Henderson v Slevin [2015] NZHC 366 (5 March 2015)

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BETWEEN	DAVID IAN HENDERSON Plaintiff
AND	GRANT SLEVIN First Defendant
AND	ATTORNEY-GENERAL Second Defendant
AND	ROBERT BRUCE WALKER Third Defendant
AND	RYAN EATHORNE Fourth Defendant

Hearing:	1 September 2014
Appearances:	D I Henderson (Plaintiff/Respondent) in person S M Kinsler for First and Second Defendants (G Slevin and Attorney-General) T G H Smith for Third and Fourth Defendants (R B Walker and R Eathorne)
_Judgment:	_{5 March 2015}

[1] A bankrupt’s computer was seized by police on a warrant issued under the Summary Proceedings Act 1957. The police had obtained the warrant on the basis of a complaint by the liquidator of a company associated with the bankrupt. The liquidator told the police that the bankrupt was believed to have committed breaches of the Companies Act 1993. An employee of the liquidator accompanied the police on their visit to seize a computer and related equipment (the computer). The police,

_{having seized the computer, released it to the liquidator and
his employee to}

undertake for the police an analysis of the documents and to prepare an inventory of the documents. The liquidator produced a clone of the computer hard drive which he provided to a solicitor in the Official Assignee’s office who had expressed concern that the bankrupt may have acted in breach of the Insolvency Act 2006 by being involved in business while bankrupt. The liquidator provided extracts to other people. The liquidator made statements indicating a willingness to provide extracts to other people where their right to receive the documents was not obvious and issues of privacy arose. The Official Assignee’s solicitor appears not to have been deputed by the Official Assignee specifically to obtain the clone under s 171 of the Act but he asserts he relied on that provision for his authority to obtain the records. The solicitor was later a recipient of unsatisfactory correspondence within the Official Assignee’s office about a pending proceeding – the correspondence appears to indicate willingness on the part of at least some to set out to embarrass the bankrupt and involve a District Court Registry in leaking the Court papers to others.

[2] No prosecution resulted from the police seizure of the computer. The liquidator did not present the intended inventory. The search warrants were later the subject of challenge in the District Court, but with Judge C P Somerville finding the validity of the warrants was irrelevant to his Honour’s inquiry. The bankrupt tried, initially unsuccessfully, to get the complete records returned.¹Eventually he recovered at least some of the original material.

Development/Official Assignee (now Ministry of Business Innovation and Enterprise);

¹Riach v Property Ventures Ltd DC Christchurch CIV-2012-009-002031, 13 May 2013;

Commissioner of Inland Revenue v Property Ventures Limited (in rec and in liq) [2013] NZHC

(d) the liquidator’s employee, Ryan Eathorne. [4] He alleges against each defendant:

(a) breaches of s 21 of the New Zealand Bill of Rights Act 1990 (NZBORA), in relation to his right not to be subjected to unreasonable search and seizure;

He relies on the events as I have summarised them above. He says that the liquidator and his employee acted in bad faith in seizing, searching and releasing his documents.

[7] Mr Henderson says at the time of his bankruptcy (29 November 2010) his computer held a range of documents including purely personal records. The computer was seized by police on 8 April 2011 (the police seizure). Mr Henderson says that at least three people came into possession of his electronic records and breached his rights in relation to those records and his affairs generally.

[8] Attached to this judgment as Schedule 1 is the statement of claim filed by Mr

[9] High Court Rule 15.1 makes provision for orders striking out all or part of a pleading.

• r 15.1(1)(b) – the statement of claim is likely to cause prejudice or delay;

(a) in relation to the proceeding as a whole, he is immune from liability in civil proceedings by reason of s 86(1) State Sector Act 1988; and

(b) the first defendant is not an appropriate defendant for claims for breaches of NZBORA.

(b) to the extent the plaintiff asserts he has suffered losses of an economic nature, the losses would be claimable if at all by the Official Assignee as the plaintiff is an undischarged bankrupt; and

(c) to the extent that the plaintiff claims damages for emotional distress, such are insufficient in themselves for a bankrupt to bring an action.

[13] I adopt the following as principles applicable to the consideration of these strikeout applications:²

(a) The Court is to assume that the facts pleaded are true (unless they are entirely speculative and without foundation).

(d) The jurisdiction is not excluded by the need to decide difficult questions of law, even if requiring extensive argument.

(e) The Court should be slow to rule on novel categories of duty of care at the strike out stage.

21. Everyone has the right to be secure against unreasonable search or seizure, whether of the person, property, or correspondence or otherwise.

(a) By the legislative, executive, or judicial branches of the government of New Zealand; or

(b) By any person or body in the performance of any public function, power, or duty conferred or imposed on that person or body by or pursuant to law.

[16] The Court of Appeal recognised in Baigent’s case that NZBORA implied that effective remedies should be available for its breach.³The conclusions in the majority judgments of Cooke P, Casey, Hardie-Boys and McKay JJ are accurately summarised in the head-note to the Report of Baigent’s case:

An action for damages under the Bill of Rights Act was not a private law action in the nature of a tort claim, for which the state was vicariously liable. Rather, it was a public law action directly against the state for which the state was primarily liable.

