Body Corporate 172108 v Meader (No 3) HC Auckland CIV 2007-485-2168
[2010] NZHC 1647
•31 August 2010
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2007-485-2168
BETWEEN BODY CORPORATE 344862
First Plaintiff
ANDALAMIR COMPANY LIMITED Second Plaintiff
ANDNOVA GAS LIMITED Third Plaintiff
ANDE-GAS LIMITED First Defendant
ANDE-GAS 2000 LIMITED Second Defendant
Hearing: 27 July 2010
Appearances: T. Stevens and J. Verbiesen - Counsel for Third Plaintiff
L. Taylor and B. Ross - Counsel for the First and Second Defendants
Judgment: 31 August 2010 at 3.30 pm
JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL
This judgment was delivered by Associate Judge Gendall on 31 August 2010 at 3.30 pm pursuant to r 11.5 of the High Court Rules.
Solicitors: Izard Weston, Solicitors, PO Box 5348, Wellington
Kensington Swan, Solicitors, PO Box 10246, Wellington
BODY CORPORATE 344862 AND ORS V E-GAS LIMITED AND ANOR HC WN CIV-2007-485-2168 31
August 2010
Introduction
[1] The third plaintiff, Nova Gas Limited (“Nova”), seeks interlocutory orders in relation to the first and second defendants, E-Gas Limited and E-Gas 2000 Limited (together “E-Gas”). The first application that is before the Court relates to discovery and the second is an application for further and better particulars.
[2] E-Gas opposes both applications.
Background
[3] The parties are competitors in the retail gas supply market. I now set out the brief factual background to this proceeding.
[4] In 2007, various commercial gas consumers sought to terminate gas supplies from E-Gas in order to transfer their supply to Nova. Nova alleges that, in refusing to effect a transfer or switch of consumers, E-Gas has breached its obligations under an industry code operating between the competing gas retailers (“the Reconciliation Code”) and also under an agreement concluded between the gas companies and the allocation agent responsible for administering the allocation of gas among retailers (“the Allocation Agreement”). Further causes of action that are pleaded are interference with contractual relations and breach of ss 9, 13(c) and 13(i) Fair Trading Act 1986.
[5] E-Gas raises a number of matters by way of defence and counterclaim. It argues that the arrangements between Nova and the affected customers do not constitute lawful, valid or enforceable agreements, and claims misrepresentation by Nova to affected E-Gas customers, misleading and deceptive conduct, and unlawful interference with the contractual relations between E-Gas and its customers. These claims are made on the basis that Nova amongst other things advised the customers that they were being overcharged by E-Gas.
[6] The background to this proceeding was set out in more detail by Dobson J in his judgment on an application for summary judgment by Nova. Dobson J’s judgment dealt in particular with cl 48 of E-Gas’ standard terms and the application of the Reconciliation Code and Allocation Agreement. He concluded first that cl 48
was to be interpreted so as to afford a unilateral right of termination of the E-Gas supply contracts by customers once a penalty had been paid by the customer or another party on its behalf and secondly, he defined the extent of E-Gas’ obligations under the Reconciliation Code and the Allocation Agreement.
Discovery Application
[7] The two main sets of orders that are sought here by Nova relate to E-Gas’ claim of confidentiality for documents containing pricing information, and to a request by Nova for further discovery of several categories of documents. With respect to confidentiality, it should be noted at the outset that E-Gas is prepared to allow inspection of the documents by Nova’s external solicitors or counsel and external experts, subject to provision of appropriate undertakings. Nova’s position, however, is that it is critical to its case that Nova and its personnel and witnesses have access to the material. I will deal with the matter of confidentiality first.
Confidentiality
[8] E-Gas’ restrictions are claimed in relation to pricing information contained in customer contracts and customer invoices, on the basis that the pricing information is commercially sensitive. Nova contends that the information is not “truly sensitive”, and that it is central to the issues in the proceeding, particularly E-Gas’ claims that Nova misrepresented to customers E-Gas price information. Nova’s counsel, Mr Stevens, referred to a number of cases setting out the principles that govern the disclosure of allegedly confidential commercial information. The key principles were set out by the Court of Appeal in Port Nelson Limited v The Commerce Commission (1994) 7 PRNZ 344 at 348 as follows:
Relevant documents should generally be made available for inspection. The fact that they are regarded as being confidential, and would not be made available were it not for the requirements of the litigation, is immaterial. An order for non- disclosure can only be made when the Court is satisfied in terms of r 312 that such an order is “necessary”. It must be either apparent from the document in question or shown by other evidence that disclosure would be likely to prejudice the party in some significant way. Even the possibility of prejudice may be sufficient, but that will depend on the seriousness of the possible prejudice and on the significance of the document to the issues in the proceeding, and the extent to which limited disclosure may enable the concerns of both parties to be accommodated
[9] What is required, therefore, is a balancing of the seriousness of the possible prejudice caused by the disclosure with the significance of the document to the issues in the proceeding: Corbans Viticulture Ltd v Zivkovic HC Auckland CP523SW01, 27 August 2002. In Simunovich Fisheries Ltd v Television New Zealand Ltd (No 4) HC Auckland CIV-2004-404-3903, 1 June 2006, the Court observed that:
[20] It will be a rare case in which the Court declines altogether to permit documents to be made available to a party (as distinct from that party’s solicitor and counsel), at least in proceedings which are truly adversarial. In Minister of Foreign Affairs v Benipal [1984] 1 NZLR 758, the Court of Appeal considered an immigration case, in which in the context of an application for judicial review, the High Court had declined to make available to the Minister certain confidential documents upon which the plaintiff heavily relied. At p.767 Richardson J described the underlying principle in the following way:
There is nothing I can discern in either the Immigration Act 1964 or the Judicature Amendment Act 1972 which suggests a duty on the part of the High Court in this case to protect the interests of other persons so as to override the right of a party to know the case he has to meet and to deny him the opportunity of challenging it by calling evidence and by crossexamination. And the opportunity which the order gives to counsel to inspect the document - without disclosure to their clients - is not an acceptable alternative. That course could be appropriate only if jurisdiction distinctly existed to withhold the document from the party himself. It would be appropriate then in order to ameliorate the encroachment by reason of necessity on the application of natural justice in those proceedings. It is a second best and inadequate at that. For how can counsel be expected to conduct a case where he is dealing with his client across an information barrier and where he is deprived of the opportunity to test the secret information by the standard forensic methods of cross- examination and the adducing of further evidence.
[21] But it will on occasion be appropriate, for example, where the parties are trade competitors, to withhold truly sensitive documents from a party.
[10] Nova claims that the pricing information is not truly sensitive and that any possible prejudice to E-Gas would be at the low end of the scale. It submits that the information is “largely historical” as it relates to prices charged to a group of 135 retail customers over three years ago, when market processes and conditions were different to today. Nova further submits that the information is no longer confidential because both Nova and E-Gas had information as to each customers’ current prices in 2007, with the result that the information is “broadly common” to the parties. It is argued that, in these circumstances, disclosure of the information would merely confirm whether Nova’s information was right or wrong, and would thus clarify the issue.
