Commerce Commission v Viagogo AG
[2022] NZHC 3058
•23 November 2022
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-2659
[2022] NZHC 3058
BETWEEN COMMERCE COMMISSION
Plaintiff
AND
VIAGOGO AG
Defendant
Hearing: 12 October 2022 Appearances:
N Flanagan, A Luck and C Fleming for the Plaintiff A Lloyd, C Hoeft and O de Pontt for the Defendant
Judgment:
23 November 2022
JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR
[First Discovery Application and Second Discovery Application]
This judgment was delivered by me on 23 November 2022 at 4:00pm
pursuant to Rule 11.5 of the High Court Rules
…………………………. Registrar/Deputy Registrar
Solicitors:
Meredith Connell, Auckland, for the Plaintiff
MinterEllisonRuddWatts, Auckland, for the Defendant
COMMERCE COMMISSION v VIAGOGO AG [2022] NZHC 3058 [23 November 2022]
Introduction
[1] The defendant in this proceeding, Viagogo AG (Viagogo) has brought interlocutory applications for further and better discovery, for further and better discovery and particulars, and to limit interrogatories, against the plaintiff in this proceeding, the Commerce Commission (the Commission).
Background
[2] In this proceeding, the Commission alleges that Viagogo has breached various provisions of the Fair Trading Act 1986 by making false or misleading representations in connection with its online ticket reselling website.
[3] The gist of the Commission’s allegations is that Viagogo falsely represents it is an official ticket seller for events in New Zealand, but that it is not in fact an official ticket seller. It says that Viagogo represents that the number of tickets available is limited, and that this is a false or misleading representation because tickets are available through official ticket sellers.
[4] The Commission says further that Viagogo represents the tickets it sells are valid, when many in fact have already been sold or are forgeries. And it says that Viagogo only displays the ticket price at a late stage in the purchasing process, and pressures vulnerable consumers into making decisions by leading them to believe tickets are selling out.
[5] Three interlocutory applications brought by Viagogo are presently at issue. The first is an application dated 11 February 2022 seeking further and better discovery (First Discovery Application). The second is an application dated 4 July 2022 seeking further and better discovery, and further and better particulars of [18] of the Commission’s second amended statement of claim (Second Discovery Application). The third is an application dated 4 July 2022 to limit the interrogatories sought by the Commission (Interrogatories Application).
[6] Since the applications were filed, the parties have resolved some of the disputed matters between themselves.
Separate judgments
[7] This judgment determines the issues relating to Viagogo’s First Discovery Application and Second Discovery Application. The Interrogatories Application will be determined in a separate judgment.
Viagogo’s First Discovery Application
[8]Viagogo seeks orders:1
(a)requiring the plaintiff, the Commerce Commission (the Commission) to search for and locate:
(i)all documents which record complaints, enquiries, and other information that the Commission has received from consumers in relation to the defendant; and
(ii)all documents recording the Commission’s position on and approach to conduct by other participants in the secondary ticket market which is similar to the conduct alleged in these proceedings, including documents relating to any decisions not to investigate or issue proceedings in relation to that conduct.
(b)requiring the Commission to, within such period as the Court directs, file and serve a supplementary affidavit that complies with rules 8.15 and 8.16 of the High Court Rules and particularises the steps that the Commission has taken to search for potentially relevant documents;
(c)requiring the Commission to produce for inspection, within such period as the Court directs, all further relevant documents in its control; and
(d)that the Commission pay the costs of this application.
[9]The grounds on which the order is sought are:2
(a)the Commission has failed to comply with the discovery orders made by Associate Judge Smith on 28 October 2020 by failing to disclose documents that are discoverable under rule 8.7 of the High Court Rules; and
1 Notice of interlocutory application by defendant for further and better discovery dated 11 February 2022 at [1].
2 At [2].
(b)the documents sought are relevant to the issues in dispute in this proceeding and should therefore be discovered.
Viagogo’s Second Discovery Application
[10]Viagogo also seeks orders:3
Further and better discovery
(a)requiring the plaintiff, the Commerce Commission (the Commission) to search for and locate all documents that are referred to in, and/or relied upon by the Commission’s witnesses in the preparation of, the briefs of evidence filed by the Commission, including the documents listed in Schedule A to this application;
(b)requiring the Commission to, within such period as the Court directs, file and serve a supplementary affidavit of documents that complies with rules 8.15 and 8.16 of the High Court Rules and particularises the steps that the Commission has taken to search for potentially relevant documents;
(c)requiring the Commission to produce for inspection, within such period as the Court directs, all further relevant documents in its control;
Further and better particulars
(d)requiring the Commission to, within such period as the Court directs, file and serve further and better particulars of paragraph 18 of its Second Amended Statement of Claim (2ASOC); and
Other
(e)that the Commission pay the costs of this application.
[11] The grounds on which the orders are sought are that the sought documents are relevant to the issues raised in the proceeding, and [18] of the Commission’s second amended statement of claim does not give sufficient particulars to inform Viagogo as to the allegation the Commission makes against it.4
3 Notice of interlocutory application by defendant for (a) further and better discovery and (b) further particulars dated July 2022 at [1].
