Spackman v Martin
[2021] NZHC 157
•12 February 2021
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2020-409-142
[2021] NZHC 157
UNDER the Evidence Act 2006 IN THE MATTER
of SOLAR BRIGHT LIMITED (IN LIQ)
BETWEEN
AND
MURRAY SPACKMAN
First Plaintiff
THOMAS MOORE
Second PlaintiffAND AND
PATRICK MARTIN
First Defendant
NICOLA MARTIN
Second Defendantcontinued ….2
Hearing: 2 February 2021 Counsel:
G Slevin for First and Second Plaintiffs
K Smith, J Moss and H Weston for First and Second Defendants E L Keeble for Third and Fourth Defendants (appearance excused)
Judgment:
12 February 2021
JUDGMENT OF ASSOCIATE JUDGE LESTER
This judgment was delivered by me on 12 February 2021 at 2.30 pm
pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar 12 February 2021
SPACKMAN v MARTIN [2021] NZHC 157 [12 February 2021]
AND
AND
ROBERT SNOEP
Third Defendant
CREATEIP
Fourth Defendant
[1] The first plaintiff, Murray Spackman (Mr Spackman), seeks orders setting aside claims for legal advice privilege made by each of the defendants in their respective lists of documents.
[2]The fourth defendant, CreateIP, is a firm of intellectual property lawyers.
[3]The third defendant, Robert Snoep, is a principal of CreateIP.
[4] The third and fourth defendants have claimed privilege in respect of their communications with the first and second defendants.
[5] Counsel for the third and fourth defendants sought and were granted leave not to appear at the hearing as the privilege in issue is that of the first and second defendants. The third and fourth defendants will abide the Court’s decision in relation to privilege.
[6]The application relies on s 67(1) of the Evidence Act 2006 which provides:
67 Powers of Judge to disallow privilege
(1) A Judge must disallow a claim of privilege conferred by any of sections 54 to 59 and 64 in respect of a communication or information if satisfied there is a prima facie case that the communication was made or received, or the information was compiled or prepared, for a dishonest purpose or to enable or aid anyone to commit or plan to commit what the person claiming the privilege knew, or reasonably should have known, to be an offence.
Background
[7] The first defendant, Patrick Martin (Mr Martin), and the second defendant, Nicola Martin (Mrs Martin), were shareholders in and directors of Solar Bright Ltd (in liq) (SBL).
[8] In early 2017 the plaintiff and a third party, Mr Moore, were invited to invest in SBL. SBL had developed an invention known as PATeye, developed by Mr Martin, which was like a conventional roads cat’s eye, but with the ability to sense temperature and omit a warning light if the temperature dropped below freezing. SBL owned patents and other intellectual property rights in that invention. PATeye was at the early stages of development.
[9] A new invention called Dataeye had also been developed by Mr Martin and, as at early 2017, was at the point where Mr Martin had instructed the fourth defendant to apply for a New Zealand provisional patent. Dataeye was a similar idea to that of PATeye but would be able to gather and communicate in real time a greater variety of information, including relating to traffic density, weight of vehicles and other road conditions.
[10] Mrs Martin, in an email in November 2017, described Dataeye as being the “pot of gold”.
[11] SBL required investment to continue developing these concepts so they could be commercialised.
[12] On 8 February 2017, Mr Spackman attended a presentation at SBL with Mr and Mrs Martin. The plaintiff had been provided with an investor presentation document called an “Investor Deck” which included a page headed “Intellectual Property”. That page included the following: “At Solar Bright we know that to secure a competitive advantage we need a mix of first mover advantage, repeatable innovation and registered IP.”
[13] In respect of registered IP, the page recorded: “We use patents, registered designs, trademarks and copyright to protect our innovations from copying.”
[14] Mr Spackman, in his evidence, describes Mr Martin speaking to the Investor Deck containing the above observations and that Mr and Mrs Martin went on to stress the potential of the Dataeye invention.