[11] In response, E-Gas submits that pricing information is highly confidential and jealously guarded in the fiercely competitive gas industry, as price is the only real point of difference between competitors. It expresses concern that access to its pricing information would allow Nova to assess E-Gas’ pricing patterns, anomalies and variations to standard practices; and that it would lead to a “raid” on its customer base, because it would enable Nova to approach E-Gas’ customers with the offer of a marginally more attractive price. E-Gas contends, therefore, that the prejudice to its competitive and commercial position should be sufficient reason for the Court to order that disclosure be restricted, referring to the Court’s observation in Port Nelson that even the possibility of prejudice may be sufficient to prevent disclosure in some cases.
[12] E-Gas refers to Todd Pohokura Ltd v Shell Exploration NZ Ltd HC Wellington CIV-2006-485-1600, 12 August 2009 in support of its contention that Nova employees would be under pressure to use the pricing information against E- Gas in the competitive market. In that decision, Dobson J noted that the confidential information in issue “was not the sort of confidential information that could be
‘mentally ring-fenced’ and not misused in contexts outside of the present litigation” (at [20]).
[13] In response to Nova’s argument that the information is dated and thus commercially irrelevant, E-Gas submits that it is unlikely that pricing structures would have changed within the last three years, and that historical pricing information and structures still affect current pricing. E-Gas also contends that Nova’s attempt to rely on the “common” nature of the information is misguided, as Nova would have only had access to E-Gas pricing as a result of a breach of the individual E-Gas gas supply agreements, which required customers to keep the essential terms of the agreements confidential.
[14] In terms of the significance of the information, Nova contends that access to the material is critical to the proper preparation and presentation of its case, as E- Gas’ counterclaim raises a factual issue whether Nova misled customers as to E-Gas’ pricing at the time. The pricing information is therefore relevant to determining whether Nova’s representations were false, and was “put squarely in issue” by E-
Gas’ counterclaim. It is submitted that restrictions on disclosure would require Nova to deal with E-Gas claim “blind”, and that experts as well as Nova, Nova personnel and witnesses will need to be involved in assessing the misrepresentation allegations. It is argued, therefore, that this is not a situation in which Nova’s lawyers could properly operate through an information barrier, subject to undertakings, as they will need to engage with Nova in order to properly consider the pricing information against any internal Nova assessments and any representations.
[15] Nova further submits that no proper purpose would be served by such confidentiality restrictions, as these would only postpone availability of the pricing information to Nova to trial. Reference is made to Mobil Oil New Zealand Ltd v Ellison (1999) 13 PRNZ 177, where the Court concluded that no good purpose would be served by preventing a defendant from having access to information prior to trial if the information would clearly be available to the defendant at trial, and that access to the information might “assist with defining the issues at an earlier stage than might otherwise be the case”: at 181.
[16] E-Gas, on the other hand, insists that Nova will only require details of E-Gas’ pricing and pricing structure to argue that E-Gas’ pricing was outside market range, and that this “economic evidence” is more appropriately provided by an economist as opposed to a Nova employee. It is submitted that Nova’s witnesses would not be in a position to analyse or answer questions about E-Gas’ actual pricing and pricing structure. E-Gas accordingly maintains that restricting access to the pricing information would not affect Nova’s ability to prepare for hearing, but if it was not restricted this would seriously prejudice E-Gas’ market position.
[17] In my view, the possible prejudice caused by the disclosure of the pricing information to E-Gas here is significant. The parties are competitors in the same market, where price is the only real distinguishing feature. As to the historical nature of the pricing information, I accept E-Gas’ argument that pricing structures are slow to change and that current pricing would still be affected by historical pricing information. Further, I reject Nova’s contention that the information is no longer confidential because it was common to the parties, and that disclosure would thus merely clarify whether Nova’s information at the time was correct. If Nova’s
information was incorrect, then it clearly was not common to the parties, and the actual pricing information retained its commercial sensitivity.
[18] In terms of the significance of the pricing information to the issues in the proceeding, it is my view that the information is relevant to Nova’s defence to E- Gas’ counterclaim. However, I am not persuaded that confidentiality restrictions are inappropriate in the present case. The information does appear to be of largely economic relevance. Balancing the commercial sensitivity of the information with its significance to the proceeding, I consider under all the circumstances here that it is a fair and just solution to order limited disclosure of the information to Nova’s external experts, counsel and solicitors.
[19] Brief mention must also be made of Nova’s alternative argument that the restrictions on inspection sought by E-Gas are not enforceable, as E-Gas’ list of documents failed to refer to any of the proposed restrictions and r 8.33(3) was therefore not engaged. As such, it is argued that E-Gas is obliged to make the unredacted documents available for inspection. Counsel for E-Gas, Mr Taylor, acknowledged that there had been a technical breach of the rules, but submitted that a breach of this nature could not disentitle E-Gas to its claim of confidentiality.
[20] I agree with Mr Taylor that E-Gas should not lose its claim to confidentiality as a result of a technical breach of the rules. The matter must be determined on the merits.
Particular Discovery
[21] The second discovery application before the Court relates to particular discovery. Under this, Nova seeks particular discovery of documents that are grouped in eight or nine general categories. By reference to the principles summarised by Allan J in Simunovich Fisheries Ltd v TVNZ (No 6) HC Auckland CIV-2004-404-3903, 3 August 2007, Nova submits that there are grounds for believing that E-Gas has not discovered some or all documents in the categories specified; that the documents are relevant; and that discovery is reasonably necessary for the Court to do justice between the parties.
[22] One day before the hearing of the present applications, E-Gas filed a supplementary list of documents that it said completed discovery of documents in three of the categories in question being Categories A, B and D. As there was insufficient time before hearing to assess E-Gas’ compliance with Nova’s request for discovery in relation to these categories, Mr Stevens urged me to make the discovery orders sought on the basis of the evidence before the Court. Given that there appears to be no dispute that the documents listed under Categories A, B and D are (or were) discoverable, I agree that orders to this effect would be appropriate. Orders will follow. This leaves documents in the remaining five categories, Categories C, E, F, G and H for determination.
Category C
[23] Category C relates to switch request forms that were attached to a large number of discovered emails. Nova asks for discovery of these attachments to the extent that they are relevant, or are claimed to be relevant, to the matters in issue in the proceeding. The emails are not, in themselves, relevant. They form part of correspondence between Nova and E-Gas. E-Gas’ position is that it has not discovered the documents because they are part of correspondence common to the parties, and are therefore in the possession and control of Nova: see r 8.21(3)(b).
[24] Nova, on the other hand, contends that it should not bear the burden of sifting through the email attachments to establish which of the attachments E-Gas might consider relevant, and asks that a new affidavit be filed stating which attachments are relevant. It submits that the attachments are not “correspondence”, and that r
8.21(3)(b) ought not to be extended to circumstances where a party provides incomplete discovery of on the face of it irrelevant covering emails, excluding any attached documents it contends are relevant.
