Ryan v Lobb
[2021] NZHC 2219
•27 August 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2019-404-001591
[2021] NZHC 2219
BETWEEN VERENA COLLEEN RYAN
Plaintiff
AND
STUART JAMES LOBB
First Defendant
AND
LOCKHART TRUSTEE SERVICES NO.56 LIMITED
Second Defendant
AND
PUBLIC TRUST
Non-Party
Hearing: 20 July 2021 Counsel:
W M Patterson for Plaintiff
P A Fuscic for First Defendant
Judgment:
27 August 2021
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
This judgment was delivered by me on 27 August 2021 at 2.00 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
RYAN v LOBB [2021] NZHC 2219 [27 August 2021]
[1] In this proceeding, the plaintiff (Ms Ryan) asks the Court to make a declaration as to the meaning of a resettlement clause in a trust deed establishing the Lothbury Trust (the Trust). At the time the proceeding was commenced the defendants were, along with Ms Ryan, the trustees of the Trust.
[2] This judgment concerns an application by the first defendant (Mr Lobb) for orders requiring Ms Ryan and the second defendant, Lockhart Trustee Services No.56 Ltd (Lockhart) to provide tailored or particular discovery and that Public Trust provide particular non-party discovery.
[3] The application is opposed by Ms Ryan, principally on the grounds the categories of documents listed in the application are not relevant to the issue in the proceeding and the discovery sought is not proportionate. Lockhart and Public Trust will abide the Court’s decision.
Facts
[4] Mr Lobb and Ms Ryan were married on 8 January 2000 and have two children. They separated in about October 2016. The marriage has been dissolved.
[5] They settled the Trust on 17 June 2005. Mr Lobb and Ms Ryan, together with Public Trust, were the first trustees. Mr Lobb and Ms Ryan were also appointed protectors of the Trust with the power, if acting jointly and unanimously, to appoint and remove trustees. The discretionary beneficiaries of the Trust are Mr Lobb, Ms Ryan and their children. The children are the final beneficiaries of the Trust.
[6] The assets of the Trust consist of the former family home at 23 Orakei Road, Remuera, antique furniture, jewellery and watches. Mr Lobb and Ms Ryan jointly sold these items to the trustees by deeds of sale, with the debts owed to them as vendors acknowledged by deeds of acknowledgement of debt. Renovations were undertaken to the Orakei Road property in around 2005-2006 and the cost of the work documented as loans by Mr Lobb and Ms Ryan to the Trust. The debts created in favour of Ms Ryan and Mr Lobb have been forgiven. These transactions were recorded in the financial statements of the Trust. The financial statements to 31 March 2012, for instance,
record that Ms Ryan and Mr Lobb were each owed $755,216.12 and that the debt was gifted. The total liabilities were nil.
[7]This proceeding concerns cl 2.5 of the Trust Deed which relevantly provides:
2.5 Resettlement of Trust
…
(3) If the Settlors separate (or their marriage is legally dissolved), either Settlor may give the Trustees written notice requiring them to resettle (on new Trusts acceptable to the Settlor who has given notice) such part of the Trust assets as the Trustees consider fair and equitable having regard to the respective contributions of the Settlors (whether by gifting, inheritance or otherwise) to the total assets of the Trust.
[8] Mr Lobb had a falling out with Public Trust, and Public Trust retired as a trustee in 2015. Lockhart was appointed as the independent trustee in its place.
[9] In September 2017, Ms Ryan, through her solicitors, gave notice to the trustees under cl 2.5(3) requiring resettlement of the Trust. When she was unsuccessful in obtaining either Mr Lobb’s agreement to that course or his attendance at arbitration, she filed this proceeding seeking a declaration as to the meaning of cl 2.5(3). Specifically she seeks:
A declaration that the enquiry that the trustees of the Trust… must make under clause 2.5(3) of the Trust Deed is what assets were owned by and contributed to the trust by the plaintiff and the first defendant respectively.
