The Company (in liquidation) v The Director

[2019] NZHC 825

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2018-404-1615

[2019] NZHC 825

BETWEEN

THE COMPANY (IN LIQUIDATION)

Plaintiff

AND

THE DIRECTOR

First Defendant

THE TRUSTEES
Second Defendant

VS
Third Defendant

HM

Fourth Defendant

Hearing:	On the papers
Judgment:	21 March 2019

JUDGMENT OF DUFFY J

This judgment was delivered by me on 21 March 2019 at 10 am pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Solicitors:

Morris Legal, Auckland Kate Davenport QC,

Auckland Keegan Alexander, Auckland David PH Jones QC, Auckland Wotton Kearney, Auckland

THE COMPANY (IN LIQUIDATION) v THE DIRECTOR [2019] NZHC 825 [21 March 2019]

[1]    Matt Nippert is a journalist who works for the New Zealand Herald. He has applied for access to the court file in this proceeding and for waiver of the accompanying fee. He wants to access the statement of claim and accompanying affidavits, and any statements of defence and accompanying affidavits. He requests access on the ground the proceeding is a matter of public interest, and that access will enable fair and balanced reporting.

[2]I shall deal first with the fee waiver and then with the application for access.

Fee Waiver

[3]    The proceeding is brought in this Court’s civil jurisdiction. The principle of open justice which was recognised in Scott v Scott established, amongst other things, that the public have a genuine interest in proceedings before this Court.1 Today this interest is often exercised through representatives of responsible media organisations reporting on the business of this Court.2

[4]    There is no evidence to suggest that the fee of $30.00 to access Court records is prohibitive for media such as the New Zealand Herald. Parliament has chosen not to enable the media to access Court records for free. The requirement for a fee recognises there is some cost to the Court in processing requests to access its records.

[5]Before the Court would contemplate exercising its discretion to waive the

$30.00 fee it would need to be persuaded there was a proper basis for doing so.3 In my view this would require grounds that establish the requester is either unable to pay the fee or would experience some financial hardship if required to pay the fee. It is difficult to envisage a circumstance where a requester would readily have the means to pay the fee but still be exempted from doing so under the second limb of s 156.

[6]    In principle, journalists of responsible media outlets have a genuine interest in accessing this Court’s records because this may ensure they report accurately on Court

1      Scott v Scott [1913] AC 417.

2      See Erceg v Erceg [2016] NZSC 135, [2017] 1 NZLR 310 at [2].

3      Section 161 of the Senior Courts Act 2016 provides that a Judge may waive payment of a fee prescribed under s 156 of the Act for accessing Court records.

proceedings, which is how they can discharge their role in contributing to open justice. But, without evidence to suggest financial hardship I am not prepared to order waiver of the fee. Accordingly, the request as presently formed, is denied.

Access to records

[7]It is helpful to know something of the underlying dispute.

[8]    The plaintiff is [the company], which is a company in liquidation. It is bringing claims for summary judgment against [the director] and [the trustees]. A one day fixture is scheduled for 10 June 2019.

[9]    The claims arise out of payments made by the plaintiff to the accounts of the second and third defendants. The claims are in money had and received and breach of fiduciary duty. Specifically, the duty to exercise powers as a director of the plaintiff in good faith and for a proper purpose.

[10]   The claim against [the director], is for USD $669,900 and AUD $93,725 as well as interest from 1 January 2015.

[11]   The claim against [the director] and [the trustees] of is for $873,528.47 and interest from 1 June 2014.

[12]   The claim against VS, third defendant, is for $562,486.13 and interest from 01 June 2014 and costs. She is the third defendant and is [the director’s] wife. She has seemingly been drawn into the proceeding because she is the joint owner with the second defendants of bank accounts in which funds of the plaintiff have allegedly been wrongly or unlawfully deposited.

[13]   Mr Nippert’s request was received on 19 February 2019. It was made on a standardised form which requires the requestor provide a reason for access. The reason given was:

To provide a fair, balanced and accurate report of proceedings.