4 At [2].
The Commission’s notice of opposition to Viagogo’s First Discovery Application and Second Discovery Application
[12] The Commission opposes Viagogo’s two discovery applications.5 The grounds on which it opposes the orders are lengthy and detailed, but can be summarised as being that the material Viagogo seeks will have little, if any value, to the substantive proceeding, would be disproportionately burdensome to provide, is irrelevant to the extent it relates to other participants in the secondary ticket market, and that the paragraph of the Commission’s second amended statement of claim to which Viagogo objects is a straightforward pleading that does not require further particularisation.6
Viagogo’s submissions
[13] Aaron Lloyd, for Viagogo, begins his submissions by addressing Viagogo’s two applications for further and better discovery. He submits that the Commission was ordered, on 28 October 2020, to give standard discovery in this proceeding. He says, however, that the Commission’s discovery was inadequate and it did not discover documents that should have been discovered in compliance with the order. He says the Commission has failed to comply with its continuing obligations to give discovery and offer inspection at all stages of the proceeding.7
[14] Mr Lloyd says the Court should order the Commission to discover those documents recording complaints, enquiries and other information that the Commission has received from consumers in relation to Viagogo because the number and nature of those complaints are squarely in issue, the material the Commission has produced to date in relation to complaints is incomplete, there are reasonable grounds to believe further documents exist and are in the Commission’s control, and disclosure of the records is proportionate.8
[15] Mr Lloyd similarly submits that the Court should order the Commission to discover those documents recording the Commission’s position on, and approach to,
5 Notice of opposition to defendant’s interlocutory applications dated 25 July 2022 at [1]–[2].
6 At [3].
7 Defendant’s submissions in support of applications for further discovery, further particulars and to limit interrogatories dated 27 September 2022 at [7]–[10].
8 At [20]–[34].
conduct by other participants in the ticketing market that is similar to the conduct alleged in this proceeding. He submits that any inconsistencies in the Commission’s approach to similar conduct by other market participants will adversely affect the Commission’s case, and ought to be discovered. He says there is no evidence to suggest that these documents do not exist or that discovering them would be disproportionate.9
[16] Next, Mr Lloyd says the Court should order the Commission to disclose those documents that have been referred to in its briefs of evidence, but that it has not discovered. He says these documents are plainly relevant as the Commission intends to rely on them at trial, there are reasonable grounds to believe that the documents exist and are within the Commission’s control, and disclosure of the documents is proportionate.10
[17] As for Viagogo’s application for further and better particulars, Mr Lloyd submits that the Commission’s second amended statement of claim included a new [18], which reads:
When Viagogo places Google Advertisements for events in New Zealand, those advertisements typically appear as the first result, or among the first results, in Google searches for that event.
He submits that Viagogo requires identification of what events are referred to here, what is meant by the words “typically appear” and what is meant by “among the first”. He submits Viagogo cannot plead a proper response to the paragraph because it contains ambiguous phrases capable of a variety of meanings. He says it is reasonable to infer that the Commission has some specific values in mind and an evidential basis for making its pleadings — Viagogo should be provided with such further details to allow it to confirm or deny the Commission’s allegations.11
[18] Concluding, Mr Lloyd submits that Viagogo seeks costs on its applications in the event its sought orders are made.12
9 At [35]–[38].
10 At [39]–[48].
11 At [123]–[130].
12 At [131].
Commission’s submissions
[19] Nick Flanagan, for the Commission, submits that the Commission opposes the orders sought broadly on the basis that the essential issue in the proceeding is simply whether Viagogo breached the Fair Trading Act in the ways the Commission alleges, the applications for further discovery relate to material that is irrelevant to any pleaded issue, and the application for further particulars is without merit.13
[20] As to the applications for further discovery, Mr Flanagan submits that to the extent the applications refer to relevant material in the Commission’s possession, that material has already been provided. Beyond that, he submits, the material sought is irrelevant to the matters at issue. He says the applications ought to be declined on that basis. And, as to the application for further and better particulars, Mr Flanagan submits that the disputed paragraph is a straightforward pleading of the fact that, when an advertiser arranges to show Google advertisements, those advertisements appear at the top of search listings. He says the paragraph provides sufficient particularity to enable Viagogo to plead to it accordingly.14
[21] Concluding, Mr Flanagan submits that Viagogo’s applications for further and better discovery and for further and better particulars ought to be dismissed, with costs awarded to the Commission.15
Supplementary submissions
[22] Following the hearing, the Court issued a minute dated 11 November 2022 requesting that counsel for each of the parties provide supplementary submissions dealing with the following questions:
(a)whether the Commission could exercise statutory powers to require the witnesses providing evidence to provide the underlying documents referred to in their briefs, as sought by Viagogo; and
13 Commerce Commission’s submissions in opposition to interlocutory applications dated 4 October 2022 at [1.1]–[1.2].
14 At [4.1]–[5.9].
15 At [6.1].
(b)whether the Court could properly make a discovery order requiring the Commission to exercise its statutory powers to obtain those documents, and therefore bring the underlying documents under the Commission’s “control” for the purposes of discovery.
[23] Each of counsel filed supplementary submissions as directed by 18 November 2022.
[24]The supplementary submissions are discussed further at [68] to [84] below.
Legal principles
Further and better discovery
[25]Rule 8.19 of the High Court Rules 2016 provides:
8.19Order for particular discovery against party after proceeding commenced
If at any stage of the proceeding it appears to a Judge, from evidence or from the nature or circumstances of the case or from any document filed in the proceeding, that there are grounds for believing that a party has not discovered 1 or more documents or a group of documents that should have been discovered, the Judge may order that party—
(a)to file an affidavit stating—
(i)whether the documents are or have been in the party’s control; and
(ii)if they have been but are no longer in the party’s
control, the party’s best knowledge and belief as to when the documents ceased to be in the party’s
control and who now has control of them; and
(b)to serve the affidavit on the other party or parties; and
(c)if the documents are in the person’s control, to make those documents available for inspection, in accordance with rule 8.27, to the other party or parties.
