Singapore Airlines Limited v Mistry
[2014] NZHC 1682
•17 July 2014
ORDER PROHIBITING PUBLICATION OF ANY PART OF THE JUDGMENT (INCLUDING THE NAMES OF THE PARTIES AND OF EVA ENTERPRISES LTD) IN NEWS MEDIA OR ON THE INTERNET OR OTHER PUBLICLY AVAILABLE DATABASE UNTIL FINAL DISPOSITION OF TRIAL NUMBER CRI-2013-085-4178. PUBLICATION IN LAW REPORT OR LAW DIGEST PERMITTED.
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2013-485-3911 [2014] NZHC 1682
BETWEEN SINGAPORE AIRLINES LIMITED
Plaintiff
AND
JITESH MOHAN MISTRY Defendant
Hearing: 11 June 2014 Counsel:
C Matsis for Plaintiff
J D Haig for DefendantJudgment:
17 July 2014
JUDGMENT OF ASSOCIATE JUDGE SMITH
[1] The plaintiff, Singapore Airlines Ltd (the airline) obtained summary judgment against the defendant, Mr Mistry, on 25 November 2013, for the sum of
$340,427.67 together with interest and costs. Mr Mistry did not appear at the hearing, and an application was subsequently made to set aside the judgment. On
20 May 2014, the judgment was set aside on the ground that Mr Mistry had not been properly served.1 I directed that the airline’s application for summary judgment was to be heard afresh, and made directions for the filing of a formal notice of opposition by Mr Mistry and further affidavits, including reply affidavits from the airline. The airline’s application for summary judgment was re-heard on 11 June 2014. I now
give judgment on that application.
1 Singapore Airlines Ltd v Mistry [2014] NZHC 1055.
SINGAPORE AIRLINES LIMITED v JITESH MOHAN MISTRY [2014] NZHC 1682 [17 July 2014]
Background
[2] Eva Enterprises Limited (Eva), now in liquidation, was a travel agent which carried on business in Manners Street, Wellington under the name “Travel Smart Manners Street”.
[3] Eva was incorporated on 1 September 1999, and Mr Mistry was at all times material to this application the sole director. He also held 40 percent of the shares in Eva, the balance of the shareholding being held by family members living at the same address as him.
[4] The airline appointed Eva as one of its Passenger Sales Agents (PSA’s) on
8 June 2007. The appointment carried with it the right for Eva to issue to its retail customers tickets for flights on Singapore Airlines, using the airline’s carrier identification plate. The airline, as a member of the International Air Transport Association (IATA), was bound to honour tickets issued by a PSA, whether or not the PSA had accounted to the airline for the payment made by the PSA’s client.
[5] In appointing Eva as a PSA, the airline required that Eva maintain its formal accreditation from IATA, which Eva had held since 2005, to promote and sell international air passenger transportation. Eva was also required by the airline to maintain full membership of the Travel Agents Association of New Zealand (TAANZ), and to continue to participate in TAANZ’s bonding scheme. That scheme provides protection for members of the public against default by members of TAANZ generally, and there is also an “Airline Fund”, set aside for the protection of airlines who suffer loss as a result of default by a TAANZ member..
[6] Eva had been a TAANZ member continuously since 21 October 2002, and it participated in the TAANZ bonding scheme.
[7] Eva defaulted on its obligations to make payment to the airline, in December 2011. The airline subsequently recovered $175,635.04 from TAANZ under the airline protection scheme, and the balance which the airline says is now due to it from Eva is $340,427.67.
[8] Eva was put into liquidation on 5 November 2012. One of the liquidators is
Jeremy Morley, a Wellington chartered accountant.
[9] Mr Morley noted that the liquidators had identified Eva creditors’ claims totalling approximately $1.137 million, including a claim of $516,062.71 by the airline. The airline’s claim related to the issue by Eva of tickets for travel on Singapore Airlines flights for which payment was never made to the airline.
