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High Court of New Zealand Decisions |
IN THE HIGH COURT OF NEW ZEALAND
WELLINGTON REGISTRY
CIV-2005-485-2589
IN THE MATTER OF an intended proceeding
BETWEEN KAREN KERIATA HUMPHREYS
Intending Plaintiff
AND THE NEW ZEALAND GUARDIAN
TRUST CO LIMITED
Intended Defendant
Hearing:
8 March 2006
Appearances: G.J. Thomas for Intending Plaintiff
M.J. Wenley for Intended Defendant
Judgment: 9 March
2006
In accordance with r540(4) I direct the Registrar to endorse this judgment with a
delivery time of 3.45pm on the 9th day of
March 2006.
JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL
[1] The Intending Plaintiff applies pursuant to Rule 301
for an order for
particular discovery by the Intended Defendant before a proceeding is commenced.
[2] The application is opposed
by the Intended Defendant.
Background Facts
[3] The Intending Plaintiff was in a de facto relationship with Douglas Frederick
Wereta ("Doug") for 3½ years prior to an accident in Australia on 16 March 1980 in
which Doug was seriously injured.
HUMPHREYS
V THE NEW ZEALAND GUARDIAN TRUST CO LIMITED HC WN CIV-2005-485-2589 9
March 2006
[4] The Intending Plaintiff and Doug had a
child ("Breize") aged 13 months at
the time of the accident. The Intending Plaintiff was apparently expecting a second
child at that
time.
[5] Following Doug's accident the Intending Plaintiff contends that she provided
constant care, comfort and support for
Doug and for Breize.
[6] On 25 September 2001 His Honour Justice Michael Grove in the Supreme
Court of New South Wales made
an order approving a settlement in proceedings
brought by Doug arising out of the accident on 16 March 1980.
[7] The Intending
Plaintiff has obtained a copy of that Order, which refers to a
sum of money to be paid to the New Zealand Guardian Trust Co. Limited
at Napier.
[8] No particulars or details of the settlement are disclosed in that Order, but the
Intending Plaintiff understands
that approximately $6,000,000.00 was settled on the
Intended Defendant Trust. That sum was to be held pursuant to s66(4) of the Public
Trust Office Act 1957 which specifically refers to past maintenance as an authorised
payment by Trustees.
[9] The Intending
Plaintiff's position is that this term "past maintenance" must
include the care, comfort and support provided by the Intending Plaintiff
for both
Doug and Breize in the past.
[10] The Intending Plaintiff through solicitors has corresponded with the Intended
Defendant
requesting further particulars of the Trust and documentation so that the
Intending Plaintiff could formulate her claim. As I understand
it, copies of the
settlement terms have been provided (but with the settlement sum deleted), but
otherwise these requests have been
rejected.
[11] The Intending Plaintiff also understands that payments may have been made
from the Trust Fund to various present
and former caregivers of Doug.
[12] The Intending Plaintiff contends that although the basis of such payments to
former caregivers
is not known, since the funds held by the Intending Defendant in
trust in part are held for past maintenance, some of those payments
may well have
been for that past maintenance.
[13] The Intending Plaintiff submits that it is impossible or impracticable for
her
to formulate her claim without reference to the documents sought, as she does not
know the amount of the funds held in trust,
the names of other caregivers who have
been paid from these funds, or the amounts paid to such caregivers.
Counsel's Arguments
and My Decision
[14] The documents sought on discovery here are specified in the Intending
Plaintiff's application in the following
way:
(a) The terms signed by the solicitors for the representative parties
and dated 25 September 2001 and referred to
in the decision of
Michael Grove J. on 25 September 2001 in the Supreme Court
of New South
Wales, Common Law Division in the matter of:
20922/97 Douglas Frederick Wereta by his Tutor Joyce
Wereta v The Nominal Defendant.
(b) Copies of the accounts of The New Zealand Guardian Trust
Company Limited from 2001 to date in relation to the Douglas
Wereta Trust;
(c) A copy
of any proceedings filed in the Family Court at Napier
or elsewhere under the Protection of Personal and Property
Rights Act 1988 in relation to Douglas Frederick Wereta and/or
the Douglas Wereta Trust;
(d) Advice of the names of all caregivers to whom payments have
been made from the Douglas Wereta
Trust and the amounts of
all payments made to such caregivers;
(e) Advice on the duties of all
caregivers referred to in (d) above;
(f) Advice on whether gift duty has been paid for or required from
any caregiver referred to in (d) above.
[15] The application before the Court is made pursuant to Rule 301 High Court
Rules which provides:
301. Order to discover particular documents before proceeding
commenced
(1) This rule applies if it appears to the Court that
(a) A person (the intending plaintiff) is or may be entitled
to claim
in the Court relief against another person (the intended
defendant) but that it is
impossible or impracticable for the
intending plaintiff to formulate the intending plaintiff's claim
without reference to one or more documents or group of
documents; and
(b) There are
grounds to believe that the documents may be or may
have been in the control of a person (the person), who may
or
may not be the intended defendant.
