NORTHLAND ENVIRONMENTAL PROTECTION SOCIETY INCORPORATED v THE CHIEF EXECUTIVE OF THE MINISTRY FOR PRIMARY INDUSTRIES [2016] NZHC 406

NORTHLAND ENVIRONMENTAL PROTECTION SOCIETY INCORPORATED v THE CHIEF EXECUTIVE OF THE MINISTRY FOR PRIMARY INDUSTRIES [2016] NZHC 406 [10 March 2016]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2015-404-2128[2016] NZHC 406UNDER the Judiciature Amendment Act 1972 andthe Declaratory Judgments Act 1908IN THE MATTER of an application for judicial review ofdecisions under the Forests Act 1949,Customs and Excise Act 1996 and theProtected Objects Act 1975BETWEEN NORTHLAND ENVIRONMENTALPROTECTION SOCIETYINCORPORATEDPlaintiffAND THE CHIEF EXECUTIVE OF THEMINISTRY FOR PRIMARYINDUSTRIESFirst DefendantCOMPTROLLER OF CUSTOMSSecond DefendantTHE CHIEF EXECUTIVE OF THEMINISTRY FOR CULTURE ANDHERITAGEThird DefendantHearing: 16 February 2016Appearances: D Salmon and D Bullock for the PlaintiffA Martin and B Charmley for DefendantsJudgment: 10 March 2016JUDGMENT OF WOODHOUSE J(Discovery)This judgment was delivered by me on 10 March 2016 at 4:00 p.m. pursuant to r 11.5 of the High Court Rules 1985.Registrar/Deputy Registrar[1] In this judicial review proceeding the plaintiff seeks an order that the first defendant make discovery of emails electronically identified by using searchparameters as recorded in the plaintiff's application. The first defendant hasidentified 9,704 emails within the search parameters. The first defendant opposes the application for discovery.The plaintiff's claims and the first defendant's defence[2] The plaintiff is seeking judicial review of a range of decisions made by the Ministry for Primary Industries (the Ministry) relating to the export of ancient swamp kauri (swamp kauri). The Forests Act 1949 (the Act) prohibits, amongst other things, export of swamp kauri unless it is a finished or manufactured product, or a stump or root.[3] The plaintiff alleges that large volumes of swamp kauri have been exportedfrom New Zealand in breach of the prohibition. The plaintiff's principal affidavit insupport of the statement of claim contains and produces a substantial amount of evidence supporting this contention.1[4] The plaintiff pleads three grounds for review against the first defendant:(a) Error of law. The plaintiff alleges that the Ministry approved exports of swamp kauri contrary to the prohibitions. There are contentions that officers of the Ministry misinterpreted or misapplied the provisions of the Act in respect of particular exports. It is alleged, forexample: exports described as "tabletops" or "table slabs" were notfinished or manufactured products; swamp kauri logs described as"Maori carvings" and "temple poles" were not finished ormanufactured products or were not genuine Maori carvings at all; descriptions of exports of swamp kauri as "stump logs" were notdescriptions recognised by the Act and were not stumps or roots which are free from the prohibition.1 Affidavit of Fiona Gwneyth Furrell, 11 September 2015.(b) Failure to take into account relevant considerations. Central allegations are, in essence, that the Ministry failed to take account of evidence showing that large volumes of swamp kauri, intended for export, were widely misrepresented as finished or manufactured products, or as stumps, and other evidence that swamp kauri prohibited from export was being exported.(c) Unreasonableness. The essence of this ground is that, given inspections by Ministry officers of proposed exports, and what they knew or ought to have known from a range of information, decisions of Ministry officers relating to export were unreasonable.[5] In the first defendant's statement of defence the central allegations of the plaintiff are denied. The statement of claim, in the usual way, sets out the underlying factual allegations before particularising the specific contentions in respect of each of the grounds for review. All of those particular contentions, to the extent that they are directed to the first defendant, are simply denied by the first defendant. Thisincludes bare denials of alleged knowledge in respect of a range of matters.Knowledge is therefore in issue. This is of importance on this application.Discovery principles[6] The Court's power to order discovery in judicial review proceedings is contained in s 10(2)(i) of the Judicature Amendment Act 1972. The Court has a discretion to make an order for discovery. Mr Martin, for the first defendant,submitted that the discretion is circumscribed and, in particular, by principles thatdiscovery must be limited to what is necessary, or what is truly required. I do notagree that the discretion is circumscribed in these ways. My reasons are notedbelow.