Vijay Holdings Limited (in liquidation) v Kumar [2024] NZHC 1863 (9 July 2024)

Last Updated: 25 July 2024

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-1494 [2024] NZHC 1863

UNDER	the Companies Act 1993
BETWEEN	VIJAY HOLDINGS LIMITED (in liquidation) Plaintiff
AND	VINOD KUMAR Defendant

Hearing:	On the papers
Counsel:	F Tuteja for Plaintiff Defendant in person P Tumelty for Applicant
Judgment:	9 July 2024

JUDGMENT OF O’GORMAN J

[Application for access to court documents]

This judgment was delivered by me on 9 July 2024 at 2 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

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

Solicitors:

Waterstone, Auckland

Russell McVeagh, Auckland (for Applicant)

Copy to:

Vinod Kumar

VIJAY HOLDINGS LIMITED v KUMAR [2024] NZHC 1863 [9 July 2024]

• [1] Russell McVeagh have applied on behalf of their client, CNP Holdings Ltd (CNP Holdings), to access the Court file in this proceeding. CNP Holdings is the plaintiff in another proceeding CNP Holdings Ltd v Central Park Property Investment Ltd, CIV-2023-404-636 (the CNP Holdings proceeding). CNP Holdings wishes to have access to documents in this proceeding, because they may be relevant to the matters at issue in the CNP Holdings proceeding.

Legal principles

• [2] Access to the Court file in a civil proceeding is governed by the Senior Courts (Access to Court Documents) Rules 2017, particularly r 8 (general rights of public, including access to formal court record), r 9 (general right of parties to proceedings), r 11 (accessing documents not covered by general rights) and r 12 (matters to be considered).

• [3] For documents not searchable as of right under rr 8 and 9, relevant considerations include:

(a) the orderly and fair administration of justice: r 12(a);

(b) the right to bring and defend civil proceedings without the disclosure of any more information about the private lives of individuals, or matters that are commercially sensitive, than is necessary to satisfy the principle of open justice: r 12(c);

(c) the protection of other confidentiality and privacy interests and any privilege held by, or available to, any person: r 12(d);

(d) the principle of open justice (including the encouragement of fair and accurate reporting of, and comment on, court hearings and decisions): r 12(e);

(e) the freedom to see, receive and impart information: r 12(f); and

(f) any other matter that the Judge thinks appropriate: r 12(h).

• [4] There is no presumption in favour of disclosing information.¹ The balancing exercise also depends on the particular stage of the proceedings:

(a) Before the substantive hearing, the protection of confidentiality and privacy interests and the orderly and fair administration of justice may require that access to documents be limited.

(b) During the substantive hearing, open justice has greater weight than at other stages of the proceeding and in relation to documents relied on in the hearing than other documents: r 13(b)(i) and (ii).

(c) After the substantive hearing:

(i) open justice has greater weight in relation to documents that have been relied on in a determination than other documents: r 13(c)(i); but

(ii) the protection of confidentiality and privacy interests has greater weight than would be the case during the substantive hearing: r 13(c)(ii).

• [5] The reason for these three different stages was discussed by the Court of Appeal in Greymouth Petroleum Holdings Ltd v Empresa Nacional Del Petróleo:²

These divisions reflect that during the substantive hearing open justice has greater weight, in particular in relation to documents admitted in evidence. When a court is engaged in hearing a dispute its workings, including documents referred to or relied on, should be open to full scrutiny by all members of the public, unless there are particular and strong reasons to the contrary. The public should be able to follow and understand the hearing process. However, prior to and after the substantive hearing, the importance of public scrutiny is less, as the court is not hearing and resolving the dispute. Prior to the hearing there is no guarantee the case will go to hearing at all. Therefore open justice has less weight. The parties are entitled to the protection of confidentiality and privacy within reasonable limits, given that they have not at that point aired the dispute in public. After the substantive hearing the need for public scrutiny diminishes in importance as time moves on.

¹ Schenker AG v Commerce Commission [2013] NZCA 114, [2015] NZAR 1561.

2. Greymouth Petroleum Holdings Ltd v Empresa Nacional Del Petróleo [2017] NZCA 490, [2017] NZAR 1617 at [25].

Applicant and opposition

• [6] The applicant seeks access to the following documents:

(a) the “formal Court record” as defined in s 8(1); and

(b) all other documents on the court file including, as specified by the applicant, all pleadings (including any counterclaim) and all affidavits and briefs of evidence.