(2) The Court may, on the application of the intending plaintiff
made
before any proceeding is brought, order the person
(a) To file an affidavit stating
(i) Whether the documents are or have been in the person's
control; and
(ii) If they have been, but are no longer, in the person's control,
the person's best knowledge and belief
as to when they
ceased to be in the person's control and who now has
control of them;
and
(b) to serve the affidavit on the intending plaintiff.
(3) An application under subclause (2) must
be by interlocutory
application made on notice
(a) To the person; and
(b) To the
intended defendant.
(4) The Court may not make an order under this rule unless satisfied
that the order
is necessary at the time when the order is made.
[16] McGechan on Procedure at para HR301.02 indicates that the object of
discovery
under Rule 301 appears to be to allow a plaintiff to formulate its claim
properly, but a wider notion of allowing the plaintiff the
opportunity to consider its
further course of action, however, and of possibly limiting the issues at stake has
received support
in the decisions of Nelson v Dittmer [1986] 2 NZLR 48, Bell South
New Zealand Limited v Telecom (1995) 8 PRNZ 635, and Hetherington v Carpenter
[1997] 1 NZLR 699.
[17] Three jurisdictional requirements under Rule 301 must be met:
(1) The intending plaintiff must show that it
is or may be entitled to claim
relief against the intended defendant or some other person.
(2) It is
impossible or impracticable for the intending plaintiff to
formulate the claim without reference to one or more of
the
documents sought.
(3) There are grounds to believe that the documents are or have been in
the possession of the intended defendant.
[18] I turn now to consider these three requirements.
Plaintiff entitled
to claim relief?
[19] This is a threshold test. Although counsel for the Intended Defendant noted
that the Intending Plaintiff
will have to overcome limitation defences and will have
to persuade the Court that the fund held by the Intended Defendant is subject
to a
Trust in favour of those who have rendered gratuitous services to Doug, I am
satisfied that the Intending Plaintiff here has
done sufficient to show that she is or
may be entitled to claim relief against the Intended Defendant in these proceedings.
There
is, in my view, an adequate basis for the Intending Plaintiff's claim here. It is
more than a speculative possibility or a mere fishing
expedition Hetherington Ltd v
Carpenter.
[20] The Intended Defendant holds the funds in question pursuant to s66(4) Public
Trust Office Act 1957 which provides:
66. Protection of persons not of full mental capacity who are entitled
to money or damages
...
(4) Without limiting subsection (3) of this section, where
the
Court directs that the whole or any part of any money or
damages awarded to such
person in any cause or matter or of
any money to which such person is entitled under an
agreement, compromise, or settlement approved under
subsection (1) of this section shall be held on trust
for such
person under this subsection by the Public Trustee or any
other person then,
except so far as the Court directs any
immediate payment therefrom or otherwise orders, and
subject to any directions or conditions given or imposed by
the Court
(a) The
amount shall be invested and held by the trustee upon trust
(i) To make such payment
(if any) to such person out of the
income and capital of the amount as the Court may specify;
and
(ii) To apply the income and capital of the amount or so much
thereof
as the trustee from time to time thinks fit for or
towards the maintenance or education (including past
maintenance or education) or the advancement or benefit of
such person:
(b) Such person shall have no power, either by himself or in
conjunction with any other person or persons,
to terminate the
trusts upon which the amount is held or to modify or extinguish
those trusts:
(c) The interest of such person in the income and capital of the
amount shall not, while it
remains in the hands of the trustee, be
alienated, or pass by bankruptcy, or be liable to be seized, sold,
attached, or taken in execution by process of law.
(emphasis added)
[21] Although s66(4)(a)(ii)
is a discretionary provision, it does enable the trustee
to apply income and capital for or towards the maintenance or education
(including
past maintenance or education) or the advancement or benefit of Doug.
[22] Counsel for the Intending Plaintiff referred me to two Accident
Compensation decisions Taylor v Tait (HC
Rotorua, 23 May 2002, M13/00,
Chambers J) and Kidd v ACC (HC Invercargill, 14 February 2001, CP1/01,
Panckhurst J). In each of these
decisions, claims for past maintenance were brought
against ACC lump sum awards, and the Courts accepted that these sums were
impressed
with a trust which would enable payment to be made to caregivers for
their services at earlier times. Applying these ACC cases by
analogy, the Intending
Plaintiff here considers that she has a claim against the Intended Defendant.
[23] Although counsel for
the Intended Defendant endeavoured to distinguish
these cases, I am satisfied that they have some relevance here, and that the plaintiff
has done enough to show that she is or may be entitled to claim against the Intended
Defendant for such past maintenance. The threshold
test under this first requirement
has been met.
