FRIENDS OF TURITEA RESERVES SOCIETY INCORPORATED V PALMERSTON NORTH CITY COUNCIL HC PMN CIV-2006-454-879

FRIENDS OF TURITEA RESERVES SOCIETY INCORPORATED V PALMERSTON NORTH CITY COUNCIL HC PMN CIV-2006-454-879 23 February 2007IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY CIV-2006-454-879UNDER The Judicature Amendment Act 1972 IN THE MATTER OF a decision under s24A of the Reserves Act 1977 BETWEEN FRIENDS OF TURITEA RESERVES SOCIETY INCORPORATED Applicant AND PALMERSTON NORTH CITY COUNCIL Respondent Hearing: 2 February 2007 Appearances: K. Johnston and C. Jurgeleit for Applicant P.J. Reardon for Respondent Judgment: 23 February 2007 In accordance with r540(4) I direct the Registrar to endorse this judgment with a delivery time of 3.15pm on the 23rd day of February 2007.JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL Introduction[1] There are two applications before the Court: a) An application by the respondent for security for costs. b) An application by the applicant for further and better discovery against the respondent. [2] In each case the applications are opposed.Background Facts[3] The applicant is an incorporated society. It was incorporated on 17 October 2006 and has as its overriding object in paragraph 3 of its rules:To protect for the benefit of the New Zealand public (and in particular the Manawatu Community) the Turitea Reservefrom any development on it or its adjacent boundaries which has the effect of compromising its unique environment and natural resources.[4] The respondent local authority is the registered proprietor of the Turitea Reserve, which is approximately ten kilometres east and southeast of Palmerston North city. The Reserve is classified under the Reserves Act 1977 as a "Local Purpose Reserve (Water Supply and Protection of Indigenous Flora and Fauna". [5] The portion of the Reserve in question (in this proceeding called "the Reserve") has an area of about 2,600 hectares. It consists of moderately steep to steep hill country rising to the main ridgeline which forms the northern end of the Tararua Ranges. [6] In 2004 the respondent was approached by various energy companies to assess its interest in developing a windfarm on the Reserve. In February 2005 the respondent issued a request for proposals, inviting tenders. [7] Seventeen tenders were received and then on 24 August 2005 the respondent resolved to enter into a conditional contract with Mighty River Power ("MRP") a state-owned enterprise. This contract envisaged the respondent granting MRP a license to evaluate the feasibility of a windfarm, on the Reserve, and if thought feasible, to lease a part of the Reserve for the purposes of the farm. The contract was conditional on the Council completing all necessary statutory processes. [8] On 29 August 2005 the Council released the terms of the contract (excluding commercially sensitive parts) to the public. [9] On 2 July 2006 the respondent issued a formal notice of its intention under s24A Reserves Act 1977 to change the purpose of the Reserve to:Local Purpose Reserve (Renewable Electricity Generation, Water Supply and Protection of Indigenous Flora and Fauna). The amendment adds renewable electricity generation as a purpose[10] This notice was incorporated in a brochure prepared for the respondent consisting of eight pages of background and context which was intended to explain the reasoning behind the proposed change. It was sent to every householder in Palmerston North city. [11] As background to its proposal, the respondent maintained that the Reserve had been, and still is, in the process of a slow decline. In the 1960's the respondent says the canopy of the native forest on the Reserve collapsed as a result of the depredations by possums, and attack by other pests. [12] The 2 July 2006 brochure explained that the respondent had it in mind to convert the Reserve into a mainland island. By that the Council says it meant setting up the Reserve as an area insulated from pests, reintroducing the original vegetation, reintroducing endangered bird species such as Kiwis and North Island Robins and removing the existing pine forest. In addition, the respondent said its vision was to provide citizens with "well formed walking tracks, mountain biking and other outdoor pursuits". [13] The respondent says its position is that in order to fund this expensive vision, MRP as an electricity generator in return for being allowed to construct and operate wind turbines inside the Reserve, would agree to pay the respondent an annual royalty estimated to be in the region of $1,000,000.00. Counsel for the respondent noted before me that as the legislation required money generated from the reserves to be spent on those individual reserves, these royalties would enable the respondent to restore the Turitea Reserve to "its original glory". [14] The respondent's brochure then went on to say that the electricity generated by the proposed turbines would produce:Between 1-2% of the nation's electricity needs or sufficient power for up to 100,000 households.And that this would:Add to the region's energy self-sufficiency[15] The brochure then pointed out that the respondent was merely carrying out its statutory obligation under s24A Reserves Act 1977 to notify a change of purpose. It said this process:does not involve obtaining resource consent. That is a separate process that will be undertaken by Mighty River Power under the Resource Management Act 1991. Consideration of the particular environmental effects of a windfarm are best addressed through the resource consent process.