[26] The Court will apply a four-stage test in considering an application under r 8.19:16
16 Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760 at [14].
(a)Are the documents sought relevant, and if so how important will they be?
(b)Are there grounds for belief that the documents sought exist? This will often be a matter of inference. How strong is that evidence?
(c)Is discovery proportionate, assessing proportionality in accordance with Part 1 of the Discovery Checklist in the High Court Rules?
(d)Weighing and balancing these matters, in the Court’s discretion applying r 8.19, is an order appropriate?
[27] As to the first limb, documents will be discoverable only if they are relevant to the pleaded issues.17 As to the second limb, the party seeking discovery must show some credible objective evidence that the existing affidavit of documents is incomplete. It need not prove the sought documents actually exist.18 As to the third limb, the possibility of discovering relevant documents needs to be balanced against the cost of the discovery exercise. Highly relevant documents may justify greater expense.19 The final limb of the test entails a holistic assessment whether the Court, having regard to the factors considered under the first three limbs, should exercise its discretion to order further discovery.
Further and better particulars
[28]Rule 5.26 of the High Court Rules provides:
5.26Statement of claim to show nature of claim
The statement of claim—
(a)must show the general nature of the plaintiff’s claim to the relief sought; and
(b)must give sufficient particulars of time, place, amounts, names of persons, nature and dates of instruments, and other circumstances to inform the court and the party or parties against whom relief is sought of the plaintiff’s cause of action; and
17 High Court Rules 2016, r 8.7; and Intercity Group (NZ) Ltd v Naked Bus NZ Ltd [2013] NZHC 1054 at [15].
18 Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd, above n 16, at [10] and [12]; Lighter Quay Residents’ Society Inc v Waterfront Properties (2009) Ltd [2017] NZHC 818 at [16]; McCullagh v Robt Jones Holdings Ltd [2015] NZHC 1462 at [7]; and Robert v Foxton Equities [2014] NZHC 726 at [8].
19 Commerce Commission v Cathay Pacific Airways Ltd [2012] NZHC 726 at [18] and [21].
(c)must state specifically the basis of any claim for interest and the rate at which interest is claimed; and
(d)in a proceeding against the Crown that is instituted against the Attorney-General, must give particulars of the government department or officer or employee of the Crown concerned.
[29] Pleadings must clearly set out the facts or circumstances relied upon as giving rise to each cause of action and the relief claimed in consequence. This allows the hearing to be conducted within recognisable boundaries; pleadings should not comprise mere inferential assertions.20
[30] It is in the Court’s discretion whether to order further particulars or a new statement of claim, based on a test of convenience.21
Analysis
[31]The issues to be determined in this judgment are:
(a)Should the Commission be obliged to discover the documents sought in Viagogo’s discovery applications, being:
(i)the complaints, enquiries and other information the Commission has received from consumers in relation to Viagogo (Complaints Records);
(ii)all documents recording the Commission’s position on and approach to conduct by other participants in the secondary ticket market which is similar to the conduct alleged in these proceedings, including any documents relating to any decisions not to investigate or issue proceedings in relation to that conduct (Competitor Enforcement records); and
20 Body Corporate 351522 v Queenstown Lakes District Council [2013] NZHC 559 at [59]; Price Waterhouse v Fortex Group Ltd CA179-98, 30 November 1998 at 18; and Financial Markets Authority v Warminger [2016] NZHC 1193 at [13].
21 Ellison v Talaroa (1897) 16 NZLR 63 (SC) at 64.
(iii)all documents that are referred to and/or relied upon by the Commission’s witnesses in the preparation of briefs of evidence filed by the Commission, including the documents listed in sch 2 to Viagogo’s Second Discovery Application (Underlying Witness Documents)?
(b)Should the Commission be ordered to provide further and better particulars in relation to statements at [18] of the Commission’s second amended statement of claim?
[32]I deal with each of these issues in turn.
Should the Commission be ordered to discover the Complaints Records?
[33] I consider each of the four criteria set out at [26] above in relation to the Complaints Records.
Are the Complaints Records relevant, and if so, how important will they be?
[34] Mr Lloyd points out that at [3] of the Commission’s second amended statement of claim, the Commission pleads that “since 18 July 2016, the Commission has received over 1,382 complaint and enquiries about Viagogo”. Mr Lloyd submits the Commission has also served briefs of evidence which refer to the complaints and enquiries received by the Commission, including the number of complaints that relate to various categories of issues, and draws conclusions based on this. He submits the Commission plainly relies on the Complaints Records and therefore these documents meet the standard discovery test in r 8.7 of the High Court Rules.
[35] Mr Lloyd submits the contents of the complaints and enquiries received by the Commission are plainly at issue in this proceeding. The Commission has relied upon the content of the communications to categorise them, and the Commission’s served evidence, including Professor Slonin’s evidence, addresses the volume of complaints and enquiries received by category. Mr Lloyd submits it is clear the Commission wants the Court to draw inferences from that evidence and it is plain from the pleadings that the Commission is also seeking to draw inferences from the total
number of complaints or enquiries it has received about Viagogo to support its allegations. He submits Viagogo has the right to interrogate the Complaints Records in its defence of these allegations.
[36] Mr Lloyd submits that the relevance of the Complaints Records is clear from the fact that Viagogo itself was required to discover a substantial volume of communications with its customers.22 Mr Lloyd submits that with the Commission having obtained discovery from Viagogo of its communications with the customers, it is now contradictory to assert that complaints from consumers about Viagogo are not relevant.
