Waho v Ratana

[2015] NZHC 656

IN THE HIGH COURTOF NEW ZEALAND WELLINGTON REGISTRY

CIV 2014-485-11177 [2015] NZHC 656

UNDER

(in part) the Trustees Act 1956

IN THE MATTER

of Te Kohanga Reo National Trust Deed of
20 December 2013

BETWEEN

TONI JAMES DAVIS WAHO Plaintiff

AND

TINA OLSEN RATANA First Defendant

AND

TE KOHANGA REO NATIONAL TRUST

Second Defendant

Hearing:	1 April 2015
Counsel:	J K Mahuta-Coyle for Plaintiff M F McClelland QC and V S Kemp for First Defendant N Russell for Second Defendant
Judgment:	2 April 2015

JUDGMENT OF BROWN J

[1]      The plaintiff, who has been removed as a trustee of the second defendant, seeks an order under s 51 of the Trustee Act 1956 to remove the first defendant as a trustee.   The factual context which I need not traverse is detailed in the earlier judgment  of  MacKenzie J1   and  on  appeal.2      This  judgment  concerns  the  first defendant’s request for further particulars of the plaintiff’s amended statement of

claim dated 19 September 2014.

1      Waho v Olsen-Ratana [2014] NZHC 2729.

2      Waho v Olsen-Ratana [2014] NZCA 612.

The position of the second defendant

[2]      By memorandum dated 25 March 2015 the second defendant signalled its support  for  the  first  defendant’s  application,  noting  that  the  majority  of  the allegations relating to the alleged conduct of the first defendant personally reflect adversely on the second defendant.

[3]      Mr Russell further advised that agreement had been reached with the plaintiff that  prayer  for  relief  (B)  would  not  be  pursued  and  accordingly  would  not  be included  in  the  second  amended  statement  of  claim  which  is  to  be  filed. Mr Mahuta-Coyle having confirmed  that  position,  I granted Mr Russell  leave to withdraw.

Applicable principles

[4]      Counsel  were  in  general  agreement  on  the  principles  applicable  to  an application   for   further   particulars   of   a   statement   of   claim.      That   said, Mr Mahuta-Coyle gave emphasis to the proposition that the general rule, that the inability to give particulars properly required is no excuse, gives way in cases where the party seeking particulars knows that the party from whom particulars are sought does not have them or that the particulars sought are within the knowledge of the

requesting party.3

[5]      For the first defendant Mr McClelland QC submitted that when accusations of fraud (or concealed fraud), misleading and/or dishonest conduct are made then a plaintiff must take “especial particularity and care” in framing such allegations.4

[6]      While the plaintiff contended that his lack of knowledge as to what had transpired justified the Court in exercising its discretion to decline to order the provision of further particulars pending discovery, the first defendant was concerned to obtain a more particularised pleading in order that the task of discovery could be

suitably focused and confined.

3      Prime v Hardie HC Auckland CP 248-SD/01, 15 March 2002.

4      Commerce Commission v Qantas Airways Ltd (1992) 5 PRNZ 227 (HC) at 230.

The particulars sought

[7]      The first defendant itemised in Schedule A to its interlocutory application the paragraphs in the amended statement of claim in respect of which specific particulars were sought.   A significant focus was on paragraphs which had been included as particularisation  of  the  allegations  in  the  original  statement  of  claim  dated

28 August 2014.

[8]      As a consequence of my discussions with counsel I consider it appropriate to direct two aspects of particularity which were not explicitly raised in the first defendant’s Schedule A.  The first of these relates to the timeframe applicable to the allegation in para 10 that the first defendant has misused her roles as co-chair and trustee.  The plaintiff is to specify the date on which that alleged conduct of the first defendant commenced.

[9]      The second matter relates to the pleading of “allegations of wrongful acts against the Trust and/or against the Trust’s commercial arm, Te Pātaka Ōhanga Ltd” in para 13.1.   Those allegations are then the subject of cross-reference in other subparagraphs of para 13.  They are then also referred to in para 15 which provides further particulars of the allegation in para 13.1.   Schedule A drew attention to the fact that such “allegations of wrongful acts” were not specified save in paras 15.3 and 15.4 which referred to “allegations from Rakei Tawhiwhirangi”.   The first defendant inferred that the various references to allegations of wrongful acts were confined to those referred to in paras 15.3 and 15.4 but was concerned to obtain certainty on that question.