[16] The brochure indicated that the Council was inviting ratepayers "to have your say" by filling in a freepost form or contacting the Council's website. The brochure explained that the Reserve might support around sixty wind turbines, with further turbines being sited on privately owned adjacent land. It pointed out that the final location of the turbines would be considered under the Resource Management Act when MRP applied for consent. At this stage the respondent indicated that it was only asking whether or not it should make the Reserve area available for renewable electricity generation. [17] Time for filing submissions closed on 4 September 2006 and public hearings were conducted by the Respondent Council on 11, 13, 17 and 27 September 2006. [18] Following these hearings, on 30 October 2006 the respondent decided to proceed with the proposal and it resolved to change the purpose of the Reserve to add "renewable electricity generation". [19] On 15 November 2006 the applicant commenced these judicial review proceedings, asking the Court to declare the decision of the respondent to change the purpose of the reserve as invalid.Security for Costs Application[20] I turn now to consider the respondent's security for costs application.[21] The application is brought under s17 Incorporated Societies Act 1908 and under r60(1)(b) High Court Rules. [22] Section 17(1) Incorporated Societies Act 1908 provides:17. Security for costs where society is plaintiff – Where a society is the plaintiff in any action or other legal proceeding, and there appears by any credible testimony to be reason to believe that if the defendant is successful in his defence the assets of the society will be insufficient to pay his costs, any Court or Judge having jurisdiction in the matter may require sufficient security to be given for those costs, and may stay all proceedings until that security is given.[23] Rule 60(1)(b) High Court Rules provides:60. Power to make order for security for costs(1) Where the Court is satisfied, on the application of a defendant, (b) That there is reason to believe that a plaintiff will be unable to pay the costs of the defendant if the plaintiff is unsuccessful in the plaintiff's proceeding,— the Court may, if it thinks fit in all the circumstances, order the giving of security for costs.[24] Broadly speaking, the inquiry under both these provisions is the same. A well-established two-step approach is required. First, the Court must address whether the 'threshold test' (reason to believe a plaintiff is unable to pay costs) has been met. Once this threshold has been passed, a second question arises: should the Court exercise its discretion to order security for costs, in the circumstances of the case? (Hamilton v Papakura District Council (1997) 11 PRNZ 333, 335-36.) [25] Before me Mr Johnston, counsel for the applicant, conceded that the threshold test of impecuniosity had been met here. The applicant has no assets. [26] Turning now to the second question, the authorities suggest that the Court's discretion under r60 is not to be fettered by the application of principles, but is to be exercised based on a careful assessment of the circumstances of a particular case:A.S. McLaughlin Ltd v M E L Network Ltd (2002) 16 PRNZ 747. There is nopredisposition towards either the grant or refusal of an application: Bell Booth Group Ltd v Attorney-General (1986) 1 PRNZ 457, 460. [27] A balance between the interests of the plaintiff and the defendant is to be considered. If an order for security for costs would prevent a plaintiff bringing a genuine claim, such an order should be made only after careful consideration and where the claim has little chance of success. This must be balanced against the need to protect a defendant from unjustified litigation (especially where it is overly complicated or unduly protracted) – A.S. McLaughlin Ltd v M E L Network Ltd at paragraphs 15-16. [28] The merits of a case in so far as they can be assessed at this interlocutory stage will be relevant to the exercise of the discretion under r60 –Meates v Taylor(1992) 5 PRNZ 524 (CA). [29] So far as public interest cases may be concerned, McGechan on Procedure at para HR60.05(11) states:(11) Public interest casesThat litigation is brought in the public interest, or is of public importance, is a factor in exercising the discretion: Ratepayers' and Residents Assn Inc v Auckland CC [1986] 1 NZLR 746 (CA). There, the Court specifically referred to the valuable public service performed by community organisations acting responsibly as watchdogs in the public interest.Mothers Against Genetic Engineering Inc v Minister for the Environment15/4/03, France J, HC Auckland M22-PL03, is a recent case where the Court declined to order security in a public interest case (challenge to decision on an application for approval to develop genetically modified cattle in order to study their gene function and genetic performance).