LYTTELTON PORT COMPANY LIMITED v AON NEW ZEALAND [2017] NZHC 3017

LYTTELTON PORT COMPANY LIMITED v AON NEW ZEALAND [2017] NZHC 3017 [6 December 2017]THERE IS A RESTRICTION ON PUBLICATION OF THIS JUDGMENT ASSET OUT IN [80].IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2015-409-000428[2017] NZHC 3017BETWEEN LYTTELTON PORT COMPANYLIMITEDPlaintiffAND AON NEW ZEALANDDefendantHearing: 28 November 2017Appearances: N R Campbell QC and S D Williams for PlaintiffZ Kennedy and N Frith for DefendantJudgment: 6 December 2017JUDGMENT OF DUNNINGHAM JIntroduction[1] Lyttelton Port Company Limited (LPC) suffered significant earthquakedamage to its assets, as well as business losses, as a result of the Canterburyearthquakes.[2] LPC is now suing the defendant, Aon, an insurance broker, for variousbreaches of duties it owed under its broker agreement and in tort, including failing toarrange appropriately worded full reinstatement cover for LPC's assets andappropriate business interruption insurance, for the period 1 July 2010 to30 June 2011. LPC claims damages of nearly $200,000,000.11 Being the shortfall between the amount LPC says it should have been paid if it had appropriate[3] Aon applied to join LPC's solicitor as a third party to this proceeding relyingon two documents provided by LPC in the discovery process. LPC objected toAon's use of the documents, asserting they were privileged and that they had beeninadvertently disclosed.[4] Aon's application to join LPC's solicitor and its application to set asideLPC's claims to privilege on the two documents, were heard beforeAssociate Judge Christiansen. The Associate Judge dismissed both applications.2 Ina subsequently issued minute, he recalled the unredacted version of his judgment anddirected Aon to return all copies of the privileged documents to LPC's solicitors.3Aon has applied to review both the Associate Judge's decision and his subsequentdirections.[5] The present applications arise out of Aon's applications for review. Aon nowapplies:(a) to transfer both its review applications to the Court of Appeal (thetransfer application);4 and(b) for a stay of the directions that require it to return the unredactedjudgment and all copies of the privileged documents, until the reviewapplication is determined (the stay application).[6] LPC opposes both applications.Procedural background[7] Before addressing the two applications it is necessary to provide some furtherdetail of the procedural background to explain how they have arisen out of Aon'sapplications for review.cover and the amount it received in a settlement reached with its insurers.2 Lyttelton Port Company Limited v Aon New Zealand [2017] NZHC 2215.3 Minute of Associate Judge Christiansen dated 19 October 2017.4 Initially Aon applied to transfer just the review of the substantive judgment. At a subsequentcase management conference on 30 October 2017, the parties advise that the Court directed thatthe review of the 19 October 2017 minute also be subject to the transfer application.[8] Aon applied to join LPC's solicitor as a third party to this proceeding inMay 2017 on the grounds that he provided legal advice to LPC on the wording of theinsurance policy. If Aon was found liable in respect of any alleged breaches of duty,then LPC's solicitor was similarly liable, and Aon would be entitled to a contributionfrom him.[9] LPC opposed that application on various grounds, including that theapplication relied on two documents over which LPC claimed privilege even thoughthese documents had been disclosed to Aon's solicitors during the discovery process.[10] The first document (LPC.00040) was an email communication betweenLPC's claims consultant to LPC's Chief Financial Officer and its solicitor. It wasmarked "private, confidential and privileged". The second document (LPC.01596)was an email between LPC's Chief Financial Officer and the Chairman of LPC'sBoard, which included a communication of legal advice that Aon accepts was aprivileged communication. However, it maintains that privilege was waived and thebalance of the document was not privileged.[11] Aon's applications to set aside LPC's claims to privilege and to join LPC'ssolicitor as a third party were heard on 22 August 2017. In his judgment deliveredon 14 September 2017, Associate Judge Christiansen upheld LPC's claim toprivilege in the documents and declined the application for leave to join a third party.[12] The decision set out the text of both LPC.00040 and LPC.01596, andcontained discussion about the content of both documents and its relevance to theissues raised. LPC promptly filed a memorandum with the Court raising its concernsabout releasing the decision in its current form and sought that the decision be issuedin redacted form. The Court issued a minute which stated that the Court wasprepared to arrange for publication of a redacted version and requested that counselprovided a marked-up version of the judgment showing where redactions wererequired.55 Minute of Associate Judge Christiansen dated 15 September 2017.[13] Counsel for LPC filed a copy of the decision with its proposed redactions andcopied that to Aon's solicitors. On the same day, 15 September 2017, the Courtissued a redacted version of the judgment, stating that "this version will be the onlyone released to the publishers".