[10] Mr Lobb responded by filing a statement of defence and an appearance under protest to jurisdiction. He prepared those documents himself. The statement of defence is substantially unhelpful. It purports to deny all allegations in the statement of claim, even those that Mr Lobb’s affidavits reveal are not in dispute. It does not define the issue and contains both irrelevant and inappropriate allegations. Although Mr Lobb is now represented by counsel, an amended statement of defence has not been filed.
[11] In accordance with a direction from the Court, Mr Lobb filed an application to dismiss the proceeding on the basis the Court lacked jurisdiction. He also applied for
orders for the return of financial and other records he alleged Ms Ryan had removed from the Orakei Road property.
[12] In separate proceedings, Lockhart applied to the Court for an order discharging it as a trustee of the Trust and appointing an interim trustee or a receiver of the Trust’s assets. On 27 July 2020, Edwards J removed all of the trustees and appointed Digby Noyce as a receiver of the Trust’s assets.1 An application by Mr Lobb for an extension of time to appeal that decision has been refused.2
[13] Coming back to this proceeding, in a judgment of 20 November 2020, Associate Judge Smith refused Mr Lobb’s application to dismiss the proceeding.3 He refused also Mr Lobb’s application for the return of documents. Associate Judge Smith noted the Court had no jurisdiction to order the return of the documents but that such an order was not necessary for Mr Lobb to present his case. The Judge said, if Ms Ryan had the documents and they were relevant, an application for discovery could be made ahead of the trial.4
[14] Mr Lobb wished to appeal the decision. Leave to appeal was refused by Associate Judge Bell,5 and also by the Court of Appeal.6 The avoidance of further delay was an important consideration. The Court of Appeal said as follows:
[18] The more significant consideration is the delay that would result from an appeal. It is evident from both Edwards J’s decision and Associate Judge Smith’s decision that virtually no progress has been made towards the resolution of the issues between the parties. Five years after separation, they are still engaged in a number of proceedings, resolution of which is an ongoing cost to both. Had Mr Lobb acceded to the proposal for arbitration in 2017 it is very likely that the issues between the parties, including his contention as to the basis on which resettlement should proceed under cl 2.5, would have been resolved by now. After so long, and given the history of the dispute, the interests of justice make prompt resolution of the substantive proceeding the determinative factor.
1 Lockhart Trustee Services No 56 Ltd v Ryan [2020] NZHC 1823, (2020) 5 NZTR 30-019.
2 Lobb v Lockhart Trustee Services No 56 Ltd [2021] NZCA 180.
3 Ryan v Lobb [2020] NZHC 3085.
4 At [117].
5 Ryan v Lobb [2021] NZHC 496.
6 Lobb v Ryan [2021] NZCA 224.
[15] Prior to the issue of the Court of Appeal’s decision, the case came before Associate Judge Sussock for case management review. In her minute of 19 March 2021, Associate Judge Sussock noted that Lockhart had filed an appearance and was abiding the decision of the Court.7 As between Mr Lobb and Ms Ryan there was a difference of view as to how to progress the case. Mr Lobb considered discovery was necessary. Associate Judge Sussock imposed a timetable for the filing and disposal of an application by Mr Lobb for discovery. That is the application presently before me.
The issue in the proceeding
[16] The battle-line between Ms Ryan and Mr Lobb has been identified in the interlocutory skirmishes and the decisions of the Court resolving them. It is, what is meant by the words “contributions of the Settlors... to the total assets of the Trust” in cl 2.5(3) of the Trust Deed?
[17] Ms Ryan’s position is the words require the trustees to consider the legal ownership of assets when they were contributed to the Trust. On Ms Ryan’s approach, as all of the assets were jointly owned by her and Mr Lobb, their respective contributions were equal.
