Issued
10 Dec 2018
Decision
10 Dec 2018
Court
NZHC
Appeal Status
Pending

High Court grants third party access to Court file

Kea Investments Ltd, is considering options for enforcement against the Valley Trust, which owned shares in Cullen Group Ltd.

Case
Cullen Group Limited v The Commissioner of Inland Revenue [2018] NZHC 3238
Legal terms
Access to Court Documents

Summary

Kea Investments Ltd ("Kea"), a successful party in a recent decision of the High Court of England and Wales (Glenn v Watson [2018] EWHC 2016 (Ch)), is considering options for enforcement against the Valley Trust, which owned shares in Cullen Group Ltd ("CGL"). This decision relates to Kea's application to access court documents, specifically the formal court record of judgments, orders and minutes of the court, pursuant to r 8 of the Senior Courts (Access to Court Documents) Rules 2017 ("the Rules").

Kea also requested access to the pleadings, submissions and index to the agreed bundle of documents pursuant to r 11 of the Rules. The Commissioner of Inland Revenue ("the Commissioner") agreed to abide the Court's decision and CGL agreed to abide the Court's decision with respect to r 8 but opposed access to the information requested under r 11. The Court, in noting the public interest element in favour of disclosure, granted Kea's request under both rules.

Impact

The Court noted that while the principle of open justice is not a presumption, it is a starting point (at [21]). Access to the court record is more likely where the circumstances constitute a public purpose and where it contributes to the orderly and fair administration of justice (at [25]), such as enforcement of a judgment issued in other (overseas) proceedings.

Facts

The New Zealand proceeding is a challenge brought by CGL, associated with Mr Eric Watson, to the Commissioner's assessment that CGL avoided tax. The substantive hearing was heard before Palmer J in August and September 2018. During that hearing, media requested access to documents on the court file, including pleadings and submissions. The parties abided the decision of the Court and Palmer J granted access. The substantive decision is yet to be delivered.

Kea obtained judgment in the High Court of England and Wales against Mr Watson for a maximum of £43,495,891.33 with compounding interest of 6.5%. (Glenn v Watson [2018] EWHC 2016 (Ch)). There were also tracing orders, disclosure orders and an undertaking that Mr Watson would not dispose of, or deal in or diminish assets over £100,000 without notice (Consent Order of Nugee J, Glenn v Watson EWHC (Ch) HC-2015-1647, 14 September 2018). Mr Watson has appealed the interest rate awarded.

Kea says that Mr Watson did not make the interim payments, that his solicitor said Mr Watson was unable to pay the sums ordered as he did not have the assets to do so, and that the shareholder of CGL, and another company in Mr Watson's structure, changed. Kea obtained freezing orders from the High Court of England and Wales restraining identified companies, including CGL, from dealing with or diminishing assets up to the value of £47,333,247 and is now considering enforcement options, including whether to appoint receivers in respect of Mr Watson's interests in the Valley Trust, which Kea understands holds shares in CGL.  CGL and Valley Trust feature in the factual matrix of the challenge proceeding before the New Zealand High Court and Kea applied to access the court file in that New Zealand proceeding.

Decision

Subject to r 8 of the Rules, the Court noted every person has the right to access the formal court record relating to a civil proceeding. Under r 4, the formal court record includes judgment, order or minute of the court, including a judge's reasons. The Court granted Kea access to the formal court record, noting the request was not opposed.

Under r 11 of the Rules, a person may request access to any document, however, the court must consider the nature of and reasons for the request taking into account the various considerations outlined at r 12. Those considerations are then balanced by r 13.

Kea's request for access was made to assist it with its enforcement of the English judgment, noting it would facilitate the orderly and fair administration of justice, a consideration under r 12(a) of the Rules.

CGL contended the pleadings contained large amounts of commercially sensitive material including, for example: details of the approved issuer levy tax amounts paid; the precise nature of CGL's finance structure; and the trust structures associated with CGL. CGL's counsel submitted the Rules were not designed to facilitate private applicants pursuing commercial purposes and that other mechanisms, such as pre-proceeding discovery, are available to Kea.

In finding for Kea, the Court noted the final decision in this (NZ) proceeding is yet to be delivered. Pursuant to r 13 of the Rules, the principle of open justice is given greater weight while the substantive hearing is on foot. A "substantive hearing" is defined by r 4 as being from the start of the hearing until the court delivers its judgment.

The Court also noted there was little specificity to CGL's claim of commercial confidentiality. Furthermore, media access to the court filed had not previously been opposed and confidentiality orders were not sought in the proceeding.

The Court accepted that the purpose for which Kea seeks the information contributes to the orderly and fair administration of justice and it is not fishing for information in order to consider whether initiate private litigation. Kea's purpose is to seek to enforce a judgment of the High Court of England and Wales which has been issued and in respect of which that Court has subsequently granted freezing orders and disclosure orders. Enforcement of a foreign judgment in these circumstances is constitutes a public purpose, not just a private purpose, by contributing to the orderly and fair administration of justice.

Kea was granted access to the court file, including the pleadings, submissions and the index to the agreed bundle of documents on the condition Kea does not use any documents other than for the purposes of the English proceedings and related proceedings taken in other jurisdictions, without leave of the High Court of New Zealand.

High Court Rules 2016, r 11.5
Senior Courts Act, s 173(1)
Senior Courts (Access to Court Documents) Rules 2017, rr 8, 11 & 12