[14]   The registry sought the views of the parties. The plaintiff does not oppose access, whereas the defendants are so opposed. In addition, the third defendant has also filed an application for confidentiality orders and suppression of any material that might identify her. This application is to be called in the Duty Judge List at 10am on Monday 25 March 2019.

[15]   Access is governed by the Senior Courts (Access to Court Documents) Rules 2017. Rule 11 provides:

11       Any person may ask to access documents

(1)This rule applies if a person is not entitled to access a document relating to a proceeding or an appeal under rule 8 or 9. [access to formal court record and access rights of parties respectively]

(2)A person may ask to access any document by providing the Registrar of the relevant court registry with a letter, an email, or any other written form of request that-

(a)identifies the person and gives the person’s address; and

(b)sets out sufficient particulars of the document to enable the Registrar to identify it; and

(c)gives reasons for asking to access the document, which must set out the purpose for which the access is sought; and

(d)sets out any conditions of the right of access that the person proposes as conditions that he or she would be prepared to meet were a Judge to impose those conditions (for example, conditions that prevent or restrict the person from disclosing the document or contents of the document, or conditions that enable the person to view but not copy the document)

…

(7)A Judge may-

(a)grant a request for access under this rule in whole or in part-

(i)without conditions; or

(ii)subject to any conditions that the Judge thinks appropriate; or

(b)refuse the request; or

(c)refer the request to a Registrar for determination by that Registrar

(8)Without limiting the powers in subclause (7), the Judge may refuse a request for access under this rule solely for the reason that the request does not comply with subclause (2)(a), (b), (c), or (d).

[16]   Rule 12 provides the matters to be considered when determining a request under Rule 11:

In determining a request for access under rule 11, the Judge must consider the nature of, and the reasons given for, the request and take into account each of the following matters that is relevant to the request or any objection to the request:

a)the orderly and fair administration of justice:

b)the right of a defendant in a criminal proceeding to a fair trial:

c)the right to bring and defend civil proceedings without the disclosure of any more information about the private lives of individuals, or matters that are commercially sensitive, than is necessary to satisfy the principle of open justice:

d)the protection of other confidentiality and privacy interests (including those of children and other vulnerable members of the community) and any privilege held by, or available to, any person:

e)the principle of open justice (including the encouragement of fair and accurate reporting of, and comment on, court hearings and decisions):

f)the freedom to seek, receive, and impart information:

g)whether a document to which the request relates is subject to any restriction under rule 7:

h)any other matter that the Judge thinks appropriate.

1. Rule 13 provides the approach for the application of Rule 12:

13Approach to balancing matters considered

In applying rule 12, the Judge must have regard to the following:

(a)before the substantive hearing, the protection of confidentiality and privacy interests and the orderly and fair administration of justice may require that access to documents be limited:

(b)during the substantive hearing, open justice has—

(i)greater weight than at other stages of the proceeding; and

(ii)greater weight in relation to documents relied on in the hearing than other documents:

(c)after the substantive hearing,—

(i)open justice has greater weight in relation to documents that have been relied on in a determination than other documents; but

(ii)the protection of confidentiality and privacy interests has greater weight than would be the case during the substantive hearing.

[18]The procedure for dealing with requests and objections is set out in Rule 14:

14Procedure for dealing with requests and objections

A Judge may determine a request for access (and any objection received under rule 11(5) and referred to the Judge) in any manner the Judge considers just (including on the papers or at an oral hearing) and may-

(a)require the person asking for access to-

(i)file an interlocutory application or originating application (if the request is being dealt with in the High Court):

(ii)file a written request providing, in detail, the persons for the request, including the purpose for which the document is sought, and the matters in rule 12 that the person relies on as relevant to the request (if the request is being dealt with in the Court of Appeal or the Supreme Court); or

(b)require the person asking for access or any other person concerned to give notice of the request to any person who, in the opinion of the Judge, may be adversely affected by this request; or

(c)dispense with the giving of notice under paragraph (b), if the judge thinks it appropriate to do so.

[19]   The first and fourth defendants oppose the application on the ground it does not comply with rule 11 because Mr Nippert has not identified the matters in rule 11 that apply to his request.

