Nathans Finance NZ Limited (in receivership) v AIG Insurance New Zealand Limited [2014] NZHC 2997 (28 November 2014)

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BETWEEN	NATHANS FINANCE NZ LIMITED (in receivership) First Plaintiff MERVYN IAN DOOLAN Second Plaintiff KENNETH ROGER MOSES Third Plaintiff DONALD MENZIES YOUNG Fourth Plaintiff JOHN LAURENCE HOTCHIN Fifth Plaintiff
AND	AIG INSURANCE NEW ZEALAND LIMITED First Defendant ACE INSURANCE LIMITED Second Defendant

Hearing:	21 November 2014
Appearances:	M J Tingey and T B Fitzgerald for Plaintiffs M G Ring QC and M Cavanaugh for First Defendant T G Aherne and A C Cupples for Second Defendant
_Judgment:	_{28 November 2014}

This judgment was delivered by me on 28 November 2014 at 11.30 am, pursuant to Rule 11.5 of the

NATHANS FINANCE NZ LTD (in rec) v AIG INSURANCE NZ LTD [2014] NZHC 2997 [28 November 2014]

[1] Nathans Finance NZ Limited (in receivership) (Nathans) and its directors, the second to fifth plaintiffs (collectively the Nathans’ plaintiffs), sue AIG Insurance New Zealand Limited (AIG) as the directors’ directors and office’s insurer. ACE Insurance Limited (ACE) also carries potential liability under an excess policy for the claim.

[2] Nathans was placed in receivership in August 2007. Following receivership the directors were charged with and convicted of offences under the Securities Act

1978. Nathans also took civil proceedings against the directors. Nathans’ civil claim was settled in December 2012. The directors accepted they were jointly and severally liable to Nathans in the sum of $30 million for their defaults. Judgment was entered on that basis in March 2013. The directors’ claim for indemnity for that sum under the policy has been declined by AIG and ACE.

[3] The plaintiffs’ claim against AIG and ACE is set for trial for three weeks

[4] AIG proposes to call an accountant, Mr Grant Graham, to give expert evidence on the issue of whether the director’s actions were dishonest in terms of a policy exclusion for dishonesty. The Nathans plaintiffs object to Mr Graham’s evidence and seek a ruling that it is not admissible at trial.

(a) Mr Graham was formerly engaged by the trustee of Nathan’s Trust Deed, Perpetual Trust. In 2006 he advised it on Nathan’s intercompany receivables. He cannot use information obtained during that engagement in these proceedings to give evidence to support the insurers’ case. If the insurers successfully oppose the claim that will

ultimately be contrary to the interests of Nathans and Perpetual as trustee of the deed.

(b) Mr Graham was engaged by a Mr McPherson who was appointed to carry out an investigation under the Corporations (Investigation and Management) Act 1989 (the CIM Act) into Nathans. He cannot use confidential information obtained during that investigation as a basis for his evidence. It would be unlawful to do so. The information he obtained during that investigation cannot be “unlearnt”.

[6] As an alternative to the exclusion of Mr Graham’s evidence in its entirety on one of the above three grounds, Mr Tingey submitted that parts of it should be ruled inadmissible as irrelevant to the pleaded dispute. As advised to counsel I am not prepared to engage in such an exercise at this pre-trial interlocutory stage. Issues of relevance are best determined by the trial Judge. The issue for this Court at this time is whether the Nathans plaintiffs can satisfy the Court that Mr Graham’s evidence should be ruled inadmissible in its entirety for one or more of the substantial reasons advanced.

[7] In his brief of evidence Mr Graham disclosed his former involvement with Nathans both in relation to the Perpetual brief and the engagement by the Ministry of Economic Development under the CIM Act.

[8] On the Nathans plaintiffs’ case, in mid 2006 Perpetual sought comfort about an audit of one of Nathans’ major creditors, Intelligent Vending LLC (IVL) and about a valuation provided by MC Capital to VTL Group Ltd (VTL). Perpetual instructed Mr Graham and his firm. In the course of his brief Mr Graham interviewed Mr Doolan. He asked Mr Doolan about Nathans’ loans to IVL. However, ultimately Mr Graham advised Perpetual that he did not believe his firm could provide the comfort it requested. They did not have sufficient information to

give informed valuation advice in relation to what seemed a heavily US domiciled business nor about the US market in which it operated.