[18]Mr Lobb contends the enquiry requires consideration of:
(a)contributions made to the original acquisition of each asset regardless of the legal ownership of the asset at the time it was contributed to the Trust;
(b)contributions post-settlement to the maintenance, development and improvement of the Trust’s assets, particularly the Orakei Road property; and
(c)contributions by third parties that give rise to matching liabilities “attached to or related to the contributed assets”.8
7 Ryan v Lobb HC Auckland CIV-2019–404–1591, 19 March 2021 (minute).
8 Mr Lobb’s argument is that liabilities attaching or related to Trust assets were “negative contributions”. Clause 2.5(3) is not, in its terms at least, concerned with contributions of third parties and there is no evidence that such claims have been pursued. No other arguments were advanced as to how such claims may be brought into account upon resettlement of Trust’s assets.
[19] On Mr Lobb’s view Ms Ryan contributed little, if anything, to the Trust’s assets. He says the assets were all acquired (and in the case of the Orakei Road property, also maintained, developed and improved) with the use of his pre- relationship separate property and these assets were intended to be protected for him. He says several times in his affidavit, “There was no intermingling and my assets have been kept separate and distinct at all times before and during our marriage in 2000.” Further, he contends that his father has four to five types of claim over the Trust’s assets.
[20] Counsel appeared to agree the same principles apply to the construction of trust deeds as to the construction of contracts. In Firm PI 1 Ltd v Zurich Australian Insurance Ltd, the Supreme Court confirmed the approach is objective, the interpretive task is contextual but the text remains centrally important.9 Recently in Bathurst Resources Ltd v L & M Coal Holdings Ltd the Supreme Court confirmed that Firm PI
1 Ltd settled the general approach to be taken to contractual interpretation, as follows:10
[46] The objective approach as articulated in Firm PI is one grounded in the policy objectives identified above: the desirability of providing the certainty needed to facilitate the efficient conduct of commerce; of holding people to the bargains they make; and of supporting access to justice through the efficient and just conduct of proceedings. Giving primacy to the written words of the agreement accords with the policy of providing commercial certainty. It also recognises that since the written contract contains the words the parties chose to record their agreement, the language used to do so has to be important. But by allowing a contextual reading of those words, the Firm PI approach recognises both that words have to be read in context and that the promotion of commercial certainty should not be allowed to defeat what the parties actually meant by the words in which they recorded their agreement. The objective approach to this contextual assessment is a legal construct designed as the best way of reliably determining the true agreement as recorded in the words of the contract. It rejects the parties’ subjective evidence of intent as irrelevant to what both parties meant and as generally unreliable. Rather, the court (embodying the reasonable person) assesses the evidence reasonably available to both (or all) of the parties at the point of contract which could bear upon the meaning of those words. Overall, this is a test which best supports the aim of the efficient and just conduct of proceedings.
9 Firm PI 1 Ltd v Zurich Australian Insurance Ltd [2014] NZSC 147, [2015] 1 NZLR 342 at [60]- [63].
10 Bathurst Resources Ltd v L & M Coal Holdings Ltd [2021] NZSC 85.
The applications against Ms Ryan and Lockhart
[21] Mr Lobb seeks tailored or particular discovery against Ms Ryan and Lockhart. The reference to particular discovery under r 8.19 of the High Court Rules 2016 is unclear. That rule allows a party to bring against another party an application at any stage after discovery has been provided, which is not the case here. I do not need to consider that aspect of the application further.
[22] Attached to Mr Lobb’s application as schedules 1 and 2 are lists of the categories of documents for which tailored discovery is sought from Ms Ryan and Lockhart respectively. For all practical purposes they are identical. I have resisted attaching the schedules to this judgment. It will suffice if I note the scope of the discovery sought as startling, consisting of more than 70 categories or sub-categories of documents going back to 1984.
The High Court Rules
[23] Under r 8.5 of the High Court Rules a Judge must make a discovery order for a proceeding at the first case management conference unless they consider the proceeding can be justly disposed of without any discovery. Under r 8.6, discovery orders may direct either standard or tailored discovery.
[24] Standard discovery requires disclosure of documents of actual and direct relevance. Each party must disclose documents that are or have been in that party’s control and that are:11
(a)documents on which the party relies; or
(b)documents that adversely affect that party’s own case; or
(c)documents that adversely affect another party’s case; or
(d)documents that support another party’s case.
