DOWNEY v QUIRK [2021] NZHC 2778

DOWNEY v QUIRK [2021] NZHC 2778 [15 October 2021]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2018-409-000737[2021] NZHC 2778IN THE MATTER of the estate of PETER EDWARDCULMER READBETWEEN RICHARD WILLIAM DOWNEY andTRUST GROUP LIMITED as the trustees ofST JOHN'S TRUSTPlaintiffsAND TREVOR KINRED QUIRK as trustee andexecutor of the estate of PETER EDWARDCULMER READDefendantHearing: 7 October 2021Appearances: M S Smith and R Mofassir for PlaintiffsH D P van Schreven and J D Kaye for DefendantJudgment: 15 October 2021JUDGMENT OF ASSOCIATE JUDGE PAULSENThis judgment was delivered by me on 15 October 2021 at 4.30 pmpursuant to Rule 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:[1] The plaintiffs consider the discovery process has seriously miscarried. Theyhave filed a wide-ranging application for orders the defendant file a correctingaffidavit to remedy failures to comply with the Listing and Exchange Protocol in pt 2of sched 9 of the High Court Rules 2016 (the Protocol), for particular discovery, andfor inspection of documents.[2] As a result of discussions prior to, during and following the hearing counselhave resolved almost all the issues. I have been asked to record the agreements asconsent orders. There are only three issues upon which agreement has not beenreached.Background[3] The defendant is the executor of the estate of Peter Read. The plaintiffs havebrought this claim to recover sums claimed to be owing for services provided toMr Read during his lifetime, primarily in relation to the settlement of a matrimonialproperty dispute and insurance claims. The case has a degree of complexity, not leastbecause the plaintiffs argue that in part their remuneration was to be determined byreference to the settlements achieved for the insurance claims and that Mr Read andthe defendant owed them fiduciary duties to maximise the settlements. The plaintiffswill argue the defendant breached those duties in the manner in which settlementsoccurred.[4] The discovery process has been fraught. The parties were originally orderedto provide tailored discovery by 27 March 2020 but there have been manyadjournments of case management conferences to address the plaintiffs' concerns thatthe defendant's discovery is inadequate. The defendant filed affidavits of documentsdated 24 June 2020 and 17 September 2020. In late November 2020, the defendant'scounsel advised that a hard drive on a computer belonging to Mr Read, likely tocontain business records and communications relevant to this proceeding, requiredrestoration. In fact, steps had not been taken to preserve documents on Mr Read'scomputer which had been "cleaned". The defendant filed a third affidavit ofdocuments dated 17 March 2021. In it the defendant sets out the circumstances underwhich Mr Read's computer was cleaned and steps taken to recover relevant documentsfrom the computer hard drive.The first issue[5] Paragraph 1(a) of the plaintiffs' application seeks an order that the defendantfile an amended affidavit of documents correcting the affidavit of 17 March 2021 soas to comply with the requirements of the High Court Rules. The plaintiffs say, interalia, the affidavit fails to list or otherwise identify the documents required to bediscovered in a schedule that complies with r 8.16 and clauses 6, 7, 8 and 11 of theProtocol.[6] The defendant does not dispute that the affidavit does not comply with therequirements of the Rules. Notably, schedule "A" of pt 1 of the affidavit does not listindividual documents, rather it is an index of reconstructed files which, I understand,contain 6,643 documents. The defendant's position is that due to the volume andformat of the files it is difficult to list documents strictly in accordance with theProtocol. It contends it is enough the listed files contain everything potentiallyrelevant that can be obtained from the computer hard drive.[7] In the absence of any dispute that the affidavit does not comply with therequirements of the Rules, the issue for me to determine is whether that matters. Inmy view, it plainly does.[8] In Minister of Education v James Hardie New Zealand, the plaintiff applied foran order that a defendant, Carter Holt Harvey Ltd, file a new list of documentscomplying with the Protocol.1 The consequences of the defects were said to includethat documents could not be easily grouped or identified by reference to the listhampering the plaintiff's preparation for trial. Carter Holt argued that its list wascompliant in many respects, the suggestion of significant prejudice to the plaintiff wasnot credible, reliance on the list of documents rather than fully text searchable copiesof the underlying documents had "gone out of fashion", and that it would bedisproportionate to require a compliant list to be prepared.1 The Minister of Education v James Hardie New Zealand Ltd [2020] NZHC 82.