TAUA v TAHI ENTERPRISES LTD [2020] NZHC 2899

TAUA v TAHI ENTERPRISES LTD [2020] NZHC 2899 [4 November 2020]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2019-404-001589[2020] NZHC 2899BETWEEN TE WARENA TAUA, GEORGE HORIWINIKEREI TAUA, NGARAMAWALKER and MIRIAMA TAMAARIKI astrustees of the Te Kawerau Iwi TribalAuthorityPlaintiffsAND TAHI ENTERPRISES LIMITEDFirst DefendantDIANNE LEESecond DefendantTAO (MARTIN) LIThird DefendantHearing: 7 August 2020Appearances: J S Langston for the PlaintiffsC Upton for the DefendantsJudgment: 4 November 2020JUDGMENT OF ASSOCIATE JUDGE GARDINERThis judgment was delivered by me on 4 November 2020 at 3.30 p.m.pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDate.......................................Solicitors:Shieff Angland, AucklandLeeSalmonLong, AucklandIntroduction[1] This is an application by the defendants, under r 10.12 of the High Court Rules2016, that this proceeding (relating to breach of confidence) and proceedingCIV-2017-404-435 ("the earlier proceeding") are consolidated and case managedtogether, and that the two proceedings be tried at the same time. The alternativeapplication sought in the notice of application (that this proceeding be stayed untilafter determination of the earlier proceeding) was not pursued at the hearing.[2] The plaintiffs oppose the defendants' application and contend thatconsolidating the proceedings or having them case managed together will prejudicethe plaintiffs and will delay progressing this proceeding.[3] An interlocutory application in the earlier proceeding was heard with thisapplication. That application, brought by the first and second defendants, soughtparticular discovery of any registers of the individual members of the Te Kawerau āMaki iwi ("the Iwi") in the control of the plaintiffs. They also sought discovery ofother specific documents and objected to redactions made and confidentiality claimed.The outcome of that application is the subject of a separate judgment.The earlier proceeding[4] The first and second defendants in this proceeding, Tahi Enterprises Ltd("Tahi") and Dianne Lee ("Mrs Lee"), are the first and second plaintiffs in the earlierproceeding. The third defendant in this proceeding, Tao (Martin) Li ("Mr Li"), isMrs Lee's husband. Mr Li is not a party in the earlier proceeding.[5] The plaintiffs in this proceeding, the trustees of the Te Kawerau Iwi TribalAuthority ("the Tribal Authority"), are the second defendants in the earlier proceeding.[6] The earlier proceeding arises out of three alleged agreements involving Tahi,Mrs Lee, Te Warena Taua ("Mr Taua") and the Iwi. The first of these was a jointventure agreement dated 27 June 2007 ("the 2007 Agreement"). The named parties tothe 2007 Agreement were Tahi and "Te Kawerau ā Maki". Mrs Lee signed thedocument for Tahi, and Mr Taua and Piki Taylor for the Iwi. Under the 2007Agreement, Tahi agreed to provide funding of up to $2 million "in support ofTe Kawerau's Treaty claims process". In consideration for receiving the sums, the Iwiagreed that Tahi would be its exclusive partner in all commercial developmentsundertaken using the proceeds of the settlement of the Iwi's Treaty of Waitangi claims.Profits would be shared 35 per cent to Tahi and 65 per cent to the Iwi.[7] The second agreement was signed on 22 July 2008 and purported to vary the2007 Agreement ("the Variation Agreement"). The signatories to the VariationAgreement were Mrs Lee on behalf of Tahi, and Mr Taua and Hariata Ewe on behalfof the Iwi. Under that agreement, Tahi agreed to pay further instalments on certaindates, and the Iwi agreed to repay the sums on a certain event.[8] In the third agreement, Mr Taua agreed to assign to Mrs Lee his four per centinterest in the Iwi's treaty settlement, in return for ownership of a property in Mangerewhere he had been living and financial assistance of $220,000 ("the Mangere PropertyAgreement").[9] The Iwi reached a settlement with the Crown in relation to its historical Treatyof Waitangi claims on 22 February 2014. This settlement came into effect through theTe Kawerau ā Maki Claims Settlement Act 2015.[10] In September 2016, the Iwi, the Tribal Authority and Mr Taua purported tocancel the 2007 Agreement and the Variation Agreement. Tahi and Mrs Lee filed theearlier proceedings.[11] Tahi and Mrs Lee's causes of action in the earlier proceeding are:(a) Damages for breach of the 2007 Agreement and the VariationAgreement (first cause of action).(b) In the alternative, unjust enrichment and equitable compensation(second cause of action).(c) Subrogation to the defendants' indemnity rights and a charge (thirdcause of action).