HEART OF THE CITY INCORPORATED v SWNEY [2015] NZHC 508

HEART OF THE CITY INCORPORATED v SWNEY [2015] NZHC 508 [17 March 2015]ORDER SUPPRESSING PUBLICATION OF THE REASONS FORJUDGMENT IN NEWS MEDIA OR ON THE INTERNET OR OTHERPUBLICLY AVAILABLE DATABASE UNTIL FINAL DISPOSITION OFTRIAL.IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2014-404-003087[2015] NZHC 508BETWEEN HEART OF THE CITYINCORPORATEDPlaintiffAND ALEX GORDON SWNEYFirst DefendantAND ALEX GORDON SWNEY andANGELINE JANE MARSHALL asTrustees of the COUNTRY STYLETRUSTSecond DefendantsAND ALEX GORDON SWNEY andANGELINE JANE MARSHALL asTrustees of the SWNEY-MARSHALLTRUSTThird DefendantsOn the papersAppearances: SE Fitzgerald and MP Mabbet for the PlaintiffE St John and S Anderson for the First and Third DefendantsTJG Allan and TJP Gavigan for the Second DefendantsJudgment: 17 March 2015JUDGMENT OF TOOGOOD J[Application by NZ Herald for access to court file]This judgment was delivered by me on 17 March 2015 at 4:30 pmPursuant to Rule 11.5 High Court RulesRegistrar/Deputy Registrar[1] Matt Nippert has requested permission on behalf of the New Zealand Heraldto have access to the whole of the court file in this proceeding. He says he is"particularly interested in inspecting [the] application for freezing orders andaccompanying Grant Thornton report." The reason for the request is "public interestin [an] ongoing case involving substantial sums of public funds and allegedwrongdoing."[2] The plaintiff ("Heart of the City") is an incorporated society having the primarypurpose of operating as a lobbying and support organisation for local businesses in theAuckland city centre. It is constituted as a "Business Improvement District", fundedby Auckland Council pursuant to a policy which the Council operates in partnershipwith local businesses to improve the local business environment. The vast majority ofthe plaintiff's funding is derived from the Council which in turn levies businesseswithin the relevant geographical area.[3] The first defendant, Alex Swney, is the former chief executive of the plaintiff.He is described by the chairperson of the plaintiff, Mr Gould, as having been the high-profile "public face" of Heart of the City. In this proceeding, Heart of the City seeksto recover from Mr Swney damages to compensate it for losses which it says it sufferedas a result of his improper conduct. Claims for damages are also made againstMr Swney and his wife in their capacities as trustees of two trusts.[4] Mr Swney has pleaded guilty to tax evasion and he is due to be sentenced on30 April 2015. There can be no doubt, in all the circumstances, that there is legitimatepublic interest in Heart of the City's affairs including, particularly, matters related toits finances and the actions of its former chief executive.[5] Mr Swney has filed a statement of defence which does no more than admitroutine matters of undisputed fact; disavow knowledge of some allegations; andmerely deny allegations of substance. It is strongly arguable that the pleading doesnot comply fully with the requirements for an informative statement of defenceprescribed by r 5.48 of the High Court Rules and it appears to have been intended tobe a pro forma document only.[6] The rules governing access to court files and documents in a civil proceedingare found in rr 3.5 to 3.16 of the High Court Rules. Because the substantive hearingstage of the proceeding has not been reached, the present application must beconsidered under r 3.13. A Judge considering an application for access under r 3.13may refuse the application, or grant it in whole or in part, without conditions or subjectto any conditions the Judge thinks appropriate.1[7] The matters which the Court is required to take into account in considering theapplication are listed in r 3.16, which provides as follows:3.16 Matters to be taken into accountIn determining an application under rule 3.13 the Judge must considerthe nature of, and the reasons for, the application and take into accounteach of the following matters that is relevant to the application, request, orobjection:(a) the orderly and fair administration of justice;(b) the protection of confidentiality, privacy interests (including those ofchildren and other vulnerable members of the community), and anyprivilege held by, or available to, any person;(c) the principle of open justice, namely, encouraging fair and accuratereporting 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 issubject to any restriction under rule 3.12;(f) any other matter that the Judge thinks just.[8] The factors set out in r 3.16 are not hierarchical; a balancing exercise isrequired.2[9] The application is opposed by Heart of the City and Mr Swney; Mr and MrsSwney, in their capacities as trustees, abide the decision of the Court.1 High Court Rules, r 3.14.2 Schenker AG v Commerce Commission [2013] NZCA 114.[10] The decision in this case requires the Court to give weight to the principles ofopen justice and of freedom to seek, receive and impart information. The responsibleand respected newspaper on whose behalf the application is made has a duty to act asthe eyes and ears of the public in a matter of undoubted public significance. Theseconsiderations, however, must be balanced against the orderly and fair administrationof justice and the protection of confidentiality and privacy interests.[11] So far as the orderly and fair administration of justice is concerned, it issignificant that this case is very much in its infancy. Given the bare pleading byMr Swney denying the substantive allegations, it would not be possible to obtain abalanced view of the issues and the parties' respective positions by an examination ofthe file at this point. Moreover, the interlocutory stages of a proceeding often include,as is the case here, applications made without notice to a defendant who has not hadan opportunity to rebut them.[12] It is not until the hearing that the parties have fully identified the issues withwhich the Court is required to deal. The preliminary stages of litigation involve theparties in a great deal of paperwork, such as the filing of statements of claim anddefence, and discovery by way of the exchange of lists of relevant documents.Changes of pleading often follow discovery and inspection, and the parties may berequested to provide particulars of their pleadings. Allegations of financialimpropriety are particularly susceptible to refinement by particularisation and, in thiscase, it is highly likely that Mr Swney will be required to be more forthcoming in hisresponses to the plaintiff's allegations.[13] Once the case is fully shaped, at the commencement of the hearing, theprinciples of open justice assume pre-eminence and, under r3.9, any person is entitled,at that stage, to access documents relating to the proceeding; namely:(a) any pleading, reference, notice, or application filed in the Court;(b) affidavits, depositions, or other written statements admitted intoevidence for the purposes of the hearing;(c) documents admitted into evidence for the purposes of the hearing; and(d) if any evidence given orally at the hearing has been transcribed, atranscript of that evidence.[14] The stage at which a fair and accurate report on the claims by Heart of the City,and the defendants' responses to them, can be given has not yet been reached, in myview. Mr Nippert's request for access is premature and I decline it...Toogood J