Oceanic Holdings (International) Ltd v Air Transport World Freight Ltd Hc Ak

JurisdictionNew Zealand
CourtHigh Court
Judgment Date21 Feb 2011
Neutral Citation[2011] NZHC 103
Docket NumberCIV 2008-404-000751

[2011] NZHC 103

IN THE HIGH COURT OF NEW ZEALANI) AUCKLAND REGISTRY

CIV 2008-404-000751

BETWEEN
Oceanic Holdings (International) Limited
Plaintiff/Respondent
and
Air Transport World Freight Limited
Defetidant/Applicant
Apperances:

B R D Cuff for the Plaintiff/Respondent

P Barratt for the Defendant/Applicalit

Application by defendant for discovery — plaintiff suing for loss of mobile phones destroyed by fire in the defendant's holding yard near Brisbane — settlement reached with other parties in Queensland — whether deed of settlement should be disclosed — whether documents discovered by defendants in Queensland proceedings should be disclosed — whether Court should allow collateral use of discovered documents — whether such documents were in the possession and control of the plaintiff under r1.3 High Court Rules (interpretation).

Held: There was a trend towards more openness in litigation ( General Accident Fire & life Assurances Corp Ltd v Elite Apparel Ltd). Confidentiality on the grounds of commercial sensitivity is not a ground for opposing discovery. The sole test is relevance although restrictions can be imposed by a Court on the use of confidential documents (r8.20(2)(e) (affidavit of documents)).

The possibility that the unredacted deed could contain an indemnity in respect of the Queensland defendants was not a relevant purpose for its discovery. Air Transport could make a claim for contribution from the Queensland defendants and any indemnity given to them did not affect that right. However the possibility that the unredacted deed contained a release of the Queensland defendants, rather than an undertaking not to sue, was decisive. Air Transport should have the opportunity at the substantive trial to argue it was a joint tortfeasor. If it was a joint tortfeasor, it was relevant to the issue of its liability whether or not a release had been given to the Queensland defendants, so the unredacted deed was relevant and discoverable for that purpose.

With regards to the documents discovered by the Queensland defendants, the definition of control under r1.3 HCR included possession or the right to possession. It extended to documents that others were entitled to have in their custody but in respect of which the party had a lesser entitlement of access to inspect or copy. The documents discovered were therefore in the control of Oceanic.

As to their discoverability in the present proceeding, the fact that the Queensland defendants would have been parties to these proceedings but for an accident of geography was relevant. If the loss had occurred in New Zealand, then Oceanic would have joined them in this proceeding. If the Queensland defendants were part of the proceeding, Air Transport would be entitled as of right to discovery of the relevant documents possessed by them. The facts of the proceedings were the same, and it was artificial to try and separate them. It was in the interests of justice that consistent results were arrived at in both sets of proceedings. Therefore Oceanic was released from the implied undertaking that the discovered documents were not to be used for collateral or ulterior purposes.

Application allowed.

Introduction
1

The plaintiff is in the mobile telecommunications business. It claims damages against the defendant, an international freight company, in respect of the loss through fire of 20,000 mobile telephones at a holding yard near Brisbane when the telephones were in transit from Sydney to Port Moresby.

2

The plaintiff also commenced action against other parties in Queensland — Rancroft Transport Pty Ltd and a truck driver employed by Rancroft, Scott Callen. It reached a settlement in those proceedings and made a net recovery of $444,369.92. It now claims $610,228.10 from the defendant, being the cost of the telephones less the amount received from settlement of the proceedings in Queensland.

3

The defendant's solicitor has been provided with a redacted copy of the deed of settlement executed in the Queensland proceedings. It has not been formally discovered. The defendant seeks discovery of the deed and all documents discovered by the defendants in the Queensland proceedings. The defendant's application for particular and other discovery is opposed by the plaintiff.

Defendant's submissions
4

As to the deed of settlement, the defendant submits it should be discovered and produced for inspection because:

  • (a) It relates to the loss which the plaintiff claims to have suffered;

  • (b) The deed may contain information which assists the defendant's case or damages that of the plaintiff; and

  • (c) The plaintiff has reduced its claim against the defendant taking into consideration the amount received from the settlement of the Queensland proceedings.

5

The defendant says it is unable to ascertain from the redacted version of the deed whether the settlement sum included a contribution to legal fees and investigation costs. The defendant says it is entitled to know whether the claim against it should be reduced by the full settlement sum rather than the lesser sum by which the plaintiff has currently reduced it.

6

In addition, the defendant says that in settling the Queensland proceedings, the plaintiff may have provided releases in favour of the Queensland defendants. The defendant says it is entitled to know whether there are such releases and the terms on which they were given as they may impact on its own liability. The release of one joint tortfeasor releases all the others. The defendant says the facts alleged by the plaintiff make the defendant a joint tortfeasor with the Queensland defendants.

7

The defendant also submits that it would be usual for a settlement agreement to contain an indemnity by the plaintiff in respect of the settling defendants in relation to any claim that may be brought against those defendants by the present defendant. It says that it has a clear entitlement to claim contribution or indemnity from the Queensland defendants. The existence or otherwise of an indemnity in favour of those parties by the plaintiff it says is relevant to the defendant's consideration of whether or not to seek contribution or indemnity.

8

The defendant also seeks discovery of all documents discovered by the defendants in the Queensland proceedings. Although it has acknowledged that there is an implied undertaking on the part of parties who receive documents through discovery not to use those documents for collateral or ulterior purposes it submits that the implied undertaking can in appropriate cases be released or modified by the Court.

9

The defendant says that the factual and legal issues are the same in both sets of proceedings and include the scope and alleged breach of the duty of care alleged to be owed to the plaintiff. The plaintiff has said that the Queensland defendants were negligent and that the defendant is vicariously liable for that negligence. It concludes by submitting that the release or modification of the undertaking not to use those documents for collateral or ulterior purposes is necessary to secure the just, speedy and inexpensive determination of the proceedings.

Plaintiff's submissions
10

The plaintiff says that it is clear from the redacted version of the deed of settlement provided to the defendant that it is subject to a confidentiality clause and there is no good or substantial reason why disclosure of the terms of the deed should be made outside of the redacted version already provided.

11

The plaintiff says that the redacted version of the deed clearly shows that the deed settled all claims against the Queensland defendants which included the plaintiff's claim for investigation and legal costs incurred in pursuing the Queensland action. It says that it has accordingly made...

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