CRICHTON & ANOR v NASERI & ORS [2019] NZHC 546

CRICHTON & ANOR v NASERI & ORS [2019] NZHC 546 [26 March 2019]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2018-404-2115[2019] NZHC 546IN THE MATTER OF The Samoan Speaking Fellowship of theAvondale Union ParishBETWEEN PERELINI CRICHTON and VAAIMALUSI'ITIA as representatives of the SamoanSpeaking Fellowship at Avondale UnionParishProposed Plaintiffs/ApplicantsAND TALAOALI'I SAMOA NASERIProposed First Defendant/RespondentMALIEGEGAOI AUMUAProposed Second Defendant/RespondentOLINDA WOODROFFE and COLIN JOHNWOODROFFE as partners ofWOODROFFE LAW PARTNERSHIPProposed Third Defendants/RespondentsHearing: 20 March 2019Appearances: M S P Pang for the Proposed Plaintiffs/ApplicantsI P Tongatule for the Proposed First and SecondDefendants/RespondentsJ Stafford for the Proposed Third Defendants/RespondentsJudgment: 26 March 2019JUDGMENT OF POWELL J[Redacted version]This judgment was delivered by me on 26 March 2019 at 4 pm pursuant toR 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:[1] The proposed plaintiffs/applicants, Perelini Crichton and Vaaimalu Si'itia ("theapplicants"), have applied for pre-commencement discovery from the proposeddefendants/respondents ("the respondents").[2] The application arises out of earlier proceedings1 in which the issue waswhether a particular group had left a particular church congregation by a particulartime (December 2013). The second named applicant was a defendant in thoseproceedings, while the first and second respondents were part of the group found tohave left the congregation at the relevant time, and who in the earlier proceedings wererepresented by the first named third respondent, Olinda Woodroffe of the WoodroffeLaw Partnership.[3] In his judgment on those earlier proceedings Moore J recorded:2In or about August 2013 Mr Naseri approached Mr Tuia and requested that hesign an account signatory authorisation form to remove Mr Su'a as anauthorised signatory and replace him with Mr Aumua. Mr Tuia, whose graspof English and understanding of business matters is limited, said he signed theform because he trusted Mr Naseri. Up until that time he and Mr Naseri hadbeen senior officers within the SSF [the Samoan Speaking Fellowship] andboth had been strong and vocal critics of Rev Amosa. According to Mr Tuia,the week after Mr Naseri obtained Mr Tuia's signature Mr Naseri "changedsides" and joined the plaintiffs' group.Mr Naseri denied any subterfuge or dishonest conduct in relation to thistransaction. He said the removal of Mr Su'a as a signatory and replacing himwith Mr Aumua was because Mr Su'a had been removed as Vice Secretary atthe May Annual General Meeting. While I am not required to decide this issuethe consequence of Mr Naseri and Mr Aumua being authorised signatories ofthe accounts is that the plaintiffs' group has been able to control the accountsformerly operated by the SSF. Significantly the funds in these accountsincluded contributions made by the wider SSF which included members fromboth the plaintiffs' and defendants' groups. Any suggestion the funds in theseaccounts were derived solely from the generosity of the plaintiffs' group ismisleading. The funds represent the cumulative efforts and generosity of thewhole of the SSF.Over the period since the plaintiffs' group has controlled these accounts some$70,000 has been withdrawn for unknown purposes and with the exception ofa limited number of automatic payments the SSF has made no contribution tothe AUP's [the Avondale United Parish's] joint general account with theconsequence the ESF [the English Speaking Fellowship] has carried the1 Matamu v Si'itia [2016] NZHC 2516. The judgment was subsequently upheld in the Court ofAppeal, Matamu v Si'itia [2017] NZCA 482 and leave to appeal was refused by the Supreme CourtMatamu v Si'itia [2018] NZSC 14.2 At [42]–[44].burden of meeting the liabilities for the whole of the AUP including thepayment of substantial insurance and levy payments.[4] The primary purpose of the present pre-commencement discovery applicationis to obtain further information with regard to the transactions that took place in theseaccounts from the time Mr Aumua was appointed as a signatory until the accountswere frozen by order of this Court in June 2014. In addition, the applicants also seekdocumentation relating to various chattels, including instruments belonging to thecongregation's brass band. Finally, the applicants also seek pre-commencementdiscovery against Mrs Woodroffe's firm in order to obtain information about the originof the funds used to pay her accounts.The legal basis for the application[5] The applicants rely on r 8.20 of the High Court Rules 2016 which allows forparticular discovery before a proceeding is commenced. In Welgas Holdings Ltd vPetroleum Corporation of NZ Limited,3 McGechan J held that to obtain an order underwhat is now r 8.20 three things have to be established:(a) the intending plaintiff is or may be entitled to claim relief againstanother person;(b) it is impossible or impracticable for the plaintiff to formulate the claimwithout the document sought; and(c) there are grounds for belief that the documents may or have been in thepossession of the person concerned.[6] In the present case it is clear that different considerations apply to theapplicants' application in respect of the first and second respondents and theapplication in respect of the third respondents. These will now be considered in turn.3 Welgas Holdings Ltd v Petroleum Corporation of NZ Limited (1991) 3 PRNZ 33 (HC).The application against the first and second respondents[7] Having heard the submissions of counsel and considered the results of theearlier proceedings, including in particular the passages quoted above,4 I am satisfiedthat an order for particular discovery before the proceeding is commenced isappropriate with regards to the various bank accounts to which the first and secondrespondents ended up as authorised signatories around August 2013. First, thecircumstances outlined by Moore J clearly give rise to a real probability of a claimagainst someone, and in particular the first and second respondents as the authorisedsignatories of the accounts. Likewise, I accept it is impossible or impractical to tryand formulate the claim against the first and second respondents without the benefitof knowing what amounts were received and/or paid out. Finally, as the authorisedsignatories to the accounts there are clearly substantial grounds for belief that the firstand second respondents would be in possession of the necessary documentation.