Bunnings Ltd v Commerce Commission

[2019] NZHC 3340

THIS IS A REDACTED VERSION OF THE JUDGMENT FOR

PUBLICATION. AN UNREDACTED VERSION HAS BEEN DELIVERED TO THE PARTIES.

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CRI 2018-404-0315

CIV 2018-404-2098

[2019] NZHC 3340

IN THE MATTER OF

Criminal Procedure Act 2011

BETWEEN

BUNNINGS LIMITED

Appellant

AND

COMMERCE COMMISSION

First Respondent

MITRE 10 (NEW ZEALAND) LIMITED

Second Respondent

CRI 2018-404-180

IN THE MATTER OF

The Fair Trading Act 1986

BETWEEN

COMMERCE COMMISSION

Prosecutor/Respondent

AND

BUNNINGS LIMITED

Defendant/Appellant

Hearing:

10, 11 December 2018, Further submissions 21 December 2018,

12 February 2019, 14 June 2019, 21 June 2019, 24 June 2019,
27 & 28 June 2019, 8 July 2019, 24 July 2019, 29 July 2019,
5 August 2019

Appearances:

J E Hodder QC and J Lindsay for Appellant

J Dixon QC, I Brookie and C Fraquhar for Commerce Commission

M Dunning QC, L Farmer for Mitre 10

Judgment:

17 December 2019

BUNNINGS LIMITED v COMMERCE COMMISSION [2019] NZHC 3340 [17 December 2019]

JUDGMENT OF DUFFY J

This judgment was delivered by me on 17 December 2019 at 11.30 am pursuant to

Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Solicitors/Counsel:

Kayes Fletcher Walker, Manukau Meredith Connell, Auckland John Dixon QC, Auckland

Lindsay Litigation, Auckland Jack Hodder QC, Wellington Adam Ross QC, Auckland

[1]    The Commerce Commission (CC) brings a Judge alone prosecution in the District Court under the Fair Trading Act 1986 (FTA) against Bunnings Ltd (Bunnings).1 The charges arise out of representations made by Bunnings to consumers that it had the lowest prices. The CC alleges that these representations were false and misleading. Bunnings denies the charges. The CC’s investigation resulted from a complaint made by Mitre 10 in late 2014.

[2]    On 1 August 2018, Judge Cunningham made pre-trial rulings in favour of the CC on the admissibility of the evidence of Murray Snowden and the validity of a witness summons for Mr Snowden to appear at the pre-trial hearing and at trial and to produce the information set out in the witness summons.2 Bunnings now challenges those rulings by way of judicial; review and it seeks leave to appeal against them. The CC does not oppose the grant of leave and is content for the Court to deal with the appeal.

The pre-trial rulings

Background

[3]    Mr Snowden works for Mitre 10. Mitre 10 is one of Bunnings’ competitors. Mitre 10 conducted a comparison of the prices of items sold by Bunnings and by Mitre 10 during a specific time frame.3 To do so it used a process known as web data collection.

[4]    Both companies now have publicly accessible web sites which contain their respective products. Persons can either purchase the products online or after viewing the web site attend a store to make their purchase. Accordingly, the prices at which each company sells their products can be obtained electronically. In the past a company wanting to compare its prices with those of a competitor would go to the competitor’s stores to make such comparison. Now with appropriate software such comparisons can be made electronically, which is the web data collection process.

1      Bunnings Ltd faces 45 charges for alleged breaches of ss 10 and 13 of the Fair Trading Act 1986.

2      Commerce Commission v Bunnings Ltd [2018] NZDC 15629.

3      Such exercises were also carried out by Perceptive Insight Ltd and HOED Mystery Shopping Ltd. These do not form part of the dispute.

[5]    Here the web data collection led Mitre 10 to conclude that in some instances it was selling comparable items at a lower price than Bunnings.4 At some point this was drawn to the CC’s attention and ultimately it decided to bring the prosecution against Bunnings under ss 10 and 13 of the FTA.

[6]    To prove the charges the CC must establish that Bunnings made representations that were misleading or false in their effect. Part of this will require the CC to establish that other retailers were selling comparable items to Bunnings at the same or lower prices than Bunnings. Hence the relevance of Mr Snowden’s evidence and the need for production of the Mitre 10 web data collection, which the CC relies upon to prove that at the relevant times Mitre 10 was selling comparable items at the same or lower prices than Bunnings.

