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High Court of New Zealand Decisions |
Last Updated: 26 August 2012
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2010-404-1709 [2012] NZHC 991
UNDER the Judicature Amendment Act 1972
IN THE MATTER OF an application for Judicial Review
BETWEEN VINCENT ROSS SIEMER Plaintiff
AND OFFICIAL ASSIGNEE First Defendant
AND KATE FARDELL Second Defendant
Hearing: 29 March 2012
Appearances: Plaintiff in person
B J Upton for the First Defendant
No appearance by or on behalf of the Second Defendant
Judgment: 11 May 2012
RESERVED JUDGMENT OF ELLIS J
This judgment was delivered by me on 11 May 2012 at 3 pm, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors: Simpson Grierson, Private Bag 92158, Auckland 1141
Copy To: V Siemer, Auckland.
SIEMER v OFFICIAL ASSIGNEE HC AK CIV-2010-404-1709 [11 May 2012]
[1] This decision relates to applications for particular discovery made by Mr Siemer in the context of his application for judicial review of a decision of the Official-Assignee made on 25 August 2009 not to assign back to him his claim in Siemer v Fardell (the Fardell proceedings).1 That claim essentially concerned an allegation that the late Mr Fardell QC had given negligent advice to Mr Siemer and his wife in relation to the affairs of Paragon Service Limited, a company in which the
Siemers had invested. Breach of fiduciary duty was also alleged. Substantial losses were pleaded and a commensurate amount of damages was claimed.2
[2] It is necessary to set out the background to the present application in some detail.
[3] The Fardell proceedings were commenced in 2003. Due to Mr Siemer’s failure to pay costs awarded against him in those and related proceedings, Mrs Fardell applied for security for costs in 2007. It was in the context of that application that the merits of the Siemers’ claim (in its then form) were canvassed in a general way by Associate Judge Abbott.3 It is relevant for present purposes that at [42] of his judgment Judge Abbott said:
[42] The Siemers also face a substantial hurdle in proving that any advice or action by Mr Fardell was the cause of their loss. As I have said, it is difficult to see that the steps which they contend should have been taken would have achieved anything more. The biggest component of their claim ($750,000) is for loss of technology. Counsel referred me to an affidavit by Mr Siemer filed in the s 174 proceeding in which Mr Siemer acknowledged that the industrial process in which he was investing was still in the development phase, and said that if the matter proceeded to trial, the defendant would be leading expert evidence that “there was no magic in the industrial formula” and that equivalents were available on the internet.
[4] On 8 November 2008, Mr Siemer was adjudicated bankrupt. The Fardell proceedings had not been heard and therefore vested in Mr Siemer’s estate in bankruptcy. The Official-Assignee was charged with deciding whether to progress Mr Siemer’s claim in the Fardell proceedings and, if not, whether to assign that
claim back to Mr Siemer. In making that decision and subsequently in defending
1 Siemer v Fardell HC Auckland CIV-2003-404-5782, 2 May 2008.
2 In the latest iteration of the claim for losses/damages, approximately $1 million are pleaded.
3 Siemer v Fardell.
these proceedings, the Official Assignee has been advised by the law firm Simpson
Grierson.
[5] On 7 May 2009, there was a meeting between Mr Siemer, the Deputy Official Assignee, Mr Viljoen, and two lawyers from Simpson Grierson. The fate of the Fardell proceedings was on the table. What precisely was said at that meeting has been a matter of contention between the parties, but it has recently transpired that the meeting was recorded and a transcript of that recording has now been provided to Mr Siemer. It appears that Mr Viljoen did not actively participate in the discussion at the meeting.
[6] The formal decision neither to continue nor to assign the Fardell proceedings to Mr Siemer was made by Mr Viljoen on 25 August 2009.4 Before doing so, he received advice from Simpson Grierson. This advice has recently been disclosed to Mr Siemer and privilege waived for that limited purpose. The advice referred to the perceived evidential difficulties that would be faced in relation to the cause of any losses that were related to the value of the technology.