[14] Aon immediately objected to the Court's decision to reissue the judgmentwith redactions and submitted that a formal application was required which it couldthen respond to, particularly as it considered that a number of proposed redactionswere not of privileged material and were inappropriate.[15] On 21 September 2017, the Court issued a further minute seeking LPC'sresponse to Aon's memorandum and suspending publication of the decision.[16] On that day Aon filed its application for review of the 14 September decision(the first review application). A notice of opposition was filed by LPC on4 October 2017.[17] On 18 October 2017, LPC filed a memorandum which sought an orderrecalling the unredacted version of the decision and requested that Aon return allcopies of the privileged communications.[18] On 19 October 2017, and without hearing from Aon,Associate Judge Christiansen issued a minute in which he:(a) ordered the recall of his unredacted judgment of 14 September 2017;(b) expressed the view that it is "inappropriate and unnecessary for thedefendant to retain the unredacted form of the judgment or refer to thecontent of the privilege communications in its submissions onreview", but that, on the first review application, "the plaintiff canhand up the privileged documents for the Court to review in the usualway";6 and6 At [13] and [15].(c) directed Aon to return all its copies of the privileged communicationsto the plaintiff's solicitors.7[19] On 27 October 2017, Aon filed its application for review of the19 October 2017 minute (the second review application) and the stay application.On 30 October 2017, Aon filed the transfer application. On 3 November 2017, Aonfiled its opposition to those applications.The transfer applicationLegal principles applying to transfer applications[20] As this proceeding was filed in June 2015, the Judicature Act 1908 appliesand the proceeding must be continued, completed and enforced under this Act.8[21] Section 64 of the Judicature Act 1908 grants the High Court a discretion totransfer a proceeding to the Court of Appeal. That section provides:64 Transfer of civil proceedings from High Court to Court ofAppeal(1) If the circumstances of a civil proceeding pending before the HighCourt are exceptional, the High Court may order that the proceedingbe transferred to the Court of Appeal.(2) Without limiting the generality of subsection (1), the circumstancesof a proceeding may be exceptional if—(a) a party to the proceeding intends to submit that a relevantdecision of the Court of Appeal should be overruled by theCourt of Appeal:(b) the proceeding raises 1 or more issues of considerable publicimportance that need to be determined urgently, and thoseissues are unlikely to be determined urgently if theproceeding is heard and determined by both the High Courtand the Court of Appeal:(c) the proceeding does not raise any question of fact or anysignificant question of fact, but does raise 1 or morequestions of law that are the subject of conflicting decisionsof the High Court.7 At [16].8 Schedule 5, cl 10(1) of the Senior Courts Act 2016.(3) In deciding whether to transfer a proceeding under subsection (1), aJudge must have regard to the following matters:(a) the primary purpose of the Court of Appeal as an appellatecourt:(b) the desirability of obtaining a determination at first instanceand a review of that determination on appeal:(c) whether a full court of the High Court could effectivelydetermine the question in issue:(d) whether the proceeding raises any question of fact or anysignificant question of fact:(e) whether the parties have agreed to the transfer of theproceeding to the Court of Appeal:(f) any other matter that the Judge considers that he or sheshould have regard to in the public interest.(4) The fact that the parties to a proceeding agree to the transfer of theproceeding to the Court of Appeal is not in itself a sufficient groundfor an order transferring the proceeding.(5) If the High Court transfers a proceeding under subsection (1), theCourt of Appeal has the jurisdiction of the High Court to hear anddetermine the proceeding.[22] In summary, therefore, s 64 provides for transfer where:(a) the circumstances of the proceeding are "exceptional"; and(b) the Court is satisfied that transfer is appropriate having regard to thematters set out in s 64(3).Are there exceptional circumstances?Aon's submissions[23] Aon argues that the circumstances of the first review application areexceptional as it will not involve the determination of any significant questions offact but instead raises two questions of law that are the subject of conflictingdecisions of the High Court.9 These are:9 Thus meeting the test for exceptional circumstances in s 64(2)(c).(a) the legal test for determining whether a communication between athird party and a solicitor attracts privilege under s 54 of the EvidenceAct 2006; and(b) the test for determining when a privileged (or partly privileged)document has been disclosed "mistakenly" for the purposes of s 65(4)of the Evidence Act 2006.