[25] Although counsel for the parties were unable to refer me to any authority on whether attachments to emails form part of “correspondence” between the parties, given that the purpose of the rule seems to be to avoid unnecessary discovery where all parties are in possession of the documents, I would find it surprising if attachments were not interpreted as “correspondence”. On this basis and although it
might at one level seem somewhat unfair to require Nova to search through all of the attachments on the basis that E-Gas might consider some of them to be relevant, Nova has had this material for some time and I am satisfied that the attachments are within the r 8.21(3)(b) definition of “correspondence” reasonably assumed to be in the possession of all parties and thus do not require further particular discovery here.
Category E
[26] Category E concerns price increase letters rendered to E-Gas Group customers, and invoices with respect to those customers on dates immediately prior to and following any price increases during the periods August 2004 to February
2007. In its statement of defence to E-Gas’ counterclaim, Nova alleges that E-Gas unlawfully increased its charges for supply of gas following the price increase letters sent in 2005 and 2006 to various E-Gas customers. This allegation was made in response to E-Gas’ claim that it invoices its customers for gas supply in accordance with the provisions of the E-Gas Group customer contracts.
[27] Nova submits that analysis of substantial numbers of E-Gas Group invoices will be necessary for the parties to address this issue. E-Gas argues that copies of template price increase letters rendered to E-Gas customers have already been discovered, together with a list of customers to whom “one of the price increase letters was sent”. It further submits that the invoices have either already been discovered or are otherwise irrelevant.
[28] On this, E-Gas does not appear to elaborate on its claim that the invoices in question are irrelevant. And, given the wide Peruvian Guano test of relevance, I disagree and find that the invoices may well be relevant here. An order for their discovery will follow. If they have already been discovered and, as I understand it that is disputed, that will not affect the position to any extent. As to the price increase letters sought, no order is to be made. Copies of these template letters together with a list of recipients as I understand it have already been provided.
Category F
[29] Category F concerns all invoices rendered to any E-Gas Group customer “for whom an incorrect pressure factor has been charged” on dates immediately prior to and following any changes in pressure factors. In its statement of defence, Nova alleges overcharging by E-Gas due to use of an incorrect pressure factor. As with Category E, it claims that the invoices are necessary to address these overcharging allegations.
[30] E-Gas accepts that a simple and genuine error in metering did occur at the time which meant that some of its customers were overcharged and some undercharged. But it says that this category of documents is irrelevant to the current proceedings, as the information relating to this genuine pressure factor mistake only became known to Nova in December 2008 and to E-Gas in February 2009, but Nova’s initial allegation that E-Gas was overcharging its customers was made back in May 2007. E-Gas does not dispute that some customers were overcharged (and some undercharged) as a result of the pressure factor metering error. It submits that Nova cannot use the pressure factor information retrospectively to establish that it was justified in making the overcharging allegations to E-Gas customers. Nova submits that whether it was aware of the pressure factor issue at the time of the customer switch requests is not determinative, as the overcharging allegations are “live pleaded issues” and the documents are relevant to those issues.
[31] Documents must be discovered if they “relate to a matter in question in the proceeding”: r 8.18. Those matters are identified by reference to the pleadings: NZ Rail v Port Malborough [1993] 2 NZLR 641 (CA). Having regard to the E-Gas’ counterclaim and Nova’s statement of defence, I consider that the invoices are relevant to the overcharging allegations. An order will follow.
Category G
[32] Category G includes six versions of the E-Gas Terms and Conditions that were expressly or impliedly referred to in E-Gas’ particularised statement of defence and counterclaim. E-Gas’ pleadings refer to “version 3”, “version 2”, “version 1”
and “version 6”, which Nova says implies that there are other relevant versions (namely version four and version five). Nova argues that versions four and five are relevant to the time frame in issue, and that all versions should be disclosed so that Nova can be certain how E-Gas’ versions correspond to the contract terms relied upon by Nova, whose statement of claim uses different terminology to describe the different versions. E-Gas asserts that only versions two, three and six are relevant, that these have been provided and that an order that all versions be discovered would be unnecessary.
[33] In my view, and based upon the wide Peruvian Guano test of “relevance” noted above, all versions of the document must be considered to be relevant here and should be discovered, including versions four and five. Based on E-Gas’ pleadings, it seems that versions four and five may have been applicable at the relevant time, although they are not expressly referred to in those pleadings. An order for their discovery will follow.
Category H
[34] Category H relates to copies of all hitherto undiscovered E-Gas internal and external correspondence and communications regarding each remaining transferring customers, including customer notes, reports and standard form/template documents. Nova submits that there are clear gaps in E-Gas’ discovery. At the hearing, Mr Taylor asserted that further documents had been found and supplied to Nova. On that basis, the parties were prepared to agree to a twenty working day order for further discovery of any documents that appeared to be missing. An order to that effect will follow.
Order 7
[35] Under the guise of “Order 7 such other orders as this Honourable Court thinks just” before me Mr Stevens for Nova also sought discovery of invoices relating to each of the Remaining Transferring Customers identified in Nova’s statement of claim.
[36] In advancing this argument for the first time at the hearing before me, it is fair to say that these are matters effectively sprung upon E-Gas. Mr Taylor for E- Gas had little opportunity to respond before me. And, in any event, relating as it does to the orders specifically agreed to by E-Gas for the Category D documents mentioned above, I am satisfied that the relevant invoices here would already have been provided. No order under this Order 7 is to follow.
Inspection
[37] Nova complains that the documents E-Gas has made available for inspection from Part I of its list are heavily redacted, although they are listed without qualification. The basis for the redactions it is said is not apparent. Nova now seeks an order that E-Gas identify each redaction, specifying why the redaction has been made.
[38] E-Gas disputes that it is under any obligation to specify why the redactions have been made. Because unredacted versions of privileged and confidential documents are listed in Parts II and III, it submits that Nova could simply cross- check any redacted document in Part I against those listed in Parts II and III in order to ascertain the status of the redaction. Nova submits that this approach is impracticable, as documents in Parts I, II and III are differently numbered without cross-referencing and the documents are not in chronological order. It argues that it ought not have to bear the burden of “unravelling these anomalies”.
[39] Rule 8.21 requires a Schedule of documents to identify or list documents according to the categories of documents specified in paras (a) to (e). Paragraph (a) concerns documents “for which the party does not claim privilege or confidentiality”, whereas paras (b) and (c) deal with documents for which privilege or confidentiality is claimed. Part I of the defendant’s list is stated to identify documents for which the defendant does not claim privilege or confidentiality, but does include redacted versions of privileged and confidential documents.
[40] McGechan on Procedure at para HR8.18.04 addresses redaction of documents on relevance or confidentiality grounds and states:
HR8.18.04 Partial disclosure on relevance or confidentiality
Where only part of a document is relevant, and the party concerned does not wish to disclose the whole document, it is permissible to cover up the irrelevant parts of the document: G E Capital Corporate Finance Group Ltd v Bankers Trust Co [1995] 2
All ER 993(CA). If the extent of covering up content is disputed, the Court may inspect the whole documents to determine discoverability. The same practice may be adopted in respect of privileged or confidential material: see Marr v Arabco Traders Ltd (1986) 2 PRNZ 72, and HR8.31.17.