[17] In short, an award of Baigent compensation for a s 21 NZBORA breach is a Court response to the state’s unreasonable exercise of its powers of search and seizure. Mr Henderson’s claim against Messrs Walker and Eathorne for a breach of s 21 NZBORA rights is identified in his first cause of action, the key elements of the

(a) Mr Walker, in making his complaint, would have known that the police would obtain search warrants and obtain the later-seized material;

(b) Mr Eathorne, in assisting the police and collecting the material, would have been aware that the material was not part of the search warrants or was private, privileged or commercially sensitive material which should not have been taken;

(c) The equipment and documents seized by the police were provided to Mr Walker and the staff on the basis that they were acting as agents of the police;

(d) Mr Walker wilfully and/or in bad faith did a number of things (particularised at paragraph [15] of the statement of claim) in relation to searching, releasing and not protecting information; and

(e) Mr Walker failed to provide a full schedule of material he accessed and distributed.

[18] The striking feature of Mr Henderson’s NZBORA claim in this proceeding against Mr Walker and Mr Eathorne is that the liquidator’s role in receiving the seized material from the police and processing it was “as agent of the police”. That follows from allegations against Mr Walker relating in particular to his initial complaint.

[19] Mr Henderson’s claim against individuals such as Mr Walker is untenable. As the authorities establish, it is the Crown, rather than individuals, which is held accountable through Baigent compensation for NZBORA breaches. Significantly, Mr Henderson has separately commenced proceedings against the police in respect

[20] For the first and second defendants, Mr Kinsler referred me to the judgment of Cartwright J in Innes v Wong.⁵The plaintiffs in that case (administrators of the estate of the late Matthew Innes) sued three defendants for unlawful imprisonment and/or restraint of Mr Innes, breach of NZBORA and negligence. The defendants were the Crown, the local area health authority and its director of Area Mental Health Services, Dr Wong.

[21] Cartwright J granted Dr Wong’s application to strike out the claim against

... the remedy sought by the plaintiffs is for a sum of money by way of public rule compensation. That is consistent with an acknowledgment that these proceedings are not private law in the nature of the tort claim but a public law action brought directly against the state ...,

Both of those [two causes of action] are based on allegations that the state has certain responsibilities whether under the NZBORA or generally, to protect Matthew from abuses of basic human rights. These are responsibilities which are placed on a state to ensure that its agents or nationals do not perpetrate or condone human rights abuses.

[22] The NZBORA claims against the third and fourth defendants in this case are parallel to that against Dr Wong in Innes v Wong. In that case, the Crown was already a defendant in the same proceeding. In relation to Mr Henderson’s claims, the unlawful search and seizure claim is already being pursued in another proceeding. Mr Henderson in that other proceeding will be able to obtain any appropriate remedy against the state for either the actions of the police directly in relation to the search and seizure or the actions of police indirectly through anyone whom Mr Henderson proves to have been the agent of the police.

[23] It is inappropriate that NZBORA compensation be pursued against the third and fourth defendants.

[24] Mr Henderson alleges that the first defendant (Mr Slevin) is a senior lawyer in the NZ Insolvency and Trustee Service, a division of the former Ministry of Economic Development. As such, Mr Slevin undertakes work for the Official Assignee. The Attorney-General is sued as second defendant as the representative of the Ministry.

[25] Mr Henderson’s claims against Mr Slevin and the Ministry are identified collectively as the “second cause of action”, the key elements of the allegation of breach being:

(b) Mr Slevin was not entitled to the information through the provisions of the Insolvency Act 2006, a Court order or the consent of the police.

(e) The actions of Mr Slevin and the Ministry were unreasonable and in bad faith.

(f) Mr Slevin has failed to provide details of the material accessed, copied or distributed.

(b) Mr Slevin is employed by the Crown in that capacity and at all times material to the claim was acting within the scope of his employment.

(c) The Attorney-General is the senior law officer of the Crown sued as the representative of the Crown either directly for breaches of NZBORA or as representative of the Crown which may be vicariously liable for the torts of its servants.

[27] Mr Henderson’s NZBORA claim against Mr Slevin is the parallel of his claim against Messrs Walker and Eathorne. As such it is untenable. If there is a claim for NZBORA compensation (which I will come to shortly) it lies against the State (or Crown) as represented by the Attorney-General. The Attorney by his defence has recognised the legal position in relation to any actions of Mr Slevin which were in breach of NZBORA rights. That position is that the Attorney is sued as a representative of the Crown directly for breach of NZBORA.

[28] Mr Henderson represents himself. His present pleading (the original statement of claim) bears some of the hallmarks of a lay pleading with allegations as to different causes of action bundled together and some lack of particular allegations. The defendants chose not to pursue further particulars and Mr Kinsler (for the first and second defendants) and Mr Henderson, in relation to the NZBORA claim concerning the activities of the Official Assignee’s office, identified in submissions the two issues on which the strike out application must turn.

(a) Search and seizure by that department of state occurred unlawfully in the sense of being unauthorised.

(b) The following search of material taken included a search of personal and private information beyond information legitimately searchable by the Official Assignee, was unreasonable and in any event conducted in bad faith.

