New Zealand Guardian Trust Company Limited v Easton

[2021] NZCA 205

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

 CA279/2021
 [2021] NZCA 205

BETWEEN	THE NEW ZEALAND GUARDIAN TRUST COMPANY LIMITED First Applicant IAN EASTON LMITED Second Applicant PERPETUAL TRUST LIMITED Third Applicant
AND	IAN CHARLES EASTON Respondent

Hearing:	21 May 2021
Court:	Miller and Goddard JJ
Counsel:	L J Taylor QC and J B Orpin-Dowell for Applicants DJS Parker and D A Fry for Respondent
Judgment:	21 May 2021

ORAL JUDGMENT OF THE COURT

The application for a stay of the direction to disclose documents given in Easton v The New Zealand Guardian Trust Co Ltd [2021] NZHC 117 is dismissed.

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REASONS OF THE COURT

(Given by Miller J)

1. Before us is an application for stay pending the hearing of an application for leave to appeal an interlocutory decision of the High Court in a civil proceeding.

2. The application has been made in the course of a trial which is scheduled to conclude next week.  Most of the evidence has already been heard.  The stay will force the High Court to adjourn the trial part-heard, possibly for an indefinite period.

3. An application of this kind is most uncommon.  It is a very rare case in which this Court will interfere in a trial Judge’s management of the case at trial, for two reasons.  One is that the Court is not well placed to second-guess the trial Judge’s conduct of the trial, or to gauge the impact of its intervention.  The other is that it is a rare case in which any error cannot be remedied on appeal from the substantive judgment.

4. The decision which the applicant wishes to appeal is an interlocutory decision, made on 17 May 2021, requiring that the applicant make discovery of documents that are the subject of a claim to legal professional privilege.  Cooke J upheld the claim to privilege before trial, but acceded to an application made after he had heard a week’s evidence at trial.  He gave detailed reasons, the essential substance of which was that he was now satisfied that the claim to privilege as against the respondent was unsustainable.  He ordered that the applicant make discovery.

5. A stay of this decision could not be entertained unless this Court was satisfied both that leave to appeal is likely to be granted and that unless a stay is granted the applicant may suffer some harm of a kind that will be difficult to remedy.

6. As required by s 56(3) of the Senior Courts Act, leave to appeal was first sought from the trial Judge.  He declined it for two reasons.

7. The first reason was that the applicant could not satisfy him that its position was not adequately protected by the right to appeal against any adverse substantive judgment.  The Judge held that:

   [21]     I pressed Mr Taylor on why the defendants’ position is not adequately protected by the right to appeal against any adverse substantive judgment.  He indicated that once the documents were available the defendants’ fundamental right to confidential legal advice was destroyed, and that this could not be remedied by a substantive appeal.  I asked Mr Taylor why the position would be any different from why the Court of Appeal could not resolve the effect of any such error.  He responded by contending that it was not ultimately material whether or how the documents might affect the substantive judgment, and that the key point was that the defendants’ fundamental right to confidential legal advice would be compromised.  Indeed he indicated that he had not reviewed the documents claimed as privilege in formulating the arguments now advanced by the defendants.

   [22]     I see no substance to the defendants’ position.  I accept that any erroneous decision requiring privileged documents to be disclosed cannot be completely remedied on appeal in terms of the point of principle referred to by Mr Taylor.  But any adverse impact of any wrong admission of those documents on the ultimate decision in this case would be able to be.  Appeal courts are well able to identify how, if at all, an erroneous admissibility decisions affected an ultimate judgment.  The defendants have an available right of appeal to address this situation if the plaintiff’s claims were to succeed.

8. Nothing in the papers before us or the argument that we have heard today persuades us that the Judge was wrong to refuse leave. 

9. It may be that an error has been made, but we are not persuaded that it cannot be remedied on appeal.  It is true that information once disclosed to the respondents cannot be unknown, but the question is whether evidence subsequently held by this Court to be inadmissible cannot be put aside and disregarded when deciding the substantive appeal or, should that course be necessary, on a retrial.  There is nothing before us to show that that would be the case here.  It is common ground that the discovered material may be used only for the purposes of the litigation and Mr Taylor accepts that the only relevant prejudice is that which may be experienced in the litigation.  That is so because but for the litigation the respondents would be entitled to see the documents.

10. The balance of convenience unquestionably favours continuing.  It is not a case in which this Court’s decision might avoid the need for a great deal of evidence at trial;  the trial is substantially complete and it does not appear that the information is likely to lead to much more evidence being led.  To grant leave would be to delay the substantive judgment for what may be a considerable period, and with it the ultimate resolution of the case.  The applicant characterises the issue as an important one of legal principle, and we are prepared to accept for present purposes that that is so, but it is also and substantially a question of the application of law to fact.  The proposed appeal will require that this Court traverse the evidence that led the Judge to his conclusion. 

11. For these reasons we are not persuaded that an application for leave to appeal has sufficient prospects of success to justify intervention at this juncture in the trial.

12. The application for stay pending hearing of the leave application is declined.  In the circumstances it is proper that the applicant should pay costs as for a standard application on a band A basis with disbursements as fixed by the Registrar.

Solicitors:
Carlile Dowling, Napier for Applicants
Parker & Associates, Wellington for Respondent