West Harbour Holdings Limited (in liquidation) v Tamihere [2014] NZHC 716 (2 April 2014)

Last Updated: 1 May 2014

ORDER AS TO CONFIDENTIALITY AND RESTRICTING ACCESS TO THE COURT FILE WITHOUT LEAVE OF A JUDGE

_{(IN TERMS OF PARAGRAPH [51] OF THIS JUDGMENT)}

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-4474 [2014] NZHC 716

BETWEEN WEST HARBOUR HOLDINGS LIMITED (In Liquidation) Plaintiff

AND JOHN HENRY TAMIHERE Defendant

OFFICIAL ASSIGNEE

First Counterclaim Defendant

CALEDONIAN NOMINEES (No.2) LIMITED

Second Counterclaim Defendant

THE COVE LIMITED

Third Counterclaim Defendant

Hearing: 2 April 2014

Appearances: D E Smyth for Plaintiff

T J G Allan for Defendant

C Jones for Official Assignee as First Counterclaim Defendant

G Bogiatto for Second and Third Counterclaim Defendants

Judgment: 2 April 2014

_{ORAL JUDGMENT OF ASSOCIATE JUDGE BELL}

Solicitors:

Waterstone Insolvency (B J Norling), North Shore City, for Plaintiff

Grove Darlow & Partners (TJG Allan), Auckland, for Defendant

Official Assignee’s Office (C Jones), Auckland, for First Counterclaim Defendant

George Bogiatto, Auckland, for Second and Third Counterclaim Defendants

Copy for:

David E Smyth, Barrister, Auckland

WEST HARBOUR HOLDINGS LIMITED (In Liquidation) v TAMIHERE [2014] NZHC 716 [2 April 2014]

[1] The plaintiff and the defendant apply for further and better discovery. The documents they seek are set out in the schedules to this decision.

Background

[2] I spelt out the background to this proceeding in my security for costs decision of 2 September 2013.¹ Since that decision, the trustees of The Cove Trust have changed. Mr van Dijk and Mr Palmer are no longer trustees. Caledonian Nominees (No.2) Ltd has taken their place and is now the second counterclaim defendant. West Harbour Holdings Ltd was formerly represented by an independent solicitor but now the solicitor instructing Mr Smyth - who has remained counsel for the plaintiff throughout – is with the insolvency practice which is responsible for the liquidation of the plaintiff.

[3] Mr Ivil, the first counterclaim defendant, was recently adjudicated bankrupt. One consequence of this is that any of his assets are now vested in the Official Assignee. It was agreed that this proceeding should nevertheless continue. to ensure that there is a proper determination of the issues affecting the plaintiff, the defendant and the other counterclaim defendants, and also Mr Ivil and the Official Assignee. If Mr Tamihere is successful in his defence, the outcome will be that the money he owes will be paid to the Official Assignee. It is therefore relevant to the administration of Mr Ivil’s bankruptcy whether the debt claimed against Mr Tamihere is an asset of Mr Ivil’s estate. I have therefore substituted the Official Assignee as first counterclaim defendant for Mr Ivil. It seems to me that it is not necessary to grant the Official Assignee leave to continue the proceeding, but if leave is required under clause (c) of the Sch 1 of the Insolvency Act 2006, I grant it. Leave under s 76 of the Insolvency Act is not required, as the Official Assignee’s role in this proceeding is as a potential creditor of Mr Tamihere.

[4] The general factual background to this proceeding is set out in the judgment of Andrews J of 22 April 2013:²

¹ _{West Harbour Holdings Ltd (in liq) v Tamihere [2013] NZHC 2279 at [2]- [8].}

² West Harbour Holdings Ltd v Tamihere [2013] NZHC 841 at [5]- [17].

[5] On 7 February 2007, Mr Ivil was loaned $210,000 (“the Ivil loan”). Mr Tamihere says that the loan was made by way of a cheque drawn on the account of Consultus Downunder Ltd (“Consultus”) (of which Mr Tamihere is a director), payable to The Cove Ltd (of which Mr Ivil is a director). West Harbour and Mr Ivil (director of West Harbour) contend that this loan was made by Consultus, but accept it was made to Mr Ivil personally. Mr Tamihere says that the loan was from himself to Mr Ivil, personally, but that their respective commercial entities were used to effect the loan.