[24] Aon is challenging the finding that document LPC.00040 is privileged for thepurposes of s 54 of the Evidence Act 2006. Aon says it is not met in the present casewhere LPC's claims consultant simply passed on documents to the solicitor but wasnot authorised to request and obtain legal advice on behalf of LPC. The relevance ofthis in Aon's submission, is that while what occurred may satisfy the test inBrandlines Ltd v Central Forklift Group Ltd,10 it does not meet the more narrowformulation which it says was articulated in the subsequent decision of Kōs J inRobert v Foxton Equities Ltd.11[25] Specifically, in Brandlines Ltd, Associate Judge Gendall (as he was then)said:12 it is clear from the New Zealand authorities cited to me that there are tworequirements that must be fulfilled in this country: that the third party actedas an agent in communicating with the client's solicitor; and that thecommunication was for the purpose of obtaining or providing legal advice.It may well be that these two questions are inter-related to some extent.Nevertheless, they raise separate issues and should be considered as such. Itis not sufficient, therefore, that the third party passes on information to theclient's solicitor for the purpose of enabling legal advice to be given.In addition, the third party must have been authorised to assume – and musthave assumed – the role of the client in communicating the information tothe solicitors: the third party must have acted as the "man on the spot", asthe client "alter ego", and on its behalf. A third party does not qualify as anagent if it acted as an "independent contractor"[26] However, he also said:1310 Brandlines Ltd v Central Forklift Group Ltd HC Wellington CIV-2008-485-2803, CIV-2009-485-384, 11 February 2011.11 Robert v Foxton Equities Ltd [2014] NZHC 726, [2015] NZAR 1351.12 At [33]-[34].13 At [35].Accordingly, I do not accept the defendant's submission that, to fall underthe agency concept for the purposes of solicitor-client privilege, theinvestigators, advisers and experts in this case ought to have had the capacityto instruct and/or receive legal advice from the solicitors in question on theclient's behalf.[27] In Robert v Foxton Equities Ltd, Kōs J held that:14Given that privilege is now codified in the Evidence Act 2006, it is importantto focus on the words of the statute. They support the view that to be anagent for the purposes of privilege, a person must be given authority tocommunicate with a solicitor to obtain legal advice, and actually do so.[28] Accordingly he concluded:15A third party to whom the privilege attaches must be operating under anagency agreement that encompasses them obtaining professional legalservices.[29] Aon argues that these two formulations are in conflict. It says that the test inFoxton Equities requires an agent to be operating under an agency agreement thatauthorises the agent to obtain legal services, whereas the test in Brandlines does not.It says this conflict was identified in the subsequent decision of Aquaheat NZ Ltd vHiseat Ltd (in liq and rec), where Associate Judge Sargisson noted:16Arguably the formulation in Foxton Equities is narrower than that inBrandlines, especially given the later comment in Foxton Equities that:[a] third party to whom the privilege attaches must be operatingunder an agency agreement that encompasses them obtainingprofessional legal services.[30] Aon says resolution of this conflict is of central importance to the first reviewapplication. It submits that, in this case, there is no evidence of an agency agreementunder which LPC's claims consultant was given authority to communicate withLPC's solicitor to request or obtain legal advice on LPC's behalf. Aon says thatdistinction is important because, if that is a requirement, it would effectivelydetermine whether LPC.00040 is capable of sustaining LPC's claim to privilege.14 At [40].15 At [41].16 Aquaheat NZ Ltd v Hiseat Ltd (in liq and rec) [2014] NZHC 1173, [2014] NZCCLR 21 at [44].[31] Aon's proposed second question of law relates to the legal test for when adocument has been "mistakenly" disclosed for the purposes of s 65(4) of theEvidence Act 2006. Aon says that Body Corporate No. 191561 v Argent House Ltd17and Pernod Ricard New Zealand Ltd v Lion Beer, Spirits and Wine (NZ) Ltd18 bothendorse the view that s 65(4) does not preserve privilege where a documentcontaining privileged material is deliberately handed over. For example, in ArgentHouse, Asher J held:19 if the mistake was a deliberate handing over of a document without aconsideration that it was privilege, or forgetting that it was privilege, thatwould not be the sort of mistake covered by that section.[32] Similarly, Allan J said in Pernod Ricard that:20Section 65(4) was not intended to preserve privilege where a document isknowingly and deliberately disclosed after close attention has been given toits status for privilege purposes.