[41] Here, as I understand it, E-Gas has provided both redacted and unredacted copies of the documents in question. Nova is able therefore to identify each redaction although this may take it some little effort. If Nova is unhappy with, and disputes the extent of, any particular “covering up” it can approach the Court to inspect the whole document to determine confidentiality or discoverability. This is the appropriate course of action if inspection matters remain unresolved.
[42] No order is to be made here regarding this inspection issue.
Application for Further and Better Particulars
[43] Nova seeks orders for further and better particulars on the grounds that E- Gas’ statement of defence and counterclaim are defective. Three categories of deficiency are relied upon, namely that the pleadings are evasive; that the pleadings purport to rely on the terms of documents without expressly stating which terms are relied on and how the terms are relied on; and that E-Gas has failed to provide sufficient particulars in respect of its claim that Nova has made false and misleading representations.
[44] Nova submits that E-Gas’ allegations are so general as to prevent Nova from answering or understanding the nature of E-Gas’ counterclaim or its defence. It argues that it is well established that a statement of defence and counterclaim need to be sufficiently detailed to inform the plaintiff of the case to be met and to enable a reasonable degree of pre-trial briefing and preparation. In Nova’s submission, E- Gas’ current pleadings “fall well short of the minimum standard required”.
[45] E-Gas, on the other hand, contends that Nova is well aware of the essential elements and ingredients of E-Gas’ defence and counterclaim, and that Nova’s application appears to be an attempt to require E-Gas to prove its allegations. It submits, therefore, that the particulars sought are not reasonably required. Moreover, it argues that any requirement to further refine its pleading would result in unfair prejudice to E-Gas.
[46] The requirements for pleadings are set out in Part 5 of the High Court Rules. Rule 5.48 provides that a statement of defence must admit or deny, in substance and without evasion, allegations of fact in the statement of claim. An affirmative defence must be pleaded. Moreover, the statement of defence must give particulars of time, place, amounts, names of persons, nature and dates of instruments, and other circumstances sufficient to inform the court and the plaintiff of the defendant’s defence. Similar requirements apply in respect of statement of claims and counterclaims. These are provided for in r 5.26.
[47] Rule 5.21 provides that a party may serve a notice requiring such further particulars as may be necessary to give fair notice of a cause of action or ground of defence, or particulars required by the rules. In Price Waterhouse v Fortex Group Ltd CA179/98, 30 November 1998, the Court of Appeal described the importance of pleadings as follows:
It has become fashionable in some quarters to regard the pleadings as being of little importance. There was an echo of that approach in the implicit suggestion floated in this case that exchange of briefs of evidence before trial might be seen as curing any lack of particularity in the pleadings. Any such view is misguided. Pleadings which are properly drawn and particularised are, in a case of any complexity, if not in all cases, an essential road map for the Court and the parties. They are the documents against which the briefs of evidence are or should be prepared. They are the documents which establish parameters of the case, not the briefs of evidence.
... What we are saying is that both the Court and opposite parties are entitled to be advised of the essential basis of a claim or defence, and all necessary ingredients of it, so that subsequent processes and the trial itself can be conducted against recognisable boundaries. Neither the Court nor opposite parties should be placed in the position of having to deal with a proposition of whose substance adequate notice has not been given in the pleadings.
[48] The Court then noted that a party’s pleading is intended to “supply an outline of the case advanced, sufficient to enable a reasonable degree of pre-trial briefing
and preparation”. Similar observations were made by Barker J in Commerce Commission v Qantas Airways Limited (No 2) (1992) 5 PRNZ 227, where the Judge referred to the following summary of principles from one of his earlier decisions, Re Securitibank Ltd (No 25) HC Auckland A355/81, 10 October 1983:
The function of particulars is to carry into operation the over-riding principle that the litigation between the parties, and particularly the trial, should be conducted fairly, openly, without surprises and, incidentally, to reduce cost. Their function has been stated inter alia:
(a) To inform the other party of the nature of the case he has to meet, as distinguished from the mode in which the case will be proved;
(b) To prevent the other party from being taken by surprise;
(c) To enable the other party to know with what evidence he ought to be prepared; and
(d) To limit and define the issues.
A certain amount of detail is necessary in order to ensure clearness. What particulars need to be stated depend on the facts of each case.
...
Another important principle is that where misconduct is imputed against any party, those allegations against him must be stated with especial particularity and care. This general statement applies to allegations of fraud, dishonesty, breach of trust, bad faith and the like — all of which are found in these pleadings.
If the only object of an application for particulars is to obtain the names of witnesses or some other detail of the opposite party's evidence, it will be dismissed; however, where the information sought is clearly necessary to enable the applicant properly to prepare for trial, the information must be given, even though it may incidentally disclose some portion of the evidence upon which the other party proposed to rely at the trial.
The (1982) Annual Practice at p 334 states in regard to the frequently-made objection to providing particulars that the applicant must know the true facts better than his opponent; ‘but each party is entitled to know the outline of the case that his adversary is going to make against him, and to bind him down to a definite story. Particulars therefore will be ordered whenever the Master is satisfied that without them the applicant will not know what his opponent will try to prove against him at the trial.’ ”
[49] In BNZ Investments Ltd v Commissioner of Inland Revenue CIV-2004-485-
1059, 4 February 2008 the Court noted that the temptation to insist upon excessively refined pleadings is to be resisted as unnecessary and wasteful of costs and court time, and that this was particularly so in complex cases, “where over-pleading can obscure rather than clarify the issues” (at [45]).
Are the pleadings evasive?
[50] Nova’s first complaint in this category is directed at E-Gas’ denial in its statement of defence that the arrangements between Nova and the affected customers were lawful, valid and/or enforceable agreements. Some additional information was provided in response to Nova’s request for further particulars, to the effect that the arrangements were unlawful or invalid because Nova induced the customers to enter into them by way of misrepresentations, deceptive conduct or unlawful interference with contractual relations. In oral submissions, Mr Taylor for E-Gas clarified that these allegations correlate to the allegations in E-Gas’ counterclaim. This part of E- Gas’ statement of defence thus directly relates to its counterclaim and does not require separate particularisation.
[51] A further complaint made by Nova is that E-Gas’ statement of defence contains the following admissions and denials that are said to be evasive:
•A statement at para 49 that E-Gas has not “as yet” disputed Nova’s calculations as to the penalties payable by affected customers pursuant to cl 48, in response to Nova’s claim that E-Gas “has not disputed the calculations as to the sum payable pursuant to clause 48”
Nova submits that it is entitled to know whether its calculations are in issue, and whether E-Gas will allege miscalculation. E-Gas contends that it will only need to provide particulars of its response if it decides to dispute the calculation. In my view, E-Gas’ pleading provides a sufficient response to the claim here, which is that it has not disputed the calculations so far.
•A pleading at para 61 that E-Gas admits that it declined a switch request, but that it “otherwise den[ies]” para 61
Nova submits that it is unclear what E-Gas is “otherwise denying” in the corresponding uncontroversial allegation, which has been admitted in substance. It argues that this approach is adopted throughout the statement of defence, but that there is no reason why E-Gas should not be able to clarify what it is that it is denying. E-Gas argues that there is no dispute that it declined the switch requests, so that further particulars are unnecessary.