[30] Ratepayers' and Residents' Assn Inc v Auckland CC was decided in 1985. In the Court of Appeal in that case, McMullin J noted that he was not aware of any authority from New Zealand or the United Kingdom where the issue of public interest litigation had been taken in to account in a security for costs application. He did however cite a decision of Gillard J in the Full Court of Victoria in which it was said that it was a:fairly well established principle in this State that where the decision on the points of law raised in an appeal may affect matters of public importance,then the court generally will not order security for costs to be provided" (Smail v Burton [1975] VR 776 at 777-8)[31] In delivering his judgment in the Ratepayers' case which was also a judicial review case Richardson J stated at p750:As the development of public law in common law jurisdictions amply demonstrates, compliance with the law by those acting under statutory powers is itself a matter of public interest and the availability of judicial reviewis a statutory recognition of the need to provide adequate procedures for testing the purported exercise of statutory powers In acting in a responsible way as watchdogs of the public interest community organisations perform a valuable public service. Having in the public interest opened the Court door to the airing of public law questions, the public interest in having those questions proceed to hearing and determination must be a factor for consideration in deciding whether to order security, and if so, at what figure it should be fixed."[32] Security for costs applications in Public interest cases have since been further considered in this court in Mothers Against Genetic Engineering Inc v Minister for the Environment HC Auckland M22 – PL03, Ellen France J, 15 April 2003. There, Ellen France J endorsed the approach taken in Ratepayers', holding that the Court is to have regard to any public interest considerations which the litigation serves.Application of Principles to this case[33] As previously noted, the threshold test of impecuniosity has been conceded by the Applicant. That leaves the only issue as being whether the discretion to order the applicant to give security for costs should be exercised.Discretionary Factors[34] The Court of Appeal's warning in McLachlan that principles should not be constructed from the facts of previous cases must be remembered. However, certain factors are regularly regarded as relevant in dealing with applications for security for costs. For example, delay in making the application; any admissions; and whether the impecuniosity in any way results from the respondent's actions complained of inthe proceeding. None of these matters are relevant in the current situation and can be quickly dismissed. [35] This leaves for consideration the merits of the case, the public interest involved in it, and general questions of access to justice.The merits of the case[36] The merits of a case, in so far as they can be assessed at this interlocutory stage will be relevant to the exercise of the discretion under Rule 60 (Meates v Taylor (1992) 5 PRNZ 524 (CA)). [37] The applicant's first cause of action is that of illegality. It is claimed that the decision to add a further purpose of "renewable electricity generation" (the "intended purpose") to the existing purposes was ultra vires and unlawful. This claim is based on the assertion that the Act does not permit a specific purpose which is mutually incompatible with the existing purposes; that the "intended purpose" does not constitute use of the Reserve land as a "local purpose" in terms of the Act; that it is contrary to the general purpose of the Act (sections 3(a)(iii), (iv) and 3(b)), incompatible with the primary purpose of the reserve and contrary to section 23(2)(a). Section 23(2)(a) reads:(2) It is hereby further declared that, having regard to the [specific local purpose for which the reserve has been classified], every local purpose reserve shall be so administered and maintained under the appropriate provisions of this Act that—(a)Where scenic, historic, archaeological, biological, or natural features are present on the reserve, those features shall be managed and protected to the extent compatible with the principal or primary purpose of the reserve:[38] Finally under this ground of illegality it is claimed that the dominant reason for the decision to change the purpose of the reserve was to secure payment to the Council of moneys under the conditional agreement with Mighty River Power. This, it is claimed, constituted the exercise of a statutory power of decision under section 24A of the Act for an improper purpose.[39] The second ground advanced by the applicant is that the decision was unreasonable in that it failed to take in to account a mandatory relevant consideration, namely the general purpose of the Act, in particular section 3(a)(iii),(iv) and 3(b). [40] A breach of natural justice is also claimed. The applicants contend that in making its decision the respondent had an obligation to act in accordance with the principles of natural justice and to consult with the public in accordance with outlines it set down in August 2000 in a formal Consultation Policy document before making the decision. These obligations were breached in that the information in the consultation document and various representations by the Mayor and councillors were said to be unbalanced, misleading and biased in their representation of the benefits of the windfarm proposal. Furthermore, it is alleged the respondent became bound by an agreement with MRP to take all necessary affirmative action to change the purpose of the Reserve. This, it is said, acted as a fetter on the discretion the respondent has under the Reserves Act 1977 and rendered it unable to make the decision to change the purpose of the Reserve. The $1 million per year payment which the respondent hoped would come to it from MRP once the purpose was changed was said to constitute an additional fetter. [41] Finally, the applicants claim that there