[7] Mr Viljoen provided written reasons for his decision to Mr Siemer, although not until 4 March 2010. In these reasons, Mr Viljoen stated:
Additionally and significantly, when the negligence claim was discussed with you, you were unable to explain or provide any evidence to demonstrate how the alleged negligent advice caused you loss. You simply asserted that you would not have agreed to appoint a Receiver, and that you would have pursued another course of action, which, you said, might have prevented the disposal of the intellectual property.
As such, and aside from the fact that it is most likely in our view that a court will not agree that the advice was negligent, what you assert is premised on a speculative positive outcome (that the alternative action would necessarily have preserved the technology), and on an unsupported assumption that the technology in question actually had value. In that regard the defendant has said that if the case proceeded it would be leading expert evidence that the technology was unproven and that equivalent were available on the internet.
4 Mrs Siemer was struck out as a plaintiff in the proceedings on 9 August 2010 after she failed to comply with an unless order involving the payment of $100,000 security. The other plaintiff, Paragon Services Limited, was struck off the Companies Register in June 2009 and cannot proceed with the claim.
[8] Shortly after Mr Viljoen’s decision was made, the present review proceedings were filed. In December 2010, an affidavit was sworn and filed by Mr Viljoen in which he restated the reasons for his decision. In it, he said (inter alia) that:
[26] One aspect of [the 7 May 2009] discussion that struck me is that Mr Siemer was unable to explain in a meaningful way what loss he had suffered as a result of Mr Fardell’s negligence.
[9] This appears merely to be a reiteration of Mr Viljoen’s view of the matter which had previously been notified to Mr Siemer. It is consistent not only with the legal advice he received but also with the view expressed in a judgment of this Court. Notwithstanding this, Mr Siemer has taken particular objection to this passage of Mr Viljoen’s affidavit. He says it is not borne out by the facts of the matter and that the losses suffered by him are all set out in the statement of claim. It can be observed in passing that this contention misses the point of Mr Viljoen’s opinion, which is that (in his view) Mr Siemer will have considerable difficulty in establishing as a matter of law that any loss suffered by him was caused by the alleged negligent advice.
[10] In any event, Mr Siemer alleges that in making this statement in his affidavit
Mr Viljoen was seeking deliberately to mislead the Court.
[11] Mr Siemer applied to cross-examine Mr Viljoen at the hearing of the substantive review proceeding. That application was heard by Duffy J in February 2011 (the date originally scheduled for the hearing of the substantive review proceedings). At about this time, Mr Siemer wrote to Simpson Grierson requesting (under the Privacy Act) details of the legal costs incurred by the Official Assignee in the course of managing his estate in bankruptcy. That request was refused.
[12] Duffy J issued her decision declining Mr Siemer’s application to cross- examine on 4 August 2011.5 In her decision she was, however, critical of aspects of Mr Viljoen’s affidavit, essentially saying that he should have let his written reasons
speak for themselves.6 She recorded that, although she had given Mr Upton the
5 Siemer v Official Assignee HC Auckland CIV-2010-404-1709, 4 August 2011.
6 At [12].
opportunity to eschew any reliance on the affidavit at the substantive hearing, he had not done so.7 Contrary to Mr Siemer’s analysis of Duffy J’s judgment, she did not say that the affidavit was false or misleading, although she did consider that certain aspects of it (aspects that were unrelated to the present issue) were provocative and that other parts were inadmissible.8
[13] Later in her decision, Duffy J said (at [27]):
Added to the above is another matter that Mr Siemer drew to my attention after the hearing by written memorandum dated 7 March 2011. Counsel for the Official Assignee filed no explanation in response. Mr Siemer requested details of the legal costs incurred by the Official Assignee in relation to managing his estate. The request was made under the Privacy Act 1993. The Official Assignee responded by declining to provide the information on the ground the request was “subsumed by ... the application for a witness subpoena seeking cross-examination”, and further said that the information would not be released until the Court issued a decision on the application to cross-examine. The request was also described as being “sub-judice”. It is hard to see how the request could be considered “sub-judice” and to see any other reason under the Privacy Act for refusing to release the information requested. The result has been that Mr Siemer has drawn the matter to the Court’s attention on the ground it provides “further evidence of the legally flawed and obstructive approach the [Official Assignee] has adamantly clung to”.