[9] The only other relevant advice Mr Graham and his firm gave Perpetual was whether Staples Rodway, Nathans’ auditors, had adequately responded to Perpetual’s request under s 50(3) of the Securities Act to enable Perpetual as trustee to rely on it. The rather limited nature of the brief overall is reflected by the fee of $3,500 plus GST.

interests are adversely affected by the defendant’s opposition to the plaintiffs’ claim.

[11] Mr Tingey submitted that Mr Graham’s interview of Mr Doolan was conducted in order to scope Perpetual’s initial broader instruction and the interview covered a number of the issues ultimately discussed by Mr Graham in his evidence. Mr Tingey noted that Mr Graham proposed to give evidence relating to IVL, including the master franchise sale, lending, revenue, performance, problems with a Mr Hyslop and VTL’s involvement with IVL.

It is necessary to go back to the basic issue, which is the protection of confidential information from disclosure. In our view this issue should be addressed by the Court applying a principled approach, for which it is neither necessary nor desirable to lay down a series of propositions covering a variety of different hypothetical situations, which are likely some time later to be found non-exhaustive. Three questions emerge. The first is whether confidential information is held which if disclosed is likely to affect the concerned (former) client's interests adversely. The second is whether in the particular factual circumstances, viewed objectively there is a real or appreciable risk that the confidential information will be disclosed. The third, which arises if the first two questions are answered affirmatively, is whether recognising the significance and importance of the special fiduciary relationship which gives rise to the duty of protection, the Court's discretionary power to disqualify should be exercised.

_{Graham obtained information which he now proposed to disclose as it
informed part}

¹Russell McVeagh McKenzie Bartleet & Co v Tower Corporation [1998] NZCA 158; [1998] 3 NZLR 641 at 651.

of Mr Graham’s brief of evidence. He submitted that the Court should act to prevent

[14] Of course Russell McVeagh v Tower involved a solicitors’ firm. The Auckland office was acting for GPG in relation to an intended takeover of Tower. At the same time, the Wellington office was acting for Tower in a dispute with the Inland Revenue Department. The Court of Appeal held that where the solicitors possessed confidential information the Court would readily infer a risk of disclosure in the absence of negating evidence. In the case before it the Court ultimately held there was nothing to support an inference of risk of disclosure.

[15] I accept that similar principles could apply to prevent an accountancy firm disclosing confidential information. However, an important, and in my judgment fundamental, distinction between the present case and the Russell McVeagh case is that Mr Graham and his firm are not acting for AIG. Mr Graham is to be called as a witness. As Mr Ring QC submitted the starting point is that anyone who is eligible to give evidence and whose proposed evidence is otherwise admissible may be

called to give evidence.²There is no proprietary interest in a witness. Mr Graham

could have been subpoenaed to give evidence. More than that, Mr Graham is to be called as an expert witness. In accordance with r 9.43 and the Code of Conduct an expert witness has an overriding duty to assist the Court impartially and is not an advocate for the party engaging him or her.

It is important to keep in mind that moral and ethical obligations do not necessarily equate legal, including fiduciary, duties which are enforceable by the Courts. Professional bodies properly undertake supervisory functions over their members, and lay down codes of conduct which can be enforced under their own jurisdictions. The Court has a separate and independent function, and will provide a remedy when there has been a breach of duty recognised by law.

³Russell McVeagh McKenzie Bartleet & Co v Tower Corporation, above n 1, at 649.

[17] The only duty recognised by law that could conceivably relate to the Perpetual engagement is the duty recognised by s 69 of the Evidence Act to preserve confidential information. However the Court would have to be satisfied the communications between Mr Graham and Mr Doolan and Perpetual were sufficiently confidential so that the Court should make a direction that they not be disclosed at this stage, some eight years later. The test is whether the public interest in the disclosure of the communication or information is outweighed by the public interest in preventing harm to Perpetual, or the relationship between Perpetual as trustee and accountants it may engage from time to time.

[18] The information Mr Graham obtained from Mr Doolan in the present case lacks such confidentiality, particularly given the passage of time and subsequent events. The affairs of IVL and Nathans have been publicly aired in the criminal trial. In any event, the short answer to this point is that Mr Graham does not refer or purport to refer in his brief to any of the discussions he had with Mr Doolan arising out of his meeting with him. The role Mr Graham had when acting for Perpetual was a relatively limited brief. The evidence he now gives is considerably broader and focused on quite different issues. Section 69 has no application.

[19] There is nothing in Mr Graham’s and his firm’s former engagement by Perpetual that prevents him from giving evidence as an expert witness called by AIG in the present case.

