Addleman v Lambie Trustee Limited [2020] NZCA 194 (28 May 2020)

Last Updated: 3 June 2020

IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA

CA545/2017 [2020] NZCA 194

	BETWEEN	PRUDENCE ANNE ADDLEMAN Appellant
	AND	LAMBIE TRUSTEE LIMITED Respondent

Counsel:	A S Ross QC and R A Rose for Appellant D A T Chambers QC for Respondent
Judgment: (On the papers)	28 May 2020 at 4 pm

JUDGMENT (No 2) OF COOPER J ON STAY

1. All documents in the respondent’s possession or power relating to the Lambie Trust in the categories of (a) financial statements and (b) minutes of meetings required to be provided by this Court’s substantive judgment of 4 October 2019 must now be provided within 10 working days. Any privilege issues may be dealt with by appropriate redactions.
2. The appellant is entitled to costs.

100. If costs cannot be agreed, memoranda are to be filed by the appellant within 10 working days from the date of this judgment and by the respondent within 10 working days after receipt of the appellant’s submissions.

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REASONS

[1] This Court’s judgment of 4 October 2019 directed that the respondent was to provide the appellant with all documents in its possession or power relating to the Lambie Trust in three categories.^[1] The categories were (a) financial statements, (b) minutes of meetings and (c) any legal opinions and other advice obtained by the Trustees and funded by the Trust. The Court also required provision of (d) an affidavit sworn by a person having the relevant knowledge explaining, in the case of any documents in categories (a) to (c) that are no longer available, what efforts have been made to locate the missing documents, what is thought to have become of them and when.
[2] By memorandum dated 16 March 2020, counsel for the appellant seeks orders requiring the respondent to supply the documents in categories (a) and (b), the affidavit (d), and a full transaction list setting out all financial transactions since the date of the most recent set of financial statements and the date upon which the list is supplied. The appellant’s application is opposed by the respondent.
[3] On 3 December 2019, I issued a judgment granting an application for stay dated 18 November 2019, made by the respondent after seeking leave to appeal to the Supreme Court.^[2] The orders I made were as follows:

1. The stay of execution sought by the respondent in its application dated 18 November 2019 is granted. The stay is to apply until either the Supreme Court refuses leave to appeal, or determines the appeal.

B The stay is granted subject to the conditions that:

(a) This Court’s judgment must be sealed by the respondent on or before Thursday 12 December 2019.

(b) The respondent must refund to Mrs Addleman the sum of $47,238.68 that she paid following the High Court’s judgment, on or before Thursday 12 December 2019.

[4] The respondent’s application for leave to appeal to the Supreme Court was successful, but only in part. In its judgment of 4 March 2020 granting leave, the Court said:^[3]

[1] We do not consider the criteria for the grant of leave to appeal are met in relation to the orders to disclose financial statements and minutes of meetings (subject to any necessary redactions).^[4] The Court of Appeal’s decision in relation to those documents was an application of this Court’s recent decision in Erceg v Erceg and there is no reason for us to revisit that decision.^[5] Nor do we see any appearance of miscarriage in relation to those aspects of the Court of Appeal’s decision.

[5] Consistently with that, the grant of leave was expressed as follows:

A Leave to appeal is granted on whether the Court of Appeal was correct to order the applicant to disclose to the respondent any legal opinions and other advice obtained by the trustees of the Lambie Trust and funded by the Trust (Addleman v Lambie Trustee Ltd [2019] NZCA 480, (2019) 5 NZTR 29‑016).

2. The approved question is whether the Court of Appeal was correct to reject the applicant’s claims of legal advice privilege and litigation privilege respectively.

