Vandy v Vandy
[2019] NZHC 3080
•25 November 2019
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2018-419-0329
[2019] NZHC 3080
UNDER Part 18 of the High Court Rules and s 51 of the Trustee Act 1956 and the Declaratory Judgments Act 1908 IN THE MATTER
of The Vandy Family Trust
BETWEEN
GLEN HUDSON VANDY, JANE
ELIZABETH SOMERVILLE and PAUL NICHOLAS VANDY
Plaintiffs
AND
ERIC GREENWELL VANDY, RAGLAN TRUSTEES LIMITED and VERNA GAZETTA VANDY
Defendants
Hearing: 30 September 2019 Appearances:
P A Fuscic for the Plaintiffs
D Delic and J Hooper for the Defendants
Judgment:
25 November 2019
JUDGMENT OF ASSOCIATE JUDGE SMITH
This judgment was delivered by me on 25 November 2019 at 4.30 pm pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors / Counsel:
McVeagh Fleming, Auckland SD Legal Ltd, Hamilton
VANDY v VANDY [2019] NZHC 3080 [25 November 2019]
[1] By application dated 18 July 2019, the plaintiffs applied for the following orders:
1.1That the defendants file and serve a Supplementary Affidavit of Documents which lists and identifies each of the documents contained in Part 3 of the Defendants' Affidavit of Documents dated 28 June 2019 in a schedule that complies with r 8.16 and the listing and exchange protocol in Part 2 of Schedule 9 of the High Court Rules.
1.2Setting aside the defendants' confidentiality claim in respect of the documents and directing their production to the plaintiffs in accordance with the prescribed protocol.
1.3That the defendants file and serve a statement verified by affidavit in answer to the plaintiffs' Notice to Answer Interrogatories dated 05 July 2019.
1.4For such further or other order for the due discovery and inspection of documents and for the answering of interrogatories as this Honourable Court considers necessary and appropriate.
1.5Costs.
[2] The plaintiffs contended first that the defendants' verified list of documents dated 28 June 2019 did not comply with the High Court Rules 2016, in that it did not adequately identify each of the documents listed as being confidential and unavailable for inspection by the plaintiffs.1 They said that at least some of these documents were relevant and should be disclosed and made available for inspection.
[3] Arising out of their concerns about the defendants' discovery, the plaintiffs had administered a number of interrogatories. The defendants provided answers to those interrogatories on 19 July 2019, but the plaintiffs are dissatisfied with a number of the
1 Item 6(1), Part 2, Schedule 9. Item 6(1) provides:
6 Protocol requirements
(1) Parties are required to—
(a)list documents, providing the following detail for each document:
(i) document ID:
(ii) date:
(iii) document type:
(iv) author:
(v) recipient:
(vi) parent document ID:
(vii) privilege category; and
(b)exchange documents electronically by way of—
(i) a single, continuous table or spreadsheet, with each column exclusively containing the detail from paragraph (a); and (ii) multi-page images in PDF format (or another format if agreed).
responses, particularly those responding to questions seeking clarification of document descriptions in the defendants’ discovery list, and/or allegedly relevant documents that were not disclosed.
[4] In their notice of opposition, the defendants opposed all of the orders sought by the plaintiffs. They said that the documents described in the list as "confidential" were in fact irrelevant to the issues in the proceeding. To the extent that the Court might conclude that these documents are relevant, the defendants contended in the alternative that the disclosure of the confidential documents could damage their interests, as there would be a serious risk of the confidential documents being used for purposes other than this proceeding. For that reason they should be permitted to limit the inspection of the confidential documents as they have proposed.
Background
The plaintiffs and the Trust
[5] The plaintiffs (Glen, Jane and Paul) are the three children of Eric Greenwell Vandy (Eric) and Margaret Vandy (Margaret). Margaret died in 2004.
[6] By Deed dated 1 April 2004 (the Trust Deed), Eric and Margaret settled a Trust called the Vandy Family Trust (the Trust). The discretionary beneficiaries of the Trust included Eric, Margaret, Eric and Margaret’s children, and Eric and Margaret’s (now eight) grandchildren. On the date of final distribution of the Trust fund, the trustees were directed to hold the fund for “such person or persons as [Eric] and [Margaret] may during their joint lifetimes appoint, and failing such appointment for such of the children of [Eric] and [Margaret] as are living at the date of distribution, and if more than one in equal shares”. 2
[7] The Trust Deed provided that the power of appointment of new trustees was vested in Eric and Margaret during their lifetime, and after their death in the administrator or the executors of trustees for the time being of their will. In the
2 That provision was qualified by the common “substituted issue” proviso, under which the child or children of any child of Eric and Margaret who died before the distribution date would take the share that his, her or their parent would take if he or she had survived to the distribution date.
absence of any administrator, executor or trustee able and willing to act after the death of Eric or Margaret, the Trust Deed provided that the power of appointment would be vested in the person or persons in whom the statutory power is vested by the Trustee Act 1956.
[8]Clause 18.1(1) of the Trust Deed provided:
18.1The Settlor expresses the wish (but without intending to bind the Trustees that in exercising any discretion given to them by this Deed the Trustees:
(1)give preference to the wishes of the Settlor (whether expressed in writing during the Settlor’s lifetime or in his or her Will), provided that those wishes are expressed personally and not by any personal representative, assignee or other person having lawful control over the assets or affairs of the Settlor.
[9] The original trustees of the Trust were Eric, Margaret and JW Trustees Ltd. Following Margaret's death, there have been further changes in the trustees as follows. On 18 July 2011, Eric purportedly exercised his power of appointment under the Trust Deed to appoint Magill Earle Trustees (2008) Ltd as trustee in place of JW Trustees Ltd. And on 23 July 2018 Eric, acting under the same power of appointment, purportedly appointed the third-named defendant Verna Gazetta Vandy (Verna) and Raglan Trustees Ltd as trustees in place of Magill Earle Trustees (2008) Ltd.
[10] The principal asset of the Trust is a beachside home at Raglan formerly owned by Eric and Margaret (the property). The property was transferred to the Trust shortly before Margaret's death.
[11] The plaintiffs say that their parents' intention in establishing the Trust and settling the Raglan property on the Trust was to leave them an inheritance of the family home (i.e. the property) after Eric's death, so that the property would always be available for their enjoyment.
Events following Margaret’s death
[12] Because Margaret owned very few assets, no application was made for probate of her last will.
[13] Eric married Verna in 2005. By written memorandum of wishes dated 28 July 2008 addressed to the then-trustees of the Trust, Eric expressed his wish that Verna should be permitted to live for as long as she wished in any dwelling house owned by the Trust, on the basis that she would pay all normal outgoings during her occupation.
[14] In 2011 Eric borrowed $75,000 from ANZ National Bank (ANZ), and he and his co-trustee at the time allowed the property to be used as security for the loan. ANZ’s mortgage was discharged in 2013, but within two months after the discharge a further mortgage was registered on the title to the property. The mortgagee under the second mortgage was Ark Resources Ltd (Ark), and the amount secured was
$76,209.14 (with priority for lending of up to $150,000).
[15] At a meeting held on 13 February 2018 at the offices of Magill Earle (solicitors for the Trust and for Eric and Verna personally), attended by Glen and Jane,3 Eric and Verna advised of their wish that 50 per cent of the property be gifted through Eric to Verna. The proposal was confirmed in writing by Mr Magill on 15 February 2018. He advised Glen and Jane that Eric and Verna wished to sell the property and buy another property, which they would purchase as tenants in common in equal shares. The proposal was rejected by Glen and Jane.
[16] Mr Magill advised in March 2018 that his firm was no longer acting for Eric and Verna. Glen then began making enquiries into the financial position of the Trust. It was then that he learned that Eric had mortgaged the property, and that he had purported to appoint Raglan Trustees Ltd as trustee in place of Magill Earle Trustees (2008) Ltd.
[17] Eric and Verna put the property on the market later in 2018. An auction sale was scheduled for 25 October 2018, but the plaintiffs threatened legal action to prevent the sale. The defendants agreed to take the property off the market temporarily, at the plaintiffs’ request.
[18] The plaintiffs say that on 25 September 2018, Eric told Glen on the telephone that the property was not in a trust, that it was Eric's property, and that he could do
3 The third plaintiff, Paul, lives overseas and did not attend.
what he liked with it. They say that Eric made a similar statement to Jane in another meeting.
The plaintiffs’ claims
[19] The plaintiffs say that the defendants' actions have caused them to be concerned that the property will be taken out of the Trust.
[20] In their first amended statement of claim (the Claim), the plaintiffs plead five causes of action. In their first cause of action, they apply for the removal of the defendants as trustees and the appointment of a new trustee. They rely primarily on the defendants’ actions in putting the property on the market for sale, which they say was contrary to the purpose of the Trust Deed, and what they see as a conflict of interest between Verna’s position as a potential claimant against the Trust and her role as trustee. They also contend that Eric no longer has the cognitive skills and/or mental capacity to make appropriate decisions as a trustee. As an alternative to the removal of the trustees, they seek an enquiry into Eric's mental capacity and an order suspending his power of appointment under the Trust Deed under further order of the Court. Finally, they ask for orders removing the property from the market and staying any attempt to sell or deal with it until further order of the Court.
[21] In their second cause of action, the plaintiffs seek an order under s 68 of the Trustee Act 1956 setting aside the defendants' decision to sell the property and distribute the proceeds of sale.