[14] Immediately after the release of Duffy J’s judgment, Mr Siemer amended his statement of claim to include a fresh cause of action based on an allegation of bad faith on the part of the Official Assignee and (at least inferentially) his counsel.9 It is that allegation that is relevant to the present application. For that reason, I record the following aspects of Mr Siemer’s pleading:
27.0 The Official-Assignee defendant further declined to pursue or assign the proceedings to the plaintiff on the expectation that continuation of the proceedings would result in significant costs being incurred.
28.0 The Official-Assignee has nonetheless spent significant sums already opposing assignment of the claim to the plaintiff in circumstances where:
7 I record that Mr Upton advised me that Mr Viljoen was, however, prepared to withdraw paragraph [32] of his affidavit which contains the statement to which Mr Siemer now takes objection.
8 The passages relied on by Mr Siemer can be found at [23] – [25] of Duffy J’s judgment.
9 Mr Siemer alleges that the decision not to assign the Fardell proceedings to him was (a) based upon an error of law, (b) in breach of natural justice, (c) made without taking into account relevant considerations, (d) based on irrelevant considerations, (e) based upon procedural impropriety.
28.1 Such expenditures make no economic sense.
28.2 It is unusual for such a state functionary to not merely abide by the decision of the Court in such judicial review proceedings.
28.3 The mere expenditure and aggressive misleading of the Court in opposition gives rise to suspect motives by the Official-Assignee and/or his counsel.
29.0 Questionable motivation was given support when, on 7 March 2011, the sole witness Mr Viljoen wrote a letter to the plaintiff wherein he stated he would not provide relevant discovery on the costs he was incurring on legal advice related to the plaintiff’s estate on the grounds:
29.1 Reply to this request was “subsumed by your application for
a witness subpoena seeking cross-examination”.
29.2 The information being sought was “sub-judice” and would not be provided until after the application to cross-examine was determined.
[15] And in terms of the specific relevant pleading of bad faith, the claim states:
45.3 The first defendant acted in an unlawfully obstructive manner, and did so in a deliberate and determined fashion. The defendant first refused to provide reasons for his refusal to assign and later refused to provide discovery regarding the notably significant legal fees he was charging against the plaintiff’s estate in this matter. Tellingly, he claimed he was refusing the lawful request for discovery on the basis the evidence was “sub-judice” and “subsumed by your application for a witness subpoena seeking cross-examination”.
....
45.7 The evidence, in the form of legal bills from the first defendant’s counsel to the first defendant, would disclose the extent of counsel’s complicity in the deception of this Court. This is the evidence which the first defendant untenably claimed to be “sub-judice” and asserted would not be provided on this basis in March 2011.
45.8 While not indicative of bad faith by itself, the fact that the first defendant spent significant sums opposing the judicial review (before the bad faith ground was pleaded) with no hope of return and a situation where the decision-maker ordinarily abides by the decision of the Court, must be considered in the full context of his other conduct which indicates a bad faith motive in refusing to pursue or assign the claim.
The particular discovery applications
[16] It is against the above background that the first application for particular discovery was made, on 31 October 2011. By it, Mr Siemer sought an order:
Directing the First defendant to produce discovery in the form of detailed time and attendance invoicing from Simpson Grierson in respect to this proceeding and Siemer v Fardell CIV-2003-404-5787 ...
[17] A renewed application to cross-examine Mr Viljoen was also made on that date. Although that application was opposed by the Official Assignee, Mr Siemer’s ability to make it was not disputed because it followed the amendment to the statement of claim and because of the recent discovery of the transcript of the 7 May meeting.
