Splitz-Firewood Limited v Jacobsen

[2024] NZHC 1896

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2023-485-106

[2024] NZHC 1896

IN THE MATTER

of a breach of contract

BETWEEN

SPLITZ-FIREWOOD LIMITED

First Plaintiff

GARY MCIVOR
Second Plaintiff

AND

BRENT GRAEME JACOBSEN and WENDY LOU MCCUNE

Defendants

Hearing:

11 July 2024

Appearances:

C Bell and A Chrystall for Plaintiffs

A Butler KC and D Hardasa for Defendants (appearances not required)

Judgment:

11 July 2024

JUDGMENT OF ASSOCIATE JUDGE SKELTON

[1]                 This is an application by the second plaintiff, Gary McIvor, for a non-party discovery order against Slingshot Communications Ltd (Slingshot) pursuant to r 8.21 of the High Court Rules 2016.

[2]                 Mr McIvor seeks to obtain text messages, call logs and voice messages between 1 January 2021 and 29 June 2023 between his own mobile phone and the mobile phones of various other parties. Mr McIvor contends that the information is relevant to the issues in the proceedings and his own records of this information are materially incomplete.

SPLITZ-FIREWOOD LIMITED v JACOBSEN [2024] NZHC 1896 [11 July 2024]

[3]                 The amended application dated 15 March 2024 and Mr McIvor’s affidavit in support were served on Slingshot at its registered office on 19 March 2024. No opposition or appearance has been filed for Slingshot and the time for doing so has expired.

[4]                 The defendants have confirmed that they do not oppose the application. However, the defendants note that they do not accept all of the factual claims in the application and in Mr McIvor’s affidavit in support of the application and in the submissions on behalf of Mr McIvor in support of the application. Counsel for the defendants filed a memorandum dated 8 July 2024 confirming this position. In the circumstances I did not require the defendants to appear or be represented at the hearing.

Background

[5]                 The proceedings concern an alleged agreement between the plaintiffs and the defendants under which Mr McIvor and his company, the first plaintiff, Splitz-Firewood Ltd (SFL), would fell a number of trees on the defendants’ property.

[6]                 There is a dispute as to the existence of the contract, the terms of any contract, the performance of the services, and the nature and end of any contract.

[7]Broadly, the following issues arise in the proceedings:

(a)whether there was a contract between the parties for Mr McIvor or SFL to provide tree felling services on the defendants’ property and if so, what were the terms;

(b)to what extent did Mr McIvor or SFL provide tree felling services to the defendants; and/or breach any term of the alleged contract or a statutory guarantee;

(c)if there was a contract, were the defendants entitled to cancel, and did they cancel, the contract;

(d)to what extent have  the  defendants  retained  property  owned  by  Mr McIvor or SFL;

(e)to what extent has Mr McIvor or SFL suffered loss, and has such loss resulted from the defendants’ actions;

(f)is Mr McIvor or SFL entitled to any remedy, and if so, what remedy?

[8]                 Mr McIvor states in his affidavit that the information sought is primarily communications between him and potential witnesses in these proceedings, being:

(a)the defendants’ neighbour with whom Mr McIvor says he had initial discussions about tree felling services and who introduced Mr McIvor to the defendants;

(b)contractors for SFL who assisted with the provision of services, including a contractor who was present during the discussion at which the basis for the alleged contractual relationship was established;

(c)the health and safety officer who assisted Mr McIvor in formulating the health and safety policy and plan for the services;

(d)a vendor of equipment purchased by Mr McIvor for the provision of the services; and

(e)the supplier of logs to Mr McIvor, which Mr McIvor says he stored on the defendants’ property and have remained there.

[9]                 Mr McIvor states that he has lost or destroyed several phones over the past few years and does not have the information sought on his current device. He states he has not been able to recover the messages.

[10]            Mr McIvor states that he has contacted Slingshot to obtain the information. However, Slingshot has advised that it cannot provide the information without a Court order.

[11]            Mr McIvor states that the order he is seeking is for the production of the documents to him for inspection. He states that his intention is to review the documents provided by Slingshot and then file a further affidavit of documents listing only those messages which are discoverable and making  them  available  to  the  defendants. Mr Bell, for the plaintiffs, submits that the basis for this approach is the cost implications and time delay in requiring Slingshot to file an affidavit of documents. Further, he submits it is possible that, given some of the people that Mr McIvor was communicating with were friends, there may be information which is not relevant to these proceedings.