Impossible or impracticable for the Intending Plaintiff to formulate the claim?
[24] The second requirement is that it needs to be impossible or impracticable for
the Intending Plaintiff to formulate her claim
without reference to one or more of the
documents sought.
[25] Counsel for the Intended Defendant here notes the confidentiality
requirement included in the Terms of Settlement dated 25 September 2001 from the
Supreme Court of New South Wales which provides
specifically that:
These (settlement) terms are not to be disclosed.
[26] As noted above, the Intended Defendant has in
fact disclosed the settlement
terms to the Intending Plaintiff, but with the settlement sum deleted. It is the
Intended Defendant's
position that the settlement sum must remain confidential.
This is to comply with the direction of the Supreme Court of New South
Wales
which no doubt was made at least in part to protect the confidentiality of personal
injury claim settlements common in that
jurisdiction.
[27] Further, the Intended Defendant argues that, in any event, as the quantum of
the Intending Plaintiff's claim
is dependent on the value of the services alleged to
have been provided to Doug and not on the value of the Trust Fund itself, the
Intending Plaintiff does not need to know the details of the settlement sum in
question. It follows, according to the Intended Defendant,
that it is not impossible or
impracticable for the Intending Plaintiff to formulate her claim in the absence of this
information.
[28] Further, what support or assistance that may have been provided from the
Trust Fund to other past caregivers of Doug, according
to the Intended Defendant, is
irrelevant to the Intending Plaintiff's claim here.
[29] In reply, the Intending Plaintiff was
at pains to spell out that her present
application is not simply a fishing expedition. Counsel argued that she needs more
information
to bring the claim, particularly to avoid either the possibility of a strike
out application or the delays and costs involved in
the raft of other interlocutory
measures which may follow if the complete basis of her claim is not able to be
pleaded from the
outset. Counsel noted that the object of R.301 must be to minimise
litigation and not to unnecessarily increase it.
[30] Further,
counsel indicated that, in any event, the Intended Defendant had in
the past invited the Intending Plaintiff to submit a claim for
its consideration that
was made and calculated bearing some proportionality to payments made to other
caregivers. To do so, of course,
necessarily required details of such other payments.
[31] An additional ground put forward for the Intending Plaintiff was that
the
costs of issuing a complete proceeding and going through discovery and other
interlocutory applications on the part of all parties
might be avoided here if the
Intending Plaintiff did have access to the required documentation, as she might then
decide that her
claim was not justified because of either the quantum of the Fund or
the criteria for and level of payments made to other caregivers.
[32] For these
reasons, and seeking support from the decisions in Nelson v Dittmer
and W v Counties-Manakau Health, counsel submitted that the Intending
Plaintiff
could not properly formulate her claim until she knew the full extent of the Trust
Fund and the extent of payments made
to other caregivers.
[33] On balance I accept these arguments advanced for the Intending Plaintiff and
find that this second
limb of the test under Rule 301 has been satisfied.
Documents are in the possession of the Intended Defendant?
[34] There is
no dispute that the Intended Defendant has in its possession the
various documents sought here.
Discretion of the Court
[35]
McGechan on Procedure at para HR301.04 states:
The Court must be satisfied that the order is necessary at the time it
is made:
Rule 301. In Rule 301 applications, necessity will generally be subsumed in
the jurisdictional requirements:
HR301.03.
The Court's discretion is particularly important in dealing with confidential
documents. The potential for
abuse of confidential business information
obtained under Rule 301 has been recognised by the Court. If an order to
disclose such documents is made, it will often be appropriate for it to be only
in respect of a very limited class of documents,
and for a small number of
persons...
[36] Although in the present case the documents in question do not contain
confidential
business information, it is clear that the Terms of Settlement filed in the
Supreme Court of New South Wales recorded a confidentiality
requirement.
[37] I accept the position that, as a result, the Intended Defendant may feel it has a
duty to maintain as confidential
the settlement figure. Further, as trustee of Doug's
Trust, the Intended Defendant will no doubt feel a broad obligation to keep
confidential specific Trust matters.
[38] But, as I see it, those confidentiality claims can be met here by the imposition
of
appropriate confidentiality undertakings and restrictions.
[39] Indeed, in W v Counties-Manakau Health Limited the Court dealt
with this
confidentiality issue by specifically restricting discovery to the Intended Plaintiff's
solicitors and counsel and expert
medical witnesses. In my view, the present case is
one where similar restrictions could apply.
[40] In conclusion, I am satisfied
that this is an appropriate case for the Court's
discretion to be exercised in favour of granting some of the discovery orders which
are sought, but with appropriate confidentiality conditions. The case referred to
above, Taylor v Tait, illustrates the importance
of proportionality, that is knowing in
advance the extent of the Fund in question and knowing what payments may have
been made from
the Fund to other caregivers. Much of the information sought here
by the Intending Plaintiff particularises these matters.
