SIGNUM HOLDINGS LIMITED v OKUORA HOLDINGS LIMITED [2023] NZHC 2252

SIGNUM HOLDINGS LIMITED v OKUORA HOLDINGS LIMITED [2023] NZHC 2252 [18 August 2023]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2023-409-152[2023] NZHC 2252BETWEEN SIGNUM HOLDINGS LIMITEDApplicantAND OKUORA HOLDINGS LIMITEDRespondentHearing: 15 August 2023Appearances: N F Flanagan and P J O'Boyle for ApplicantD R Kalderimis and T J Powell for RespondentJ A Craig and J I Kerkin for The a2 Milk Company Limited (non-party)B G Frowein for Synlait Milk Limited (non-party)T Hunter for National Business Review (by VMR)Judgment: 18 August 2023JUDGMENT OF ASSOCIATE JUDGE PAULSENThis judgment was delivered by me on 18 August 2023 at 4.15 pmPursuant to Rule 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate[1] This judgment deals with an application by two non-parties for a non-publication order and an order limiting access to the court file.[2] Signum Holdings Ltd (Signum) has applied to set aside a statutory demandissued by Okuora Holdings Ltd (Okuora). Signum is a holding company and itsoperating subsidiary is Trust Codes Ltd (TCL). TCL sells technology that permitsdigital tracing of products through supply chains. One of its customers was SynlaitMilk Ltd (Synlait) and, through Synlait, The a2 Milk Company Ltd (a2MC).[3] At relevant times, Maury Penno was the sole director of Signum and ashareholder and director of Okuora. Her husband, John Penno, was also a shareholderand director of Okuora. He was also the founder, a director and shareholder in Synlait.[4] Okuora invested in Signum but disagreements arose between them. Okuoraappointed receivers to Signum on 22 January 2022.[5] Okuora's statutory demand was issued in respect to an amount of $500,000 thatSignum agreed to pay under a Deed of Agreement to Pay (DAP), which was one of asuite of agreements entered into to settle Signum's indebtedness and end thereceivership.[6] Although this does not do justice to the quality of counsel's arguments,Signum's case is that it is fairly arguable that Okuora's statutory demand should be setaside as it was obtained by undue influence. The foundation for this assertion is thealleged non-disclosure by Ms Penno of an email written by Mr Penno to a2MC sometime prior to the parties entering into the DAP. Signum says a2MC was one of itscritical commercial partners, Ms Penno had a duty to disclose the email, the emailundermined the relationship with a2MC, and it would not have entered into the DAPhad the email been disclosed.[7] Signum's application is opposed and was heard on 15 August 2023.[8] Before the hearing proper commenced, I heard the application by Synlait anda2MC seeking a non-publication order and an order restricting access to the court file.They are concerned that their confidential and commercially sensitive information willbe disclosed in the proceeding.[9] Specifically, the orders sought are:(a) an order prohibiting the disclosure or publication outside the courtwithout the prior permission of the Judge of:(i) any references to, or communications involving, a2MC, itsemployees, directors and/or executive officers;(ii) any reference to a2MC's commercial arrangements with theparties to this proceeding or otherwise;(iii) any references to, or communications involving, Synlait, itsemployees, directors and/or executive officers; and(iv) any references to Synlait's commercial arrangements with theparties to this proceeding or otherwise (including with TCL);and(b) an order that any request by third parties for access to the file be notifiedby the registry to a2MC and to Synlait so they have an opportunity tobe heard on any such application (in addition to the existing orderalready in place that "[t]he file not be accessed without the leave of aJudge, with any requests by third parties for access to the file to benotified by the registry to the parties");1 and(c) an order reserving leave to the parties, a2MC and Synlait to apply tothe Court for variation of the orders on seven days' notice.[10] The application is not opposed by Signum or Okuora.1 Signum Holdings Ltd v Okuora Holdings Ltd HC Christchurch CIV-2023-409-152, 27 April 2023(Minute).[11] I heard from Tim Hunter, a senior reporter with the National Business Review.He has also made a request to access the court file. That is yet to be determined. Healso spoke in opposition to the application for a non-publication order.[12] After hearing from counsel and Mr Hunter, I made an interim non-publicationorder on the basis that I would consider the submissions and issue a ruling later. Thisis that ruling.The law and submissions[13] The High Court has inherent jurisdiction to make a non-publication order incivil cases. The starting point is a presumption of open justice, and any departure fromthat principle is justified only to the extent that the Judge reasonably believes it isnecessary to serve the interests of justice. The party seeking such an order must showspecific adverse consequences that are sufficient to justify an exception to thefundamental rule of open justice. The standard is a high one but does not requireexceptional or extraordinary circumstances.2[14] I was referred to two cases where it was submitted that non-publication orderssimilar to those requested have been made. These were Glaister v AmalgamatedDairies Ltd,3 and Ridge v Parore.4 I note, however, that in both instances the ordersmade were more limited than had been sought, reflecting the principle of open justiceand the freedom to report proceedings.