[25] Mr Lobb however is seeking tailored discovery. Tailored discovery must be ordered when the interests of justice require an order involving more or less discovery
11 High Court Rules 2016, r 8.7.
than standard discovery would involve.12 Under r 8.9, there is a presumption in favour of tailored discovery in certain types of proceeding but there was no particular submissions directed to the applicability of that rule to a case such as this, where all that is sought is a declaration.
[26]McGechan on Procedure notes:13
Usually tailored discovery will be narrower in scope than under standard discovery. But in an appropriate case it can be extended to documents that “may” lead to a train of enquiry in accordance with the pre-2011 Peruvian Guano approach:- Intercity Group (NZ) Ltd v Naked Bus (NZ) Ltd [2013] MZHC 1054 at [15]… .
[27] The concept of proportionality is central to tailored discovery and the scope of the discovery order must be informed by the relevance of the discovery sought to the issues in the case.14 The fact that a document is relevant does not mean it follows that discovery will be ordered.15
[28]The principles applying to applications for tailored discovery were set out in
Commerce Commission v Cathay Pacific Airways Ltd as follows:16
[12] The concept of proportionality is central to tailored discovery. It is relevant in determining whether tailored discovery is appropriate (r 8.9(a) and checklist cl 1). It is relevant in deciding if there is tailored discovery, whether the categories of tailored discovery are reasonable and proportionate (checklist cl 3(2)(a)(i)). And it is also a key concept in determining what is a reasonable search for documents within the scope of a discovery order (r 8.14(2)(e) and checklist cl 2(b)), and the methods and strategies for locating documents (checklist cl 3(2)(a)(ii)). At issue in this application is the definition of specific discovery categories, and whether the category orders sought by the Commission are reasonable and proportionate.
[13] The starting point in such a consideration of appropriate tailored discovery orders must be an analysis of the issues. Discovery categories will reflect the issues and will only be ordered for the discovery of documents that are relevant to those issues. Except in exceptional circumstances, these issues will be discernible from a review of the pleadings. Discovery orders that are essentially of a “fishing” nature are not part of tailored discovery. Orders will not be granted where the categories do not relate to a pleaded relevant issue,
12 Rule 8.8.
13 Andrew Beck (ed) McGechan on Procedure (looseleaf ed, Thompson Reuters) at [HR8.10.01].
14 Goodman Fielder Consumer Foods Pty Ltd v Heinz Wattie's Ltd [2017] NZHC 177 at [12]-[13].
15 ASB Bank Ltd v Commissioner of Inland Revenue [2014] NZHC 2184, (2014) 22 PRNZ 359 at [8].
16 Commerce Commission v Cathay Pacific Airways Ltd [2012] NZHC 726 (footnotes omitted).
but rather a non-pleaded issue which might be pleaded should discovery reveal documents that support such a pleading.
[29] In Pyne Gould Corp Ltd v Bath Street Capital Ltd, Katz J endorsed observations of Associate Judge J P Doogue in Body Corporate 212050 v Covekinloch Auckland Ltd (in liq) that:17
There is no prescription of the degree of relevance which any particular documents must have before the court will make a tailored discovery order. In cases where greater discovery is called for, such as where the presumption in r 8.9 applies, it may be that a less rigorous measuring stick of relevance is to be applied. I am not aware of any authority exactly on this point but it would seem obvious that the documents must have some degree of connection to, or relationship with, the issues in the case before tailored discovery can be ordered. It is unlikely that the “interests of justice” could be invoked to direct a party to provide documents which are entirely irrelevant.
[30] Where tailored discovery is appropriate parties are required to endeavour to agree a proposal in relation to the discovery order that should be made with respect to:18
(a)the categories of documents required to be discovered, and for each category to seek to limit discovery to what is reasonable and proportionate; and
(b)the methods and strategies for locating documents as appropriate to conduct a reasonable and proportionate search for the documents identified in the agreed categories.
