Wang v Westpac New Zealand Limited (1763882) HC Auckland CIV 2009-404-7750

[2010] NZHC 2040

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-404-7750

IN THE MATTER OF     the Insolvency Act 2006

ANDIN THE MATTER OF  the bankruptcy of MAY YAN WANG Judgment Debtor

ANDWESTPAC NEW ZEALAND LIMITED (1763882)

Judgment Creditor

CIV-2010-404-3177

AND IN THE MATTER OF  the Insolvency Act 2006

ANDIN THE MATTER OF  of the proposal of MAY YAN WANG Insolvent

ANDIN THE MATTER OF  JEFFERY PHILLIP MELTZER Applicant

Ruling:           23 September 2010

RULING OF POTTER J

In accordance with r 11.5 High Court Rules

I direct the Registrar to endorse this judgment

with a delivery time of 10.30 a.m. on 23 September 2010.

Solicitors:           Sargent Law, P O Box 1482, Shortland Street, Auckland 1140

Crown Law Office, P O Box 2858, Wellington 6140

Copy to:            P Sills, P O Box 1990, Shortland Street, Auckland 1140

WANG V WESTPAC NEW ZEALAND LIMITED (1763882) HC AK CIV-2009-404-7750  23 September 2010

Introduction

[1]      By letter dated 25 August 2010 the Overseas Investment Office (“OIO”) applied to search the Court file in relation to “two applications to adjudicate May Yan Wang bankrupt”.  In a subsequent memorandum filed by the Crown Law Office on behalf of the OIO the files were identified as CIV-2009-404-7750 and CIV-2010-

404-3177.   The OIO through the Crown Law Office in a memorandum dated 22

September 2010 has confirmed that its application extends to the Court file in CIV-

2010-404-3177 which relates to a proposal by May Yan Wang to creditors under

Part 5, Subpart 2 of the Insolvency Act 2006.

[2]      The proposal to creditors is opposed.  The matter has been allocated a hearing date on 3 and 4 November 2010.  The bankruptcy proceeding in CIV-2009-404-7750 is for mention on that date.   Ms Wang has filed notice of intention to oppose the applications.

[3]      Rule 3.11 and r 3.13 of the High Court Rules apply to the application.  Rule

3.9 which applies during the substantive hearing stage does not apply.   That stage has not yet been reached.

[4]      Rule 3.13 applies whenever the permission of the Court is necessary and is sought to access a document, Court file, or any part of a formal Court record except where access under r 3.9 may be sought.   Rule 3.9 applies to parties, so does not apply to the OIO application.

[5]      Matters to be taken into account on such an application are set out in r 3.16 as follows:

(a)       The orderly and fair administration of justice;

(b)      The protection of confidentiality, privacy interests ... ;

(c)The principle of open justice, namely, encouraging fair and accurate reporting of, and comment on court hearings and decisions;

(d)      The freedom to seek, receive, and impart information;

(e)Whether the document to which the application or request relates is subject to any restriction under r 3.12;

(f)       Any other matter that the Judge or Registrar thinks just.

[6]      Subparagraph (e) of r 3.16 is not applicable in this case.

[7]      The Judge or Registrar must take into account the above matters and must consider the nature of, and the reasons for, the application or request.

OIO’s submissions

[8]      The reasons given for the OIO’s application are to advance an investigation being  undertaken  by  the  OIO  relating  to  the  affairs  of  May  Wang  and  her relationship to farm properties previously controlled by the Crafar family.   The memorandum dated 22 September 2010 advises that this is for the purposes of considering the applications for Overseas Investment Act 2005 consent made by UBNZ  Funds  Management  Limited,  UBNZ  Assets  Holdings  Limited,  UBNZ Trustee Limited and Natural Dairy (NZ) Holdings Limited.

[9]      In its memorandum of 1 September 2010 the Crown Law Office on behalf of the OIO explains that the investigation by OIO has two parts; an investigation of possible offences against the Overseas Investment Act 2005 (by a number of entities including entities apparently controlled by May Wang); and an investigation into whether or not certain individuals (including May Wang) are of good character and have business experience and acumen.

