Te Wairua o te Ora Limited v Tuhoe Waikaremoana Maori Trust Board
[2016] NZHC 1013
•18 May 2016
IN THE HIGH COURT OF NEW ZEALAND
ROTORUA REGISTRY
CIV 2013-463-000340
[2016] NZHC 1013
BETWEEN TE WAIRUA O TE ORA LIMITED
Plaintiff
AND
TUHOE WAIKAREMOANA MAORI TRUST BOARD
First Defendant
RAKEIWHENUA TRUST
Second Defendant
WAYLYN TAHURI-WHAIPAKANGA
Third Defendant
Hearing: 17 May 2016 Appearances:
S Barker for the Plaintiff
F Wood for the Second and Third Defendants
Judgment:
18 May 2016
JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN
This judgment was delivered by me on
18.05.16 at 4:30pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date……………
TE WAIRUA O TE ORA LIMITED v TUHOE WAIKAREMOANA MAORI TRUST BOARD AND ORS [2016] NZHC 1013 [18 May 2016]
[1]The second and third defendants apply for orders:
(a)Requiring the plaintiff to file a second statement of claim giving further and better particulars of its claim; and
(b)Requiring the plaintiff to provide further and better discovery.
[2]The second and third defendants say:
(a)The plaintiff’s amended statement of claim dated 24 November 2014 is defective and is absent of any degree of specificity; and
(b)There are grounds for believing the plaintiff has not discovered documents that it should have.
[3] The background to this proceeding has been reviewed by the Court’s decision when refusing applications requesting the plaintiff to provide security for costs. The plaintiff had been locked out of premises it occupied. The plaintiff pleads it was developing a social services operation at the time.
The applications
[4]The defendants seek further particulars including:
(a)Details of claims of contracts, commitments or undertakings the plaintiff had entered into at the time.
(b)Particulars of actual services being provided.
(c)The names of each of the 36 employees claimed to be engaged, and the role of each.
(d)Full particulars of the people the plaintiff was looking after at the property.
(e)Full particulars of chattels allegedly removed by the second and third defendants, and the estimated value of each item.
(f)Full particulars of the people the plaintiff was caring for at the time.
(g)Details of the plaintiff’s business activities being undertaken.
(h)Particulars of claims of business operation losses.
(i)An explanation of those claims of business losses as they are described in the plaintiffs records.
(j)Particulars of the plaintiff’s claims that the third defendant “orchestrated or directed” the actions of the first defendant or the second defendant and was personally a party to the trespass, conversion, and detinue.
[5]The second and third defendants request for further discovery includes:
(a)All contracts, accounts or correspondence relating to the delivery of health, social services, or other programmes;
(b)Employment contracts, correspondence confirming employment terms, wage records and correspondence regarding the termination of employment of all 36 employees to the extent of losses claimed.
(c)Documentation verifying the existence of the chattel stock and records including asset list, inventory lists, chattels register, invoices and receipts.
(d)Documentation supporting claims of losses including invoices, bank statements, correspondence, demands from IRD, storage costs, IT system costs, contracts and invoices including rent, plant hire, printing and stationery, waste disposal, consultancy, hospitality, travel, chattels register etc.
(e)Aside from the financial accounts any documentation providing evidence of budgets, business plans, projected cash flow/earnings, or actual earnings.
(f)Documentation proving the plaintiff’s purchase of stock and chattels from Awatapu Investments Limited.
(g)All correspondence and documentation between the plaintiff and the Liquor Licensing Agency in relation to the sale of liquor from the premises and the subsequent appeal.
(h)Documentation concerning the existence or termination of the contracts with the Ministry of Social Development and Child Youth and Family.
(i)Documentation disclosing the relationship between the plaintiff and TWOTOT and the circumstances surrounding the loan of $152,332 by TWOTOT.