[31] If parties are able to agree categories of tailored discovery, an order requiring such discovery will usually be made by consent, but in the event of a failure to agree, the scope of discovery may be determined at a case management conference or, if necessary, a defended interlocutory hearing.19 In this case there is no agreement as to either the categories of documents required to be discovered or the methods and strategies for locating them.
17 Pyne Gould Corp Ltd v Bath Street Capital Ltd [2020] NZHC 1247 at [15], citing Body Corporate 212050 v Covekinloch Auckland Ltd (in liq) [2017] NZHC 2642 at [24].
18 High Court Rules, sch 9, cl 3(2)(a)(i) and (ii) and Pyne Gould Corp Ltd v Bath Street Capital Ltd, above n 17, at [17].
19 Pyne Gould Corp Ltd v Bath Street Capital Ltd, above n 17 at [19], citing Intercity Group (NZ) Ltd v Nakedbus NZ Ltd [2013] NZHC 1054 at [10]–[11].
The submissions for Mr Lobb
[32] Mr Fuscic submits Mr Lobb’s interpretation of cl 2.5(3) is a correct one and the categories of documents sought are relevant to the case he will advance. However, he contends, I do not need to accept Mr Lobb’s interpretation to order the discovery sought. This is because the interpretation of cl 2.5(3) is a trial issue and not for determination on this application. Questions about which parties’ interpretation is correct, or has more or less weight, do not arise.
[33] Mr Fuscic argues Ms Ryan has not denied that the categories of documents listed in the application might contain documents relevant to Mr Lobb’s interpretation. Further, Mr Lobb does not accept that Ms Ryan has returned all his documents taken from the Orakei Road property which is an issue that has “pre-occupied this dispute for some time.” He argues to achieve closure on that matter Ms Ryan should be required to file an affidavit stating exactly the documents she has or knows the whereabouts of. At the same time, Mr Fuscic rejects the submission that Mr Lobb is seeking discovery for a collateral purpose and attacking the prior judgments of the Courts dismissing his applications for the return of his records.20
[34] Ms Ryan’s opposition to tailored discovery is, Mr Fuscic argues, premised on the misconceived argument that she should not be required to produce more documents than are relevant to the interpretation of cl 2.5(3) that she advances. He submits Ms Ryan effectively seeks to predetermine the issue of interpretation of cl 2.5(3).
The submissions for Ms Ryan
[35] Mr Patterson advises that Ms Ryan is not opposed to giving discovery but within reasonable bounds. He argues that applying the relevant principles of construction, Mr Lobb’s interpretation of cl 2.5(3) is untenable. He also submits the categories of document that are the subject of the application are not relevant to the issue, nor would requiring discovery be proportionate.
20 Lobb v Ryan [2020] NZHC 834 at [32]; Lobb v Ryan [2020] NZHC 2031 at [13].
[36] Mr Lobb is, he argues, wrongly seeking to advance claims not only for himself but for others contrary to the interests of the Trust’s beneficiaries. He notes that some documents have already been made available and inspected by Mr Lobb and his counsel, but this has not affected the scope of the discovery sought which is in unacceptably broad terms.
[37] Mr Patterson submits the documents in issue are identical to the documents unsuccessfully sought by Mr Lobb in other proceedings. He argues Mr Lobb is making a collateral attack on prior decisions of the Court or is fishing for documents which may or may not support a baseless or speculative line of enquiry.
Discussion
Ms Ryan
[38] On this application I am not called upon to decide which of the parties’ competing interpretations of cl 2.5(3) is correct. However, the Court has an overriding discretion whether to order discovery within the bounds of relevance (as defined by the pleadings) and proportionality. The Court is also not required to accept uncritically assertions as to the relevance of document sought by way of discovery21 and it is not proportionate to require a party to discover documents that are plainly irrelevant.