[20] On 8 February 2007 Mr McPherson, an investigating accountant with the Ministry of Economic Development (MED), was appointed by the Registrar under s 19 of the CIM Act to carry out an investigation into the affairs of Chancery Finance Ltd and VTL, entities associated with Nathans.

[21] In July 2007 Mr Graham was engaged by Mr McPherson to assist his investigation. His brief was to:

[22] During the course of that investigation Mr Graham and his staff met with and interviewed a number of the directors. Both Mr Doolan and Mr Hotchin have deposed to the discussions they had with Mr Graham. Mr Tingey submitted the most significant event appeared to have been a meeting on 19 July 2007. Both Mr Doolan and Mr Hotchin were in attendance as were Mr Graham and Mr McPherson.

[23] Mr Doolan explained his personal understanding and views of how the VTL franchise model worked and the master licence derived as income, Nathans’ loans and the recoverability of them, how the VTL business was working and the prospects of business in New Zealand, Australia and the United States.

[24] Mr Hotchin discussed VTL’s business model, VTL’s performance in the USA, the performance of the partial subsidiary that he was working for at the time, IVL’s performance, the valuations for the businesses and VTL’s plans for the future of VTL and IVL.

[25] Mr Tingey submitted that Mr Graham must have relied on that information in preparing his brief of evidence. He noted there was a substantial overlap in the factual matters underlying the inquiry and the matters covered in Mr Graham’s evidence. For instance the schedule Mr Tingey prepared for the hearing confirms Mr Graham refers to the VTL business model, VTL’s other operation and a historical overview of VTL.

[26] I record that Mr Tingey accepted Mr Graham’s brief does not expressly refer to the discussions. He did, however, note Mr Graham himself had said in his brief that, for instance:

31. For my understanding of the business model I rely in part on my previous knowledge of the business from the MED assignment and certain briefs of evidence from the Securities Commission proceedings.

[27] He submitted Mr Graham was not entitled to use the information obtained during the course of the MED engagement in the preparation of his brief of evidence, even indirectly.

[28] Mr Tingey also submitted that Mr Graham could not have “unlearnt” the information he had gained from Messrs Doolan and Hotchin in preparing his evidence and forming his opinion as to the directors’ honesty.

[29] In an affidavit for the purposes of this application Mr Graham has deposed that he believes he has approached the AIG engagement afresh. He says that, while he had some background knowledge of VTL prior to August 2014, (the date he was first asked to give evidence in this case) it was not something which he used or relied on in any material way in preparing his brief of evidence. He says:

64. ... AIG’s instruction required me to review what documentary information was available to the directors in the period leading up to the collapse of the VTL Group.

65. ... I was not required to form any impressions of the directors during [Ferrier Hodgson’s] prior engagements, whereas my current assignment has required me to consider what documents the directors had in fact received as was evident from the board papers and various emails, and draw conclusions from that. ... [In relation to the prior engagements] I was looking at issues unrelated to the conduct of the directors in both instances. Specifically, my focus during the MED engagement was on the financial position of VTL at a specific point in time in order to provide a valuation.

[30] Mr Graham also addressed the reference at para 31 of his brief relied on by

61. ... I wish to make it clear that to the extent I referred to documents for the background information on which I relied, I was referring specifically to the background information which I gleaned from the

Hotchin, Hyslop and Seymour briefs, and the documents discovered in the current proceeding which included the interim report to MED. Those documents recorded most, if not all, of the background information on which I have relied, and certainly address any material issue.

[31] For the reasons given above relating to the Perpetual engagement, subject to consideration of the effect of the CIM Act, I do not consider that Mr Graham’s engagement by MED would prevent him from giving evidence in these proceedings.

[32] The CIM Act has a number of provisions dealing with confidentiality. The starting point is that the CIM Act confirms the compulsion on persons such as the Nathans’ directors in this case to answer the questions put to them during the course of an investigation and to assist the investigation. It is an offence to refuse to answer any questions from, in this case Mr McPherson (or Mr Graham as his agent), without reasonable excuse.⁴

(1) Any person appointed under section 19 of this Act may, for the purposes of carrying out an investigation of the affairs of a corporation,—

(a) By notice in writing, require that corporation or any officer or employee of that corporation or any associated person or any other person to—

(i) Supply any information relating to the business, operation, and management of the corporation:

(ii) Produce for inspection any documents of, or relating to, the business, operation, and management of that corporation in the custody, or under the control, of that corporation, officer, employee, or person:

(iii) Where necessary, reproduce in usable form any information recorded or stored in such documents:

(b) Take copies of any documents produced for inspection under paragraph (a) of this subsection:

question relating to the business, operation, and management of that corporation.