(d) Specific performance of the Mangere Property Agreement or damagesin lieu of specific performance (fourth cause of action).(e) Judgment against Mr Taua for unpaid rent (fifth cause of action).This proceeding[12] This proceeding arose after the defendants' solicitors informed the plaintiffs'solicitors on 30 July 2019 that while complying with the discovery order in the earlierproceeding, the defendants had found in their possession a copy of the register ofmembers of the Iwi as at 18 December 2013. In this judgment and my judgment onthe interlocutory application for particular discovery in the earlier proceeding, I referto this document as the "List of Members", and the current database of members ofthe Iwi as the "Register of Members".[13] The defendants claimed that the List of Members was given to Mr Li byMr Taua on 19 December 2013 at a hui held by the Iwi to ratify the deed of settlementwith the Crown and the post-settlement governance entity. The List of Membersidentifies the names and addresses of 230 members of the Iwi.[14] In the correspondence that followed, the solicitors for the plaintiffs advised thatthe List of Members was confidential, the release of the List to Tahi had not beenauthorised and that Mr Taua denied giving the document to Mr Li. The plaintiffs alsocame to believe that the defendants held other documents, which the plaintiffsconsidered confidential, relating to the Tribal Authority's private and confidentialnegotiations with the Crown and the Iwi's settlement with the Crown ("the FurtherDocuments"). They say that further particulars of the documents are unknown to theplaintiffs at the time.11 Amended statement of claim dated 26 February 2020 at [20].[15] Tahi denied any wrongdoing and indicated an intention to use the List ofMembers to identify individual iwi members for the purpose of joining them asdefendants in the earlier proceeding.[16] On 8 August 2019, the plaintiffs filed this proceeding and an application for aninterim injunction restraining the defendants from using, communicating or disclosingany confidential information of the Tribal Authority that was obtained surreptitiouslyor during the course of the second and third defendants' employment with the TribalAuthority relating to the Register of Members, including the List of Members and itsbusiness (including details of the Iwi's settlement with the Crown).[17] The plaintiffs' application for an interlocutory injunction came beforeJagose J on 29 August 2019.2 On 18 December 2018, in the earlier proceeding, thetrustees of the Tribunal Authority had been ordered by Associate Judge Smith toprovide Tahi with the Register of Members following an interlocutory application forpre-commencement discovery by Tahi and Mrs Lee.3 That decision had been appealedby the Tribunal Authority trustees and cross-appealed by Tahi and Mrs Lee. In viewof Associate Judge Smith's order, the parties reached an interim accommodation. Thedefendants undertook not to use the information at issue in this proceeding in any wayuntil after the Court of Appeal's decision was made.[18] The defendants now apply to have this proceeding consolidated and casemanaged with the earlier proceeding. The defendants contend that:(a) Common questions of law and fact arise in both proceedings;(b) The rights to relief claimed in the proceedings are in respect of or ariseout of the same series of events and same series of transactions;(c) Consolidation will achieve savings in time and cost to the parties, andof judicial resources; and2 Taua v Tahi Enterprises Ltd HC Auckland CIV-2019-404-1589, 29 August 2019 (Minute of JagoseJ).3 Tahi Enterprises Ltd v Taua [2018] NZHC 3372.(d) A serious risk of inconsistent decisions will be removed if theproceedings are consolidated.[19] The plaintiffs oppose consolidation, saying that the issues in question in thetwo proceedings are separate and distinct, the events out of which relief arises aredifferent, and consolidation will delay this proceeding, not produce savings and willresult in serious injustice to the plaintiffs.Legal principles[20] At the hearing, the parties agreed on the applicable legal principles.[21] The Court may make orders that two or more proceedings be consolidated ifthe Court is satisfied:4(a) that some common question of law or fact arises in both or all of them;or(b) that the rights to relief claimed therein are in respect of or arise out of:(i) the same event; or(ii) the same transaction; or(iii) the same event and the same transaction; or(iv) the same series of events; or(v) the same series of transactions; or(vi) the same series of events and the same series of transactions; or(vii) that for some other reason it is desirable to make an order underthis rule.4 High Court Rules 2016, r 10.12.