[18] On 9 November 2011, counsel for the Official Assignee filed a memorandum which stated (inter alia):
[13] There are two further points:
(a) At the hearing of this matter on 3 February 2011, Your Honour [Justice Duffy] suggested that it might assist the Court and Mr Siemer if the legal advice provided to the Official-Assignee were disclosed;
(b) Your Honour’s judgment of 4 August 2011 was in some respects critical of the Official-Assignee’s decision not to provide the costs incurred by Mr Siemer’s estate in bankruptcy. Mr Siemer had made a request under the Privacy Act for this information. He has since renewed that request, been provided with some information but now sought further breakdown. It appears that Mr Siemer is keen to identify how much has been spent by the Official- Assignee on these proceedings and (perhaps) the advice relevant to the assignment back of these proceedings to him.
[14] To assist both matters, the Official-Assignee has instructed that it will:
(a) Allow disclosure of the legal advice on the understanding that this [sic] that waiver of privilege is limited to the advice itself – it cannot give rise to a waiver of any other advice provided around or subsequent to that legal opinion; and
(b) Provide, as best it can, a breakdown of costs per task in terms of the legal fees the Official-Assignee has incurred in relation to Mr Siemer’s bankruptcy.
[19] On 14 November 2011, Mr Siemer’s application was called in the Duty Judge list. After hearing from Mr Siemer and Mr Upton, White J made directions which included the following:
The first respondent is to make particular discovery in respect of the legal attendances, that is how much costs in total were spent on particular tasks by the Official-Assignee in the estate, including the time and attendances spent preparing for and attending the meeting on 7 May 2009 by 5 pm on Monday
21 November 2011.
The first respondent is to file and serve his notice of opposition to Mr Siemer’s second application for cross-examination of Mr Viljoen and for an order referring counsel to the New Zealand Law Society by 5.00 pm on Monday 21 November 2011.10
[20] The Official-Assignee subsequently:
(a) provided to Mr Siemer a breakdown of the costs charged by Simpson Grierson accompanied by a general description of the matters in respect of which those costs were incurred;
(b) filed a formal notice of opposition to the application to cross-examine, the application for referral to the Law Society, and the application for particular discovery.
[21] As far as the opposition to the discovery application was concerned, the notice of opposition said that to the extent the information had not already been provided, it was the subject of legal professional privilege.
[22] As far as the cost breakdown is concerned, no detailed time and attendance records have been provided other than in relation to preparation for and participation in the meeting on 7 May 2009. Mr Upton said that this was consistent with what he advised White J would occur on 14 November and with the terms of White J’s minute. Mr Upton accepted that the time and attendance records relating to the
7 May 2009 meeting were potentially relevant to specific issues that had been raised
10 I record that although Mr Siemer attempted to make various submissions at the hearing before me that were related to this application (which essentially alleges various breaches of professional conduct by counsel for the Official Assignee) Duffy J directed on 16 February 2102 that that application should be dealt with separately from Mr Siemer’s other applications and I do not propose to deal with any aspect of it in this judgment.
by Mr Siemer (in an affidavit) about the two Simpson Grierson lawyers who had attended the meeting. He said that the agreement by the Official Assignee to provide the costs breakdown did not constitute any wider concession of relevance and that no finding of wider relevance can be inferred from White J’s minute.
[23] Mr Siemer, however, says that the Official Assignee has not complied with White J’s direction which (he says), properly interpreted, requires disclosure of the time breakdown for all attendances. As I understand it, essentially what he seeks is discovery of Simpson Grierson’s timesheets, particularly in relation to the preparation of Mr Viljoen’s affidavit. He also says that it must necessarily be assumed that White J considered that the material ordered to be disclosed was relevant to the judicial review proceedings.
[24] Because there was no agreement about the scope of White J’s order or about Simpson Grierson’s compliance with it, Mr Siemer filed a further application for particular discovery on or about 18 January 2012. That application was materially the same as the earlier one. A further notice of opposition, effectively incorporating the grounds set out in the earlier notice of opposition, was duly filed.
