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High Court of New Zealand Decisions |
Last Updated: 26 September 2018
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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
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BETWEEN
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HAVEN INSURANCE LIMITED
Plaintiff
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AND
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HEINRICH LOMBARD
First Defendant
STATUS FINANCIAL LIMITED (in
liquidation) Second Defendant
STEPHEN NICHOLAS BROWN
Third Defendant
Continued ...
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Hearing:
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7 August 2018
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Counsel:
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JEM Lethbridge for the Plaintiff
B Gustafson for the Third and Fourth Defendants S A Keall for the Fifth and
Sixth Defendants
E J Taia for the Seventh and Eighth Defendants
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Judgment:
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13 September 2018
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JUDGMENT OF ASSOCIATE JUDGE BELL
This judgment was delivered by me on 13 September 2018 at 4:45 p.m. pursuant to r 11.5 of the High Court Rules 1985.
..........................................
HAVEN INSURANCE LTD v LOMBARD [2018] NZHC 2421 [13 September 2018]
Continued ...
ALL SMALL JOBS LIMITED
Fourth Defendant
JACK DOUGLAS MILLER
Fifth Defendant
J MILLER CONSULTING LIMITED
Sixth Defendant
DENZEL COETZER
Seventh Defendant
YOURWAY LIMITED
Eighth Defendant
BRUCE CARR
Ninth Defendant
B & M CARR FINANCIAL SERVICES LIMITED
Tenth Defendant
FRANCOIS VILJOEN
Eleventh Defendant
[1] The defendant companies worked under contract as advisors for Haven Insurance Ltd, which carries on a financial services business in Auckland. It operates primarily as an insurance broker for life, risk and medical insurance. After the defendants terminated their contracts at the end of 2016, Haven sued them and their directors for soliciting Haven clients with causes of action for breach of contract, breach of confidence, breach of fiduciary duty and unlawful means conspiracy.
[2] Haven applies for further discovery under r 8.19 of the High Court Rules against the third, fourth, fifth, sixth, seventh and eighth defendants. Muir J ordered standard discovery on 29 June 2017. These defendants filed their affidavits of documents in July 2017. The eleventh defendant, Mr Viljoen, has only recently filed an affidavit of documents. In its application of 15 June 2018 Haven seeks an order that the third, fourth, fifth, sixth, seventh and eighth defendants make further discovery affidavits as to the following classes of documents:
(a) Communications between the defendants (including by email or telephone) from the date six months prior to that party leaving Haven to date (including telephone records).
(b) Communications between any of the defendants (and their related entities) and any clients of Haven (including by email or telephone) from the date six months prior to that defendant leaving Haven to date.
(c) Financial information of the defendants and their related entities showing payments for all commissions earned, including bank statements and financial accounts from the date six months prior to that defendant leaving Haven to date.
(d) Any documents that refer to any of the clients set out in the list that is annexed to the affidavit of Craig William Baldwin affirmed 7 March 2018 or referred to in the affidavit of Craig William Baldwin affirmed 15 June 2018, and the list of leads attached to the affidavit of Craig William Baldwin affirmed 15 June 2018.
(e) Information from insurance companies that the defendants (or their related entitles) have placed clients from the two lists referred to above six months prior to the defendants leaving Haven to date. Otherwise confirmation that Haven can obtain this information direct from insurers.
[3] The defendants variously say that they have disclosed all relevant documents within their control, that the application is over-broad, that Haven has made unparticularised allegations of dishonesty and they have no further documents to discover.
[4] There is one aspect where Mr Brown has not made adequate discovery, documents of his company, Kiwi Assurance Market Ltd. That aside, I find that the defendants have made proper discovery and more should not be ordered.
