partners, which makes the bulk of its revenue from ratepayers through its work

for the Auckland Council on leaky buildings, and his former legal partner Helen Rice. It is important to the public of Auckland to know what is going on within the law firm it funds through its rates.

[3]      NBR’s application is opposed by the defendants and I have received the

submissions filed on their behalf. The plaintiff abides the decision of the Court.

The relevant rules

[4]      Rule 3.9 of the High Court Rules provides that during the substantive hearing of a proceeding and until “the close of the 20th working day after the court has given the final judgment” there is a prima facie entitlement to access a court file including (inter alia) any pleading, reference, notice, or application filed.  An application must nonetheless be made and the Court retains a discretion to deny such access.

[5]      But because the present matter is not yet at the substantive hearing stage, the application is governed by r 3.13, which relevantly provides:

(1)       This rule applies whenever the permission of the court is necessary under these rules and is sought to access a document, court file, or any part of the formal court record, except where access may be sought under rule

3.9.

(2)      An application under this rule is made informally to the Registrar by a letter that –

(a)      identifies the document, court file, or part of the formal court record that the applicant seeks to access; and

1      NBR letter to the Court dated 14 May 2014.

(b)       gives the reasons for the application.

(3)       The application is heard and determined by a Judge or, if a Judge directs the Registrar to do so, by the Registrar.

…

[6]      Rule 3.14 states that the court may refuse or grant an application under r 3.13 “in whole or in part without conditions or subject to any conditions that the Judge … thinks appropriate”.

[7]      The factors to be taken into account when determining an application are set out in r 3.16, as follows:

In determining an application under rule 3.13, or a request for permission under rule 3.9, or the determination of an objection under that rule, the Judge or Registrar must consider the nature of, and the reasons for, the application or request and take into account each of the following matters that is relevant to the application, request, or objection:

(a)       the orderly and fair administration of justice:

(b)       the protection of confidentiality, privacy interests (including those of children and other vulnerable members of the community), and any privilege held by, or available to, any person:

(c)      the principle of open justice, namely, encouraging fair and accurate reporting of, and comment on, court hearings and decisions:

(d)       the freedom to seek, receive, and impart information:

(e)      whether  a  document  to  which  the  application  or  request relates is subject to any restriction under rule 3.12:

(f)       any other matter that the Judge or Registrar thinks just.

[8]      It has been said that these factors do not represent a hierarchy: “the relevance and weight ascribed to each [factor] will depend on the context of [the] request and in  particular  the  nature  of  and  the  reasons  for  an  application  or  request”.2      A

balancing exercise is required.3 It has also been noted that the rule no longer requires

that an applicant establish a legitimate interest.  The courts are nonetheless likely to

2      Schenker AG v Commerce Commission [2013] NZCA 114 at [37].

3      Chapman v P [2010] NZFLR 855, (2009) 20 PRNZ 330 (HC) at [31].

be less sympathetic to persons who cannot show a “recognisable and legitimate public or private purpose” for seeking access.4

The defendants’ position

[9]      The defendants’ opposition to the application can be summarised as follows.

[10]     First, they submit that the fact that the parties to the dispute are lawyers who are regularly engaged by Auckland Council is insufficient to raise a legitimate public interest  in  disclosure.   They say that  the proceeding is  not  concerned  with  the expenditure of ratepayers’ funds but is, rather, a private dispute concerning the assets of the former firm.

[11]    The defendants also submit that the subject matter of the proceeding is confidential to the parties, and that the pleadings contain commercially sensitive information whose disclosure would prejudice them. This information includes:

(a)       The revenue and earnings of the firm and its former partners;

(b)      The terms of Heaney & Co’s partnership agreement and its lease; and

(c)       Contents of private correspondence between the parties.

[12]     As  well,  they contend  that  the  statement  of  claim  contains  “serious  and embarrassing” allegations about the defendants’ behaviour, particularly the allegation regarding the motive for dissolution of the partnership and the defendants’ intentions at that time.  These allegations are strenuously denied.  The submission therefore is that it is contrary to the fair and orderly administration of justice, and the defendants’ privacy and confidentiality interests for these allegations to be aired publicly.