[6] Mr Ivil says that the loan was a birthday present from Mr Tamihere; that he had not asked for the loan. Mr Tamihere says that Mr Ivil asked for the loan and he agreed to lend.

[7] Also on 7 February 2007, Mr Ivil signed an acknowledgement of debt in favour of Mr Tamihere. Mr Tamihere says that Mr Ivil wrote the acknowledgement out and volunteered its terms. Mr Ivil says that he handwrote the acknowledgement at Mr Tamihere’s dictation.

[8] On 7 May 2008, a payment of $500,000 was made to Mr Tamihere. This payment was made by Turner Hopkins (solicitors acting for West Harbour) to Corban Revell (solicitors acting for Mr Tamihere).

[9] At the time, West Harbour was the owner of a town house development, in respect of which it had borrowed from Waipareira Investments Ltd (“Waipareira”), of which Mr Tamihere was Chief Executive Officer, secured by a mortgage.

[10] Mr Tamihere says that the payment of $500,000 came about as follows. In February 2008, he entered into an agreement to buy a house. He then asked Mr Ivil to repay the $210,000 Ivil loan, so that the money could be put towards completing the house purchase. Mr Tamihere says that Mr Ivil was embarrassed at not being able to repay the Ivil loan, and proposed that if Waipareira would discharge its mortgage over one of the townhouses (Unit 7D) for no consideration, Mr Ivil would arrange a loan of

$500,000 to repay the Ivil loan, and at the same time lend Mr Tamihere

$290,000. Mr Tamihere says that he had not asked for the loan of $290,000. However, he says, when he received the $500,000 from Corban Revell,

$210,000 of it was repayment of the Ivil loan, and the balance of $290,000

was a personal loan from Mr Ivil to himself. He further says that, as was the

case with the Ivil loan, there was no interest payable on Mr Ivil’s loan of

$290,000 to himself.

[11] Mr Ivil says that after entering into the agreement to buy the house, Mr Tamihere was in serious financial trouble, and desperate to find funds to settle the purchase. He says that Mr Tamihere procured Waipareira to release its mortgage over Unit 7D so that it could be sold to the second counterclaim defendant, Mr Van Dijk (a director of The Cove Ltd). Mr Ivil further says that Mr Tamihere well knew that West Harbour had to sell Unit 7D so that West Harbour would have sufficient funds to make the loan. He said that it was Mr Tamihere who devised the means by which Waipareira could release the mortgage over Unit 7D.

[12] On 5 May 2008, Turner Hopkins wrote to Waipareira (for the attention of Mr Tamihere) advising that West Harbour had sold Unit 7D and wished to repay the mortgage over that property. The same day, Mr Tamihere

on behalf of Waipareira wrote to Turner Hopkins advising that it had entered into a joint venture in respect of a property owned by Mr Ivil, or interests directly associated with him and under his direction, and that on that basis Waipareira considered itself to be protected by all-obligations mortgages elsewhere, and consented to the release of the mortgage over Unit 7D. Waipareira then completed the usual discharge of mortgage.

[13] On 6 May 2008, Turner Hopkins wrote to Corban Revell confirming the deposit of $500,000 into Corban Revell’s trust account. The letter was headed “Re: West Harbour Holdings Ltd (Brent Ivil) – Waipareira Investments Ltd (John Tamihere) and included the following statement:

... in accordance with our client’s instructions [we] confirm that we have deposited the sum of $500,000 into your trust account to be held for Mr Tamihere ...

[14] $500,000 was then paid to Mr Tamihere. Unit 7D was transferred to Mr van Dijk. Mr van Dijk says that he borrowed $500,000 from Sovereign Home Loans to purchase Unit 7D.