What the case is about
[5] To understand the issues in the case and in the discovery application, it is helpful to understand how Haven operated. Through a call centre, it makes cold calls to potential clients, and refers promising leads to its advisors who contact the client with a view to their taking out insurance brokered by Haven. Haven has a standard agreement with its advisers, but the contractual arrangements between Haven and all the defendants are not the same. Its “introducer agreement” (sometimes called an “advisor agreement”) is for five years. It has termination provisions. The advisor is an independent contractor, not an employee or agent or joint venturer of Haven. The advisor is to promote Haven’s products to potential clients and give them advice on financial affairs with a view to the clients signing up for Haven’s products. Advisors are paid by commission, but that is subject to “claw-back”. If an insurance policy is cancelled within two years of it being taken out, Haven is required to refund any commission to the insurer. The advisor agreement provides that Haven in turn is entitled to a refund of the commission paid to the advisor. The advisor is not to promote financial services except those endorsed by Haven. The advisor is to use only marketing materials and methods approved by Haven. Haven provides the advisors
with initial and ongoing training. The advisor is required to use their best endeavours to promote products.
[6] Haven relies on certain contractual terms, which in paraphrase provide:
(a) where an advisor was a company, the director of the company
guaranteed the company’s performance (cl 1.6);
(b) keep confidential all confidential information received from Haven (cl 11.1.2);
(c) not to do anything that could bring Haven or any insurer into disrepute including after termination or expiry of the agreement (cl 11.1.5);
(d) on termination of the agreement the advisor is to return to Haven all material and equipment of any kind (cl 15.2);
(e) the clients are Haven’s, not the adviser’s (cl 16.1);
(f) not to solicit any client or use Haven’s client lists or database for the advisor’s personal gain to the exclusion of Haven (cl 16.1);
(g) during the agreement, and for two years afterwards, not to solicit away from Haven anyone who is a client for three years before termination, or to divert any customers from Haven (cl 16.2.2); and
(h) all intellectual property belongs to Haven (cl 17.1).
[7] It says that one justification for the two-year post-contract restraint against non-solicitation of clients is to protect itself against claw-back of commissions arising from the cancellations of insurance cover.
[8] For the seventh and eighth defendants, Denzel Coetzer and Yourway Ltd, Haven says that there was an additional term of contract. There was a two-year
restraint against competing against Haven. That restraint goes further than barring soliciting of clients and keeping information confidential.
[9] Haven referred leads to advisors in the area where those leads lived. Haven did not refer a lead to more than one advisor. Each advisor had access on Haven’s database only to their own leads, not to leads for other advisers. The database is called the Customer Relationship Management System (CRM).
[10] Mr Heinrich Lombard, the first defendant, is a director and sole shareholder of Status Financial Ltd, which became an advisor in October 2011. Mr Lombard gave notice terminating the agreement in September 2016. He is now bankrupt. The claim against him is stayed under s 76 of the Insolvency Act 2006. His company, Status Financial Ltd, is in liquidation. Haven says that the liquidator consents to the proceeding continuing against it while it is in liquidation.
[11] Mr Stephen Brown, a director of All Small Jobs Ltd, had experience in the financial services industry in Australia. He moved to Queenstown in 2011. He now lives in Tauranga. He became a Haven advisor for Otago in February 2012. He says that he never signed an advisor agreement with Haven, but Haven disputes that. At Haven’s prompting, he later moved to Tauranga in 2015 to service the Haven client base there. On 25 August 2016 he sent a letter to Haven terminating his contract with Haven.
[12] Mr Jack Miller, director and shareholder of J Miller Consulting Ltd, is based in Pukekohe. His company became an advisor in April 2012. On 5 August 2016 he gave notice on behalf of J Miller Consulting Ltd terminating its agreement with Haven.
[13] Mr Denzel Coetzer, of Glenfield, Auckland, a director of Yourway Ltd, initially worked as a Haven employee from October 2013. Yourway Ltd became an advisor in March 2015. Mr Coetzer gave notice of termination on 21 October 2016.
[14] Mr Bruce Carr, a director of B & M Carr Financial Services Ltd, is Mr Brown’s father-in-law. B & M Carr Financial Services Ltd was an advisor from June 2013 to
July 2017 when Haven “suspended the agreement pending an investigation”. He has taken no steps in the proceeding.
[15] Mr Francois Viljoen of New Plymouth gave notice terminating his agreement in September 2016.
[16] Mr Heino van Rensburg was also an advisor with Haven from February 2016 to January 2017. He is not one of the defendants.