[39] Here, regardless of which parties’ interpretation of cl 2.5(3) is preferred, the interests of justice do not require the making of the order for tailored discovery that is sought. This is because the tailored discovery relates to categories of document which are defined without any regard to either relevance or proportionality.22
[40] The starting point is what is the issue in the case. I have identified that issue is what is meant by respective contributions of the Settlors to the total assets of the Trust for the purposes of cl 2.5(3). Importantly, a finding by the Court on that issue
21 See for instance Venning J’s analysis in Goodman Fielder Consumer Foods Pty Ltd v Heinz Wattie’s Ltd, above n 14, Gavin v Powell [2020] NZHC 3017, Body Corporate 212050 v Covekinloch Auckland Ltd (in liq), above n 17, and Pyne Gould Corp v Bath Street Capital Ltd, above n 17.
22 High Court Rules, sch 9, cl 3(2)(a)(i).
will not be determinative of the dispute between the parties nor do I expect it will, without more, assist these particular parties to resolve their differences. The issue is only one that calls for determination under cl 2.5(3). Other issues arising are, what do the Trust’s assets consist of, what has each party contributed to the total assets and what part of the Trust’s assets is it fair and equitable to resettle upon Ms Ryan’s trust. These further matters are not put in issue in this proceeding.23 The issue then is particularly narrow and well-defined and each party should be required to give disclosure of documents only so far as is necessary for the Court to justly determine it.
[41] I accept, consistent with the authorities to which I have referred, that the search for the meaning of cl 2.5(3) goes beyond the words used and is contextual. Assuming for present purposes, as I must, Mr Lobb’s interpretation of cl 2.5(3) is correct, what categories of document might be relevant to the case he advances? In my view, such categories would not extend beyond:
(a)the immediate source of funds used to originally acquire each of the Trust’s assets;
(b)specific post-settlement contributions by either party to the maintenance, development and improvement of the assets; and
(c)liabilities that attach to the assets.
[42] While that is more discovery than Ms Ryan would say is necessary upon the case she advances, such documents should nonetheless be relatively few in number. I take as an example the Orakei Road property which is by far the most significant asset in terms of value. The evidence of Ms Ryan is that it was purchased in 2003 for
$760,000. She says she and Mr Lobb together contributed $210,000 and they obtained a mortgage from Westpac for $550,000 to buy the property. It was originally registered
23 I have raised with counsel the utility of the proceeding in these circumstances particularly as there are presently no trustees of the Trust to give effect to a determination of the Court as to the meaning of cl 2.5(3). In light of the Court of Appeal’s decision dismissing Mr Lobb’s application for leave to appeal the refusal to stay or dismiss the proceeding, that issue is beyond the scope of the present application.
in their joint names and then in August 2005 transferred to Ms Ryan, Mr Lobb and Public Trust as trustees. If, as I understand, Mr Lobb’s case is the money used to acquire the property was not as Ms Ryan deposes but was his pre-relationship separate property or advances by his parents, then documents showing the source of the funds would be relevant and should be discovered. But the source of those funds should also be easily established by reference to banking records or solicitors’ trust account records at that time. The discovery exercise does not require or justify a meticulous consideration of Mr Lobb’s and Ms Ryan’s financial circumstances and business interests going back over almost four decades to 1984, which is what Mr Lobb’s application contemplates will be undertaken.
[43] Turning to the categories of document in Mr Lobb’s application, categories 1, 2 and 3 are defined in the broadest terms. They all will, due to the sheer breadth of definition, encompass documents that are relevant to the issue before the Court but a far greater number that will be irrelevant. Category 1 at least is confined to documents concerning the Trust. Categories 2 and 3 are, arguably, so broad as to be meaningless. It is also not clear what documents within categories 2, 3 and 4.4 could be relevant and add to category 1.
[44] In category 4, Mr Lobb seeks discovery of “files and matters” in 22 sub- categories (and many more sub-sub-categories). These are documents he says Ms Ryan took from the Orakei Road property and did not return. I do not accept Mr Fuscic’s submission that Mr Lobb is not using this application for a collateral purpose. His preoccupation with the return of his records is amply reflected in the content of his affidavits and in the scope of the discovery sought which is only marginally tethered to the issue before the Court. His application reflects demands Mr Lobb has been making for several years and has pursued in other proceedings.