[15] Mr Spackman records that Mrs Martin said the intellectual property in the Dataeye invention was protected for the company by the Martins’ employment contracts. I will return to this point below.
[16] Addressing this paragraph in Mr Spackman’s evidence, Mrs Martin in her evidence, which she says was also made on behalf of Mr Martin, does not deny that at the meeting they stressed the potential of Dataeye. As to the ownership of the intellectual property in Dataeye, Mrs Martin says: “In all of the media and advertising of Dataeye it was always represented by us that this was owned by SBL not personally.”
[17] Mrs Martin says that the “background paper”, which I interpret as a reference to the “Investor Deck”, was not reviewed by Mr and Mrs Martin. She does not, however, deny that Mr Martin spoke to that document.
[18] Mr Spackman, after the February meeting, sought from the then Chair of SBL’s Board, Mr Hampson (who was also associated with another investor in SBL called Powerhouse Ventures Ltd (PVL)), more information about how the intellectual property in Dataeye would be protected.
[19] Mr Hampson attended a meeting with Mr Snoep, Mr Martin and Ayna Hornsey, PVL’s investment manager, on 7 March 2017 to discuss SBL’s IP strategy.
[20] Mr Spackman was advised by Mr Hampson by email on 7 March 2017 that Dataeye would not work without PATeye IP and that SBL’s patents over PATeye would provide practical protection in respect of Dataeye. The email stated:
Anya has a background in IP and has prepared the attached document summarising SolarBright’s strategy regarding the IP protection of the DataEYE. In summary:
· The new technology leverages the PatEYE and part of the protection strategy is to file continuations to this IP. Without the PatEYE IP the DataEYE doesn’t work.
· They have a portfolio of patents on the PatEYE and have just had Europe and the UK progress through to grant.
· Within the next two weeks they will file a provisional around the DataEYE. It won’t be too specific at this point but will be enhanced as we complete the technology trials.
· The regulation around the use of the PatEYE is another key component with three countries now approving the use on roads. Pat is busy getting the M29 road stud specifications drafted to include their technology.
[21] The email concluded: “Overall, given the stage SolarBright is at with the Dataeye we feel the IP strategy is in a good position.” The email was not copied to Mr and Mrs Martin.
[22] Mrs Martin disputes the accuracy of the statement that Dataeye cannot work without the PATeye IP. She says “[t]hey both operate independently” and “are different products.” Mrs Martin says the summary “contradicts the summary provided by CreateIP” of the meeting, but CreateIP’s summary has not been discovered. CreateIP’s summary is specifically referred to as being one of the privileged documents sought in this application. Other than the one technical issue noted above, Ms Martin does not identify any other errors in the email summary of the meeting that took place on 7 March 2017.
[23] I also note that in respect of the relationship between PATeye and Dataeye, Mr Snoep says in an email to Mr and Mrs Martin that:
… the existing PATeye patents do in part cover the road marker to some extent so the IP position is already one big step ahead of an entirely new product/project.
[24] To the extent Mrs Martin might be seeking to suggest the PATeye and Dataeye products are entirely discrete, such would appear inconsistent with Mr Snoep’s observation above.
[25] Having been informed by the 7 March 2017 email that an application in relation to Dataeye would be made in the following couple of weeks, Mr Spackman
was invited to a meeting of SBL’s directors held on 6 April 2017 at which Mr Martin told him a provisional patent application for Dataeye had been filed. Mr Spackman says Mr Martin confirmed to him in subsequent conversations that the intellectual property for both Dataeye and PATeye belonged to SBL.
[26] Mr Spackman says that he and Mr Moore, having been assured that the intellectual property around Dataeye was secured, confirmed they would invest
$250,000 between them. In the end, they invested $300,000 between them with the payments being made by instalments in April, June and July 2017 so that, by 26 July 2017, Mr Spackman had invested $172,500 and Mr Moore had invested
$127,500.