The need for the rulings

[7]    In the District Court Bunnings sought to have the Snowden summons set aside on the ground it was a misuse of Court processes because:

(a)The Snowden Summons constituted an improper attempt to obtain non- party disclosure of Mitre 10 documents which would not have been available to the CC under the Criminal Disclosure Act 2008 (the CDA).

(b)Issuing the Snowden Summons would create delay.

(c)The CC knew of the existence and nature of the documents sought by the Snowden Summons prior to bringing the charges.

(d)The CC had alternative means to obtain the documents at an earlier date but chose not to do so.

(e)The documents sought were not adequately identified in the Snowden Summons.

4      Mr Snowden’s assessment is that over the relevant time frame Bunnings’ prices were not the lowest for on average [redacted] per cent of the matched products.

(f)The Snowden Summons were oppressive to both Mitre 10 and Bunnings.

[8]    The CC opposed Bunnings’ application on the grounds that the purpose of the Snowden Summons was to secure evidence, which was not an abuse of process. The information it sought under the summons was necessary for the fair resolution of the case and Bunnings had sufficient opportunity to review this information.

[9]    Mitre 10 sought to amend the Snowden Summons. Mitre 10 was concerned the scope of the original witness summons the CC issued to Mr Snowden was framed too widely because it requested him to provide all documents and data relating to the price comparisons conducted by Mitre 10 over a stated period in which Mitre 10’s prices were compared with Bunnings prices. Accordingly, it sought the scope of the summons be reduced and for confidentiality orders to be made to protect to the information to be provided under the amended summons. Regarding the confidentiality orders, Mitre 10 did not want to reveal to Bunnings the software system it relied upon to achieve the price comparisons electronically.

[10]   Subject to one or two minor points the CC did not oppose Mitre 10’s application.

[11]   Bunnings opposed the application to amend the summons and contended that it would be as flawed as the original summons.

[12]   Judge Cunningham allowed Mitre 10’s application to reduce the scope of the summons (the amended summons). The CC has not challenged this aspect of the Judge’s ruling. She rejected Bunnings arguments for setting the summons aside. Confidentiality orders were also made to protect to protect the information that would be obtained pursuant to the amended summons. And she found that the proposed evidence of Mr Snowden was admissible.

The matters before this Court

[13]   Bunnings challenges: (a) the admissibility of Mr Snowden’s proposed brief of evidence; (b) the dismissal of its application to set aside the Snowden Summons; and

(c) the granting of Mitre 10’s application to amend the Snowden Summons.

[14]   Bunnings considers the Judge was wrong to refuse to set aside the summons, to allow Mitre 10’s application to amend the summons, and to find that Mr Snowden’s proposed evidence is admissible. Because it has no right of appeal against the rulings, it seeks leave to appeal (where that is possible) and, in the alternative, it brings judicial review proceedings against the rulings.

[15]   Bunnings also sought to challenge the confidentiality orders, however this was not pursued at the hearing before me. Bunnings contends that any variation to the confidentiality orders is more appropriately dealt with in the District Court and  Mitre 10 holds a common view on how they should be approached. Given the view of the parties most affected by the confidentiality orders I see no reason to take a different view. Accordingly, I shall make no determinations in respect of the confidentiality orders.

[16]   Leave to appeal is sought under ss 215 and 219(b) of the Criminal Procedure Act 2011 (CPA) in relation to the admissibility of Mr Snowden’s evidence. Bunnings also judicially reviews the rulings on the ground they are based on errors of law.

[17]   The admissibility of Mr Snowden’s proposed brief of evidence was determined under s 79 of the CPA. Subject to this Court granting leave, Bunnings therefore has a right of appeal under s 215(2)(a) of the CPA. The CC has not opposed leave being granted, and the parties have focussed their arguments on the appeal rather than the leave application. In such circumstances I am satisfied that leave to appeal should be granted and have dealt with this aspect of Bunnings case by way of substantive appeal.

[18]   However, the validity of the Snowden summons and the amended summons was determined under s 159 of the CPA. This section falls outside the ambit of s 215.

There is no other right of appeal in respect of the Judge’s decisions in respect of the witness summonses.5

[19]   The parties agree that the appropriate means of challenging Judge Cunningham’s decision relating to the summonses is judicial review as the Judge was exercising a statutory power pursuant to s 5 of the Judicial Review Procedure Act 2016.