[15] The financial statements for West Harbour for the year ended

31 March 2011 do not record as an asset any loan to Mr Tamihere.

[16] Mr Tamihere says that on 18 August 2011, in the course of an argument between them (at a time when West Harbour and Waipareira were “embroiled in litigation”), Mr Ivil said that Mr Tamihere was “out the backdoor to me to the tune of $290,000”. Mr Ivil denies saying this, and says that in the discussion (which he says was on 22 August 2011), Mr Tamihere made other statements concerning “the $500,000 loan”.

[17] On 22 September 2011, a solicitor acting for West Harbour demanded repayment by Mr Tamihere of a “loan advance of $500,000 plus interest”. The demand recorded that West Harbour had held Unit 7D on trust for The Cove Ltd, and that the transfer to Mr van Dijk was to enable The Cove Ltd to make the advance to Mr Tamihere.

[5] For the present applications, the key issues in the proceeding are these:

(a) When Mr Tamihere advanced funds to Mr Ivil, did Mr Ivil become a

debtor of Mr Tamihere or Mr Tamihere’s company, Consultus?

Until recently it was common ground that only Mr Tamihere could be Mr Ivil’s creditor, but the pleadings of the second and third counterclaim defendants have put this in issue.

(b) Who is the creditor of Mr Tamihere for the sum of $500,000 advanced to him on 7 May 2008? Was it Mr Ivil or was it West Harbour

Holdings Ltd – or some other Ivil interest separate from Mr Ivil personally?

If the creditor was not Mr Ivil personally, Mr Tamihere will not be able to raise a defence by way of set-off that he is also a creditor of Mr Ivil in the sum of $210,000.

(c) Mr Tamihere says that the advance of $500,000 he received in May

2008 was interest-free, whereas the plaintiff alleges that Mr Tami here is liable for interest.

Mr van Dijk incurred interest on the loan for the purchase of the townhouse identified as 7D Clearwater Cove and West Harbour Holdings Ltd says that it can claim reimbursement for that interest from Mr Tamihere.

The plaintiff ’s application

[6] While Mr Tamihere initially resisted the plaintiff’s application, he has changed his stance, with certain reservations. He is prepared to make an affidavit of documents which addresses the matters listed in the plaintiff’s discovery application.

[7] Mr Allan makes the point that Mr Tamihere has already disclosed in his affidavit of documents items within classes 1.5 and 1.6 in the plaintiff’s schedule. Mr Allan explains that those have already been included as part of the schedule identified as confidential documents in Mr Tamihere’s affidavit. Mr Tamihere has required that anyone wishing to inspect those documents must first give an express confidentiality undertaking. Whereas the second and third counterclaim defendants have done so and have been able to inspect the documents, apparently the plaintiff has not. That aside, Mr Tamihere is prepared to make a fresh affidavit disclosing documents within classes 1.1-1.4 of the plaintiff ’s schedule. However, he requires that appropriate safeguards be put in place to ensure that the documents are not misused.

[8] Mr Tamihere has not been unduly alarmist in requiring those safeguards. At the outset of the hearing, Mr Allan set out for me matters which give good grounds

for believing that documents that have been disclosed as part of open discovery – that is, not subject to any claims of privilege or confidentiality – have been misused. For this decision, it is not necessary that I record the particular circumstances. Counsel for the plaintiff and for the counterclaim defendants may have been taken somewhat by surprise by these submissions. They did not advance any significant opposition to the matters raised by Mr Allan except as to the terms of any protective directions the court might give. I take the view that there are real grounds for believing documents have been misused and therefore that it is appropriate to put safeguards in place.

[9] Rule 8.30 of the High Court Rules makes it very clear that documents disclosed on discovery in a civil proceeding are to be used for the purpose of that proceeding and not for any other purpose. It is important that the courts maintain a strict policy on that. Discovery is a demanding process. A party to litigation is required to go to special efforts to set out comprehensively all documents that relate to the matters in issue and that are within that party’s control. That process gives many litigants cause for concern. It is important for the proper determination of proceedings that parties comply with the requirements of discovery honestly, faithfully, and to the best of their efforts. Both sides need to be assured that if they do make disclosure of documents, the discovery rules will be respected. If they were to have doubts that those requirements would be honoured, confidence in the process would be eroded and the value of discovery would likewise be reduced.