19 of this Act may, for the purposes of carrying out an investigation of the affairs of the corporation, at any time,—

(b) Inspect, remove, and take copies of any documents, or extracts from documents, relating to the business, operation, and management of that corporation in the possession, or under the control, of any person, and where necessary, require the reproduction in usable form of any information recorded or stored in such documents.

[34] It is accepted that no notice was given in accordance with s 21(1)(a). However Mr Tingey submits s 21(1)(c) applied. I note that the information referred to in s 21(1)(a)(i) and (iii) to be provided in response to a notice is defined as “includes data, documents and forecasts”. A different focus applies to the requirement to answer any question under s 21(1)(c). No notice is required to engage the requirement to answer the questions. For present purposes I accept that Mr Graham as Mr McPherson’s agent could require the directors to answer questions and, if the directors failed or refused without reasonable excuse to answer, they would have committed an offence. To that extent there was compulsion on the directors to answer the questions put to them by Mr McPherson and Mr Graham.

[35] What is the consequence of that in the present context? As relevant, s 23 provides:

(i) The Registrar [or the FMA] under, or for the purposes of, or in connection with the exercise of powers conferred by, this Part of this Act:

(b) Information derived from, or based upon, information referred to in paragraph (a) of this subsection:

(2) Neither the Registrar [nor the FMA], nor any person authorised by the Registrar under section 17 or section 19 of this Act, shall publish or disclose any information to which this section applies except—

(b) To the extent that the information is available to the public under any Act other than the Official Information Act 1982, or in a public document:

(e) To any person who the Registrar [or the FMA] is satisfied has a proper interest in receiving such information.

(4) No person to whom any information to which this section applies is published or disclosed pursuant to paragraph (c) of subsection (2) of this section shall publish, disclose, or use such information except—

(a) For the purposes of this Act or in connection with the exercise of powers conferred by this Act; and

(b) In accordance with such conditions as may be specified by the Registrar [or the FMA].

(5) No person to whom any information to which this section applies is published or disclosed pursuant to paragraph (a) or paragraph (e) of subsection (2) of this section, shall publish, disclose, or use such information unless the publication, disclosure, or use is—

(b) Necessary or desirable in connection with the exercise of any function or power conferred by any enactment.

(6) Every person who contravenes this section commits an offence against this Act.

[36] Mr Tingey says that Mr Graham received information (within the meaning of the section) from Mr McPherson and was bound by the provisions of s 23(4). I record that MED has not authorised Mr Graham’s use of the information under s 23(5). If Mr Tingey’s argument is correct then it is arguable Mr Graham has already committed an offence under s 23(6).

[37] Mr Ring accepted that the requirement for confidentiality under s 23 must apply to Mr Graham as Mr McPherson’s agent. He submitted that the issue then is whether any of the exceptions to s 23(2)(a)–(e) apply.

[38] As noted, Mr Tingey argues that s 23(4) applied to Mr Graham on the basis that Mr McPherson disclosed information to Mr Graham in accordance with s 23(2)(c), so that Mr Graham was subject to s 23(4) with the result Mr Graham was not able to “use” the information in the preparation of his brief. Mr Tingey needed to incorporate s 23(4) to support his argument that Mr Graham could not have “unlearnt” the information he obtained and so must have “used” it in the preparation of his brief.

[39] After the hearing had concluded Mr Tingey filed a “supplementary memorandum” with further submissions directed to this point. The memorandum should not have been filed without first obtaining leave. The issue it addressed was raised in the course of argument, and the memorandum did not refer to any authority directly on the point, but rather sought to reprise the argument. Mr Ring opposed the memorandum. I have read it, but do not consider it advances matters.

[40] On Mr Tingey’s submission, only Mr McPherson would be bound by s 23(2). Mr Graham is bound by s 23(4). He suggested the alternative interpretation, that an agent is also caught by s 23(2), was inconsistent with the scheme of the CIM Act. I disagree. Section 23(4) is clearly directed at preventing republication of information by a person who receives it under s 23(2). But Mr Tingey’s argument overlooks that Mr Graham did not obtain the information provided by Mr Doolan and Mr Hotchin from Mr McPherson. He obtained it directly from Messrs Doolan and Hotchin. Section 23(4) was not engaged in relation to the information obtained from them of which complaint is made.