Preliminary issue: what was the scope of White J’s direction and did he determine relevance?
[25] In the circumstances I have set out above, I am not prepared to accept that White J’s minute of 14 November does any more than record the position that had been agreed by Mr Upton. The specific reference to “time and attendances” is directly linked with the 7 May meeting which (rightly or wrongly) Mr Upton had accepted could be relevant and discoverable. There is no evidence that White J heard wider arguments about relevance in relation to time and attendance records more generally, and nor is it likely that he was able to do so in the context of the Duty Judge list. I therefore consider the question whether the timesheets now sought by Mr Siemer remains at large and should be determined by me.
Discussion
Are Simpson Grierson’s timesheets relevant to the matter at issue in the proceedings?
[26] In general terms, the judicial review proceedings seek to impugn the Official Assignee’s refusal to pursue or to assign the Fardell proceedings. The reasons for those decisions and, potentially, aspects of the process leading up to them are squarely in issue. I observe that Mr Siemer now has those reasons and the advice that underlay them. He now has the transcript of the 7 May meeting. It is open to him to make what he can of either their contents or any delay occasioned in providing these to him.
[27] As I have said, however, the present applications arise out of the newer, “bad faith”, pleading (see [14] and [15] above). On my analysis of the pleading, that cause of action seems to be predicated on:
(a) Allegations of earlier obstructive behaviour by the Official Assignee in the course of the proceeding (including the delay to which I have referred in the previous paragraph);
(b) The Official Assignee’s alleged deception of the Court and counsel’s
“complicity” in that deception;
(c) The amount of money spent defending the claim in circumstances
where there is said to be “no hope of return”.
[28] Given that Mr Siemer now has a breakdown of the legal costs incurred by the Official Assignee in relation to the proceedings, it is difficult to see how Simpson Grierson’s timesheets could have any further bearing whatsoever on either the first or the third of these contentions. As I understood it, that was accepted by him. However, he says that he is entitled to the timesheets because they are relevant to the second matter.
[29] As I have earlier explained, the allegation that underlies this second aspect of the bad faith claim concerns the statement made by Mr Viljoen at [32] of his affidavit referred to above. Mr Siemer contends that this statement constitutes a “deception” because he does not agree with that statement which (he says) is at odds with the losses pleaded in his statement of claim and (as I understand it) what he said at the
7 May meeting. Mr Siemer now also seeks to implicate counsel in this “deception” because the opinion expressed by Mr Viljoen was reflective of Simpson Grierson’s advice. At the hearing before me, Mr Siemer went so far as to say that lawyers at Simpson Grierson had in fact written Mr Viljoen’s affidavit for him.
[30] Whether or not Mr Siemer might be entitled to see the Simpson Grierson timesheets under the Privacy Act (as to which I make no comment) has no bearing on the matter that is presently before the Court. It is unfortunate if the passage I have quoted at [13] above from Duffy J’s judgment has caused him to think otherwise. The present application and this judgment are concerned only with whether or not the timesheets are relevant to a matter in issue in these proceedings. The application is to be assessed within the context I have set out above.
[31] In order to establish that the statement made by Mr Viljoen was a “deception”, Mr Siemer would need to persuade a Court that the statement was something more than merely an expression of Mr Viljoen’s opinion or that it was an opinion he did not honestly hold.
[32] The timesheets could only arguably be relevant to the second matter. In that respect, I accept that the timesheets might well disclose that Mr Viljoen did receive assistance from Simpson Grierson both in forming his views about the assignment issue and in preparing his affidavit. On the basis of the material that Mr Siemer already has in his possession, that would indeed appear to be the case. But that is
unremarkable. Mr Viljoen was not only entitled,11 but obliged, to seek legal advice
on the issue.12 And having received that advice, he was entitled to act in accordance with it.