[37] Mr Lloyd also rejects the Commission’s argument that the Complaints Records could not be admitted into evidence because it does not intend to call evidence from the complainants. He contends that if the Complaints Records are not admissible for this reason, the evidence that the Commission proposes to lead in reliance on those documents is equally not admissible. He submits that the admissibility or otherwise of the Complaints Records, and/or any records to be produced by Viagogo in response to the Commission’s evidence relating to the complaints and enquiries it received about Viagogo, is a matter that should be dealt with by the trial judge.
[38] Mr Lloyd submits that the proposed discovery category would not capture communications between the Commission and the consumer which are not themselves relevant. He submits all communications between the consumers and the Commission relating to Viagogo, including administrative responses from the Commission to the consumer, are relevant to the Commission’s allegation Viagogo is subject to a large number of complaints.
[39] Mr Lloyd submits that the table provided by the Commission has not produced a complete record of all the information the complainants provided to it. He submits that Viagogo has a right to broader discovery of the underlying records, so that it can interrogate the Commission’s categorisation of the complaints and enquiries received,
22 On 14 June, Campbell J ordered Viagogo to give discovery of records of written communications between Viagogo and the consumers during the period from 18 July 2016 to 31 December 2020, which had been categorised in accordance with certain enquiries of the source topic.
and respond to any inferences the Commission would otherwise seek to draw about the volume of complaints and enquiries that it received about Viagogo. He cites, for example, that information about a complainant’s identity will allow Viagogo to investigate whether the complaint was in fact a Viagogo customer, whether the information provided to the Commission by the complainant was true, and whether the complaint was subsequently resolved by Viagogo.
[40] Mr Lloyd submits that the Commission is not prevented by the Privacy Act 2020 from providing discovery of the Complaints Records. Information Privacy Principle 11 specifically provides for disclosure of personal information for the purposes of Court proceedings.23
[41] Mr Flanagan, on the other hand, submits that the substance of the Complaints Records sought by Viagogo has already been provided in full, save for the fact that the Commission has redacted personal identifying particulars of the complainants to the extent of those appearing in the complaint descriptions and/or the attachments provided.24
[42] Mr Flanagan submits that the only additional information the Commission anticipates it would hold in relation to the Complaints Records would be:
(a)the original records of the complaints; and
(b)the personal identifying particulars of the complainants.
23 Clause 1(e)(iv) of Information Privacy Principle 11 permits disclosure of personal information if the agency believes, on reasonable grounds, that disclosure is “necessary … for the conduct of proceedings before any Court”.
24 On 1 May 2022, counsel for the Commission provided Viagogo with a table containing the text or a summary of complaints or enquiries that it has received from consumers about Viagogo, with redactions made to remove any personal information or information which might otherwise identify the relevant consumers. On 31 August 2022, counsel for the Commission provided Viaogo with a link containing some of the attachments to the complaints received by the Commission, again with redactions to remove personal information. Viagogo has recently written to the Commission to highlight complaints which appear to refer to attachments, but where the attachments have not been provided. The Commission has advised it is currently undertaking a review of its records to confirm whether that material is in its possession. If any additional attachments are identified in that review, they will also be provided, but on the same redacted basis taken in respect of other attachments (subject to the terms of any order of the Court).
[43] Mr Flanagan submits that the original records are simply emails and written complaints made to the Commission. He submits the contents of these have been reproduced in the table already provided and the discovery of this material adds nothing of substance to what the Commission has already provided to Viagogo voluntarily.
[44] As to the second point at [42](b) above, Mr Flanagan submits that the material the Commission has provided to Viagogo contains redactions to withhold personal identifying particulars of the complainants. He submits the complainants’ identities are not relevant to any matter at issue and have not formed part of the categorisation exercise or evidence of Professor Slonin. He submits that the Commission declined to provide these personal identifying details in order to protect the privacy of the complainant, while otherwise giving Viagogo the full context of what those complainants said when they contacted the Commission. He submits that this approach is justified in the light of the Commission’s wider obligations at law, including those under the Privacy Act.
[45] Mr Flanagan submits the Court should be sceptical about Viagogo’s stated reason for wishing to obtain the Complaints Records (that it will carry out analysis of Viagogo’s own records in response to the complaints). He bases this submission on Viagogo’s response to a number of the interrogatories dealt with in Viagogo’s Interrogatories Application, which indicate that they either did not track the relevant information or, if it is held, it would be burdensome to manually review it. He invites the Court to reject as inherently implausible the suggestion that Viagogo will investigate the individual complaints against its own records.
[46] Mr Flanagan also submits that Viagogo’s application is based on the proposition that persons who have made a legitimate complaint to the Commission about their tickets will have also raised the issue with Viagogo. Mr Flanagan submits that this proposition is doubtful as consumers who decided to complain to the regulator had likely reached the conclusion that it was pointless to draw themselves to the attention of Viagogo itself.
Conclusion on relevance and importance of the Complaints Records
[47] In my view, the Complaints Records are relevant to the pleadings in the Commission’s second amended statement of claim. They have been used in Professor Slonin’s evidence, and in my view Mr Lloyd is correct in his submission that the Court is being invited to draw inferences from the Complaints Records, particularly when compared with the complaints received by other ticket sellers in the market.
[48] Their importance is difficult for the Court to assess on the evidence before it. Mr Flanagan has urged that the Court should be sceptical of the use to which Viagogo proposes to put the discovered Complaints Records. Mr Lloyd has submitted the Complaints Records can be used to interrogate the Commission’s reliance on them. In my view, Viagogo should be given the benefit of the doubt and is entitled to the opportunity to use the Complaints Records as it so determines in relation to preparing its defence to the Commission’s allegations.