[22] The plaintiffs’ third cause of action relates to access to the Trust's records. They say that as trustees of the Trust the defendants owe them a duty as beneficiaries to keep proper accounts, and to give information as requested concerning the Trust. They ask for an order directing the defendants to disclose all relevant updated information in their power concerning the financial affairs of the Trust, including the mortgages registered against the property, the Trust’s assets and liabilities, how the funds borrowed under those mortgages were spent, updated independent accounts for the Trust, resolutions of trustees, any memoranda to another trust or third party, documents involving or concerning the Verna Family Trust, and a distribution schedule including information as to the income and rents received from the property.
[23] In their fourth cause of action, the plaintiffs say that, as Margaret's will had not been probated at the times Eric purported to exercise his power of appointment of new trustees, and he was not the executor or administrator of Margaret's last will, the power of appointment enjoyed by Margaret under the Trust Deed was never vested in Eric. For that reason, the property has never been validly vested in the defendants, and the defendants have no right, power or authority to administer the Trust or to sell or otherwise deal with the property. They seek an order removing the defendants as trustees and appointing a new trustee, and an order suspending Eric's power of appointment under the Trust Deed pending further order of the Court. They also seek an order removing the property from the market, and staying any sale pending further order of the Court.
[24] In their fifth cause of action, the plaintiffs allege misconduct in the administration of the Trust. The alleged misconduct is the same as that pleaded in their fourth cause of action. They seek a declaration that Raglan Trustees Ltd and Verna are not trustees of the Trust. In addition, they seek orders (i) for the removal of the defendants as trustees and their replacement by a new trustee, (ii) for the suspension of Eric's power of appointment, and (iii) preventing any sale of the property pending further order of the Court.
The defendants’ statement of defence
[25] In their first amended statement of defence dated 28 May 2019 (the Defence), the defendants deny that it was necessary to obtain any grant of probate of Margaret's will, as Margaret's personal estate did not contain assets in excess of the prescribed amount under the Administration Act 1969. They say also that the final distribution of Margaret's estate has taken place.
[26] The defendants deny that the plaintiffs are the sole final beneficiaries of the trust. They contend that under cl 9.1 of the Trust Deed Eric and Margaret had the ability during their lifetime to appoint other final beneficiaries of the trust. They say that all beneficiaries are discretionary beneficiaries, and that the Trust Deed confers wide discretionary powers on the trustees to deal with Trust property.
[27] The defendants deny the plaintiffs' contention that Eric and Margaret settled the property on the Trust so that the plaintiffs would be able to enjoy it in the future. They say that Eric and Margaret's primary intention and objective was to provide for their own security and wellbeing, by providing for their enjoyment of the Trust’s assets during their lifetimes. Of course the property would go to the plaintiffs and their children on the death of the survivor of Eric and Margaret.
[28] The defendants say that the power of appointment of new trustees was validly exercised on the occasions to which the plaintiffs have referred.
[29] The defendants admit the mortgages to ANZ and Ark. They say that the loan from Ark was an interest-free loan to Eric and Verna jointly, and that the balance as at September 2018 was $16,986.53, an amount Eric and Verna are in a position to repay in full.
[30] On the meeting at Mr Magill's offices on 13 February 2018, the defendants say that the purpose of the meeting was to try to reach a consensus on Eric and Verna's ongoing welfare, security and living arrangements in their old age, recognising that the property (in which they both live) is owned by the Trust. The defendants say that Eric and Verna were concerned that the property required a high level of maintenance, and was no longer fit for its purpose. They wanted to replace it with a different property, which would be a sounder investment for the Trust.
[31] The defendants say that Mr Magill proposed at the meeting that the Trust sell the property, with 50 per cent of the sale proceeds to be made available to Verna on the basis that she had contributed a substantial sum to Eric and Verna's relationship and to the maintenance and expenses of the property over the years Eric and Verna had been married. In making that proposal, Mr Magill did not express any predetermination by the trustees at the time as to the final course of action they would take.
[32] In response to the plaintiffs' allegations relating to the listing of the property for sale in 2018, the defendants say that the plaintiffs knew about the intention to sell the property and purchase something more manageable from as early as 2014, and
they had known since January 2018 that the property would be put on the market in September of that year. They admit that the property was scheduled to be auctioned on 25 October 2018, and that the property was withdrawn from sale in October 2018 so that the dispute with the plaintiffs could be dealt with by negotiation or mediation. However they say that the plaintiffs did not follow through on their expressed intention to negotiate or mediate.
[33] They admit that Eric made the statements to Glen and Jane to the effect that the Trust was his Trust and he could do what he liked with it, but say that Eric acknowledges that his statements were made in error, and arose out of his frustration with Glen's interference in the Trust's affairs, and pressure and provocation from Glen. The defendants say that Eric is aware of his rights and obligations as a trustee, and that he has always sought legal advice before taking any action. They accept that Glen made a similar statement to Jane, but say that the statement was merely Eric's expression of his understanding of the office of trustee, and that, as a trustee, he had a discretion to deal with the Trust property in accordance with the Trust Deed.
[34] The defendants deny that the plaintiffs are entitled to any of the relief sought in their five causes of action. They say also that the expectations of Eric and Margaret as settlors are not determinative in the exercise of the trustees' discretionary decision-making powers.
[35] The defendants admit that they have not had financial accounts for the Trust prepared by accountants. They say that was never considered necessary or appropriate, as the property is the only Trust asset. They admit that they have allowed the property to be mortgaged but deny that allowing the property to be mortgaged was contrary to the purposes of the Trust or outside the powers conferred on the trustees by the Trust Deed. They deny the plaintiffs’ allegations about Eric’s mental capacity.
[36] In response to the plaintiffs’ second cause of action, the defendants deny that there is any basis for the relief sought. Alternatively, they contend that the plaintiffs have no standing to bring a claim under s 68 of the Trustee Act.
[37] On the third cause of action, relating to the supply of information to the plaintiffs as beneficiaries, the defendants deny that they were obliged to give the plaintiffs all the information they requested. As discretionary beneficiaries, the plaintiffs were entitled to some, but not all, of the records they sought. The defendants specifically deny that the plaintiffs are entitled to documents concerning the Verna Family Trust, memoranda of wishes, memoranda to third parties, or information regarding how advances made to beneficiaries have been spent by those beneficiaries. They say that all documents the plaintiffs were entitled to see have been disclosed and are now in the plaintiffs' possession.
[38] On the fourth cause of action (alleged invalid appointment of trustees), the defendants repeat their denial that a grant of probate in Margaret's estate was necessary. They say that Eric properly exercised his power of appointment under cl 14.1 of the Trust Deed.
[39] In response to the fifth cause of action, the defendants deny any misconduct. They say further that the plaintiffs as discretionary beneficiaries have no standing to bring a claim under s 51 of the Trustee Act.
[40] The defendants plead a number of affirmative defences. First, they rely on their discretion under the Trust Deed to deal with the Trust property, and the plaintiffs’ alleged lack of standing, as discretionary beneficiaries only, to seek relief under ss 67, 68, and 51 of the Trustee Act.
[41] The defendants next plead that the plaintiffs' actions in challenging the sale of the property and commencing this proceeding, have caused them loss in the form of the loss of the opportunity to purchase a new home. They refer to a previous flood at the property, and the risk of further flooding at the property which would cause significant damage and affect their ability to sell the property in the future.
[42] The defendants ask for orders declaring that they have been validly appointed pursuant to Eric's power of appointment under the Trust deed. They also ask for directions under ss 64 and/or 66 of the Trustee Act 1956 that the trustees may sell, deal
with or distribute the property at their discretion, in accordance with the powers granted to them by the Trust Deed.
The plaintiffs’ reply
[43] The plaintiffs have filed a short reply (the Reply) to the affirmative allegations in the Defence. In the Reply, the plaintiffs contend that they do have standing under the relevant sections of the Trustee Act, because they are not only discretionary beneficiaries but also the named final beneficiaries under the Trust Deed. They admit the various powers contained in the Trust Deed that the defendants identify, but say that such powers must be exercised for proper purposes. They deny that their actions have caused the defendants any loss, and they deny that the defendants are entitled to the relief they seek in the Defence.
[44]The plaintiffs also allege the following in the Reply:
7.1Aside from knowing that the defendants want to sell [the property] and of a proposal that 50% of the sale proceeds would be made available to Verna, the defendants have failed or refused to provide any or sufficient particulars of just how they will deal with or distribute the property or proceeds of its sale and full particulars thereof are sought.
The discovery order and the defendants’ discovery lists
[45] At a case management conference convened on 28 May 2019, the plaintiffs asked for an order for tailored discovery of a number of categories of documents, some of which were objected to by the defendants. The Associate Judge was unable to resolve the objections in the short time available at the conference, and an order was made for standard discovery under r 8.7.
[46] The defendants filed their discovery list on 28 June 2019. It contained the following:
9.In Part 3 of the Schedule, we list the documents that are in our control and for which we claim confidentiality. We propose that inspection of these documents be restricted and that the following restrictions apply:
(a)No inspection or exchange of confidential documents listed in Part 3 of the Schedule be ordered; and/or
(b)Inspection of confidential documents is limited to counsel for the Plaintiffs and is limited to inspection at the offices of Counsel for the Defendants, and no copy of the document may be made.