[10] If it is found that there has been actual misuse of documents disclosed in discovery in this case, a stern view will be taken. As it is, there are grounds to justify putting measures in place to ensure that the additional documents Mr Tamihere will disclose are not misused in any way. The safeguards I propose are these:

(a) All the documents to be disclosed by Mr Tamihere are to be treated as if they were confidential documents. Anyone who is to have access to those documents – either the plaintiff or the counterclaim defendants

– is to give an express confidentiality undertaking in terms typically used for such cases.

(b) In the first instance, I restrict disclosure of the documents to counsel acting for the plaintiff and the counterclaim defendants. If it is proposed that the documents should be shown to any other person, the defendant’s lawyers should be consulted. It may well be that there is a basis for showing the documents to an expert, for example. In that event, the expert would be required to give a similar confidentiality undertaking before disclosure occurs. I would expect the defendant to recognise, when there is a proper reason for disclosing documents to a third party, that arrangements should made co-operatively. Failing that, leave is reserved to come back to the court for further directions.

[11] One matter in contention was whether the documents should be disclosed to instructing solicitors and to the liquidators of the plaintiff. I accept Mr Allan’s submissions that the nature of the documents to be disclosed would not typically call for reference to the liquidators for accountancy advice. They tend to be factual matters which counsel should be able to deal with without needing expert assistance. To that end it seems unnecessary that use of the documents should go beyond counsel for the plaintiff and the counterclaim defendants. If it transpires that wider disclosure is required and agreement cannot be reached, counsel should ask for a telephone conference before me on short notice.

[12] That effectively deals with the plaintiff’s application for discovery. Mr Allan indicates that a new affidavit of documents should be able to be sworn, filed and served by 11 April 2014.

The defendant’s application

[13] I decide this application on the basis of relevance. There was also argument whether these documents were within the control of the parties. That is a secondary consideration.

[14] The application is directed against the second and third counterclaim defendants, not against the plaintiff, West Harbour Holdings Ltd. The Cove Ltd says that West Harbour Holdings Ltd owned the townhouse 7D on trust for itself. Mr van

Dijk says that he purchased the townhouse 7D and held it on trust for The Cove Ltd. It seems to me that The Cove Ltd is, through its directors, in a position where it should be able to extract documents from the other counterclaim defendants and also, to the extent that West Harbour Holdings Ltd was acting as a trustee, from West Harbour Holdings Ltd. The matter should not stand or fall on the niceties of whether the documents are or are not outside the control of the second and third counterclaim defendants.

Discovery and relevance

[15] I make preliminary observations about relevance. The first is that it is the pleadings that determine the limits of relevance. In New Zealand Rail Ltd v Port Marlborough New Zealand Ltd, Richardson J said:³

Parties are required to discover only those documents which are relevant to a question in the proceedings. They must be relevant in the sense of being capable of advancing a party’s case or of damaging the case of its adversary. Relevance is determined by the pleadings and an order is not to be made unless the Court is satisfied that it is reasonably necessary.

[16] A qualification needs to be added to that: the question of reasonable necessity no longer forms part of the test under New Zealand law . But in other respects I follow Richardson J’s guidance. Pleadings set the outer limits of what needs to be disclosed on discovery.

[17] As to the materiality of disclosure to a particular issue, it is the case of the party seeking discovery that must be assumed to be true, not that of the party from whom discovery is sought.⁴

[18] The court will not order discovery of documents if the only purpose is to impeach the credit of those who might give evidence for the other side. There is a helpful explanation in Thorpe v Chief Constable of Greater Manchester Police. Neil

_{LJ said} ⁵

³ _{New Zealand Rail Ltd v Port Marlborough New Zealand Ltd [1993] 2 NZLR 641 (CA) at 644.}

⁴ Paul Matthews and Hodge M Malek Disclosure (4th ed, Thomson Reuters, Cornwall, 2012) at [5.09], citing Edward Bray The Principles and Practice of Discovery (Reeves and Turner, London, 1885) at 18.