[17] After they gave notice terminating their agreements, Mr Lombard, Mr Brown, Mr Miller, Mr Coetzer and Mr Viljoen continued operating as financial advisors but independently of Haven. Haven, on the other hand, alleges that they have solicited Haven clients, they have continued to use lead lists, and have swapped lists of clients and leads amongst each other to get round the non-soliciting ban. Haven sues them for breach of contract, breach of confidence, breach of fiduciary duty and unlawful means conspiracy. The alleged “unlawful means” is that the defendants worked in concert in breach of their contracts to continue to deal with Haven clients. The defendants strongly reject these allegations. They claim that they have returned all written materials to Haven and that their access to Haven’s database was terminated when their contracts came to an end. Instead, they bought client lists from tele- marketers and have taken other steps to establish client bases.
[18] In March 2017, Haven applied without notice for an interim injunction against the first to eighth defendants.1 The application was supported not only by an affidavit from Mr Baldwin, Haven’s director, but also by Mr van Rensburg. He described his dealings with Mr Viljoen and Mr Lombard. According to Mr van Rensburg, Mr Viljoien told him that he had attended a meeting with Mr Lombard, Mr Brown, Mr Miller, Mr Coetzer and another insurance provider before any of them had terminated their contracts with Haven. The purpose of the meeting was to arrange for them to get codes to arrange policies through the other insurance provider. Later, after Status Financial Ltd had terminated its agreement with Haven, Mr van Rensburg arranged with Mr Lombard to refer Haven clients to Mr Lombard in return for a commission.
That happened between October 2016 and January 2017. Mr van Rensburg was paid
$23,443.39. He discontinued his association with Mr Lombard in December 2016. Mr Viljoen’s wife worked for Mr Lombard in an administration role. Mr van Rensburg established a company, Accelerate Services Ltd, in October 2016. Mr Viljoen became a director in February 2017. Mr van Rensburg resigned in March 2017. He also says that he was told that Mr Brown was also involved with targeting Haven’s clients.
[19] Gordon J made confidentiality orders and an interim injunction.2 She ordered:
(a) The defendants to cease contact with all present and former clients of Haven, including those set out in any Haven client lists, for three months.
(b) The defendants to cease, directly or indirectly canvassing, soliciting or attempting to solicit, serve or act for any former or present client of Haven, including those set out in any clients lists, for no more than three months.
(c) The defendants to cease to use any and all confidential information belonging to Haven.
(d) The defendants to deliver up all confidential information of Haven in their possession or control pending resolution of the substantive proceeding, and not to copy or disseminate to any person or entity any of Haven’s confidential information.
(e) If any confidential information of Haven had been in the defendants’ possession or control of the defendant but now has been destroyed, to swear an affidavit that any such information has been destroyed or deleted.
(f) Each defendant to provide a sworn affidavit setting out details of:
2 Haven Insurance Ltd v Lombard [2017] NZHC 596.
(i) the identity of the Haven clients they have met with;
(ii) what details have been disclosed to those Haven clients; and
(iii) all and any documents that have been provided to Haven clients.
[20] Messrs Lombard, Brown, Miller and Coetzer filed affidavits as directed. Mr Lombard described contacts he had with Haven clients but denies that he was poaching Haven clients or approaching them. The clients initiated the contact. In some cases they were his own acquaintances or their relatives. He had retained documents on termination but these were records of clients, not Haven’s confidential documents. To comply with Gordon J’s orders he returned the hard copy documents. He said he no longer held any hard copy or electronic copies of documents within the scope of Gordon J’s orders.
[21] Mr Brown explained that he did not sign a contract with Haven and he would not have signed one as he did not agree with the terms of the Haven contract. He denies poaching Haven clients or actively approaching them. He did speak with Mr Lombard and they agreed to buy lists of leads from an Australian company. He has used those to build his client base. He has not had any significant contact with any of the other defendants. He was locked out of Haven’s email account when he terminated his contract. He has no documents to return. He used to upload documents for each client into the database and destroyed any physical documents. He has not actively poached Haven clients, but some had contacted him to ask for help and he has bumped into them occasionally. He confirms that he had destroyed all confidential information from his relationship with Haven and he cannot access any other confidential information belonging to Haven. His affidavit identified Haven clients who had contacted him asking for help after he had terminated.