[10] The airline says that funds received by Eva from its clients for the purchase of Singapore Airlines tickets were required to be held by Eva on trust for the airline, pursuant to IATA regulations which were incorporated by reference in the airline’s PSA Agreement with Eva. The airline says that Eva failed to account to the airline for monies received from its clients in payment for Singapore Airlines tickets issued by Eva, instead using the money to meet its own general business expenses. The airline says that Eva acted in breach of trust in so doing, and that Mr Mistry, as the sole director and “controlling mind” of Eva, dishonestly assisted Eva in committing the breaches of trust. It says that Mr Mistry has no reasonably arguable defence to that claim.
The defendant’s case
[11] Mr Mistry denies any breach of trust by Eva. He says further that he did not know of the alleged trust and/or of its terms and did not dishonestly assist any breach of trust or fiduciary duty.
[12] He also challenges certain of the airline’s evidence, which he contends was inadmissible. He stated that, in order to fairly present his defence, he would need access to a number of documents to which he has not had access. These included the airline’s ticketing request records, IATA’s files on Eva, and the results of TAANZ audits on Eva.
[13] Mr Mistry stated that Eva operated two bank accounts, one being an operating (current) account, and the other being a client trust account. He described that as normal practice for travel agents. Rent, outgoings, salaries, advertising and other usual business expenses were paid out of the operating account with money
transferred from the client trust account. Monies paid by clients for travel were paid into the client trust account.
[14] Mr Mistry referred to Eva’s high annual expenses and low margins on
airfares resulting in Eva running into financial difficulty by late 2011.
[15] In answer to the airline’s claims that Eva had acted in breach of trust in failing to account to it for monies Eva had received for Singapore Airlines travel, Mr Mistry deposed that he was not aware that there were special rules relating to Eva’s client trust account. He said that he did not know that he was not supposed to put Eva’s own money into the client trust account, or that there was anything untoward or out of the ordinary in paying Eva’s general business expenses out of the funds held in the client trust account. He commented that Eva had run at a deficit for some years, and required topping up from time to time. Eventually the situation became unsustainable and Eva defaulted.
[16] To add context to the way in which he conducted Eva’s business, Mr Mistry described his introduction to the travel agency business. He began as a junior with Eva when he was about 19 years old, having left school at the age of 16 and subsequently completed a 6 month travel and tourism course. He said that the owner of the business at that time was his mentor, and taught him everything he knew about how to run a travel agency, including how to look after the accounts. He said that one practice he was taught by this mentor was not to issue tickets to clients straight away when they paid money for travel. That was to help with cashflow. He acknowledges that he now realised that was “probably incorrect practice”, but maintained that it was something he understood was acceptable, as it had been taught to him by a mentor with over 30 years’ travel agency experience.
[17] Mr Mistry’s evidence was that neither IATA nor his mentor ever made him aware of any special rules relating to the operation of Eva’s client trust account. He said that he had not retained any record of Eva’s application for IATA membership, so could not say what IATA required of Eva at the time it became an IATA member. As far as he was aware, there was no special treatment required for airline ticket payments when compared with other creditor payments that needed to be made.
[18] Mr Mistry acknowledged that Eva’s client trust account went into overdraft occasionally. He says he topped it up with more than $200,000 over the years, using some of his own money and some borrowed money.
Summary judgment principles
[19] The principles to be applied in considering an application for summary judgment have been clearly established through decisions of the Court of Appeal2.
[20] In considering the airline’s application I apply the following general
principles:
(1)The airline must satisfy the Court that Mr Mistry has no arguable defence to the claim brought against it. The issue is whether there is a real question to be tried.
(2)It is generally not possible to determine disputed issues of fact based on affidavit evidence alone, particularly when issues of credibility arise. Issues of law, even though they may be complex, can, however, be determined in an application for summary judgment.
(3)Although the Court should adopt a robust approach, nevertheless summary judgment may be inappropriate where the ultimate determination turns on a judgment that can only properly be reached after a full hearing of all the evidence.
[21] In Pemberton v Chappell, the Court of Appeal held:3
Where the defence raises questions of fact upon which the outcome of the case may turn it will not often be right to enter summary judgment. There may however be cases in which the Court can be confident – that is to say satisfied – that Mr Mistry’s statements as to matters of fact are baseless. The need to scrutinise affidavits, to see that they pass the threshold of credibility, is referred to Eng Mee Yong v Letchumanan.