Here, I agree with Nova that E-Gas’ statement that it otherwise denies the allegation appears technically to be redundant (and somewhat confusing). In my view, however, further particulars are not really needed here in the circumstances.
• The pleading at para 66(a)(ii), as an example of similar pleadings at
71(a), 72(b) and 72(c), that E-Gas “deny that any purported termination by the remaining affected customers of their E-Gas Group Customer contracts has been lawful and/or effective”
Nova submits that E-Gas is required to provide a fair and substantive answer to Nova’s allegations, which in this instance would include an explanation of why E-Gas considers that such terminations were not lawful and/or effective. In essence, Nova’s position seems to be that it is unclear whether E-Gas purports to rely on its counterclaim as the basis for its defence. E-Gas contends that further particulars are unnecessary.
I consider that E-Gas should clarify here whether it denies the lawfulness or effectiveness of the purported terminations on grounds that are further specified in the counterclaim, or otherwise provide an answer to Nova’s allegations.
Requests 23, 24 and 25 relate to paras 71(a) and 72(c), which would seem to be covered by E-Gas previous concession that its contention that arrangements between Nova and affected customers were unlawful is advanced on the grounds set out in the counterclaim. Again, I am of the view that E-Gas should clarify here whether it denies the lawfulness or effectiveness of the purported termination on grounds that are further specified in the counter-claim, or otherwise provide an answer to Nova’s allegations.
[52] Nova also argues that E-Gas has failed to provide basic particulars in respect of the following matters:
•The claim in paras 44 and 99(c) that E-Gas “provided copies of the relevant E-Gas-Group customer contracts during October and November
2007”
This claim is advanced in the context of Nova’s allegation that E-Gas did not, in response to requests for a copy of the contract, provide a copy to the customers or to Nova. It claims that E-Gas’ refusal to disclose customer contracts to its customers whilst relying on the details of the contracts was misleading and deceptive. E-Gas admits that requests were made by Nova, on behalf of the customers, for such contracts in July.
On that basis, Nova submits that it is entitled to particulars specifying to whom, and how, E-Gas provided copies of the relevant contracts. It submits that these particulars would help to clarify whether E-Gas’ pleading asserts a belated disclosure to any party other than Nova’s solicitors. E-Gas asserts that this is a matter of evidence.
I agree with Nova’s contentions. It seems to me that, in the circumstances, Nova should be entitled to know whether disclosure was made to the customers. Further particulars are required.
•The admission in paras 99(d) and 101(b) of representations by E-Gas to affected customers to the effect that the customers remain E-Gas Group customers and “under contract” with the E-Gas Group
Nova submits that E-Gas should have specified whether it admits making representations to all affected customers or, if only to particular customers, to which customers it admits making such representations. It submits that, absent particulars as to who E-Gas’ admission relates to, Nova will need to prove to whom such representations were made.
In my view, given that E-Gas has defined the term “affected customers” in its pleadings as the 136 customers from which Nova procured signatures during May and June 2007, it seems clear that E- Gas’ admission relates to those customers. No further particulars are required here.
•The statement in paras 66(d)(iii), 87(f) and 92(b) that 66 of the affected customers have entered into new fixed terms contracts with the E-Gas Group
Nova submits that E-Gas is required to specify the names of those customers. More particularly, it argues that it is entitled to particulars as to which customers, in addition to the customers listed in column
14 of Schedule 1 of Nova’s statement of claim, have resigned with E- Gas.
But, at para 41 of the counterclaim, E-Gas refers to the 66 customers (as referred to in the paragraphs above) as those listed in column 14. Nova says, however, that E-Gas has since discovered documents that indicate that customers other than those listed in that schedule have resigned with E-Gas. It seems that it would be desirable for E-Gas to clarify whether there are additional customers that have resigned, as its pleadings would otherwise be incorrect.
[53] The next matter in respect of which Nova claims that E-Gas has provided insufficient detail is E-Gas’ assertion in paras 37(a), 45 and 46 that Nova’s provision of a cheque in purported payment of penalties for a large group of affected customers was unlawful or ineffective to terminate contracts. The cheque was attached to a schedule specifying individual payments per customer. Nova submits that it requires
clarification as to why its use of the single cheque is alleged to have been unlawful or ineffective.
[54] In the particulars already provided, E-Gas claims that the purported termination was ineffective because a cl 48 penalty cannot be tendered in such a way that it is impossible or impractical for the E-Gas Group to accept payment. It contends that the tender of a single cheque which purports to relate to a large number of affected customers is impossible or impractical to accept in relation to individual affected customers, in circumstances where the total cl 48 penalty to which the cheque purportedly relates has been incorrectly calculated.
[55] Nova now seeks to know whether E-Gas’ argument is that the cheque was ineffective because (i) it was non-compliant with cl 48 of E-Gas’ Terms and Conditions, or (ii) it was unlawful in some other manner, or (iii) it was simply inconvenient to E-Gas, or (iv) it was in some other way material to their defence.
[56] As I see it the pleadings do require clarification here. Nova claims in para 37 that a failure by E-Gas to accept payment of a clause 48 penalty would not deprive the customer of the benefit of the unilateral right to terminate or render any purported termination ineffective. E-Gas, on the other hand, seems to argue that the termination is rendered ineffective if the penalty is impossible or impractical to accept. In my view, it is necessary to provide further explanation as to why the cheque could not be accepted, other than E-Gas’ contention that the penalty to which the cheque related had been incorrectly calculated.
[57] The final matter in this category is E-Gas’ allegation at para 14 of its counterclaim that Nova “was aware or ought to have been aware” of various matters. Nova submits that any pleading that alleges that a person ought to have known something implies that there are facts and circumstances from which the person ought to have derived that knowledge, and that it is incumbent on the party making such an allegation to plead particulars of those facts and circumstances.
[58] This submission is made with reference to Fox v H Wood (Harrow) Ltd
[1962] 3 WLR 1513 at 1516, where the Court held that:
An allegation that a person ought to have known something has implicit in it not only an allegation that he did not know something, which is an allegation of a state of mind, but also an allegation that facts and circumstances existed from which he ought to have acquired, either by observation or by inference, the knowledge of which he was deficient, and that some fault, in this case amounting to contributory negligence, lies upon him in having failed to note, or draw an inference from, particular facts and circumstances. Of such facts and circumstances particulars ought to be given.
[59] As to this matter, it seems to me to be unnecessary to require E-Gas to provide these particulars if Nova has not responded to the particular allegation in its reply, and therefore does not appear to dispute that it was or ought to have been aware of these matters. (E-Gas pleads that, at the time the Nova campaign was commenced, Nova was aware or ought to have been aware of various matters such as the fact that the majority of E-Gas customers were subject to fixed term contracts with E-Gas; the provisions of version 3 of the E-Gas terms; that the terms had been amended from time to time; and that E-Gas commercial customers may have been subject to a version other than version 3.