[7] Relevance is an essential consideration. To the extent that there are otherlimits on the Court's discretion, these are contained in s 10(1). This provides, in effect, that an order for discovery, and a number of other orders or directions as specified in subsection (2), may be made –For the purpose of ensuring that any application or intended application for review may be determined in a convenient and expeditious manner, and that all matters in dispute may be effectively and completely determined [8] In a particular judicial review proceeding the Judge may determine that the discovery sought is not necessary and, in exercise of the discretion, decline an order for discovery. But that would follow from the Judge's assessment of the particular case. If necessity is made a consideration applying in every case the broad discretion contained in s 10(1) would be improperly fettered. I agree with the observations of Priestley J in Air New Zealand Ltd v Auckland International Airport Ltd.2In some judicial review cases discovery may be unnecessary. In others limited discovery may assist. In some cases it is conceivable that discovery in the nature of general discovery might be required. Issues such as theseshould be determined on a case by case basis in the exercise of the Court'spowers under s 10(2)(i).[9] The one constraint on the discretion not contained in s 10(1) is relevance. Counsel in this case were agreed on that point, and it is the issue on which this application in large measure turns. Discovery will not be ordered unless thedocuments may be relevant to the issues, with this to be determined on thepleadings.3 That is not to say that the Court is bound to make an order if relevance isestablished.[10] I referred earlier to the first defendant's submission that the discovery soughtmust be shown to be necessary, or what is truly required, and my conclusion that thediscretion is not circumscribed in these ways. Mr Martin cited cases which hesubmitted supported the submission.4 The foundation, at least in relation to theauthorities cited, is the decision of Hammond J in Wellington International AirportLtd v Commerce Commission. However, the requirement for "necessity", anddifferent ways of expressing a similar concept, appears to have derived from r 300 ofthe High Court Rules before the 2008 amendment. As Mr Martin quite properly2 Air New Zealand Ltd v Auckland International Airport Ltd (2001) 16 PRNZ 783 (HC) at [35].3 Diagnostic Medlab Ltd v Auckland District Health Board HC Auckland CIV-2006-404-4724, 30 October 2006 at [8].4 Wellington International Airport Ltd v Commerce Commission HC Wellington CP 151/02, 23 July 2002 at [42], [44]; BNZ Investments Ltd v Commissioner of Inland Revenue (No. 3) 23 NZTC 21,078 (HC) at [15]; Te Runanga O Ngati Awa v Attorney-General HC Wellington CIV- 2006-485-1025, 28 March 2007 at [6]; Keenan v Attorney-General [2014] NZHC 1649 at [9], [21].noted, r 300, directed to particular discovery, included a provision that the Courtcould not make an order "unless satisfied that the order is necessary", but therequirement for necessity was not repeated in the current particular discovery rule, r 8.19. Quite apart from the changes to the High Court Rules, it does not seem to me to be appropriate that the wide discretion provided in s 10(1) justifies what would amount to a mandatory requirement for an applicant to establish necessity. The only mandatory requirements are the broad concepts in s 10(1) and relevance which arises because of the nature of the application. As Priestley J observed in the passage cited above, discovery may be declined because it is unnecessary. But that is a different consideration.Relevance[11] The plaintiff submits that the discovery sought will be relevant to show the actual knowledge and belief of decision makers as to the likelihood of further processing occurring on products claimed to be in their final shape and form, knowledge of other matters pleaded by the plaintiffs, and the extent of enquiries made by Ministry officers. Mr Salmon, for the plaintiffs, submitted that knowledge is central to the pleading of unreasonableness, but also arises in respect of disputed allegations in support of the two other grounds.[12] The essence of the submission for the first defendant was put as follows:The discovery process is unlikely to generate documents relevant to theissues in this proceeding. The plaintiff's application does not focus onparticular decisions – the proper focus of judicial review – but instead seeksdiscovery of documents generally related to swamp kauri. Documents arenot rendered relevant and discoverable merely because they may tangentiallyand generally relate to the proceeding. Rather, only discovery that isrelevant to the decisions under review and therefore proportionate to thesubject matter of the proceeding should be ordered. In the first defendant'ssubmission, that is not the case here.[13] In developing that submission it was contended, first, that the plaintiff'sclaim is misconceived. This was on the basis that the plaintiff's allegations "do notalign with the first defendant's statutory role under the" Act. I am not persuaded thatthis provides adequate grounds for dismissing the present application. Inconsiderable measure the first defendant is asking the Court, on an application fordiscovery, to make rulings on arguments about the interpretation of the Act which are amongst the matters in issue. If it is plain that the claim is misconceived, the appropriate course would have been to apply to strike it out, but there has been no such application.[14] The heart of the first defendant's argument on relevance was that the realenquiry is whether the exports of swamp kauri particularised in the statement ofclaim were illegal and the first defendant has already discovered all documentsrelating to the particularised exports. It will then be a matter for the Court todetermine whether any particular export was illegal. It is submitted that thediscovery sought does not relate to exports impugned by the plaintiff in its statementof claim and that this application amounts to a fishing expedition.