The current James Hardie litigation concerns allegations that certain exterior cladding products manufactured by the James Hardie group were defective, which defects are alleged to have caused moisture ingress and associated damages. The recent judgment in the Court of Appeal, James Hardie New Zealand Limited  NZCA 142 concerns a narrow question of when it is appropriate for one party to swear an affidavit of documents on behalf of other parties. In dispute was whether Alexander Petrie, employed by James Hardie Australia Pty Limited as “Legal Counsel – APAC” was entitled to make an affidavit on behalf of seven companies within the James Hardie group.
The Court of Appeal said he was permitted to do so. It allowed the appeal and reversed the decision of the High Court. This provides clarity to parties involved in multi-party litigation (e.g. class actions, leaky building cases etc).
What is an affidavit of documents?
In litigation in New Zealand, parties are usually required to provide to the other party or parties certain documents in their possession. In other words, they are required to ‘discover’ to the other side documents in their control. Discovery can be standard (documents that help a party’s case, hurt that party’s case, or help the other side) or it can be tailored (with the parties agreeing, or the court deciding, what documents should be discovered by category). A court will make what is called a discovery order.
Documents must always be relevant. Relevance is determined by the pleadings (being the documents that make and defend the claim or claims). The documents are required to be listed in a prescribed way and the default position is that one or more parties must make an affidavit (the giving of an oath) as to what steps they have taken to meet their obligations.
The reasons for finding that Mr Petrie was permitted to make an affidavit on behalf of all seven James Hardie companies can be stated briefly:
1. Where two or more defendants agree to collaborate on discovery, instruct the same solicitors, and make all relevance documents available to each other for the purpose of the proceeding, each defendant controls those documents for the purpose of the definition of “control” in the High Court Rules 2016. In such a case every defendant is prima facie in control of every document.
2. In such a situation, there is no need for the affidavit of documents to identify when that party came to be in control of the document. This is not something contemplated by the Rules, not is it necessary at the discovery stage. There is also a difference between “control” in the sense defined by the rules, particularly in the case of a corporation, and the ordinary meaning of “control” in the sense that relevant individuals
within the organisation having knowledge of the documents.
3. It is not necessary for every defendant, in control of all of the same documents, to provide identical lists of documents. No useful purpose would be served by this other than duplication. In this case Mr Petrie was authorised by all seven companies to provide an affidavit of documents.
The Court of Appeal also stated that a decision on discovery in the High Court was both procedural and discretionary. As such, the appeal would be governed by the principles relevant to the exercise of a discretion. The test for such an appeal is higher. Such appeals should be approached in a cautious way.