The nub of the plaintiffs’ complaint
[27] The plaintiffs say that while they were led to believe the intellectual property in Dataeye was owned by SBL, Mr Martin had, even before the plaintiffs committed to invest in SBL, intended to take the IP rights in Dataeye in his own name.
[28] It is not in dispute that Mr Martin had instructed CreateIP to make a provisional patent application in respect of Dataeye in his own name. This was underway, it seems, from 7 March 2017 – the same day as the meeting referred to at [19] and [20] above – although it is not clear which meeting occurred first.
[29] In the evidence there is an invoice dated 31 March 2017 issued by CreateIP to Mr Martin personally, the narration beginning: “Meeting with you regarding your new invention.” The narration refers to the drafting of the specification for the invention and that being forwarded to Mr Martin for review. The subject of the invoice is described as “Dataeye NZ Provisional Patent Application”. The amount of the invoice was for just over $6,000. A second invoice was issued by CreateIP on 30 May 2017 with the heading “DATA eye Due Diligence Work”. It was related to due diligence on the patentability of the invention and the invoice was for just over $13,000.
[30] A letter of engagement issued by CreateIP was emailed to Mr Martin on 14 March 2017 and copied to Mrs Martin which recorded as follows:
Following on from our meeting last Friday, please find attached a letter of engagement for this new Dataeye project made out to you personally noting that you will fund and own this new filing.
[31] Mr Snoep’s file note of that meeting is in the evidence. The meeting took place on 7 March 2017 and the file note concluded with the note: “Pat sole inventor + sole owner & bill direct to Pat.”
[32] Neither Mr Martin nor Mr Snoep have filed evidence seeking to explain how these references to Mr Martin’s ownership of the Dataeye IP means other than what they say.
Plaintiffs’ claim
[33] The plaintiffs claim they were deceived by Mr and Mrs Martin as to SBL owning Dataeye’s IP and say they would not have invested any money in SBL had they known that it did not own the Dataeye IP. The plaintiffs allege Mr and Mrs Martin fraudulently represented to them that SBL owned the Dataeye IP despite planning to secure ownership of the IP in Mr Martin alone. They say that while Mr and Mrs Martin represented to them that Dataeye was an invention of SBL and while they then enquired as to how SBL’s ownership of the Dataeye IP was to be protected, Mr Martin had personally and secretly engaged CreateIP to protect his ownership of the intellectual property.
[34] Accordingly, the plaintiffs say that the fraud exception to privilege in s 67(1) is available and they ask for orders setting aside Mr and Mrs Martin’s privilege claims in respect of their communications with the third and fourth respondents in relation to Dataeye.
Legal principles
[35] Both counsel referred to Rollex Group (2010) Ltd v Chaffers Group Ltd.1 Both counsel also referred to the comment of Kós J (as he then was) in that case that there is a “high threshold” to be met to establish the dishonest purpose of s 67(1).2
[36] At common law what was required was “fraud, sham or trickery”.3 Counsel for Mr and Mrs Martin submitted that Kós J in Rollex Group discussed whether it was necessary to establish a “strong prima facie case” that a communication was made, received or prepared for a dishonest purpose before s 67(1) would apply.
[37] In Cityside Asset Pty Ltd v 1 Solution Ltd, Woodhouse J held that a prima facie case was sufficient.4 His Honour noted that s 67(1) did not express any presumption in favour of protection of privilege and that parliament had chosen the phrase “prima facie case” in preference to a recommendation by the Law Commission that a “strong prima facie case” should be required.5
[38] Counsel for Mr and Mrs Martin submit that, considering the value of legal privilege in society, Kós J’s reference to a “high threshold” should be preferred. They further rely on Rollex Group, submitting that before the legal advice privilege can be disallowed, the advice has to be part of the instrumentation of the illegal purpose.6
[39]As to what a “dishonest purpose” means in this context, Woodhouse J in
Cityside Asset at [44] said:
A dishonest purpose encompasses things less than, as well as different form, an offence. Also, as the legislature has chosen to use the expression “dishonest purpose”, rather than “fraud”, or the composite expression “fraud, sham or trickery”, it is reasonable to conclude that the legislature was intending to cover any dishonest purpose, not just those particular types of dishonest purpose.