[8] In the course of the hearing Mr Pang refined what was sought from the firstand second respondents in respect of the accounts being:Documents including bank statements relating to [specific designated bankaccounts], run by the Samoan Speaking Fellowship (and subsequently coveredby the Freezing Order in CIV-2014-404-00170 Matamu & Ors v Si 'itia & Ors)identifying or otherwise establishing when, from whom, and how much waspaid into the accounts and when, to whom, how much and for what purposemonies were paid out of the accounts between 1 July 2013 and 19 June 2014.[9] Following discussion of this re-formulation Mr Tongatule took instructionsfrom the first and second respondents and confirmed that they did not oppose ordersin those terms being made, but only for the period between July and December 2013.[10] It was somewhat difficult to follow Mr Tongatule's reasoning for thisdistinction but it appeared to be based somewhat on an argument rejected in theprevious proceedings that an identity known as the Pacific Islands Church Avondalehad in fact been in existence for some considerable period before 2013. Even if thisargument had not been rejected by Moore J in the earlier proceedings it is howeverdifficult to see it could have any relevance to the present application. It appears to becommon ground that the fourteen accounts in respect of which the particular discovery4 At [3] of this judgment.orders are sought belonged to the original congregation and the issue is whether themonies in those accounts have been used for purposes that were not intended orotherwise approved. It is therefore difficult to see why an order should cease inDecember 2013 as opposed to June 2014 when the freezing orders were put in place,when the first and second respondents remained in control of the congregation'saccounts notwithstanding they had by that time been found to have left thecongregation. I therefore have no hesitation in concluding the order should cover theperiod between 1 July 2013 and the making of the freezing orders on 19 June 2014.[11] The position is different with regard to the provision of documentation relatingto the various chattels. As Mr Pang accepted in argument, there is in fact no evidencebefore the Court to suggest either the first and second respondents had or have anyparticular knowledge with regard to the chattels and therefore insufficient grounds toestablish any belief that relevant documents may be or have been in their possession.Following this discussion Mr Pang appropriately withdrew the application as it relatedto those chattels and no order was accordingly required on that part of the application.Application for particular discovery against third respondents[12] In his submissions filed in support of the application, Mr Pang suggested thatthe orders were necessary against the third respondents because Mrs Woodroffe hadinduced a breach of contract. Following discussion with Mr Pang it appeared thatwhat was suggested was that Mrs Woodroffe had somehow induced those leaving thecongregation to leave. It was apparent however there was absolutely no evidentialfoundation for such a suggestion, nor indeed how, even if there was, it could give riseto any circumstance where the trust account and other billing records of WoodroffeLaw Partnership relating to the earlier proceedings might conceivably be relevant.[13] Mr Pang subsequently went on to suggest that the information may be relevantif it contained correspondence as between those trying to leave and Mrs Woodroffethat would provide evidence of an intention to utilise the money that is held in thefourteen accounts for the purposes of paying Mrs Woodroffe's legal fees. Once againthere is absolutely no evidence whatsoever to provide any factual foundation for suchan allegation and, on the contrary, there is nothing before me to suggest thatMrs Woodroffe was other than the solicitor and counsel for the leaving group.[14] The authorities are clear that this process is not to be used as a fishingexpedition5 and in the absence of any factual foundation whatsoever for thesuggestions made by Mr Pang there can be no grounds for belief that the types ofdocuments Mr Pang was after may exist let alone be in the possession ofMrs Woodroffe or the Woodroffe Law Partnership.Decision[15] The proposed first and second defendants/respondents are, on or before 10April 2019, to provide sworn affidavit(s) of documents stating whether any documentsreferred to are or have been in their possession, custody or power and, if the documentshave been but no longer are, when they parted with them and what has become ofthem. These documents are:Documents including bank statements relating to [specific designated bankaccounts], run by the Samoan Speaking Fellowship (and subsequently coveredby the Freezing Order in CIV-2014-404-00170 Matamu & Ors v Si 'itia & Ors)identifying or otherwise establishing when, from whom, and how much waspaid into the accounts and when, to whom, how much and for what purposemonies were paid out of the accounts between 1 July 2013 and 19 June 2014.[16] Following the filing of the affidavit of documents, inspection is to becompleted as between the applicants and the first and second respondents by 1 May2019. The costs incurred by the first and second respondents on the preparation of theaffidavit of document and inspection are to be met by the applicants on asolicitor/client basis, together with reasonable disbursements.[17] The application for particular discovery before proceeding commenced againstthe third respondents is dismissed. Leave is reserved to reapply for particulardiscovery before proceeding commenced against the third respondents should groundsbe disclosed following discovery and inspection of the documents held by the first andsecond respondents.5 See, for example, Welgas, above n 3, at [43].[18] Although the third respondents abided the decision of the Court it wasappropriate that they were represented in this and earlier hearings given the lack ofclarity with regard to the orders sought against them. As a result, the third respondentsare entitled to costs in the application which I fix in the sum of $1,000 to cover allattendances in respect of the application. There are otherwise to be no costs payableon the application._______________________________Powell J