[30] The Court is required to assume that the facts pleaded by Mr Henderson are true unless they are entirely speculative and without foundation. Except to the limited extent relating to those residual categories (“speculative and without foundation”), I am not weighing evidence with a view to resolving contested factual assertions as the Court may do on a defendant’s summary judgment application. No such application was pursued in this case.

[31] I focus on Mr Henderson’s pleading as to the unreasonableness of the first and second defendants’ actions in relation to search and seizure. As I will be finding the NZBORA claim sustainable by reason of the allegation of unreasonableness, Mr Henderson’s other allegations (particularly the unlawfulness of the search and bad faith) are not in themselves decisive. I will return to them only briefly.

[32] There is a distinctly factual aspect to the allegation that the search was unreasonable. Mr Henderson pleads that the documentary material taken included personal and private material and material which was legally privileged. Mr Henderson pleads that it includes personal information of both himself and his wife. He pleads that Mr Slevin freely accessed all the information without regard to any obligation in relation to privacy or intrusion.

[33] Notwithstanding these allegations, Mr Kinsler began his submission on this area of the application with the proposition that the search had been “lawful and reasonable”. Mr Kinsler submitted that the context of the Assignee’s powers and

... the reasonableness of any privacy expectation in the material must be assessed in light of the Assignee’s responsibility to inquire into the plaintiff’s property, conduct and dealings to discharge here statutory obligations under Part 3 of the Act.

[34] Mr Kinsler effectively invites the Court to find as definitely reasonable actions of the Official Assignee’s office which have been pleaded to be unreasonable by reason of an unacceptable access and intrusion into private material. Any determination in that regard is, in terms of the principles attaching to strike out application, a matter for trial, not strike out.

[35] I am reinforced in this conclusion by some of the authorities to which Mr Kinsler referred me in his extensive and responsible submissions. He referred to the various judgments of the Supreme Court in Hamed v R, the leading authority on s 21

rationale underlying s 21 NZBORA is the protection of privacy. There remains uncertainty over what constitutes a search in light of the fact that differently constituted majorities of the Supreme Court determined the issue of which several different classes of improperly obtained material were admissible against each of several defendants. In Lorigan v R, the Court of Appeal discussed the divergent approaches in the judgments of the Supreme Court in Hamed, finding in the case before it that surveillance involving no or at most minimal intrusion into the privacy

of the target did not constitute a search.⁹In the present case, Mr Henderson pleads

the accessing of personal and private and legally privileged material, with any characterisation of the extent of the privacy necessarily remaining a matter for assessment at trial. Mr Kinsler himself accepted in the light of the jurisprudence that the question of the extent of any intrusion into reasonable expectations of privacy remained relevant to the reasonableness of any search.

Mr Henderson’s claims against the first and second defendants are a challenge to the orders made in that judgment.¹⁰I do not view the matter that way. The Havenleigh decision was made in the context of the pending public examination of Mr Henderson in relation to his discharge from bankruptcy, the Assignee having objected to Mr Henderson’s discharge under s 29(2) Insolvency Act. The Assignee applied for discovery of the electronic documents held by Mr Walker following the

execution of the warrants by the police. I was making interlocutory rulings as to the discovery reasonably necessary for Mr Henderson’s public examination. In that sense it was a forward-looking exercise. The orders I made encompassed the “quarantining” of purely personal documents. I was not purporting to give any judgment in relation to what had previously occurred either in relation to search or seizure. The focus was on the High Court’s case management of the litigation which was before it by reference to the rules relating to discovery of documents.

[37] Mr Kinsler placed reliance on passages in my judgment in which I rejected a ground of opposition in which Mr Henderson asserted it would be unfair or oppressive if the Court were to direct the liquidator to provide the hard drive and flash drive to the Assignee.¹¹But I was not focussing on production of documents for the Assignee’s general administration of Mr Henderson’s estate. The focus was on whether the discovery orders I was asked to make would be oppressive or unfair (that is to say as an aspect of the management of the particular litigation before the Court).

[38] In the course of the Havenleigh judgment, I observed that the term “conduct” as used in the Insolvency Act may encompass that which is purely personal, business related, or a mix of the two.¹²An interpretation of “conduct” which puts documents involving personal communications between a debtor and other beyond the reach of the Assignee would cut across the legislative purpose of enabling the Assignee to make a fully informed decision on the matter Parliament had entrusted to her.¹³

_{Assignee or her officers will always act reasonably or lawfully in
executing what}

may be very extensive powers. NZBORA is a means by which those exercising powers, even very extensive powers, may be held to account. The theory of Mr Henderson’s case is that the defendants had no regard to his personal or private material and that the first and second defendants in particular acted unreasonably and in bad faith in accessing such material. Such is pleaded. I do not view the reasoning in my judgment in Havenleigh as cutting across Mr Henderson’s right to pursue the NZBORA claim as pleaded against the second defendant.