[33] However, in Station Properties Ltd v Lever Action Ltd, Associate JudgeAbbott held that privilege had not been waived where a document had been handedover which contained a single privileged phrase in the middle of an email, saying it"could easily have been overlooked".21[34] Aon says that Associate Judge Christiansen essentially adopted the StationProperties approach, holding that there was no waiver given the solicitor's evidenceof it being "an inadvertent mistake in the nature of an oversight" which the Courtheld was "understandable, given the number of documents that were viewed in thediscovery process".22 Aon says that, as there was a conflict between the testarticulated in Argent House and Pernod Ricard on the one hand, and StationProperties on the other, and it is appropriate the matter is resolved by the Court ofAppeal.17 Body Corporate No. 191561 v Argent House Ltd (2008) 19 PRNZ 500 (HC).18 Pernod Ricard New Zealand Ltd v Lion Beer, Spirits and Wine (NZ) Ltd [2012] NZHC 2801.19 At [42].20 At [49].21 Station Properties Ltd v Lever Action Ltd CIV-2009-404-000354, 27 May 2011 at [46].22 At [45].[35] While it was not suggested that the second review application on its ownraised exceptional circumstances, the two applications were inextricably linked asthe second review application would determine how the first would proceed and thusAon submitted they should be transferred together.LPC's submissions[36] LPC, on the other hand, says that the alleged conflicts between the decisionsdiscussed by Aon are more illusory than real and, in any event, the legal issues theyraise do not play the pivotal role in the outcome that is suggested by Aon. In reality,Aon is simply challenging the Associate Judge's factual findings and these arematters which can readily be decided by the High Court.[37] In respect of the first question of law that Aon says the first reviewapplication raises, the relevant legal test is the statutory test in s 51(4) EvidenceAct 2006. It requires the Court to decide whether the email in question, LPC.00040,was "a communication made or received or an act carried out by an authorisedrepresentative of that person on that person's behalf". In this case, LPC says theAssociate Judge made a factual finding that the email was sent for the purpose ofobtaining legal advice from LPC's solicitor and the sender of the email had beeninstructed by LPC to do so. This, in LPC's view, was a routine application of thestatutory test and the factual findings were based on the evidence before theAssociate Judge.[38] In any event, LPC says there is no conflict between the two decisions towhich Aon refers. Brandlines Ltd was explicitly considered by Kōs J in Robert vFoxton. He did not distinguish or disavow any aspect of that decision. LPC saysthat both decisions are consistent, making it clear that the third party must have beenauthorised by the client to make the communication for the purpose of obtaininglegal advice on behalf of the client. In the present case, the first review applicationwill not call into question the correct legal test under the Evidence Act 2006. It willmerely challenge the Associate Judge's factual findings that the LPC's claimsconsultants had been authorised by LPC to send the email to their solicitors and thatthe email was sent for the purpose of obtaining legal advice from the solicitors.[39] In relation to the second alleged question of law, regarding the test unders 65(4) Evidence Act 2006 for when a document has been mistakenly disclosed, LPCsays the Judge's decision did not rely on s 65(4). Rather it was based on anapplication of s 65(2) and whether the documents in question had been disclosed incircumstances that were "inconsistent with a claim of confidentiality". Section 65(4)is simply one subset of circumstances in which disclosure would not waive theprivilege. Indeed, Aon's review application asserts that the Judge "erred in law indetermining that privilege had not been waived under s 65(2)", and does not refer tos 65(4).[40] In any event, again LPC says the decisions on s 65(4) are not in conflict.They illustrate nothing more than that the application of the legal test will producedifferent results depending on the facts before the Court. The Associate Judge inStation Properties accepted the distinction drawn in Argent House between a mistake"as to the implications of disclosure rather than the act of disclosure itself" andconsidered that on the facts before him the mistake was as to the act of disclosure.23Analysis[41] In my view, Aon is wrong to suggest that there are conflicting High Courtdecisions on the issue of when a communication between a third party and a solicitorattract privilege under s 54. There is no suggestion in Foxton Equities that theHigh Court is departing from Brandlines. Foxton Equities simply gives clearexpression to the authority which the person acting as an agent must have. InBrandlines, Associate Judge Gendall says "the third party must have been authorisedto assume – and must have assumed – the role of the client in communicating theinformation to the solicitor".24 Kōs J expresses this in not dissimilar terms, sayingthat "to be an agent for the purposes of privilege a person must be given authority tocommunicate with a solicitor to obtain legal advice, and actually do so".25[42] While Aquaheat is relied on by Aon to suggest the two decisions are inconflict, Associate Judge Sargisson does not make that claim. She simply says that23 At [43]-[46].24 At [34].25 At [40]."arguably the formulation in Foxton Equities is narrower than that in Brandlines".Under either case, the third party must have been authorised by the client tocommunicate with the solicitor to obtain legal advice. Whether that is the case inany particular question is a matter of the question of fact. In this case, it will bedetermined by considering whether the affidavit evidence as to the scope ofinstructions given to LPC's claims consultant means he is the authorisedrepresentative of the client in terms of s 51(4). In my view, this does not raise aquestion of law on which there are conflicting decisions such as would warrant thiscase being transferred to the Court of Appeal as an exceptional case.