⁵ Thorpe v Chief Constable of Greater Manchester Police [1989] 1 WLR 665 (CA) at 673.

At first sight there is some force in the argument that documents which may contain material to impugn the credit of one party might well enable the other party to advance his case. So too it can be said that in a case such as the present, where the defendant has access to police records and other material which might be useful for the cross-examination of the plaintiff, fairness requires that the defendant should give discovery of any documents which relate to the “characters” of the two police officers.

I am satisfied, however, that it has been the long-standing practice not to order discovery which is directed solely to credit. It is sufficient to refer to the decision of the Court of Appeal in Kennedy v Dodson [1895] 1 Ch 334 and to the decision of Walton J in George Ballantine & Son Ltd v FER Dixon & Son Ltd [1974] 1 WLR 1125 ...

The reason for this limitation on discovery is plain. Discovery in an action would become gravely oppressive and time-consuming if there were an obligation on a party to disclose any document which might provide material for cross-examination as to his credit-worthiness as a witness. The present practice is a salutary one which helps to keep discovery within reasonable and sensible bounds.

[19] For this case I do not regard it as necessary to dwell too much on the differences between standard discovery under r 8.7, the old Peruvian Guano test for relevance, and tailored discovery under r 8.8. In this case discovery was initially to be standard discovery. Each side has considered that it is necessary to refine that general direction by having more particularised discovery. Rule 8.17 which allows for variation of a discovery order and r 8.19 which allows for particular discovery can be read together:

8.17 Variation of discovery order

(1) Subject to rule 7.18, a party may apply for an order varying the terms of a discovery order.

(2) The variation may be granted by a Judge on the ground that—

(a) compliance or attempted compliance with the terms of the order has revealed a need for a variation; or

(b) there has been a change of circumstances that justifies reconsideration.

8.19 Order for particular discovery against party after proceeding commenced

If at any stage of the proceeding it appears to a Judge, from evidence or from the nature or circumstances of the case or from any document filed in the proceeding, that there are grounds for believing that a party has not

discovered 1 or more documents or a group of documents that should have been discovered, the Judge may order that party—

(a) to file an affidavit stating—

(i) whether the documents are or have been in the party's control; and

(ii) if they have been but are no longer in the party's control, the party's best knowledge and belief as to when the documents ceased to be in the party's control and who now has control of them; and

(b) to serve the affidavit on the other party or parties; and

(c) if the documents are in the person's control, to make those documents available for inspection, in accordance with rule 8.27, to the other party or parties.

[20] I regard the fact that disclosure of some documents in the course of discovery may show the need for further discovery as being a relevant change of circumstance that may justify reconsideration under r 8.17. Rule 8.19 applies only when there are grounds for believing that a party has not discovered documents that should have been discovered. For that, discovery is measured against the applicable standard. But when you take rr 8.17 and 8.19 together, it seems to me that if further discovery is sought and that proper grounds are made out showing the need for it, there will be very few cases that do not full under either r 8.17 or r 8.19. In saying that, I consider that I do no more than follow the approach taken by Associate Judge Osborne in his decisions in Karam v Fairfax New Zealand Ltd and Westpac New Zealand Ltd v

Adams.⁶

Merits of the defendant’s discovery application.

[21] One part of Mr Tamihere’s application can be dealt with fairly quickly. The plaintiff is claiming interest from Mr Tamihere on the $500,000 that was advanced. Mr Tamihere denies that he was to pay interest under that loan. He says the arrangement was interest-free. The plaintiff has calculated its interest by reference to the interest that was charged to Mr van Dijk on the loan arranged from

_{Sovereign/Mortgage Holdings Trust Company Ltd. The Sovereign loan agreement}

⁶ Karam v Fairfax New Zealand Ltd [2012] NZHC 887 and Westpac New Zealand Ltd v Adams

[2013] NZHC 3113.

and the records of interest charged by the mortgagee have not been put in evidence. That is clearly relevant to the claim for interest made against Mr Tamihere and ought to be disclosed. The loan agreement comes within class 6 of the defendant’s schedule. Other documents - for example, notices varying interest rates - come within class 7. While those documents quite clearly are relevant to a matter in issue on the pleadings, the rest of the application requires longer consideration. It is necessary to put the matter into context.