Existence of the Complaints Records
[49] There is no dispute that the Complaints Records exist. My understanding from the hearing is that the Complaints Records are stored in an electronic file held by the Commission, and that this file could be made available to Viagogo.
Proportionality
[50] Mr Lloyd submits that discovery of the Complaints Records is proportionate and there is no evidence before the Court to suggest that it would be burdensome for the Commission to give discovery of these documents. He submits that the Commission has not, for example, given any indication of the time or effort that would be required to produce these documents. He points out that Viagogo anticipates the documents would be readily identifiable, given the analysis of the Complaints Records already undertaken by the Commission to produce the table provided to Viagogo and to prepare its briefs of evidence.
[51] Mr Flanagan did not make any submission as to proportionality of requiring discovery of the Complaints Records.
Conclusion on discoverability of the Complaints Records
[52] It is my view that Viagogo is entitled to discovery of the Complaints Records. As my conclusion at [47] above shows, they are relevant to the pleadings and have been relied on by the Commission in its second amended statement of claim. They have been used by Professor Slonin in preparing his brief of evidence. There is no doubt the documents exist and their discovery does not appear to be disproportionately burdensome to the Commission,
Should the Commission be ordered to discover the Competitor Enforcement Records?
Are the Competitor Enforcement Records relevant, and if so, how important will they be?
[53] Mr Lloyd submits that this information is relevant as any inconsistencies in the Commission’s approach to conduct similar to that alleged in these proceedings will adversely affect the Commission’s case and ought to be discovered as required by r 8.7. Mr Lloyd points out that the Commission’s expert witness, Professor Slonin, refers in his brief of evidence to the complaints about other ticket seller platforms as part of his assessment of Viagogo’s conduct.25 Mr Lloyd submits that Professor Slonin’s reliance on the information goes to the relevancy of this information.
[54] Mr Flanagan submits that the information sought is irrelevant. He submits that the proceeding relates to conduct engaged in by Viagogo, not its competitors. Any approach the Commission has taken on any other set of facts is logically incapable of being relevant to the specific allegations made against Viagogo and cannot be adverse to either party’s case. Mr Flanagan submits that the Commission’s “position on and approach to” any conduct in the marketplace is also irrelevant. He submits the test for liability under ss 9 to 13 of the Fair Trading Act is an objective one that requires the
25 Exhibit RS-1 of the affidavit of Robert Slonin affirmed on 22 July 2022 at [14.49]–[14.52] and [14.57].
Court to determine whether the conduct examined objectively is deceptive or misleading in the particular circumstances. He refers to the Supreme Court decision of Red Eagle Court Ltd v Ellis.26 There, the Court observed in the context of s 9 of the Fair Trading Act that the question to be answered is whether a reasonable person in the consumer’s position would likely have been misled or deceived.
[55] Mr Flanagan submits that the Court has previously accepted a submission made by Viagogo that documents or evidence of the parties’ internal considerations are not relevant in the context of the objective test for liability under the Fair Trading Act.
[56] Mr Flanagan also refers to the fact that in its submissions Viagogo made references to paragraphs of Professor Slonin’s evidence that compared the numbers of complaints the Commission has received in relation to Viagogo to the number of complaints received against other ticket sellers operating in New Zealand. He points out the number of complaints is not the information being sought by Viagogo under this part of its application, but rather the Commission’s approach and actions in relation to any other enforcement actions relating to other ticket sellers. Mr Flanagan therefore submits the use of numbers of complaints against other ticket sellers operating in the New Zealand market in Professor Slonin’s evidence does not engender any relevancy of the documents sought by Viagogo under this part of its application.
Conclusion on this issue of relevance
[57] In my view, Mr Flanagan’s submissions are correct and no order for discovery of Competitor Enforcement Records should be made. This is because:
(a)particular reasons that may apply where the Commission has chosen to take enforcement action, or chosen the type of enforcement action taken, or chosen not to take enforcement action in relation to other ticket sellers, will have been dictated by the specific circumstances in each case and therefore are not relevant to Viagogo’s alleged infringements of the Fair Trading Act; and
26 Red Eagle Court Ltd v Ellis [2010] NZLR 492 (SC) at [28].
(b)the evidence supplied by Professor Slonin in his brief of evidence of complaints against other ticket sellers versus complaints against Viagogo is not the information being sought by this part of Viagogo’s discovery application. Accordingly, the use of the complaints information by Professor Slonin does not engender relevancy for the information sought.
Existence of the documents and proportionality
[58] Given the conclusion I have reached at [57] above on relevancy, it is not necessary to consider the existence of the documents sought or their proportionality.
Conclusion on discovery of Competitor Enforcement Records
[59] In my view, the Competitor Enforcement Records sought by Viagogo are not sufficiently relevant to the pleadings to order discovery of them.
Should the Commission be ordered to discover the Underlying Witness Documents?
Are the Underlying Witness Documents relevant, and if so, how important will they be?
[60] Mr Lloyd submits that the Commission served several briefs of evidence that refer to, or rely upon, documents that have not been discovered by the Commission. At sch 2 of Mr Lloyd’s submission, he sets out a list of categories of documents relied upon by the Commission’s witnesses in their briefs which have not been provided to Viagogo.
[61] Mr Lloyd submits that the fact that a witness has referred to a document in support of their evidence, and drawn conclusions from the document or documents, means that a party intends to rely upon them and r 9.2 clearly defines “documents to be relied upon” to include “documents referred to in a brief or to be referred to by a witness” and envisions those documents will be disclosed. He submits that plainly such documents ought to be discovered under the standard discovery test under r 8.7(a).