Legal principles

[12]Rule 8.21 of the High Court Rules 2016 provides:

8.21 Order for particular discovery against non-party after proceeding commenced

(1)This rule applies if it appears to a Judge that a person who is not a party to a proceeding may be or may have been in the control of 1 or more documents or a group of documents that the person would have had to discover if the person were a party to the proceeding.

(2)The Judge may, on application, order the person—

(a)to file an affidavit stating—

(i)whether the documents are or have been in the person’s control; and

(ii)if the documents have been but are no longer in the person’s control, the person’s best knowledge and belief as to when the documents ceased to be in the person’s control and who now has control of them; and

(b)to serve the affidavit on a party or parties specified in the order; and

(c)if the documents are in the control of the person, to make those documents available for inspection, in accordance  with rule 8.27, to the party or parties specified in the order.

(3)An application for an order under subclause (2) must be made on notice to the person and to every other party who has filed an address for service.

[13]            The power to make an order under r 8.21 is discretionary.1 However, the usual considerations of relevance and proportionality apply. The approach to non-party discovery applications is set out in Vector Gas Contracts Ltd v Contact Energy Ltd:2

(a)The court should have regard to the test under r 8.7 of the High Court Rules for standard discovery. However, the former Peruvian Guano approach, that is, the “train of inquiry” approach, may still inform non- party discovery in some instances but is not to be encouraged.

(b)A non-party discovery order must still be necessary—this means, without limitation, that other sources of evidence are “unlikely to be sufficient because they are materially incomplete or unreliable”, and “the documents sought may make a real difference, and are not merely marginal”.

(c)Section 69 of the Evidence Act 2006 applies, so that restrictions may be imposed on disclosure of confidential information.

[14]            While r 8.21(2) provides for the filing of an affidavit of documents by the non-party, it is open to the Court in its discretion to order discovery on an informal basis.3

Assessment

[15]            I am satisfied that the information sought by Mr McIvor falls within the ambit of r 8.21 of the High Court Rules. The information seems to me to be relevant or potentially relevant to the issues in dispute. The order is necessary as Mr McIvor’s own records of the information are materially incomplete. The order appears reasonable and proportionate. There are grounds for belief that Slingshot has or had documents that would be discoverable if it was a party.

1      Vector Gas Contracts Ltd v Contact Energy Ltd [2014] NZHC 3171, [2015] 2 NZLR 670 [Vector Gas] at [28].

2      At [29]-[31].

3      O’Brien v Parkinson [2021] NZHC 1193 at [80]–[81].

[16]            It is not apparent to me that there are any issues with regard to disclosure of confidential communications or information which require restrictions to be imposed at this stage. Mr McIvor will have been a party to any communications, and previously in possession of any information, made available by Slingshot. Only information relevant to the proceedings will be disclosed to the defendants who are subject to the usual restrictions on use of discovered documents under r 8.30 of the High Court Rules. The details of the potential witnesses and their phone numbers are not disclosed in this judgment.

[17]            I consider that it is appropriate in the circumstances to make an order for informal discovery by Slingshot rather than requiring Slingshot to file and serve an affidavit of documents. This will reduce the cost to Slingshot of complying with the order.

Result

[18]            Slingshot Communications Ltd is to provide non-party discovery, pursuant to r 8.21 of the High Court Rules, on the terms set out in paragraphs [1.1] and [1.2] of the amended interlocutory application for non-party discovery order dated 15 March 2024. The documents are to be made available by Slingshot Communications Ltd to counsel for the plaintiffs as soon as practicable.

[19]            The reasonable costs of Slingshot Communications Ltd in making the documents available to counsel for the plaintiffs are to be met by the plaintiffs in accordance with r 8.22 of the High Court Rules.

[20]            The first plaintiff, Mr McIvor, is to provide further discovery and make any relevant documents available for inspection by the defendants in terms of paragraphs [1.3] and [1.4] of the amended interlocutory application for non-party discovery order dated 15 March 2024.

[21]No costs orders are sought or made as between the parties to the proceeding.

Further directions

[22]            The proceeding is adjourned and is to be listed for call in the Associate Judge’s chambers list on 27 August 2024 at 9.00 am.

[23]            The parties are to file a joint memorandum  or separate memoranda at least   2 working days in advance of the conference addressing all outstanding matters in sch 5 to the High Court Rules, and seeking appropriate directions including with regard to completion of discovery and inspection and timetabling of any interlocutory applications.

Associate Judge Skelton

Solicitors:

Cullinane Steele Ltd, Wellington for Plaintiffs Strachan O’Connor, Upper Hutt for Defendants