Tailored Discovery in the Family Court?

The case of Fisher v Fisher [2015] NZHC 2693 was a case which came to the High Court on appeal from the Family Court. One of the applications associated with the appeal was for a stay of execution of orders for discovery.

The Judge, Nation J, pointed out that pursuant to the Family Court Rules, the Judge has a discretion as to whether to make discovery orders.

Although the rules require an order for discovery to be in a certain form, a Family Court Judge could, in his or her discretion, give directions as to the particular discovery required to enable the Court and the parties to more speedily and economically resolve the actual issues which are before the Court. (See Rules 141(3) and 16. Dixon v Kingsley [2015] NZHC 2044.)

The Judge observed that a good deal of discovery had been made both formally and informally by the parties before the wife applied to the Family Court for an order that the husband make discovery. Even although both parties had cooperated to some extent in enabling an accountant engaged for Mr Fisher to have relevant documents and to obtain documents from banks and Mr Fisher’s counsel had made it clear that those documents were available for inspection, nevertheless there was considerable mutual distrust between the parties.

One the matters that the husband wished to address was the setting aside of a settlement agreement partially on the basis he was not adequately informed as to the true nature and extent of the property at issue. It was thus understandable that the Judge required Mr Fisher to verify, by way of affidavit, what documents he held personally and particularly what documents he had in his possession at the time the settlement agreement was entered into.

Mrs Fisher claimed that Mr Fisher had been responsible for removing a considerable collection of relevant business documents from where they were normally kept, while later in the proceedings she had found relevant documents. There was no evidence as to the particular circumstances in which that had happened.

On this basis the Family Court Judge had decided to make full Peruvian Guano discovery (See Compagnie Financière et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55, (CA).   However, since that order had been made counsel for the parties had the benefit of considering the decision of Kos J in Dixon v Kingsley [2015] NZHC 2044. In that case His Honour noted that the Peruvian Guano approach to discovery had been “shovelled out the door in 2012”, as far as the High Court was concerned. While there had not been a change to the Family Court Rules to reflect the discovery regime in the High Court and the District Court, given the discretion that the Family Court had to make discovery orders, a tailored approach was permissible and desirable.

Counsel had recognised that some discovery would be appropriate but on a much more tailored basis than the original Family Court orders. Counsel had not settled the way in which discovery should be made but it was agreed that the appeal about discovery should be allowed.

The Judge made orders for both parties to provide discovery as to particular documents held by them in terms to be agreed between counsel. Within 21 days of this judgment, counsel were required to file a memorandum setting out the scope of discovery which is required and a timetable for inspection of those documents. Leave was reserved to either party to seek further directions as to discovery if that becomes necessary.

It is clear from this decision that the themes of reasonableness and proportionality that underpin the High Court Rules on discovery have been adopted by the Judges in considering discovery in the context of relationship property. The measured and relevance based approach of tailored discovery means that discovery in relationship property cases, where often there is an inequality of financial ability to fund extensive discovery, is more focussed and relevant. It is encouraging to see that the High Court in two cases has delineated the approach to discovery in relationship property cases. What is also significant is that the parties recognised their responsibilities in this regard and the Court was content to allow counsel to agree upon the scope of discovery.

What augurs well for the future is that a tailored approach to discovery in relationship property cases will be considered in the event that there are e-discovery issues to be addressed. While it is unlikely that large datasets of documents will be at issue that require a TAR approach, nevertheless the ground rules are set. And this can only be for the benefit of the parties in these fraught and often highly charged cases.

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