[39] First, Mr Kinsler attacked the allegation of bad faith in Mr Henderson’s statement of claim as an abuse of process for being a “bare pleading”. Rule 5.17(2) High Court Rules requires that if a party alleges a state of mind of a person, the party pleading must give particulars of facts relied in alleging the state of mind. This rule applies to a pleading of bad faith.¹⁴

[40] Mr Kinsler categorised a number of matters which emerged through Mr Henderson’s submissions as not amounting to matters which would support an allegation of “bad faith”. I am inclined to agree without having to decide the matter. Of more relevance, however, is the thrust of Mr Henderson’s case in relation to NZBORA breach as it was developed, namely that those involved (including Mr Slevin) in dealing with the electronic records acted with a disregard of Mr Henderson’s expectation of having purely private or personal (or indeed legally privileged) material respected. In the order I make, I will be directing Mr Henderson to provide further and better particulars of the bad faith allegation (and indeed the “unreasonableness” allegation) but I do not view the pleading as beyond repair.

[41] Secondly, in support of his pleading that Mr Slevin was not entitled to obtain the electronic documents either under the Insolvency Act or otherwise, Mr Henderson developed submissions relating to the Assignee’s powers to require delivery of documents relating to a bankrupt’s property, conduct or dealings under

_{s 171 Insolvency Act. Mr Henderson in turn relies upon the definition
of “Assignee”}

¹⁴Commissioner of Inland Revenue v Chesterfields Pre-Schools Ltd [2013] NZCA 53, [2014] 2

under s 3 of the Act as meaning the Official Assignee for New Zealand, the Deputy Official Assignee and any other Official Assignee or Deputy Assignee appointed under the Act. Mr Henderson’s case as he argued, is that Mr Slevin did not hold such an appointment. These matters relating to authorisation emerged through submissions rather than pleadings and should properly be the subject of particulars, which I will be directing.

[42] Notwithstanding the express reference to “the Assignee” in s 171 of the Act, Mr Kinsler submitted that the section necessarily contemplates the Assignee acting through agents and employees. Mr Kinsler invoked the Carltona principle.¹⁵I was not referred to any authority in which the Carltona principle has been specifically applied to s 171 of the Act. While I recognise the strength of Mr Kinsler’s submissions from the point of view of general principle, I do not regard this strike out application as the appropriate context in which to rule conclusively against Mr Henderson on his pleading.

(a) The existence of facts in respect of which there was a reasonable expectation of privacy; and

(b) Publicity given to those private facts that would be considered highly offensive to an objective reasonable person.

_{[44] Relevantly to the present applications, Gault and Blanchard JJ
elaborated on}

¹⁵_{Carltona Ltd v Commissioner of Works [1943] 2 All
ER 556 (CA) at 563 per Lord Greene MR.}

¹⁶Hosking v Runting [2005] 1 NZLR (CA) at [117] per Gault and Blanchard JJ, [259] per Tipping

[125] ... it is quite unrealistic to contemplate legal liability for all publications of all private information. ... The concern of the law, so far as we are presently concerned, is with wide-spread publicity of very personal and private matters. Publication in the technical sense, for example as applies in defamation, is not in issue.

[126] Similarly publicity, even extensive publicity, of matters which, although private, are not really sensitive should not give rise to legal liability. The concern is with publicity that is truly humiliating and distressful or otherwise harmful to the individual concerned. The right of action, therefore, should be only in respect of publicity determined objectively, by reference to its extent and nature, to be offensive by causing real hurt or harm. ... the requirement is “highly offensive to a reasonable person”; the formulation expressed in Australia by Gleeson CJ (drawn from the United States cases) and referred to by the English Court of Appeal in Campbell imbues the reasonable person with “ordinary sensibilities”. In similar vein the Privacy Act, in s 66 defining interference with the privacy of an individual, requires “significant” humiliation, loss of dignity or injury to feelings.

[127] We consider that the test of highly offensive to the reasonable person is appropriate. It relates, of course, to the publicity and is not part of the test of whether the information is private.

[45] Mr Henderson’s pleading of matters relating to an alleged breach of privacy by the first and second defendants is exceedingly spare. There appear to be three relevant allegations against the first and second defendants, namely:

(a) The first defendant accessed the electronic information without regard to any obligations in relation to privacy.

(b) He has not provided details of any material he distributed or to whom he made a distribution.

(c) The first and second defendants had a duty not to access private information and breached that duty by accessing such information.

[46] Mr Henderson’s pleading goes on to allege that Mr Henderson has suffered loss (“personal anguish, humiliation and stress”) through “the access to his personal information and that of his wife”.

[47] Although the pleadings must generally be the focus of consideration on a strike out application, the parties provided affidavit evidence which gives some indication of the particulars which Mr Henderson may have provided if he had pleaded particulars. Mr Slevin has deposed that he was very conscious of the need to ensure that the emails were not disclosed to other parties and that he did not disclose them to anyone other than the “Acting Investigations Manager of the Ministry’s [then] National Enforcement Unit”. Mr Henderson provided an affidavit in response to Mr Slevin’s evidence. He did not identify a disclosure to anyone outside the National Enforcement Unit. He neither amended his claim nor provided a draft amendment indicating the particulars of any other disclosure.