[13]     The defendants signal that even at the substantive hearing stage, they will seek suppression or confidentiality orders in respect of commercially sensitive and

private information that may be disclosed.

4      Commerce Commission v Air New Zealand Ltd [2012] NZHC 271 at [30].

[14]     As far as open justice is concerned, the defendants make the point that, in the context  of  r 3.16,  the  relevant  principles  do  not  extend  to  the  reporting  of proceedings generally, but to enabling accurate reporting of substantive hearings and decisions.   Because these proceedings have not yet reached that stage, any report published by NBR at this point will, by definition, not relate to a court hearing or decision. There is no need for disclosure now.

[15]     Lastly, the defendants have submitted that if the Court is minded to grant NBR access to the file, the confidential and private information should be redacted from the relevant documents.   They have requested the opportunity to provide redacted versions of the documents to the Registry in that event.

Discussion: the pleadings

[16]     I have formed the view that an appropriate balancing of the relevant r 3.16 factors supports the defendants’ position.

[17]     First, I consider that publication of the allegations and counter-allegations contained in the pleadings at this early stage would not be conducive to the orderly and fair administration of justice.  I consider that airing these contested but, as yet, untested allegations would be likely to be an unfair and unwarranted diversion for the  parties.    Moreover,  publication  would  potentially  inflame  the  relationship between them in a way that is likely to diminish any prospect of them reaching an extra-judicial resolution of the proceedings.

[18]     Secondly, I accept the defendants’ submissions that the pleadings contain commercially confidential, sensitive and private information.  It would, in my view, be quite wrong to pre-empt their signalled intention to apply for confidentiality orders at the hearing stage by permitting public disclosure now.

[19]     Thirdly, while it is beyond dispute that the media have a vital role to play in disseminating and commenting upon judicial decisions, I accept that the dictates of open justice have more limited force at this, very early, stage of the proceedings. That is, as I have said, clear from the terms of r 3.16(c) itself.  Because there are, as yet, no court hearings and decisions on which to report it is impossible to assess

whether granting access to the file will encourage accuracy in that respect.   The matter can, if necessary, be revisited at the time when interlocutory hearings have been held and decisions given.

[20]     Fourthly, there is the freedom to seek, receive, and impart information.  That reflects the freedom protected by s 15 of the New Zealand Bill of Rights Act.   It overlaps with the principles of open justice and might be thought to be subject to the same qualifications.5    That point is reinforced in the present case by the fact that the courts have said that when determining the weight to be given to this right, the nature and reason for the access request is important. As Asher J stated in Commerce Commission v Air New Zealand Ltd, this freedom “does not exist in a vacuum” but rather “requires a consideration of the reason for the request”.6

[21]     In that regard, I record that I reject the proposition that there is an additional public interest in knowing “what is going on” in the defendants’ firm merely by dint of the fact that it from time to time represents the Auckland Council.  The dispute is intrinsically a private one.  Any money spent by the defendants in resolving it is not public money.   At this stage there is no reason to think that the proceedings will affect the interests of the Council or its ratepayers.

[22]     Access by NBR to the statement of claim and the statement of defence (and any memoranda or other documents filed by the parties) is therefore denied at this stage.

Discussion: the minute

[23]     As I noted at the outset, there is presently one minute issued by the Court on the file.  It is a minute issued by me on 8 May 2014 following the first face to face conference in the proceedings.   Its contents are limited to procedural matters and

timetable directions.

5      Schenker AG v Commerce Commission, above n 2,at [36]

6      Commerce Commission v Air New Zealand Ltd, above n 4, at [33].

[24]     That said, minutes issued by the Court are defined in the rules as part of the formal court  record.7     Different rules  govern the disclosure of such documents. More particularly, under r 3.7, there is a general right of access to the formal court record,  although  the  Court  still  retains  a  discretion  to  refuse  disclosure  under r 3.7(3).  None of the potential restrictions on access under r 3.12 appear to me to apply.

[25]     Although the defendants also oppose NBR being given access to the minute, it does not refer to any of the specific matters that I have accepted are confidential, sensitive or private in nature.  Although I am unable to see what interest NBR might have in the contents of the minute of 8 May, I can see no good reason for refusing

access to it and I decline to do so.

Rebecca Ellis J

7      High Court Rules, r 3.5.