WALKER v FORBES [2017] NZHC 1023

WALKER v FORBES [2017] NZHC 1023

The Court refused most of the plaintiffs' discovery requests on grounds of confidentiality, lack of demonstrated relevance and disproportionality, ordered PWC to discover internal IFRS guidance documents 2006-2008, reserved the Elgin audit issue pending PWC instructions, refused disclosure/orders concerning Hanover conflict checks and 'My Client' system access, and directed PWC (and if possible Mr Noone) to file a further affidavit within 28 days answering specified questions about missing documents; costs to lie where they fall absent timely memoranda.

Citation
[2017] NZHC 1023
Parties
First Plaintiff: Robert Bruce Walker; First Plaintiff: John Marshall Scutter; Second Plaintiff (in Liquidation): Property Ventures Limited; Third Plaintiff (in Receivership and in Liquidation): Five Mile Holdings Limited; Fourth Plaintiff: Cashel Ventures Limited; Fifth Plaintiff (in Receivership and in Liquidation): Tay Ventures Limited; Sixth Plaintiff (in Receivership and in Liquidation): LivingSpace Properties Limited; Seventh Plaintiff (in Liquidation): Beechnest Ventures Limited; Eighth Plaintiff (in Receivership and in Liquidation): Tuam Ventures Limited; Ninth Plaintiff (in Receivership and in Liquidation): Castle Street Ventures Limited; Tenth Plaintiff (in Receivership and in Liquidation): Lichfield Ventures Limited; Eleventh Plaintiff (in Receivership and in Liquidation): 92 Lichfield Limited; Twelfth Plaintiff (in Liquidation): St Asaph Ventures Limited; Thirteenth Plaintiff (in Liquidation): Montecristo Construction Company Limited; First Defendant: Austin John Forbes; Second Defendant: Alister Spedding Johnston; Third Defendant: Gordon Lewis Hansen; Fourth Defendant (a Bankrupt): David Ian Henderson; Fifth Defendant: Adolf de Roos; Sixth Defendant: Daniel James Godden; Seventh Defendant: Price Waterhouse Coopers (PwC) (sued as a firm); Third Party: Vero Liability Insurance
Court
High Court
Jurisdiction
New Zealand
Judgment Date
18 May 2017
Procedural Posture
Companies Act 1993 Liquidation Proceedings; Auditors Liability Claims / Interlocutory Application for Further Discovery
Outcome
Interlocutory application partially granted in part and otherwise dismissed or reserved as specified
Legal Topics
Discovery, Confidentiality, Conflict of Interest, Internal Controls, IFRS Transition, Proportionality of Disclosure
Company Law Civil Procedure Evidence Professional Negligence / Auditors' Duties Discovery Confidentiality Conflict of Interest Internal Controls +2 more

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Parties

Robert Bruce Walker

First Plaintiff

John Marshall Scutter

First Plaintiff

Property Ventures Limited

Second Plaintiff (in Liquidation)

Five Mile Holdings Limited

Third Plaintiff (in Receivership and in Liquidation)

Cashel Ventures Limited

Fourth Plaintiff

Tay Ventures Limited

Fifth Plaintiff (in Receivership and in Liquidation)

LivingSpace Properties Limited

Sixth Plaintiff (in Receivership and in Liquidation)

Beechnest Ventures Limited

Seventh Plaintiff (in Liquidation)

Tuam Ventures Limited

Eighth Plaintiff (in Receivership and in Liquidation)

Castle Street Ventures Limited

Ninth Plaintiff (in Receivership and in Liquidation)

Lichfield Ventures Limited

Tenth Plaintiff (in Receivership and in Liquidation)

92 Lichfield Limited

Eleventh Plaintiff (in Receivership and in Liquidation)

St Asaph Ventures Limited

Twelfth Plaintiff (in Liquidation)

Montecristo Construction Company Limited

Thirteenth Plaintiff (in Liquidation)

Austin John Forbes

First Defendant

Alister Spedding Johnston

Second Defendant

Gordon Lewis Hansen

Third Defendant

David Ian Henderson

Fourth Defendant (a Bankrupt)

Adolf de Roos

Fifth Defendant

Daniel James Godden

Sixth Defendant

Price Waterhouse Coopers (PwC) (sued as a firm)

Seventh Defendant

Vero Liability Insurance

Third Party

Procedural Posture

Companies Act 1993 Liquidation Proceedings; Auditors Liability Claims / Interlocutory Application for Further Discovery

Legal Issues

  1. 1 Whether PWC must disclose documents relating to audits of Elgin Investments Limited that bear on knowledge of Mr Henderson and internal controls
  2. 2 Whether PWC must disclose conflict check documents and internal communications arising from its advice to Guardian Trust on the Hanover group
  3. 3 Whether PWC must provide the plaintiffs access to its internal 'My Client' document management system

Ratio Decidendi

The Court refused most of the plaintiffs' discovery requests on grounds of confidentiality, lack of demonstrated relevance and disproportionality, ordered PWC to discover internal IFRS guidance documents 2006-2008, reserved the Elgin audit issue pending PWC instructions, refused disclosure/orders concerning Hanover conflict checks and 'My Client' system access, and directed PWC (and if possible Mr Noone) to file a further affidavit within 28 days answering specified questions about missing documents; costs to lie where they fall absent timely memoranda.

Court Disposition

Interlocutory application partially granted in part and otherwise dismissed or reserved as specified

Orders

  • PWC to discover and produce any internal documents in existence between 2006 and 2008 directing or instructing PWC staff on implementation and application of IFRS conversion
  • No order made at this stage for production of Elgin audit documents; leave reserved for parties to apply further after PWC seeks instructions from its client