1 Rollex Group (2010) Ltd v Chaffers Group Ltd [2012] NZHC 1332, (2012) 22 PRNZ 21.
2 At [32]-[33].
3 Rollex Group, above n 1, at [28] citing Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd
[1972] Ch 553 (Ch D) at 565.
4 Cityside Asset Pty Ltd v 1 Solution Ltd [2012] NZHC 3162, [2013] 1 NZLR 722.
5 At [43].
6 Rollex Group, above n 1, at [45].
[40] Woodhouse J adopted the approach to dishonesty in this context from Royal Brunei Airlines Sdn Bhd v Tan, where the test was stated as:7
[A]cting dishonestly, or with a lack of probity, which is synonymous, means simply not acting as an honest person would in the circumstances. This is an objective standard.
[41]Cross on Evidence says:8
Removal of the privilege under the “dishonest purpose” limb of s 67(1) requires dishonesty, in the sense of an intention to deceive, or to commit “sharp practice” by intentionally taking advantage of a misapprehension.
Sharp practice
[42] The issue then is whether the applicants have established a prima facie case of sharp practice here. For different reasons, counsel agreed it did not matter whether the threshold was a strong prima facie case or a prima facie case: Mr Slevin for the applicants submitted if the higher test applied, it was met, whereas Ms Weston for the respondents submitted if the lower test applied, then that test was not met.
[43] It is not clear to me that Kós J in Rollex Group was proposing that the evidentiary threshold to be met for the purposes of s 67 was a “strong prima facie case”. Certainly, his Honour emphasised the importance of legal adviser privilege but, when his Honour referred to preferring a higher threshold than that adopted in Gemini Personnel Ltd, it was in relation to whether the reference to dishonest purpose in s 67 should involve “fraud, sham or trickery” or a lesser test suggested by Laurenson J in Gemini Personnel Ltd.9 Ultimately, in respect of the threshold, Kós J concluded the plaintiffs had not shown a prima facie case.10
[44] The defendants do not suggest that if the facts asserted by the plaintiffs are correct, that the plaintiffs would not be entitled to a remedy. The real issue is whether it can be said the plaintiffs’ evidence reaches the level of a prima facie case. On key
7 Cityside Asset, above n 4, at [45], citing Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378, [1995] 3 WLR 64 at 389.
8 Mathew Downs (ed) Cross on Evidence (online ed, Thomson Reuters) at [EVA67.3], citing
Gemini Personnel Ltd v Morgan & Banks Ltd [2001] NZLR 14 (HC) at [66] – [69].
9 At [32] – [33].
10 At [47] – [51].
aspects of the plaintiffs’ case, there is no direct conflict of evidence for example, what was said about the employment contracts at the 8 February 2017 meeting. Nor do Mr and Mrs Martin assert at the outset that they made it express to the plaintiffs the Dataeye IP would be owned by Mr Martin subject to some right to redeem held by SBL. That Mr and Mrs Martin intended throughout SBL’s dealings with the plaintiffs to take the IP in Mr Martin’s name is not disputed. Such appears beyond dispute given the contemporaneous documents, at least on the state of the evidence before me. Nor is it disputed that the plaintiffs enquired about safeguarding the Dataeye IP prior to their making their investments. Nor is it disputed that the plaintiffs were told a provisional patent application had been sought. It is no answer for Mr and Mrs Martin to say that the plaintiffs should have undertaken further due diligence. At best for Mr and Mrs Martin that is a contribution argument, not a king-hit defence to the plaintiffs’ claim.
[45] I am satisfied that the plaintiffs have established a prima facie case of sharp practice. The reasons are as follows.