Bunnings’ challenge

[20]   Because the lawfulness of the summons to obtain the underpinning data impacts on the question of whether Mr Snowden’s proposed brief of evidence is admissible, I propose to consider Bunning’s challenge to the summons issue first.

[21]   Bunnings contends that the CC decided not to exercise its statutory powers to collect known evidence during an investigation, but later changed its mind after the charges had been laid. The issue of the Snowden summons was an attempt to cure this deficiency and is therefore an abuse of process. Bunnings further says that the Amended Summons does not alter this.

[22]   The judicial review proceeding pleads the following errors of law on the part of the Judge: (a) failing to recognise the issuing of the summons was an abuse of process because it sought to obtain non-party disclosure when that was not specifically available to the CC under either the CPA or the CDA and when the CC had failed to identify specific documents; (b) failing to recognise the issuing of the summons was an exercise of evidence gathering investigative powers in circumstances where none existed; (c) the summons called for the creation of new documents by Mitre 10 from a data base created by a third party and not by a witness; (e) the summons was unnecessary; and (f) wrongly granting Mitre 10 standing to address the Judge on matters relating to Bunnings application to set the summons aside.

5      In the application for leave to appeal Bunnings sought to rely on s 213 of the Criminal Procedure Act 2011 as providing a right to appeal against the rulings relating to the summonses. However this provision does not provide a right of appeal and Bunnings did not advance its arguments at the hearing in reliance on s 213.

Should the amended summons be set aside?

Background

[23]   Initially when Bunnings received Mr Snowden’s briefs of evidence Bunnings complained they were not admissible because they were not accompanied by the underpinning data on which Mr Snowden’s evidence rested. Mitre 10 was concerned to protect the confidentiality of this material, in particular it wanted to keep secret the algorithm used to enable the price comparison exercise to be conducted electronically. The CC attempted to have the confidentiality question determined prospectively. However, Bunnings argued there was no jurisdiction for this to occur.

[24]   Bunnings could have applied under the CDA for non-party disclosure from Mitre 10 of this information. Had Bunnings taken this step Mitre 10 would then have standing to argue for the confidentiality of its information to be protected. However, Bunnings did not take this step.

[25]   Later in December 2017 Mitre 10 voluntarily provided the CC with some of the underpinning data on which Mr Snowden’s evidence rested. The CC provided this information to Bunnings so that it could verify whether the price comparisons had been accurately made or not.

[26]   The CC then took the step of issuing the witness summons under s 159(2) of the CPA requiring Mr Snowden to produce the underpinning data, which in turn led to objections from both Bunnings and Mitre 10. They were resolved by the rulings which left the amended summons as the operative order.6

[27]   After the hearing before Judge Cunningham Mitre 10 provided the CC with additional price comparison data. This was done in circumstances where Mitre 10 was given signed confidentiality undertakings from the CC and Bunnings.

6      This, in short, is the net effect of the Judge’s refusal to set aside the summons and allow Mitre 10’s application to amend the summons.

Discussion

Was the Judge right to amend the summons

[28]Section 159 of the CPA relevantly provides:

(1)  Either the prosecutor or the defendant may at any time obtain from a judicial officer or a Registrar a summons calling on any person to appear as a witness at any hearing in relation to a charge.

(2)  A summons issued under subsection (1) may require the person summoned to bring with him or her and produce at the hearing any document or thing that is specified in the summons.

[29]   In its original form the Snowden summons covered extensive information from Mitre 10 regarding the web data collection as it related to the price comparison exercises undertaken by Mitre 10 between retail items sold by Mitre 10 and those sold by Bunnings. This can be seen from the form of the original summons:

The witness is required to bring to Court the following documents:

All documents and data relating to all the price comparisons conducted by Mitre 10 from 1 June 2015 to 1 May 2016, comparing Mitre 10’s prices with Bunnings Limited’s prices, including the following documents (whether stored in hard copy format or electronically):

-            All data downloaded by, or at the request of, Mitre 10 from the Bunnings website, including the product code, product name and description, SKU, barcode number and price;

-            All data for all Mitre 10 products that were available on each occasion when the price comparisons were conducted, including the product code, product name and description, SKU, barcode number and price; and

-            The datasets derived from each of Mitre10’s comparisons of the above two datasets, comprising all matched products across the two companies, including the product code, product name and description, SKU, barcode number and price for each matched product for each retailer; and

-            All information as to how the comparison was undertaken, including any formulae or algorithms used by Mitre 10 to create the comparison data set.