[15] I do not agree with the first defendant's submissions. I accept the plaintiff'ssubmission that general knowledge of Ministry officers about the true nature ofswamp kauri being exported, and not just information provided for or relating to aspecific export, is relevant to pleaded allegations which are denied. In respect of theunreasonableness ground there are, for example, the following pleadings:48. At all material times the Table Slab Products seen or inspected by MPI and/or Customs were in fact rough sawn or unfinished slabs of timber that plainly were not in their final shape or form and plainly were not ready to be used.49. At all material times MPI and/or Customs knew or ought to have known that the primary export demand for the Table Slab Products was for the purposes of further processing and manufacturing overseas, or that it was likely that this was the case.50. At all material times MPI and/or Customs knew or ought to have known that the true end use, or the likely true end use, of the Table Slab Products was further processing and manufacturing overseas.51. At all material times MPI and/or Customs placed weight on written assertions as to product types despite strong evidence that the true end use in fact involved further processing or use in different products.53. At all material times MPI and/or Customs knew or ought to have known that the primary export demand for such timber was for the purposes of further processing and manufacturing in that thedescription of "carvings" described above was a pretence.[16] There is a bald denial of those allegations by the first defendant (to the extentthat they affect the first defendant) and of a number of broadly similar allegations.[17] Knowledge is also directly raised as an issue under the second cause of action– that the first defendant failed to take into account relevant considerations. There is,for example, a pleading as follows:47 (a) MPI and/or Customs failed to take into account evidence showing that ancient swamp kauri table tops were being processed overseas.[18] That allegation is denied without more.[19] Mr Salmon also submitted that knowledge of Ministry officers of evidence of misdescriptions of swamp kauri exports, or knowledge of evidence of processing overseas of swamp kauri, will also be relevant to the illegality ground. As earlier noted, this involves contentions of misinterpretation or misapplication of provisions of the Act by officers of the first defendant. It may be arguable that knowledge doesbear on these matters, and in particular application of provisions of the Act toparticular export transactions.[20] This may arise, for example, in relation to the definition of "finished ormanufactured indigenous timber" which, relevantly, is as follows:finished or manufactured indigenous timber product—(a) Means any indigenous wood product that has been manufactured into its final shape and form and is ready to be installed or used for its intended purpose without the need for any further machining or other modification; and(c) Does not include dressed or rough sawn timber, mouldings, panelling, furniture blanks, joinery blanks, building blanks, or similar items.One specific question will be whether very large and heavy slabs of swamp kauri purportedly to be exported as table tops came within that definition. It is not a definition to be applied in a vacuum. The meaning of particular words may beinformed by the knowledge of an experienced officer of the Ministry. And such an officer would have broader responsibility under Part 3A of the Act which contains provisions for the purpose of promoting the sustainable forest management of indigenous forest land.[21] The first defendant argued that the discovery sought "is likely to generate asignificant volume of irrelevant material, as well as duplication of material alreadyprovided". I am unpersuaded by that submission. The evidence for the firstdefendant records that, although 9,705 emails have been identified using the keywords, none has been inspected. The plaintiff's criticism of the Ministry for resistingdiscovery in these circumstances has some justification. In any event, the plaintiffhas obtained one email from a Ministry officer which indicates knowledge of at leastthe possibility of illegal exports and concern in that regard. This was from a seniorofficer in respect of a 2014 export of what was described as a Maori carving. Theemail, which appears to be an internal email to another officer includes thefollowing:I wonder if I could use the expertise of you or one of your team. Could someone have a quick read of this and give me your impression please. NZ Forests Ltd [the exporter] is one of two Chinese companies that now dominates the NZ swamp kauri industry. They have amassed large stockpiles of swamp Kauri logs with the intention to export, but the bottleneck for them is to convert the logs to finished products so they can be permitted for export. NZ Forests Ltd intend to export the attached piece as a finished carving. The exporter states it will be going to a Chinese showroom to showcase Maori culture. I find this piece rather unconventional because of its raw appearance.The exporter stated it has taken two months of work to carve it and apart from some minor finishing and a light oil no more work is intended. My concern is that the raw nature of the piece could suggest it's not in its finalshape and form as required by the Forests Act. The position of other logs inthe yard suggest there are more to come.I'm currently seeking more information on the destination, and invoice but ifthis checks out, unless someone raises a red flag we are likely to approve it.I'd appreciate hearing if you think its authentic. I thought it might besomething you might be interested in as well.