[22] The Cove Ltd had undertaken a substantial property development at Clearwater Cove. It had run into financing problems. In 2007 it had transferred seven townhouses in its development to West Harbour Holdings Ltd. It appears that that was done to allow Waipareira Investments Ltd, a company of which Mr Tamihere was chief executive, to advance funds for finance. In effect, it set to one side some of the properties in the development to be refinanced separately from others. Waipareira Investments Ltd took a registered first mortgage over the properties transferred to West Harbour Holdings Ltd. One of them was townhouse

7D.

[23] In 2008 Waipareira Investments Ltd gave a discharge of its mortgage over townhouse 7D. West Harbour Holdings Ltd sold the townhouse to Mr van Dijk. Mr van Dijk raised finance from Sovereign/Mortgage Holdings Trust Company Ltd. That was the sum of approximately $530,000. Mr van Dijk says he took title but held the property on trust for The Cove Ltd. The funds he raised were paid to West Harbour Holdings Ltd. Of the $530,000 paid to West Harbour Holdings Ltd,

$500,000 was then paid to Mr Tamihere. That payment was made on 7 May 2008.

[24] That much does not seem to be overly contested, although how the transaction is to be characterised is in issue. Mr Tamihere’s defence to the claim by West Harbour Holdings Ltd for repayment of the $500,000 is that that constituted an advance to him by Mr Ivil personally, not money lent to him by West Harbour Holdings Ltd.

[25] On discovery, the counterclaim defendants have disclosed the conveyancing file of Turner Hopkins. That firm acted for both sides on the sale and purchase of

townhouse 7D. That is, they acted for both Mr van Dijk and West Harbour Holdings Ltd. The trust account ledger on the conveyancing file shows the transfer of the funds to Corban Revell, who were the lawyers acting for Mr Tamihere. There has been a disclosure of documents which goes to support the case being run by the plaintiff and the second and third counterclaim defendants. Mr Tamihere’s objection is that the documents disclosed so far show only the back end of the transaction. Mr Tamihere says that there are also documents in existence which go to the front end of the transaction and which are relevant to the matters in issue.

[26] He develops the matter this way. Mr Tamihere points to the agreement for sale and purchase. That identifies the townhouse as 7G, but it seems to be common ground at least in this proceeding that it is in fact townhouse 7D. It is a handwritten document for a sale by private treaty. No land agents acted. Turner Hopkins acted on both sides of the transaction. The agreement for sale and purchase does not record that Mr van Dijk was holding the property as trustee for The Cove Ltd or anyone else. The purchase price was $670,000. There was a deposit payable of $135,000. However, documentation has been produced showing that that deposit was not paid. Instead, Mr Ivil signed a document, apparently falsely, stating that the deposit was paid. With that, Mr Tamihere says that this is evidence consistent with a mortgage fraud. The mortgagee has been induced to lend money for a transaction believing that the purchase price represented the townhouse’s market value of $670,000 and that there has been an appropriate loan-to-value ratio. In fact, if the deposit was not paid then there is a risk to the mortgagee that the loan-to-value ratio is much higher than it had been led to believe.

[27] Mr Tamihere’s object is to obtain further documents so that in the course of the hearing his counsel can cross-examine Mr van Dijk and Mr Ivil, who will undoubtedly be witnesses for the plaintiff and the counterclaim defendants, and expose them as men of less than total probity.

[28] I asked Mr Allan whether he was seeking disclosure of the front-end documents for the purpose of impeaching the credit of Mr Ivil and/or Mr van Dijk.

Mr Allan said that that was his purpose. I put to him the decision in Thorpe,⁷ as showing that disclosure will not be ordered when its sole purpose is to impeach the credit of someone who may give evidence in a proceeding. In his opening submissions, Mr Allan accepted that that was his sole purpose. In his reply submissions he retreated from that. He carefully analysed the decision in Thorpe⁸ to show that the Court had allowed discovery of documents which related to the matters in issue - that is, the events that gave rise to the cause of action - but had restricted discovery which was to extend more widely into matters that went to the character of the policemen whose actions were the subject of the proceeding.