[30]   The amended summons, which subsequently issued following Mitre 10’s successful application before Judge Cunningham, is more confined:

The witness is required to bring to Court the following documents:

All documents and data relating to all the price comparisons conducted by Mitre 10 in respect of the first day of each month from 1 June 2015 and 1 May 2016, comparing Mitre 10’s prices with Bunnings Limited prices, including the following documents (whether stored in hard copy format or electronically):

(a)an excel workbook containing the SKU, product name and description, and price for each product downloaded from the Bunnings website by, or at the request of, Mitre 10 on the first of each month between June 2015 and May 2016;

(b)an excel workbook containing the SKU, product name and description, and price for all Mitre 10 products that were:

(i)tagged as being eligible on Mitre 10’s website for the first day of each month over the period June 2015 to May 2016; and

(ii)available for sale in at least twenty Mitre 10 and Mitre 10 MEGA stores in the corresponding date; and

(c)an excel workbook comprising 400 matched products across the two companies for each month over the period June 2015 to May 2016, including the SKU, product name and description, and price for each matched product for each retailer.

(the Mitre 10 information)

[31]   I do not accept that the Judge was wrong to hear from and then to permit Mitre 10 to amend the summons. Mitre 10 as the non-party whose employee was to be subject to the summons successfully persuaded the Judge that the scope of the summons should be narrowed. The CC has not challenged this decision. Accordingly, the party seeking the summons and the subject of the summons are content with the amended summons. In such circumstances it is not for Bunnings to seek leave to appeal on the ground the summons should not have been amended. Bunnings can argue that no summons should have been issued, but, unless it can establish it will be prejudiced thereby, it cannot complain about the scope of the summons being reduced. I note that Bunnings has made no arguments to this effect.

[32]   It follows that the original summons has been overtaken by the amended summons, which is now the operative summons. The remaining errors of law which Bunnings alleges must be assessed in relation to the amended summons.

Bunnings’ arguments on the remaining errors of law

[33]   Bunnings argues that the CC cannot rely on the power to obtain a summons under s 159 of the CPA because when it comes to prosecutions under the FTA the CC is limited to the information gathering powers given to it by s 47G of the FTA. Bunnings further argues that because the FTA does not have an equivalent power to s 98G of the Commerce Act 1986 it cannot use s 47G of the FTA to continue to gather information to support a prosecution after its commencement. More specifically, Bunnings says that here the CC’s use of the amended summons under s 159(2) of the CPA subverts s 47G of the FTA, which defeats the specific legislative intent of the FTA. This argument is linked to Bunnings’ argument that the CC’s s 47G powers may not be used after proceedings have been instituted.

[34]   Bunnings also contends that the CC’s reliance on s 159 is an attempt to bypass the requirements of the CDA. Bunnings says that the CDA requires prosecutors to collect all relevant information prior to bringing a charge and to disclose to the defendant all evidence on which they rely once the charge has been brought.7 The defendant has the right to seek non-party disclosure under s 24, but there is no corresponding right for the prosecutor. Bunnings argues that this all shows that prosecutors must cease gathering evidence after bringing a charge. Bunnings then uses this argument as a platform to support its argument that the use of the amended summons was simply an unlawful attempt to obtain information in circumstances where there was no legal means of achieving this outcome.

[35]   According to Bunnings there is at the least conflict between the regimes of the FTA and CDA and the CC’s use of s 159(2) of the CPA. Faced with such a conflict, Bunnings says the general provision of s 159 should be made subservient to the more specific statutory schemes.

[36]   Further, Bunnings contends that the amendment sought by Mitre 10 has not cured matters. In this regard Bunnings contends that the amended summons is so vague as to constitute discovery. Bunnings asserts that the amended summons would have Mitre 10 generate an entirely new set of 400 monthly price comparisons; these

7      Sections 12 and 13 of the Criminal Disclosure Act 2008.

are not historical documents that the CC could have known about or what they might show or what products might be included. Bunnings says this inherent uncertainty falls well short of constituting evidence that the CC would want to adduce as evidence “conditional perhaps on the precise nature of those contents”.

Analysis

[37]   The parties’ submissions inform me there is information that was disclosed by Mitre 10 to the CC before the hearing (and which has since been disclosed by the CC to Bunnings in compliance with the CC’s obligations under the CDA). There is additional information that was voluntarily disclosed by Mitre 10 to the CC after the hearing in the District Court and which has since been disclosed to Bunnings. Further the sum total of this information is something that falls within the scope of the amended summons. Accordingly, both the CC and Bunnings now possess the two sets of information. The CC states this much in its submissions and Bunnings says nothing to the contrary.