[9] Fitzgerald J said the default position was that the plaintiff was entitled to a listthat met the Protocol's requirements.2 She emphasised compliance with the Protocolis not optional. The Protocol provides a detailed and considered "baseline" to whichall parties should be working when completing their discovery.3 Further she said:[31] I agree with Carter Holt that being able to electronically search acrossPDF document images is a powerful tool, particularly when looking to collatedocuments by topic or issue. But there are also real benefits to be able to sortand collate documents from a parties' electronic discovery list, such as by date,author and recipient. The former will be important when consideringdocuments on particular topics arising at specific points in time. The lattermight be especially useful when preparing cross-examination. The evidenceon the present application demonstrates that at least in some respects, CarterHolt's reliance on metadata to populate document description fields makessuch sorting difficult.[32] I am also not persuaded that to order Carter Holt to produce adiscovery list which complies with the Protocol is disproportionate,particularly in a case of this size and scale. Discovery, while at times adifficult and tedious task for parties and their advisers, is one of the mostcrucial aspects of civil proceedings, together with witnesses' oral evidence attrial. It enables the relevant contemporaneous documentary record to bebefore the parties and the Court, and is often decisive of issues to bedetermined at trial. And where a very large number of documents have beendiscovered, it is vital the opposing party can work with and manipulate thedata set in a meaningful way. That is the very purpose of the Protocol'srequirements.[10] The Protocol provides a common standard for dealing with the listing andexchange of documents promoting uniformity and consistency and avoidingunnecessary costs and delay to proceedings. Although the defendant submits thateverything potentially relevant has been discovered in the listed files, in the absenceof the proper enumeration and description of each document in a convenient sequence,the plaintiffs cannot know that to be the case. There is also likely to be prejudice tothe plaintiffs in conducting a review of the more than 6,600 documents and suchprejudice may continue as the proceeding progresses to the briefing of evidence andpreparation for the trial. It follows the order sought by the plaintiffs should be made.[11] Counsel advise there is disagreement as to the date by which the furtheraffidavit should be filed. The plaintiffs contend the further affidavit should be filedby 2 December 2021. The defendant asks to be given until 16 December 2021 to do2 At [28].3 At [34].so. Given the large number of documents involved and the likelihood the defendantmay need to seek specialist assistance, it should be given until 16 December 2021 tofile the further affidavit. This case is not to be heard until October 2022 so I cannotsee any prejudice to the plaintiffs in this.Second issue[12] At para 1(c)(xiv) of the application, the plaintiffs seek an order that thedefendant make available for inspection copies of the following:Documents related to contact between the Defendant and third parties (suchas White Fox & Jones, Mr Tom Rose, Mr Paul Black, Dr Rodney Harrison,IAG, EQC, Mrs Rosemary Read, and Ms Samantha Read) concerningdiscovery in these proceedings.[13] For the plaintiffs, Mr Smith recognises that such documents would ordinarilybe privileged but he submits that given the difficulties associated with the discoveryprocess, an exceptional order is required. He says, from the plaintiffs' perspective,most important are documents relevant to the circumstances in which Mr Read'scomputer was cleaned, who instructed that and why. Such documents are, he contends,sufficiently relevant to the issue of the defendant's understanding of his fiduciaryobligations which extended to preserving the hard drive and maximising the fruits ofthe insurance litigation.[14] In Hoyle v Hoyle the Court considered whether to order a defendant to makean affidavit of documents going to the adequacy of searches for documents theplaintiffs identified as relevant but missing from discovery.4 Clarke J held thatdocuments going to enquiries made by the defendant's solicitors were privileged butthat was not an end of the matter. As she was not satisfied the defendant's affidavit ofdocuments adequately described the steps taken to obtain relevant documents, shedirected the defendant to file a further affidavit that complied with r 8.15particularising the steps that had been taken in fulfilment of the defendant's obligationto make a reasonable search for the documents in question.4 Hoyle v Hoyle [2015] NZHC 3001.[15] Here, the defendant has set out in sufficient detail the circumstances relating tothe cleaning of the hard drive and steps taken to restore it in the affidavit of 17 March2021. While I accept the plaintiffs are not satisfied with the explanations provided,they can if they wish issue interrogatories or cross-examine at trial. I do not make theorder sought.Third issue[16] Counsel agree that costs of the application should be reserved. However, theplaintiffs say I should record in this judgment they are the successful party for costspurposes. The defendant argues that the Court cannot make such an assessment at thisstage.