[22] I noted in the introduction that the plaintiff's principal affidavit, in support ofthe statement of claim, contains and produces a substantial amount of evidencesupporting the plaintiff's contentions. None of this has so far been challenged by thefirst defendant (and it may not be challenged by the first defendant). This evidence,as it presently stands, appears to indicate widespread evasion of the prohibitions inthe Act relating to swamp kauri, and that concerns in that regard have been publiclyexpressed over some years and published reasonably widely. It is also said in anaffidavit for the plaintiff that the plaintiff, for a number of years, has provided theMinistry with evidence of illegal swamp kauri exports.5 The first defendant doestake issue with these contentions to an extent.6 The fact of communications from theplaintiff is not disputed, but it is said that the information provided by the plaintiffdid not provide reliable evidence of further processing or manufacturing overseas ofswamp kauri that is not stump or root timber. On the present application what isrelevant is that the plaintiff's concerns, with what the plaintiff regarded as evidenceof breach, were conveyed directly to the Ministry.[23] Photographs and other evidence produced by the plaintiff at this point establish, at the least, a reasonably arguable case that products labelled as being swamp kauri not subject to prohibition are not what they were represented to be. There is a more than ample foundation for relevance in respect of the documentssought. It is not a fishing expedition. The enquiry is focussed by the parameters forthe search with key words and eight identified Ministry officers.7Proportionality[24] The first defendant argued that the scope of the discovery sought isdisproportionate to the subject matter of the proceeding. Cases in which discoveryhas been declined on this basis were referred to.8 It is unnecessary to discuss thecases. I accept that the Court may, in exercise of its discretion, decline discovery ofdocuments that are relevant because discovery of them would be disproportionate forsome reason or other.5 Affidavit of Fiona Gwneyth Furrell, 9 December 2015 at [8]-[10].6 Affidavit of Mathew Francis Bartholomew, 18 January 2016 at [19]-[25].7 The officers' names are recorded in correspondence between counsel. By agreement the nameshave not been released, I assume to protect privacy at this point in the proceeding, with confidentiality maintained by undertakings between counsel.8 Commerce Commission v Cathay Pacific Ltd [2012] NZHC 726 at [18]; Karam v Fairfax New Zealand Ltd [2012] NZHC 887 at [137]-[142]; NSK Ltd v General Equipment Co Ltd [2015] NZHC 1979 at [21]-[23]; ASSA Abloy New Zealand Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760 at [13]-[14].[25] The essence of the first defendant's argument was that the cost of providingthe discovery outweighs the benefits to be gained. It was submitted:The extraction and review of the 9,700 emails and their attachments captured by the plaintiff's application will be significantly resource and timeintensive. This additional discovery would need to be provided in parallel with the first defendant's preparation for the urgent fixture sought by theplaintiff (25-26 July 2016).[26] It is relevant to the first defendant's argument that there has already beensome discovery. This followed discussions between the parties and agreementreached for discovery of three out of four categories of documents sought by theplaintiff. It is the fourth category which is the subject of the present application. Inrespect of the fourth category the first defendant has offered to provide more limiteddiscovery than what is sought.[27] I am not persuaded that the discovery now sought would be disproportionate, and notwithstanding the extent of discovery already made. There is no sufficient evidential foundation for the propositions in the defendant's submission, recordedabove, and as developed. I am entitled to take judicial knowledge of what can bedone with computers and by competent lawyers and their support staff. The emailshave already been identified. Without more, I would have concluded that the emailsidentified, notwithstanding that there are 9,704, could be reviewed reasonablyquickly and not at a cost disproportionate to what is at issue in this case.