[48] Mr Henderson’s cause of action for breach of privacy is untenable against the first and second defendants. As pleaded, the cause of action lacks the characteristics required by the Court of Appeal judgment in Hosking v Runting. If one anticipates the possibility of Mr Henderson making an amendment whereby he pleaded a disclosure to a manager in the Ministry’s National Enforcement Unit, the pleading would still not carry the ingredients required to establish the tort. While there may have been a “publication” as that word is used in the context of defamation law, the communication lacks the required quality of “publicity that is truly humiliating and distressful or otherwise harmful to the individual concerned”. The standard is that

which is “highly offensive to a reasonable person”. ¹⁷While a bankrupt whose affairs

are being considered within the Ministry might be expected to have concern about the passing of information to someone in an enforcement unit within the same Ministry, a reasonable person could not conclude that the passage of such information was “highly offensive”.

_{[49] The privacy claim against the first and second defendants will
be struck out.}

[50] Although Mr Henderson’s pleading of a privacy claim against the third and fourth defendants is unsatisfactorily drafted, the pleading identifies with some particularity conduct in the nature of publicity or threatened publicity. By way of particulars of an allegation that Mr Walker acted wilfully and/or in bad faith, Mr Henderson alleged that Mr Walker had:

(a) Contacted media outlets (including the National Business Review) and promoted to them details of the contents of the plaintiff’s personal computer (which was amongst the items seized);

(b) Provided material, including personal material, to third parties that were not employed by him, including with individuals who had unrelated personal disputes with the plaintiff such as Mr Grahame Thorne, Mr Dennis Marshall and Mr Gary Holden;

(c) Offered to provide third parties access to any material that they wanted, including in at least one case (to Mr Wayne Idour), for a fee; and

[51] There is no similar allegation made against the fourth defendant. To the extent that the breach of privacy claim is made against the fourth defendant as well, it is plainly untenable and will be struck out.

[53] Notwithstanding the usual principle applying in strike out cases, namely that the plaintiff’s pleading is taken to be correct, Mr Walker provided an affidavit responding to the factual allegations as to disclosure. He referred to Mr Henderson’s particulars in which it was asserted that personal material had been provided to

Messrs Thorne, Marshall and Holden. He deposes that that allegation is untrue. He nevertheless goes on to explain that he did forward, from Mr Henderson’s electronic records, two emails between Mr Henderson and Mr Bob Parker (former mayor of Christchurch) to Mr Thorne. The emails concerned a possible apartment development in the Christchurch CBD, at a time when Mr Henderson was already bankrupt. Although Mr Walker describes Mr Henderson’s allegations as to disclosure of material to Messrs Thorne, Marshall and Holden as “untrue”, he cannot have been suggesting that there had been no disclosure at all to Mr Thorne. I infer that he was taking issue with whether the disclosure was of “personal material”. That is certainly the basis upon which Mr Smith, for the third and fourth defendants, based his submissions in relation to the privacy breach cause of action.

[54] Because of the manner in which Mr Walker worded his affidavit evidence, the Court is left uncertain as to his particular position relating to the allegations of disclosures to persons other than Mr Thorne.

[55] The Court has no basis (even on Mr Walker’s own evidence) to conclude that the pleaded allegations of disclosure of personal material by Mr Walker to named individuals are incorrect. So far as the disclosure to Mr Thorne is concerned, Mr Henderson in his evidence has pointed to material which might be taken to suggest that Mr Walker was intent on embarrassing Mr Henderson at a personal level. Although the emails between Mr Henderson and the mayor can be said to be about a business matter, Mr Eathorne had earlier forwarded them to Mr Walker under cover of an email with the observation “a bankrupt trying to do a deal with the Mayor – oh really?”. Mr Walker sent the chain of Henderson/Parker email correspondence, including Mr Eathorne’s editorial comment about Mr Henderson’s conduct, to Mr Thorne.

[56] Mr Walker, in his affidavit, gave an explanation as to why he had sent the emails to Mr Thorne (“a resident in the Gibbston Valley” who “has a direct interest in the PVL Group Companies and keeps regular contact with my office. I judge this email to the Mayor to be subject to the Local Government Official Information and Meetings Act 1987 and therefore public information”). Understandably, Mr Henderson took issue with this explanation, questioning Mr Walker’s role in judging

whether information was covered by the 1987 Act and therefore public information. Mr Henderson noted also that Mr Thorne had no direct interest in the PVL group of companies.

[57] Mr Walker’s explanation of the disclosure is far from conclusive. It is at most debatable. (Mr Walker explained in a subsequent affidavit that he had “always felt that [Mr Thorne] had a legitimate interest in knowing about the broader workings of Mr Henderson’s business empire”).

[58] Mr Henderson pleaded also that Mr Walker offered the release of material to Mr Idour. Mr Henderson has exhibited the transcript of a telephone conference between Mr Walker and Mr Idour, in which Mr Walker is recorded as saying amongst other things:

... so I have basically ended up, whether I have got a complete legal right to all this stuff or not. I am not entirely clear because its so bloody complicated.

... I can see, I can get that basically, I have probably got more information than I can ever deal with to be honest, um, and notwithstanding that I’m kinda at the margins of the law of being able to give people stuff. I mean, no doubt he’ll start squealing about the Privacy Act in the near future and I’ll say “little pricks like you – you have no rights, see you in Court, fuck off”.

I’ll push it right up to the edge then I’ll go slightly beyond it because I know he’s got no means of enforcing anything against me.