11 Elmer v Toime [2005] NZAR 228 (HC), upheld (on this point) in Elmer v Toime [2008] NZCA
411, [2008] NZCA 411; [2009] NZAR 47 (CA).
12 Callis v Pardington (1996) 7 NZCLC 261,211 (CA).
[33] To the extent that Mr Siemer wishes to contend that Mr Viljoen in fact held a different view and that Simpson Grierson forced him against his will to change it, I think the Court is entitled to take something of a reality check. Just as a Court hearing a strike out application is not required to accept pleaded facts as true if they are plainly speculative and without foundation (Collier v Panckhurst13) it seems to me that a Court is not required to determine relevance for discovery purposes on the basis of pleadings that are plainly speculative and without foundation.
[34] The reality here is simply that the view expressed by Mr Viljoen not only coincided with that of his legal advisers (Simpson Grierson), but also with that of Associate Judge Abbott. It is possible that the view was, in light of whatever was said by Mr Siemer at the 7 May meeting, wrong. It remains open to Mr Siemer to try and establish that, but he already has the relevant documentation in that respect (in particular the transcript of what was said at the meeting). It remains a long and unnecessary bow to contend that Mr Viljoen’s view was dishonestly held, particularly in light of the need for particularly strong and direct evidence to support such an allegation. The proposition that Simpson Grierson’s timesheets might constitute such strong and direct evidence (or, indeed, relevant evidence of any kind) is, in my view, untenable.
[35] For these reasons, I consider that Simpson Grierson’s timesheets (or any other records of their time and attendances in relation to this litigation and/or the Fardell proceedings) are not relevant to the bad faith cause of action. Moreover, and in terms of the usual threshold for particular discovery under High Court Rule 8.19, there can in my view be no question that disclosure of the records sought is
necessary to do justice between the parties.14 The application for particular
discovery is accordingly declined.
13 Collier v Panckhurst CA 136/97, 6 September 1999.
Privilege
[36] For completeness, I also record Mr Upton’s submission that the timesheets are protected by either litigation or legal professional privilege. I accept that that is arguably so, and that there is some authority that might support that proposition.15
However, Mr Upton did not pretend that the issue was clear-cut and in my view it might be necessary for the Court to examine the timesheets in question before forming a final view on it. In light of my conclusion in the preceding paragraph that course is, however, unnecessary.
Postscript: conflict issue
[37] Finally, it is necessary to record that at the beginning of the hearing before me, Mr Siemer raised an issue about what he said was Mr Upton’s conflict of interest in acting and appearing for the Official Assignee in relation to the application. As I understood it, a conflict was alleged because:
(a) Mr Siemer considers that Simpson Grierson were complicit in the
filing of Mr Viljoen’s (allegedly) false affidavit;
(b) The documents sought by this application will (or may) assist in proving such complicity.
[38] An allegation of dishonesty is serious and is not to be made without foundation.
[39] In the present case, Mr Viljoen’s statement was an expression of opinion only. While Mr Siemer may not agree with that opinion, there was (on the material now disclosed to Mr Siemer) an adequate basis for it. That position is not altered by the fact that Mr Siemer may consider that he put forward a contrary view on 7 May or
that he may, in time, be able to establish that there is other evidence that contradicts
152 (HC) and to the position in Victoria, recently discussed in Hodgson v Amcor Limited: Amcor
Limited v Barnes & Ors (No. 2) [2011] VSC 204 (16 May 2011) (SC).
the opinion (as to the likelihood of which I express no view). Moreover, in all the circumstances I have described, it would be quite unreasonable to draw any inference that is adverse to counsel merely from the fact that Mr Viljoen’s opinion coincided with that earlier expressed of Simpson Grierson. Rather, it would be surprising if it did not.
[40] I do not therefore accept that there is any foundation for the alleged conflict of interest and I have dealt with the matter on that basis.
[41] As I have said, Mr Siemer’s application for particular discovery is declined.
The Official Assignee is entitled to costs on a 2B basis.
Rebecca Ellis J
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