Signum Holdings Limited v Okuora Holdings Limited

[2023] NZHC 2252

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2023-409-152

[2023] NZHC 2252

BETWEEN

SIGNUM HOLDINGS LIMITED

Applicant

AND

OKUORA HOLDINGS LIMITED

Respondent

Hearing:

15 August 2023

Appearances:

N F Flanagan and P J O’Boyle for Applicant

D R Kalderimis and T J Powell for Respondent
J A Craig and J I Kerkin for The a2 Milk Company Limited (non- party)

B G Frowein for Synlait Milk Limited (non-party) T Hunter for National Business Review (by VMR)

Judgment:

18 August 2023

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 18 August 2023 at 4.15 pm Pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date

SIGNUM HOLDINGS LIMITED v OKUORA HOLDINGS LIMITED [2023] NZHC 2252 [18 August 2023]

[1]        This judgment deals with an application by two non-parties for a non- publication order and an order limiting access to the court file.

[2]        Signum Holdings Ltd (Signum) has applied to set aside a statutory demand issued by Okuora Holdings Ltd (Okuora). Signum is a holding company and its operating subsidiary is Trust Codes Ltd (TCL). TCL sells technology that permits digital tracing of products through supply chains. One of its customers was Synlait Milk Ltd (Synlait) and, through Synlait, The a2 Milk Company Ltd (a2MC).

[3]        At relevant times, Maury Penno was the sole director of Signum and a shareholder and director of Okuora. Her husband, John Penno, was also a shareholder and director of Okuora. He was also the founder, a director and shareholder in Synlait.

[4]        Okuora invested in Signum but disagreements arose between them. Okuora appointed receivers to Signum on 22 January 2022.

[5]        Okuora’s statutory demand was issued in respect to an amount of $500,000 that Signum agreed to pay under a Deed of Agreement to Pay (DAP), which was one of a suite of agreements entered into to settle Signum’s indebtedness and end the receivership.

[6]        Although this does not do justice to the quality of counsel’s arguments, Signum’s case is that it is fairly arguable that Okuora’s statutory demand should be set aside as it was obtained by undue influence. The foundation for this assertion is the alleged non-disclosure by Ms Penno of an email written by Mr Penno to a2MC some time prior to the parties entering into the DAP. Signum says a2MC was one of its critical commercial partners, Ms Penno had a duty to disclose the email, the email undermined the relationship with a2MC, and it would not have entered into the DAP had the email been disclosed.

[7]Signum’s application is opposed and was heard on 15 August 2023.

[8]        Before the hearing proper commenced, I heard the application by Synlait and a2MC seeking a non-publication order and an order restricting access to the court file.

They are concerned that their confidential and commercially sensitive information will be disclosed in the proceeding.

[9]Specifically, the orders sought are:

(a)an order prohibiting the disclosure or publication outside the court without the prior permission of the Judge of:

(i)any references to, or communications involving, a2MC, its employees, directors and/or executive officers;

(ii)any reference to a2MC’s commercial arrangements with the parties to this proceeding or otherwise;

(iii)any references to, or communications involving, Synlait, its employees, directors and/or executive officers; and

(iv)any references to Synlait’s commercial arrangements with the parties to this proceeding or otherwise (including with TCL); and

(b)an order that any request by third parties for access to the file be notified by the registry to a2MC and to Synlait so they have an opportunity to be heard on any such application (in addition to the existing order already in place that “[t]he file not be accessed without the leave of a Judge, with any requests by third parties for access to the file to be notified by the registry to the parties”);1 and

(c)an order reserving leave to the parties, a2MC and Synlait to apply to the Court for variation of the orders on seven days’ notice.

[10]The application is not opposed by Signum or Okuora.

1      Signum Holdings Ltd v Okuora Holdings Ltd HC Christchurch CIV-2023-409-152, 27 April 2023 (Minute).

[11]      I heard from Tim Hunter, a senior reporter with the National Business Review. He has also made a request to access the court file. That is yet to be determined. He also spoke in opposition to the application for a non-publication order.

[12]      After hearing from counsel and Mr Hunter, I made an interim non-publication order on the basis that I would consider the submissions and issue a ruling later. This is that ruling.

The law and submissions

[13]      The High Court has inherent jurisdiction to make a non-publication order in civil cases. The starting point is a presumption of open justice, and any departure from that principle is justified only to the extent that the Judge reasonably believes it is necessary to serve the interests of justice. The party seeking such an order must show specific adverse consequences that are sufficient to justify an exception to the fundamental rule of open justice. The standard is a high one but does not require exceptional or extraordinary circumstances.2

[14]      I was referred to two cases where it was submitted that non-publication orders similar to those requested have been made. These were Glaister v Amalgamated Dairies Ltd,3 and Ridge v Parore.4 I note, however, that in both instances the orders made were more limited than had been sought, reflecting the principle of open justice and the freedom to report proceedings.