[10]   I consider that the first defendant’s concern is justified.   However the particularity which needs to be provided relates not (simply) to the allegation in para 15 but  more generally to the allegation in 13.1 (of which  para 15 is itself particularisation).     Consequently  the  plaintiff  is   directed  to   provide  further particulars of the reference in para 13.1 to “allegations of wrongful acts”, specifying in particular whether those are confined to the references in paras 15.3 and 15.4 or if the phrase extends to other instances of allegations of wrongful acts.   If the latter, those other instances are to be pleaded.

[11]     Particulars are sought of paras 10.1 to 10.7 inclusive.  By way of example, in relation to the allegation in para 10.1 that the first defendant failed to provide the plaintiff with Board papers, the first defendant asks: which Board papers did the first defendant   fail   to   provide   to   the   plaintiff.      In   relation   to   such   questions Mr Mahuta-Coyle presses his argument that the plaintiff cannot provide details of matters of which he presently has no sufficient knowledge.

[12]     I consider that the competing positions of the plaintiff and the first defendant can be addressed by requiring the plaintiff to specify which Board papers he did receive.  That would have the consequence that the first defendant can then identify for discovery purposes the extent of the alleged failure to provide Board papers to the plaintiff. Consequently I direct the following particulars:

10.1     the plaintiff to specify which Board papers he received;

10.2     the plaintiff to specify the Board meetings he was informed about;

10.3the plaintiff to specify those resolutions of which he was informed by the first defendant.

[13]     I do not consider that the same technique can be applied to paras 10.4–10.5 which state:

10.4failing to include the Plaintiff in discussions of resolutions that have been put to the Board;

10.5preventing the Plaintiff from voting on resolutions that have been put to the Board.

Notwithstanding the use of the word “preventing”, I infer that the conduct alleged in those two subparagraphs is consequential upon the failures alleged in subparas 10.1 to 10.3.   I do not think it is practicable to direct further particularisation pending discovery.  Similarly I do not consider that pending discovery particulars should be required in respect of the allegation in 10.7, namely otherwise attempting to exclude the plaintiff from the business of the Trust.

[14]     However I direct that particulars be provided of the allegation at 10.6 as follows:  which Board meetings did the first defendant actively exclude the Plaintiff from?

[15]     Particularity is sought in respect of para 11.3 which states:

In  April  and  May 2014,  the  First  Defendant  arranged  for  the  trustees, excluding the Plaintiff, to receive, discuss, and make decisions about documents via email.

The first defendant contends that it is not at all clear what this particular relates to and argues that as presently pleaded it is so vague as to be meaningless.

[16]     I do not accept that submission.  While there is a degree of generality in the pleading, it relates to decisions made with reference to documents circulated by email and it is confined to the two months period April–May 2014.  I consider that sufficient  particularity  is  provided  to  enable  the  first  defendant  to  undertake discovery on that matter.

[17]     Particulars were originally sought in respect of paras 13.5 to 13.10 inclusive. The plaintiff’s written submissions advised that, without conceding that the paragraphs  were  deficient,  the  plaintiff  did  not  intend  to  pursue  the  claims  at paras 13.6 to 13.8.  Further, in the course of submissions Mr McClelland accepted that sufficient particularity of para 13.9 had been provided in para 30.   It was also accepted that the allegation in 13.10 was sufficiently explicit to enable discovery to be undertaken.

[18]     That left the allegation in para 13.5:

otherwise  attempting  to  cover-up  or  prevent  the Trust  and/or  Te  Pātaka

Ōhanga Ltd, from properly dealing with those allegations.

[19]     Whereas the allegations in paras 13.1, 13.2, 13.3 and 13.4 are the subject of further particulars in paras 15, 16-19, 20-25 and 26-29 respectively, the amended statement of claim does not provide particularity of the allegation at para 13.5.  The plaintiff argues that it has pleaded the instances of which it is aware.  However this is an allegation of “otherwise attempting” to take various steps and logically that is distinct  from  the  conduct  the  subject  of  paras 13.1-13.4,  in  respect  of  which particularity is provided.

[20]     While there is no point in ordering the plaintiff to provide particulars which it is simply unable to provide at this time, nevertheless I consider that the nature of the allegation is sufficiently serious that the instances which the plaintiff states that he is aware of should be specifically pleaded by reference to this paragraph.  While that may necessitate some repetition, it will serve to avoid any ambiguity as to the known conduct which is the subject of this allegation.