[22] Mr Miller said that he had not been poaching Haven clients or actively approaching them, but he had had communications with seven who had insurance policies arranged through Haven. He had not kept any confidential information of Haven. He destroyed or deleted it after he left Haven. While an advisor, it was his
practice to destroy clients’ applications and related documents after the documents were emailed to Haven.
[23] Mr Coetzer says that he kept Haven files and documents after termination because he was concerned that Haven might not give him support if there was a dispute with a client. In the light of the orders made by Gordon J, he delivered those records to his lawyers to send on. He confirmed that he had no other Haven confidential information or materials in his possession or control. His affidavit refers to Haven clients he had contact with, but for many of them he says they were not within the claw-back period. He denies actively soliciting Haven clients.
[24] An affidavit by Mr Viljoen takes issue with much that Mr van Ransburg says in his affidavit. At that stage in the proceeding, Mr Viljoen was not a defendant. His affidavit accordingly does not address the matters required by Gordon J’s order.
[25] Mr Brown cross-applied to rescind Gordon J’s orders as to non-solicitation orders on the basis that he had not signed an agreement with Haven barring post- termination solicitation of clients. Gordon J held that Haven had failed to make full disclosure of all relevant facts. She rescinded the non-solicitation orders against Mr Brown and his company in paragraph [18](a) and(b) above, saying:3
At this stage, there is no sufficient evidential basis to support the claim that Mr Brown and ASJ [All Small Jobs Ltd] agreed to abide by the stringent confidentiality and no-solicitation clauses set out in the written agreement, upon which the plaintiff now relies. It follows that there is no serious question to be tried.
Applications for further discovery
[26] The principles for applications under r 8.19 are generally well-established. In Assay Abloy New Zealand Ltd v Allegion New Zealand Ltd, Asher J set out a four-stage approach:4
(a) Are the documents sought relevant and, if so, how important will they be?
3 Haven Insurance Ltd v Lombard [2017] NZHC 1336 at [27].
(c) Is discovery proportionate (balancing the time and cost of delivery against the potential value of discovery)?
(d) Weighing and balancing these matters, in the Court’s discretion,
applying rule 8.19, is an order appropriate?
[27] There is an initial presumption that a party’s affidavit of documents is conclusive.5 The party seeking further discovery is required to make out a case for believing that the party has not discovered documents that should have been. Relevance is to be assessed according to the pleadings.6 In determining relevance, the case of the party seeking discovery is deemed to be true, not that of a party from whom discovery is sought. The court will not try the case to decide the ultimate relevance alleged by the party seeking discovery: Rapid Metal Developments NZ Ltd v Access One Scaffold Ltd.7 In some cases, however, it may be obvious that a party is pursuing an issue for which it can have no hope of success. In those cases discovery will not be required as it will not serve any useful purpose.8
[28] For standard discovery under r 8.7 of the High Court Rules, a party is required to disclose documents on which it relies, which adversely affect its own case, or adversely affect another party’s case, or support another party’s case. For documents to be discoverable under this test, the documents or the information in them must be relevant under s 7(3) of the Evidence Act 2006. That is, the document or the information in it has a tendency to prove or disprove anything of consequence to deciding the case. Documents that are no more than background or that can only assist in a train of enquiry are not discoverable under the standard discovery test in r 8.7.9
5 Jones v The Monte Video Gas Co (1880) 5 QBD 556 (CA).
6 New Zealand Rail Ltd v Port Marlborough New Zealand Ltd [1993] NZCA 27; [1993] 2 NZLR 641 (CA) at 644.
7 Rapid Metal Developments NZ Ltd v Access One Scaffold Ltd [2017] NZHC 204 at [5] and [14].
8 Dold v Murphy [2018] NZHC 994 at [32].
9 Minister of Education v IT Architects Ltd [2014] NZHC 1541 at [13]–[17].
[29] It is not unusual in cases of this sort – pursuing a former officer, agent, employee or contractor for breach of some post-contractual restraint – for plaintiffs’ suspicions to be aroused and for defendants to resent interference with their freedom to make a living when they are no longer engaged by the plaintiff. While those matters are part of the background, they are not reason for departing from normal principles to decide whether further discovery is required.