Evidence/submissions in support
[6] An affidavit sworn in support of the further discovery/further particulars applications asserts that discovery and further particulars was requested shortly after the case management conference scheduled in March 2015. It is deposed that prior to that conference all parties agreed further time be given to the plaintiff to respond to the defendants request informally and for that reason the case management conference was adjourned until June 2015. Prior to that conference a joint memorandum was filed seeking a further adjournment for four months on the basis that:
Mr Jeffries, the solicitor for the plaintiff, has obtained records from the accountant firm Cookson Forbes & Associates Limited and is currently working through those. To-date the files held by the trusts liquidators, PricewaterhouseCoopers and the Ministry of Education, Social Development and Health, have not been obtained. Mr Jefferies is to pursue that and ultimately it may be necessary for formal applications to be made.
[7] It is deposed that the second and third defendants have not since received a formal response to their requests. They say that information/documentation is
essential if they are to be fully informed about the plaintiff’s case and are able to properly advance the defence; that they are unable to properly instruct an expert on the issue of quantum without that information.
[8] The defendants’ position is that the plaintiffs ASOC is defective in that it is absent any degree of specificity. The defendants say the particulars sought are necessary to give them fair notice of the claim and the quantum sought.
[9] They call in aid the provisions of Rule 5.26 requiring of the general nature of the claim be shown, and that there are sufficient particulars of time, place, amounts, names of persons, nature and dates of instrument, and other circumstances to inform the Court and the parties against whom relief is sought.
[10] A defendant has a right to be informed of the case to be met; to enable a defendant to know what witnesses will be needed.
[11] Mr Wood relies on the High Court authority in Body Corporate 74246 v QBE Insurance (International) Limited1 wherein the High Court outlined three useful questions that could be asked regarding requests for further and better particulars:
(a)Has sufficient information been provided to inform the other party of the case they have to meet and to enable them to take steps to respond?
(b)Is there a real risk that the other party may face a trial by ambush if further particulars are not provided?
(c)Is the request oppressive or an unreasonable burden upon the party concerned?
[12] The defendants concern is to understand the nature of the contracts, commitments or undertakings the plaintiff allegedly entered into with Tuhoe Services Trust relating to the “delivery of health, social services, training and other contracted programmes”.
1 [2015] NZHC 1 360 at [18(h)].
[13] The defendants want to know the nature of the actual services that were being provided by the plaintiff from 14 February 2009; who were employed and who were the people they were looking after at the property. They want to know what chattels were allegedly removed and or destroyed; what business activities were being undertaken and which of those did not continue following termination of the lease. They want to know why the defendants claim they are liable for overdraft interest and IRD penalties and interest; and how the plaintiff has calculated a loss of chance of
$400,000 in respect of its business. They want to know the basis for allegations that the third defendant “orchestrated or directed” the actions of the other defendants.
[14] They consider there is a risk that they may face a trial by ambush because they have absolutely no knowledge of how the plaintiff has calculated his quantum and therefore are unable to meaningfully engage an expert on the issue.
[15] The defendants believe their request is not oppressive or unreasonable because the information sought is that which the plaintiff should have had when the ASOC was drafted.
[16] As well there has been the delay for that period during which it was agreed further information would be provided.
[17] Likewise regarding the request for further discovery Rule 8.19 provides that if it appears from the nature and circumstances of the case there is more documentation that ought to be provided then a Court has require that to be done.
[18] It is for the Court to assess whether the documents sought are relevant and important; whether there was belief they exist; whether discovery of those is proportionate; and whether in the balance of matters an order for further discovery ought to be made.
[19] Regarding the documentation sought the defendants’ claim they are relevant and important to their case and are required in order for them to properly respond to the plaintiffs quantum claim. Mr Wood submits that without the information the defendants are essentially operating in a vacuum.
[20] The defendants’ dispute claims that there were difficulties associated with the provision of records allegedly seized from them. The defendants say the plaintiffs have failed to details those documents allegedly seized. The plaintiff does not say what documents will be provided as they become available.