Reliance on Documents
[60] Nova submits that the pleadings purport to rely on the terms of documents without expressly stating which terms are relied on, and how they are relied on. It says that it accepts that this practice is reasonable in respect of an unqualified admission of an allegation setting out the terms of a document, but submits that it is not reasonable to plead admissions or denials by reference to the terms of a document that is not referred to within the pleading. It argues that, to the contrary, parties are expected to provide the express terms relied upon where a party purports to deny an allegation by reference to a document, so that the Court and the other parties will know the basis of the defence.
[61] On this, Nova refers to Bison Holdings Ltd v Pacific Retail Group HC Auckland CP699-SD/01, 24 July 2002 at [28], where the Court stated that:
... the plaintiff ought to file further particulars setting out the precise basis upon which each of the allegations contained in paragraph 29 of the counterclaim is denied. The statement of defence ought also to make reference to any particular provisions of the agreement which the plaintiff relies upon as affording a defence. By way of example, if the plaintiff is relying upon contractual provisions such as clause 17.5 ... or 17.7 ... those provisions should be identified with particularity in
the statement of defence so that both the Court and the defendant will know the basis of the defence.
[62] Reference was also made to Taylforth Holdings Ltd v Duthie HC Auckland CP2770/88, 16 February 1990, where Hillyer J observed that “[a]s a matter of principle it is not sufficient ... for a plaintiff to say that particulars of an allegation will be found in a number of documents”.
[63] Rule 5.20 provides that, if a party relies on a document in whole or in part, it is sufficient to state its effect as briefly as possible, unless the precise words are material. Nova submits that the effect of r 5.20 is that it is not acceptable to simply deny an allegation by pleading reliance on the terms of a document as if pleaded in full, referring to Todd Pohokura Ltd v Shell Exploration NZ Ltd HC Wellington CIV-2006-485-1600, 12 August 2009 at [120], where Dobson J stated that:
The extent of particularity required in respect of contractual provisions and their interpretation is now guided by rr 5.19(3) and 5.20 of the High Court Rules. The former provision provides that a party asserting that the interpretation of a contract advanced by another is wrong must assert its own interpretation. That is balanced by the latter provision which provides that if a party relies upon any document in whole or in part, it is sufficient to state its effect as briefly as possible, without setting it out, unless the precise words are material. The combined effect of these two provisions will render inadequate in most situations the classic formulation for a defendant in a contract claim, simply denying the plaintiff’s pleaded effect of the contract and signalling reliance on the whole document in terms such as “ … and will rely on the contract as if exhaustively pleaded herein”. What r 5.19(3) requires is for the defendant in such a situation to do more than simply deny the effect of the contract as pleaded by the plaintiff. The defendant’s alternative interpretation of the contract must be pleaded, in its essence.
[64] Dobson J’s observations were of course made in the context of pleadings involving the interpretation of a contract. In the present case, there are three documents in particular that Nova says E-Gas is purporting to rely on without reference to express terms: the E-Gas Terms and Conditions, the summary judgment decision by Dobson J, and various correspondence from both Nova and E-Gas.
E-Gas Terms and Conditions
[65] In respect of the Terms and Conditions, Nova submits that E-Gas has failed to specify which version of the Terms and Conditions it relies upon, instead pleading reliance on “the relevant versions” of the E-Gas Group terms. Nova submits that
each such pleading is deficient, because it is incumbent on E-Gas to plead the effect of any contractual documents when it relies on any of them to support a denial of an allegation. Alternatively, Nova submits that it would be able to determine which are the “relevant versions” that E-Gas is referring to if E-Gas was willing to provide particulars as to which version of the Terms and Conditions it says applied to each “affected customer”.
[66] E-Gas, on the other hand, argues that it is irrelevant which version of the Terms and Conditions is relied on in the pleadings, referring to [14] of Dobson J’s summary judgment decision, where he said that there were no material differences in the successive versions of cl 48. E-Gas contends that, because the various contracts contain materially similar clauses, it is not necessary to specify which version of the contract is applicable. Nova maintains that E-Gas’ reference to six different versions of the terms and conditions causes confusion, and that provision of the requested particulars would clarify matters considerably.
[67] Nova further complains about E-Gas’ “refusal” to adopt any of the same defined terms used by Nova in its statement of claim, such as the various versions of the Terms and Conditions. It submits that this approach has resulted in pleadings that are difficult to follow. E-Gas argues that the definitions adopted by Nova are, in themselves, a submission, and that it thus cannot be expected to adopt them. Nova asserts that it does not dispute E-Gas’ right to use different terms, but that it should not be excused from providing precise definitions as to how E-Gas’ terms correlate to those used by Nova.
[68] Although on the one hand, if there are no material differences in the terms and conditions, it would seem unnecessary to provide particulars here as to which version is relied on, on the other hand, in my view it would not be overly burdensome to require E-Gas to amend its pleadings in the way requested, and for it to clarify whether its terminology differs in meaning from that adopted by Nova. Further particulars of this are required.
Summary Judgment Decision
[69] Nova further submits that E-Gas’ pleaded general admission of, and reliance on, the summary judgment decision causes particular difficulty and prejudice in the preparation of its case. It argues that E-Gas should provide particulars as to the paragraphs of the judgment it is admitting or referring to, or that it should disclose the basis for the reference. As an example, Nova refers to para 35 of the pleadings, where E-Gas replies to Nova’s claim that the customer’s obligation to pay the clause
48 penalty could legitimately be met by Nova, by admitting the terms of the summary judgment decision, but otherwise denying para 35.
[70] The relevant parts of Dobson J’s summary judgment decision can be found at
[39]-[41], where the Judge concluded:
[39] ... I can see no justification for confining the obligation to pay the penalty as one that must be personally discharged by the customer ... I therefore interpret clause 48 as not limiting those who may legitimately meet the customer’s obligation to pay the penalty...
...
[41] I accordingly make a declaration that cl 48 of the 2005 and 2006 standard terms used by E-Gas entitles a customer to termination of that contract before its term has expired once the customer or another party on its behalf has paid in full a penalty at the rate of $NZ1.00 per gigajoule for the remaining total estimated gas quantity for the remainder of the contract term.
[71] Nova argues that, because the decision appears broadly to compel E-Gas to admit all of para 35, it cannot reasonably ascertain from that pleading what E-Gas’ response to Nova’s allegation is. It submits that, if E-Gas intends to admit parts of para 35, then it should do so with reference to the allegations pleaded or to the express findings of the summary judgment decision. Nova points out that the judgment is 100 paragraphs in length, and that it is reasonable to expect some guidance as to what is admitted or relied on in respect of a document of that length.
[72] In response, E-Gas submits that it is unnecessary to identify the particular parts of documents that it relies upon, as it does not deny the terms of the summary judgment decisions, but the way in which Nova has summarised the effect of the
decision. Nova maintains, however, that E-Gas’ pleading does not identify which aspects of the way in which Nova summarises the terms of the decision are denied.
[73] In my view, Nova is entitled to further particulars here. E-Gas’ pleading is unclear insofar as it does not explain which aspects of Nova’s allegations are denied or admitted. To the extent that the pleading appears to be in materially the same terms as Dobson J’s declaration, a pleading of this nature is unhelpful.