…
Part 3
Documents which are in the Defendants’ control and for which the Defendant claims confidentiality. – C
Doc ID Date
Summary
Priv
VFT.3.01
Various
Documents relating to distributions from the VFT (if
existing)
C
VFT.3.02
Various
Previous or current Wills of EGV
C
VFT.3.03
Various
Documents relating to the personal affairs of VGV,
including financial or medical
C
VFT.3.04
Various
Documents relating to the personal affairs of EGV,
including financial or medical
C
VFT.3.05
Various
Eric’s memoranda of wishes
C
VFT.3.06
Various
Settlors memoranda of wishes and any other
document including diary, notes, letters, cards relative to their intentions concerning
the VFT or the VFT assets (if existing)
C
VFT.3.07
Various
All documents containing any reference to settlors’
intentions and purpose of the VFT (if existing)
C
VFT.3.08
Various
Documents including
correspondences concerning or relating to borrowing funds secured over VFT property (if
existing)
C
VFT.3.09
Various
Memoranda between VFT and third parties
C
VFT.3.10 Various
Documents relating to facts or information concerning and relevant to how they
intend to deal with the proceeds of sale (if existing)
C
VFT.3.11
Various
Documents held in files held by Jon Webb, former
solicitors of EGV, VGV and/or VFT (if existing)
C
VFT.3.12
Various
Documents held in files held by Magill Earl, former
solicitors of EGV, VGV and/or VFT (if existing)
C
[47]The abbreviations used in the table were as follows: “VFT” - Vandy Family Trust
“EGV” - Eric
“VGV” - Verna
[48] The bases for the claims to confidentiality were not stated in the list, and, in respect of seven of the 12 categories of documents listed in Part 3, it can be seen that the plaintiffs were unable to say whether there were any documents in the categories (“if existing”). No dates or descriptions were provided for any individual documents.
[49] In his submissions at the hearing, Mr Delic, for the defendants, explained that Part 3 of the defendants’ discovery list was included out of an abundance of caution, to show that the categories referred to (which had been included in the plaintiffs’ request for tailored discovery) had at least been addressed. No individual documents were identified in the Part 3 categories because the defendants did not consider any of these categories were relevant to the issues in the proceeding.
[50] With his written submissions, Mr Delic provided a draft supplementary affidavit of documents, which would amend and replace Part 3 of the defendants’ affidavit of documents filed on 28 June 2019 in its entirety. The draft supplementary affidavit again proposed that inspection of the Part 3 documents would be limited to counsel for the plaintiffs, and would only be made available at the offices of counsel for the defendant. No copies could be taken.
[51] The revised Part 3 in the draft supplementary list consisted of the following table:
Doc ID Date Description Author Rec. Prnt ID Priv. VFT.3.01 1/04/04 Will of EGV EGV C VFT.3.02 22/02/07 Will of EGV EGV C VFT.3.03 28/07/08 Will of EGV EGV C VFT.3.04 28/07/08 MoW of EGV EGV C VFT.3.05 16/06/11 ARL Term Loan Agreement ARL EGV & VGV C VFT.3.06 12/08/11 MoW of EGV EGV C VFT.3.07 23/07/18 MoW of EGV EGV C VFT.3.08 23/07/18 Will of EGV EGV C VFT.3.09 22/03/19 MoW of EGV EGV C VFT.3.10 22/03/19 Will of EGV EGV C
[52] The references to "EGV" and "ARL" in the above table are references to Eric and Ark respectively. The expression "MoW" means "Memorandum of Wishes", and "VGV" refers to Verna.
[53] Mr Delic explained in his submissions that the documents in this table are documents that do exist and could, potentially, be relevant.
The plaintiffs’ interrogatories and the defendants’ answers
[54] The plaintiffs have challenged the defendants’ answers to interrogatories numbers 5.12, 5.14 and 5.15, which relate generally to the borrowings from ANZ and Ark. They have also challenged the defendants’ answers to interrogations 5.30-5.41. These interrogatories were concerned with the 12 document categories referred to by the defendants in Part 3 of their discovery list. In respect of each of the 12 categories, the plaintiffs asked “What are the documents concerned?”, and “On what basis is it claimed that the document is confidential?”
[55] In each case, the defendants objected to answering the interrogatory on the basis that:
… the question relates to a procedural or discovery matter and is not relevant to a fact or issue in the substantive proceedings, is an abuse of the interrogatory process, and/or is unduly onerous or oppressive to answer.
[56] Mr Fuscic, for the plaintiffs, acknowledges that interrogatories 5.30-5.41 cover essentially the same ground as the application relating to discovery of the 12 document
categories, and that the application will likely fall away as a result of the Court’s determination of the discovery issues.
The arguments for the parties
The plaintiffs
[57] Mr Fuscic submitted that the broad purpose of the proceeding is to protect the Trust’s only asset, the property, from being sold and disposed of to (or shared with) a non-beneficiary, namely Verna, in defiance of Eric's and Margaret's intention that the property should be kept for the ultimate use of the plaintiffs and their children. Eric and Margaret’s joint wishes for the property are likely to be defeated if the Court does not intervene.
[58] On the issue of confidentiality raised by the defendants, Mr Fuscic referred to the principles discussed by the Court of Appeal in Port Nelson Ltd v Commerce Commission, including the need for confidentiality claims to be assessed on a document-by-document basis.4 He referred to the defendants' failure to include in their discovery list a description of the documents for which confidentiality was asserted, the defendants' refusal to show the documents concerned to the plaintiffs' counsel (on any basis), and the defendants’ refusal to give particulars of these documents in response to the plaintiffs' interrogatories.
[59] On the claimed risk that the allegedly confidential documents might be misused if disclosure were ordered, Mr Fuscic submitted that the defendants are adequately protected by r 8.30 of the High Court Rules, which strictly limits the use to which a party can put a document disclosed by the other party on discovery.
[60] Mr Fuscic submitted that the defendants have wrongly resisted disclosure on the basis of general principles applicable where a discretionary beneficiary seeks documents or information from the trustees of a trust. Here, a court proceeding is pending, and the plaintiffs' entitlement to the documents and information sought is governed by the provisions of the High Court Rules.
4 Port Nelson Ltd v Commerce Commission (1994) 7 PRNZ 344 (CA) at 349.
[61] Mr Fuscic referred to the defendants' obligations as trustees to account to the beneficiaries, and their duty to administer the Trust assets in accordance with the Trust deed.
[62]Mr Fuscic asked for the following orders:
(36)Setting aside the defendants [sic] claim of confidentiality in respect of documents referred to in Part 3 of their Affidavit of Documents dated 28 June 2019.
(37)That the defendants within 3 working days to file and serve a Supplementary Affidavit of Documents which lists such documents in accordance with r 8.16 and the listing and exchange protocol in Part 2 of Schedule 9 of the High Court Rules and to provide inspection of the [documents] accordingly.
(38)That the defendants within 3 working days to file and serve a Verified Answer to the Plaintiffs' Notice of Interrogatories dated 5 July 2019 with respect to interrogatories 5.12 to 5.15 inclusive and 5.30 to 5.41 inclusive.
(39)Costs [to the plaintiffs] on an indemnity basis.
The defendants
[63] Mr Delic submitted that the Court should not permit discovery for "fishing expeditions", and that documents required to be disclosed under a discovery order must be relevant to the pleadings in the case.5 He also referred to the general law of trusts, submitting that the Court is entitled to take into account any confidentiality of personal or trust documents where a beneficiary of a trust would not otherwise be entitled to them, even where such documents may be relevant to a pleading.
[64] Mr Delic addressed in his submissions each of the documents listed in the table at [46] of this judgment. In respect of a number of them, the defendants' position is that, to their knowledge, no such documents exist. That is the case with the documents identified as VFT.3.01, VFT.3.06, and VFT.3.07.
[65] To the extent that the documents listed in the table exist, they are Eric’s personal documents, including wills and memoranda of wishes. The plaintiffs are attempting in this proceeding to seize control of the Trust so that they can advance
5 Referring to Gavin v Powell [2018] NZHC 2866 at [35].
their own agenda, and the defendants have deposed that the disclosure of personal documents is likely to give the plaintiffs even more power over the lives of Eric and Verna. The Court should exercise its discretion to uphold the defendants' claims to confidentiality, and decline to order discovery and inspection of those documents.
[66] On the issue of the relevance of the documents sought by the plaintiffs, Mr Delic submitted that the plaintiffs have misunderstood their entitlement as beneficiaries, in the following respects:
(a)they have (wrongly) elevated their own status above the status of other discretionary beneficiaries;
(b)they have (wrongly) elevated the importance of the wishes and intentions of a deceased settlor (Margaret) above those of the living settlor (Eric) because it better serves their interests;
(c)they have ignored the legitimacy of the trustees taking into account in the exercise of their discretion personal contributions to the Trust assets made by Verna;
(d)they have raised irrelevant grievances over Eric and Verna's personal spending, which is unrelated to the Trust;
(e)they have incorrectly ascribed to the trustees a duty to retain Trust assets that is inconsistent with the trustees’ unfettered discretion in relation to the administration of the Trust; and
(f)they have incorrectly ascribed to the trustees a duty not to take into account the wishes of only one class of beneficiaries when exercising their discretion, which the law and the Trust Deed expressly allow the trustees to do.
[67] Mr Delic submitted that the defendants have generally provided full and comprehensive answers to the plaintiffs’ interrogatories. However the defendants have objected to answering two categories of questions. The first category relates to
loans taken out by Eric and Verna personally, which were secured over the property (interrogatories 5.12 to 5.15). The second category relates to the documents listed at Part 3 of the defendants' verified list of documents (interrogatories 5.30 to 5.41).
