CAPITAL + MERCHANT FINANCE LTD (IN RECEIVERSHIP AND IN LIQUIDATION) v STACE HAMMOND [2013] NZHC 2121

CAPITAL + MERCHANT FINANCE LTD (IN RECEIVERSHIP AND IN LIQUIDATION) v STACE HAMMOND [2013] NZHC 2121 [21 August 2013]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2012-404-007534[2013] NZHC 2121BETWEEN CAPITAL + MERCHANT FINANCELIMITED (IN RECEIVERSHIP AND INLIQUIDATION)PlaintiffAND STACE HAMMONDDefendantHearing: On the papersCounsel: V Heine for PlaintiffPJ Napier for DefendantJudgment: 21 August 2013JUDGMENT OF ASHER J(Application to obtain access to Court documents)This judgment was delivered by me on Wednesday, 21 August 2013 at 1.00 pmpursuant to r 11.5 of the High Court Rules.Registrar/Deputy RegistrarSolicitors:Chapman Tripp, Wellington.Keegan Alexander, Auckland.Copy to:Fairfax Media, Auckland.Introduction[1] On 11 June 2013 a reporter, Tim Hunter of Fairfax Media, made a request for access to the statement of claim and statement of defence in this proceeding underr 3.13 of the High Court Rules. The defendant, Stace Hammond, opposes hisapplication and submits that it should be declined.[2] In written submissions Mr Napier, for Stace Hammond, observed that the reputation of a law firm is of the utmost importance. The existence of theproceeding has already caused harm for Stace Hammond, with their work beingcalled into question in public, as well as reluctance from clients to the firm. Therehas also been reluctance from other solicitors to refer work to the defendant andrumours and misconceptions being circulated in the community. It is submitted thatthe release of the statement of claim and statement of defence will compound thedamage.[3] There is also concern that the parties' obligations in progressing to trial willbe diverted by publicity at such an early stage, and that the full strength of thedefence is not adequately shown in the statement of defence. The untestedallegations in the statement of claim could cause irreparable harm to the defendant.It is also submitted that the complexity of the proceeding makes it difficult to reportobjectively and accurately, and that the fact of public interest is not in itself enough.[4] In response, Fairfax Media submitted that there is a legitimate public interestin the case. It submits that investors may be affected by and have an interest in theactions of the receiver, and other investors more generally may be interested.Further, it submits that the public are entitled to know the details of the claim.Approach[5] Rule 3.16 of the High Court Rules provides that in determining an applicationunder r 3.13, the following matters must be taken into consideration:(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 or Registrar thinks just.[6] Mr Napier relied on the following extract from Commerce Commission v Air New Zealand Ltd:1I conclude that open justice is not the paramount consideration in the newaccess regime. As has been observed, it is a principle and not a freestandingright. It is just one of the matters to be taken into account, and there is nopresumption in favour of disclosure. In this regard I respectfully prefer thereasoning of Mallon J in Chapman to that of Wild J in BNZ Investments Ltd,and agree with the observation in McGechan that the r 3.16 factors "do notrepresent a hierarchy".(footnotes omitted)[7] The plaintiff through the liquidators does not oppose any search of the pleadings.Analysis[8] Journalists of Fairfax Media are "members of the media" as defined by theCriminal Procedure Act 20112 and have a legitimate interest as the surrogate of thepublic in publishing details of court proceedings. The principle of open justicetherefore works in favour of access.[9] Stace Hammond has no particular privacy interest or vulnerability. It is aprofessional firm operating in the commercial arena. It cannot claim particularinterest in confidentiality or privacy beyond that of any commercial person whowould rather not have adverse allegations concerning it published.1 Commerce Commission v Air New Zealand Ltd [2012] NZHC 271 at [29], approved in Schenker AG v Commerce Commission [2013] NZCA 114.2 Criminal Procedure Act 2011, s 198(2).[10] The reality is that the fact Stace Hammond is being sued is already in themarketplace. It is difficult to see how the provision of details of the claim will havea marked additional adverse effect. The claim is detailed and alleges contractualbreach and tortious negligence. It asserts that Stace Hammond committed errors inits work. There is nothing scurrilous or abusive in the way in which the claim ispleaded. Indeed, it is pleaded in an entirely professional way. Any approved searchwill also involve the search of the statement of defence which is full, denies anumber of the allegations, and sets out the firm's affirmative defence of contributorynegligence.[11] The pleadings are sober, professionally prepared documents which areproperly lacking in scurrilous allegations or indeed unnecessary adjectives. They arethe sort of proceedings that can be expected when there are contested allegations oferror made by one commercial party against another.[12] Given that the fact of the claim is already out there, I am unable to see any additional significant detriment to Stace Hammond in the publication of the detail. Indeed, the publication of the detail will give the informed reader a better perspective of the nature of the allegations, and could well take some of the sting out of the baldfact that Stace Hammond is being sued.[13] I also reject the suggestion that the position is similar to that of thedefendants in Commerce Commission v Air New Zealand Ltd, where substantialresources would have had to be devoted by busy parties to go through documents todelete confidential material. No such issue arises here as it is not suggested a cullingof confidential material is required.Conclusion[14] Fairfax Media has a legitimate interest in searching the file in the mannerproposed, and the principle of open justice supports its position. There are noparticular factors that stand in the way of publication and indeed, in my assessment,Stace Hammond's position in the marketplace is unlikely to be significantlyworsened following publication. The plain fact is Stace Hammond faces courtproceedings that are undoubtedly unwelcome, and that those proceedings are in thepublic eye. In due course there will be a public hearing in which the details of the claim will be traversed in any event.[15] I am prepared to grant the request.Result[16] The request of Fairfax Media to inspect and take copies of the statement ofclaim and statement of defence filed in this proceeding is granted...Asher J