[22] The power to consolidate proceedings is a wide discretion, to be exercisedbroadly in the interests of justice.5 The Court may consolidate the proceedings onsuch terms as it thinks just; order them to be tried at the same time but withoutconsolidation; order them to be tried sequentially; or order one to be stayed until theother has been determined.[23] The Courts must "balance all the considerations of justice, convenience andexpense" in determining whether to consolidate proceedings.6 Relevant considerationsin the Court's exercise of the discretion include:7(a) whether time and cost for the parties (and the Court) will be saved;8(b) whether judicial resources will be used more efficiently;9 and(c) whether the risk of inconsistent findings (of fact and/or law) will beeliminated or reduced.10[24] The existence of some degree of commonality between the proceedings and apotential for inconsistent findings does not necessarily lead to a conclusion that theproceedings should be consolidated.11DiscussionCommon questions of law or fact — submissions[25] The parties did not have an agreed position on the issues before the Court inthis proceeding or the earlier proceeding.[26] Central to the defendants' argument for consolidation is their contention thatthe List of Members and the Further Documents came into their possession and are5 Regan v Gill [2011] NZCA 607 at [10].6 Gair v Newnhan [1934] 1 NZLR 662 (CA) at 665.7 See McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR10.12 03(3)].8 Medlab Hamilton Ltd v Waikato District Health Board (2007) 18 PRNZ 517 (HC) at [8].9 At [8].10 CallPlus Ltd v Telecom New Zealand Ltd (2015) PRNZ 14 (HC) at [51].11 Fairway Holdings Ltd v McCullagh [2019] NZCA 353 at [17] and [21].held pursuant to their rights under the agreements at issue in the earlier proceeding(that is, the 2007 Agreement, the Variation Agreement, and the Mangere PropertyAgreement (together, "the Agreements")).[27] Mr Li says that Mr Taua gave him the List of Members at the hui for him andMrs Lee to keep, in recognition of their contribution to the Iwi in relation to theAgreements, to thank them for assisting the Iwi to achieve the milestone reached thatday, and for "various other matters where we gave assistance to Mr Taua and the Iwi".[28] On that basis, the defendants maintain that an issue in this proceeding is theirentitlement to use the List of Members and the Further Documents pursuant to theirrights under the Agreements. As the nature and extent of their rights generally underthe Agreements is at issue in the earlier proceeding, this key question of fact and lawfalls to be determined in both proceedings.[29] Further, the defendants say that Mr Taua gave the List of Members to Mr Li inpursuance of the Agreements and acting as agent and/or trustee of the Tribal Authorityand the Iwi members. Mr Taua's capacity to act as agent and/or trustee of the TribalAuthority and the Iwi members is an issue in the earlier proceeding. So again, thereis commonality.[30] In addition, they contend that in the earlier proceeding they will rely on theprovision of the List of Members and Further Documents to the defendants as evidenceof the parties' performance of the Agreements. If, as the plaintiffs contend, thedocuments were obtained surreptitiously, or during the second and third defendants'employment with the Tribal Authority, that will be significant in both proceedings.[31] Mr Taua, on the other hand, denies giving the List of Members to Mr Li orsaying any of the things Mr Li asserts in his evidence. He says that he understood thepersonal and confidential nature of the information in the Register of Members andthat he would not provide that information to anyone without the permission of theIwi members concerned.[32] Rewi Newton, an employee of the Tribal Authority, has been responsible formaintaining the Register of Members since 2010. The database is stored on hiscomputer. His evidence is that the information contained in it concerning the Iwimembers is treated as personal information under the Privacy Act 1993 and is notgiven to any third parties (including trustees of the Tribal Authority) unless there isgood reason, for a specific purpose and it is done on a confidential basis. Theapplication form says that the information supplied by registrants is confidentialwithin the terms of Privacy Act 1993 and for the lawful use of the Tribal Authority.