Are the allegations of misrepresentation and deceptive conduct sufficiently particularised?
[74] Nova submits that E-Gas has made allegations of misrepresentation and deceptive conduct without providing any particulars as to the actual alleged verbal representations; the times and places the representations were made; to whom specifically the representations were made; who was affected by them; or what specific loss was caused to E-Gas as a result.
[75] With respect to the alleged verbal representations, Nova requests further particulars as to: the dates, times and places of the meeting at which E-Gas allege the representations were made; the names of the affected customers that E-Gas allege Nova made representations to; what words are alleged to have been used and by whom the representations were made; and any other facts and circumstances E-Gas relies on to establish the allegation. It submits that it cannot defend allegations of misrepresentations when it does not know what the alleged misrepresentations actually are, or the circumstances of those alleged misrepresentations.
[76] Nova refers to my decision in Miro Property Holdings Limited v Ling 2
Investments Ltd HC Wellington CIV-2003-485-1322, 18 November 2003, where further and better particulars were ordered in respect of certain allegations of misrepresentations, on the basis that the defendant was entitled to “particulars of time, names of persons and other circumstances as suffice to inform all relevant parties of the plaintiff’s cause of action”. Nova submits that it “presumes that the misrepresentation allegations, being serious allegations, have been made responsibly and that E-Gas has the necessary information to support those allegations”. It
submits that, having made the allegations, E-Gas must be in possession of the relevant information.
[77] Moreover, in reliance on Commerce Commission v Telecom Corporation of New Zealand Ltd HC Auckland CIV-2004-404-1333, 21 December 2004, Nova submits that it is an abuse of process to make allegations in anticipation of obtaining information during discovery to support the allegations. In that case, the Court considered that “the discovery process cannot be used as a fishing expedition which the plaintiff hopes will net information essential to its case” (at 16]).
[78] E-Gas submits that it would be difficult to provide the requested particulars because it has been subject to an “orchestrated campaign” by Nova and does not know who the Nova representatives were who made the representations, and when the representations were made. Furthermore, in its written submissions, E-Gas submits that the level of detail sought is “extreme” and well beyond the bounds of what is required to be contained in pleadings. It also argues that there is no risk of trial by ambush because briefs of evidence would be exchanged in advance of trial.
[79] Nova denies this, referring to Re Securitibank Ltd (as cited above) in support of its proposition that it is entitled to bind E-Gas to a “definite story”, even if that might involve some incidental disclosure of matters of evidence. Nova also refers to Price Waterhouse v Fortex, where the Court of Appeal described as misguided the implicit suggestion in that case that “exchange of briefs of evidence before trial might be seen as curing any lack of particularity in the pleadings” (at 13).
[80] In applying the principles from the authorities referred to, above, I agree with Nova here that some further particulars if available are necessary dealing in particular with the names of the affected customers that E-Gas allege Nova made representations to and (if known) the general place of the meetings in question.
[81] E-Gas alleges that the meetings took place during the months of May, June and July 2007 (para 21), which in my view is sufficient to satisfy the “date” requirement. The verbal/oral representations are pleaded at para 24. They are to the effect that E-Gas was overcharging its customers, that it was charging above market
rates, that E-Gas Group had increased its gas supply prices unlawfully, that E-Gas customers ought to be seeking compensation for overcharging, that E-Gas purchases gas from Nova, and that E-Gas had insufficient supplies of gas to meet its customers’ requirements. Although E-Gas has not pleaded the exact words of the alleged representations, as I see it para 24 is sufficient to notify Nova of the claim against it.
[82] In terms of specifying the Nova representatives/persons making the alleged representations, it may well be that E-Gas would be unfairly prejudiced by having to specify the names of the relevant Nova representatives. The customers in question might not be able to remember the name of the person they were dealing with. And this information may well be within the knowledge of Nova, in any event. It seems to me that an absence of these details should not prevent the claim from going ahead.
[83] Regarding the allegations of deceptive conduct, Nova requests the following particulars: names or details of the re-signed customers Nova continued to contact, treat as customers, invoice and require payment from; the “relevant parties” in the gas supply/delivery chain that Nova allegedly tendered payment to in respect of the resigned customers; and specifics of the “active encouragement” Nova is alleged to have given to customers to convince them not to communicate with E-Gas. Nova submits that the deceptive conduct allegations lack basic detail, and that Nova cannot be expected to plead to vague allegations of “active encouragement” in any meaningful way.
[84] This matter relates to paras 64(e), 69(a), (b) and (c), 48 and 64(d). Again, I am of the view that some further particulars as to names or details of the relevant customers or parties are necessary. I also agree that the allegation that Nova “actively encouraged affected customers to refer communications from the E-Gas Group in relation to the affected customer’s E-Gas Group contract to Nova” (at para
64(d)) is vague and requires further particularisation.
[85] Nova has also requested further particulars in respect of E-Gas’ pleading of facts that is designed to establish that the alleged representations were misleading. It submits that E-Gas has not provided anything more than bare assertions that such
representations were untrue, and that there is the risk of trial by ambush if the information is not provided in the pleadings.
[86] First, Nova asks for particulars as to the rates and prices charged by E-Gas and the “rate specified in each customer’s E-Gas Group contract”, together with any relevant alleged adjustment made in accordance with the contracts in respect of the customers that Nova allegedly made representations to. Secondly, Nova seeks the particular terms in the E-Gas Terms and Conditions that E-Gas alleges entitle it to increase gas prices and the particular term relied on in respect of each E-Gas Group price increase of the affected customers’ supply. It seeks these particulars to clarify E-Gas’ assertion that E-Gas has not increased gas prices in breach of the E-Gas Group terms. Finally, Nova requests particulars of the facts and circumstances supporting E-Gas’ assertions at paras 53 and 55 of its counterclaim that Nova’s representations as to the price of gas supplied by E-Gas were in fact misleading, including particulars as to who was in fact mislead and in what way the persons were mislead.
[87] The first matter seems to relate to the following paragraphs in particular:
•para 52(a)(ii) (“the E-Gas Group charges fair and reasonable market rates”)
•para 52(a)(viii) (“E-Gas Group customers are bound by the terms of their E-Gas Group customer contract and pay for their gas supply at the rate specified in each customer’s E-Gas Group customer contract, as adjusted from time to time in accordance with the E-Gas Group terms”)
•para 52(b)(ii) (“The E-Gas Group charges rates for its gas supply in terms of its customer contracts”)
•para 52(b)(iii) (“The E-Gas Group charges competitive market rates for its gas supply”)
•para 62(e)(ii) and (iii) and para 62(f)(ii) and (iii) (“The E-Gas Group terms provide that the E-Gas Group is entitled to increase gas prices in certain circumstances” and “The E-Gas group has not increased gas prices in breach of its E-Gas Group terms”)
[88] In my view, these requests are all concerned with pricing information and, as such, are matters of evidence. No further particulars are required.
