ROBERT JONES HOLDINGS LTD v MCCULLAGH [2016] NZHC 2529

ROBERT JONES HOLDINGS LTD v MCCULLAGH [2016] NZHC 2529

The Associate Judge's refusals to order further discovery on the sham licence, solvency and credibility grounds were a proper exercise of discretion based on relevance, proportionality and the evidential complexion (including RJH's own conduct showing Northern Crest's insolvency); however the Judge erred in law on waiver by not applying collateral waiver principles—where the liquidators selectively relied on privileged communications they waived privilege in respect of other privileged communications dealing with the same discrete factual propositions (payments, insolvency indicators, and fees) and those communications must be disclosed to the limited extent indicated; the Associate...

Citation
[2016] NZHC 2529
Parties
Applicant on Review: ROBERT JONES HOLDINGS LIMITED; Respondent on Review: ANTHONY JOHN MCCULLAGH; Respondent on Review: STEPHEN MARK LAWRENCE
Court
High Court
Jurisdiction
New Zealand
Judgment Date
21 October 2016
Procedural Posture
Originating Application Under the Companies Act 1993 Concerning Voidable/insolvent Transactions in Company Liquidation / Interlocutory Review of Associate Judge's Discovery, Privilege and Costs Decisions
Outcome
Review allowed in part and dismissed in part; Associate Judge's discovery refusals and most interlocutory rulings upheld; Associate Judge's approach to waiver corrected; Associate Judge's costs uplift quashed
Legal Topics
Insolvent Transactions (voidable Transactions), Discovery and Disclosure, Legal Professional Privilege and Waiver, Relevance and Proportionality in Interlocutory Discovery, Credibility/veracity Evidence, Costs Uplift, Third Party Payments, Fresh Evidence
Companies Law Insolvency Law Civil Procedure Evidence Law Insolvent Transactions (voidable Transactions) Discovery and Disclosure Legal Professional Privilege and Waiver Relevance and Proportionality in Interlocutory Discovery +4 more

Case Brief

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Parties

ROBERT JONES HOLDINGS LIMITED

Applicant on Review

ANTHONY JOHN MCCULLAGH

Respondent on Review

STEPHEN MARK LAWRENCE

Respondent on Review

Procedural Posture

Originating Application Under the Companies Act 1993 Concerning Voidable/insolvent Transactions in Company Liquidation / Interlocutory Review of Associate Judge's Discovery, Privilege and Costs Decisions

Legal Issues

  1. 1 Whether payments by third parties (Columbus and MSH No.2) constitute payments by the insolvent company Northern Crest under s 292(3) Companies Act 1993
  2. 2 Whether discovery should be ordered into documents alleged to show the licence was a sham and into documents relevant to Northern Crest's solvency
  3. 3 Whether the liquidators waived legal professional privilege by selectively disclosing privileged communications and, if so, scope of waiver

Ratio Decidendi

The Associate Judge's refusals to order further discovery on the sham licence, solvency and credibility grounds were a proper exercise of discretion based on relevance, proportionality and the evidential complexion (including RJH's own conduct showing Northern Crest's insolvency); however the Judge erred in law on waiver by not applying collateral waiver principles—where the liquidators selectively relied on privileged communications they waived privilege in respect of other privileged communications dealing with the same discrete factual propositions (payments, insolvency indicators, and fees) and those communications must be disclosed to the limited extent indicated; the Associate...

Court Disposition

Review allowed in part and dismissed in part; Associate Judge's discovery refusals and most interlocutory rulings upheld; Associate Judge's approach to waiver corrected; Associate Judge's costs uplift quashed

Orders

  • Quash the Associate Judge's costs order and make no order as to costs (parties encouraged to agree costs)
  • Admit the fresh evidence filed on review for the purposes of the review proceeding