[17] All issues of costs are discretionary and the exercise of that discretion in thiscase will be influenced by the outcome of the steps the parties have agreed to take asset out below. I see no utility in making any statement identifying the successful partyuntil that is known.An additional matter[18] Counsel should confer and submit a memorandum of any variations requiredto the existing timetable as a result of the orders made below.Result[19] By 16 December 2021, the defendant shall file and serve an amended affidavitof documents in substitution for its affidavit of 17 March 2021 that complies withr 8.15 and the Protocol. As requested by counsel, I also order the affidavit shall list(to the extent that they have not already been listed in accordance with the High CourtRules) the documents that are the subject of the agreements recorded below as well asall relevant documents that the defendant has identified from Mr Read's computer harddrive, and include editable Excel spreadsheets as provided for in counsels' agreement.[20] By consent, orders are made that within 10 working days:(a) The defendant is to make enquiries of Young Hunter Lawyers as towhether it retains a copy of any emails dated 26 April 2018 from TrevorQuirk to Karen Welsford in relation to the Read v IAG proceeding, asreferred to in the email chain at paginated page 156 of the exhibit toMr Downey's affidavit of 9 September 2021 ("Mr Downey's firstaffidavit"); and if so to request Young Hunter to provide copies of anysuch documents to the defendant and through the defendant to theplaintiffs by way of discovery;(b) The defendant is to provide by way of discovery a copy of the emaildated 16 April 2018 that is referred to in paragraph 22(a) of Mr Quirk'saffidavit of 9 September 2021;(c) The defendant is to inquire of Samantha Read whether she holds copiesof any correspondence between 7 February 2017 and 30 April 2017between her and the defendant that relate to the NZI Documentdiscussed in paragraph 24(c) of Mr Downey's first affidavit exhibitedas BOD 0439-0466; and if so to request Ms Read to provide copies ofany such documents to the defendant and through the defendant to theplaintiffs by way of discovery;(d) The defendant is to provide by way of discovery copies of alldocuments held by or within the control of the defendant that relate toany proposed and/or agreed settlement, including copies of thedocuments recording the agreed terms of any settlement(s) and copiesof documents prepared for the purposes of settlement discussionsincluding at mediation(s);(e) That the undisputed orders sought at 1(b)i.-vi. of the plaintiffs'application are made, being provision by the defendant of copies of thefollowing documents:(i) All attachments to the document discovered as TQ.1464;(ii) All attachments to the document discovered as TQ.1637;(iii) Any responses to the document discovered as TQ.1640;(iv) All attachments to the document discovered as TQ.1662 (otherthan TQ.1663);(v) All attachments to the document discovered as TQ.1937;(vi) All attachments to the document discovered as TQ.1939.[21] The parties further agree and I order by consent:(a) The plaintiffs' forensic expert, Computer Forensic Consultants Ltd, isto have access to all files that were extracted before the hard drive toMr Read's computer was destroyed, with leave reserved to the plaintiffsto apply for consequential directions if and to the extent that agreementcannot be reached (within 10 working days of the issue of thisjudgment) on a practical process to be followed for that purpose. Theissue of the defendant's responsibility for the plaintiffs' costs associatedwith computer forensic work is reserved, and is to be determined after,and in light of, that work;(b) Within five working days the defendant will confirm whether it hascomplete files (including all electronic and pre-existing hardcopydocuments) of Wynn Williams; Rodney Harrison QC; and White Fox& Jones, and, should it not, it will request copies of these. Thedefendant consents to providing these files to the plaintiffs. Plaintiffs'counsel consents to collecting all such files from the defendant's office.(c) Within five working days the defendant will make (or if it cannot make,to take all steps available to it to get relevant entities to make) a requestor requests under the Privacy Act 2020 to EQC and to IAG for copiesof all documents held on their files in respect of the InsuranceProceedings and underlying claims. The defendant is to provide copiesof all documents provided by EQC and IAG in response to suchrequests to the plaintiffs immediately on receiving the same. Theparties are agreed that these documents do not need to be reviewed forthe purposes of being incorporated within any further discoveryaffidavit that is sworn.[22] Costs are reserved._______________________O G PaulsenAssociate JudgeSolicitors:GCA Lawyers, ChristchurchClark Boyce, Christchurch