100. In all other respects, the application for leave to appeal is dismissed.

[6] The application for stay dated 18 November 2019 which was dealt with in the stay judgment was simply for an order that execution of the judgment of 4 October 2019 be stayed. The principal basis on which it was advanced was that the proposed appeal would be rendered nugatory if the order for stay was not made. This, on the basis that “disclosure of information cannot be undone”. The applicant also proffered that if the application for leave were dismissed, the judgment would be performed “promptly” by the respondent. It is clear that neither the application itself nor the wording of the order I made expressly contemplated a partial grant of leave of leave to appeal by the Supreme Court.
[7] It is against that background that the appellant’s 16 March 2020 application now falls to be addressed. The principal basis on which the application is opposed by the respondent is that the order for stay remains in effect. It is said that the terms of the stay are such that, the Supreme Court having granted leave to appeal, the stay applies until the Supreme Court delivers judgment. The fact that the Supreme Court refused leave in respect of the orders concerning documents in categories (a), (b) and (d) is said to be irrelevant. The respondent buttresses this argument with assertions that the application is an attempt to relitigate matters already determined by this Court, thereby offending against the principal of finality in litigation; that this Court is “functus officio”, and only the Supreme Court can vary the stay having regard to r 30 of the Supreme Court Rules 2004; that the arguments now raised in support of the application were considered and rejected by this Court deciding that the balance of convenience favoured the grant of the stay; and that although it was entirely foreseeable that the Supreme Court would only grant leave in respect of some categories of documents and not others, this Court had nevertheless granted a stay in respect of all of them.
[8] I observe that it is regrettable that these arguments would be advanced by a trustee against a beneficiary to defeat her access to documents to which she has a right. That right was affirmed (not created) by this Court’s judgment of 4 October, which was regarded by the Supreme Court as an application of the principles affirmed by its decision in Erceg v Erceg.^[6] In effect, the respondent seeks to make a purely technical point about the form of this Court’s order for a stay to maintain a stance which it is not entitled to maintain in accordance with its obligations as a trustee. Given the Supreme Court’s limited grant of leave there can be no justification for the respondent’s continued failure to fulfil those obligations with respect to documents in categories (a) and (b). In respect of those documents, the respondent’s obligations will not change between now and the delivery of the Supreme Court’s judgment. It would be antithetical to the concept of trustee obligations to assert otherwise. It is unfortunate that the respondent needs to be reminded of this.
[9] In this case the stay was granted to the point at which the Supreme Court refused leave to appeal or determined the appeal. While the words used did not expressly refer to the situation that has arisen, I consider they can be applied in the current circumstances on the basis that the stay would cease to apply to those matters that cannot be pursued on appeal under the limited terms of the grant. The refusal of leave to challenge the orders made by this Court concerning the documents in categories (a) and (b) amounts to a refusal of leave in terms of the stay judgment, and therefore the stay no longer applies in respect of those matters.
[10] It is simply wrong to suggest that would somehow amount to a departure from the reasoning that lay behind the original grant of the stay or constitute re-entry into matters that must be assumed to have already been considered and rejected by the terms of the grant of the stay. The rationale for the stay was that the respondent should not be deprived of the fruits of a successful appeal to the Supreme Court, since information handed over could not be reclaimed. That rationale no longer exists for the category (a) and (b) documents.
[11] I note that the respondent suggests that it would be onerous for it to have to comply with the substantive judgment pending the determination of the Supreme Court appeal because of the possibility that some documents in category (a) and/or (b) might be privileged and it might not be clear cut as to which are in that category. The issue is said to be complicated by the fact that the appellant has been threatening to commence litigation against the respondent for many years, giving rise to issues concerning litigation privilege. These points are not persuasive; the respondent simply needs to make appropriate decisions on these issues in good faith. The orders made in the substantive judgment acknowledged that redactions might need to be made to respond to legitimate issues of privilege.
[12] Given that the stay does not apply in respect of documents in categories (a) and (b), the respondent could provide the affidavit (d) in a form that relates only to those documents. The respondent’s disclosure obligations regarding the documents in categories (a) and (b) are clear, and the order requiring provision of the affidavit was ancillary to the principal order requiring disclosure.^[7] I accept, however, that requiring the respondent to provide the affidavit in respect of documents in only those categories would not conform to the strict wording of the stay. The terms of the stay would need to be varied.
[13] While I would be minded to grant the variation, I accept that the ability to do so lies outside the power of this Court. The stay was granted pending the determination of an appeal or an application for leave to appeal to the Supreme Court. That power is conferred on this Court, and the Supreme Court, by r 30(2) of the Supreme Court Rules. The Supreme Court also has the ability to vary or rescind any order for stay made by this Court,^[8] and may “at any time vary or rescind an order made by it under this rule”.^[9] The same power to vary an existing stay is not conferred on this Court. That is significant. Given that the basis of the Supreme Court’s power to revisit its own orders made under r 30 is express, clear wording would also be required to confer the same power on this Court. The power cannot arise by implication.
[14] No injustice arises from the fact this Court cannot vary a stay it has granted under r 30(2), as that power is conferred on the Supreme Court. The remedy for an applicant is therefore to apply to that Court for the variation it seeks.
[15] While the respondent cannot be compelled to provide the affidavit (d) in respect of documents in categories (a) and (b), it is preferable that it does so. There is no justification for withholding it, beyond the respondent’s reliance on the exact wording of the stay. In the event the affidavit in amended form is not forthcoming, the appellant is able make an application to Supreme Court for the stay to be varied to make the respondent’s duties in that respect explicit.
[16] That leaves for consideration the appellant’s request for an order requiring provision of a list of financial transactions that have taken place since the date of the last set of accounts. It appears from correspondence attached to the submissions of counsel that there is a concern that there may have been transactions since the last set of accounts was prepared. In this case I agree with Lady Chambers QC that the respondent’s request is outside the scope of the conditions attached to the original stay, and since no order requiring disclosure of such material was made in the Court’s substantive judgment I do not consider such an order can be made at this point. That is an issue which needs to be pursued in the High Court, where a proper evidential foundation could be laid, if the respondent considers it is not obliged to provide such information following this Court’s affirmation of the respondent’s duties to the appellant in the substantive judgment.