has been a breach of their legitimate expectation that the Council would abide by its August 2000 Consultation Policy. It is contended that this did not occur and that the decision is thereby flawed. [42] For the respondent, the allegation of illegality is denied. It claims there is nothing in the Reserves Act 1977 requiring purposes to be compatible. It is contended that the fact that electricity may in the immediate future go in to the national grid does not cause it to be other than a local purpose. A locally generated electricity source, it is claimed, will add to the region's energy self-sufficiency and this local security of supply is said to be a local purpose. The respondent argues that the proposal is consistent with section 3 of the Reserves Act 1977 as revenue raised as rent or royalties from MRP must be spent on the Reserve and this will substantially enhance the protection of flora and fauna there. The respondentsubmits that there is no evidential basis for the allegation of improper purpose and that it is inappropriate and consequently denied. [43] The respondent further denies the applicant's claims of unreasonableness. It says this has no factual basis. It is submitted that all material considerations were taken into account and that the respondent worked closely with the Department of Conservation to ensure a proper focus on its responsibilities under the Reserves Act 1977. [44] The allegations of a breach of natural justice are also denied. The respondent submits that the consultation document goes further than what is required by the Reserves Act 1977. The consultation process was in relation to the status or purpose of the Reserve, not a particular windfarm configuration. As a result, it is said, the details the applicant contends were necessary but omitted would have been misleading and inaccurate, and thus would have undermined the integrity of the consultation process. [45] The respondent submits it did comply with its consultation policy so denies any breach of natural justice. Further it denies that there has been a breach of the applicant's legitimate expectation. [46] At this early stage of the proceeding little more can be done than to undertake a general assessment of these contentions and to consider whether there are aspects to the applicant's claim that are at least arguable. Ellen France J suggested inMothers Against Genetic Engineering (at paragraph [39]), that an important consideration in determining whether aspects of a claim are arguable is to ask whether the case in question could be classified as hopeless or as some sort of "try on". In the present case, in my view, there are arguable aspects to the applicant's claims, and certain statutory interpretation issues (such as the meaning to be given to "public use" and "local purpose" in the Reserves Act 1977) are raised that may have wider application outside this case. The decision made in the present case could have an impact on the possible uses of local purpose reserves in the future.[47] Accordingly, I conclude that there is sufficient material before the Court at this point to support the applicant's contention that at the very least, aspects of its claim are arguable and the case has some merit.Public Interest Considerations[48] The Ratepayers' and Mothers Against Genetic Engineering decisions make it clear that in exercising the Court's discretion to determine a security for costs application one factor the Court is to have regard to is any public interest consideration the litigation serves. [49] The respondent concedes that the public interest is a relevant consideration here but it questions whether the applicant's present proceeding has genuinely been brought on a public interest basis. The respondent submits that the concern of a large portion of the applicant's members appears to be the visual impact of the turbines. Many of those members are said to be immediate neighbours of the Reserve. Before me counsel asked the Court to infer that the motives of those members of the applicant are not purely derived from a disinterested concern for the welfare of the general public but from a "not in my backyard" standpoint. This point was used to suggest the current situation was distinguishable from that which prevailed in the Ratepayers' case which concerned the construction of Auckland's Aotea Centre. That centre was built on Queen St., in the heart of commercial Auckland City, and not where the objecting members lived. [50] Further to this, it is submitted that the Court in Ratepayers' was concerned with the need for the law to enable disinterested citizens to prevent illegalities in Government which otherwise no one would be able to challenge. This policy, it is contended, is not relevant in the present case. According to the respondent this is because section 3 Reserves Act 1977 specifically provides that the Department of Conservation is to administer the Act and oversee its operation. In the respondent's submission the Department of Conservation is therefore an independent guardian. [51] In response the applicant contends there is a strong public interest element to its present proceeding and this arises from the following factors:a) The public interest in having questions answered as to whether a statutory authority has acted outside its powers. b) The future of a large tract of land is at stake. The land is close to and visible from much of Palmerston North City. The respondent's decision will cause radical change to that land on the one hand in terms of the