[62] Mr Lloyd rejects the Commission’s argument that while the briefs do refer to communications and other materials that have not been discovered, the contents of these documents has not been put in issue by the relevant witnesses and is therefore not discoverable. Mr Lloyd alleges that the documents are put in issue by the witnesses’ proposed reliance on them and cites [122] of Ms Andreeva’s brief of evidence by way of example. That paragraph reads as follows:
122. The Commission has arrangements with Regulators in other jurisdictions whereby we regularly exchange information about our activities. Through those arrangements, I am familiar with actions that have been taken against Viagogo by overseas regulators and other organisations, including the actions taken by [the stated regulator].
[63] Mr Lloyd submits it is clear that Ms Andreeva’s reference to the Commission’s regular exchange of information with other regulators is intended to draw an inference against Viagogo. He submits that Viagogo may wish to cross-examine Ms Andreeva on this aspect of her evidence but to do so it needs to understand the basis of her knowledge and what information was exchanged with other regulators.
[64] Mr Lloyd submits the same reason applies to the Commission’s other witnesses and that Viagogo cannot properly respond to the Commission’s case against it without understanding the basis of the evidence relied on by these other witnesses.
[65] Mr Flanagan makes two initial points. First, he submits that the Commission does not hold the records sought in respect of these briefs, as they are held by the relevant witnesses. He submits this fact alone should defeat Viagogo’s application.
[66] Secondly, he submits that the Commission has written to all seven witnesses to relay Viagogo’s requests verbatim and invite them to provide responses to the information or documents. A number of those witnesses have done so. Mr Flanagan points out these issues are not referred to at all in Viagogo’s submissions.
Conclusion on relevancy of the Underlying Witness Documents
[67] In my view, to the extent the Commission’s witnesses who have provided briefs of evidence rely on specific documents in their evidence, these documents are sufficiently relevant to the pleadings to justify discovery.
Supplementary submissions on whether the Court can order discovery of the underlying witness documents
[68] In order to determine whether the Court should order discovery of the Underlying Witness Documents, the two questions posed in the Court’s minute of 11 November 2022 must be considered.
Whether the Commission could exercise its statutory powers to require witnesses providing evidence to provide the Underlying Witness Documents as sought by Viagogo?
[69] Mr Lloyd submits that the Commission must have an obligation to discover (and Viagogo a right to inspect) the Underlying Witness Documents. He submits that:
(a)either the Commission has had possession of the documents sought, in which case they are discoverable under r 8.7; or
(b)the Commission does not have and has never had possession of the documents, in which case:
(i)it needs to take all reasonable steps to obtain copies of them in order to fulfil its duty to co-operate under r 8.2; or
(ii)it can obtain them by exercising its powers under s 47G of the Fair Trading Act.
[70] Mr Lloyd submits that whether the Underlying Witness Documents are within the “control” of the Commission (within the meaning of r 1.3) should be analysed in respect of each element of the definition of “control”, being:
(a)possession of the documents;
(b)the right to possess the documents; or
(c)a right, otherwise than pursuant to the High Court Rules, to inspect or copy the document.
[71] As to actual possession of the Underlying Witness Documents, Mr Lloyd submits that Viagogo brought its application for discovery of the Underlying Witness Documents on the assumption that the Commission must, as a party acting prudently, have gathered together all the documents referred to or relied on by the Commission’s witnesses. It would be highly unusual for counsel to finalise and serve the signed brief of evidence without reviewing material referred to in it.
[72] Mr Lloyd further submits that while the Commission wrote to some witnesses to request copies of certain documents referred to in the briefs of evidence, the Commission is obliged to take reasonable steps to obtain and discover relevant documents held by a third party where their relationship indicates that they can reasonably be expected to gain access to those documents.27 I note in relation to the Yashili case that the Court ordered the plaintiff to make a formal request for the relevant documents. In this case the Commission has already made a formal request.
[73] Mr Lloyd also criticises the Commission’s communication to witnesses, first, as not encouraging witnesses to provide the documents and indeed providing witnesses an excuse not to do so and, secondly, making a request that was in fact narrower than Viagogo’s discovery request by restricting the request to witnesses to give a list of specific documents referred to in their briefs, rather than “all documents referred to or relied on” in the Commission’s briefs.
[74] In summary, Mr Lloyd submits the Commission has not gone far enough to comply with its obligations to take all reasonable steps to obtain copies of the Underlying Witness Documents from its witnesses.
Right to possess the document or inspect or copy the document
[75] Mr Lloyd submits the Commission plainly has the ability to obtain the underlying witness documents under s 47G of the Fair Trading Act, which gives the Commission broad powers to require any person to provide it with any information or document. Section 47G provides, as far as relevant, that:
27 Mr Lloyd relies on Yashili New Zealand Dairy Co Ltd v AsureQuality Ltd [2022] NZHC 332.
(1)If the Commission considers it necessary to desirable for the purposes of carrying out its functions and exercising its powers under the Act, the Commission may, by notice in writing served on any person, require that person—
(a)…
(b)to supply the Commission, or to a person specified in the notice acting on its behalf in accordance with the notice, any document or class of documents specified in the notice; …
[76] Mr Lloyd submits that the only limit on the exercise of the Commission’s power is that the Commission must consider its exercise “necessary or desirable for the purposes of carrying out its functions and exercising its powers under this Act”. He points out there is no temporal limit on the exercise of the power, or any New Zealand case law suggesting that there is any blanket prohibition on exercising its powers once proceedings have commenced. He then deals with, in his submissions, the specific provisions relating to the Australian Competition and Consumer Commission limitations under the relevant provision of Australian law, and made the point that there is no equivalent limitation in the Fair Trading Act.