[46] I referred at the outset to Mr Spackman saying that, at the presentation on 8 February 2017, Mrs Martin told him that IP was protected for the company by Mr and Mrs Martin’s employment contract.
[47] Mr and Mrs Martin had employment contracts they entered in 2012 which expressly reserved the ownership of any intellectual property they created to SBL. However, in 2015 unbeknown to the other board members at the time, Mr and Mrs Martin entered into fresh employment contracts on behalf of SBL which deleted the clause reserving intellectual property rights to SBL. These agreements were signed only by Mr and Mrs Martin.
[48] In support of Mr Spackman’s evidence that Mrs Martin said their employment contracts protected IP for the company, a file note made by Mr Moore, who also attended the meeting, was produced which concludes with the note “Employment contract – keep IP in company”.
[49] In reply, Mrs Martin says she does not recall discussing the employment contracts at the February 2017 meeting and says she thinks it was unlikely. There is no separate affidavit from Mr Martin on this issue.
[50] Accordingly, given the absence of an express denial by Mrs Martin, and that Mr Spackman’s evidence is supported by the contemporaneous note, there is, in my view, a prima facie case that the plaintiffs were led to believe that Mr and Mrs Martin’s employment contracts meant the intellectual property developed by them would be owned by SBL. An inference in this regard can be drawn from the absence of any direct evidence from Mr Martin on this point and generally.
[51] Mrs Martin asserts: “we have never denied that SBL would have owned the Dataeye once (and if) it became intellectual property”. The tenor of her evidence is to suggest there was no intellectual property in Dataeye for SBL to own at the time the plaintiffs invested. If this was what was intended by Mrs Martin, I would consider it a disingenuous position to adopt given that in the first quarter of 2017 Mr Martin had already instructed CreateIP to proceed with a provisional patent application for Dataeye in New Zealand. Mr Martin and his IP lawyer must have thought there was a concept or invention in relation to some IP right that warranted such an application.
[52] The object of SBL was to create and commercialise intellectual property. The plaintiffs’ enquiries about the patent protection of Dataeye prior to their investment show they wanted to confirm SBL’s interest in Dataeye was protected. They were informed that a provisional patent application had been filed, but not that it had been filed in the name of Mr Martin personally.
[53] Mr and Mrs Martin were aware that the application had not been made in SBL’s name. There is therefore a prima facie case that they stood by and allowed the plaintiffs to believe that the patent application for Dataeye had been made on behalf of SBL.
Mr and Mrs Martin’s explanation
[54] Mr Martin sent Mr Spackman an email on 27 September 2017 when the relationship between the parties had deteriorated. The email was prompted by an
enquiry from Mr Spackman about the process for valuing IP. In response to questions raised by Mr Spackman, Mr Martin in his email said:
… any thing I personally pay for belongs to me until it’s is [sic] paid for by solarbright I’m entitled to file or patent anything I want personally the contract is for solarbright if solarbright pays me then it can be assigned over all of the patent work is done in my time even the meeting with Robert are in my time before or after work I’m not employed by solarbright to develop or write patents and therefore it’s not unreasonable to want my money that I pay personally back before I assign rights to solarbright my COE clearly states I’m employed in implement [sic] the R&D in the company and I get paid for R&D
– I don’t get paid nor does my COE state I’m employed to produce ideas and patents – hope that clears that
The reason for this is simply because prior to PHV – I pat martin inventor of PATeye paid personally for all patents then assigned all rights to solarbright as per direction of PHV for zero and fore gave $187k before they invested in SBL.
Therefore I am not doing that ever again I learnt the hard way.
[55]PHV is a reference to the other investor in SLB, Powerhouse Ventures Limited.
[56] Mrs Martin, in her affidavit, says that “Dataeye was always intended to be assigned to SBL once it became intellectual property”.