Discovery orders are
appropriate and will follow.
[41] I turn now to consider the specific documents for which discovery
is sought.
a) The terms signed by the solicitors for the representative parties and
dated 25 September 2001 and referred
to in the decision of Michael
Grove J. on 25 September 2001 in the Supreme Court of New South
Wales Common Law Division
in the matter of 20922/97.
This document has already been provided, with the exception of the
settlement amount which
has been deleted. It is appropriate, in my
view, for the settlement amount to be disclosed, but again respecting
confidentiality
upon the basis I will outline below. An order to this
effect will follow.
b) Copies of the accounts of the New Zealand Guardian
Trust Company
Limited from 2001 to date in relation to the Douglas Wereta Trust
Given my findings at paragraph [41](a),
(d), (e) and (f) hereof, the
request for these accounts, in my view, goes too far. The accounts are
not necessarily required for formulation of the Intending
Plaintiff's
claim here. No order relating to these accounts is to be made.
c) A copy of any proceedings filed in the Family
Court at Napier or
elsewhere under the Protection of Personal and Property Rights Act
1988 in relation to Doug and/or the
Douglas Wereta Trust
Again, the relevance of these proceedings to the Intending Plaintiff's
claim here is dubious. Any
such proceedings would not appear to
relate to past care given to Doug by the Intending Plaintiff or other
caregivers,
or any payments made from the Trust to those other
caregivers. There is to be no order made with respect to these
proceedings.
d) Advice of documents giving the names of all caregivers to whom
payments have been made from the Douglas Wereta Trust
and the
amounts of all payments made to such caregivers
For the reasons outlined above, I am satisfied that
documents held by
the Intended Defendant relating to the names of caregivers and details
of caregiver
payments made are relevant, and should be discovered to
enable the Intending Plaintiff to formulate her claim against
the
Intended Defendant. An order to this effect, again with the
confidentiality restriction below
will follow.
e) Advice on/documents relating to the duties of all caregivers referred
to in (d) above
to the extent that this relates to any documentation held
by the Intended Defendant relating to the duties of all caregivers
to
whom payments have been made from the Trust
This is relevant caregiver information potentially and
again, I am
satisfied that these documents should be discovered. An order to this
effect will follow.
f) Advice on/documents relating to whether gift duty has been paid for
or required from any caregiver
referred to in (d) above
Again, to the extent that this relates to documentation held by the
Intended
Defendant, as to payment of gift duty for/to any of the other
caregivers, I am satisfied this documentation should
be discovered.
An order to this effect will follow.
Conclusion
[42] It will be apparent from the above that the
Intending Plaintiff's R.301
application has succeeded to a large extent.
[43] The following orders are now made:
a)
The Intended Defendant is to file and serve an affidavit within 21
days of service on it of this order stating
whether the following
documents or any documents of that class are or have been in its
possession, custody
or power, and if they have been in its possession,
what has become of them; and
b) Within that 21 day period to deliver
up the said documents for
inspection by the solicitors for and counsel to the Intending Plaintiff;
The documents are
to be the following documents relating to the
Douglas Wereta Trust:
i) Documents setting out the terms signed by
the solicitors for
the representative parties and dated 25 September 2001 and
referred to in the decision
of Michael Grove J. on 25
September 2001 in the Supreme Court of New South Wales,
Common Law Division, in
the matter of 20922/97 Douglas
Frederick Wereta by his Tutor Joyce Wereta v The Nominal
Defendant including
the settlement sum.
ii) Any documentation containing the names of all caregivers to
whom payments have been
made from the Douglas Wereta
Trust and the amounts of all payments made to such
caregivers.
iii)
Any documentation containing advice on or details of the
duties of all caregivers referred to in paragraph (ii) above.
iv) Any documentation containing details of whether
gift duty has
been paid for or required from any caregiver referred to in (ii)
above.
c) Confidentiality
condition
Discovery and inspection in terms of the discovery order now made,
is to be restricted at all times to the
Intending Plaintiff's solicitors and
counsel only. Appropriate undertakings are to be provided to this
Court from those
persons prior to completing inspection.
d) Leave is reserved to apply further on two days notice for clarification
of any of these orders.
Costs
[44] The Intending Plaintiff is legally aided. There is to be no order as to
payment
by the Intending Plaintiff of the Intending Defendant's costs for carrying out the
discovery ordered.
[45] As to the
present Rule 301 application, there is to be no order as to costs.
They are to lie where they fall.
________________________________
Associate Judge D.I.
Gendall
Solicitors:
Thomas Dewar Sziranyi Letts, Lower Hutt for Intending Plaintiff
Willis Toomey Robinson, Napier for Intended
Defendant
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