[29] I accept that that is an appropriate analysis of what was decided on the facts in Thorpe. Nevertheless, it is still important to recognise the principle that was established in that case. The English Court of Appeal gave that decision when the Peruvian Guano test for relevance still held sway in England. To the extent that there is a more restrictive approach to discovery in both England and New Zealand now, the policy against discovery of documents going only to credit applies even more strongly now than it did then.

[30] In this case, what had to be established for the plaintiff and counterclaim defendants was that the funds lent to Mr Tamihere came from West Harbour Holdings Ltd. It was relevant to their case that those funds were held by West Harbour Holdings Ltd in a particular capacity, that is, that West Harbour Holdings Ltd itself held the townhouse 7D on trust for The Cove Ltd. That would be consistent with showing that the proceeds of sale of townhouse 7D could not have been paid over to Mr Ivil by way of some kind of advance.

[31] The way by which Mr van Dijk and arguably Mr Ivil went about arranging finance for the sale of townhouse 7D may have been, on present appearances, dishonest or less than completely candid. No doubt that would show them up in bad light under cross-examination. But that, by itself, is not enough to require the additional documents to be made over by way of discovery. Notwithstanding

_{Mr Allan’s submissions, I am satisfied that the extra documents Mr Tamihere wants}

⁷ _{Thorpe v Chief Constable of Greater Manchester Police [1989] 1 WLR 665 (CA).}

⁸ Thorpe, above n 5.

are solely for impeaching the credit of Mr Ivil and Mr van Dijk, but are not required under any test of relevance for this proceeding.

[32] Accordingly my decision is that documents that relate to the charging of interest, particularly the source documents and loan documents from Sovereign/Mortgage Holdings Trust Company Ltd and documents going to their interest charges, are discoverable. No further documents are to be discovered by the counterclaim defendants on Mr Tamihere’s application.

Amended timetabling directions

[33] These directions take the place of the timetable I gave on 8 November 2013, and any adjustments that have been made since then.

[34] Mr Allan will have until 7 April 2014 in which to file and serve any amended pleadings – be they changes to the statement of defence or to the counterclaim document.

[35] The plaintiff will have until 11 April 2014 to file any reply to any amended pleading by the defendant.

[36] The second and third counterclaim defendants will have until 11 April 2014 in which to file any amended statements of defence to any amended pleading by the plaintiff.

[37] By 11 April 2014 both the defendant and the second and third counterclaim defendants are to file affidavits of documents as directed in this decision.

[38] The new close of pleadings date will be 14 April 2014.

[39] The plaintiff is to serve its evidence and a list of documents for the bundle by

17 April 2014.

[40] The second and third counterclaim defendants are to serve their evidence and a list of documents for the bundle by 30 April 2014.

[41] If the Official Assignee wishes to give any evidence, that is also to be served by 30 April 2014.

[42] Mr Tamihere’s evidence is to be served by 23 May 2014.

[43] By 30 May 2014 the plaintiff is to file and serve an agreed bundle of documents plus the existing chronology prepared by Mr Allan.

[44] The plaintiff and counterclaim defendants are to file and serve their openings by 30 May 2014.

[45] Mr Tamihere is to file and serve his opening by 5 June 2014. [46] The fixture for 5 days beginning 9 June 2014 is maintained. [47] I reserve leave to the parties to apply for further directions. Costs

[48] Mr Tamihere has been partially successful. He has succeeded on the documents which are relevant to the issues but I have found that there are other documents where the counterclaim defendants are entitled to resist the application on the grounds that they are outside the bounds of relevance. For that partial success I fix costs to Mr Tamihere at one-half of the costs for an interlocutory application. I record that this matter has taken three-quarters of a day for hearing.