[38]   It follows that the material that is to be produced at trial under the amended summons is already in the possession of the CC and it has already been disclosed to Bunnings. Accordingly, this is not a circumstance where material that neither the prosecution nor the defendant has viewed beforehand is to be produced at trial under the compulsion of a summons issued under s 159(2) of the CPA.

[39]   The lawfulness of the use of a s 159(2) summons cannot be assessed in vacuo; consideration of the factual matrix is required. Here both the prosecuting authority and the defendant already have possession and/or disclosure of the information sought to be produced under the amended summons. Further, this information was voluntarily disclosed to the CC by Mitre 10. Thus, there has been no need for the CC to use any authority vested in it to acquire this information. In such circumstances I cannot see how the issue of the summons can be said be an attempt by the CC to obtain discovery from Mitre 10. I consider this a complete answer to all the legal questions Bunnings has raised about the validity of the summons.

[40]   Bunnings has provided extensive argument on the operation of s 47G of the FTA, compared the operation of this provision with s 98 of the Commerce Act and

essentially sought to argue that in a prosecution under the FTA the CC is confined to gathering information through the use of its power under s 47G of the FTA. Further, that the CC can only exercise the authority given to it under s 47G before it has commenced a prosecution.8 To support these submissions Bunnings relies on the finding of the Court of Appeal in Commerce Commission v Telecom Corporation of New Zealand Ltd that the CC does not have a general power of inquiry.9

[41]   However, Bunnings overlooks the ability of the CC, as is the case with any prosecuting authority, to receive and accept information that persons choose to give to it. There is no rule of law that precludes a prosecuting authority from accepting voluntarily tendered information and then choosing to use it as evidence in a prosecution, providing such information is otherwise admissible in terms of the requirements of the Evidence Act 2006. Further, there is no time limit on when such information must be acquired. The only time constraint relating to such information would require that it be disclosed to the defendant in accordance with the requirements of the CDA.

[42]   Bunnings’ reliance on the findings in Commerce Commission v Telecom is misplaced. The findings need to be placed in context; in that case the CC had embarked on an inquiry into the development of competition in the telecommunications industry in New Zealand and the extent to which the regulatory framework assisted with this. The CC had carried out an extensive inquiry and then prepared a report of more than 80 pages which it released publicly, and in which the CC had found that the existing regulations were of virtually no assistance in removing the obstacles to the development of competition in telecommunications. The CC could not tie this conduct to a specific power under the Commerce Act. Both in this Court and the Court of Appeal the CC was found to have acted ultra vires in conducting this general inquiry and publishing its report:10

8      In this regard Bunnings sought to contrast the language of s 47G of the Fair Trading Act 1986 with s 98G of the Commerce Act 1986, which expressly provides that the Commerce Commission may exercise its powers under s 98, notwithstanding that it has instituted proceedings under Part 6 of the Commerce Act 1986 or otherwise in any Court.

9      Commerce Commission v Telecom Corporation of New Zealand Ltd [1994] 2 NZLR 421 (CA).

10 At 429.

Wide though the powers and functions are, they do not extend to conducting an inquiry and publishing a report on the efficacy or otherwise of the disclosure regulations.

[43]   The factual circumstances of Commerce Commission v Telecom are distinguishable from the present case where the CC is acting under a specific statutory power available to it: namely an investigation and prosecution under ss 10 and 13 of the FTA.11 Indeed, in relation to the CC’s exercise of prosecutorial powers the Court of Appeal had expressly recognised the existence of implied incidental functions and powers:12

The prosecuting functions and powers of the Commission under Part VI must carry implied incidental functions and powers.

[44]   Whilst the above comments were made in relation to the CC’s prosecutorial powers under the Commerce Act, I see no reason why they should not also be read as applicable to prosecutions under the FTA. Further, I note that, as with the present case, in Commerce Commission v Telecom the CC was the recipient of volunteered information from a variety of sources, and had not purported to use statutory power to gather such information. The Court of Appeal did not concern itself with how the CC came by the information it had used in its inquiry.