[59] Mr Henderson’s pleading does not suggest that any personal information was actually disclosed to Mr Idour. In that sense, the reliance upon the discussion with Mr Idour may foreshadow material at trial that will be of evidential significance rather than constituting direct proof of a material part of the cause of action. However, given Mr Walker’s reliance on his own affidavit evidence in this strike out context, the Court must view the evidence of Mr Walker’s conversation with Mr Idour as reinforcing the importance of proceeding upon the basis of the pleadings rather than an assessment of evidence. The very nature of Mr Walker’s alleged

conversation with Mr Idour militates against the Court concluding that Mr Walker

[60] Mr Henderson, for breach of his privacy, seeks a declaration of breach and general damages of $50,000.00. Mr Walker’s application included the proposition that (were Mr Henderson to establish a breach) the claim to general damages (for emotional distress) is insufficient in itself for a bankrupt to bring an action. Mr Smith did not present submissions in support of that proposition. It does not appear to be supportable. A bankrupt’s rights of privacy count (albeit subject to the Assignee’s rights under the Insolvency Act).

[61] I am not satisfied that the allegation of a privacy breach or the claims for a declaration and damages are untenable. But further particulars of the alleged disclosures should be pleaded and directions will be made in that regard.

[62] In addition to relying upon the tort of invasion of privacy, as recognised by the Court of Appeal in Hosking v Runting,¹⁸Mr Henderson relies upon the tort of intrusion upon seclusion, as articulated by Whata J in C v Holland.¹⁹

[63] The tort of intrusion upon seclusion does not require publication or threatened publication, but otherwise shares those elements with the privacy tort. In C v Holland, Whata J identified the tort as involving:²⁰

[64] Of the second ingredient (that there be an intrusion “into seclusion (an intimate personal activity, space or affairs)”) Whata J explained:²¹

The reference to intimate personal activity acknowledges the need to establish intrusion into matters that most directly impinge on personal autonomy.

William Young P and Glazebrook J in the Court of Appeal decision in R v Williams.²²

The Court was there dealing with reasonable expectations of privacy in the context of search and seizure. The issues included whether there had been an unreasonable search in breach of NZBORA and whether evidence obtained should be excluded. William Young P and Glazebrook J recognised that searches of residential property will have the highest expectation of privacy attaching but that there will be some gradation even within a residential property. They identified areas of a house property which will “count as private areas”, such as inaccessible areas (drawers and cupboards, particularly where one would expect to find private correspondence or intimate clothing). Less privacy would be expected in other areas such as gardens,

[66] The facts in C v Holland illustrate the required ingredient of “seclusion”. Mr Holland had intruded into C’s intimate personal space and activity when he videoed her in her boyfriend’s house (by installing a recording device in the roof cavity) in the shower.

[67] Mr Henderson’s pleading refers in the heading to each cause of action – not only to breach of privacy and breach of s 21 NZBORA but to “intrusion”. There is no reference in the headings or in the body of the pleading to there having been “an intrusion into seclusion” (my emphasis). There is no identification of the “personal

[69] Mr Henderson’s pleading falls short of an allegation of the claims of “seclusion” required for the tort to be established. The reference to material which was “private” may approach the concept of “seclusion” but it does not reach it. Nor did Mr Henderson in his evidence or submissions point to material suggesting that the facts exist to justify an amended pleading. No particulars or example is given of something so private it might be found to amount to existing in a state of seclusion. The example of the residential property in Williams v R illustrates that although a person’s house is clearly private property (my emphasis) there will be many parts of

[70] There is strength in Mr Kinsler’s submission that when the Assignee (or a liquidator) accesses computer records such as those involved in this case, the degree of intrusion is authorised. It was Mr Henderson’s choice to use his computer hard drive both for work and personal purposes.²⁵In R v Williams, William Young P and Glazebrook J considered the intimacy of a space by reference to a residential property, identifying a gradation between public areas up to the most private areas

(inaccessible areas such as drawers and cupboards), where one would expect to find private correspondence or intimate clothing. If one turns to the “area” occupied by a computer, the intermingling of business records with personal material takes the situation some significant distance from the “private drawers and cupboards” which a person sets aside for protection of their intimate items.²⁶

_{“highly offensive to a reasonable person” objectively
determined by reference to its}

extent and nature.²⁷It is not possible to say that any of the defendants’ access to the mixed record kept by Mr Henderson (without the further dimension of publicity) would be highly offensive to a reasonable person.

[72] The claims based on the tort of intrusion upon seclusion are not tenable against any defendant.

[73] The defendants, in the event their strike out applications are not fully granted, seek security for costs. Given the orders I will make striking out claims, the extant applications for security for costs are those of the Attorney-General and Mr Walker.

[74] Both the Attorney-General and Mr Walker seek orders for security for costs on the basis that they should not have to assume the full financial risk associated with defending the claims if the claims are ultimately unsuccessful.

(a) the causes of action are founded in fundamental human principles and therefore there is a public interest to the claims being heard;

(b) the claims are supported by considerable evidence and in some regards, admitted to by the defendants; and

[76] Rule 5.45(2) High Court Rules empowers the Judge to order the giving of security for costs when it is just in all circumstances to do so.