[21]     The particulars sought in relation to paras 15 and 23 concern the issue of allegations  that  have been  made.    I consider that  that  request  for particulars  is addressed by the order made in respect of para 13.1.  I did indicate to Mr McClelland that specifically with reference to para 23 I would have had difficulty directing the provision of particulars of “allegations” which were only mentioned in the context of the following sentence:

The letter made no reference to the (sic) many of the allegations that had been made.

[22]     Paragraph 25 of the amended statement of claim states:

The Serious Fraud Office could only have been led to these false conclusions and/or to misunderstanding the scope of the allegations, from information provided to it by Chen Palmer on behalf of the Te Pātaka Ōhanga Ltd on the instructions of the First Defendant.

[23]     The first defendant sought specific particulars as to the information which it was alleged that the first defendant had provided which lead to the false conclusions or misunderstandings reached by the SFO.   Alternatively it was said that specific particulars were required as to the instructions which the plaintiff alleged the first defendant had provided to Chen Palmer which resulted in the false conclusions or misunderstandings reached by the SFO.

[24]     Paragraph 25 needs to be read in the context of para 22:

Throughout Chen Palmer’s time representing Te Pātaka Ōhanga Ltd to the Serious Fraud Office, Chen Palmer acted on the instructions of the First Defendant.

[25] My initial reaction was that the nature of any instructions given by the first defendant to Chen Palmer would have been apparent from written communications which I would have expected to have been provided as part of initial disclosure. However it appears that there was no initial disclosure in the circumstances where reasonably extensive affidavits were filed with reference to the plaintiff ’s application for an interlocutory injunction the subject of the judgments referred to at [1] above.

[26]     It was further apparent that the level of the first defendant’s concern about this allegation was occasioned in part from the fact that the first defendant in an affidavit dated 26 September 2014 had expressly denied instructing Chen Palmer in respect  of  the  Serious  Fraud  Office  investigation  or  providing  instructions  to Chen Palmer on behalf of Te Pātaka Ōhanga Ltd.  Indeed in that affidavit she stated that she had played no part whatsoever in the SFO investigation.

[27]     With   reference   to   this   allegation   in   a   written   submission   in   reply Mr McClelland drew attention again to the Qantas decision5  and to a number of other decisions and made reference to cl 13.8.1 of the Lawyers & Conveyancers Act (Lawyers: Conduct and  Client Care) Rules 2008 which he submitted imposed a heavy ethical duty on counsel concerning the pleading of Court documents.

[28]     Of course the application before me is one seeking further particularity of the claim,  not  an  application  to  strike  out  part  of  a  pleading  under  r 15.1(1). Furthermore I note that the affidavit of the first defendant was filed subsequent to the filing of the amended statement of claim and hence the plaintiff may wish to reconsider its pleading in the light of the contents of that affidavit.   For the time being I decline to direct the plaintiff to provide further particulars of para 25 which is, as I suggested to counsel, an allegation very much in the res ipsa loquitur mode. So far as the burden of discovery is concerned, the affidavit of the first defendant referred to above would suggest that there is no discovery to be made by the first defendant and hence the particularity sought of para 25 is not required in order to

discharge the discovery obligation.

5      At n 4 above.

[29]     The final paragraph in respect of which particulars are sought is para 28 in respect of which Appendix A states:

Between March and June 2014 Mr Fox gave numerous media interviews (including on TV and radio and to journalists from the print media) and released numerous press statements.  The statements which it is alleged were misleading must have been identified because without the interviews and press  statements  being  identified  it  is  not  possible  to  respond  to  this particular.

[30]     Paragraph 28  certainly  alleges  that  Mr  Fox  gave  a  number  of  media interviews and issued press statements on behalf of the Board and that those statements were misleading.  However it goes on to state that Mr Fox’s statements misled the public by leading the public to believe eight propositions, alleged to be untrue, in paras 28.1 to 28.8.

[31]     Mr Mahuta-Coyle submits that the identification of the alleged untrue nature of those statements enables them to be identified and for discovery to be provided.  I accept that submission and I decline to order particulars of para 28.

Costs

[32]     I consider that both the plaintiff and the first defendant have had a measure of

success on the first defendant’s application for further particulars.  Consequently I

consider that it is appropriate that costs should lie where they fall.

Brown J

Solicitors:

DLA Phillips Fox, Wellington

Chen Palmer, Wellington