alteration to the landscape as viewed from the city, and on the other, in terms of the physical impact it will have on the Reserve and the flora and fauna it supports. c) Invitations for public comment drew a large response – there were 530 responses, 341 of them opposed to the change, with 40 submitters taking advantage of their right to be heard. [52] As I have noted the respondent asserts that the Reserve Act 1977 has an independent guardian in the form of the Department of Conservation (section 3). Therefore regard for the public interest in keeping a check on Government decisions in these circumstances it is suggested is unnecessary. As I see it, this may have some element of truth. It is questionable however whether the role of the Department can be said to fulfil that role which the Court of Appeal in Ratepayers'importantly envisaged for the "disinterested citizen". This role was considered by Ellen France J in Mothers Against Genetic Engineering. She said (at paragraph [40]):It is clear from the Ratepayers' and Residents case, that the Court is to have regard to "any public interest considerations which the litigation serves" (At 750 per Richardson J). In that case, Richardson J stated: As the development of public law in common law jurisdictions amply demonstrates, compliance with the law by those acting under statutory powers is itself a matter of public interest and the availability of judicial review is a statutory recognition of the need to provide adequate procedures for testing the purported exercise of statutory powers. Finally, the freer approach to standing reflects, the feeling that the law must somehow find a place for the disinterested citizen in order to prevent illegalities in government which otherwise no one would be competent to challenge. In acting in a responsible way as watchdogs of the public interest community organisations perform a valuable public service. Having in the public interest opened the Court door to the airing of public law questions, thepublic interest in having those questions proceed to hearing and determination must be a factor for consideration in deciding whether to order security, and if so, at what figure it should be fixed. (at 750)"[53] The respondent, however, contends that this "watchdog of the public interest" role, in the circumstances under consideration here, is one played by the Department of Conservation. [54] But, significantly, section 3 of the Act provides that:It is hereby declared that, subject to the control of the Minister, this Act shall be administered in the Department of [Conservation] for the purpose of(emphasis added) [55] Not only is the Department of Conservation a government department, its role in the administration of the Reserves Act 1977 is subject to the control of the Minister. In my view it is difficult to contend that the position it holds is comparable to that of the independent and disinterested citizen recognised in Ratepayers' who was working to prevent illegalities in Government. [56] I am satisfied therefore that there are public interest aspects raised in this proceeding. The fact that ultimately it may be shown that some members of the applicant Society lack a purely altruistic motive here and are party to the cause more out of concern for their own property does not, as I see it, detract from the importance this matter has for the public in general. The fate of the Reserve will impact on the flora and fauna it supports as well as on the city of Palmerston North and its broad landscape. The volume of submissions received is testament to this.Access to Justice[57] If an order for security for costs would prevent a plaintiff bringing a genuine claim, such an order should be made only after careful consideration and where the claim has little chance of success. This must be balanced against the need to protect a defendant from unjustified litigation (A.S. McLachlan Ltd v M E L Network Ltd).[58] As I have noted, I am satisfied that aspects of the applicant's claim here are at least arguable and there is little doubt that it is bringing a genuine claim. No one iscontending that this is a case where the respondent is in need of protection from completely unjustified litigation. [59] The applicant has stated that it is not itself in a position to meet an order for security for costs and it would have to obtain the necessary funds from its members. While the applicant is unable to say that proceedings could not continue if an order for security for costs was made, it claims it would place an undue burden on its members to have to put up those costs in advance of a decision as well as finding the funds to pay for the conduct of the litigation. [60] The need to call upon the applicant's members to make some contribution towards the proceedings was considered in Ratepayers'. There, McMullin J stated (at p752):Sinclair J thought that the members of the Association ought to be called upon to display whether they have any real interest and faith in the proceedings. I think that it is reasonable that members of the Association should be called upon to contribute from their own pockets something towards the cost of the proceedings.