[57] Mr Martin’s contemporary email confirms that he deliberately took the Dataeye intellectual property in his name as some form of security in relation to amounts owed to him. To the extent that “security” was intended to protect Mr and Mrs Martin for legal costs incurred in the patent process for Dataeye, Mr Spackman’s response was that SBL had sufficient funds to meet the invoices produced in that regard. Nor was this “security” arrangement made known to the plaintiffs before they invested.
[58] If Mr Martin intended the Dataeye IP to be a broader security, pursuant to which he could call for all amounts he claimed he was owed before transferring the rights to SBL, then that is the very type of arrangement that should have been made clear to investors who were, on the face of it, led to believe the rights were already held in SBL. Mr and Mrs Martin sought and obtained the plaintiffs’ investment without disclosing their “security claim” over the Dataeye IP.
[59] Mrs Martin asserts that Mr Martin was the one who made the provisional patent application because it is necessary for the application to be lodged in the inventor’s name rather than SBL’s. This is something of a red herring. Mr Martin’s email makes it clear that he did not lodge the patent in his name for administrative reasons, with the intention he would hold it on behalf of SBL. It shows he lodged it in his name so that the IP would be owned and controlled by him. In any event, the provisional patent application form does not support Mr Martin’s claim, as it has separate areas to name the inventor and the applicant.
[60] While Mr Spackman does not dispute that Mr and Mrs Martin would, in due course, be entitled to be reimbursed for amounts they were owed, Mr and Mrs Martin do not suggest they told the plaintiffs that the rights would only be available to SBL upon SBL paying Mr and Mrs Martin what they were owed.
[61] Both the third and fourth defendants and Mr and Mrs Martin knew that the IP rights in Dataeye were important to investors.
[62] In an email on 2 May 2017 to Mr and Mrs Martin, Mr Snoep referred to a call from a potential Canadian investor who Mr Snoep said appreciated the summary provided. Having referred to the Dataeye patent, Mr Snoep said:
Neville’s investors want some assurance that the data collection capabilities are patentable/patented. As soon as that can be proven, the deal becomes a big reality.
I reiterated where we are at in the process with DATAeye i.e. a provisional.
[63] A similar comment was made by Mr Snoep in an email dated 1 September 2017 to Mr and Mrs Martin that provided an updated filing plan and budget for Dataeye. Mr Snoep referred to that plan as: “an approach that will give you and your potential investors confidence in the patent process as soon as possible.” None of the defendants suggested the Dataeye product was not presented to attract investments from the plaintiffs.
The documents sought
[64] The applicants seek the disallowance of privilege in relation to the categories of documents concerning:
(a)the protection of the intellectual property in the invention known as “Dataeye”;
(b)the meeting between the first and third defendants and Mr Stephen Hampson and Anya Hornsey held on 7 March 2017; and
(c)any meetings between the first and/or second respondents and the third respondent at which the protection of the intellectual property in the invention known as “Dataeye” was discussed.
[65] The documents sought by the plaintiffs are not before the Court. Category (b) refers to the report Mrs Martin says was provided to her following the meeting referred to at [22] above. Having considered the plaintiffs have established a prima facie case, the issue is whether the documents sought were instrumental to the sharp practice alleged by the plaintiffs.
[66]In Rollex Group, Kós J said:11
At common law therefore it is apparent that the advice has to be part of the instrumentation of the illegal purpose for it to lose its ordinary protection. The solicitors were needed to convey the properties the subject of the mortgage fraud. They established the new ventures to which the plaintiffs’ corporate opportunities were unlawfully diverted by the defendants. In each case where the privilege was set aside the legal advisers’ participation was essential or desirable to effect the dishonesty, or the adviser was a witting participant in that dishonesty.