[77] In A S McLachlan Ltd v MEL Network Ltd, the Court of Appeal emphasised the discretionary nature of the jurisdiction and observed that it is not to be fettered by constructing “principles” from the facts of previous cases.²⁸There is no check list of so-called principles.

[78] Security may be ordered under r 5.45(2) if one of the threshold tests under r

[79] The applicants in this case rely on r 5.45(1)(b), asserting that there is reason to believe that the plaintiff will be unable to pay the costs of each defendant if the plaintiff is unsuccessful in his proceeding.

[80] Mr Henderson is an undischarged bankrupt, having had that status now for more than four years.

[81] In his notice of opposition, Mr Henderson explained his current financial situation in this way:

I accept that I am an undischarged bankrupt of three years and eight months. Ironically, it is Mr Walker and the Official Assignee’s Department who are applying to keep me in bankruptcy which self evidently means that I cannot earn money to help support such cases. Their application should be viewed in light of that. How can I be expected to put up security when I am not allowed to earn significant money?

[83] The Court of Appeal in McLachlan recognised that access to the Courts for a genuine plaintiff is not likely to be denied.²⁹The Court went on to add that the

_{interests of defendants must also be weighed, in that they must be
protected against}

²⁸_{A S McLachlan Ltd v MEL Network Ltd [2002] NZCA 215; (2002) 16 PRNZ
747 (CA).}

being drawn into unjustified litigation, particularly where it is over-complicated and unnecessarily protracted.³⁰

[84] The events relied on by Mr Henderson in this case emanate from the execution by the police of search warrants over property of Mr Henderson and his related entities. Each of the defendants has subsequently had access to Mr Henderson’s documents, relying upon statutory powers. This is not a case which can be described as litigation between private individuals.

[85] There is therefore force in Mr Henderson’s first ground of opposition in which he asserts reliance upon fundamental human principles and a public interest in having the claims heard.

[86] On the facts of this case I find this to be a factor militating against security.

[87] In reaching my judgment on the strike out applications, I have necessarily focussed on whether the pleadings render the claims tenable rather than on the prospects of success as emerging from evidence.

[88] Kós J observed in Highgate on Broadway Ltd v Devine that it is only where a clear impression can be formed that the plaintiff ’s claim is altogether without merit – so that in the alternative it would be amenable to being struck out – that it would be right for security to be ordered where to do so would bring the plaintiff ’s claim to a dead halt.³¹

[89] By reason of my findings in relation to the strike out applications, I do not consider the extant claims to be without merit.

[90] Although Mr Henderson has not deposed, in unequivocal terms, that a significant order of security would preclude him from proceeding, it is a reality that

_{his ability to generate income is constrained by his continuing
bankruptcy. I do not}

³¹Highgate on Broadway Ltd v Devine [2012] NZHC 2288 at [23](b); see also Athendale Property

disregard the observations of the Supreme Court in Reekie v Attorney-General, relied upon by Mr Smith in support of the application for security.³²In particular, William Young J, delivering the judgment of the Court, observed:³³

An appellant without liquid assets may be required to borrow money to provide security. It might be appropriate to investigate whether it is reasonable for another party (such as a related family trust or a close relative) to provide funding. If a trust associated with the appellant or a close relative has the resources but is unwilling to provide security, it may suggest that dispensation is inappropriate. Proof that security cannot be provided may require full disclosure of financial circumstances and the sources of funding relied on by the appellant to support his or her general lifestyle.

[91] Care must be taken not to treat the considerations attaching to applications for security in appellate cases as the same as those at first instance. Access to justice issues loom large when a proceeding is at first instance.

[92] For Mr Walker, Mr Smith nonetheless submitted that the Court might properly consider requiring Mr Henderson to make full disclosure of his financial circumstances given some matters which Mr Smith suggested point to Mr Henderson having access to at least some significant funds. The suggested indicia include:

(b) There is some evidence that Mr Henderson has had access during the course of his bankruptcy (albeit some time ago) to liquid funds to make payments for legal services.

(c) The Official Assignee’s current objection to Mr Henderson’s discharge from bankruptcy derives in part from a suspicion that Mr Henderson has been carrying on business during his bankruptcy.

(d) Potter J in Thorn v RFD Finance Ltd observed that a company associated with Mr Henderson had been treating another associated

month period, at a time when Mr Henderson was disqualified from directorship by reason of his bankruptcy.³⁴

[93] With the evidence filed by Mr Henderson, and in particular his failure to state in terms (or support with documentary evidence) that an order for security would bring this proceeding to a dead halt, I am not satisfied that it will.

[94] A consideration of the merits and the effect of an order of security therefore do not weigh entirely against an order of security but rather in favour of moderating the level of security that might normally be ordered.

[95] It is recognised that it may be unjust for a defendant to receive security for costs if it is the defendant’s actions, being subject of the litigation, which have caused the plaintiff ’s impecuniosity.³⁵As Kós J observed in Highgate on Broadway Ltd v Devine, this factor involves a consideration of linkage rather than a re- examination of the merits.³⁶

[96] Although Mr Henderson did not assert this as a ground of opposition, his submissions invited a consideration of the circumstances of his present financial predicament.

