Sainsbury Logan & Williams v Bell
[2013] NZHC 185
•13 February 2013
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2009-091-197
2013] NZHC 185
BETWEEN SAINSBURY LOGAN & WILLIAMS Plaintiff
ANDROBERT ARTHUR BELL Defendant
Hearing: 30 January 2013 (Heard at Wellington)
Counsel: B.R.D. Cuff - Counsel for the Plaintiff
E.M.S. Cox and A.K. Sinclair - Counsel for the Defendant
Judgment: 13 February 2013
JUDGMENT AS TO COSTS OF ASSOCIATE JUDGE D.I. GENDALL
Under r 11.5 of the High Court Rules I direct the Registrar to deliver this judgment at 2.45 pm on 13 February 2013.
Solicitors: Sainsbury Logan & Williams, Solicitors, PO Box 41, Napier
Gibson Sheat, Lawyers, PO Box 2966, Wellington
SAINSBURY LOGAN & WILLIAMS V RA BELL HC WN CIV-2009-091-197 [13 February 2013]
[1] In a judgment I issued in this proceeding on 4 February 2013 I confirmed an order made by me on 30 January 2013 dismissing the plaintiff’s application for an Unless Order.
[2] At para [6] of that judgment dated 4 February 2013 I reserved costs on the
plaintiff’s application and now give my decision on that costs question.
[3] The plaintiff’s application for an Unless Order related to discovery by the defendant and was filed in this Court on 27 August 2012. The application sought an Unless Order for further and better discovery by the defendant together with an order for costs.
[4] The grounds on which the Unless Order was sought were set out at para [2]
of the application in the following way:
(a) The defendant’s affidavit of documents dated 29 June 2012 fails to
comply with the discovery order made by His Honour Clifford J on 8
June 2012 (Minute 8 June 2012, [12]). (b) In particular, the defendant’s affidavit:
(i)fails to identify the documents he has in respect of the communications with the plaintiff as solicitors in respect of the subject matter of his various counterclaim causes of action.
(ii)the defendant’s counterclaim in his sixth and seventh causes of action put in issue certain tax claims both of which will have involved events and documents (including in particular the defendant’s tax returns, assessments and dealings with third parties including his accountants, other lawyers, the IRD, and the Banks). The defendant has failed to disclose any such documents.
(c) The defendant has been given numerous and ample opportunities to file a compliant affidavit of documents and yet he continues to fail to do so.
[5] The earlier discovery order made by His Honour Justice Clifford on 8 June
2012 was in the following terms:
[12] In terms of r 8.19, I therefore made an order that Mr Bell was to prepare and file an affidavit of further and better discovery listing, by reference to a description of type and subject matter, but not by individual document, the documents he now has in his possession relating to the matters at issue between himself and Sainsbury Logan & Williams and, particularly:
(a) any notes prepared by him for the purposes of meetings with
Sainsbury Logan & Williams; and
(b) any accounting and tax records and information relating to the lost benefit of Resident Withholding Tax and interest deductibility as would be relevant to establish a claim that he could otherwise have benefited from those matters if they had been provided to him as he said was required.
[6] A first issue arises as to whether it was reasonable for the plaintiff to bring the Unless Order application in the first place. It is clear from the authorities that an Unless Order for alleged non-compliance should not be made unless that non- compliance is generally clear, non-contentious and unchallengeable – Anderson v Mainland Beverages Limited (2005) 17 PRNZ 757 (CA). In particular at paras [45] and [46] of that Anderson decision it is stated:
[45] ..... As an example, failure to file a particular document by a particular day can be assessed objectively without possibility of challenge and can, for repeated breach, be properly the subject of an “Unless” Order.
[46] By contrast, particulars, interrogatories and disputes over discoverability are so commonly the subject of legitimate disputes between parties and counsel that they should only be the subject of an “Unless” Order if the matter has been considered by the Court and the defaulting party’s obligation clearly defined. That can especially apply where a party’s obligation is to serve particular documents but not file them.
[7] In this case the defendant’s “Further Affidavit of Documents” dated 29 June
2012 which he filed in purported compliance with the discovery order made in the decision of His Honour Justice Clifford noted at para [5] above, is a short two page affidavit which lists in the Schedule the documents the defendant says he is required to discover as follows:
Schedule
Part 1
Documents that are in my control and for which I claim neither privilege nor confidentiality
(a) Draft settlement agreement prepared by Ann Hinton which contains my proposed amendments and changes.
(b) Box undated notes prepared by me for the purposes of meeting with the
Plaintiff.
(c) Accounting or Tax records in respect to Resident Withholding (RWT) tax in respect to the disputed relationship property:-
(i) My RWT tax certificate for $38,304;
(ii) I do not have any document relevant to my ex-partners RWT tax of $34,236. (See Part 5).
(d) Other Documents
(i) Copies of correspondence between the plaintiff and myself as discovered by the plaintiff;
(ii) Copies of correspondence between plaintiff and third parties as discovered by the plaintiff;
Part 2
Documents that are in my control and for which I claim privilege
Nil
Part 3
Documents that are in my control and for which I claim confidentiality
Nil
Part 4
Documents that are no longer in my control
Personal Notes given to the Plaintiff
I have not retained many of the notes made by me for the purposes of meetings with the Plaintiff. They have either been lost or discarded subsequent to the meetings.
Part 5
Documents that have never been in my control
My ex-partners RWT and tax records.
[8] I turn now to consider generally the history of discovery issues in this proceeding. Once this proceeding had been transferred into this Court, on 30
September 2011 and after discussion with counsel for the plaintiff and the defendant personally, I made discovery orders. These were to be complied with by 28 October
2011.