• [7] The applicant explains that the main issue in the CNP Holdings proceeding is whether certain defendants disclosed to investors all material information when they issued a product disclosure statement dated 30 June 2020. CNP Holdings alleges that there was a failure to disclose the true financial status of the “Nido Development”, which comprised the purchase and development of land in west Auckland for the construction of a large retail store to be operated under the “Nido” brand name.

• [8] Mr Kumar, the defendant in this proceeding, was involved in the Nido Development, as were entities he controlled. Among other things:

(a) Vijay Holdings Ltd (Vijay Holdings), of which Mr Kumar was the sole director, was the “Developer” for the Nido Development pursuant to a development agreement that it entered into with Everest Central Investments Ltd (Everest). Everest was a wholly-owned subsidiary of Central Park Property Investment Ltd (Central Park).

(b) Mr Kumar was a director of Everest, along with Neil Tuffin and Mark Hughson.

(c) Mr Kumar was the sole director of Magsons Hardware Ltd, which was to be the tenant of the Nido store.

(d) Mr Kumar was the sole director of Magsons Investments Ltd, which was guarantor under a number of contracts entered into for the purposes of the Nido Development.

• [9] CNP Holdings alleges that the nature of the Nido Development meant that the financial status of Central Park was linked to that of Vijay Holdings and other entities controlled by Mr Kumar engaged in the Nido Development. The financial status of Vijay Holdings at the time of the Central Park capital raise is relevant in the CNP Holdings proceeding. That is inherently connected with the date Vijay Holdings became insolvent and whether Mr Kumar traded recklessly as a director of Vijay Holdings, both of which are matters to be determined in this proceeding.

• [10] The liquidators of the plaintiff abide the decision of the Court in relation to this application for access to the Court file.

• [11] Mr Kumar, as the defendant in this proceeding, strongly opposes the application on the grounds that:

(a) he does “not want it [this proceeding] to be affected by any third party actions”; and

(b) the case “is yet to be heard and we require a fair trial and hence do not want our case to be tainted in any way”.

Analysis

• [12] The applicants are entitled under r 8(1) to access the formal court record, namely:

(a) the register or index of documents filed in the proceeding; and

(b) any minute, judgment, order and/or reasons given by a judge.

• [13] For the balance of the documents, principles of open justice are not particularly engaged, because the documents are sought for private purposes.

• [14] The proceeding has not yet reached the point of a substantive hearing. For this interlocutory stage, privacy interests and the orderly and fair administration of justice

may require access to documents be limited.³ Applications for access to affidavits brought at the pre-trial stage may be declined in circumstances where they contain “untested and unanswered allegations and could give an unbalanced impression of the issues and facts involved in the proceeding”.⁴

• [15] In this case, I accept the applicant has a good reason for wanting to review the documents, because of their potential relevance to the matters at issue in the CNP Holdings proceeding.

• [16] I consider the current pleadings are sufficient for the applicant’s purposes (not any earlier pleadings that have now been superseded), namely:

(a) the statement of claim dated 29 July 2022;

(b) the amended statement of defence dated 8 April 2024; and

(c) the statement of reply to amended statement of defence dated 22 April 2024.

• [17] I do not consider it appropriate for the applicant to have access to the affidavits filed to date, because they are procedural (establishing service) or address discovery, rather than containing substantive evidence. No briefs of evidence have been exchanged. The applicant may reapply nearer to any substantive fixture, at which time this position might have changed and the balancing exercise may be different.

Result

• [18] Under r 8(1), the applicants are entitled under to have access to:

(a) the register or index of documents filed in the proceeding; and

3. GFD I LPP v Melview (Kawarau Falls Station) Investments Ltd (In Rec) [2012] NZHC 677 at [16]–[17].
4. Sellman v Slater [2021] NZHC 752 at [55], referencing Commissioner of Police v Doyle [2017] NZHC 3049 at [17] per Palmer J; and GFD I LPP v Melview (Kawarau Falls Station) Investments Ltd (In Rec), above n 3.

(b) any minute, judgment, order and/or reasons given by a judge.

• [19] In addition, I grant access to the documents listed at [16] above.

• [20] I otherwise decline the application.

O’Gorman J