[33] Mr Newton does not recall providing the List of Members to Mr Li or Mrs Lee.The List of Members as at December 2013 was created by Elections NZ for the TribalAuthority, to enable voting at the information hui. It was also used to confirmattendance at the hui and update contact details. Mr Newton recalls that Mr Li assistedin preparing an information booklet that was handed out at the hui. Mr Taua says thatif Mr Li attended the hui, he did so as an employee of the Tribal Authority (Mr Li wasemployed by the Tribal Authority from October 2010 to30 June 2016). Mr Newton says that it is possible, but unlikely, that Mr Li wasprovided the List of Members so he could assist in checking off the Iwi members whoattended. If that was the case, he would have received the list as an employee.[34] The plaintiffs contend that the issues in this proceeding are of a narrowcompass, being:(a) Is the List of Members a confidential document belonging to the TribalAuthority?(b) Did Mr Taua give the document to Mr Li on 19 December 2013? Ifyes, was the List of Members supplied in circumstances that suggesteda duty of confidence?(c) If no, how did Mr Li obtain the List of Members?(d) Do Tahi, Mrs Lee and Mr Li hold any other confidential documentsbelonging to the Tribal Authority?(e) Are the defendants entitled to possess and use the List of Members andthe Further Documents under the Agreements?(f) Does the settlement between the Tribal Authority and Mr Li dated20 October 2016 preclude the Tribal Authority trustees from bringing abreach of confidence claim against the defendants?[35] The plaintiffs submit that the issues at (a) to (e) involve an analysis of eachdocument and the circumstances of how each document came into the defendants'possession.[36] The plaintiffs contend that there are numerous issues in the earlier proceeding,the majority of which are unconnected to the issues in this proceeding. In support ofthat, they submitted a schedule of what they say are the 26 issues to be determined inthe earlier proceeding. They say that Mr Taua's authority to provide the List ofMembers to Mr Li on 13 December 2013 is not an issue in the earlier proceeding. Inthat proceeding the central issue is whether Mr Taua acted as a trustee for all Iwimembers or acted as an agent (under express authority for all Iwi members and theTribal Authority trustees) when he executed the Agreements in 2007 and 2008.Common questions of law and fact — conclusion[37] I accept as correct the statement of issues in this proceeding articulated by theplaintiffs. The focus of this proceeding is:(a) The nature of the documents in question, including whether the List ofDocuments and the Further Documents were confidential to individualIwi members and/or the Tribal Authority. This will involve consideringthe List of Documents in the context of the Privacy Act 1993, as thestarting point must be that the information contained in the List is thepersonal information of the individuals concerned.(b) How Mr Li and Mrs Lee came to possess the documents(surreptitiously, through their employment or in pursuance of theAgreements).(c) If the documents were confidential, whether they have retained thatcharacter such that the defendants should be prevented from using themand should be required to deliver them up to the plaintiffs.[38] None of these issues feature in the earlier proceeding. The focus of thatproceeding is on whether Mr Taua and Mrs Taylor (in relation to the 2007 Agreement)and Mr Taua and Ms Ewe (in relation to the Variation Agreement) had authority toexecute the Agreements on behalf of Iwi members, whether they were acting as agentsand/or trustees, and whether Iwi members over the age of 18 acted as agents and/ortrustees for all Iwi members, whenever born.[39] It is not immediately obvious to me why the Tribal Authority would give Mr Liand/or Mrs Lee a List of Members "in furtherance of" the Agreements. The defendantsdid not explain specifically for what purpose the List was allegedly provided. In anycase, it is not apparent to me how a determination on whether these documents cameinto their possession under the Agreements would advance the authority issue at theheart of the earlier proceeding one way or another. There is no dispute between theparties in the earlier proceeding that the Agreements were signed and were notpurported to be cancelled until September 2016. If the List of Documents wasprovided to Mr Li by Mr Taua in 2013 "pursuant to the Agreements" as the defendantsmaintain, that does no more than prove that those individuals were acting consistentlywith there being agreements in place at that time. However, it has minimal if anyrelevance to the issue of the authority of Mr Taua, Mrs Taylor and/or Mrs Ewe to actas agents or trustees for individual Iwi members when signing the 2007 Agreementand the Variation Agreement.