The plaintiff’s response
[21] It is the plaintiff’s position that its business was in its infancy and had been in operation for just over a year; that it had limited records. The plaintiff says it has provided initial discovery, a verified list of documents and that it provided an additional list of documents in December 2014. The plaintiff’s Ms Stewart has disposed many of the plaintiffs records were seized by the second and third defendants when they took possession of the premises.
[22] The plaintiff submits the essential purpose of the statement of claim is to reasonably inform the Court and the parties of the case being pursued. He submits the plaintiff’s pleading is perfectly adequate – indeed that particulars of the claim already go well beyond the bare minimum required.
[23] Objection is taken to the request for names and roles of employees. Such are not required the plaintiff submits to enable the defendants to understand what has been asserted.
[24] Regarding the chattels alleged to have been removed by the defendants, the plaintiff notes the chattels themselves are particularised later in the ASOC.
[25] Regarding requests for names of people and witnesses the plaintiff submits this is not a matter of pleading but matters of evidence for which briefs will ultimately be given.
[26] Regarding business losses the plaintiff submits the entire business was destroyed and further particulars are not required for that to be understood.
[27] Regarding claims of losses the plaintiff submits that the pleaded allegation is simple and clear and that it will be for the plaintiff to establish by expert evidence its
future loss of profits/loss of a chance. As pleaded there is no cause to claim any misunderstanding.
[28] The plaintiff criticises what it considers is a lack of any appropriate foundation for claims of further particulars/discovery. It asserts there is no evidence directly from the defendants setting out what is required and why, nor of any discussions with an expert about what is required and why.
[29] The plaintiff submits no evidential foundation has been provided in support of perceived difficulties with the pleading or why further particulars are sought – or for that matter why further discovery is required.
[30] The plaintiff says discovery has been provided to the extent required although it is recorded there were difficulties in providing records as many of those had been seized by the defendants. No affidavit evidence has been filed which challenges that assertion; that claims of the destruction of records have not been explicitly denied.
[31] The plaintiff challenges the presumption that the plaintiff’s affidavit of documents has not achieved compliance – or that documents have been retained which should have been discovered. There is no evidence direct or by implication that further documents are available which have not been discovered. It is a fact the plaintiff was a recently established company with limited records; that it no longer has the records it once had.
Considerations
[32] In the background of these applications there were informal communications between the parties to effect further discovery. Perhaps understandably the defendants considered too little information was being provided in support of significant claims of losses.
[33] Over a period of about seven months the proceeding did not progress while time was given for the plaintiff to complete discovery obligations. In the end it seems
no additional discovery was provided hence the purpose of these applications. To an extent the purpose of each overlaps the other.
[34] The plaintiff has not filed an affidavit of documents since 2014. In the Court’s view another ought to be provided but to include only any reference to documents for discovery since the previous affidavit of documents.
[35] As well the plaintiff ought to disclose relevant documents in the possession of others to which the plaintiff may have access.
[36] The proceeding is now ready for a trial to be scheduled. Significant claims have been filed but there is a lack of information that supports claims of losses or calculation of those.
[37] The Court believes some clarity ought to emerge once the defendants engage their own financial expert with whom the plaintiff’s financial expert shall consult and shall provide that same information used in loss calculations.
Other directions
[38]The plaintiff will also disclose:
(a)Copies of health, social services and other contracted programmes.
(b)Whatever evidence it has available to identify its ownership of chattels it says it lost at the time of eviction.
(c)The plaintiff is to provide such documents it has to identify income received from healthcare and related services on the one hand, and in connection with the liquor store/takeaway work element on the other.
(d)Evidence of the loan to the plaintiff of $152,332 by TWOTOT needs to be provided.
Result
[39] In part the application for further particulars and better discovery has been successful but nevertheless the Court considers any question of costs shall be reserved meanwhile.
[40] The Court believes a trial should be scheduled and directs the parties to consult for the purpose of estimating trial time needed, and appropriate timetable orders. Counsel are to file memoranda before 20 June 2016.
Associate Judge Christiansen
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