2 See for example Pemberton v Chappell [1987] 1 NZLR 1 (CA); Grant v New Zealand Motor Corporation Ltd [1989] 1 NZLR 8 (CA) and Westpac Banking Corporation v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA).
3 Pemberton v Chappell [1987] 1 NZLR 1.
[22] In Eng Mee Yong, the Privy Council said4:
Although in the normal way it is not appropriate for a Judge to resolve conflicts of evidence on affidavit, this does not mean that he is bound to accept uncritically as raising a dispute of fact which calls for further investigation, every statement on an affidavit however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements made by the same deponent, or inherently improbable in itself it may be.
[23] With those principles in mind I turn to consider the issues in this case.
The issues
[24] The questions which fall to be determined are these:
(1)Were monies received by Eva from clients for Singapore Airlines tickets issued by Eva required to be held by Eva on trust for the airline?
(2)If so, did Eva act in breach of that trust by failing to account to the airline for monies received by Eva from its clients for Singapore Airlines tickets?
(3)If the answer to both (a) and (b) is ‘yes’, did Mr Mistry dishonestly assist those breaches of trust by Eva?
[25] It is for the airline to show that Mr Mistry has no arguable case on any of (1)
to (3) above.
Issue 1 – were monies received by Eva for the issue of Singapore Airlines tickets subject to a trust in favour of the airline?
[26] I am satisfied that there is no serious issue over this. In my view the documents clearly show that Eva was obliged to account to IATA member airlines, including the airline, for client payments which it received for travel booked by Eva
on those airlines.
4 Eng Mee Yong v Letchumanan [1980] AC 331 at 341 (PC).
[27] Eva executed a standard form PSA Agreement with IATA on 7 November
2005. The agreement was said to be made with “each IATA Member…which appoints the agent…”. The Agreement therefore became binding as between Eva and the airline when the airline appointed Eva as a PSA on 8 June 2007.
[28] Clauses 7.1 and 7.2 of this PSA Agreement provided in relevant part as follows:
7.1 A Traffic Document shall be issued immediately money is received by the Agent for specified passenger air transportation or ancillary services sold under this Agreement and the Agent shall be responsible for remittance to the Carrier of the amount payable in respect of such Traffic Document.
7.2 All monies collected by the Agent for transportation and ancillary services sold under this Agreement, including applicable remuneration which the Agent is entitled to claim thereunder, are the property of the Carrier and must be held by the Agent in trust for the Carrier until satisfactorily accounted for to the Carrier and settlement made.
[29] The “Carrier” was defined in the PSA Agreement as the relevant IATA
member which appointed the Agent (in this case, the airline).
[30] Clauses 7.1 and 7.2 were derived from the relevant part of IATA Resolution
824 a copy of which (as set out in the Travel Agent’s Handbook in force on 1 June
2011) was attached to an affidavit sworn by Mr Wild, Manager, Passenger Marketing
New Zealand, for the plaintiff.
[31] The PSA Agreement incorporated by reference the terms and conditions governing the relationship between the Carrier and the Agent set forth in the Resolutions contained in the Travel Agent’s Handbook, and a copy of the Handbook was said to be attached to the PSA Agreement.
[32] At cl 2.2 of the PSA Agreement, the Agent acknowledged receiving a copy of the current edition of the Handbook. The clause went on:
“The Agent specifically acknowledges that it has read and understands the contents of the Handbook, including but not limited to those dealing with…remitting procedures.”
[33] The document dated 8 June 2007 by which the airline appointed Eva as its
PSA, expressly required Eva to:
“(b) Account for [sales of Singapore Airlines tickets]…and remit all such monies due to Singapore Airlines Limited through the BSP-NZ Clearing Bank…”
[34] The reference to “BSP” is a reference to the “Bank Settlement Plan” procedures, under which IATA was entitled to deduct appropriate amounts payable to its member airlines from an accredited travel agent’s trust account, and pay those amounts to the airlines.5
[35] The obligation of travel agents to account to airlines for monies received for airline tickets was also referred to in a notice published on the TAANZ website. The TAANZ webpage included the following requirements:
The agent is not to pay money received in respect of travel arranged by the agent into any bank account into which there is at any time paid any money that is not received in respect of travel arranged by the agent, and
All money received by the agent in respect of travel on the services of the carrier, or in respect of any relating services (including any commission withheld by the agent in accordance with a manner of transacting business on behalf of the carrier agreed with the carrier) shall, as soon as practicable after its receipt be paid into a bank account, and shall