[61] The applicant here could call on its members to make contributions should an order for security for costs be made against it. However, I am satisfied that in view of the short timeframe in this proceeding before trial (the matter is set down for substantive hearing on 30 April 2007) this would be a significant logistical burden to place on the applicant. Further, and in any event, this could be seen as a disincentive for future groups considering embarking on similar public interest litigation. While access to justice might not be denied here if a security order was made against the applicant, that access would be considerably more difficult to achieve. [62] And, the applicant's case here, in my view, is at least reasonably arguable. There are issues of statutory interpretation here that are likely to be of use to future decisions under the Reserves Act 1977. Further, as I see it, there is a high degree of public interest in the litigation.Decision[63] Taking all these matters into account, in my view the interests of justice are best met here by refusing the order for security for costs sought by the respondent. [64] The respondent's application therefore is dismissed.Discovery Application[65] The second application before the Court is an application by the applicant for further and better discovery against the respondents. [66] The application which is dated 29 January 2007 seeks that the respondent discover the following listed documentation:(a) All documents in the Council's power, possession or control before 30 October 2006 that discuss or refer to benefits or disbenefits associated with the windfarm proposal or the adverse and beneficial effects it could be expected to have, including in particular:• Documents relating or referring to or discussing the potential financial benefits to Council and the use of any financial benefits that might accrue to the Council (including para 10 of discovered document 14);• The full reports on ecological effects and mitigation (Wildland Consultants) and landscape and amenity effects (Stephen Brown Environments) of which summaries are annexed to discovered document 15, and the Wildlife Consultants' reports referred to in discovered document 4, p26, refs 1 and 2 if they are different;• The draft Water Quality Monitoring Plan referred to in discovered document 1;• Any documents which discuss the use to which electricity generated by the (by the) windfarm might be put, and in particular how that electricity might be used for the benefit of Palmerston North City; (b) All press releases and media briefing documents issued or prepared by the Council or the Mayor or any of the councillors and copies of any media reports or articles relating to the proposed windfarm and based on or referring to comments made by the Council or the Mayor or any councillor;(c) All documents in the Council's power, possession or control before 30 October 2006 that relate to the scale of the proposed windfarm, the number and size of proposed turbines, or the indicative location of the proposed turbines; (d) Any documents listed under item 58-06(i)-(xiv) (except written submissions item (iii)) in the report of the Infrastructural Well- Being Committee Meeting dated 18 October 2006 (discovered document 3) not already discovered, and documents constituting the 'public comment' referred to under item 59-06 of that report; (e) Documents generated at, or for, or as a result of the Councillor Workshop held on 11 October 2006.[67] In response, the respondent filed a Notice of Opposition dated 1 February 2007. In terms of this Notice of Opposition, the respondent opposed the making of the discovery orders sought under paragraph (a) (in part), (b) and (c). [68] The Notice of Opposition noted that discovery of the documents listed in paragraphs (d) and (e) was not opposed, and these documents were to be provided in a further list. [69] At the hearing of this matter before me, counsel for the respondent then noted that discovery of those documents listed under paragraph (b) above which were held by the respondent would now be provided in a further list. In addition, counsel for the respondent suggested that the Council does not have, and has never had, documentation listed in paragraph (c) above in its possession or control, and that it would provide an affidavit to this effect. [70] This left outstanding the documents requested under paragraph (a) above. In this paragraph there are four groups of documents listed under four bullet points: a) With respect to the documents under the first bullet point, a discovery order for these is opposed. I will return to this matter shortly. b) As to the documents requested under bullet point two, before me counsel for the respondent indicated that the respondent would make these documents available to the applicant, but required undertakings as to confidentiality, and in particular undertakings that thesedocuments would not be used for any purposes other than for the present litigation. An order with respect to discovery of these documents will follow. c) As to the document requested under bullet point three, before me counsel for the respondent indicated that it would be made available in a further list. d) As to the documents requested under bullet point four, before me counsel for the respondent suggested that the respondent had no such documents in its power, possession or control, and would provide an affidavit to this effect. [71] The only outstanding discovery matter before me, therefore, relates generally to the documents listed in the opening section of paragraph (a) of the application, together with the particular documents referred to under bullet point one of that paragraph. I repeat that these documents are described in the application as:All documents in the Council's power, possession or control before 30 October 2006 that discuss or refer to benefits or disbenefits associated with the windfarm proposal or the adverse and beneficial effects it could be expected to have, including in particular:• Documents relating or referring to or discussing the potential financial benefits to Council, and the use of any financial benefits that might accrue to the Council (including para 10 of discovered document 14).