CYGNET FARMS LTD v ANZ BANK NEW ZEALAND LTD [2016] NZHC 1945

CYGNET FARMS LTD v ANZ BANK NEW ZEALAND LTD [2016] NZHC 1945 [19 August 2016]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2013-485-10160[2016] NZHC 1945BETWEEN CYGNET FARMS LIMITEDPlaintiffAND ANZ BANK NEW ZEALAND LIMITEDDefendantTeleconference: 19 August 2016Appearances: M D Branch and K F Shaw for PlaintiffS M Hunter for DefendantJudgment: 19 August 2016JUDGMENT OF PALMER JThis judgment is delivered by me on 19 August 2016 at 4.30 pmpursuant to r 11.5 of the High Court Rules......................................................Registrar / Deputy RegistrarSolicitor:Harkness Henry, HamiltonS Hunter, Barrister, AucklandGilbert Walker, AucklandSummary[1] This proceeding is set down for trial commencing Monday 22 August 2016. On Thursday 18 August 2016 the defendant, ANZ, sought to adjourn the trial because it will not have complied with its discovery obligations. Further documents remain to be discovered that may benefit Cygnet Farms, the plaintiff. However Cygnet Farms opposes adjournment. The proceeding was commenced in 2013. A new fixture would not be available until February or July 2017. Mr and Mrs Swan, the directors of Cygnet Farms, want to get on with their lives. They give anundertaking acknowledging and agreeing that ANZ's discovery obligations havebeen complied with in full. I decline the adjournment application.Context[2] In 2008 ANZ sold interest rate SWAP products to Cygnet Farms. In 2013 Cygnet Farms commenced proceedings against ANZ alleging negligence, negligent misstatement, breach of contract, misrepresentation and breach of the Fair Trading Act 1986. Part of the delay in the matter proceeding, by consent, was to allow Cygnet Farms to consider an offer by the Commerce Commission.[3] The trial is set down for seven days, commencing at 10 am Monday 22 August 2016. Two other similar proceedings against ANZ also have fixtures. A ten day hearing of Bushline Trustees Ltd v ANZ Bank New Zealand Ltd (CIV-2014- 404-1276) commences 20 February 2017 and an eight day hearing of CWK Holdings Ltd v ANZ Bank New Zealand Ltd (CIV-2015-419-314) commences 29 May 2017.[4] At a teleconference on Thursday 18 August 2016 Mr Hunter, for ANZ, advised that ANZ reluctantly seeks an adjournment. Hinton J made discovery orders on 8 August 2016, in the related case of Bushline Trustees Ltd v ANZ Bank New Zealand Ltd, which are currently being actioned.1 That caused ANZ to make additional searches which have identified material of likely relevance in this proceeding:1 Bushline Trustees Ltd and Ors v ANZ Bank New Zealand Ltd [2016] NZHC 1818.(a) around 30 documents have been identified from inquiries with three senior managers and a more systematic search is being considered;(b) another preliminary search by Chapman Tripp has identified more than 100 relevant documents which may be ready for disclosure by this weekend; and(c) a PWC search has identified hundreds of documents which may fall within the orders and have not yet been reviewed.[5] Mr Hunter explained that ANZ's initial approach to disclosure was to focuson the policies and procedures in place at the time the products were sold in late 2007 and early 2008. ANZ interpreted Fogarty J's discovery orders of 23 June 2016in this proceeding to cover documentation ANZ had in place at the time.2 However,ANZ accepts Hinton J's orders make clear the inquiry must be wider than that andthat evidence may be relevant in this proceeding as well. Mr Hunter observes some of the documentation that has been discovered will likely be of particular interest to the plaintiff here.[6] This morning I received memoranda, and heard submissions at a further teleconference, from counsel for both parties regarding the application for an adjournment. I have also established that a new seven day fixture would not beavailable in the Court's timetable until July 2017.Law regarding adjournment[7] Rule 10.2 of the High Court Rules provides that "[t]he court may, before or atthe trial, if it is in the interests of justice, postpone or adjourn the trial for any time,to any place, and upon any terms it thinks just". It is not surprising that McGechancomments that this rule grants a very wide discretion to the judge.3[8] In assessing the interests of justice I consider justice to all litigants – not only the parties here but the parties in the two similar cases which may be influenced by2 Cygnet Farms Ltd v ANZ Bank New Zealand Ltd [2016] NZHC 1373.3 McGechan on Procedure (online ed, Thomson Reuters) HR 10.2.03.the outcome of this case as well the parties in cases in the queue that will suffer further delays and the public interest in achieving the most efficient use of court resources.4 As Tipping J stated, "[i]t is essentially a balancing exercise".5SubmissionsANZ[9] Mr Hunter, for ANZ, says the solicitors advising ANZ feel compromised in going to trial where discovery orders have not been complied with in full. He saysANZ appreciates Cygnet Farms' reluctance to adjourn but submits Cygnet Farmsitself identified the possibility in the proceedings leading to Fogarty J's discoverydecision in June 2016. Mr Hunter submits Cygnet Farms cannot know what it is waiving and may consider judgment was unfairly obtained, particularly if there are different results in its proceedings compared with the other two against ANZ. He also submits there is a potential unfairness to ANZ in only some of the post-2008 documents being discovered. ANZ would be willing to cooperate to substitute theCygnet Farms trial for the Bushline trial in February 2017.Cygnet Farms[10] Mr Branch states that Cygnet Farms' position, which he characterises as anundertaking, is that:[O]n the basis that the material referred to in paragraph 15.1 of ChapmanTripp's letter dated 16 August 2016 is handed over, then Cygnet willacknowledge and agree that ANZ's discovery obligations in this proceedinghave been complied with in full.