[43] I also accept, as LPC submits, that the Associate Judge's decision engageds 65(2) not s 65(4) Evidence Act 2006. His primary finding is that LPC did notdisclose the document in circumstances that were inconsistent with its claim ofconfidentiality, saying:[48] The Court does not accept that LPC has acted inconsistently with itsclaim of confidentiality, either as to LPC.00040 or to this attachment referredto in that document.[49] For similar reasons the Court dismisses claims of waiver affectingLPC.01596[50] The Court agrees that LPC acted consistently with continued claimsfor confidentiality in relation to both documents, including attachments andthat fairness dictates that privilege has not been waived under s 65(2).Alternatively, the disclosure of those documents was mistaken in terms ofs 65(4), and privilege has not been waived.This makes it clear that s 65(4) was quite secondary in the Judge's reasoning.[44] Furthermore, to the extent that the Judge's reasoning on s 65(4) may arise onreview, I accept LPC's submission that the decisions are not in conflict. In PernodRicard, Allan J explained that the subsection "is directed at the not uncommonsituation of an administrative error or procedural mishap, where a party handing overor disclosing a document never intends to do so".26 Accordingly, he said "s 65(4)was not intended to preserve privilege where a document is knowingly anddeliberately disclosed after close attention has been given to its status for privilege26 At [49].purposes".27 He held that, on the facts in that case, the relevant documents had beenhanded over after such attention had been given to their status for privilege purposes.In Station Properties, Associate Judge Abbott concluded, albeit obiter, thatdisclosure in that case had occurred mistakenly and, by implication, it was not asituation such as arose in Pernod Ricard, where close attention had been given to itsstatus for privilege purposes.28 There is, therefore, no material conflict between thedecisions; each turns on its facts.[45] In light of these findings, I do not consider that there are exceptionalcircumstances. The appeals do not raise questions of law which are the subject ofconflicting High Court decisions. Rather, Aon wishes to argue that the law has notbeen correctly applied to the facts set out in the affidavit evidence. That issomething which is ordinarily dealt with on review to the High Court under theJudicature Act 1908. Given that finding, it is not strictly necessary to address thematters in s 64(3). However, I do so briefly, for completeness.Do the matters set out in s 64(3) of the Act support the transfer of the reviewapplication to the Court of Appeal?[46] Section 64(3) of the Act requires the Court to have regard to six factors whendeciding whether to transfer proceedings. The parties here do not suggest that a fullCourt of the High Court should hear the matter.29 Furthermore, the parties have notagreed to transfer the proceeding to the Court of Appeal.30 That leaves the followingmatters to be addressed:The primary purpose of the Court of Appeal as an appellate Court (s 64(3)(a))[47] While I accept Aon's submissions that the decision constitutes a fullyreasoned decision of the High Court at first instance and so transfer to the Court ofAppeal would be appellate in nature, I also note that under the Judicature Act thepresumption is that review of decisions of Associate Judges is within the jurisdictionof the High Court and not the Court of Appeal. While that changes under the27 At [49].28 The conclusion was obiter as it was held there was no waiver of privilege because the disclosurewas not with the consent of the person who had the privilege.29 Section 64(3)(c).30 Section 64(3)(e).Senior Courts Act 2016, that does not alter the position under the earlier Act. In myview, this is a neutral factor. In the absence of exceptional circumstances, thelegislation anticipates that review will be conducted by the High Court with only alimited right of appeal to the Court of Appeal.The desirability of obtaining a determination at first instance and a review of thatdetermination on appeal (s 64(3)(b))[48] The same considerations arise under this heading as under the previousheading. In the absence of special circumstances the Act anticipates that a reviewwill be conducted by the High Court.Whether the proceeding raises any questions of fact or any significant question offact (s 64(3)(d))[49] The need for a prolonged enquiry into the facts would militate against atransfer.31 However, in this case, the decision was made by reference to affidavitevidence only and the review would proceed on the same evidence. The Court ofAppeal would not be