[45]   Accordingly, as the prosecutor in this proceeding the CC is free to accept information that Mitre 10 has provided to it. If such conduct requires a statutory context it can be regarded as fully within the implied incidental functions and powers that are available to the CC when carrying out its prosecutorial functions and powers. Once the CC decides this information provides relevant evidence for the prosecution against Bunnings then, putting to the side the question of the information’s confidential character and whether that might restrict the CC’s use of the information (which is between the CC and Mitre 10), the CC is free to use the information as it sees fit, including as evidence against Bunnings.

11 In Commerce Commission v Telecom at p 432 the Court of Appeal expressly rejected an argument that the subject inquiry could be regarded as one that had been carried out under the Fair Trading Act 1986.

12 At 428.

[46]   Here the subject information was electronically created by Mitre 10 using raw data that it had collected. The raw data can be regarded as part of the business records of Mitre 10.13 Accordingly, Mr Snowden, who was the employee at Mitre 10 who was involved in this process, is the best person to give evidence about it. He would need to refer to the information and to produce the price comparisons because without those his oral evidence of what they showed would be no more than hearsay. Now that the CC has the relevant information in its possession a summons under s 159(2) of the CPA may not have been necessary. However, the CC and Mitre 10 are of the view the confidential character of the information can be better protected if it is produced under a s 159(2) summons. I note that Bunnings has not used this as a reason for finding the use of the summons to be improper.

[47]   It is usual for a prosecuting authority to summons its witnesses in a prosecution. If it does not do so it may find itself embarrassed should a witness fail to appear. Similarly, the CC will want to be sure it can continue to rely on the Mitre 10 information it currently has in its possession as evidence at trial. The best way to ensure this will occur is to have the witness summons issued under s 159(2). By doing this the CC excludes the theoretical risk of Mitre 10 having a last-minute change of heart about use of its information and taking steps to stop this from happening. The use of the s 159(2) summons process means Mitre 10 must either comply or take steps to have the summons set aside. Accordingly, I am satisfied that all that has occurred here is standard prosecutorial practice.

[48]   Seemingly Mitre 10 has had to run the electronic web data comparison more than once. Bunnings argues that these later runs have produced new evidence, which for this reason the CC cannot use. First, I know of no principle that precludes a prosecutor from relying upon new information that has been obtained after the commencement of a prosecution to prove the prosecution case. Provided such information is properly acquired and disclosed in accordance with the CDA’s requirements, the only question will be whether it meets the tests for admission under the Evidence Act 2006. The information Mitre 10 has generated from its various runs of the web data comparison has been provided to the CC voluntarily, albeit subject to

13     Evidence Act 2006, ss 16 and 19.

conditions of confidentiality. That is a proper way for the CC to acquire this information. Even if there is room for argument that the subsequent runs are producing new information rather than replicating information derived from earlier runs this cannot affect the fact Mitre 10 has then given this information to the CC voluntarily. Accordingly, the inclusion of any such new information in the summons falls within the same reasoning as is set out above. The only real concern with such newly generated information would be whether it has been disclosed to Bunnings. However, this is something that relates to the CC’s s statutory disclosure obligations; it would not affect the validity of the summons.

[49]   In short, therefore, the factual matrix in which the amended summons was issued does not support the argument that it is an improper exercise in obtaining back door discovery: it follows that the warrant is not invalid. I have reached the same view as Judge Cunningham, albeit by a different reasoning process. Accordingly, I am satisfied the amended summons should not be set aside.

Admissibility of Mr Snowden’s evidence

[50]Bunnings’ initial objections to Mr Snowden’s evidence were that the evidence:

(a) was not relevant; (b) not reliable (given the absence of any means to test the reliability of this evidence) (c) lacked probative value; (d) was hearsay; and (e) was otherwise inadmissible. Given that initially Mr Snowden’s proposed oral evidence was not accompanied by the electronic comparison evidence on which his oral evidence was based the objections are not surprising. Without the price comparison data to support Mr Snowden’s oral evidence it would not be admissible. It would amount to him giving a hearsay account of what the price comparison data revealed. Insofar as he purported to interpret any of the price comparison data he would be offering an opinion in circumstances where he was not independent and there is no basis to establish he has the necessary expertise to make him competent to offer such opinions.