1. Remain the property of the carrier, and
2. Be held in trust for the carrier until it has been satisfactorily accounted for to the carrier.
[36] For completeness, I note that in Air Canada v M & L Travel Ltd a case with some similarities to the present, the Supreme Court of Canada referred to the fact that the IATA agreement between Air Canada and the travel agent allowed the travel agent to “affect Air Canada’s legal responsibilities”, was consistent with the
relationship between the carrier and the travel agent being one of trust. 6 So in this
case where Eva had the right to use the airlines carrier identification plate to issue tickets which the airline was bound to honour.
5 By 2011, Eva was on a “weekly BSP cycle”. That meant that it had to prepare and lodge with IATA each week a schedule of airline tickets it had issued in that week, along with the cost of each ticket. IATA would then calculate the amounts payable to each airline, before deducting the total amount from the Agent’s client trust account.
6 Air Canada v M & L Travel Ltd [1993] 3 SCR 787 at 807.
[37] The foregoing evidence in my view overwhelmingly supports the airline’s case that Eva owed duties to it as trustee, as alleged. Mr Mistry has no arguable case to the contrary.
Issue two – did Eva act in breach of trust by failing to account to the airline?
[38] Mr Wild stated that, in December 2011, Eva made BSP weekly turnover returns in respect of the airline as follows:
Period Turnover ($)
5 December 2011 – 11 December 2011 $76,646.90
12 December 2011 – 18 December 2011 $144,619.15
19 December – 25 December 2011 $255,887.67
26 December 2011 – 1 January 2012 $38,908.99
[39] Mr Wild said that payment for the $76,646.90 written in respect of the week commencing 5 December 2011 was due on 28 December 2011, but the payment was dishonoured. The other weekly sums due in accordance with Eva’s December returns were also dishonoured.
[40] Copies of IATA’s billing statements and analysis of Eva’s BSP transactions for the four week period from 5 December 2011 to 1 January 2012 were produced, without objection, by a secretary employed by the airline’s solicitors. For each of the weekly periods, the cash sales less Eva’s commission figures correspond with the turnover figures set out in paragraph [38] above.
[41] Mr Wild’s evidence was corroborated by Mr Morley, the liquidator. Mr Morley stated that the liquidators identified creditors’ claims by the airline totalling $516,062.71. The fact that TAANZ paid out a substantial sum to the airline under its bonding scheme further corroborates the airline’s claim that Eva failed to account to it for sums due on the issue of Singapore Airlines tickets.
[42] Mr Mistry has acknowledged that monies paid by clients into Eva’s client trust account for airline tickets were treated by Eva as being available to meet Eva’s general business expenses He said client monies were paid into the client trust account and suppliers were paid out of the account with payments also being made to the current account for business expenses.
[43] In all of those circumstances I am satisfied that Mr Mistry has no reasonably arguable defence that Eva did not act in breach of trust in failing to account to the airline for monies received from its clients for the issue of Singapore Airlines tickets.
Issue Three – did Mr Mistry dishonestly assist Eva’s breaches of trust?
The Law on dishonest assistance
[44] In Royal Brunei Airlines Sdn Bhd v Tan, the Privy Council concluded that dishonesty is a necessary ingredient of accessory liability in a breach of trust. It is also a sufficient ingredient7. A liability in equity to make good resulting loss attaches to a person who dishonestly procures or assists in a breach of trust or fiduciary obligation. It is not necessary that, in addition, the trustee or fiduciary was acting dishonestly, although this will usually be so where the third party who is assisting is acting dishonestly.