[89] The second matter relates to para 62(e)(iii) that “[t]he E-Gas Group has not increased gas prices in breach of its E-Gas Group terms”. It seems that this request might be somewhat superfluous, but Nova might have a legitimate interest in knowing which specific terms are relied on here.
[90] The third request relates to para 53, where E-Gas claims that “Nova’s false and misleading representations as to the price of gas supplied by the E-Gas Group, including the market competitiveness of that price, were reasonably capable of being, and were in fact, misleading”, and para 55, where E-Gas claims that it has suffered loss as a result of Nova’s misrepresentations. It seems that Nova’s request might be legitimate, particularly in respect of E-Gas allegation that “a large number of affected customers” have refused to discuss their gas supply arrangements with E- Gas as a result of the misrepresentations. This can be more appropriately addressed as part of Nova’s next argument.
[91] The final matter in this category concerns details of the loss E-Gas alleges to have suffered as a result of the alleged misrepresentations. More specifically, Nova requests details of the affected customers who sought to terminate their E-Gas contracts in reliance on Nova’s representations or that have refused to discuss their gas supply arrangements with E-Gas; and details to support E-Gas allegations that the affected customers were directly induced to provide details of their E-Gas contracts to Nova and/or sign contracts for supply with Nova and/or cease contact with E-Gas as a result of Nova’s conduct.
[92] Nova here refers to para 55 of E-Gas’ counterclaim as an example, where E- Gas alleges it has suffered loss because “as a result of the false and misleading representations by Nova, a large number of affected customers of E-Gas Group have refused to discuss their gas supply arrangements with the E-Gas Group”. Nova submits that it requires further particulars as to who comprises the “large number”, or in what way the refusals have manifested, or how E-Gas knows that the refusals are the result of Nova’s conduct.
[93] While E-Gas has indicated that there will be evidence from E-Gas employees asserting they have statements from customers advising they were told not to contact
E-Gas, Nova again refers to the statement by the Court of Appeal in Price
Waterhouse v Fortex that witness briefs could not cure any deficiency in pleadings.
[94] It seems that Nova should be given an opportunity to prepare its case as to whether there was reliance on the alleged misrepresentations. Some particulars as to who the affected customers were should therefore be provided.
Conclusion
[95] For the reasons outlined above, in relation to the discovery application, the following orders are made:
(a) Confidentiality – the restrictions on inspection of documents listed in Part III of the defendants’ list that the defendants seek to impose broadly restricting access to external solicitors, external counsel and external experts of Nova only are upheld. A direction is now made that those parties are first to provide undertakings as to confidentiality in an approved form before these documents are to be made available to them for inspection.
(b)Particular Discovery – within 20 working days of today E-Gas is to file and serve a verified supplementary list of documents stating with respect to the documents outlined in paras (b)(i) to (vii) inclusive below relevant to matters in issue whether it has or has had in its control those documents and if such documents have been but are no longer in E-Gas’ control, the best knowledge and belief of E-Gas’ officers as to when the documents ceased to be in E-Gas control and who now has control of them:
(i)Copies of all E-Gas commercial application forms that had been signed by the Remaining Transferring Customers (as defined in paragraph 59 of the Second Amended Statement of Claim filed in this proceeding on 18 December 2008 (Second Amended Statement of Claim) prior to the dates on which
those same Remaining Transferring Customers signed Nova gas-supply agreements;
(ii)Copies of E-Gas commercial application forms that had been signed by the Remaining Transferring Customers after the dates on which those customers signed Nova gas-supply agreements;
(iii)Copies of invoices rendered by E-Gas to the Remaining Transferring Customers by E-Gas for periods covering the following dates:
• April, May, June and July 2007; and
•Dates immediately prior to any alleged or actual “switches” of Transferring Customers requested by Nova, including invoices covering any period(s) the defendants assert are relevant to payments of Clause 48
Penalties (as defined in paragraph 34 of the Second Amended Statement of Claim relating to such switches).
(iv)Copies of invoices rendered to any (current or former) E-Gas customers on dates immediately prior to and immediately following any price increases relating to such customers during the periods August 2004 to February 2007; alternatively such documents in relation to the Remaining Transferring Customers;
(v)Copies of all invoices rendered: (a) any (current or former) E- Gas Group customer for whom an incorrect pressure factor has been charged; and (b) the customers specified in the attached Schedule Two, on dates immediately prior to and following any changes in pressure factors (or, if there have been no
changes in a particular customer’s pressure factor, on the most recent date for which an invoice has been rendered to that customer); alternatively such documents in relation to the Remaining Transferring Customers only;
(vi)Copies of each version of the E-Gas Terms and Conditions expressly or impliedly referred to in the statement of defence and counter-claim; and
(vii) Copies of all correspondence and communications, including:
(a)all electronic documents, including internal and external email correspondence from, to and pertaining to each and every Remaining Transferring Customer; and
(b)all hard-copy documents , including copies of customer notes reports for each Remaining Transferring Customer and standard form/template documents pertaining to each and every Remaining Transferring Customer;
relevant to the matters in issue, save to the extent that such correspondence has already been discovered.
No order is made as to further discovery regarding first, the documents sought in paragraph (C) of Schedule 1 of the Application, secondly, concerning “price increase letters” in paragraph (E) of Schedule 1 to the Application, thirdly, with respect to Order 7 sought as noted above and fourthly regarding the Inspection Orders sought in paragraph 1 of the Application.
[96] For the reasons outlined above, Nova’s application for further and better particulars succeeds in part and the following orders are now made:
Within twenty (20) working days of today E-Gas is to provide further particulars of its particularised statement of defence and counter- claim of 13 February 2009 in the following respects but not otherwise:
• Para 66(a)(ii) of the statement of defence as noted at para [51]
above.
• Para 71(a) and 72(c) of the statement of defence as noted at para
[51] above.
• Para 44 and 99(c) of the statement of defence – as set out at para
[52] above.
•Para 66(d)(iii), 87(f) and 92(b) of the statement of defence – as set out at para [52] above.
•Para 37(a), 45 and 46 of the statement of defence – as set out at paras [53] and [56] above.
•Further particulars of the E-Gas Terms and Conditions version as noted at para [68] above are to be provided.
•Further particulars as to the paragraphs of the Summary Judgment decision as noted at paras [69] and [73] above are to be provided.
•Further particulars of the names of the affected customers that E-Gas allege Nova made representations to and (if known) the general place of the meetings in question as noted at para [80] above are to be provided.
•Paras 53 and 55 of the statement of defence – to the extent and as set out at paras [90] and [94] above.
•Para 64(e), 69(a), (b) and (c), 48 and 64(d) of the statement of defence to the extent and as set out at para [84] above.
•Para 62(e)(iii) of the statement of defence – to the extent and as set out at para [89] above.
•Particulars of the loss E-Gas alleges to have suffered as a result of the alleged misrepresentations and details of the affected customers – as set out at para [92] and [94] above.
[97] As to costs Nova’s applications before me have been extensive and although in the main successful have failed in significant respects.
[98] It is appropriate, in my view, that costs here are to lie where they fall. There is to be no order as to costs.
‘Associate Judge D.I. Gendall’
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