[20]   The first defendant also opposes the application because Mr Nippert has not suggested any conditions upon which he would be willing to receive the information. Secondly, because a fair and balanced reporting would not be possible at this stage of the proceedings as the defendants have not yet filed their defence. Finally, because the documents sought contain confidential information such as the address of the first defendant’s family home.

[21]   The second defendants oppose the application because they contend that it would be prejudicial to them if Mr Nippert were to receive only documents outlining only the plaintiff’s case against them. Secondly, because there is no public benefit in naming the parties or the proceeding at this time as the matter relates to a private family trust, and, therefore, to do so would breach the defendants’ right to privacy.

[22]   The third defendant argues that this is a private dispute about a private company. Secondly, that from a glance at the liquidator’s report there are very few creditors of the company, and they are represented by the plaintiff. Therefore, there is no genuine public interest. Thirdly, the proceeding is at a very early stage. Fourthly, that the allegations are strenuously opposed and are reputationally damaging. In this regard the third defendant argues that no allegations of wrongdoing are made against her, so publication would do significant and undue harm to her reputation, business interests and ability to defend the proceedings filed against her. Finally, the third defendant contends that publication of details of her involvement in the proceeding may have an adverse effect on her eight year old son, who has already been the subject of bullying due to previous publicity of [the director].

[23]   The fourth defendant submits that granting access at this time would be inconsistent with the orderly and fair administration of justice. Secondly, that the documents on the Court file provide private information of the fourth defendant, specifically his name and address. This is of concern as he lives with his wife and step children, one of whom “suffers from severe anxiety and is terrified of people breaking into the house”. The fourth defendant also submits that if the court grants access to Mr Nippert, conditions preventing him from making copies of the information, publishing the fourth defendant’s name, and publishing his address should be imposed.

Analysis

[24]   The proceeding is presently at the pre-trial stage, to which r 13(a) applies. Accordingly, there is a greater expectation that protection of privacy and confidentiality interests as well as the orderly and fair administration of justice may require that access to documents be limited. Thus, the strength of the plaintiffs’ case against the defendants is untested. As was recognised in Crimson Consulting Limited

v Berry there is an element of unfairness on parties in the publication of one side of the story.4 However, in the present case since Mr Nippert filed his application for access the defendants have filed notices of opposition to the summary judgment application and affidavits in support thereof. Accordingly, the force in some of the arguments the defendants make about the documents on the Court file presenting an unbalanced view of the proceeding have been reduced. The counterpoints to the plaintiffs’ case are also present, but also untested.

[25]   In principle, I consider that fair and balanced reporting can be done through a journalist like Mr Nippert making it clear that the summary judgment application is opposed. The laws of defamation and contempt, particularly while court proceedings are live, are usually sufficient to ensure fair balanced reporting and to discourage reporting that might intrude into the merits of the claims or defences of the parties concerned or otherwise damage the reputation of the parties.

[26]   The criticisms the defendants make about the form of Mr Nippert’s request raise serious issues regarding media access to Court records. As was recognised in Crimson Consulting Limited v Berry the Rules provide for an informal procedure.5 Here the defendants appear to assert that Mr Nippert should have provided a request that contained fulsome  reasons  and  was  well  argued.  I  consider  the  form  of  Mr Nippert‘s request coupled with his profession as an accredited journalist for the New Zealand Herald is sufficient to inform the Court that his request falls under r 12

(e)  and (f). I do not see r 11 as imposing formalistic requirements for applications for access, that is neither the intent nor purpose of the Rules. Moreover, the principles of open justice are well established, and they do not need to be rehearsed in the context of an application under r 11. It logically follows that a journalist is likely to: (a) provide a fair balanced and accurate report of a proceeding; and (b) correctly and accurately express the freedom to seek, receive and impart information if the journalist has had proper opportunity to acquaint him or herself with Court documents that reveal the issues raised by the proceeding.