[30] A possible criticism of Haven’s application is that it is seeking discovery on a more extensive basis than is required for standard discovery. Haven wants to see records of all communications between the defendants, whether or not they have anything to do with the case, in case they might lead to something relevant. The same goes for communications with Haven clients before the advisers terminated their contracts and the defendants’ financial records and any references to Haven leads or clients. That is “train of inquiry” discovery. As the defendants are required only to make standard discovery, the criticism would go that an application under r 8.19 cannot be used to obtain more extensive discovery. If the discovery order is to be changed, there should be an application under r 8.17, which allows variations if compliance has shown a need or there is a change of circumstances justifying reconsideration. While Haven did not apply under r 8.17, it would in my view be unduly technical for this decision to rule against Haven on that point. Haven is not satisfied with the state of the defendants’ discovery and believes that further discovery should be ordered in the interest of obtaining a just determination of its claims. The present application provides a vehicle to review the defendants’ discovery. The court should not be prevented from ordering varied discovery if it is satisfied that it is required.
The third and fourth defendants
[31] The scope of discovery for Mr Brown and All Small Jobs Ltd is the same as for the other defendants. They are required to disclose documents on the basis that they were subject to contractual non-solicitation obligations. That is notwithstanding Gordon J’s finding in her decision of 16 June 2017 that there was no serious question to be tried whether Mr Brown and All Small Jobs Ltd were bound by the non- solicitation clauses in Haven’s advisor agreement because no written agreement had
been signed. That finding in an interlocutory decision was not a final decision on a substantive issue and therefore does not give rise to res judicata, whether cause of action estoppel or issue estoppel. Notwithstanding the finding of Gordon J, as a matter of procedure Haven can continue to allege and prove at trial that Mr Brown and All Small Jobs Ltd did enter into an agreement with non-solicitation terms.
[32] Haven has addressed this by pleading that in March 2012 Mr Brown and All Small Jobs orally confirmed their assent to the terms of Haven’s agreement; Mr Brown and All Small Jobs Ltd signed the agreement and returned it to Haven on or about 10 April 2012; Mr Brown confirmed that in an email of that date; and Mr Brown and All Small Jobs Ltd conducted themselves in accordance with the terms of the agreement as pleaded. The discovery questions will be decided on the assumption that Haven will be able to prove its case.
[33] As to the other causes of action, any fiduciary obligations expired on termination. Haven does not allege breaches of fiduciary duty after termination. Aside from whether they were contractually bound, Mr Brown and All Small Jobs Ltd had ongoing obligations of confidentiality. For the conspiracy cause of action it is to be assumed that Haven will be able to prove both breaches of contract (as the unlawful means) and co-ordination with the other defendants.
[34] Mr Brown has addressed disclosure of documents several times. In his affidavit of 20 April 2017, he deposed as to the matters that Gordon J required in her interim injunction decision. He stated that all confidential information he held had been destroyed or deleted. He dealt with contacts with Haven clients. In his affidavit of documents of 26 July 2017, he listed documents relevant under the standard discovery test. In his affidavit of 29 June 2018 in response to the present application, he showed that his lawyers had responded to correspondence from Haven’s lawyers querying the adequacy of discovery. He deposed that he now operates through a new company, Kiwi Assurance Market Ltd, but has declined to disclose documents of Kiwi Assurance Market Ltd, saying that those documents are not in his own control. He discloses that Kiwi Assurance Market Ltd has received commissions totalling
$11,011.73 for four people said to be Haven clients. His access to Haven’s records was cut off when he gave notice terminating the agreement. He cannot definitively
supply a sworn answer to the request as to the correspondence with Haven clients as he cannot know who is or who is not a Haven client. He says, on the other hand, that Haven is in a position to establish what clients it has lost, because Haven holds records of advisors to whom clients were allocated. When there is a change of service provider for an insured, the former service provider is advised by the new one. Any change would become obvious to Haven because it would no longer receive trailing commissions. He says that the only written communication he has had with other defendants is correspondence amongst the lawyers for the defendants, for which they claim common interest privilege: although the correspondence is privileged, the disclosure to other defendants with a similar interest is not a waiver of privilege generally.10 His affidavit addresses each of the categories for which further discovery is sought and confirms that, with the exception of documents in the control of Kiwi Assurance Market Ltd, he does not have in his control any documents that are the subject of Haven’s application. He refutes allegations by Mr van Rensburg that he attended any meeting with a representative of another financial service provider, or that he has been otherwise working in concert with other defendants (except in the defence of this proceeding).