[40] I conclude that there is insufficient commonality with the earlier proceeding interms of the issues before the Court to justify consolidation.[41] I note that the defendants have argued that this Court has already ruled that anyconfidentiality in the List of Members is subordinate to the defendants' rights to usethe List in its litigation, referring to the decision of Associate Judge Smith in the earlierproceeding.12 Associate Judge Smith was concerned with whether any rights ofindividual Iwi members to privacy in the information contained in the Register (byvirtue of the principles of the Privacy Act 1993) are enforceable in the Court or preventthe making of a discovery order. This proceeding is concerned with a differentquestion, namely whether the defendants have acquired and hold information that isconfidential to the plaintiffs or individual Iwi members and should be returned to them.I do not take Associate Judge Smith to have concluded that the information in the Listand/or Register is not inherently personal or confidential.Same series of events and transactions[42] The defendants say that the plaintiffs claim rights to relief in this proceedingin respect of actions taken by the Iwi members (in particular, Mr Taua) in pursuanceof the Agreements. Similarly, the defendants claim rights to relief in the earlierpleading in respect of those (and other) actions taken in pursuance of the Agreements.They say, therefore, that the rights to relief claimed in both proceedings arise out ofthe same series of events and transactions, being the entering into the Agreements andthe pursuit of the Agreements by the parties.[43] The plaintiffs submit that the relief only arises in this proceeding if Mrs Leeand Mr Li obtained the documents through their employment, or surreptitiously.[44] I do not accept that the rights to relief arise out of substantially the same eventsand/or transactions. The relief sought by the defendants in the earlier proceedingarises out of the Agreements; payments made by Mrs Lee/Tahi pursuant to thoseAgreements and received by Mr Taua/the Iwi; the purported cancellation of the 2007Agreement and Variation Agreement by the Tribal Authority; and Mr Taua's allegednon-performance of the Mangere Property Agreement.12 Tahi Enterprises Ltd v Taua [2019] NZHC 630.[45] While those events and transactions form the broader factual backdrop to thisproceeding, the specific events giving rise to the claim to relief in this proceeding bythe plaintiffs are the acquisition by Mr Li and Mrs Lee of the List of Members and theFurther Documents. I find therefore that consolidation is not justified on this ground.Savings in time and costs, inconsistent decisions, justice[46] The defendants contend that if this proceeding were to proceed out of step withthe earlier proceeding, they (the defendants in this proceeding) would be required toprove a range of legal and factual issues twice, including:(a) whether the Iwi entered into joint venture agreements through theagency and/or trusteeship of the Iwi parties and variation Iwi parties;(b) whether the Iwi parties and variation Iwi parties were bound by the jointventure agreements and acted accordingly until at least 27 September2016;(c) whether the joint venture agreements were performed by the parties atleast up until their purported cancellation on 27 September 2016;(d) whether the benefitting Iwi members, Tribal Authority trusteesand settlement trustees were bound by the assignment of Mr Taua'sfour per cent interest in the settlement assets to Mrs Lee, and actedaccordingly until at least 27 September 2016; and(e) whether the Mangere Property Agreement was performed by the partiesat least up until 27 September 2016.[47] The plaintiffs maintain that consolidating the proceedings will materiallyprejudice the Tribal Authority trustees by delaying this proceeding. The earlierproceeding is awaiting a Court of Appeal decision which will either block or allow thejoinder of hundreds of other persons (the individual Iwi members). They maintainthat this proceeding, if allowed to progress, is likely to be heard before the earlierproceeding and take a fraction of the time to hear.[48] Further, they point to serious injustice which they say would arise asconsolidation would mean that the documents in this proceeding (including the List ofMembers) would be discoverable in the earlier proceeding, enabling the defendants tomake use of documents which they have no right to possess.