[68] Mr Delic submitted that the reasons for Eric's and Verna's personal borrowings, how much was borrowed, what it was used for, and how much has been repaid, are irrelevant to any issue in the proceeding. The loans were private. Mr Delic accepted that the existence of a loan secured by mortgage over the property might be relevant on the pleadings, but documents and resolutions showing decisions to provide security have already been discovered. What was done with the funds can have no bearing on Eric and Verna's administration or management of the Trust.
[69] Addressing interrogatories 5.30 to 5.41, Mr Delic provided a table setting out the defendants' reasons (separately in respect of each document) for resisting discovery and/or inspection. That table is reproduced as Appendix A to this judgment.
[70] In addition to the listed reasons, Mr Delic submitted that it was in any event inappropriate for the plaintiffs to use the interrogatories procedure to enquire about documents that have neither been listed nor produced for inspection. The proper purpose of interrogatories is to expediently require admission of facts which are in issue on the pleadings.
[71] In summary, Mr Delic submitted that there are no documents in any category of potential relevance that have not already been disclosed, except for those listed in Appendix A to this judgment. However the defendants are content to leave the question of further discovery to the Court. Mr Delic invited the Court to either: (1) exercise its discretion to decline to make the orders sought by the plaintiffs, or (2) state which of the documents listed in Appendix A have been correctly identified as confidential, and which ought to be disclosed by the defendants.
[72]Mr Delic submitted that costs on the application should be reserved.
Supplementary submissions for the plaintiffs
[73] Mr Fuscic noted that the Memorandum of Wishes to trustees signed by Eric on 28 July 2008 (in which Eric expressed the wish that Verna should be permitted to live in the property for as long as she liked) has been disclosed, but there has been no further disclosure relevant to Eric's wishes as expressed to the trustees. There were five wills made by Eric, and four memoranda setting out his wishes, only one of which has been disclosed. Mr Fuscic asked, "Why hide the rest?"
[74] Mr Fuscic submitted that any confidentiality must give way to the “adverse documents” test for discovery. He noted that the onus of proof of confidentiality lies on the party asserting the confidentiality,6 and he referred to the interests of justice in ensuring that a party is able to adequately prepare and present its case.
[75] Disclosure in this case will not involve any prejudice, in the sense dealt with by the Supreme Court in Erceg v Erceg.7 There are no beneficiaries involved who are not parties to the proceeding (the plaintiffs should be regarded as representing their children’s interests), and the Court will not lightly allow an allegation of possible prejudice to the discovering party through disclosure to lead to a restriction precluding the other party's access to the document.8
[76] Mr Fuscic submitted that there is a need for discovery of trustees’ documents, showing the reasons for their decision to put the property on the market for sale. That is relevant to both the plaintiffs’ claims and the defendants’ applications under ss 64 and 66 of the Trustee Act. Relevant questions will be why the property should be sold, why it should be disposed of to someone who is not an object of the Trust, how likely it is that that will occur, and whether the circumstances warrant removal and replacement of the trustees.
[77] Mr Fuscic submitted that the defendants' proposed supplementary affidavit of documents is still deficient, and does not give the tailored discovery the plaintiffs have sought. The defendants' submissions and draft supplementary discovery list make it
6 Referring to Port Nelson Ltd v Commerce Commission, above n 4.
7 Erceg v Erceg [2017] NZSC 28, [2017] 1 NZLR 320.
8 Referring to Payment Express Ltd v Paymark [2019] NZHC 2027 at [12].
clear that the categories of documents referred to in Part 3 of their verified list were broadly intended to be the categories the plaintiffs had sought in their request for tailored discovery, but it has now become apparent that there were only a few documents in the confidential list, namely wills and settlors' memoranda of wishes. The question is where are all the documents within the other categories of documents the plaintiffs sought by way of tailored discovery.9 As this Court said in Burgess v Monk, if a party seeks particular discovery, the question should be "why not" rather than "why".10
[78] Mr Fuscic asked for an order requiring the defendants to specifically discover the documents requested by the plaintiffs in their request for tailored discovery.
DISCUSSION AND CONCLUSIONS
The applications relating to the defendants’ discovery
The issues
[79] The plaintiffs’ first application relates to the proper identification of the documents listed in Part 3 of the defendants’ verified list. That concern appears to have been addressed, at least in respect of the documents now described as VFT.3.01
– VFT.3.10 in the draft supplementary list provided by Mr Delic with his written submissions.
[80] The defendants’ position appears to be that those documents are the only documents that exist and are in the defendants’ control that:
(1)were sought by the plaintiffs by way of tailored discovery, but not disclosed by the defendants; and
(2)are considered by the defendants to be at least potentially relevant.
9 As identified in [12] of the plaintiffs’ counsel’s memoranda for the May 2019 case management conference.
10 Burgess v Monk [2016] NZHC 527 at [8]
[81] There remain issues over the description of documents in the categories originally described as VFT.3.11 and VFT.3.12 (documents held by the solicitors formerly acting for Eric, Verna and/or the Trust), and over the relevance of any additional documents in the defendants’ control which fall within any of the categories originally described as VFT.3.01-VFT.3.12 in the table at [46] of this judgment.
[82] While the defendants followed a confusing and seemingly contradictory procedure in including in their discovery list (at Part 3) broad descriptions of categories of documents they now say are irrelevant11, it appears from Part 3 itself, in particular from the use of the expression “if existing”, that the defendants had not conducted any search for documents in these categories. In those circumstances, I doubt that it can be said that the defendants expressly or impliedly conceded the relevance of everything in these broad categories, and I think the fairest course is to deal with them on the basis that their relevance is in issue.
[83] Approaching the matter on that basis, I think it is for the plaintiffs on this application to show that there are grounds for believing that the defendants have not discovered one or more documents in these broad categories that should have been discovered.
[84] I will deal first with the issue of which documents are relevant, and then address the defendants’ claims to confidentiality protection for any documents which I find are relevant.
Particular discovery applications - Legal principles
[85]Rule 8.19 provides:
8.19 Order for particular discovery against party after proceeding commenced
If at any stage of the proceeding it appears to a Judge, from evidence or from the nature or circumstances of the case or from any document filed in the proceeding, that there are grounds for believing that a party has not discovered 1 or more documents or a group of documents that should have been discovered, the Judge may order that party—
11Mr Delic said in his submissions that “No documents have been listed at Part 3 in accordance with the listing and exchange protocol because none are relevant.”
(a)to file an affidavit stating—
(i)whether the documents are or have been in the party’s control; and
(ii)if they have been but are no longer in the party’s control, the party’s best knowledge and belief as to when the documents ceased to be in the party’s control and who now has control of them; and
(b)to serve the affidavit on the other party or parties; and
(c)if the documents are in the person’s control, to make those documents available for inspection, in accordance with rule 8.27, to the other party or parties.
[86] In considering applications under r 8.19, the Court usually follows the four- stage approach adopted by Asher J in Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd:12
(1)Are the documents sought relevant, and if so how important will they be?
(2)Are there grounds for belief that the documents sought exist? This will often be a matter of inference. How strong is that evidence?
(3)Is discovery proportionate (balancing the time and cost of discovery against the potential value of discovery)?
(4)Weighing and balancing these matters, in the Court’s discretion applying r 8.19, is an order appropriate?
[87] The first three stages are each necessary, but not of themselves sufficient, conditions of jurisdiction, as they are still subject to the weighing and balancing exercise in the fourth stage: Lyttleton Port Company Ltd v Aon New Zealand.13
[88] Applying these principles in the context of a beneficiary’s claim against a trustee, Mr Delic submitted that beneficiaries are not ordinarily entitled to access to any memoranda of wishes the settlors may have provided to the trustees, or to the
12 Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760 at [14].
13 Lyttleton Port Company Ltd v Aon New Zealand [2016] NZHC 2996 at [8].
trustees’ reasons for their exercise of discretions conferred on them by a trust deed.14 But Erceg v Erceg was a case decided on a beneficiary’s application to the Court for orders directing the trustees to provide information relating to the relevant trusts – there was no concurrent application for removal of the trustees based on their alleged unfairness or impartiality, or their failure to comply with the trust deeds or the settlor’s wishes in particular respects, as there is in this case. And I am not here exercising the Court’s trust supervisory jurisdiction, as the Court was in Erceg v Erceg– I am dealing with an interlocutory discovery application.
[89] The distinction was noted in Gavin v Powell,15 where Nation J cited the following passage from Lewin on Trusts:16
On the other hand, documents which are normally, or may in the discretion of the court, be withheld under the trust supervisory jurisdiction, may come within the scope of standard disclosure, or a wider (or narrower) order made by the court. Confidentiality may be a powerful reason for refusing or limiting disclosure under the trust supervisory jurisdiction. In general, however, though the court has a discretion, confidentiality, even of third parties, is not a reason for excluding or limiting disclosure or inspection under Part 31 of the Civil Procedure Rules. Further, the rule under the trust supervisory jurisdiction, that the court will not order disclosure in favour of a beneficiary of the trustees’ reasons for exercising a power or discretion, and normally will not order disclosure of documents concerning the trustees’ reasons, does not exclude the obligation to give disclosure of documents under Part 31 of the Civil Procedure Rules in litigation when the validity or propriety of the trustees’ actions is impeached or otherwise some other relief is sought beyond the provision of disclosure itself. Similarly, in such litigation the trustees can be required under Part 18 of the Civil Procedure Rules to provide further information about the reasons, and can be cross-examined at trial about them. (Footnotes omitted)
[90] Nation J also referred to Equity and Trusts in Australia and New Zealand, where the learned authors said:17
[40] Yet if a decision taken by trustees is directly attacked in legal proceedings, the trustees may be compelled legally, through discovery or subpoena, to disclose the substance of the reasons for their decision. Moreover, if a plaintiff puts forward a prima facie case that the trustee’s discretion has miscarried, the absence of reasons and the absence of any evidence before the court as to what happened will tend to make that prima
14 Relying on Erceg v Erceg, above n 7, at [54] and [55], referring (on the issue of disclosure of memoranda of wishes) to Breakspear v Ackland [2008] EWHC 220, [2009] Ch 32.