[35] Mr Brown’s objection to producing documents of Kiwi Assurance Market Ltd is misconceived. Under s 191 of the Companies Act, Mr Brown, as a director of Kiwi Assurance Market Ltd, has a right to inspect the records of the company. As he is the sole director of the company, the documents are in his sole control. That right to inspect and take copies comes under the definition of “control” under r 1.3(1) of the High Court Rules:
A right, otherwise than under these rules, to inspect a copy of the document.
[36] In the circumstances, I require Mr Brown to make a further affidavit of documents, deposing as to documents in the control of Kiwi Assurance Market Ltd, and its dealings with any persons known to Mr Brown to be Haven clients, especially those identified in paragraph 20 of his affidavit of 29 June 2018. That aside, I regard Haven’s suggestions that there are other documents in the third and fourth defendants’ control that they ought to have disclosed but have not as simply speculative. Aside
from the Kiwi Assurance Market Ltd issue, I see no reason for not accepting Mr Brown’s discovery.
The fifth and sixth defendants
[37] The fifth and sixth defendants’ position is broadly similar to the third and fourth defendants’. In his affidavit of 5 May 2017 required by Gordon J, Mr Miller says that when he gave notice of termination on 5 August 2016, he gave Haven a box of blank forms with Haven logos and business cards, being the only Haven documents in his possession. On termination he was locked out of all Haven systems and prevented from finalising cases for clients that were still being assessed by insurance providers, even though his months’ notice had not expired. He established a new company, Six One Ltd. He has purchased telemarketing services and call lists from other sources. He was not in New Zealand from November 2016 until early January 2017. He suffered a skydiving accident in 2017. He and J Miller Consulting Ltd have not approached Haven clients, but he had been contacted by Haven clients about policies procured through Haven. He addresses those. He confirms that after termination he did not retain any of Haven’s confidential information. He always destroyed clients’ applications and related documents after the completed applications were emailed to Haven. His affidavit of documents is relatively brief. There is a section where he claims confidentiality, which deals with communications with Haven clients he identifies in his affidavit of 5 May 2017. In his affidavit of 4 July 2018 in response to the current application, he addresses discovery generally and addresses each of the categories sought by Haven. He confirms that there are documents relating to discussions between the defendants and their lawyers regarding Haven’s claims and, as with the other defendants’ claims, asserts common interest privilege. He reaffirms that he did not have access to any Haven intellectual property or any confidential documents or information after he gave notice of termination on 5 August 2016. He says that he returned his Haven mobile phone and sim card to Haven and that he had no access to his Haven email address after 5 August 2016. He says that his affidavit of 5 May 2017 gives an accurate record of his contact with Haven clients after 5 August 2016. He says that neither he nor his company have any financial records relevant to the issues in the proceedings. He has considered the lists of clients and
leads, but does not recognise any names and confirms that he has not had any contact with them.
The seventh and eighth defendants
[38] Mr Coetzer explains that he has moved to Christchurch and is to take up employment with the Department of Corrections. He now has very limited contact with the insurance industry. The only clients he deals with are family or those he might meet through his work.
[39] In his affidavit of 1 May 2017, in response to the order of Gordon J, Mr Coetzer explains that he got rid of the sim card for his Haven mobile phone and that he had arranged for documents he had kept on termination to be given to his solicitors for forwarding on to Haven. He had held files on a cloud-based storage system known as One Drive but those have now been deleted. His affidavit identified clients he had met since October 2016. In his affidavit of 4 July 2018 he addresses each of the classes of documents and takes a similar position to Mr Brown and Mr Miller. He denies holding any documents sought in Haven’s application that he has not already disclosed.