[51]   But if Mr Snowden simply refers to the electronic data comparison process as something done by Mitre 10 and then he produces examples of the electronic data price comparison that speak for themselves in terms of revealing that Bunnings was

pricing comparable items at the same price or higher than Mitre 10 I see nothing objectionable with his evidence. In such circumstances I do not consider that the Judge hearing the prosecution would be further assisted in assessing such evidence by knowledge as to how the comparisons were achieved. Indeed, how the comparisons were achieved seems to me to be irrelevant, the key issue is whether the items being compared demonstrate that Bunnings was not the seller with the lowest prices.

[52]   There is now an amended brief of his proposed evidence and insofar as Mr Snowden’s evidence will need to refer to the basis on which the price comparisons were made there will be the information provided under the amended summons. Accordingly, the admissibility challenge must be focussed in this direction.

[53]   The crux of Bunnings’ objection to the admissibility of the Snowden Statement has seemingly now shifted to a complaint that Mr Snowden’s evidence does not conform with the “Whitford Guidelines”. These are taken from the decision of the Chancery Division of the High Court, Imperial Group Plc v Philip Morris.14 That case concerned consumer survey evidence conducted in the context of a passing off claim between cigarette manufacturers. The disputed evidence consisted of records of interviews with members of the public with regard to their impressions of the two competing products. Whitford J set out the requirements for valid survey evidence as follows:15

(a)The interviewees must be selected so as to represent a relevant cross- section of the public;

(b)The size of the survey must be statistically significant;

(c)The survey must be conducted fairly;

(d)All the surveys carried out must be disclosed including the number carried out, how they were conducted, and the totality of the persons involved;

14     Imperial Group Plc v Philip Morris [1984] RPC 293 (Ch).

15     At 294.

(e)The totality of the answers given must be disclosed and made available to the defendant;

(f)The questions must not be leading nor should they lead the person answering into a field of speculation he would never have embarked upon had the question not been put;

(g)The exact answers and not some abbreviated form must be recorded;

(h)The instructions to the interviewers as to how to carry out the survey must be disclosed; and

(i)Where the answers are coded for computer input, the coding instructions must be disclosed.

[54]   Judge Cunningham said that the Whitford Guidelines were of tangential relevance because Mr Snowden undertook a straightforward comparison and not a consumer opinion survey.16

[55]   The CC supports the Judge’s assessment. It contends that the line of cases which follow the Whitford Guidelines relates to sample surveys of subjective information collected from questions posed to consumers; whereas the Snowden evidence is simply not of that nature. Rather it is an entirely objective comparison of products and prices. It contains none of the issues that give rise to the approach required by the Whitford authorities.

[56]   However, Bunnings says the Whitford Guidelines should apply. That is because the price comparison is an inherently statistical exercise, collecting data in relation to a population (being the Bunnings’ prices). As with the consumer impression surveys, the CC is seeking to draw inferences in relation to the population from the results. The expert evidence of Bunning’s expert, Dr Henstridge, is said to support this.

16     Commerce Commission v Bunnings Ltd, above n 2, at [208].

[57]   Bunnings further points to a number of New Zealand decisions that applied the guidelines.17 However, the CC points out that both those cases involved subjective consumer surveys unlike the current situation. Moreover, in Mutual Rental Cars Barker J said:18

Like Davison CJ in the Klisser case, I am not prepared to say that evidence which fails to meet the criteria of Whitford J is necessarily inadmissible in New Zealand. However, Whitford J does offer a measuring-stick for market survey evidence.

The CC therefore says that even in relevant circumstances, the Whitford Guidelines are not prescriptive.

Analysis

[58]   The electronic price comparison data (as per the amended summons) to which Mr Snowden will refer when he gives his evidence is not analogous to the type of surveys to which the Whitford Guidelines apply. Those surveys are essentially subjective consumer surveys, hence the need to understand how they were carried out before they can be evaluated and treated as reliable evidence from which a Court might draw its conclusions. Thus, the guidelines are aimed at ensuring that the underlying methodology of a survey supports the conclusions it stands for. Here the electronic system applied by Mitre 10 has identified various retail items where the price at which the items are sold at Mitre 10 is said to be the same or lower than the price for their sale at Bunnings. Where the items are brand items counsel and the Judge hearing the prosecution will have access to the price comparisons and can ascertain for themselves if Brand A’s item X is sold at Mitre 10 at a lower price than at Bunnings. Where the items are generic such as a 5-litre plastic bucket it will be open to Bunnings to challenge the comparison on the ground Mitre 10 cannot prove the 5 litre buckets sold at Bunnings are of the same quality as those sold by Mitre 10. If Bunnings can persuade the Judge hearing the prosecution that there is a reasonable possibility the buckets are not the same in terms of their construction, strength or other characteristics, it becomes hard to see how the CC could rely on this particular comparison to prove the charges against Bunnings.