[45] In the context of the accessory liability principle, acting dishonestly means simply not acting as an honest person would act in the circumstances. As Nicholls LJ noted in Royal Brunei:8
…[honesty] is an objective standard. At first sight this may seem surprising. Honesty has a connotation of subjectivity as distinct from the objectivity of negligence. Honesty, indeed, does have a strong subjective element in that it is a description of a type of conduct assessed in the light of what a person actually knew at the time, as distinct from what a reasonable person would have known or appreciated. Further, honesty and its counterpart dishonesty are mostly concerned with advertent conduct, not inadvertent conduct. Carelessness is not dishonesty. Thus for the most part dishonesty is to be equated with conscious impropriety. However, these subjective characteristics of honesty do not mean that individuals are free to set their own standards of honesty in particular circumstances. The standard of what constitutes honest conduct is not subjective. Honesty is not an optional
7 Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378 (Royal Brunei).
8 At 389.
scale, with higher or lower values according to the moral standards of each individual. If a person knowingly appropriates another’s’ property, he will not escape a finding of dishonesty simply because he sees nothing wrong with such behaviour.
[46] In Barlow Clowes International Ltd (In liquidation) & Ors v Eurotrust International Ltd & Ors,9 the Privy Council, clarifying a passage in the judgment of Hutton LJ in the House of Lords decision of Twinsectra v Yardley,10 noted that the accessory’s knowledge of the transaction only had to be such as to render his participation contrary to normally acceptable standards of honest conduct. It did not require that the accessory should have had reflections about what those normally
acceptable standards were. All that is required is that the accessory must be “conscious of those elements of the transaction which make participation transgress ordinary standards of honest behaviour. It did not also require him to have thought about what those standards were”.11
[47] In New Zealand, the Supreme Court held in Westpac NZ Ltd v Map & Associates Ltd that the key ingredient in the cause of action for dishonest assistance is the need for a dishonest state of mind on the part of the person who assists in the breach of trust. 12 Delivering the judgment of the Court, Tipping J said:13
We agree with the statement in Barlow Clowes that such a state of mind may consist in actual knowledge that the transaction is one in which the assistor cannot honestly participate. But it may also consist in what we would describe as a sufficiently strong suspicion of a breach of trust, coupled with a deliberate decision not to make enquiry lest the enquiry result in actual knowledge. For the purpose of this alternative, it is necessary that the strength of the suspicion that a breach of trust is intended makes it dishonest to decide not to make enquiry. That state of mind, which equity equates with actual knowledge, is usually referred to as wilful blindness. It involves shutting one’s eyes to the obvious and can thus fairly be equated with the dishonesty involved when there is actual knowledge.
9 Barlow Clowes International Ltd (In Liquidation) & Ors v Eurotrust International Ltd & Ors
(Barlow Clowes) [2005] UKPC 37.
10 Twinsectra v Yardley [2002] UKHL 12; [2002] 2 AC 164.
11 Barlow Clowes at [16].
12 Westpac NZ Ltd v Map & Associates Ltd [2011] NZSC 89.
13 At [27].
Application of principles in this case
[48] For Mr Mistry, Mr Haig submitted that liability will only be imposed in an accessory liability claim where the person’s conscience can truly be said to be tainted. In this case, Mr Haig relied on Mr Mistry’s evidence that he was not aware of any special rules regarding transacting through Eva’s client trust account, and was not aware of the terms of the alleged trust. He acknowledged that Mr Mistry signed certain documents which suggest knowledge of the trust’s requirements, but alleged there were some “inconsistencies” in some of the documents relied upon by the airline.
[49] One document signed by Mr Mistry was a declaration provided by Eva to TAANZ in June 2011. The directors or proprietors of TAANZ members are required to complete statutory declarations for TAANZ on an annual basis, verifying that the member was properly accounting for monies received. Mr Olsen, chief executive of TAANZ, gave evidence that the last such annual declaration submitted on behalf of Eva was received in or about June 2011. It related to the financial year ended 31
March 2011. The document, signed by Mr Mistry on behalf of Eva, contained the following paragraph (d):
[Eva] maintains a separate “Client Travel Funds” trust account and that at all times funds received from clients by way of deposit or prepayment, and/or on behalf of consumers from other TAANZ members are held in a designated Trust account until used for the purposes intended by the client.
As evidence of the above the Directors have sighted the attached “Client Travel Funds” bank statement(s) and the attached reconciliation(s) matching client funds held with the closing balance of the client fund bank account(s).