[49] On the plaintiff’s application for costs, there was a late concession by Mr Tamihere. Mr Smyth had done substantial preparation. I allow the plaintiff costs on its discovery application which will include the costs of preparation, but allow the plaintiff costs only for one-quarter of a day for the hearing.

[50] As with my earlier order for security for costs, while I fix costs on both applications I do not order them to be paid.

Restricting access to court file

[51] I also give orders restricting access to the court file in the meantime. This case will not reach its substantive hearing stage until 9 June 2014. Up until that date, these restrictions on access to the court file apply:

(a) If there is any application for access to the court file, that application is to be referred to me. I will give the parties to this proceeding the opportunity to be heard on any application for access. Anyone making an application for access must be prepared to appear in court on short notice to set out why it should be granted.

(b) Once the case reaches its substantive hearing stage, the following documents may be inspected on access. They are:

(i) the final pleadings; and

(ii) any decisions that are on the file.

(c) The contents of any interlocutory applications and the contents of any affidavits are not to be disclosed during the substantive hearing stage. That order is subject to variation by the Judge who will conduct the case during the substantive hearing stage.

.................................................

Associate Judge R M Bell

1 Documents (without limitation), emails or texts recording:

1.1 the manner in which or how Consultus acquired the sum of $212,625 referred to in the affidavits of J H Tamihere in this proceeding and which was advanced to the first counterclaim defendant;

1.2 from whose account or by what means the BNZ bank cheque deposited into the trust account of Johnson Associates Chartered Accountants on

7 February 2007 was acquired by the defendant;

1.3 the terms upon which the sum of $210,000 was advanced by Consultus to the first counterclaim defendant;

1.4 the request by the defendant for an advance of $500,000 to be made by the Te Whanau O Waipareira Trust to the Tamihere Children’s Trust, which sum was advanced to Corban Revell on 18 April 2008;

1.5 the receipt by the defendant’s solicitors Corban Revell of the sum of

$500,000 paid to them by the plaintiff on 6 May 2008;

1.6 the manner in which the sum of $500,000 was applied by Corban Revell or otherwise as directed by the defendant or any other party.

1 Any loan application made by West Harbour Holdings Ltd, Mr Brent Ivil, Mr Nicholas van Dijk, Mr Norman Palmer or The Cove Limited or any person on their behalf (“the Ivil interests”):

(a) to or by Horizon Financial Limited, trading as Horizon Home Loans

(“HFL”);

(b) to Mortgage Holdings Trust Company Ltd trading as Sovereign

(“Sovereign”).

2 Any valuations obtained by the Ivil interests in connection with any of Units A, B, D, E or G at Clearwater Cove (the “D” being referred to as Townhouse 7D in the affidavits filed in this proceeding).

3 Any electronic communications (“email traffic”) or hardcopy communications (“correspondence”) between any of the Ivil interests and HFL and/or Sovereign concerning any proposed loan or loan application.

4 Any statement of financial position, reference to assets or securities or other documents prepared for, supplied with or referred to in any email traffic or correspondence with HFL or Sovereign touching on or concerning any proposed loan or loan application.

5 Copies of any documents referred to in any of the email traffic or correspondence above.

6 Any documents which came into existence in consequence of the loan offer from Mortgage Holdings Trust Company Limited trading as Sovereign and addressed to NAH van Dijk dated 1 May 2008, giving rise to the mortgage registered in favour of Mortgage Holdings Trust Company Limited under Memorial 7806684.3 against certificate of title NA139A/871.

7 Any email traffic and/or correspondence together with any documents referred to in those communications between Mortgage Holding Trust Company Ltd and the Ivil interests after 7 May 2008.

8 A copy of the Sale and Purchase Agreement or other document by which the Ivil interests recorded the basis on which the transfer occurred or the fact of that transfer of the property comprised and described in certificate of title NA139A/871.

9 The Turner Hopkins file relating to matter M.246056-11 together with the

Turner Hopkins trust ledger relating to M.246056-121.

10 Primary records that were relied upon by Clive Johnston to prepare the financial statements for The Cove Limited for the years 31 March 2008 to

31 March 2012 together with the tax returns prepared in consequence of those financial statements (the signed financial statements).