Walker v Forbes - [2017] NZHC 2694

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2012-409-002486 [2017] NZHC 2694

BETWEEN
ROBERT BRUCE WALKER

First Plaintiff

PROPERTY VENTURES LIMITED (In

Receivership and Liquidation) Second Plaintiff

FIVE MILE HOLDINGS LIMITED
Third Plaintiff

AND

AUSTIN JOHN FORBES

First Defendant

Hearing: 1 November 2017

Appearances:

J B M Smith QC and K Francis for Plaintiffs W J Palmer for First Defendant

Second Defendant in person

R Raymond QC for Third Defendant M J Wallace for Fifth Defendant

J Moss for Sixth Defendant

Judgment:

3 November 2017

JUDGMENT OF LANG J

[on application by plaintiffs for particular discovery and pre-commencement discovery]

This judgment was delivered by me on 3 November 2017 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

WALKER v FORBES.6 [2017] NZHC 2694 [3 November 2017]

Date……………

ALISTER SPEDDING JOHNSTON
Second Defendant

GORDON LEWIS HANSEN
Third Defendant

ADOLF DE ROOS
Fifth Defendant

DANIEL JAMES GODDEN
Sixth Defendant

VERO LIABILITY INSURANCE LIMITED

Third Party

[1] This proceeding is due to be the subject of a 12-week trial commencing on 12 February 2018. It involves claims by the liquidators of several companies against the former directors of those companies.1

[2] The plaintiffs have now sought particular discovery of any insurance policies held by the defendants. They also seek the same information by way of pre- commencement discovery in anticipation that they will need to commence proceedings against the insurers of the defendants under s 9 of the Law Reform Act 1936 (the LRA).

[3] The second, fifth and sixth defendants have reached agreement with the plaintiffs regarding the outcome of the application. They have agreed to provide the plaintiffs with declarations confirming they hold no relevant policies of insurance. Once the declarations have been provided the plaintiffs will not seek any further order and will not seek an award of costs against those defendants.

[4] The first defendant, Mr Forbes, has also reached agreement with the plaintiffs and no further order is required.

[5] The third defendant, Mr Hansen, acknowledges that he holds an insurance policy. He has declined to provide the plaintiffs with any details of that policy. The application has therefore proceeded solely in respect of the insurance policy held by Mr Hansen.

The application for particular discovery under r 8.19

[6]Rule 8.19 of the High Court Rules provides:

8.19Order 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 Claims against other parties, including the companies’ auditors, have now been settled and discontinued.

1 or more documents or a group of documents that should have been discovered, the Judge may order that party—

(a)to file an affidavit stating—

(i)whether the documents are or have been in the party's control; and

(ii)if they…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Walker v Forbes

Details

AGLC: Walker v Forbes [2017] NZHC 2694
Case: [2017] NZHC 2694
Decision Date: 3 November 2017

CaseChat Overview and Summary

The case of Walker v Forbes concerns an application by the liquidators of several companies against the former directors of those companies. The plaintiffs sought particular and pre-commencement discovery of any insurance policies held by the defendants, anticipating a potential claim against the insurers under s 9 of the Law Reform Act 1936 (the LRA). The second, fifth and sixth defendants agreed to provide declarations confirming they held no relevant policies of insurance. The first defendant, Mr Forbes, also agreed not to oppose the application. However, the third defendant, Mr Hansen, declined to provide details of his insurance policy. The application proceeded solely in respect of Mr Hansen's policy.

The primary legal issue was whether the Court should compel Mr Hansen to disclose details of his insurance policy, which was not directly related to the issues raised in the pleadings. The plaintiffs argued that the objective of the High Court Rules was to secure the just, speedy, and inexpensive determination of any proceeding and that the combined effect of rr 1.2 and 8.19 required the Court to adopt a broad approach to discovery obligations.

The Court rejected the plaintiffs' arguments and dismissed both applications. Lang J held that the existing authorities in both New Zealand and other Commonwealth jurisdictions were firmly against the proposition that the plaintiffs sought to advance, and there was no justification for extending such a well-established principle. The Court noted that the benchmark against which to measure relevance was the pleadings because documents will only be discoverable if they are referable to the issues raised by the pleadings. In this case, the pleadings did not disclose any issue relating to Mr Hansen's insurance, making the documents neither relevant nor discoverable. The Court also found that the plaintiffs were not genuinely motivated to commence a proceeding against Mr Hansen's insurer, but rather sought the information to assist them in settlement negotiations and to determine whether it was worth pursuing Mr Hansen to judgment.

Accordingly, the applications for particular and pre-commencement discovery were dismissed. Mr Hansen was entitled to costs on the application on a category 2B basis together with disbursements as fixed by the Registrar.

Orders