[10]     The OIO submits that it is in the public interest for permission to search the Court files to be granted.   It submits that the documents on the Court files have critical relevance to the application before the OIO by Natural Dairy NZ Holdings Limited to purchase the Crafar farms.  The OIO notes that s 25(1)(f) of the Overseas Investment Act 2005 provides that the relevant Ministers may grant consent retrospectively and that one criterion to be taken into account is whether or not the individuals with control of the relevant overseas person have business experience

and acumen relevant to the overseas investment.  Ms Wang claims to be one of the individuals that control the “relevant overseas person”.

[11]     The OIO submits:

• The application by the judgment creditors and the circumstances that have led to the applications being made are relevant to the question of whether May Wang has business experience and acumen relevant to the overseas investment.   Likewise, the proposal proceedings are likely to have similar relevance.

•In the absence of the information the OIO could not properly advise the relevant Ministers on that matter.

•If this were the case the OIO consideration of the matter would be delayed until  the  conclusion  or  at  least  the  hearing  stage  of  the bankruptcy/insolvency proposal proceedings.

•  The OIO understands that consent is required by 27 September 2010.

[12]     The OIO submits that the orderly and fair administration of justice will not be injured by the OIO being permitted to access the Court files.  It further submits that the confidentiality and privacy interests claimed by May Wang are insufficient to justify a refusal of access.   It says that conditions could be imposed to protect confidentiality and privacy interests if required.

[13]     The OIO further submits that the principle of open justice will be promoted by the OIO being permitted access to the Court files to enable a statutory decision to be taken on the basis of relevant information from the Court files being available to the decision-makers.

[14]     In a memoranda dated 27 August 2010 and 15 September 2010 counsel for

Ms Wang opposes the application by the OIO.  It is submitted:

• The documents would result in the disclosure of confidential information to parties not involved in the proceedings;

• The OIO has wide powers to seek and receive information from Ms Wang and has exercised these powers and accordingly it is not necessary for the OIO to have access to the documents in addition to exercising its other powers

•  Access to the documents will not serve the principle of open justice.

[15]     In relation to Ms Wang’s proposal to creditors under the Insolvency Act, it is noted that the only documentation on the file relates to the opposition to the proposal and that in the absence of Ms Wang’s response which is not yet required in accordance with the timetable orders made by the Court, the file would give a one- sided summary which would not be balanced or fair to Ms Wang.  It is submitted that until sanctioned by the Court the proposal is essentially a private affair between Ms Wang and her creditors.

[16]     Reference is made to BNZ Investments Limited v Commissioner of Inland Revenue[1]  where Wild J said that while the principle of open justice is paramount effectively creating a presumption of disclosure:

This presumption is easily displaced if the request is for documents that were not read in or read by the Court, because the principle of open justice rests on the premise that such documents have entered the public domain.

[1] BNZ Investments Limited v Commissioner of Inland Revenue HC Wellington CIV-2004-485-1059,

2 December 2009

[17]     The submissions of counsel for Ms Wang appear to overlook that on 10 June

2010 Associate Judge Bell gave permission under r 3.11 to the New Zealand Herald to inspect the insolvency proposal of Ms Wang and her statement of affairs.   The Judge set out his reasons in a minute of that date.  Ms Wang was represented by Mr Sills in relation to that application.

[18]   Accordingly the insolvency proposal is already in the public domain. Consistency would favour the application of the OIO in relation to the insolvency proposal being granted.

[19]     Having given consideration to the submissions of both parties, and taking into account the reasons for the OIO’s application, I consider that the orderly and fair administration of justice and the principle of open justice, in the circumstances of this case outweigh any confidentiality or privacy interests of Ms Wang.

[20]     The OIO will no doubt take into account in any consideration of the file relating to the insolvency proposal that Ms Wang as the debtor has still the opportunity to file in reply to the notices of opposition.

Decision

[21]     The application of the OIO to access the Court files in CIV-2009-404-7750 and CIV-2010-404-3177 for the purposes set forth in the application of the OIO and supporting memoranda dated 1 September 2010, is granted.