17     Auckland Regional Authority v Mutual Rental Cars (Auckland Airport) Ltd [1987] 2 NZLR 647 (HC) and Commerce Commission v Griffins Foods Ltd [1997] DCR 797.

18     At 658–659.

[59]   Bunnings contends that no weight can be given to the summary of results that Mr Snowden gives at paragraph 9.4 of his proposed brief of evidence. In this paragraph Mr Snowden identifies how many matching products were cheaper at Mitre 10 than at Bunnings. I acknowledge that if Mr Snowden goes no further than to give numbers for how many items fall into this category his advice is inadmissible. On this basis he would be doing no more than either offering his opinion on what he thought the price comparison data showed, or, if he gave specific details of the comparisons he would be giving hearsay evidence by giving a second-hand account of what the comparison data showed. However, I consider he can give these summaries if he also produces evidence, either in electronic or hard copy form, from Mitre 10’s electronic records that shows the items being compared, the dates on which they were for sale and the prices at which they were being sold. It will then be for the Judge who hears the prosecution to determine if the produced evidence goes to prove what Mr Snowden says it proves. At this point his evidence will simply provide a helpful introduction to what the comparable data to be produced as exhibits.

[60]   I also acknowledge that Mr Snowden cannot extrapolate from specific evidence to establish some of the price comparisons, which prove Bunnings did not have the lowest prices, and then for him to generalise from those comparisons by giving additional evidence in the form of percentage assessments or otherwise to the effect that Mitre 10 had found so many other such examples. For each example the CC relies upon of Bunnings not having the lowest prices there should be in evidence exhibits which go to prove the item of concern was not selling at the lowest price at Bunnings. How many such examples the CC choses to prove in evidence is a matter for it to determine.

[61]   Bunnings also complains that Mitre 10 has not saved the original electronic comparisons, and so to provide evidence it will need to recreate from its historical data base the instances when it found that Bunnings was not selling comparable items at the lowest prices. This leads Bunnings to argue that the CC cannot presently know of those documents because they are yet to be created.

[62]   I reject this argument. The impression I have gained is that the price comparison information may on occasion have to be retrieved from Mitre 10’s

electronic system. This is because not all of the original run of the electronic price comparison system was preserved in hard copy form. I do not accept that the retrieval of electronic information can be characterised as creating new information in the context of the issues before me. Here copies of comparable price data information that have already been voluntarily provided may be electronically retrieved from Mitre 10’s data base. All that is of importance is whether such information shows that on a specific date in time Mitre 10 was selling comparable items at a lower price than was Bunnings. The CC may also choose to rely on the occasions when the data comparison reveals that on certain occasions Mitre 10 and Bunnings were each selling comparable items at the same price, because this also goes to prove that those items were not available from Bunning at the lowest price.

[63]   The CC may also have to establish, if challenged by Bunnings, that in terms of comparable price data retrieval the same information in substance has already been disclosed to Bunnings in accordance with the CDA’s requirements. However, that is a separate issue from the admissibility issue currently before me.

[64]   Accordingly, I am satisfied that provided it is produced in the manner I have outlined above, the price data comparisons to be produced as evidence under the amended summons cannot be regarded as evidence of a relevant statistical example. It follows that this evidence need not comply with the Whitford Guidelines. I find it is admissible against Bunnings. Also provided Mr Snowden’s oral evidence is provided in the manner I have outlined, I consider his evidence will be admissible.

[65]   However, I note that the proposed evidence has changed over time. The findings I have made have been formed on the basis of the amended summons and the proposed brief of evidence of Mr Snowden that was provided to me. However, I have not had the benefit of viewing a proposed brief of Mr Snowden’s evidence together with a proposed schedule of exhibits, each of which provides a price comparison for a specific set of items. It follows that further admissibility issues may arise once the CC has reduced Mr Snowden’s evidence and the exhibits he is to produce to their final form.

Result

(a)The appeal against the pre-trial rulings of Judge Cunningham is dismissed.

(b)The judicial review of the pre-trial rulings of Judge Cunningham is dismissed.

(c)In relation to the judicial review proceedings (which is a civil proceeding) the parties have leave to file memoranda on costs.

Duffy J