required to undertake a prolonged enquiry into the facts. Thisis, in substance, the absence of a factor which would otherwise point against transfer.Any other matter that the Judge considers that he or she should have regard to in thepublic interest (s 64(3)(f))[50] Aon considers the review application raises an issue of public importance,being the significance of a subsequently agreed policy wording to an insurancecontract formed under the slip system on the date of renewal. While the Judge madean observation on this issue, I do not consider it was material to his decision. In anyevent, I do not consider Aon is correct to characterise his statement as suggestingthat the policy wording that is subsequently negotiated and agreed has littlesignificance in establishing the terms of cover to which the insurers have beenbound. I accept LPC's views that it simply reflects that there was no obligation toextend cover in respect of already damaged assets beyond the cover which hadalready been agreed in the placing slips.31 Re Erebus Royal Commission [1981] 1 NZLR 614 at 616.[51] Finally, it is suggested that it would avoid cost delay and waste of Courtresources to transfer the appeal. Aon says that given the significance of the issuesaddressed in the decision and the size of LPC's claim in the substantive proceedings,it is likely that one or both of the parties would seek leave to appeal the decision inthe first review application to the Court of Appeal. Removing it now would avoidthe needless expense, delay and waste of Court resources associated with hearing areview application in the High Court, followed by the subsequent application forleave, and an appeal, or appeals, to the Court of Appeal. Aon points out this was afactor which influenced Fogarty J to transfer the proceedings in Grey DistrictCouncil v Blain.32[52] However, as LPC points out, there is no certainty that if the application washeard in the High Court the unsuccessful party would seek leave to appeal or, if itdid, that it would meet the high test for leave. Therefore, it can not be assumed thata transfer is required to avoid cost and delay.[53] I accept that given the amount at stake, and the importance of the issues tothe parties, there is a very real prospect that the unsuccessful party will seek toappeal the decision on review to the Court of Appeal. Had there been exceptionalcircumstances, I considered this factor would have pointed towards a transfer.[54] Overall, in my view, the discretionary factors would have supported, to amoderate degree, the transfer of proceedings if there had been exceptionalcircumstances as claimed by Aon.Aon's application for a stay of the orders in the 19 October minuteLegal principles applying to stay application[55] An application for a stay of enforcement pending the review of anAssociate Judge's decision is analogous to a stay pending appeal.33 The Court mustbalance the right of the successful party to the benefit of the judgment against the32 Grey District Council v Blain [2013] NZHC 976 at [21].33 Stor-Co Mini Storage Systems Pty Ltd v Parnell Storage Lease Ltd HC Auckland CIV-2008-404-2202, 21 January 2009.need to preserve the position if the review is successful.34 Factors to be taken intoaccount in this balancing exercise include:35(a) whether the appeal may rendered nugatory by the lack of a stay;(b) the bona fides of the applicant as to the prosecution of the review;(c) whether the successful party will be injuriously affected by the stay;(d) the effect on third parties;(e) the novelty and importance of the questions involved;(f) the public interest in the proceeding; and(g) the overall balance of convenience; and(h) the apparent strength of the review application.[56] At the telephone conference on 30 October 2017, Nation J made an orderdirecting that the defendant was:entitled to retain the unredacted version of the judgment of 14 September2017 and the documents which are in dispute pending the order of the Courton the application for stay but solely for the purpose of arguing theapplications for stay and transfer.Aon's submissions[57] Aon seeks a stay of the Associate Judge's orders in the 19 October 2017minute so that it can argue the second review application. It sees this as essentiallyan extension of the orders made by Nation J on 30 October 2017.[58] Aon says that unless there is such a stay, its ability to argue the second reviewapplication would be rendered nugatory. In particular, Aon says it will prevent itfrom having access to the complete evidentiary record and the unredacted version of34 Keung v GBR Investment Ltd [2010] NZCA 396.35 Keung v GBR Investment Ltd, above n 34, at [11].the 14 September hearing decision and from referring to the content of thedocuments in its submissions on review. This would make it impossible for Aon tomake detailed submissions as to the extent to which privilege would apply to thedocuments, if indeed some parts are privileged. If it could not refer to the documentsin the second review application that, in turn, would affect its ability to run the firstreview application as it is seeking access to the documents and the judgment in thesecond review application for that purpose.