Swan v Grant - [2016] NZCA 244

IN THE COURT OF APPEAL OF NEW ZEALAND

CA436/2015
[2016] NZCA 244

BETWEEN	ANDREW MCGREGOR SWAN Appellant
AND	DAMIEN GRANT AND STEVEN KHOV AS LIQUIDATORS OF ROSEBUD CORPORATE TRUSTEE LIMITED Respondents

Hearing:	2 May 2016
Court:	Winkelmann, Simon France and Woolford JJ
Counsel:	S P Bryers for Appellant B J Norling and A Cherkashina for Respondents
Judgment:	2 June 2016 at 12.30 pm

JUDGMENT OF THE COURT

AThe applications for leave to adduce fresh evidence are declined.
BThe appeal is allowed.
CThe order as to costs in the High Court is quashed. A new order as to costs in respect of the High Court proceedings is made as follows. The appellant must pay the respondents costs in the High Court of $4,776.00 and usual disbursements.
DThe respondents must pay the appellant costs for standard appeal on a band A basis and usual disbursements.

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REASONS OF THE COURT

(Given by Winkelmann J)

Introduction

The issue on appeal is whether Lang J was correct to order that a barrister pay costs on a liquidator’s application for production of a company’s documents, where the barrister resisted production because the barrister believed the documents were not the company’s.

Factual background

Mr Swan acted for Rosebud Corporate Trustee Ltd (Rosebud) over a period of years. When Rosebud was placed in liquidation, the liquidators asked him to deliver up copies of documents he held for Rosebud. Mr Swan’s response to that request was that he had no records of Rosebud’s whatsoever other than copies of court documents the liquidators already had. In January 2015, the liquidators repeated their request. On this occasion Mr Swan’s response was different. He asserted litigation and legal advice privilege in respect of the documents and said “[u]nless you have any authority that this does not apply to liquidations or otherwise I cannot release any documents.”
The liquidators duly provided Mr Swan with the authority he sought: s 261 of the Companies Act 1993, which gave the liquidators the power to request copies of the company’s documents, including from solicitors acting for the company. Nevertheless, Mr Swan continued to maintain what he called “privilege”, a somewhat incomprehensible claim in the circumstances. We infer he meant that the documents were Rosebud’s, and he did not accept the liquidators’ authority to uplift them.
Because of Mr Swan’s intransigence, in February 2015 the liquidators commenced proceedings seeking orders that Mr Swan produce Rosebud’s books, records and documents. Mr Swan initially defended the proceeding, but by 18 March 2015, Mr Swan seems to have seen the error of his ways as on that date he provided the liquidators with “all books, records and documents of Rosebud”. But when the liquidators asked him to undertake he had provided all of Rosebud’s documents, he failed to do so. Instead he raised a further issue. On 24 March 2015, he told the liquidators that he held numerous emails from a Mr Rod Nielsen, whom he said was a discretionary beneficiary of the Rosebud Trust. Rosebud was 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.

Continue reading Swan v Grant

Details

AGLC: Swan v Grant [2016] NZCA 244
Case: [2016] NZCA 244
Decision Date: 2 June 2016 at 12.30 pm

CaseChat Overview and Summary

In the case of Swan v Grant, the Court of Appeal of New Zealand was tasked with determining whether the trial judge was correct in ordering a barrister to pay costs on a liquidator's application for the production of company documents. The barrister had resisted the production of the documents, asserting that they did not belong to the company. The appellant, Andrew McGregor Swan, had acted for Rosebud Corporate Trustee Ltd over several years. Upon the company's liquidation, the liquidators requested the delivery of documents held by Mr Swan. Mr Swan initially claimed litigation and legal advice privilege, but later provided the documents, except for those he believed belonged to a discretionary beneficiary of the Rosebud Trust. The liquidators commenced proceedings to obtain the outstanding documents, and the trial judge ordered Mr Swan to pay the costs of the proceeding. Mr Swan appealed the decision, arguing that if he had handed over the documents, he might have breached his ethical obligations to his client.

The court found that the trial judge had proceeded on the mistaken basis that the liquidators were successful and Mr Swan unsuccessful in relation to the issue of the status of the balance of the documents. As a result, the Court of Appeal declined the applications for leave to adduce further evidence, allowed the appeal, and quashed the order of costs made in the High Court. Instead, Mr Swan was ordered to pay the liquidators' costs in the High Court in the sum of $4,776.00 and usual disbursements, while the liquidators were ordered to pay Mr Swan costs for a standard appeal on a band A basis and usual disbursements.

Orders