[72] I turn now to consider the arguments raised before me with respect to discovery of these particular documents. [73] The applicant's discovery application states that it is made in reliance on s10(2)(i) Judicature Amendment Act 1972 which allows the Court to "require any party to make discovery of documents, or permit any party to administer interrogatories". The application states it also relies upon rules 293-299 High Court Rules and the principles of law relating to discovery. [74] In terms of r293, either party to a proceeding may by notice under that rule require the other to give discovery in the form of a list of the documents which are orhave been in the possession or power of that party relating to any matter in question in the proceeding. [75] So far as the words "relating to any matter in question in the proceeding" are concerned, it is clear that these words refer to the requirement that to be discoverable, the documents in question must be relevant. In addition, any discovery order is also subject to the requirement contained in r300(2) that it is necessary at the time. [76] As to relevance, the long-established test is that of Brett LJ in Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 (CA) where at 63 he said:It seems to me that every document relates to the matters in question in the action, which not only would be evidence upon any issue, but also which, it is reasonable to suppose, contains information which may –not which must –either directly or indirectly enable the party requiring the affidavit either toadvance his own case or to damage the case of his adversary. I have put in the words 'either directly or indirectly' because, as it seems to me, a document can properly be said to contain information which may enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary, if it is a document which may fairly lead him to a train of inquiry, which may have either of those two consequences: (emphasis added) [77] It is clear that relevance is to be tested with regard to matters in question in the proceeding and not to the subject matter of the proceeding – McGechan on Procedure HR 295.03(1). And also, as with interrogatories, a party is not entitled in a discovery application to "fish" for evidence – Edwards v Edwards [1976] 2 NZLR 66. As to "fishing" however, the comments of Barker J in TD Haulage Ltd v NZ Railways Corporation (1986) 1 PRNZ 668 at 673 need to be remembered:There seems little point in placing a pejorative label on the normal discovery process. Different considerations may apply to interrogatories, but much discovery is essentially "fishing" as indeed the latter part of Brett LJ's quotation recognises.[78] As I have noted, the only issue to be resolved here concerns discovery sought in terms of the first bullet point of paragraph (a) of the applicant's Notice of Opposition. That paragraph broadly requests discovery of documents relating orreferring to or discussing the potential financial benefits to the respondent of its proposal and the use of any financial benefits that might accrue to the respondent. [79] The applicant claims this category of documents to be highly relevant to its case on the basis that these documents may well go to the heart of its allegations of improper purpose. The applicant alleges that the respondent decided to change the purpose of the Reserve primarily because of the money that was in it for the respondent and that the development of the balance of the Reserve as an "eco park" was only an afterthought. [80] In response the respondent contends that while it has disclosed the final contractual arrangements with MRP, the final formulae agreed upon has been deleted because it is commercially sensitive and the respondent is not at liberty to disclose the formulae. Counsel for the respondent noted also with regard to the other tenders, the extreme commercial sensitivity and concerns of those unsuccessful tenderers (I understand 16 in total) if their tender documents were disclosed. Mr Johnston for the applicant before me was quick to point out, however, that the applicant did not want to see the other tenders. It wanted simply to see documentation concerning the respondent's deliberations on financial and other matters relating to the windfarm proposal and contract with MRP. The respondent also questions the relevance of the requested documentation because, it is said, the respondent has always acknowledged that any revenue it receives must (as a matter of law) be used for reserve purposes. The respondent's use of funds in the manner prescribed by parliament is therefore said to be inconsistent with any suggestions or allegations of improper purpose on its part. [81] Before me it was clear that there was no dispute that these documents are in the possession or control of the respondent. The only issues arising were as to relevance and the commercial sensitivity of the documents.