[11] At the teleconference, in response to my questions, Mr Branch confirmed that he has advised his clients that it is possible that the documents that remain to be discovered could materially assist their case though, in his opinion, they are unlikely to add too much. He says Cygnet Farms is emphatic in wishing to proceed. He confirms they understand that if they proceed and lose, and plaintiffs in other cases4 Commissioner of Inland Revenue v Patel [2013] NZHC 477 drawing on the decisions of the High Court of Australia in Aon Risk Services Australia Ltd v Australian National University[2009] HCA 27, (2009) 239 CLR 175 and Sali v SPC Ltd (1993) 116 ALR 625 (HCA) at [11]. See also Gray v Thom (1997) 10 PRNZ 373 (HC).5 O'Malley v Southern Lakes Helicopters Ltd, HC Christchurch CP513/89, 4 December 1990.that rely on the yet-to-be discovered documents succeed, Cygnet Farms will not be able to appeal for that reason due to their undertaking. Their appeal rights will be exercisable on the basis of the documents discovered.[12] Mr Branch submits the undertaking is sufficient protection for ANZ. He acknowledges Cygnet Farms flagged a possible adjournment leading up to the June 2016 discovery application but notes it has not done so since. He says Cygnet Farms"wants this matter determined so that Mr and Mrs Swan can get on with their lives".They, and Cygnet Farms, need to know the outcome of this hearing in order to do so.DecisionAdjournment[13] There is no suggestion ANZ would suffer significant prejudice from the trial proceed. Rather, it is the reverse. Cygnet Farms is likely to suffer more detriment than anyone else from going to trial now. But it is emphatic in wishing to do so nevertheless. It values timeliness of resolution of its proceedings over completeness of the documentary basis of resolution. I respect that priority and accord it significant weight.[14] I do not place significant weight on ANZ's submission there is a potential unfairness to ANZ in only some of the post-2008 documents being discovered. ANZ has been responsible for discovery. On 23 June 2016 Fogarty J "rejected the proposition that discovery by ANZ was confined to ANZ's dealings with the plaintiffand that documents relating to complaints made by other customers are irrelevant".6He also ordered discovery of "General ANZ briefing/marketing/training documents",material to the marketing of the transactions purchased by Cygnet Farms. His orders seem to me to capture the material at issue here though I do not determine that issue.[15] I have regard to the interests of the parties in cases that would be further delayed by room for this proceeding having to be made at a later date, as well as the public interest in the efficient use of court resources. They strengthen the case for proceeding to trial now.6 Cygnet Farms Ltd v ANZ Bank New Zealand Ltd, above n 2, at [16][16] I acknowledge the assistance to be derived in the two similar cases ofBushline Trustees Ltd and CWK Holdings Ltd may be less if the judgment here is not based on as full discovery as in those cases. But that is speculative and does notoutweigh the plaintiff's interest in timely resolution of these proceedings.[17] On balance, I conclude that the interests of justice are best served by the trial proceeding on schedule. I do so on the basis that Cygnet Farms is fully alive to the potential consequences of proceeding to trial now on the basis of attenuated discovery. The undertaking, as well as counsel's assurance, indicates Cygnet Farms is willing to accept those consequences. It would be helpful to have that undertaking in evidence, by way of affidavit from Mr and Mrs Swan at the beginning of the trial.Other matters[18] In addition, at the teleconference this morning, I offered to Cygnet Farms that the trial could start a day late, on Tuesday 23 August 2016, if that would be helpful. Although Mr Hunter would have preferred that, Mr Branch did not. The trial will commence, as scheduled, at 10 am Monday 22 August 2016. I also record:(a) Mr Hunter is awaiting instructions on whether ANZ will file and serve reply briefs of evidence. If it does that will occur as soon as possible. New evidence in reply will not, of course, be able to be put in by way of cross-examination otherwise.(b) Mr Hunter acknowledges that any objection by ANZ to the contents ofMr Schurr's brief can be dealt with at trial.[19] I reserve costs in relation to the adjournment application, to be dealt with in the context of costs for the substantive proceeding...................................................................Palmer J