Heart of the City Incorporated v Swney [2015] NZHC 508 (17 March 2015)

Last Updated: 31 December 2018

ORDER SUPPRESSING PUBLICATION OF THE REASONS FOR JUDGMENT IN NEWS MEDIA OR ON THE INTERNET OR OTHER PUBLICLY AVAILABLE DATABASE UNTIL FINAL DISPOSITION OF TRIAL.

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-003087 [2015] NZHC 508

BETWEEN	HEART OF THE CITY INCORPORATED Plaintiff
AND	ALEX GORDON SWNEY First Defendant
AND	ALEX GORDON SWNEY and ANGELINE JANE MARSHALL as Trustees of the COUNTRY STYLE TRUST Second Defendants
AND	ALEX GORDON SWNEY and ANGELINE JANE MARSHALL as Trustees of the SWNEY-MARSHALL TRUST Third Defendants

On the papers
Appearances:	SE Fitzgerald and MP Mabbet for the Plaintiff E St John and S Anderson for the First and Third Defendants TJG Allan and TJP Gavigan for the Second Defendants
Judgment:	17 March 2015

JUDGMENT OF TOOGOOD J

[Application by NZ Herald for access to court file]

This judgment was delivered by me on 17 March 2015 at 4:30 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

HEART OF THE CITY INCORPORATED v SWNEY [2015] NZHC 508 [17 March 2015]

[1] Matt Nippert has requested permission on behalf of the New Zealand Herald to have access to the whole of the court file in this proceeding. He says he is “particularly interested in inspecting [the] application for freezing orders and accompanying Grant Thornton report.” The reason for the request is “public interest in [an] ongoing case involving substantial sums of public funds and alleged wrongdoing.”

[2] The plaintiff (“Heart of the City”) is an incorporated society having the primary purpose of operating as a lobbying and support organisation for local businesses in the Auckland city centre. It is constituted as a “Business Improvement District”, funded by Auckland Council pursuant to a policy which the Council operates in partnership with local businesses to improve the local business environment. The vast majority of the plaintiff’s funding is derived from the Council which in turn levies businesses within the relevant geographical area.

[3] The first defendant, Alex Swney, is the former chief executive of the plaintiff. He is described by the chairperson of the plaintiff, Mr Gould, as having been the high- profile “public face” of Heart of the City. In this proceeding, Heart of the City seeks to recover from Mr Swney damages to compensate it for losses which it says it suffered as a result of his improper conduct. Claims for damages are also made against Mr Swney and his wife in their capacities as trustees of two trusts.

[4] Mr Swney has pleaded guilty to tax evasion and he is due to be sentenced on 30 April 2015. There can be no doubt, in all the circumstances, that there is legitimate public interest in Heart of the City’s affairs including, particularly, matters related to its finances and the actions of its former chief executive.

[5] Mr Swney has filed a statement of defence which does no more than admit routine matters of undisputed fact; disavow knowledge of some allegations; and merely deny allegations of substance. It is strongly arguable that the pleading does not comply fully with the requirements for an informative statement of defence prescribed by r 5.48 of the High Court Rules and it appears to have been intended to be a pro forma document only.
[6] The rules governing access to court files and documents in a civil proceeding are found in rr 3.5 to 3.16 of the High Court Rules. Because the substantive hearing stage of the proceeding has not been reached, the present application must be considered under r 3.13. A Judge considering an application for access under r 3.13 may refuse the application, or grant it in whole or in part, without conditions or subject to any conditions the Judge thinks appropriate.¹

[7] The matters which the Court is required to take into account in considering the application are listed in r 3.16, which provides as follows:

3.16 Matters to be taken into account

In determining an application under rule 3.13 ... the Judge ... must consider the nature of, and the reasons for, the application ... and take into account each of the following matters that is relevant to the application, request, or objection:

(a) the orderly and fair administration of justice;

(b) the protection of confidentiality, privacy interests (including those of children and other vulnerable members of the community), and any privilege held by, or available to, any person;

(c) the principle of open justice, namely, encouraging fair and accurate reporting of, and comment on, court hearings and decisions;

(d) the freedom to seek, receive, and impart information;

(e) whether a document to which the application or request relates is subject to any restriction under rule 3.12;

(f) any other matter that the Judge ... thinks just.

[8] The factors set out in r 3.16 are not hierarchical; a balancing exercise is required.²

[9] The application is opposed by Heart of the City and Mr Swney; Mr and Mrs Swney, in their capacities as trustees, abide the decision of the Court.

¹ High Court Rules, r 3.14.

² Schenker AG v Commerce Commission [2013] NZCA 114.

[10] The decision in this case requires the Court to give weight to the principles of open justice and of freedom to seek, receive and impart information. The responsible and respected newspaper on whose behalf the application is made has a duty to act as the eyes and ears of the public in a matter of undoubted public significance. These considerations, however, must be balanced against the orderly and fair administration of justice and the protection of confidentiality and privacy interests.

[11] So far as the orderly and fair administration of justice is concerned, it is significant that this case is very much in its infancy. Given the bare pleading by Mr Swney denying the substantive allegations, it would not be possible to obtain a balanced view of the issues and the parties’ respective positions by an examination of the file at this point. Moreover, the interlocutory stages of a proceeding often include, as is the case here, applications made without notice to a defendant who has not had an opportunity to rebut them.

[12] It is not until the hearing that the parties have fully identified the issues with which the Court is required to deal. The preliminary stages of litigation involve the parties in a great deal of paperwork, such as the filing of statements of claim and defence, and discovery by way of the exchange of lists of relevant documents. Changes of pleading often follow discovery and inspection, and the parties may be requested to provide particulars of their pleadings. Allegations of financial impropriety are particularly susceptible to refinement by particularisation and, in this case, it is highly likely that Mr Swney will be required to be more forthcoming in his responses to the plaintiff’s allegations.

[13] Once the case is fully shaped, at the commencement of the hearing, the principles of open justice assume pre-eminence and, under r3.9, any person is entitled, at that stage, to access documents relating to the proceeding; namely:

(a) any pleading, reference, notice, or application filed in the Court;

(b) affidavits, depositions, or other written statements admitted into evidence for the purposes of the hearing;
(c) documents admitted into evidence for the purposes of the hearing; and

(d) if any evidence given orally at the hearing has been transcribed, a transcript of that evidence.

[14] The stage at which a fair and accurate report on the claims by Heart of the City, and the defendants’ responses to them, can be given has not yet been reached, in my view. Mr Nippert’s request for access is premature and I decline it.

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

Toogood J