[67] Here, the dishonest purpose, at its most basic, is the assertion that Mr Martin induced the plaintiffs to invest in SBL on the basis it owned the Dataeye IP when, at the same time, he intended to and took steps to secure the IP rights for himself. In my view, Mr Martin’s communications with the third and fourth defendants to secure the IP rights for himself were “part of the instrumentation of” the dishonest purpose. To
11 Rollex Group (2010) Ltd v Chaffers Group Ltd, above n 1, at [45].
achieve the object of the dishonest purpose, as described above, Mr Martin had to secure the Dataeye IP for himself. The documents sought by the plaintiffs were part of achieving that aspect of Mr Martin’s plan. Specifically, the documents in category (b) may well be part of the first aspect of Mr Martin’s plan, that is, inducing the investment on the strength of the misrepresentation that Dataeye rights were owned by SBL. However, without seeing those documents, more on that subject cannot be said.
[68] In Rollex Group, Kós J suggested another way of assessing whether the documents sought were part of the instrumentation of the unlawful purpose. His Honour’s suggestion was to consider the possible difference, in that case, that the non-transmission of the emails in issue would have made to the plaintiffs.12 Here, if the documents sought had not been created, then it was common ground that the Dataeye IP would have remained with SBL.13
[69] Accordingly, I am satisfied that the requirement under s 67 that the documents sought be linked to the unlawful purpose - that is, that they were created to give effect to that purpose - is met, and that this is one of those unusual cases where it is appropriate to set aside the privilege claimed in respect of the documents subject to the application.
[70] As I have said, the documents in issue are not before the Court so it is not possible to make any definitive rulings as to the exact scope of the documents to be disclosed.
[71] The first and second defendants are to, within 20 working days, prepare a list of documents that satisfies the categories referred to in [64] above. If there are documents that they consider do not fall within those categories or are in doubt in that regard, then such documents are to be referred to me for a ruling in that regard.
12 Rollex Group, above n 1, at [49].
13 Counsel for the defendants, Ms Weston, accepted that whatever the status of the 2015 employment contracts, SBL would have owned the Dataeye IP pursuant to a “Shareholders Subscription Agreement”. In any event, it is clearly arguable that the purpose of registering the application in Mr Martin’s name was to formalise his assertion of ownership of the rights.
[72] The third and fourth defendants did not oppose the application. They advise that they have made available to the first and second defendants all documents they hold. They wish to avoid the cost of preparing a list of documents that may do little more than duplicate the list I have directed the first and second defendants to prepare.
[73] Counsel for the plaintiffs wanted to have confidence no documents would be potentially missed through that process. In order to ensure disclosure by the first and second defendants is comprehensive, the third and fourth defendants, after receiving the list directed above, are to confirm by a brief affidavit that, having reviewed that list, they do not hold and are unaware of any other documents in those categories. In the event they are aware of further documents, and it cannot be agreed between counsel, then a telephone conference will be held to discuss how that issue is to be addressed.
Costs
[74] The first and second defendants are legally aided. Mr Slevin asked that I indicate the costs that would have been awarded but for that fact. Had Mr and Mrs Martin not been legally aided then the applicants would have been awarded costs on a 2B basis, based on a half-day hearing.
Results
[75]The plaintiffs’ application under s 65 of the Evidence Act 2006 is successful.
[76] I order that the privilege claimed in respect of the documents subject to the application set out at [64] be set aside. I direct that the first and second defendants within 20 working days prepare a list of documents that satisfies the categories referred to at [64] above.
Addendum
[77] During the preparation of this Judgment, a memorandum was received from Mr Slevin attaching a decision of the Employment Court.14 That decision has not altered my view of the above.
Associate Judge Lester
Solicitors:
Maciaszek Brown Law, Christchurch (for Plaintiffs/Applicants)
Peter C Gilbert, Christchurch (for First and Second Defendants/Respondents)
Copy to counsel:
G Slevin, Barrister, Christchurch (for Plaintiffs/Applicants)
J Moss and H Weston, Barristers, Christchurch (for First and Second Defendants/Respondents)
14 Martin v Solar Bright Limited (in liquidation)[2020] NZEmpC 144.
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