15 Gavin v Powell [2018] NZHC 2866 at [38] – [42].
16 Lynton Tucker, Nicholas Le Poidevin and James Brightwell Lewin on Trusts (19th ed, Sweet & Maxwell, London, 2014) at [23-099].
17 G E Dal Pont and D R C Chalmers Equity and Trusts in Australia and New Zealand (2nd ed, LBC Information Services, Sydney, 2000) at 622. .
facie case “a virtual certainty”. So trustees may be compelled practically to disclose reasons for the decision in issue in order to avoid adverse inferences from being drawn. If the trustees divulge reasons for their decisions, the court may then assess the correctness of the reasoning. (Footnotes omitted)
Relevance of the Part 3 documents – Documents in the draft supplementary list
[91] In their first cause of action, in which the plaintiffs seek the removal of the defendants as trustees, the principal matters relied upon by the plaintiffs are the trustees’ decision to put the property on the market in 2018, and their apparent wish to make a distribution of 50 per cent of the proceeds of sale to Eric (enabling Eric to gift that 50 per cent to Verna). The plaintiffs allege that the defendants have failed to act (or will fail to act) fairly and impartially in respect of those matters, and that they have not exercised their powers (or will not exercise their powers) in accordance with the purposes of the Trust Deed – they have instead acted (or they intend to act) in the interests of Eric and Verna, to the detriment of the other beneficiaries of the Trust. They say that Verna is not an object of the Trust, and that Eric has treated the property as his own, without proper regard for his responsibilities as a trustee. They allege that the trustees have not exercised (or will not exercise) their powers in a responsible manner in accordance with the Trust Deed, but for reasons that are “irrational, perverse or irrelevant to any sensible expectation of the settlors”.
[92] In addition, the plaintiffs allege failure by the defendants to keep financial accounts for the Trust, or details of receipts and payments, and that they have allowed the principal Trust asset to be mortgaged for repayment of money not invested for the purposes of the Trust.
[93] Given those pleadings, I accept that the four memoranda of wishes (described as documents VFT.3.04, VFT.3.06, VFT.3.07 and VFT.3.09 in the draft supplementary list) will be relevant, if and to the extent that they contain statements relating to the sale or future use of the property, or to the direct or indirect payment or distribution of any Trust assets to, or for the benefit of, Verna.
[94] Trustees must generally have regard to any wishes expressed by a settlor,18 and in this case cl. 18.1(1) of the Trust Deed expressed the (non-binding) wish of Eric and
18 Chambers v S R Hamilton Corporate Trustee Ltd [2017] NZCA 3278 at [98].
Margaret that in the exercise of any discretions under the Trust Deed, the trustees should give preference to any wishes Eric and Margaret might have expressed in writing (whether during their lifetimes or by will).
[95] The extent to which the trustees took into account the settlors’ views on the issues referred to at [93] above is directly in issue on the first cause of action.19
[96] The memoranda of wishes will also be relevant to the extent they touch on the use of the property as security for the personal borrowings of Eric and/or Verna. The propriety of the trustees allowing the mortgages to be registered is raised in the plaintiffs’ first cause of action, and although the schedule of trustees’ powers annexed to the Trust Deed does permit the trustees to borrow money in the interests of any discretionary beneficiary, and to provide security for the loan over any property of the Trust,20 the questions arise as to:
(1)Whether the amount and terms of the loan were appropriate; and
(2)Whether the loans were taken out solely in Eric’s interests or whether they were taken out wholly or in part in Verna’s interests.
[97] I conclude on the four memoranda of wishes that they will be relevant, if and to the extent they contain statements or express wishes:
(1)with respect to the sale or future use of the property; or
(2)relating to the direct or indirect payment or distribution of Trust assets to Verna; or
19 In particular, on the plaintiffs’ pleading that the trustees’ exercise of their powers has been “irrelevant to any sensible expectations of the settlors”. Anything in writing shedding light on what were the settlors’ expectations will be relevant to that pleading, and the memoranda of wishes will also be relevant (to the extent they refer to the issues described at [93] above) on the plaintiffs’ pleading that the defendants “have acted and intend to act with the purpose of serving the self- interests of Eric and/or Verna and to give and/or make available [the property] and/or its proceeds of sale directly or indirectly to Verna.”
20 Schedule of Trustees’ Powers at [16].
(3)relating to the provision of security over the property for the ANZ and/or Ark loans.
[98] Turning to Eric’s five wills referred to in the draft supplementary list,21 the plaintiffs seek access to them to the extent they contain any expression relevant to the intention and purpose of the Trust.
[99] The first of the wills was signed on the same day the Trust Deed was signed, and it seems more likely than not that, to the extent it mentioned the Trust at all, it could be of assistance on the issue of what Eric and Margaret intended when they established the Trust. In my view, the April 2004 will is relevant to the extent that it may touch on the future use or sale of the property, or on broader issues of what Eric and Margaret saw as the purpose or purposes of the Trust. However, I do not see how Eric’s later wills could assist on the question of the purpose of the Trust or how relevant provisions of the Trust deed should be interpreted. Margaret had died and Eric had remarried before the later wills were signed, and there is no evidence that the contents of these wills were ever communicated to Eric’s co-trustees (so as to potentially influence their decision-making in relation to the property, or the indirect payment or distribution of Trust assets to Verna). Eric’s last will presumably revoked his earlier wills in the usual way, and his last will would necessarily only have effect after his death. It is difficult to see how a document which would only have effect on the death of its author could assist on the issue of whether the author did or did not misconduct himself or herself in the office of trustee during his or her lifetime. I am not satisfied that the plaintiffs have shown that the wills of 22 February 2007, 28 July 2007, 23 July 2018 or 22 March 2019 are relevant.
[100] The last of the documents listed in the defendants’ draft supplementary list is an Ark term loan agreement dated 16 June 2011. The principal issue would appear to be the propriety of the trustees’ decision to allow the property to be used as security for the loan. On that issue, I think the amount and terms of the loan must be relevant, as they go to the extent of risk the trustees were apparently prepared to accept in permitting the property to be used as security, and thus the extent to which the
21 Dated 1 April 2004, 22 February 2007, 28 July 2007, 23 July 2018, and 22 March 2019.
plaintiffs’ interests as beneficiaries might have been prejudiced in the event of default by Eric and/or Verna as borrowers. In my view, the Ark term loan agreement of 16 July 2011 is relevant on that basis.
Relevance of other Part 3 documents not listed in the draft supplementary list
[101] Mr Fuscic asked for discovery of all documents in respect of which his clients had sought tailored discovery, to the extent those documents were not included in the defendants’ discovery list. I am not prepared to make a wide order of that sort. In the end, the order made by Associate Judge Andrew was for standard discovery, and it was for the defendants to assess all of the documents in their control and make decisions (with the assistance of their lawyers) as to their relevance. To the extent the plaintiffs were then unhappy with the level of the defendants’ disclosure, it was for the plaintiffs to apply for particular discovery under r 8.19.
[102]I will address each of the document categories in Part 3 in turn.
Document VFT.3.01 - all distributions of the Trust
[103] The request appears to be primarily directed to payments or distributions the trustees may have made to Verna. The defendants admit in the Defence that Verna does not fall within the range of objects or beneficiaries intended by the settlors in making the settlement, and Mr Delic said in his submissions that there have been no distributions to any non-beneficiary. He submitted that beneficiaries are not in any event normally entitled to be made aware of distributions made by a trustee to other beneficiaries.
[104] The defendants have deposed that there was no Trust bank account, and that expenses on the property have had to be paid by Eric and Verna personally. The Trust had no cash or other assets (apart from the property) from which it could have made distributions. In their affidavit, the defendants attached a summary of rents received from the cottage on the property, and they provided some details of expenses paid by them over the period from 2014 to 2018. In each of those years, the rent receipts were modest (ranging from $2,210 to $9,800), and they were exceeded by expenses. Details
of the expenditure incurred in each of those years has been provided, and none of the expenses appears to be excessive or unusual.
[105] The amounts of money involved in this case are modest and, in my view, the precise details of how much was received by way of rent, and how much paid by way of expenses, do not appear to be relevant to any of the plaintiffs’ first, second, fourth or fifth causes of action. As Mr Fuscic put it in his submissions, the real issues in the case are why the trustees put the property on the market for sale in 2018, and (what he submitted was) the “hopeless conflict of interest” between Eric and Verna’s personal interests (including Verna’s interest as a potential claimant against the Trust) and their responsibilities as trustees. The plaintiffs’ third cause of action does broadly seek orders compelling the defendants to provide the plaintiffs, as beneficiaries, with a proper accounting, but the defendants’ failure to keep formal financial statements is acknowledged, and the plaintiffs’ entitlement to a full accounting will be one of the issues for trial – it is not something to be pre-determined on an interlocutory application such as this.