[77] Mr Lloyd submits that there may be situations where the Commission may be prohibited from exercising its s 47G powers. For example, it may be an abuse of process if the Commission exercised its powers to gain advantage in litigation, such as to obtain copies of documents which it could not otherwise obtain through discovery or notices to answer interrogatories. Mr Lloyd further submits that while the Underlying Witness Documents could arguably be obtained by way of non-party discovery under r 8.21, that does not mean that they are not discoverable by the Commission if the Commission has or has had possession of them or can otherwise obtain them.
[78] Finally, Mr Lloyd submits, in answer to the Commission’s proposition that the Court should not direct the Commission to exercise its statutory power:
(a)the exercise of s 47G powers must be judicially reviewable.28 It follows that, if the Commission’s use of s 47G is amenable to judicial review,
28 Mr Lloyd relies on Astrazeneca Ltd v Commerce Commission [2009] NZSC 92, [2010] 1 NZLR 297 where a similar power under s 98 of the Commerce Act 1986 was judicially reviewed.
then it must be amenable to consideration as part of a discovery order; and
(b)Viagogo has not, in any event, sought orders directing the Commission to exercise its powers under s 47G. Viagogo has sought an order requiring the Commission to discover the Underlying Witness Documents, and if the Court makes the order sought it is up to the Commission to decide whether its s 47G power is necessary or whether it can obtain these documents simply by making a more direct request of witnesses for the Underlying Witness Documents.
[79] Mr Flanagan, on the other hand, submits that the Commission’s statutory powers under s 47G are not engaged in relation to the Underlying Witness Documents sought by Viagogo. Mr Flanagan submits that while there is no doubt the Commission could compel production of the Underlying Witness Documents, the statutory criteria for exercising those powers need to be met — and in this instance they are not.
[80] Mr Flanagan submits that in order to exercise the powers, the Commission must regard the exercise of the power as being “necessary or desirable” for the purposes of carrying out its functions under the Fair Trading Act. Mr Flannagan submits in this instance, the Commission does not consider it necessary or desirable to obtain the Underlying Witness Documents for the exercise of those powers. He submits obtaining documents sought by the defendant under a discovery application when they can be obtained by the defendant by a non-party discovery order under r 8.21, does not fall within a proper exercise of the Commission’s powers.
[81] As to the question of whether the Court could properly make a discovery order compelling the Commission to exercise its statutory powers, Mr Flanagan submits that if the Court were to make such an order, it would be the equivalent of compelling the Commission to exercise its discretionary statutory power. That proposition cuts across the constitutional principle of separation of powers. He submits that the Court’s role is to ensure that the statutory power is exercised lawfully, and that it has no role in determining whether the power should have been exercised unless the exercise was unlawful.
In support of this proposition, Mr Flanagan refers to Mercury Energy Ltd v Electricity Corp of New Zealand Ltd29 and Thames Valley Electric Power Board v NZFP Pulp and Paper Ltd.30
[82] Finally, Mr Flanagan submits that while the Commission has the statutory power to obtain the Underlying Witness Documents, that does not mean the Commission has a “right” to possess, inspect, or copy the Underlying Witness Documents. Mr Flanagan refers to the decision in Lonrho Ltd v Shell Petroleum Co Ltd,31 and its adoption in New Zealand in the context of r 1.3 (relying on the decision in Dale v Jeffrey),32 for the principle that the Commission does not have a present right to obtain the documents. It has power to do so if certain conditions are met. In this instance these conditions are not met, so there is no presently enforceable legal right to the documents in question.
[83] In summary, therefore, Mr Flanagan submits that the Underlying Witness Documents are not within the “control” of the Commission and are therefore not discoverable under r 8.7.
Conclusion on this issue
[84] In my view, Mr Flanagan’s submissions are substantially correct and the Court should not order the Commission to exercise powers under s 47G of the Fair Trading Act to obtain the documents. However, to the extent the Commission possesses the documents and has not already discovered them, or decides itself to exercise its powers under s 47G of the Fair Trading Act to require production of the documents, then to the extent the Underlying Witness Documents are referred to or relied upon by witnesses in the briefs of evidence, these documents should be discovered to Viagogo. In my view this is not different to the position the Commission has already adopted in respect of the Underlying Witness Documents.
29 Mercury Energy Ltd v Electricity Corp of New Zealand Ltd [1994] 2 NZLR 385 (PC) at 388–389.
30 Thames Valley Electric Power Board v NZFP Pulp and Paper Ltd [1994] 2 NZLR 641 (CA).
31 Lonhro Ltd v Shell Petroleum Co Ltd [1980] WLR 627 (HL) at 635–636.
32 Dale v Jeffrey (2008) 19 PRNZ 568 (HC) at [22].
Existence of the underlying witness documents
[85] As to the existence of the documents, Mr Lloyd submits that there are reasonable grounds to believe that there are documents that fall within its request that exist and are in the Commission’s control, and which have not been discovered. Mr Lloyd submits that while it is acknowledged that the Commission’s witnesses have stated in some cases that no record exists of some customer complaints referred to in their briefs, it is plain from the briefs that much of the communication on the material referred to does exist.
