WHITE and the PERSONS LISTED IN SCHEDULE 1 v JAMES HARDIE NEW ZEALAND LIMITED [2020] NZHC 2374

WHITE and the PERSONS LISTED IN SCHEDULE 1 v JAMES HARDIE NEW ZEALAND LIMITED [2020]NZHC 2374IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2015-404-2981 (White)[2020] NZHC 2374UNDER the Consumer Guarantees Act 1993 and theFair Trading Act 19986BETWEEN KAREN LOUISE WHITE and thePERSONS LISTED IN SCHEDULE 1PlaintiffsAND JAMES HARDIE NEW ZEALANDLIMITEDFirst DefendantSTUDORP LIMITEDSecond DefendantJAMES HARDIE NZ HOLDINGSLIMITEDThird DefendantRCI HOLDINGS PTY LIMITEDFourth DefendantJAMES HARDIE AUSTRALIA PTYLIMITEDFifth DefendantJAMES HARDIE RESEARCH PTYLIMITEDSixth DefendantJAMES HARDIE INDUSTRIES plcSeventh DefendantCIV-2015-404-3080 (Waitakere)BETWEEN WAITAKERE GROUP LIMITEDFirst PlaintiffMETLIFE CARE PINESONG LIMITEDSecond PlaintiffFOREST LAKE GARDENS LIMITEDThird PlaintiffVISION (DANNEMORA) LIMITEDFourth PlaintiffMETLIFECARE COASTAL VILLASLIMITEDFifth PlaintiffAND JAMES HARDIE NEW ZEALANDLIMITEDFirst DefendantSTUDORP LIMITEDSecond DefendantJAMES HARDIE NZ HOLDINGSLIMITEDThird DefendantRCI HOLDINGS LIMITEDFourth DefendantJAMES HARDIE RSEARCH PTYLIMITEDSixth DefendantJAMES HARDIE INDUSTRIES plcSeventh DefendantFOn the papers: 11 September 2020Appearances: Bruce D Gray QC and Rowan A Havelock for the White PlaintiffsChristine Meechan QC, J Stewart and C Gordon for theWaitakere plaintiffsJack Hodder QC, John A McKay, Laura L Fraser and H Grahamfor the DefendantsJudgment: 11 September 2020RULING OF ASSOCIATE JUDGE R M BELLThis judgment was delivered by me on 11 September 2020 at 4:00pmpursuant to Rule 11.5 of the High Court RulesRegistrar/Deputy Registrar[1] In his judgment of 27 August 2020,1 Whata J directed that the defendants'documents JH.NZ7000.0890 and JH.NZ 5023.0387 be produced to the court toreview whether the defendants are entitled to maintain their claims of irrelevanceand privilege.[2] I have received:[a] Whata J's judgment of 31 October 2018,2[b] his judgment of 4 July 2019,3[c] his judgment of 27 August 2020,4[d] Ms O'Gorman's report of 17 July 2020,[e] her memorandum of 31 August 2020, and[f] the documents JH.NZ.5023.0386, JH.NZ.5023.0387, andJH.NZ.7000.0890.[3] The documents supplied by the defendants were not redacted. The copy ofMs O'Gorman's report of 17 July 2020 has a schedule 3, which is noted as"Confidential to the Court".[4] The documents produced by the defendants require decisions on relevanceand privilege.[5] As context for the relevance issue, there is a live issue whether the holdingcompanies in this case, especially the seventh defendant, James Hardie Industriesplc, may be liable to the plaintiffs. In James Hardie plc v White, the Court of1 White v James Hardie New Zealand [2020] NZHC 2202.2 White v James Hardie New Zealand [2018] NZHC 2812.3 White v James Hardie New Zealand [2019] NZHC 1543.4 White v James Hardie New Zealand [2020] NZHC 2202.Appeal discussed the principles on which holding companies might incur liabilityand said:5[65] Our analysis of the authorities suggests the following three categoriesof potential liability:(a) where the parent takes over the running of the relevant part ofthe business of the subsidiary;(b) where the parent has superior knowledge of the relevantaspect of the business of the subsidiary, the subsidiary reliedupon that knowledge, and the parent knew or ought to haveforeseen the alleged deficiency in process or product; and(c) more generally, where the parent takes responsibility(irrespective of superior knowledge or skill) for the policy oradvice which is limited to the wrongful act or omission.[66] It is clear that the mere fact of co-ordination within a group is notenough. Evidence will need to show that co-ordination results from controlby or reliance upon the parent, and that control is in some way relevant to thealleged wrong. [6] In light of this issue, in his judgment of 4 July 2019, Whata J directeddiscovery of insurance documents, while recognising that ordinarily documents ofthat sort are irrelevant. He said:6[15] In my view, the insurance, agency and licence agreements willlikely reveal the defendants who were associated with the James Hardieproducts and the nature, scale and degree of that association.[16] In this regard, the primary relevance of the insurance documentationis not what policies have been issued and/or what claims have been made, orwhat their merits are, but who sought and obtained those policies and for what.