Result

[17] For the reasons given, the stay granted on 3 December 2019 applies only in respect of documents in category (c) and the affidavit (d). I order that all documents in the respondent’s possession or power relating to the Lambie Trust in the categories of (a) financial statements and (b) minutes of meetings, required to be provided by this Court’s substantive judgment of 4 October 2019, must now be provided within 10 working days. Any privilege issues may be dealt with by appropriate redactions.
[18] One issue raised by the respondent concerned the effect of the “lockdown” in place to respond to the current state of emergency. I accept that there would have been difficulties complying with the substantive judgment during Alert Levels 3 and 4, but Alert Level 2 is now in place. There should be no issues with compliance.
[19] The appellant is entitled to costs. If costs cannot be agreed, I will receive memoranda from the appellant within 10 working days and from the respondent within 10 working days after receipt of the appellant’s submissions.

Solicitors:
Bell Gully, Auckland for Appellant
Kemps Weir Lawyers, Auckland for Respondent

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^[1] Addleman v Lambie Trustee Ltd [2019] NZCA 480, (2019) NZTR 29-016 [Substantive judgment] at [64].

^[2] Addleman v Lambie Trustee Ltd [2019] NZCA 609 [Stay judgment].

^[3] Lambie Trustee Ltd v Addleman [2020] NZSC 14 [Leave judgment].

^[4] Senior Courts Act 2016, s 74.

^[5] Erceg v Erceg [2017] NZSC 28, [2017] 1 NZLR 320.

^[6] Leave judgment, above n 3, at [1].

^[7] Substantive judgment, above n 1, at [66]; and Stay judgment, above n 2, at [3].

^[8] Supreme Court Rules 2004, s 30(5).

^[9] Rule 30(6).