[15]      Synlait and a2MC argue that it is appropriate to make the orders sought because:

(a)they are not parties to this proceeding, nor is their conduct in issue;

(b)the level of detail provided in the affidavits filed relating to them essentially form part of the background narrative to the dispute only;

2      Erceg v Erceg [2017] 1 NZLR 310 at [2]–[3].

3      Glaister v Amalgamated Dairies Ltd [2003] NZAR 149 (HC).

4      Ridge v Parore [2013] NZHC 2335, [2013] NZAR 1355.

(c)they are legitimately concerned to keep their confidential and commercially sensitive information private;

(d)they will suffer prejudice if the information was published to third parties;

(e)the disclosure of the information may lead to speculation about the companies through incomplete or misleading reporting, and require them to correct the speculation in circumstances where a market announcement would not otherwise be required;

(f)there is no public interest in making their confidential information publicly available;

(g)this proceeding is at an early stage and the principle of open justice does not have as much weight as it might at a later stage of the proceeding;

(h)this proceeding is analogous to an interlocutory proceeding where principles of privacy and confidentiality have greater weight; and

(i)the failure to make the orders sought may cut across confidentiality orders made in a related proceeding between TCL and Synlait.

[16]      Mr Hunter emphasised the principle of open justice, and that this is a commercial case. He also noted that a related legal proceeding in which Synlait and TCL are engaged has been the subject of an article in The National Business Review on 4 July 2023, and to that extent the “horse has already bolted”.

My analysis

[17]      I do not consider there is any justification for the making of a non-publication order in respect to the hearing. The orders sought are exceedingly broad and go well beyond what could be required to protect any commercially sensitive or confidential information of Synlait and/or a2MC. Indeed, given the centrality of correspondence

to and from a2MC to the issues I will have to decide, it would be difficult to craft a meaningful judgment if such orders were made.

[18]      While I accept and have full regard to the fact that Synlait and a2MC are non- parties, have no direct interest in the outcome of the litigation and would prefer not to be associated with it, those matters alone do not justify the making of a non-publication order.

[19]      It is also not correct that this proceeding is at an early stage, as my decision will finally determine it (subject to any appeal). The proceeding is not analogous to an interlocutory application. I am also satisfied that I am not jeopardising confidentiality orders made in another proceeding if I do not make the orders sought.

[20]      Most importantly, there are two other factors that weigh heavily against the application for a non-publication order. First, counsel for the parties were sensitive to the concerns of Synlait and a2MC and avoided in the presentation of their submissions matters that might be considered commercially sensitive or confidential. I have gone through their written submissions and my detailed notes of the hearing, and I can see nothing in them that requires or would justify the making of a non-publication order in respect to the hearing.

[21]      Second, I am prepared to accept that there is before the Court some information that Synlait and a2MC would consider commercially sensitive and confidential. That information is contained in affidavits that have been filed to which a non-party cannot have access as of right.5 In order to protect the interests of Synlait and a2MC, and preserve confidentiality with regard to information that was not referred to in open court, an order should be made that access to the court file not be allowed to a non- party except by order of a High Court Judge, and that Synlait and a2MC are entitled to be heard on any such application.

5      Senior Courts (Access to Court Documents) Rules 2017, r.11. I have not gone on and considered the application by Mr Hunter to access the Court file as it has been held in Boult v Crux Publishing Ltd [2022] NZCA 473 that an Associate Judge cannot determine an application to access a Court file made under the Senior Courts (Access to Court Documents) Rules 2017.

Result

[22]The non-publication orders made on 15 August 2023 are withdrawn.

[23]      There shall be an order that no non-party shall access the court file without order of a High Court Judge. The Registrar shall refer any such request to access the court file to the parties and to Synlait and a2MC so that they may be heard in relation to it before the application is determined.

[24]      In respect to the application by Mr Hunter to access the court file, this is now to be referred to a High Court Judge for determination. The Registry is to refer the Judge to both the Joint Memorandum of Counsel dated 25 May 2023 and the Submissions of Counsel on behalf of a2MC and Synlait dated 11 August 2023. Any further submissions by any party should be filed within seven days.

[25]      I reserve leave to apply to vary these orders by memorandum on seven days’ notice.

[26]There shall be no order as to costs.

O G Paulsen Associate Judge

Solicitors:

Meredith Connell, Auckland

Harmos Horton Lusk Limited, Auckland Simpson Grierson, Auckland

Lane Neave, Christchurch

Copy to:
D Kalderimis/T Powell, Auckland