[59] In respect of the other considerations which apply to the grant of a stay, Aonconsiders they support the grant. In particular, Aon says that LPC will not beprejudiced if the stay application is granted. Given there is no suggestion that Aonwould use the documents for any purpose other than the proceeding and anundertaking has been given that it will not do so, it says LPC can not point to anyprejudice over and above that which stems from the initial disclosure. Furthermore,no relevant third parties would be detrimentally affected by a stay and the balance ofconvenience favours it.LPC's submissions[60] LPC submits that, in respect of the stay sought in relation to [13] of theJudge's minute, that paragraph does not contain an order or direction but merely areason, so it cannot be the subject of a stay. While at [12] the Court ordered therecall of the unredacted version of the judgment, in [13] it simply stated that "theCourt considered it is inappropriate and unnecessary for the defendant to retain theunredacted form of the judgment or refer to the content of the privilegedcommunications in its submissions on review".[61] In respect of the direction made at [16] of the minute which required thedefendant to return all its copies of the privileged communications to the plaintiff'ssolicitors, LPC argues that the legal test supports its position and in particular, arefusal to grant a stay would not render the second review application nugatory.[62] LPC says that Aon is only seeking a stay in relation to the second reviewapplication and the Court must focus on whether that would be rendered nugatory ifa stay is not granted. It says that Aon largely sidesteps that question and insteadfocuses on whether the first review application would be rendered nugatory if a staywas not granted. LPC goes on to say that the return of the documents would notrender Aon's second review application nugatory because that is the usual positionwhich applies to parties who challenge claims to privilege and such challenges aremade without referring to the content of the privileged document itself. Instead itwould be retained by the privilege holder with a copy handed up to the Judge if theJudge wished to see the document. It says that the claim to be severely andunjustifiably prejudiced by having to make submissions on the privileged status ofthe documents without referring to the content of them is therefore overstated.[63] In any event, LPC says that Aon can make its submissions without having thedocuments themselves. For example, with LPC.00040, the issue of whether theemail attracts privilege turns on the status of the parties to the email and the purposeof the email. That can be argued without access to the email itself.[64] Equally, in relation to LPC.01596, there is no dispute that it contains aprivileged communication and the only issue is waiver. Again, that can be arguedwithout reference to the content of the privileged communication.[65] If Aon's second review application will not be rendered nugatory, then LPCsays there is nothing in the other factors which would point to the stay being granted.It says there is no merit to Aon's submission that LPC's stance is to give it a"tactical" advantage. LPC is simply asking for what it is entitled to following theCourt's findings that the documents were privileged and its directions requiring Aonto return them.[66] LPC says there is no obligation on it to show that it will be injuriouslyaffected by the stay. However, it is entitled to the protection afforded by legalprofessional privilege and the fact that Aon holds and is now using those privilegedcommunications against LPC's interest in this litigation is inherently prejudicial toLPC. LPC cites authority which confirms that legal professional privilege is notsimply a mere interest to be balanced and weighed against other interests.3636 B v Auckland District Law Society [2004] 1 NZLR 326 (PC).[67] LPC also says that there is an adverse effect on third parties if the stay isgranted in that LPC's former solicitor is prejudiced by Aon's use of privilegeddocuments in its ongoing attempts to issue a third party notice against him. Finally,it says that the second review application does not have merit. The Associate Judgehad inherent jurisdiction to make the direction that Aon return the privilegeddocuments and the direction necessarily follows from the decision. It does not, asAon suggests, constrain what the Court can do on review or appeal.[68] Taking all those matters into account, LPC says the balance of conveniencefavours it. The direction made by the Associate Judge is a straight forwardconsequence of the documents being held to be privileged. If a stay was granted,LPC suggests that would set an unfortunate precedent and would tend to reward the"use first and argue later" approach adopted by Aon.Analysis of stay application[69] While LPC argues that [13] contains no ruling or direction, it is clear that thestatement in [13] is a logical extension of [12] and reiterates the order made in [12]requiring the unredacted version of the judgment to be returned, by making it clearthat the Court will not permit Aon to retain the unredacted judgment even for thepurpose of Aon's review application. I therefore consider the application for staydoes encompass the direction to return the unredacted version of the judgment.