[9] On 30 November 2011 however, counsel for the plaintiff complained that the discovery undertaken by the defendant was not complete. Further orders were made then for the defendant to complete discovery by filing and serving a compliant
affidavit of documents by 14 December 2011. This led to a further affidavit of documents being filed by the defendant himself on 14 December 2011.
[10] Then on 24 February 2012, counsel for the plaintiff again complained suggesting first, that the defendant’s discovery was significantly inadequate and secondly, that a number of relevant documents which counsel had identified but which were not discovered must exist and be held by the defendant.
[11] Orders of this Court followed also on 24 February 2012. These were to the effect that any applications relating to further and better discovery were to be filed and served within 3 weeks of that date.
[12] As a result, on 9 March 2012 the plaintiff filed a formal application seeking further and better discovery by the defendant. This application was opposed in a Notice of Opposition filed 4 April 2012. It was that application which was set down for hearing before His Honour Justice Clifford on 7 June 2012 and which culminated in the judgment of His Honour dated 8 June 2012 and the discovery order noted at para [5] above.
[13] As I have noted at para [4] above, it was the plaintiff’s further complaint over the defendant’s 29 June 2012 affidavit of documents (filed in response to that order made by His Honour Justice Clifford) which provided the principal ground for the present Unless Order application.
[14] Coming forward to the present, some two weeks ago on 31 January 2013 Mr Cox, counsel who has just recently commenced acting for the defendant, filed in this Court the defendant’s “Second Amended Affidavit of Documents” (a document referred to at para [5](a) of my 4 February 2013 judgment in this matter). That “Second Amended Affidavit of Documents” is a detailed affidavit of some 8 pages with some 9 pages of accompanying schedule. It is an entirely different document from the defendant’s “Further Affidavit of Documents” dated 29 June 2012 which I have referred to at para [7] above. The documents listed in Part 1 of the Schedule as I have noted run to nearly 9 pages. As I see it, these include a substantial number of documents (including income tax files, tax returns, income and tax summaries,
communications with the Inland Revenue Department, several banks and legal advisers, an Agreement for Sale and Purchase of a property and the like) which do not appear to be included in the defendant’s earlier discovery.
[15] In addition, Part 2 of this Schedule details 10 documents for which privilege is claimed. This differs from the earlier confirmation from the defendant in his 29
June 2012 affidavit that there were no documents in his control for which he claimed privilege.
[16] As best I can tell from all this, it does seem that, since the defendant has chosen to be legally represented in this matter in the last month or two, his discovery as outlined in this Second Amended Affidavit of Documents has dramatically expanded.
[17] That said, I find that under all the circumstances prevailing here and given the difficulty the plaintiffs were experiencing in obtaining full and proper discovery from the defendant, it was reasonable in this case for the plaintiffs no doubt out of desperation to bring their application for an Unless Order. Certainly as I see the position at the time of the application on 27 August 2012, the defendant was not assisting a proper discovery process being concluded by each party, given particularly the fact that this proceeding is now in this Court only because of his major counterclaim against the plaintiff, a counterclaim for something in excess of
$800,000.00.
[18] And, following the filing of the present Unless Order application, the defendant himself filed a handwritten Notice of Opposition to that application on 5
October 2012. The grounds advanced in that Notice of Opposition in my view were reasonably difficult to identify and follow, and it was not until the defendant chose to instruct counsel to act on his behalf in this matter that an amended Notice of Opposition to the application was filed. This occurred, however, only on 29 January
2013 the day before the hearing of the opposed application was to take place.
[19] As I understand an argument advanced to me here by Mr Cox for the defendant, it is that at the least this hearing of the Unless Order application should
not have been required given the communications he had entered into with counsel for the plaintiff shortly before that hearing, including a detailed draft affidavit of documents he had prepared and proferred, which he was about to file.
[20] Although the position on all this is not entirely clear, I am persuaded here that, although the plaintiff is entitled to costs on filing the Unless Order application and all steps taken up to the date of the hearing on 30 January 2013 (including preparation for that hearing), costs for the hearing itself should simply lie where they fall.
[21] The plaintiff’s Unless Order application arose from the inability or failure of the defendant to comply with the earlier orders for discovery made by His Honour Justice Clifford. It was reasonable in my view for the plaintiffs to bring and maintain that application right up to the 30 January 2013 hearing date. The defendant’s opposition arguments and proposed draft of the Second Amended Affidavit of Documents were advanced in my view very late in the piece. Nevertheless on 30 January 2013 it was appropriate for the plaintiff in my judgment to withdraw their application in the face of the detailed affidavit of documents which Mr Cox for the defendant undertook would be completed and filed immediately. At that point no further argument on the application was required.
[22] The Unless Order application up to that hearing date did achieve its purpose in that the defendant finally provided a detailed and what would appear to be comprehensive affidavit of documents. Thus, in my view it was properly brought and pursued.
[23] The situation in this case in my view is similar to that which prevailed in Small v A Judicial Committee HC, Christchurch, CIV-2009-409-2622, 20 April 2010, which, although relating to costs on a discontinuance and therefore r 15.23 High Court Rules, is useful here. In Small a discontinuing plaintiff who had achieved all he set out to achieve was awarded “modest” costs as, effectively, a successful party. In the present case I see the plaintiffs as being effectively in the main the successful party and therefore entitled to a “modest” award of costs.
[24] For all these reasons, costs are now awarded to the plaintiff against the defendant on the plaintiff’s application for an Unless Order up to 30 January 2013 but excluding the hearing of the application on that date. These are to be calculated on a category 2B basis together with disbursements as fixed by the Registrar.
[25] Costs on that 30 January 2013 hearing and thereafter are to lie where they fall.
‘Associate Judge D.I. Gendall’
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