[106] In summary, I am satisfied that any distributions the trustees might have made would have been very modest. Quantification now is unlikely to be necessary to resolve the substantive issues at trial. Ordering discovery in those circumstances would, in my view, be disproportionate in terms of both time and cost. I decline to order further discovery of documents in this category.
VFT.3.02 - Eric’s previous or current wills
[107] I have already addressed this category in dealing with the documents disclosed in the draft supplementary list.
Document VFT.3.03 - Documents concerning Verna’s financial or medical affairs
[108] I accept Mr Delic’s submission that these documents are personal and confidential to Verna, and do not appear to be relevant to the issues in the dispute. The one exception to that would be any documents in which Verna may have asserted any claim against the Trust or the Trust property, whether under the Property (Relationships) Act 1976 or in the law of trust. Any such documents would be relevant
to the plaintiffs’ contention that Verna has failed and/or will fail to act impartially, having regard to her personal interests.
[109] Mr Fuscic seeks discovery of documents relating to any contributions, maintenance or expenses associated with the property that may have been paid by Verna, but I consider that full discovery of such documents would go beyond the bounds of relevance in the present proceeding. This proceeding is not a proceeding to decide the merits of any claims Verna might have against the property: it is primarily concerned with the possibility that Verna might make such a claim, and how such a claim might impact on the real issues of whether the trustees could properly have concluded that the property should be sold, and (if so) what should be done with the proceeds of sale. In my view, the detailed further disclosure sought by the plaintiffs is neither relevant nor proportionate, except to the extent that undisclosed documents might exist showing:
(1)that Verna will or may make a claim against the Trust, and
(2)(if such documents exist) the amount of, and basis for, any such claim.
Document VFT.3.04 - Documents relating to the personal affairs of Eric, including financial or medical
[110] As noted above, the defendants acknowledge that modest rental income has been paid to Eric, and that those receipts have been used to contribute to outgoings and expenses on the property.
[111] In my view, Eric’s financial position has been sufficiently described in the defendants’ affidavit on 26 July 2019, and the plaintiffs have failed to establish either:
(1)that there are grounds to believe that further relevant documents exist relating to his financial position; or
(2)that (to the extent such documents might exist), it would be proportionate to order their disclosure.
[112] The position appears to be a relatively simple one – the defendants have deposed that there are no Trust funds, apart from the property, nor any Trust bank account for payment of outgoings on the property. Eric has deposed that he is on superannuation, and that he has also received a small annual income from a water filter business. Superannuation, the income from the water filter business, and the modest revenue received from the guest unit on the property are all that he and Verna have had to live on. Any further disclosure about Eric’s financial situation would, in my view, be disproportionate. I decline to order it.
[113] On the subject of Eric’s medical condition, the defendants have disclosed a certificate from a psychiatrist dated 18 March 2019, addressing Eric’s capacity to make decisions regarding the Trust. Mr Delic submitted that this letter sufficiently addresses any issue of capacity, and that it would be unnecessary, irrelevant, and disproportionate to order further discovery.
[114] At [31.8] of the Claim, the plaintiffs plead a series of episodes or events going back to 2014, in support of a contention that Eric suffers from mental impairment and consequently reduced decisional capacity, such that he is not fit to be a trustee. These episodes or events are denied by the defendants.
[115] Given the extent of the various matters pleaded by the plaintiffs, and the acknowledgement of the psychiatrist in her March 2019 report that Eric does suffer to some extent from cognitive impairment, I am satisfied that Eric’s medical records over a longer period than that addressed in the March 2019 report are relevant. In my view, Eric’s medical records (to the extent that they address any cognitive or mental capacity issues) are relevant and discoverable for the full period covered by the plaintiffs’ pleading, namely from 1 January 2014 to the present time.
Categories VFT.3.05 and VFT.3.06 - Memoranda of wishes
[116] I have already dealt with Eric’s memoranda of wishes as disclosed in the defendants’ draft supplementary list. I have directed that those memoranda are relevant for discovery purposes, to the extent they may touch on or relate to the issues identified at [93] of this judgment.
[117] In respect of category VFT.3.06, settlors’ memoranda of wishes, including any diary notes concerning the settlors’ intentions relating to the Trust and the Trust assets, Mr Delic advised in his submissions that no further documents in this category exist. In those circumstances, it will be enough for the defendants to state in their supplementary affidavit that no documents in category VFT.3.06 exist that have not already been disclosed. (If any further documents in this category are located, they will be relevant to the extent they may touch on or relate to the issues identified at [93] of this judgment).
Document category VFT.3.07 - All documents containing any reference to the settlors’ intentions and purpose of the Trust.
[118] Again, Mr Delic advised that, to the defendants’ knowledge, no further documents in this category exist. I make the same orders in respect of this category of documents as I made in respect of category VFT.3.06 – the defendants are to state in their supplementary affidavit of documents that no documents exist in category VFT.3.07 that have not already been disclosed. In the event that any further documents are located in this category, they will be relevant to the extent they may touch on or relate to the issues identified at [93] of this judgment.
Document category VFT.3.08 - Documents/correspondence concerning or relating to borrowing funds secured over the property
[119] I have already directed that the Ark term loan agreement, listed in the draft supplementary list, is relevant. For the same reasons, I am of the view that documents showing the terms of the ANZ loan are relevant.
[120] In addition, the purposes of the loans, and the reason(s) the trustees elected to permit the property to be used as security are, in my view, relevant. Any documents in the defendants’ control showing the reason(s) for the borrowings (and the trustees’ reason(s) for agreeing to provide security) that have not already been disclosed are likely to be relevant in showing who would benefit from the loans (Eric, Verna, or both), and whether the trustees were acting reasonably in agreeing to provide the security. They should be disclosed accordingly. Documents showing who received the loan funds (Eric, Verna or both) will be relevant, and if the loan funds were expended for purposes other than those disclosed to the trustees, documents showing how the
loan funds were applied will be relevant. If and to the extent Verna received part of the loan funds, documents showing how much she received will be relevant. Beyond that, I am not satisfied that further discovery of documents in this category would be proportionate.
Document category VFT.3.09 - Memoranda between the Trust and third parties
[121] It is not clear what relevance any memoranda or other communications with third parties might have. This request for further discovery appears to be in the fishing category. It is refused accordingly.
Document category VFT.3.10 - Documents concerning how the trustees propose to deal with the proceeds of sale
[122] This topic was addressed by the defendants in their answer to the plaintiffs’ interrogatory 5.4. The defendants said:
The plans have only gone so far as the purchase of a low-maintenance home for the latter years. The trustees were also concerned to ensure that they did right by Verna and the beneficiaries, and were cognisant of the potential adverse claims by Verna or her personal representatives against the Trust due to the relationship property or constructive trust and considered it their duty to minimise any potential claim.
[123] The defendants say that all relevant documents in this category have been listed, and that they do not know of any other documents. If that is the position, it should be stated on oath in the supplementary discovery list the defendants will be required to swear. Beyond that, I have no basis to find that there are grounds to believe that further documents exist. This request for further discovery is refused on that basis.
Document categories VFT.3.11 and VFT.3.12 - Documents held by the defendants’ former solicitors
[124] In his submissions, Mr Delic has asserted legal professional privilege for these categories. To the extent the claims to privilege are not upheld, the defendants say that the documents are private and confidential, and are not relevant to any issues in the proceeding.
[125] I do not think it is for the Court to do the defendants’ job for them on these document categories. It was for the defendants to obtain the files from the former solicitors, go through them, and with the assistance of their current solicitors, assess the relevance of each document. In respect of each document considered to be relevant, it was then for them to decide which (if any) should be the subject of claims to legal professional privilege22 and/or confidentiality. It appears that this has not been done, and it is the defendants’ task to do it. In the supplementary discovery list they will be required to swear, they will need to list any relevant documents on the Jon Webb and Magill Earl files which they consider to be relevant, and make any claims to legal professional privilege or confidentiality that they and their advisors consider to be justified. It is not sufficient to make a broad claim of irrelevance, privilege or confidentiality for an entire file – each document needs to be reviewed separately.
The defendants’ claims to confidentiality
[126] In the draft supplementary list, the defendants propose that access to relevant documents which the Court considers to be confidential should be limited to counsel for the plaintiffs. The defendants are concerned that the plaintiffs are attempting to seize control of the Trust, so that they can advance their own agenda. Eric and Verna say that the disclosure of their documents is likely to give the plaintiffs “even more control over their lives”. On that basis, the defendants submit that the Court should decline to order discovery of any documents it accepts meet the test for confidentiality. They rely on the Court’s broad discretion under s 69 of the Evidence Act 2006 to direct that a confidential communication, or confidential information, should not be disclosed in a proceeding.
[127] Mr Fuscic first submitted that the onus on any claim for confidentiality lies on the party claiming the confidentiality.23 But even if there is a basis for confidentiality in this case, it would have to give way to the obligation to disclose the documents
22 Taking into account the limitations on a trustee’s ability to claim legal professional privilege in a claim brought against him or her by a beneficiary, where the relevant legal advice was concerned with the administration of the trust and not with the beneficiary’s threatened or actual claim (Burgess v Monk, above n 10, at [9]-[10]).
23 Port Nelson Ltd v Commerce Commission, above n 4.
under the adverse documents test, and the plaintiffs’ need to properly prepare for the trial.