[28] So far as cost is concerned, there are two important considerations. The first is that cost incurred can be reflected in costs awarded against the plaintiff if, at the end of the case, that is appropriate. The second is that the plaintiff's solicitorsoffered to undertake the review, at the plaintiff's cost, but confidentially. It appears that this was made in response, at least in part, to advice from the Ministry, following an application for these emails under the Official Information Act, that it would take 40 working weeks to review the emails. As the plaintiff has pointed out, that amounts to review at approximately 45 emails a day.9 That is not the position nowtaken by the first defendant, through counsel. Mr Martin advised that a review of theemails, including any attachments to them, could be completed within 20 working9 The calculation has obviously been made for 9,000 emails. A precise calculation is a little over 48 emails a day, a difference of no consequence.days by one person. The basis of that estimate is not clear, but it does lead to conclusions. The first is that the Ministry was earlier resisting discovery, on the grounds of proportionality, on a gross over-estimate of the amount of time that might be involved. The second is that the amount of time now indicated, which may be a conservative estimate, is not disproportionate either in terms of time or possible cost. It will not jeopardise the fixture. And if the Ministry had earlier got on with reviewof at least some of these emails the task now would be even more manageable andwould not, as Mr Martin submitted, distract counsel from preparation from thesubstantive hearing.[29] The benefit side of benefit/cost analysis has in large measure already beenaddressed when considering relevance. In the present context, dealing with aproportionality argument raised by the defendant, it is noteworthy that the defendantargues, in effect, that the benefit of discovery of these documents is outweighed bythe fact that review will take about 20 working days in spite of the fact that thedefendant has not looked at any of the emails in question to determine relevance,which here equates to benefit.[30] On this question of proportionality the plaintiff concluded its submissions with the following observations:[The plaintiff] is now left in the remarkable position where a Governmentdepartment is refusing to release public documents (that it has alreadysearched for and located) by way of discovery and under the [OfficialInformation Act], notwithstanding the relevance of those emails and thepragmatic proposal [the plaintiff] has put forward to relieve the burdens onthe taxpayer.[The plaintiff] brings these proceedings in the public interest in circumstances where real concerns have arisen as to the legality of [the Ministry's] conduct. The rule of law requires that [the plaintiff] be adequately equipped with the information it needs to prosecute its application for judicial review, and to put the Court in the best position toscrutinise the legality of the impugned decisions.[The plaintiff] is seeking public documents that it has a right to see. It hasbeen willing to make significant concessions and accept substantial burdensin order to have an opportunity to see documents that it says are of greatsignificance to its case.[31] I agree with the broad thrust of those submissions. And they find support in observations of Cooke J delivering the judgment of the Court of Appeal inEnvironmental Defence Society Inc v South Pacific Aluminium Ltd. 10 He said:11Normally [discovery] is readily obtainable in litigation and often it is essential to enable justice to be done. If parties such as the present plaintiffs were denied all access to the respondents' documents it could in practice be virtually impossible to challenge an Order in Council under the National Development Act on any grounds going to the reasons for the Order. The Act itself recognises, however, that such Orders in Council should be subject to judicial review. There are limits to the scope of judicial review. In general terms they are well known and they do not call for discussion now; but we do not think that it would accord with the intention of Parliament, embodied in the Act, if the Court were to shackle itself by denying access to highly relevant evidence. These cases are of major public importance. Public confidence in the administration of the Act and in judicial safeguards would be shaken if the Court were to confine the scope of review so narrowly as to invite suggestions of rubber-stamping.[32] In that case the question was whether the Court had any jurisdiction to order discovery against the Crown in judicial review proceedings, a different and more fundamental issue than the one that arises in this case. Notwithstanding these differences, the concluding observations, in particular, bear on the questions arising on this application and support the conclusion that discovery should be ordered.Result[33] There is an order for discovery as sought by the plaintiff.[34] There are timetable orders for discovery and inspection in accordance with the memorandum of counsel dated 1 December 2015 and the order of this Court of 3 December 2015. The practical effect, given the date of this judgment, is:(a) The first defendant is to provide discovery no later than 11 April2016.(b) The plaintiff is to complete inspection 20 working days after the date on which discovery is served by the first defendant, which therefore is10 Environmental Defence Society Inc v South Pacific Aluminium Ltd [1981] 1 NZLR 146 (CA).11 At [150].to be no later than 10 May 2016 if discovery is not provided before 11 April.______________________________ Woodhouse JSolicitors: Mr D Salmon, LeeSalmonLong, Solicitors, AucklandMr A Martin, Crown Law, Wellington