[15] Synlait and a2MC argue that it is appropriate to make the orders soughtbecause:(a) they are not parties to this proceeding, nor is their conduct in issue;(b) the level of detail provided in the affidavits filed relating to themessentially form part of the background narrative to the dispute only;2 Erceg v Erceg [2017] 1 NZLR 310 at [2]–[3].3 Glaister v Amalgamated Dairies Ltd [2003] NZAR 149 (HC).4 Ridge v Parore [2013] NZHC 2335, [2013] NZAR 1355.(c) they are legitimately concerned to keep their confidential andcommercially sensitive information private;(d) they will suffer prejudice if the information was published to thirdparties;(e) the disclosure of the information may lead to speculation about thecompanies through incomplete or misleading reporting, and requirethem to correct the speculation in circumstances where a marketannouncement would not otherwise be required;(f) there is no public interest in making their confidential informationpublicly available;(g) this proceeding is at an early stage and the principle of open justice doesnot have as much weight as it might at a later stage of the proceeding;(h) this proceeding is analogous to an interlocutory proceeding whereprinciples of privacy and confidentiality have greater weight; and(i) the failure to make the orders sought may cut across confidentialityorders made in a related proceeding between TCL and Synlait.[16] Mr Hunter emphasised the principle of open justice, and that this is acommercial case. He also noted that a related legal proceeding in which Synlait andTCL are engaged has been the subject of an article in The National Business Reviewon 4 July 2023, and to that extent the "horse has already bolted".My analysis[17] I do not consider there is any justification for the making of a non-publicationorder in respect to the hearing. The orders sought are exceedingly broad and go wellbeyond what could be required to protect any commercially sensitive or confidentialinformation of Synlait and/or a2MC. Indeed, given the centrality of correspondenceto and from a2MC to the issues I will have to decide, it would be difficult to craft ameaningful judgment if such orders were made.[18] While I accept and have full regard to the fact that Synlait and a2MC are non-parties, have no direct interest in the outcome of the litigation and would prefer not tobe associated with it, those matters alone do not justify the making of a non-publicationorder.[19] It is also not correct that this proceeding is at an early stage, as my decisionwill finally determine it (subject to any appeal). The proceeding is not analogous toan interlocutory application. I am also satisfied that I am not jeopardisingconfidentiality orders made in another proceeding if I do not make the orders sought.[20] Most importantly, there are two other factors that weigh heavily against theapplication for a non-publication order. First, counsel for the parties were sensitive tothe concerns of Synlait and a2MC and avoided in the presentation of their submissionsmatters that might be considered commercially sensitive or confidential. I have gonethrough their written submissions and my detailed notes of the hearing, and I can seenothing in them that requires or would justify the making of a non-publication orderin respect to the hearing.[21] Second, I am prepared to accept that there is before the Court some informationthat Synlait and a2MC would consider commercially sensitive and confidential. Thatinformation is contained in affidavits that have been filed to which a non-party cannothave access as of right.5 In order to protect the interests of Synlait and a2MC, andpreserve confidentiality with regard to information that was not referred to in opencourt, an order should be made that access to the court file not be allowed to a non-party except by order of a High Court Judge, and that Synlait and a2MC are entitledto be heard on any such application.5 Senior Courts (Access to Court Documents) Rules 2017, r.11. I have not gone on and consideredthe application by Mr Hunter to access the Court file as it has been held in Boult v Crux PublishingLtd [2022] NZCA 473 that an Associate Judge cannot determine an application to access a Courtfile made under the Senior Courts (Access to Court Documents) Rules 2017.Result[22] The non-publication orders made on 15 August 2023 are withdrawn.[23] There shall be an order that no non-party shall access the court file withoutorder of a High Court Judge. The Registrar shall refer any such request to access thecourt file to the parties and to Synlait and a2MC so that they may be heard in relationto it before the application is determined.[24] In respect to the application by Mr Hunter to access the court file, this is nowto be referred to a High Court Judge for determination. The Registry is to refer theJudge to both the Joint Memorandum of Counsel dated 25 May 2023 and theSubmissions of Counsel on behalf of a2MC and Synlait dated 11 August 2023. Anyfurther submissions by any party should be filed within seven days.[25] I reserve leave to apply to vary these orders by memorandum on seven days'notice.[26] There shall be no order as to costs._______________________O G PaulsenAssociate JudgeSolicitors:Meredith Connell, AucklandHarmos Horton Lusk Limited, AucklandSimpson Grierson, AucklandLane Neave, ChristchurchCopy to:D Kalderimis/T Powell, Auckland