4      Crimson Consulting Ltd v Berry [2018] NZCA 460 at [39].

5 At [12].

[27]   Furthermore, I consider that in principle the privacy concerns expressed by the first, second and fourth defendants regarding their private addresses is something that can be addressed by imposing a condition that details of a parties’ private address not be published in any article resulting from the disclosure. This is something the Court is able to do without input from Mr Nippert.

[28]   More importantly, the privacy interests the defendants raise, in relation to the subject matter of the proceeding being a private family trust, engage matters of principle regarding how the Court manages the tensions between individuals’ privacy interests and the principle of open justice. In this regard, I note that in Crimson Consulting Limited v Berry at [40] the Court of Appeal observed that the principle of open justice and the freedom to seek information are important factors, which do not cease to work in the pre-trial stage.6

[29]   Ordinarily the matters raised by this request and the opposition would have warranted a hearing before a final determination was made. However, here Mr Nippert’s request has been overtaken by the application by the third defendant for suppression and confidentiality orders. Also, I consider that before a final decision is made on the access request either Mr Nippert or the New Zealand Herald may wish to respond to the arguments the defendants have raised, given the countervailing considerations the Court is  required  to  assess  here.  I  consider,  therefore,  that  Mr Nippert should have the opportunity to respond to the arguments in opposition to the request for access.7 I expect that the media will also want to be heard on the third defendant’s application for suppression and confidentiality.

[30]   Mr Nippert, or counsel the New Zealand Herald may choose to engage, should have a fair opportunity to be heard on the matters raised by the defendants’ opposition to the access request and to the third defendant’s application for suppression and confidentiality. I consider that Mr Nippert and/or the New Zealand Herald, whom he represents, should have access to certain documents on the Court file in this

6 Above n 4 at [40].

7      Rule 5 of the Senior Courts (Access to Court Documents) Rules 2017 recognises the Court’s inherent powers to direct requests for access to its records, which includes determination rights of reply and the form of hearing to determine such requests.

proceeding for the sole purpose of preparing their submissions. Those documents being:

(a)The pleadings;

(b)The interlocutory application for summary judgment and the affidavits filed in support; and

(c)The notices of opposition and the affidavits filed in support.

[31]   Access should be given forthwith. Without access to the above documents  Mr Nippert and/or counsel for the New Zealand Herald would essentially be preparing blind and only be able to address points of general principle. The Court will be better helped if the media can make informed arguments on the particular issues of concern here.   The limited access I am prepared to grant falls within the general request     Mr Nippert has made and therefore I consider the defendants have already been given the opportunity to address whether access should be given or not. Accordingly, I see no need to give them a further opportunity to be heard on the question of limited access.

[32]   Such access is on the condition that copies of those documents are not to be disseminated beyond Mr Nippert, his editor and counsel engaged by the New Zealand Herald. Nor are the contents of those documents to be presently used for any publication or other purpose that is unrelated to preparation of argument in support of the access request. Whether Mr Nippert and/or the New Zealand Herald can continue to hold the documents or use them for other purposes is something for later determination by this Court.

[33]   The limited access I  have  allowed  is  for  the  sole  purpose  of  enabling  Mr Nippert and the New Zealand Herald to prepare their case against the defendants’ opposition to the access request. Whether access is expanded beyond this purpose will be determined later and at the same time as the third defendant’s application for suppression and confidentiality. In this regard I note that the media commonly attends Court and hears argument in closed Court regarding confidentiality and suppression

issues. In those circumstances where the Court decides against publication, the media properly observes the Court’s orders. I see no difference between those circumstances and the approach I am taking to giving restricted access to Mr Nippert.

[34]   The request for access is to be called together with the third defendant’s application for suppression and confidentiality in the Duty Judge list at 10.00 am, Monday 25 March 2019.

Result

[35]   Mr Nippert is to be given access to (which includes given possession of copies) the documents listed in [30](a) to (c) herein.

[36]   The access is for the limited purposes set out at [32] and on the conditions set out at [33] herein.

[37]The limited access to the above documents is granted forthwith.

[38]   The request for access (in its wider aspect) is to be called together with the third defendant’s application for suppression and confidentiality in the Duty Judge list at 10 am, Monday 25 March 2019.

Duffy J