[50] Mr Haig submitted that the form of TAANZ declaration indicates the beneficiaries of the trust arrangements are the agents customers rather than the carriers. I do not accept that submission. Paragraph (d) of the annual TAANZ declaration form clearly required that funds received from Eva’s clients by way of deposit or pre-payment had to be held in the designated trust account until used for the purposes intended by the client. Quite clearly, the purpose of a payment made by a client to a travel agent for international air travel is to pay the airline for the ticket (less any commission the agent might be entitled to under arrangements existing between the airline and the agent).
[51] Mr Haig also pointed out that the airline did not produce any properly executed form of IATA resolution 824. But that cannot help Mr Mistry, as the relevant part of that resolution is replicated in cl 7.2 of PSA Agreement which became binding on Eva when the airline appointed Eva a PSA in June 2007.
[52] Other matters raised by Mr Haig, including that the PSA Agreement produced by the airline has no page numbers and is not initialled by Mr Mistry on each page, have, in my view, no substance.
[53] On 19 September 2011, Eva entered into a deed of indemnity with TAANZ, apparently in association with Eva’s application to renew or continue its TAANZ membership. The deed of indemnity, which was signed by Mr Mistry on behalf of Eva, referred to TAANZ’s Airline Fund as a fund maintained by TAANZ “for the purpose of providing the Airlines with a measure of protection against the default of TAANZ members in accounting to Airlines pursuant to the BSP-NZ Scheme for monies received from trading with members of the public as agents of the Airlines”.
[54] The deed of indemnity contained an acceptance by Eva, as a condition of its continued TAANZ membership, of the responsibility to indemnify from all losses and expenses (subject to a limitation provided in the deed) incurred by TAANZ in connection with the failure of Eva to account to its principal/s in respect of all such monies received as aforesaid).
[55] Mr Haig submitted that it should not be assumed that Mr Mistry understood what was meant by these documents, including in particular the obligation to “hold in trust” monies received from clients for airline tickets. He referred to the fact that Mr Mistry had left school at 16 and had only had one year’s training from a mentor who did not inform him of what he was supposed to do in respect of the trust. Mr Haig referred to the following passage from the Privy Council in Royal Brunei: 14
Likewise, when called upon to decide whether a person was acting honestly, a court will look at all the circumstances known to the third party at the time. The court will also have regard to the personal attributes of the third party such as his experience and intelligence and the reason why he acted as he did.
14 Royal Brunei, above n 7, at 391.
[56] Mr Haig submitted that Mr Mistry’s evidence of what he knew or understood
about the trust had not been tested.
[57] I cannot accept those submissions. Even in the context of a summary judgment application, where the court will normally be reluctant to make findings on issues of credibility (particularly where the honesty of the defendant is in issue), the point can be reached where a defendant’s evidence is so inconsistent with contemporary documents that an adverse finding of credibility against him cannot be avoided. In my view, this is such a case. Mr Mistry had been running Eva’s business for approximately ten years before the December 2011 default, and the proper handling of client funds received in payment for tickets for international air travel must have been a daily bread and butter issue for him. There was nothing particularly complex about the language used at cl 7.2 of the PSA Agreement (all monies collected by the Agent…are the property of the Carrier…), and the wording of paragraph (d) of the June 2011 TAANZ declaration signed by Mr Mistry was in my view equally clear. There was nothing in the wording of these provisions which in my view called for any particular explanation or advice, but even if there had been, advice was readily to hand from the TAANZ website and no doubt other avenues which Mr Mistry could have used if he had wished to do so. In my view it is inescapable on the evidence that Mr Mistry was either aware that monies received from clients for the purchase of Singapore Airline tickets were the property of the airline, and were to be accounted for to the airline, or he deliberately elected not to acquaint himself with the meaning of the wording in documents signed by him which clearly informed him of Eva’s obligations in that regard. In either event, the only sensible conclusion is that he elected to take the risk of using the airline’s money, no doubt in the belief that he would be able to pay it back. It was a risk he was simply not entitled to take.
[58] Mr Haig submitted that it would not be appropriate to enter summary judgment against Mr Mistry when he has not had access to a number of documents which it was submitted might provide some ground of defence. But that seems to me to be purely speculative.
