Henderson v Walker

• Jurisdiction: New Zealand
• Judge: Thomas J
• Judgment Date: 03 September 2019
• Neutral Citation: [2019] NZHC 2184
• Court: High Court
• Docket Number: CIV-2014-409-45
• Date: 03 September 2019

Between

David Ian Henderson

Plaintiff

and

Robert Bruce Walker

Defendant

[2019] NZHC 2184

Thomas J

CIV-2014-409-45

IN THE HIGH COURT OF NEW ZEALAND

CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA

ŌTAUTAHI ROHE

Tort — liquidator — disclosure of material by liquidator — breach of confidence — cope of invasion of privacy tort — scope of the tort — reasonable expectation of privacy-personal material stored on company laptop and server — misfeasance in public office — application of the tort of conversion applied to intangible property, such as private digital files — liquidation had been stayed when the material had been obtained by warrant and supplied to the liquidator

Counsel:

J Moss and H M Weston for Plaintiff

R J B Fowler QC and S B McCusker for Defendant

JUDGMENT OF Thomas J

Table of contents

Introduction	[1]
Background	[6]
Private and privileged documents	[41]
Distributions	[43]
(i) 12 April 2011 — Tape Drive to the IRD	[44]
(ii) 28 May 2011 — email from Mr Walker to a United States university address, Mr Holden, Mr Thorne and Mr Tubb	[51]
(iii) 13 June 2011 — email from Mr Eathorne to Mr Slevin attaching a screenshot concerning SOL Management Ltd	[54]
(iv) and (v) 14 June 2011 and 26 August 2011 — Mr Walker provided Mr Slevin flash drives of all emails and voice recordings from the Laptop	[59]
(vi) 11 July 2011 — Mr Eathorne provided the police with materials relating to SO Systems Ltd	[68]
(vii) 12 June 2012 — Mr Walker sent Mr Thorne an email between Mr Henderson and the then Mayor of Christchurch	[74]
(viii) 4 July 2013 — Mr Walker gave emails from the Laptop on a flash drive to Ron McQuilter of Paragon New Zealand	[87]
(ix) 26 September 2013 — Mr Eathorne provided the Official Assignee with a brief of evidence containing information about Mr Henderson's American Express card	[98]
(x) 29 February 2016 — PVL discovery of 848,000 documents, including 65,000 from the Laptop	[104]
(xi) 22 September 2011 — Messrs Walker and Eathorne to Mr Holden	[110]
Other disclosures	[123]
Factual findings	[126]
Breach of confidence — relationship with the invasion of privacy tort	[144]
Breach of confidence — application	[161]
Does the information have the necessary quality of confidence about it?	[161]
Was the information imparted in circumstances importing an obligation of confidence?	[170]
Has there been an unauthorised use of the information?	[184]
Defence of public interest	[191]
Damages	[196]
Invasion of privacy — scope of the tort	[199]
Reasonable expectation of privacy	[200]
Highly offensive to the objective reasonable person	[203]
Publicity	[207]
A note about procedure	[218]
Notice requirement	[219]
Invasion of privacy — application	[221]
Are there facts in respect of which there is a reasonable expectation of privacy?	[221]
Did Mr Walker have notice that the information was private?	[229]
Would disclosure be considered highly offensive to a reasonable person?	[230]
Damages	[242]
Conversion	[248]
Conversion of intangible property	[250]
Did Mr Walker convert Mr Henderson's personal digital files?	[271]
Misfeasance in public office	[277]
Does Mr Henderson have standing to sue?	[278]
Are liquidators public officers?	[279]
Proof of loss	[297]
Conclusion	[298]
Breach of statutory duty	[299]
Has there been a breach of statutory duty?	[301]
Did Parliament intend breaches of pt 16 of the Companies Act should be a ground of civil liability?	[304]
Conclusion	[305]
Contempt of Court	[306]
Result	[316]

Introduction

1 To say there is bad blood between David Henderson and Robert Walker is an understatement. From the time Robert Walker was appointed liquidator of Property Ventures Ltd (PVL) on 27 July 2010, he has been on a collision course with David Henderson, former director of companies in the PVL group. Frustrated by PVL's liquidation being stayed, when Mr Walker was appointed liquidator of five other companies in the group, he set about his task with gusto. Fearing that documents relevant to the liquidations might be unlawfully accessed following the February 2011 Christchurch earthquake, Mr Walker was instrumental in the police seeking and obtaining warrants to seize records of the companies. It is what Mr Walker did on receipt from the police of PVL's tape drive and a laptop (used by Mr Henderson but owned by PVL) that is the subject of these proceedings. Mr Henderson claims Mr Walker, fuelled by malice towards him, provided his personal information to the Inland Revenue Department (IRD), the Official Assignee and other third parties.