[82] I turn first to the respondent's claim to commercial sensitivity. It is well established that confidentiality and commercial sensitivity of information is not a ground for opposing discovery. The sole test is still relevance in the usual way(McGechan on Procedure HR307.17). This was emphasised in Port Nelson Ltd v Commerce Commission (1994) 7 PRNZ 344 where it was said that:Relevant documents should generally be made available for inspection. The fact that they are regarded as being confidential, and would not be made available were it not for the requirements of the litigation is immaterial.[83] The respondent here is entitled to claim confidentiality for the documents in question by stating in its affidavit the restrictions needing to apply to protect that confidentiality (Rule 297(2)(e)) but the claimed commercially sensitive nature of the documents is not enough to enable the respondent to refuse discovery. [84] As I see it, this leaves the question of relevance as the respondent's only effective avenue for refusing discovery of these documents. [85] The affidavit evidence filed on behalf of the respondent here appears to question the relationship between the respondent's use of funds which it says is strictly in accordance with the manner prescribed by Parliament and the applicant's allegations of improper purpose. In my view, this is not enough, however, to vitiate the relevance of the documents here when the wide Peruvian Guano test of relevance is brought into consideration. From that test, to be discoverable the documents "may not must either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary." As I see it, irrespective of the respondent's assessment of the merits of the applicant's case, documents concerning potential financial benefits to the respondent could undoubtedly advance the applicant's case that the respondent decided to change the purpose of the Reserve primarily for financial reasons only. As I have noted, the Peruvian Guano test of relevance is a wide and permissive one and there is little doubt, in my view, that it encompasses the documents in question here. [86] The respondent's opposition to the request for discovery of documents relating to the financial benefits of the windfarm proposal to the respondent must fail.Result[87] The applicant's application for further and better discovery therefore effectively succeeds. [88] An order is now made in terms of the application for further and better discovery against the respondent and in terms of r295 High Court Rules, but with the time period truncated to 10 working days. In particular, the respondent within 10 working days of today is to file and serve its affidavit of documents to deal specifically with discovery of the following documents: (a) All documents in the Council's power, possession or control before 30 October 2006 that discuss or refer to benefits or disbenefits associates with the windfarm proposal or the adverse and beneficial effects it could be expected to have, including in particular: (i) Documents relating or referring to or discussing the potential financial benefits to Council and the use of any financial benefits that might accrue to the Council (including para 10 of discovered document 14); (ii) The full reports on ecological effects and mitigation (Wildland Consultants) and landscape and amenity effects (Stephen Brown Environments) of which summaries are annexed to discovered document 15, and the Wildlife Consultants' reports referred to in discovered document 4, p26, refs 1 and 2 if they are different; (iii) The draft Water Quality Monitoring Plan referred to in discovered document 1; (iv) Any documents which discuss the use to which electricity generated by the by the windfarm might be put, and in particular how that electricity might be used for the benefit of Palmerston North City; (b) All press releases and media briefing documents issued or prepared by the Council or the Mayor or any of the councillors and copies of any media reports or articles relating to the proposed windfarm and based on or referring to comments made by the Council or the Mayor or any councillor;(c) All documents in the Council's power, possession or control before 30 October 2006 that relate to the scale of the proposed windfarm, the number and size of proposed turbines, or the indicative location of the proposed turbines;(d) Any documents listed under item 58-06(i)-(xiv) (except written submissions item (iii)) in the report of the Infrastructural Well-Being Committee Meeting dated 18 October 2006 (discovered document 3) not already discovered, and documents constituting the 'public comment' referred to under item 59-06 of that report;(e) Documents generated at, or for, or as a result of the Councillor Workshop held on 11 October 2006. [89] As I have noted earlier, confidentiality issues may arise with respect to certain documents to be discovered. Leave is reserved to either party on two days notice to approach the Court for further assistance should any issues arise with respect to these confidentiality matters, or indeed with regard to any other matters concerning discovery and inspection of the documents in question in this application.Costs[90] As to costs, the applicant has been successful in opposing the respondent's security for costs application and in bringing its application for further and better discovery. That said, I see no reason why costs should not follow the event in the normal manner. [91] Costs are therefore awarded to the applicant with respect to the applications before the Court on a category 2B basis, together with disbursements as fixed by the Registrar.________________________________ Associate Judge D.I. GendallSolicitors:Wadham Goodman, Palmerston North for Applicant Cooper Rapley, Palmerston North for Respondent