[17] This documentation is therefore directly and cogently relevant tothe third, fourth and seventh defendants' denial of responsibility, theirknowledge of likely product defects, and the steps they took, or did not take,to mitigate the effects of those defects. [7] Document JH.NZ.5023.0387 is an internal paper dated 19 May 2013 by thechief financial officer of James Hardie Industries plc, sent to the remunerationcommittee of the board. The paper deals with whether two matters are to be takeninto account in assessing senior executives' bonuses. One of those matters has5 James Hardie plc v White [2018] NZCA 580, [2019] 2 NZLR 49.6 White v James Hardie New Zealand [2019] NZHC 1543 at [15].nothing at all to do with this case.7 The other part deals with New Zealandweathertightness costs. The document refers to costs incurred by James HardieIndustries plc's New Zealand subsidiaries. Whether claims against James HardieIndustries plc's New Zealand subsidiaries should be considered when calculatingexecutives' bonuses is not relevant to deciding that company's liability under theapproaches suggested by the Court of Appeal. Subject to one matter, there isnothing in the document that could be used to prove or disprove any of the threecategories of potential liability.[8] The report does, however, contain a self-serving, exculpatory statement:the first sentence in the fourth paragraph on page 5. It will not help the plaintiffs.The defendants resist producing the document at all, and accordingly I take it thatthey do not want to rely on the self-serving statement. Accordingly, the documentis irrelevant.[9] I do not uphold the privilege claim. The author of the report is a chieffinancial officer. The report does not contain any legal advice.[10] The defendants provided document JH.NZ.5023.0386 to support theirprivilege claim. That document is an email chain dated 13 and 14 May 2013 inwhich JHI executives make comments on the chief financial officer's report. Oneof them is general counsel. Being an overseas practitioner, he is a legal adviserunder the definition of "legal adviser" in s 51(1) of the Evidence Act 2006.His email does not, however, contain any legal advice or convey any professionallegal services under s 54 of the Evidence Act 2006. Nor was his email sent incontemplation of litigation and for that purpose. Accordingly, there is no privilegein the document.[11] The document does not need to be produced for inspection.[12] Document JH.NZ.7000.0890, dated 29 January 2004, by Peter Shafron,"SVP finance and legal" and Folkert Zwikels, "treasurer" is an insurance updatepaper for the audit committee of JHI NV. JHI NV was a Dutch company which7 From page 1, paragraph A2, to page 4, paragraph A4.was re-domiciled in Ireland and reconstituted as James Hardie Industries plc. Thepaper is marked "confidential" and is said to contain legally privileged material.The paper deals with James Hardie Industries group insurance cover. James HardieIndustries arranged global cover for all the subsidiaries in its group. The documenthas a reference to possible New Zealand weathertightness claims, but there isnothing in the document that would tend to prove any of the potential categories ofliability identified by the Court of Appeal. The document shows no more than co-ordination of insurance arrangements, but does not show anything that could beused to prove product liability on the part of JHI NV or any of the holding companydefendants.[13] The copy of the paper provided has some handwritten notes. They arecomments on the content of the paper and do not raise anything relevant to theissues in this case. The entire document, including the handwriting, is accordinglyirrelevant.[14] Notwithstanding the privilege claimed at the start of the document, I do notuphold any privilege claim. One of the authors of the report was an in-houselawyer, again an overseas practitioner, but the document is for a commercialpurpose (insurance arrangements), not the provision of legal services.[15] In summary, I reject the claims for privilege for the documents, but they donot need to be produced, because they are irrelevant.Associate Judge R M BellSolicitors:Adina Thorn Limited (Rohan Havelock), Auckland, for the White PlaintiffsMinterEllisonRuddWatts (C J Gordon/Janine Stewart), Wellington, for the Waitakere PlaintiffsChapmanTripp (J A McKay), Auckland, for the DefendantsCopy for:B D Gray QC, Auckland, for the White PlaintiffsChristine M Meechan QC, Bankside Chambers, Auckland, for the Waitakere PlaintiffsJ E Hodder QC, Wellington, for the Defendants