Haven’s response
[40] Haven relied on circumstantial matters to say that I should not take the defendants’ assurances at face value, including the following: Mr Rensburg’s evidence about Mr Lombard; Mr Baldwin had inspected records of Status Financial Ltd, which supported his view that Mr Lombard had made payments to some of the other defendants; there were said to be discrepancies in the defendants’ accounts of events; a meeting between Mr Lombard and Mr Miller was said variously to be for business or personal; and there was evidence of Mr Lombard, Mr Coetzer and Mr Viljoen working together.
Result
[41] The circumstantial matters may help Haven’s case on the substantive merits, but I am not satisfied that further discovery should be ordered, except for documents
of Kiwi Assurance Market Ltd in the control of Mr Brown. The circumstantial matters do not by themselves or taken together persuade me that an order for further discovery would yield anything more than what has been disclosed so far. The defendants have addressed Haven’s further discovery request in their affidavits in opposition. Those affidavits are in effect the discovery affidavits Haven seeks, even if they do not disclose further documents. Haven has not shown grounds to believe that the defendants have not disclosed documents that they should have. That is reinforced by these considerations:
(a) Haven and its advisors operated with electronic records. The defendants lost access to them when they terminated their contracts.
(b) While Haven has given names, the defendants are unlikely to be able to identify Haven clients or leads other than those Haven referred to them while they are its advisors.
(c) The defendants’ affidavits in response to Gordon J’s order give grounds for confidence. In complying with her order, they were open about their contacts and dealings with Haven clients.
(d) The defendants have addressed disclosure of documents and information in their affidavits in response to Gordon J’s order, in their discovery affidavits and in answering the current application. It would be surprising if there were anything still left out.
(e) Even on a “train of inquiry” basis, there are not sound grounds for believing that the defendants have in their control documents that should be discovered.
[42] I also accept the defendants’ point that Haven can establish when it has lost clients and who their new service provider is. It will also be able to establish whether those clients are associated with any of the defendants.
[43] In short, apart from Mr Brown, I am satisfied that the defendants have made due discovery and that a further discovery order is not required to see whether the defendants have in their control documents sought in Haven’s application.
[44] The further discovery application was not directed at Mr Viljoen. He did not file a discovery affidavit until 6 August 2018. It appears to address matters Haven raised in its application. The parties should have the opportunity to come back if there are any issues as to the adequacy of his discovery.
[45] I make these orders:
(a) Within fifteen working days of this decision Mr Brown is to file and serve an affidavit disclosing documents that are or have been in the possession or control of Kiwi Assurance Market Ltd relating to current or past clients of Haven, including those identified in paragraph 20 of his affidavit of 29 June 2018.
(b) Subject to [a], the application for further discovery is dismissed.
(c) Leave is reserved to apply for further directions, including as to discovery by Mr Viljoen.
(d) Mr Brown is to pay costs on the application to Haven.
[46] Haven is to pay costs on the application to the fifth, sixth, seventh and eighth defendants. If the parties cannot agree costs, memoranda may be filed and I will decide costs on the application.
.................................
Associate Judge R M Bell
Solicitors:
Lowndes Law (Ms JEM Lethbridge/Mr T Jeffcott), Auckland, for the Plaintiff Sharp Tudhope (Ms S Grice), Tauranga, for the 3rd and 4th Defendants
Vicki Ammundsen Trust Law Ltd (Ms V Ammundsen), Auckland, for the 5th and 6th Defendants Franklin Law (Mr E J Taia), Pukekohe, for the 7th and 8th Defendants
Copy to:
Mr D H McLellan QC, Shortland Chambers, Auckland, for the Plaintiff Mr Bret Gustafson, Barrister, Auckland, for the 3rd and 4th Defendants Mr S A Keall, Barrister, Auckland, for the 5th and 6th Defendants
Mr R T Wilson, Barrister, New Plymouth, for the 11th Defendant
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URL: http://www.nzlii.org/nz/cases/NZHC/2018/2421.html