[70] The most critical question is whether the second review application will berendered nugatory if a stay is not granted. That review application is essentiallychallenging the Associate Judge's decisions to recall the unredacted version of thejudgment and require the return of all copies of the privileged documents, when inAon's view they are required to argue the first review application. Whether they willbe available for the first review application is not for consideration now, but is fordetermination in the second review application.3737 The reference to it being the "second" review application is, of course, a reference to the order inwhich they were filed, and not the order in which they will be heard as, logically, the secondreview application must be determined prior to the first review application.[71] In my view, the second review application would not be rendered nugatory ifthe documents had to be returned and the judgment recalled, as it would still bepossible, albeit difficult, for Aon to make submissions relying on its knowledge ofthe documents and the unredacted version of the judgment. However, simplybecause it is technically possible for counsel to make submissions based on recall ofthe documents and the unredacted version of the decision, it would lead to a highlyartificial hearing where, as LPC says, the Judge would have access to the unredactedjudgment in the documents, but the defendant would not, and the Judge would haveto ensure he or she was linking the plaintiff's submission to the relevant part of thedocument or judgment. That would not, in my view, be a desirable approach.[72] I also do not consider that the authorities on the importance or paramountcyof legal professional privilege are relevant in this case. The cases relied on by LPCaddressed circumstances where there was no question that legal professionalprivilege applied and had not been waived, but considered whether the privilegeshould be overridden in what was considered the public interest. This is not such acase. Instead, in the context of these review applications, the questions are whetherlegal professional privilege arises at all or if it has, whether it has been waived. Aonseeks no more than to argue that the review application should be conducted on thesame basis as the original applications, where it had access to the documents, and tothe Judge's full reasoning in relation to those documents. Thus, while I have heldthat the second review application would not be rendered nugatory, it would besufficiently difficult to run the hearing in such circumstances that this considerationpoints in favour of the stay being granted.[73] In terms of the other considerations, I am not prepared to conclude that eitherparty is not acting in good faith. There is a lot at stake for both parties, and it isunderstandable that each party has taken the position it has. I also do not considerthat LPC will be injuriously affected by the stay. It is a stay for a very limitedpurpose. All judgments of the Court give rise to substantive legal rights, but theCourt recognises that they may be stayed for certain purposes while litigation iscontinuing on the issues. Furthermore, LPC acknowledges that the Judge may haveaccess to these documents. Thus, to the extent they are being used to argue foroutcomes which are not in LPC's interests, that will not be avoided by declining thestay.[74] I do not consider there is a relevant effect on third parties. Aon will only beable to issue a third party notice if, in the end, the documents are held to be notprivileged or that any privilege has been waived.[75] In terms of the merits of the second review application, I am not prepared toexpress a view beyond saying it is, at least, arguable.[76] Finally, in terms of the balance of convenience, I consider that given thelimited use the documents and the unredacted version of the judgment will be put to,as against the inconvenience of proceeding on the second review application withoutthem and the lack of any prejudice to LPC in granting the stay, weighs in favour ofthe stay being granted. It is, of course, only for the purpose of arguing the secondreview application. Whether or not the documents can then be used in the firstreview application depends on the outcome of that application.Outcome[77] I decline the application for transfer because there are no "exceptionalcircumstances" as required by s 64 of the Judicature Act 1908.[78] I order that the orders and rulings in the 19 October minute are stayedpending the determination of Aon's application for review of that minute.[79] I reserve the issue of costs, although, as each party has had a measure ofsuccess, my clear view is that this is a case where costs should lie where they fall.[80] Finally, although I have endeavoured to be careful in this judgment to avoiddisclosure of any material which is arguably privileged, out of an abundance ofcaution this judgment is not to be published until final disposition of the applicationsfor review which are referred to in this judgment or as otherwise ordered by theCourt.Solicitors:Chapman Tripp, ChristchurchMinter Ellison Rudd Watts, Auckland