[41] The intent of the scheme of the Act is to prevent a person who has authority to require directors or officers to answer questions about the business from disclosing that information further. If the information is passed on for the purposes of the Act under s 23(2)(c) then the recipient is similarly bound to keep it confidential and is only to use it for the purposes of the CIM Act.

[42] However, s 23(4) is not particularly apt to deal with the issue of an agent such as Mr Graham obtaining information directly during the course of an investigation. Mr Graham did not receive the information in question from Mr McPherson (which is what s 23(2)(c) contemplates), rather he received it directly from Messrs Doolan and Hotchin. Mr Tingey suggested that, where Mr Graham was present with Mr McPherson at meetings with Messrs Doolan and Hotchin and Mr McPherson asked a question which the directors responded to, then Mr Graham effectively obtained the information from Mr McPherson. I am unable to accept that submission. The information is obtained from the answer, not the question. The information was provided in the answers given by Messrs Doolan and Hotchin. It was obtained directly from them.

[43] Mr Tingey’s argument is also inconsistent with his point that the directors were compelled to answer Mr Graham’s questions. The directors would only be compelled to answer Mr Graham’s questions under s 21 if Mr Graham as Mr McPherson’s agent had the same authority as Mr McPherson to require the directors to answer.

[44] I return to the issue whether any of the exceptions to s 23(2) apply. In my opinion s 23(2)(b) does, to the extent that information Mr Graham obtained from Messrs Doolan and Hotchin was given as evidence by him in the course of the prosecution of the directors. Mr Graham gave evidence under subpoena in the Securities Commission prosecution of the directors. He was asked to prepare a statement which included, amongst other things, a summary of Ferrier Hodgson’s findings in relation to the interim MED report. The statement was given in evidence. Mr Graham outlined the information relied on in providing the report. Anything material learnt from the directors and management was included in the report which was provided to the Court together with the documentary information on which he had relied at that time.

[45] The exemption under s 23(2)(b) applies to the publication or disclosure of information once it has been made available to the public in a public document. The record of evidence produced during the course of a public hearing must come within the meaning of public document in this context. There was no restriction on the

publication of the evidence. The Criminal Procedure Act 2011 prescribes the restrictions on publication of evidence in Court proceedings. No objection was taken during the course of the SFO trial by anyone to the disclosure of the information by Mr Graham. Further, under Part 6 of the Criminal Procedure Rules 2012 any person may apply after trial to access written statements admitted into evidence. Mr Graham’s evidence, the Ferrier Hodgson report and accompanying documents have become public documents.

[46] Such a result is also consistent with the purpose behind the confidentiality provisions of the CIM Act. The CIM Act permits the Registrar to conduct an investigation into the affairs of a company when concerns are raised that it may be operating fraudulently or recklessly. It is reasonable to expect his appointee to appoint agents to assist the inquiry. The object of the confidentiality provisions is to limit or prevent the risk of further deterioration of the financial affairs of a corporation. Obviously such an inquiry into the affairs of such a company must be kept confidential. If it became public knowledge that there was an inquiry into a company under the CIM Act it could have disastrous consequences for the future of the company and its directors even if, ultimately, the inquiry concluded that the company business was not being carried on fraudulently or recklessly. Where, however, the investigation is concluded and a prosecution follows either as a result of the investigation or, as in this case, as a result of an inquiry by a related agency, the Securities Commission, and the information obtained as part of the investigation is given in evidence in Court at a public hearing then the rationale for requiring the confidentiality to be maintained no longer remains.

[47] Finally on this point, Mr Graham has not, in any event, published or disclosed the information that s 23 applies to in this case, namely the responses to the questions provided by Messrs Doolan and Hotchin to the questions asked by Mr McPherson or Mr Graham on the issues they were concerned with. He has not referred to those answers in his brief. The short point is, therefore, that s 23 is not engaged. Mr Graham’s evidence is given on the basis of the information obtained from his review of the documentation relevant to these particular proceedings, albeit with background knowledge from his earlier involvement.

[48] I conclude that the provisions of the CIM Act do not prevent Mr Graham from giving evidence either.

(1) An opinion by an expert that is part of expert evidence offered in a proceeding is admissible if the fact-finder is likely to obtain substantial help from the opinion in understanding other evidence in the proceeding or in ascertaining any fact that is of consequence to the determination of the proceeding.

