Strahl v McKinnon - [2014] NZHC 1411

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2013-485-6758 [2014] NZHC 1411

UNDER the Declaratory Judgments Act 1908

IN THE MATTER

of an application under Part 18 of the High
Court Rules

BETWEEN

JOHN RUSSELL STRAHL Plaintiff

AND

ALEXANDER MALCOLM MCKINNON AND OTHERS

First Defendants

GOUGH HOLDINGS LIMITED Second Defendant

Hearing: On the papers

Counsel:

R J B Fowler QC for Plaintiff
J W A Johnson and G J C Carter for First and Fifth named First
Defendants

J A Farmer QC and P A Robertson for Third, Fourth, and Ninth named First Defendants

T C Weston QC and A V Foote for Fourteenth, Fifteenth and
Sixteenth named First Defendants
L J Taylor QC for Second Defendant

Judgment:

20 June 2014

JUDGMENT OF MACKENZIE J

I direct that the delivery time of this judgment is
4.45 pm on the 20th day of June 2014.

Solicitors: DLA Phillips Fox, Wellington, for Plaintiff.
Wynn Williams Lawyers, Christchurch, for First and Fifth name First Defendants
Mortlock McCormack, Christchurch, for Third, Fourth and Ninth named First
Defendants
Duncan Cotterill, Christchurch, for Fourteenth, Fifteenth and Sixteenth named First
Defendants
Clark Boyce, Christchurch, for Second Defendant

STRAHL v MCKINNON & ORS [2014] NZHC 1411 [20 June 2014]

[1] The second defendant has applied for the following orders:

(a) Suppressing all pleadings and submissions and the judgment in the proceedings CIV 2013-485-006758 until the final judgment (after all appeals have been exhausted) in CIV 2012-404-3798 (Auckland Registry) become publicly available.

(b)Suppressing all details including but not limited to the fact of this application and any affidavits and submissions and any judgment in respect of this application.

(c) Providing that if any application to view the file CIV 2013-485-

006758 is received by the Registry that the Second Defendant have an opportunity to be heard on such an application.

[2] That application was filed on 5 June 2014. In a minute issued on 6 June

2014, I gave certain directions as to the hearing of the application. Counsel for the third, fourth and ninth named first defendants, and counsel for the first and fifth named first defendants, and two other named first defendants filed memoranda advising that those parties will abide the decision of the Court and do not wish to be heard. I issued a further minute dated 13 June 2014 in which I directed that if there were no parties other than the second defendant who wished to be heard, counsel for the second defendant could file written submissions and I would deal with the matter on the papers. Counsel for the plaintiff has subsequently filed a memorandum abiding the decision of the Court. Mr Taylor QC, for the second defendant, has filed written submissions, and confirmed that there are no other parties who wish to be heard. I therefore issue this judgment, having considered Mr Taylor’s submissions.

[3] When the present application was received, I was on the point of delivering my judgment in the proceedings. I delayed that pending the hearing of the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] NZHC 1411
Decision Date: 20 June 2014

CaseChat Overview and Summary

The second defendant in the case of Strahl v McKinnon sought suppression of all pleadings and submissions, and the judgment in the proceedings CIV 2013-485-006758, until the final judgment in CIV 2012-404-3798 (Auckland Registry) become publicly available. The application was filed on 5 June 2014, and the Court issued a minute on 6 June 2014, providing certain directions as to the hearing of the application. Counsel for the third, fourth and ninth named first defendants, and counsel for the first and fifth named first defendants, and two other named first defendants filed memoranda advising that those parties would abide the decision of the Court and did not wish to be heard. The Court issued a further minute dated 13 June 2014 in which it directed that if there were no parties other than the second defendant who wished to be heard, counsel for the second defendant could file written submissions and the Court would deal with the matter on the papers.

The second defendant sought suppression of the proceedings due to the potential damage to its business, particularly its exclusive dealership for heavy equipment and machinery, which represents the largest business division of the Gough Group. The second defendant argued that the proceedings may cause irreparable damage to the second defendant and its shareholders in circumstances where ultimately the point decided in these proceedings may be moot. The Court considered the principle of open justice, which was reaffirmed by the Court of Appeal in Broadcasting Corporation of New Zealand v Attorney-General. The Court found that the circumstances of this case did not justify suppression of the proceedings and dismissed the application.

The Court held that the interpretation of the constitution of the second defendant was not a matter which had the potential to cause damage to the second defendant. The Court noted that the constitution was a document of public record under the Companies Act 1993 and that any declaration by the Court about the interpretation of the constitution should similarly be a matter of public record. The Court found that the publicity which the proceedings may attract was not a factor which weighed in favour of the orders sought, even on an interim basis. The Court also found that concern about Caterpillar's reaction was not a factor which carried significant weight in favour of suppression.

The Court held that the second defendant's role in these proceedings was not closer to that of a disinterested third party than to a defendant with an interest opposed to that of the plaintiff. The Court found that the interests of a wholly owned family company did not constitute a separate and independent interest which should be taken into account in applying the principle of open justice. The Court held that the proceedings involved the interpretation of a company constitution, which was a matter of public record, in which the public and all persons having dealings with the company had a potential interest. The Court dismissed the application and directed that the affidavit of Mr Smith sworn on 3 June 2014 was not to be accessed in the period prescribed in r 3.9(1) without the permission of a judge.

Orders