[49] I am not convinced that consolidation of the two proceedings would save timeand cost or be more efficient with judicial resources.[50] I accept that if the two proceedings proceed separately there will be someduplication in terms of proving the broad factual background to the Agreements, theIwi's settlement with the Crown and the events that followed. However, I do notaccept that it will be necessary for the defendants (in this proceeding) to prove all thepoints they say to establish, as they contend, that Mr Li and Mrs Lee received thedocuments in pursuance of the Agreements. It is not necessary for the agency ortrustee aspects at issue in the earlier proceeding to be proven in this proceeding toestablish the facts around the acquisition of the documents by Mr Li and Mrs Lee.This factual issue will be determined with reference to the evidence of Mr Li and MrsLee on the one hand and Mr Taua and Mr Newton on the other. These individualshave already filed affidavits addressing this factual issue, and the point couldconceivably be determined on those affidavits, with cross-examination if that wasthought necessary.[51] The defendants are overstating the degree of overlap of the two proceedings.This proceeding is a reasonably focused claim for breach of confidence through whichthe plaintiffs seek the recovery of allegedly confidential documents. The earlierproceeding is much more complex and wide-ranging, concerns events which form thebackdrop to, but not the direct focus of, this proceeding, and involves different relief.The plaintiffs in this proceeding are defendants in the other. Rather than simplifyingmatters and creating efficiencies, there is a risk that consolidation could result inconfusion and greater complexity.[52] Further, the defendants (in this proceeding) have said that they intend to usethe information in the List of Members to identify individual Iwi members, so theycan be joined as defendants in the earlier proceeding. Logically, whether they areentitled to do so needs to be determined ahead of the earlier proceeding, not at thesame time.[53] I also accept that consolidation could result in injustice to the plaintiffs as itwould have the effect of bringing the documents into the discovery pool in the earlierproceeding in circumstances where they may have been wrongly obtained. It ispreferable that this issue is determined separately and if the documents are found tohave been wrongfully obtained, they are returned to the plaintiffs.[54] While I do not consider that the two proceedings should be consolidated, thereare interdependencies between the two. Logically, this proceeding should be resolvedahead of the earlier proceeding, as it affects the defendants' ability to join additionalparties to that proceeding. However, if the Court of Appeal upholds the decision ofAssociate Judge Smith in the earlier proceeding, and the plaintiffs are required todiscover the current Register of Members to the defendants, the plaintiffs may wellconclude that this proceeding is redundant (as it concerns the List of Members).Therefore, it is appropriate that this proceeding is reviewed following the Court ofAppeal's decision to determine if there remain any live issues.Result[55] The application for consolidation is dismissed.[56] This proceeding will be listed for a case management conference once theCourt of Appeal has delivered its judgment on the appeal of Associate Judge Smith'sdecision on the application for discovery of the Register in the earlier proceeding.Counsel are to notify the case officer when that has happened.[57] At that conference, it will be determined whether there are any live issuesremaining in this proceeding, in light of the Court of Appeal's judgment. If there are,timetable directions will be made to have this proceeding heard, at the earliestopportunity.[58] The parties are to confer in advance of the case management conference and,if possible, file a joint memorandum updating the Court five days in advance andproposing suitable timetable orders. Failing agreement, the plaintiffs are to file amemorandum five days in advance, and the defendants three days in advance.Costs[59] The plaintiffs are entitled to the costs of defending this application on a2B basis. The parties are to file an agreed memorandum within two weeks and I willdetermine costs on the papers. Failing agreement, the plaintiffs are to file amemorandum within two weeks, and the defendants one week later._____________________Associate Judge Gardiner