[128] Mr Fuscic submitted that one of Eric’s memoranda of wishes (dated 28 July 2008) has been disclosed, and there is no reasonable basis for refusing to disclose the other memoranda. He referred to cl 18(1) of the Trust Deed, in which the trustees are expressly permitted to give preference to the wishes of the settlors. The Trust Deed contained no provision requiring the trustees to keep matters relating to the administration of the Trust confidential, and the insertion of cl 18 in the Trust Deed, which all beneficiaries could be expected to have access to, implied that no particular confidentiality was intended as far as any preferential treatment for Eric was concerned.
[129] In response to the defendants’ concern that the plaintiffs might misuse the documents sought by them to exert improper control over the lives of Eric and Verna, Mr Fuscic referred to r 8.30(4) of the High Court Rules. It provides that a party who obtains a document by way of inspection, or who makes a copy of a document under the rule, may only use the document for the purposes of the proceeding. The party inspecting must not make it available to any other person unless it has been read out in open Court.
[130] Mr Fuscic referred to Port Nelson Ltd v Commerce Commission, for the following propositions:24
(1)the ability to inspect documents is an important aspect of the litigation process. It avoids surprise and enables legal advisers to establish the real issues and better assess the likely outcome of trial. Where relevant documents are confidential, the Court may take steps to prevent unnecessary disclosure.
(2)An order for non-disclosure can only be made when the Court considers it necessary. It must be apparent either from the document itself or from some other evidence that disclosure would be likely to prejudice the party in some significant way.
(3)Assessment of prejudice can only be undertaken in respect of individual documents. It should generally be possible for counsel to agree as to special protection: where there is a genuine point of difference which warrants referral to the Court, the matter can be decided by a Judge.
24 At 344
[131] Dealing first with the documents listed in the draft supplementary list, I do not consider that the defendants have made out any basis to resist inspection of the memoranda of wishes, at least to the extent they touch on or relate to the issues identified at [93] of this judgment. To the extent the memoranda of wishes may deal with other matters, appropriate redactions can be made.
[132] Nor do I see any basis for resisting inspection of Eric’s April 2004 Will, subject again to the redaction of parts of the Will that do not touch on or relate to the interpretation of the Trust Deed and/or the future use or sale of the property.
[133] The last of the documents listed in the draft supplementary list was the Term Loan Agreement relating to the Ark loan. Again, no sufficient basis has been put forward for a claim for confidentiality in respect of this document. It is to be listed in a sworn supplementary list, and promptly thereafter made available to the plaintiffs for inspection.
[134] Turning to the other document categories listed in the table at [46] of this judgment, I have determined in some cases that the categories are irrelevant or need not be disclosed for proportionality reasons. Others have already been addressed because they were listed in the defendants’ draft supplementary list produced by Mr Delic with his submissions.
[135] I considered that documents in category VFT.3.03 would be irrelevant, except to the extent that they may disclose any claim, or threatened claim, Verna might have made against the Trust, including the amount of such claim. The existence and amount of any such claim or threatened claim is important on the issue of whether the property should be sold, and if it is, what is to be done with the proceeds of sale. Given the central nature of that issue, I think it is unrealistic to expect that the details of any such claim or threatened claim should not be made available to the plaintiffs now. I decline to make any confidentiality order in respect of the documents in category VFT.3.03 (to the extent I have held those documents to be relevant).
[136] Turning to the documents in category VFT.3.04 (personal affairs of Eric, financial or medical), I note that the March 2019 psychiatrist’s report has already been
disclosed to the plaintiffs. I have held that any other medical records for Eric (to the extent that they address any cognitive or mental capacity issues) from 1 January 2014 to the present time are relevant and discoverable. If the March 2019 psychiatrist report was not considered confidential, I have no basis to conclude that other medical records addressing Eric’s cognitive skills and/or mental capacity within the period should be protected from inspection by the plaintiffs. The plaintiffs will be well aware of their obligation not to use any such records for any purpose beyond this court proceeding, and I am not satisfied that the argument of probable or possible misuse of those documents by the plaintiffs has been sufficiently made out. No other reasonable basis for confidentiality protection having been advanced, I decline to make any confidentiality order relating to Eric’s medical records. Any medical records or reports that I have held are relevant and discoverable should be listed in the supplementary discovery list the defendants will be required to file, and promptly made available for inspection by the plaintiffs.
[137] Document category VFT 3.08 was concerned with documents, including correspondence, relating to the borrowing of funds secured over the property. The critical issue here appears to be whether the loans were taken out, or the property provided as security, in Eric’s interests or in the interests of Verna. Mr Delic advised that documents and resolutions showing the trustees’ decisions to provide security have been discovered, but he submitted what was done with the funds has no bearing on Eric and Verna’s administration or management of the Trust.
[138] The defendants have not put forward other than a broad general claim to confidentiality, and in my view the need for the plaintiffs and the Court to have all relevant information must trump any confidentiality concerns of the defendants in respect of these documents. I decline to order any confidentiality protection for the relevant documents in category VFT.3.08. Those documents should be listed in the sworn supplementary list of documents the defendant will be ordered to provide, and made available to the plaintiffs for inspection promptly thereafter.
The application for an order relating to the answers to interrogatories
[139]No orders are necessary on the application relating to interrogatories 5.30 -
5.41 – the orders I have made relating to the defendants’ discovery are sufficient to address those interrogatories.
[140] The remaining interrogatories are numbers 5.12, 5.14 and 5.15. The plaintiffs’ questions and the defendants’ answers, are set out below:
5.12On 17 August 2011 a mortgage to ANZ National Bank Limited (ANZ mortgage) was registered against the title to [the property] purporting to secure a loan of
$75,000.00 to Eric as recorded in a written Resolution of Trustees dated 04 August 2011 signed by Eric and Magill Earl Trustees (2008) Limited. In respect of this mortgage please answer the following questions:
(a)For what purpose was the loan raised?
The Defendants object to answering 5.12(a) on the basis that it is irrelevant to a fact or issue in the proceedings why separate funds were raised or what they were spent on.
(b)What was the loaned money expended on? (In answering this question please provide the names of the accounts to which the monies was paid, and out of which it was expended, how it was spent and to whom it was spent and the dates of expenditure).
The Defendants object to answering 5.12(b) on the basis that it is irrelevant to a fact or issue in the proceedings why separate funds were raised or what they were spent on.
5.14On 18 October 2013 a mortgage was registered against [the property] to [Ark] purporting to be for the principal amount of $76,209.14 (being the initial advances secured by the mortgage), with priority sum of $150,000.00 plus costs
…, as recorded in a written Resolution of Trustees dated 17 October 2013 signed by Eric and Magill Earl Trustees (2008) Limited. In respect of this mortgage please answer the following questions:
(a)For what purpose was the loan raised?
Eric and Verna had a previous interest-free loan from [Ark] which was secured over a separate property. On the sale of separate property, the security was transferred to [the property].
(b)On what was the loan money expended? (In answering this question please provide the names of the accounts to which the monies was paid and expended out of, how it was spent and to whom it was spent and the dates of expenditure).
The Defendants object to answering 5.14(b) on the basis that it is irrelevant to a fact or issue in the proceedings why separate funds were raised or what they were spent on.
5.15In respect of the repayments made towards the reduction of principal owing under [the Ark] mortgage and interest, please advise of the source of the monies used to make such payments, the name and account number of the bank account(s) from which such payments are being made?
The Defendants object to answering 5.15 on the basis that it is irrelevant to a fact or issue in the proceedings what arrangements are in place for their separate funds and borrowing. No interest applied in the transaction.
[141] For the reasons I have given on the corresponding discovery issue, I consider the defendants must provide an answer to question 5.12(a). In my view, the issue raised by the question is relevant.
[142] On question 5.12(b), I consider the question is relevant to the issue of whether the loan monies were paid to Eric or Verna. It will be sufficient for the defendants to answer question 5.12(b) by confirming that the loan monies were expended on the purpose for which the loan was raised, and by stating how much of the loan (if any) was paid to or for the benefit of Verna. If and to the extent the loan monies were not expended for the purpose or purposes stated in the defendants’ answer to question 5.12(a), the defendants must state each other purpose for which the loan monies were expended.
[143] The issue raised by question 5.14 appears to be why the Trust assumed liability for the personal indebtedness of Eric and Verna, and whether doing so was a proper exercise of the trustees’ power. It would appear to be an issue arising on the plaintiffs’ first cause of action, particularly to the extent that Verna, a non-beneficiary, may have benefitted from the provision of the security. The defendants have not provided an answer to the question of what purpose the loan (apparently originally taken out in 2011) was taken out for, and I think that purpose is relevant to the issues of:
(1)who would benefit from the continued availability of the loan funds (Eric, or a non-beneficiary, Verna); and
(2)to the extent that Verna benefitted, the nature and extent of that benefit.
[144] The defendants are directed to provide an answer to question 5.14(a) stating the purpose or purposes for which the Ark loan was originally taken out, and explaining the extent to which the Ark lending benefitted Verna. The defendants need not provide further answers to question 5.14 beyond those matters.
[145] Question 5.15 is concerned with any repayments that may have been made on the Ark mortgage. The defendants say that no interest was payable, and in the Defence they plead that the balance owing as at September 2018 was only $16,986.53 (an
amount they say Eric and Verna can meet from their own resources). In those circumstances, they contend that the question is irrelevant.
[146] I am not satisfied this interrogatory is relevant. The evidence shows that there is no cash in the Trust, and it does not seem relevant to any issue in the pleadings whether repayments on the Ark loan, which was apparently not taken out for any purpose of the Trust, have been made by Eric or by Verna.