[97] In particular, Mr Henderson submitted that it is as a result of the direct efforts of the defendants, in objecting to his discharge from bankruptcy, that he is unable to earn money. The asserted inability to earn money was not supported by any evidence and is not a necessary consequence of bankruptcy. More fundamentally, however, any actions taken by the defendants under the Insolvency Act in relation to Mr Henderson’s status as a bankrupt are not actions of the defendants which are the subject of this litigation. Mr Henderson’s insolvency and subsequent bankruptcy are circumstances which have brought the defendants into contact with Mr Henderson

_{(and vice versa) but there is no linkage between the actions of the
defendants which}

³⁵_{Bell- Booth Group Ltd v Attorney-General and BCNZ
(1986) 1 PRNZ 457 (HC).}

have become the subject of litigation and any inability of Mr Henderson to fund security.

[98] Understandably, given that the strike out applications were yet to be determined, there was a difference between the parties at the hearing as to the likely duration of a trial of this proceeding. One view was three days. Another view was five days.

[99] While the judgment as to strike out eliminates two defendants and some causes of action, the factual circumstances to be traversed at trial may not differ significantly from those anticipated by the parties at the interlocutory hearing. It is impossible to say with accuracy at this point whether this proceeding is more likely to involve a three-day trial than a five-day trial. My impression, in the light of the degree of evidence filed simply on these interlocutory applications, is that a five day trial may be more realistic, particularly having regard to the fact that Mr Henderson is self-represented.

[100] The case is likely to involve a significant amount of evidence and cross- examination. There is likely to be a focus on a considerable number of documents. There are also legal issues of some novelty, therefore requiring some complex preparation. In my judgment, these uncertainties can be most justly approached at this point by awarding a single, limited tranche of security, to cover the period to close of pleadings. The security applications will be adjourned with leave to the defendants to seek a second tranche of security applying to the briefing of evidence and the trial, but upon the basis that by this judgment I find that the defendants are entitled to some, albeit a modest, level of security.

[101] It is just that each of the two remaining defendants has security for its costs up to the close of pleadings (but excluding the costs and disbursements of the present applications) in the sum of $7,000. It is appropriate that there be a period for Mr Henderson to arrange such security.

[102] The parties did not address me on costs. That was appropriate given the number of issues dealt with at the hearing and the possible permutations of any judgment.

[103] There has been a mixture of outcomes on the various applications, with the applications in some ways logically falling to be dealt with as two sets (the first set involving the first and second defendants and the second set involving the third and fourth defendants). My tentative conclusion is that the defendants have had substantial measures of success. The principle that costs follow the event may be viewed as substantially, but not completely, in their favour. I look to counsel to have a realistic discussion with Mr Henderson to reach agreement on any order as to costs and disbursements. There will be provision for the exchange of memoranda in the event agreement is not possible.

(i) The proceeding as against the first, third and fourth defendants is struck out.

(ii) As against the second defendant, the plaintiff shall provide further and better particulars of the allegations of unreasonableness and bad faith.

(iii) The proceeding against the first, second and fourth defendants is struck out.

(iv) As against the third defendant, the plaintiff shall provide further and better particulars of the date and content of each

(v) The proceeding against all defendants is struck out. (d) Proceeding generally

(vi) The plaintiff is within 20 working days to file and serve an amended statement of claim naming the Attorney-General as first defendant and Robert Bruce Walker as second defendant (omitting prior claims against Messrs Slevin and Eathorne) and re-pleading the claims appropriately, including the provision of further and better particulars as above ordered.

(vii) The plaintiff shall at the same time as serving his amended statement of claim provide any additional documents required under r 8.4 of the High Court Rules by reason of any additional allegations in the amended statement of claim.

(viii) The defendants shall file and serve amended defences to the amended statement of claim within 10 working days after service of the amended statement of claim.

(ix) The plaintiff within 20 working days shall provide to the satisfaction of the Registrar security for the costs of each defendant in the sum of $7,000.00 (a total of $14,000.00).

(x) The application of the Attorney-General and of Robert Bruce Walker for an order for security is otherwise adjourned with counsel and Mr Henderson to file memoranda near the close of

pleadings date in the event the parties disagree on the amount of a second tranche of security.

(xi) In the event the plaintiff by the required date fails to provide any sum ordered to be paid as security in this proceeding, the plaintiff’s claim against the party entitled to security shall be stayed until further order of this Court, with leave to the defendants to apply for an unless order if security remains unpaid for two months after the required date.

(xii) I reserve the costs and disbursements of the defendants’ application. In the event the parties cannot resolve those matters, memoranda are to be filed and served. The memorandum in relation to any application is to be filed within 15 working days (five page limit) and the memorandum in response is to be filed within five working days thereafter, with the Court’s judgment to then be given on the papers.

[105] I adjourn the proceeding to a further case management conference by telephone at 12 noon, 19 May 2015 (Associate Judge Osborne). Counsel and Mr Henderson are to confer by 5 May 2015 as to Schedule 5 matters and are to file by 12 May 2015 either a joint memorandum or separate memoranda as to those matters and suggested timetable.

High Court of New Zealand Decisions

Henderson v Slevin [2015] NZHC 366 (5 March 2015)