[50] The “substantial helpfulness” test in s 25(1) creates a higher threshold of admissibility than mere probativeness.⁵Mr Tingey noted that Mr Graham’s evidence was effectively his opinion on whether the directors acted dishonestly for the purposes of the conduct exclusion in the insurance policy. Also he effectively reconstructed events based on the discovered documents. He submitted that if Mr Graham’s opinion on dishonesty was inadmissible the remainder of the brief would

[51] Counsel are agreed that the standard of dishonesty in this context is that set out in McMillan v Joseph.⁶However they disagree on what standard the Court applied in that case. The Court of Appeal were concerned with the meaning of

_{dishonesty was not objectively construed so that Mr Graham’s views
were not of}

assistance to the Court and were certainly not of the substantial help. He referred to comments by Cooke P (as he was) noting that:⁷

The law has experienced unexpected difficulty in defining dishonesty. In England there have been vacillation and differences of opinion between Judges of high authority about whether the test is objective or subjective or some compromise between the two.

[the] only workable answer ... is that the tribunal of fact has to make up its own mind whether, according to the ordinary understanding of this ordinary English word, it is satisfied that the actions in question were dishonest.

The description of the excepted acts or omissions - dishonest fraudulent criminal or malicious - indicates that the word 'dishonest' is to be given its natural meaning of deliberate conduct which is dishonest according to ordinary professional standards, in this case of solicitors.

[55] Somers J’s approach supports an objective test to consideration of the issue, namely according to the ordinary professional standards of directors of finance companies. Further, Casey J also confirmed that in his opinion the test was an objective one and that:¹⁰

[t]he insured's conduct is to be judged by that standard of honesty generally accepted as appropriate for members of the legal profession in their dealings with their clients.

[56] I note that in the McMillan v Joseph case evidence had been given by two practitioners as to the standards of the profession. Cooke P did not consider it necessary to refer to the evidence because the solicitor’s conduct was so blatant that the Judge could have formed the view it was dishonest without the need for such evidence. However, that is quite a different thing to suggesting that the evidence

[57] In passing I note that it is also relevant that in this context s 25(2)(a) confirms that an expert opinion is not inadmissible simply because it is about the ultimate issue, in this case whether the directors’ actions were dishonest in terms of the policy.

[58] Mr Tingey suggested, somewhat faintly, that Mr Graham’s expertise might be challenged as he was not a finance company director. However, Mr Graham has considerable experience as a chartered accountant. He has also acted as a director himself and has, in the course of his work had occasion to consider the actions of finance company directors. In this context it is also relevant that the claims Nathans brought against the directors alleged:

(a) negligence in making the loans by such following conduct: (i) failing to establish or follow procedures;

(v) failing to review and monitor borrowers’ financial position and/or security;

(vi) causing or allowing the loans where there is no basis for believing the borrower would be able to meet its obligations or covered by security.

In each case Nathans alleged the directors caused or allowed the pleaded conduct relating to the loan and that the directors also knew of VTL’s financial position;

(b) issuing specified debt securities without undertaking any proper analysis to see whether Nathans would be able to perform and providing prospectuses to the public where a reasonable director would have concluded Nathans would not be able to repay;

(c) preparing Nathans’ financial accounts after 30 June 2004 when from at least 30 June 2004 the directors knew or should have known that if Nathans’ assets had been properly recorded its liabilities would have exceeded its assets and the trustees would have been alerted to breaches of the trust deed. The allegations included that on 22

(d) allowing Nathans to incur obligations under the prospectuses without having reasonable grounds for believing Nathans would be able to perform the obligations when required; and

[59] For present purposes I accept Mr Graham is sufficiently qualified to give expert opinion on those issues.

[60] In the context of the issues before the Court Mr Graham’s evidence on the issue of dishonesty satisfies the test of substantial helpfulness so as to be admissible. At this interlocutory stage I accept that it appears Mr Graham’s conclusions are derived from certain identified documents. Whether they are conclusions that can properly be drawn from the documents are matters for trial. Ultimately it will be for the trial Judge to determine that and what weight overall to give the evidence.

[62] Costs should follow the event. In the event counsel are unable to agree on the issue of costs they can file submissions but I would expect counsel to agree.

[63] The application has affected the existing timetable. To address that issue there will be a telephone conference before me at 9.00 am on Friday, 5 December

2014. In the event counsel are able to agree a revised timetable I invite them to file a

High Court of New Zealand Decisions

Nathans Finance NZ Limited (in receivership) v AIG Insurance New Zealand Limited [2014] NZHC 2997 (28 November 2014)