[147] Mr Fuscic referred to the plaintiffs’ third cause of action, which is generally concerned with the plaintiffs’ entitlement as beneficiaries to a proper accounting by the trustees, but it seems to me that is part of the substantive relief claimed in the proceeding, and the Court should not effectively grant substantive relief on an interlocutory application such as this, especially as an Associate Judge does not have jurisdiction to exercise the supervisory function of the Court over trustees. The question must be whether the information sought is relevant to an issue arising on one or more of the plaintiffs’ first, second, fourth or fifth causes of action. I do not believe this question is relevant on those causes of action, and I accordingly decline to order the defendants to answer interrogatory 5.15.
Result
[148]I make the following orders:
(1)Within three working days of the date of this judgment, the defendants are to make available for the plaintiffs’ inspection the Ark term loan agreement dated 16 June 2011, all of the memoranda of Eric’s wishes, and Eric’s will dated 1 April 2004. The memoranda of wishes may be redacted to delete any parts that do not contain statements or express wishes relating to the sale or future use of the property, or to the direct or indirect payment or distribution of any Trust assets to, or for the benefit of, Verna. Eric’s will dated 1 April 2004 may be redacted to delete any parts that do not touch on the future use or sale of the property or the broad purpose or purposes of the Trust.
(2)Within the same period, the defendants are to make available for the plaintiffs’ inspection any document showing the terms and conditions of the 2011 ANZ loan (referred to in the plaintiffs’ interrogatory no.5.12)
(3)Within 10 working days of the date of this judgment, the defendants are to file and serve a supplementary affidavit of documents:
(a)listing the documents referred to in orders (1) and (2) above.
(b)stating whether the defendants have in their control any documents meeting the following descriptions:
(a) documents referring to any claims or threatened claims by Verna against the Trust (including the amount of, and claimed bases for, any such claims);
(b) Eric’s medical records for the period from 1 January 2014 to the present time, to the extent that the medical records address any cognitive or mental capacity issues;
(c) documents showing the purpose or purposes to which the ANZ and Ark loans were applied;
(d) documents showing the reasons the trustees of the Trust permitted the property to be used as security for the ANZ and Ark loans;
(e) documents showing who (as between Eric and Verna) received the money lent by ANZ and Ark, and if Verna received funds from either loan, how much she received;
(c)stating (if it is the case) that the defendants do not have in their control any documents in categories VFT.3.06, VFT.3.07 and VFT.3.1025, beyond those which have already been disclosed.
(d)listing (in accordance with the requirements of the High Court Rules) all relevant documents from the files of Jon Webb and Magill Earl (being documents in the categories VFT.3.11 and VFT.3.12 in the table at [46] of this judgment).
(4)If and to the extent the defendants have in their control documents of the kind described in order (3)(ii)(a)-(e) above, then (subject to any claims of legal professional privilege) those documents are to be made available for the plaintiffs’ inspection within two working days after service of the defendants’ affidavit. Within the same period, the defendants are to make available for the plaintiffs’ inspection (subject to any claim to legal professional privilege) any documents of the kind referred to in order 3 (iv) above.
(5)The defendants’ request to limit the inspection of the further documents now ordered to be disclosed in the manner proposed in the defendants’ verified list of documents sworn on 28 June 2019, and in the draft supplementary list, is refused.
(6)Within 10 working days of the date of this judgment, the defendants are to file and serve a further affidavit in answer to the plaintiffs’ interrogatories numbers 5.12 and 5.14 in accordance with [141-[144] of this judgment.
(7)The plaintiffs might not have been totally successful with their application, but that was at least partly due to the further information provided by the defendants in their evidence, and/or by Mr Delic in his submissions. The defendants’ non-compliant listing of documents as confidential which they later claimed were irrelevant was, in my view,
25 Referring to the document categories in the table at [46] of this judgment
confusing, and it has added to the costs and delay. I think the justice of the case will be met by an award of costs to the plaintiffs on a 2B basis, with disbursements to be fixed by the Registrar. I make an order accordingly.
Amended timetable directions
[149] Timetable directions have been made directed towards a three-day trial commencing on 16 March 2020. The need for further discovery and inspection arising from this judgment means that the parties will be behind with a number of the timetable steps, but I think it is important for this family that the case go ahead as scheduled on 16 March 2020. Cases like this can create considerable stress for the parties, and any delays are to be avoided if at all possible.
[150] Fortunately the issues in the case are not many, and I am satisfied that counsel and the parties ought to be able to work through the remaining pre-trial steps and be ready to have the case go on in March of next year, on the basis of the revised timetable directions set out below.
[151]I make the following directions:
(1) The defendants are to provide the inspection directed at orders 1 and 2 of this judgment, by 28 November 2019.
(2) The defendants are to file and serve the affidavits referred to at orders 3 and 6 of this judgment, by 9 December 2019.
(3) Further inspection is to be made available in accordance with order 4 of this judgment, by 11 December 2019.
(4) The plaintiffs are to file and serve any further amended statement of claim by 23 December 2019.
(5) The defendants are to file and serve their statement of defence to any further amended statement of claim, by 20 January 2020.
(6) The plaintiffs are to file and serve any reply, together with any further affidavits in support of their claims, and serve an index of documents for inclusion in a common bundle of documents for trial, by 3 February 2020.
(7) The close of pleadings date is fixed at 10 February 2020.
(8) The defendants are to file and serve any further affidavits in opposition, and serve their index of documents for the common bundle, by 24 February 2020.
(9) The plaintiffs are to file and serve their chronology, and any reply affidavits, by 2 March 2020. By the same date the plaintiffs are to file and serve an indexed and paginated common bundle of documents for the trial.
(10) The defendants are to file and serve their response to the plaintiffs’ chronology, by 9 March 2020.
(11) The plaintiffs are to file and serve their synopsis of opening submissions, by 12 March 2020.
Associate Judge Smith
APPENDIX A
Part 3 Defendants' reasons for opposing discovery and inspection (a) VFT.3.01:
Documents relating to distributions
from the VFT.
No documents exist, to the Defendants' knowledge.
No distributions have been made to a non-beneficiary. The beneficiaries are not entitled to reasons or amounts of distributions to them or to other beneficiaries, due to the Trustees wide discretion in making distributions.
(b) VFT.3.02: Previous or current wills of [Eric] [As listed in the defendants’ draft supplementary list].
Eric Vandy's wills are private and confidential to him personally and are not connected to the operation or administration of the Trust. They are irrelevant in terms of establishing any allegation of misconduct on the Trustees and are not probative of his intention in settling the Trust.
(c) VFT.3.03:
Documents relating to the personal affairs of [Verna],
including financial or medical.
Private and confidential to Verna Vandy and are not connected to the operation or administration of the Trust. Irrelevant in terms of establishing allegation of misconduct. (d) VFT.3.04:
Documents relating to the personal affairs of [Eric],
including financial or medical.
As above (b) and (c).
Modest rental income has been paid into Eric Vandy's business account which has been used to offset outgoings costs of the Trust asset.
Trustee's capacity is adequately dealt with in the formal letter from a medical practitioner which has been discovered by the Defendants. Eric Vandy's entire medical records are unnecessary, irrelevant and disproportionate to discover.
(e) VFT.3.05: Eric's memorandum of wishes [As listed in the defendants’ draft supplementary list]
Memoranda of wishes are non-binding expressions of guidance to Trustees which are not normally disclosable to beneficiaries.
Accordingly they are not relevant to the issue of the propriety of the exercise of the Trustee's discretion, who have wide discretion to deal with Trust property.
(f) VFT.3.06: Settlors' memoranda of
wishes and any other documents
As above (d) and (e).
No documents existing, to the Defendants' knowledge.
including diary, notes, letters, cards relative to their
intentions
concerning the VFT or the VFT assets.(g) VFT.3.07: All documents
containing any reference to the
settlors' intentions and purpose of the VFT.
As above (d), (e) and (f).
No documents existing, to the Defendants' knowledge.
(h) VFT.3.08: The documents are private and confidential to the Documents borrowers, who were Eric and Verna Vandy in their including personal capacities and not as Trustees of the Trust. correspondence How the funds were advanced, used/spent or repaid concerning or are not relevant to any question of misconduct as a relating to Trustee. borrowing funds secured over VFT property. (i) VFT.3.09: Communications between the Trustees and third Memoranda parties (for example, for the purposes of security) are between VFT and not relevant to any misconduct by the Trustees, who third parties. have wide discretion to deal with trust property. (j) VFT.3.10:
Documents relating to facts or
information
concerning and
relevant to how they intend to deal with proceeds of sale.All relevant documents have been listed.
No other documents existing, to the Defendants' knowledge.
The Trustees have wide discretion to deal with Trust property and are not required to disclose the reasons for an exercise of their discretion.
(k) VFT.3.11:
Documents held in files held by Jon Webb, former solicitors of [Eric],
[Verna] and/or VFT.
The Defendants claim legal professional privilege to Eric and Verna personally in respect of Jon Webb files. The Defendants wish to record that even in the event that privilege is not upheld, the Defendants claim that the documents are private and confidential, and are not relevant to any issues in the proceedings. No documents existing that are contemporaneous with settlement, to Defendants' knowledge. (l) VFT.3.12:
Documents held in files held by Magill
The Defendants claim legal professional privilege to Eric and Verna personally in respect of Magill Earl files. The Defendants wish to record that even in the
Earl, former
solicitors of [Eric], [Verna] and/or VFT.
event that privilege is not upheld, the Defendants claim that the documents are private and confidential, and are not relevant to any issues in the proceedings.
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