[45] In some instances Mr Lobb offers explanations for the relevance of documents in category 4 but the discovery sought is not limited to relevant documents. I take as an example sub-category 4.1, which is described as the “Matson Road Partnership (NZ/UK) 1994-2007”. Mr Lobb says capital gain from 13 Matson Road was used to pay the deposit on the Orakei Road property. Leaving aside the lack of any explanation of how that could be so, I accept documents showing the source and transfer of funds
to pay the deposit would be relevant. But that is no justification for making a discovery order in respect to all documents of the partnership over a period of 13 years. The same can be said about sub-categories 4.2, 4.3, 4.5, 4.6, 4.7 and 4.10.
[46] On several occasions Mr Lobb vaguely asserts sub-categories will record the “international money flow” or the source of “some of the funding” to acquire or improve trust assets. On the basis of following the money, he seeks discovery of a plethora of documents which are almost certainly irrelevant. As examples, I cannot see how bank statements from 1984, tenancy agreements relating to non-Trust properties dating to 1993 or property management fees incurred from those same properties, can possibly be relevant. If, as Mr Lobb asserts, his assets were kept separate and distinct at all times before and during his marriage to Ms Ryan, the immediate source of funds used to acquire or improve the Trust’s assets should be immediately obvious and easily proved.
[47] Then there are sub-categories where Mr Lobb offers no specific explanation as to how documents may be relevant to the issue, nor is there any apparent basis upon which relevance could be asserted. Sub-categories 4.11, 4.12, 4.13 and 4.17 are examples.
[48] I am not prepared to make the tailored discovery order sought against Ms Ryan, nor am I prepared to attempt what would necessarily be a wholesale redrafting of categories for tailored discovery. I also do not accept Mr Fuscic’s invitation to make the discovery order sought to achieve “closure” over Mr Lobb’s concern Ms Ryan has retained his documents. That would be unprincipled and I have no doubt Mr Lobb will not accept any discovery provided by Ms Ryan as complete, in any event.
[49] However, this is not a case where I am satisfied the proceeding can be justly disposed of without discovery. In those circumstances, I consider the appropriate course is to require Ms Ryan and Mr Lobb to provide standard discovery in accordance with the orders below.
Application against Lockhart
[50] Although Lockhart will abide the Court’s decision, its director, Mason Lockhart (Mr Lockhart), has sworn two affidavits in response to the application. He deposes his discovery obligations have been explained to him and that he has complied with such obligations. He identifies the steps taken to provide disclosure in accordance with Mr Lobb’s request and the documents that Lockhart holds and does not hold by reference to the categories of documents listed in Mr Lobb’s application. Mr Lockhart also deposes that he has prepared disclosure of documents in Lockhart’s possession and control that will be provided to Ms Ryan and Mr Lobb. I understand that such disclosure has been provided.
[51] Despite this, Mr Lobb pursues the application for discovery orders against Lockhart. Mr Lobb argues that Mr Lockhart’s affidavits are not sufficiently clear as to what documents Lockhart has had and continues to have in its possession or control. He further submits that absent a formal affidavit of documents being filed by Lockhart, the disclosure it has provided cannot be regarded as conclusive or complete.
[52] I have considered whether, given the content of Mr Lockhart’s affidavits, it would be appropriate to dismiss the application against Lockhart on the basis the proceeding can justly be disposed of without a formal discovery order being made against it.24 I have concluded that such an approach would be counter-productive as it would likely result in further interlocutory skirmishes. There is, however, no justification to order discovery against Lockhart on a more expansive basis than against Ms Ryan, particularly when there is no reason to believe Lockhart would have any documents in most of category 4’s sub-categories. Lockhart will also be required to provide standard discovery on the terms below.