[86] Mr Flanagan submits that the communications sought by Viagogo are referred to in witness briefs as background context only. He submits that the most common example of that approach is the request for records of complaints made to the industry participants by persons who have purchased tickets from Viagogo. He submits that it is apparent from the briefs that, in the significant majority of cases, those complaints are made by affected consumers in person, at the door of the venue, on the day of the event. Accordingly, these organisations may not have documentary records of all the complaints made in that way.
[87] Mr Flanagan submits that the application is directed to portions of the briefs that refer by way of background context to communications the witnesses are aware of and which relate to the respective organisations’ awareness of Viagogo, and not specific documents. He submits the categories of documents include:
(a)statements to the effect the industry participants have received complaints from consumers regarding Viagogo;
(b)communications the relevant organisations have made to the general public, such as event cancellations;
(c)documents likely to be held by Viagogo; and
(d)the fact that the Commission has contacted consumers who have made complaints to it, and regulators and other jurisdictions who have also taken action against Viagogo.
[88] Mr Flanagan points out that evidence given by the witnesses, such as Ms Andreeva, will be of a nature that necessarily refers to background documents but are general statements as to background context. He cites, for example, that responses taken by regulators in Australia and Europe against Viagogo do not inform whether Viagogo has breached the Fair Trading Act in New Zealand. He therefore submits that extensive cross-examination of witnesses in relation to these is unlikely to be permissible.
Is discovery of the documents proportionate?
[89] Mr Lloyd submits that identification and disclosure of the documents sought will be relatively straightforward, given the reference to such documents in the Commission’s briefs of evidence. He submits there is no evidence before the Court that providing discovery sought would be burdensome or costly to the Commission.
Conclusion in relation to relevancy and existence of the underlying witness documents
[90] In my view, Viagogo is entitled to limited discovery of the Underlying Witness Documents. This basis is as follows:
(a)Discovery would only apply to specific documents held by the witnesses to which they refer or rely on in giving their evidence. To the extent the witnesses make general background or contextual comments that do not rely on specific documents, no discovery order is appropriate.
(b)The Commission has agency over whether it exercises its statutory powers to obtain documents from the witnesses, and the Court should not order the exercise of those powers. To the extent that the Underlying Witness Documents come into the possession of the Commission due to the Commission deciding to exercise its statutory powers to obtain them, then those documents should be discoverable.
Should the Commission be ordered to provide further and better particulars in relation to statements at [18] of the Commission second amended statement of claim?
[91] The Commission’s second amended statement of claim dated 29 April 2022, at [18], reads as follows:
When Viagogo places Google advertisements for events in New Zealand, those advertisements typically appear as the first result, or among the first results, in Google searches for that event.
[92]Viagogo’s application is seeking further and better particulars of [18], namely:
(a)Which events are referred to?
(b)What is meant by the words “typically appear”?
(c)What is meant by “among the first”?
[93] Mr Lloyd submits that Viagogo cannot plead a proper response to [18]. He submits the words “typically appear” and “among the first” are ambiguous statements capable of a variety of meanings. He submits that the order of search results (including paid advertisements) is a product of Google’s algorithm, over which Viagogo has no control or input. Accordingly, Viagogo does not have sufficient knowledge to answer the allegations in the generic way it has been pleaded.
[94] Mr Lloyd submits that it is reasonable to infer that the Commission has some specific values in mind when using the terms “typically appear”, and “among the first”, and presumably an evidential basis for making those pleadings. He submits Viagogo should be provided with such further detail as to be able to confirm or deny with confidence the Commission’s allegations.
[95] Mr Flanagan submits that the evidence shows that Viagogo makes extensive use of search advertising. He submits that the evidence contains a considerable number of instances where an advertisement for Viagogo appears as the top results in a Google search for tickets to a particular event. The paragraph provides sufficient particularity to enable Viagogo to plead to it accordingly.
[96] Mr Flanagan also submits Viagogo is a substantial e-commerce business which makes extensive use of search advertising. He urges the Court to treat with scepticism Viagogo’s statement that it cannot plead as to how search advertising works, particularly when it has the benefit of the Commission’s evidence.
Conclusion on this issue
[97] In my view, this pleading does require some elaboration. My view is that it will be sufficient clarification if particulars are provided that Viagogo’s advertisement appears at the top of the search and before the “organic results”. I am also of the view that the Commission should provide further particulars of the range of events in which it has reviewed advertisements by Viagogo for the periods from 2016 to 2018. For example, if there were 25 events during that period advertised by Viagogo in relation to New Zealand, what did the analysis of Google Search results show in relation to the 25 events?
Orders
[98]As a result of the conclusions I have reached at [52], [59], [90] and [97] above:
(a)The Commission is to provide discovery of the Complaints Records.
(b)The Commission is not obliged to provide discovery of the Competitor Enforcement Records.
(c)The Commission is to provide discovery of the Underlying Witness Documents referred to or relied on in the witnesses’ briefs of evidence, to the extent:
(i)the Commission obtains possession of the documents by electing to exercise its statutory powers to require the production of such documents; and
(ii)only specific documents which exist which witnesses refer to or rely on their evidence are to be discovered.
(d)The Commission is to provide further particulars in relation to [18] of its second amended statement of claim dated 29 April 2022 to the extent that:
(i)the particulars clarify that Viagogo’s advertisements appear at the top of the search, ahead of the “organic results”; and
(ii)the particulars give information on events advertised by Viagogo in the period between 2016 and 2018, where the Commission has had the advertisements analysed regarding the position in Viagogo’s advertisement relative to other search results appearing.
(e)Costs are reserved until completion of the judgment relating to the Interrogatories Application.
…………………………….. Associate Judge Taylor
10
1