[59] It is a well-settled principle that a party who seeks discovery must be particular about the documents he seeks, and show a tangible connection between those documents and his defence.15 While Mr Mistry has specified a broad category of documents to which he seeks access, a mere speculation that those documents might be helpful is not enough. I reject this submission accordingly.
[60] In all the circumstances, I find that Mr Mistry has no seriously arguable case on the dishonest assistance issue.
Judgment
[61] Accordingly, there will be judgment for the airline in accordance with its claim, for the sum of $340,427.67. I will receive memoranda on the question of costs, including costs in respect of the bankruptcy notice issued by the airline and subsequently set aside. The airline is to file its memorandum within 14 days of the date of this judgment, and Mr Mistry may file a memorandum in reply within 14 days after his receipt of the airline’s memorandum.
Suppression
[62] Mr Mistry is facing criminal charges in respect of what I understand to be essentially the same matters as are traversed in this judgment. The criminal charges are the subject of a jury trial scheduled for hearing in October 2014.16 At the hearing, I invited counsel to file memoranda on the question of whether a suppression order might be appropriate in the event that my decision on the airline’s summary judgment is unfavourable to Mr Mistry (as it is).
[63] Mr Haig subsequently filed a memorandum seeking non-publication orders covering both Mr Mistry’s name and the facts of this case. He submitted that both the defendant’s name and the facts of this case are uncommon, and that a Wellington criminal jury is more likely to recall the defendant’s name and/or facts compared with a more common name and set of facts. In those circumstances media
publication of the decision in this case could influence the criminal jury, who could
15 See for example NZI Bank Ltd v Philpott (1988) 1 PRNZ 560 (HC) and Mobil Oil NZ Ltd v
Bagnall (1999) 12 PRNZ 655 (HC).
16 The file number for this trial in the District Court is CRI-2013-085-4178.
equate the reasons for a decision on civil liability with the facts in the criminal setting. He asked that if a non-publication order is made, leave should be reserved to come back to Court to seek to vary the terms of the order.
[64] Mr Matsis did not oppose the making of a non-publication order, provided his client was not prejudiced in taking any steps to enforce its judgment.
[65] I accept there is a danger that the conduct of the jury trial in the criminal proceeding could be prejudicially affected by any publicity which might be given to this decision which identifies (or might identify) Mr Mistry as the defendant. Although the decision in this case has been given based on the civil standard of proof (on the “balance of probabilities”), and not on the higher standard of proof required in criminal proceedings (“beyond reasonable doubt”), that distinction might not be known or understood by some jurors. At least I do not think it safe to assume that it would be known and understood.
[66] I accept too that Mr Mistry’s name is relatively uncommon, and that the facts of the case, involving as they do loss suffered by a major international airline following significant defaults by a travel agency which had operated in central Wellington for over 10 years, could well be remembered by jurors and connected (along with the result of this judgment) with Mr Mistry.
[67] In those circumstances I accept that it is appropriate that anything in this judgment which might tend to identify Mr Mistry as the defendant should be suppressed from publication, pending the hearing of the criminal charges. In the particular circumstances of this case, I think that requires suppression of more than just Mr Mistry’s name – the danger of prejudicial effect on the criminal trial lies in the risk that the jurors will connect the facts of the two cases, and may allow themselves to be inappropriately influenced in their deliberations by their knowledge that a court has already found Mr Mistry liable for dishonest assistance on essentially the same facts.
[68] In the end, I think the safest course is to make an interim order for non- publication in news media, covering not only the parties’ names and Eva’s name, but
extending to the judgment as a whole, pending completion of the jury trial. I
therefore make the following non-publication order:
Prohibiting the publication of any part of this judgment (including the names of the parties and of Eva) in news media or on the internet or other publicly available database, until final disposition of trial number CRI-2013-085-
4178. Publication in law reports or digests is permitted.
Leave is reserved to the parties to apply to vary the terms of that order, or to cancel or extend it as the case may require.
Associate Judge Smith
Solicitors:
Gault Mitchell Law, Wellington for Plaintiff
Greenwood Roche Chisnall, Wellington for Defendant
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