The application against Public Trust
[53] Mr Lobb seeks tailored discovery against Public Trust in essentially the same terms as against Ms Ryan and Lockhart. The application is made under r 8.21 of the High Court Rules. Public Trust is in possession of documents which are relevant to
24 High Court Rules, r 8.5(1).
the issue and which it would have been required to discover had it been a party to the proceeding.25 The Court has jurisdiction to make an order that Public Trust provide particular discovery and Public Trust agrees to abide by any order that the Court makes. Public Trust asks that its costs be met by the party requesting discovery, which in this case is Mr Lobb.
[54] I am not prepared to order Public Trust provide discovery on the terms sought for reasons I have already given. I will, however, make an order Public Trust provide particular discovery of all documents in its possession or control concerning the formation and administration of the Trust including, but not limited to, any documents relevant to the acquisition of the assets of the Trust and the contributions made to the acquisition, maintenance, development or improvement of the assets by Ms Ryan and Mr Lobb.
Costs
[55] The costs on Mr Lobb’s applications against Ms Ryan and Lockhart shall be reserved pending receipt of memoranda from counsel. I identify as a separate issue whether Lockhart should bear the cost of providing discovery or whether such costs should be borne by Mr Lobb.26 If that is an issue Lockhart wishes to pursue then it should be addressed in its submissions on costs.
[56] On the issue of Public Trust’s costs, Mr Fuscic submits these should be reserved on the basis Public Trust did not provide disclosure on a voluntary basis and it did not respond appropriately to requests by Mr Lobb for disclosure but rather hid behind the Privacy Act and delayed disclosure. I do not accept that submission. Public Trust promptly acknowledged and processed Mr Lobb’s requests. Disclosure has been made by Public Trust on a voluntary basis. Notwithstanding that, Mr Lobb requires Public Trust to go to the expense of preparing an affidavit of documents.
[57] I do not propose to award Public Trust costs on Mr Lobb’s application for discovery since it did not take a position in respect to it. However, I can see no reason
25 Rule 8.21(1).
26 Rule 8.22(1).
why it is not entitled to its reasonable costs of complying with the discovery order Mr Lobb requires to be made against it .27
Result
[58] Ms Ryan, Mr Lobb and Lockhart shall provide standard discovery by filing affidavits of documents compliant with r 8.15 High Court Rules within 28 days of the date of this judgment.
[59] Public Trust shall, within 28 days of the date of this judgment, file an affidavit of documents, compliant with r 8.15 High Court Rules, which are or have been in its possession or control concerning the formation and administration of the Trust including, but not limited to, any documents relevant to the acquisition of the assets of the Trust and the contributions made to the acquisition, maintenance, development or improvement of assets by Ms Ryan and Mr Lobb.
[60] The actual and reasonable costs and disbursements of Public Trust in complying with the order in [59] above shall be paid by Mr Lobb. I reserve leave to refer any dispute as to the amount of such costs for resolution by the Court, noting that any application may, in its own right, have costs consequences.
[61] As between Ms Ryan, Mr Lobb and Lockhart, costs on this application and in relation to compliance with the orders made are reserved. Counsel shall confer and if they cannot agree on costs, they are to file memoranda within 28 days which shall be no longer than 5 pages. Any reply to such memoranda shall be filed seven days thereafter. I will determine costs on the papers.
[62] There is no reason why the case cannot be progressed while the parties provide discovery. The Case Officer should set the case down for a case management teleconference on the first available date so that directions can be made for the trial.
27 Rule 8.22(3); Churchill Group Holdings v Aral Property Holdings Ltd HC Auckland CIV-2001- 404-2302, 21 January 2010 and Clear Communications Ltd v Telecom Corporation of NZ Ltd (1994) 8 PRNZ 200 (HC).
Counsel shall file memoranda not later than three working days prior to the teleconference addressing all matters in sch 5 High Court Rules.
O G Paulsen Associate Judge
Solicitors:
Patterson Hopkins, Auckland for Plaintiff McVeagh Fleming, Auckland for First Defendant
Alexandra Low & Associates, Auckland for Second Defendant
3
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