2 Mr Henderson claims Mr Walker not only breached his rights to privacy and confidence in confidential information but also that he breached a number of duties associated with his office as liquidator and as an officer of the Court.

3 Mr Henderson seeks declarations in respect of his six causes of action, orders that Mr Walker provide a schedule of material accessed and to whom it has been distributed and $100,000 in general damages for personal anguish, humiliation and stress.

4 Mr Walker denies there has been any unlawful disclosure of Mr Henderson's personal information and says none of the claims can succeed.

5 In this decision, I will first outline the background in some detail as it provides important context. I will then consider each claimed breach and make factual findings, before considering those findings as against the law applicable to the six causes of action.

Background

6 PVL was placed into receivership in March 2010, and liquidated on 27 July 2010, but the liquidation was stayed until 8 February 2012. This caused Mr Walker some considerable frustration.

7 On 29 November 2010, Mr Henderson was adjudicated bankrupt.

8 On 13 December 2010, Mr Walker was appointed liquidator of Tay Properties Ltd and, on 16 December 2010, liquidator of Cashel Ventures Ltd, Tay Ventures Ltd, Hotel So Corporation Ltd and Dweller Ltd. All those companies were subsidiaries of PVL. Mr Henderson was a former director of those companies.

9 On 16 December 2010, Mr Walker wrote to Mr Henderson pursuant to s 261 of the Companies Act 1993, requesting the records of the five companies. 1 He requested that Mr Henderson:

• • provide all business records and information in respect of the companies in his possession;

• • advise him of the whereabouts of any records he did not hold; and

• • advise the identity of the accountants, lawyers and bankers to the companies.

10 He also required Mr Henderson provide or otherwise direct him to all records the subject of s 189 of the Companies Act, including minutes of meetings of directors and shareholders, certificates signed by the board, interests registers, financial reports prepared in accordance with s 10 of the Financial Reporting Act 1993 and the general ledgers, along with all supporting workings or primary documentation such as invoices, receipts, cash records, and bank statements that supported the general ledgers. Mr Walker also expected Mr Henderson to provide him with all company correspondence, contracts, legal documents and advice of whatever nature generated in the name of, or addressed to, the companies.

11 On 20 December 2010, Maurice Andrews, an employee of Mr Walker, went to Christchurch in an effort to retrieve documentation. He met Mr Henderson (without an appointment) and requested the accounting records. Mr Henderson said the office

would not be open until mid-January. It was agreed Mr Andrews would send Mr Henderson a letter outlining the records he wanted. They made a tentative date for Mr Andrews to pick up the relevant records around the middle of January but Mr Andrews was to phone Mr Henderson beforehand

12 On 24 December 2010, Mr Walker emailed Mr Henderson regarding the s 261 notice. He requested cooperation and informed Mr Henderson that a failure to comply was a criminal offence. He told Mr Henderson that there were two ways a liquidator could achieve statutory objectives — an easy way or a hard way. He expressed his indifference between the two alternatives but said he was prepared to carry out the task in a conciliatory way to the extent it was consistent with his duties. He said, however, it was not really his choice but that of Mr Henderson and his fellow erstwhile directors. He offered to fly to Christchurch to meet, if Mr Henderson wanted to explore a less fractious route.

13 Mr Walker concluded his email with the following words:

To redeem the past is to transform every “it was” into “I wanted it thus”, that alone would I call redemption.

14 On the same day, Mr Walker and Mr Henderson spoke on the telephone. When Mr Walker again wrote to Mr Henderson on 12 January 2011 requesting all records, Mr Henderson responded by email referring to his telephone conversation with Mr Walker on 24 December 2010, saying he then made it clear he was unavailable until late January and would work with Mr Walker then to meet his obligations and assist in any reasonable way. Mr Walker responded, noting his obligations under the Companies Act to report to creditors and the Companies Registrar within 25 working days of appointment, meaning his first reporting date was 21 January 2011. He said it would be preferable to report against the backdrop of information relating to the companies. He asked Mr Henderson not to put hurdles in his path.

15 In his response, Mr Henderson expressed some frustration, noting Mr Andrews' unannounced visit and the arrangement he had made with him. He said he was working to meet Mr Walker's requirements as quickly as he could. Relatively ill-tempered email exchanges ensued. On 20...