Commerce Commission v Winstone Wallboards Limited
[2025] NZHC 2695
•17 September 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
COMMERCIAL PANEL
CIV-2024-404-2853
[2025] NZHC 2695
UNDER ss 27, 36 and 80 of the Commerce Act 1986 BETWEEN
COMMERCE COMMISSION
Plaintiff
AND
WINSTONE WALLBOARDS LIMITED
Defendant
Hearing: 9 September 2025 Appearances:
M D O’Brien KC, B Hamlin and E M Greig for plaintiff
J D Every-Palmer KC, A M Boberg and T C Wood for defendant
Date of judgment:
17 September 2025
JUDGMENT OF JAGOSE J
[Tailored discovery]
This judgment was delivered by me on 17 September 2025 at 3.30pm.
Pursuant to Rule 11.5 of the High Court Rules.
………………………… Registrar/Deputy Registrar
Counsel/Solicitors:
M D O’Brien KC, Auckland
J D Every-Palmer KC, Wellington B Hamlin, Barrister, Wellington Meredith Connell, Auckland
Bell Gully, Auckland
COMMERCE COMMISSION v WINSTONE WALLBOARDS LTD [2025] NZHC 2695 [17 September 2025]
[1] For my decision is Winstone’s application for tailored discovery of “internally created … documents and communications produced by or for” either of two specified deliberative groups constituted within the Commission in relation to (a) its 2013–2014 and 2022–2024 investigations into Winstone and (b) its 2021–2022 competition study so far as it related to the market for plasterboard in New Zealand and Winstone’s practices.
Background
[2] By claim dated 31 October 2024, the Commission seeks declarations and pecuniary penalties on its allegations, between 1 April 2016 and 31 December 2022, Winstone entered into and gave effect to plasterboard supply arrangements with major building supply merchants to substantially lessen competition in a market in contravention of s 27, and otherwise took advantage of its substantial degree of power in a market for anti-competitive purpose in contravention of s 36, of the Commerce Act 1986. So far as the s 27 allegations are concerned, they mainly are focused on rebates provided by Winstone to merchants as part of the plasterboard supply arrangements. The s 36 allegations plead particular conduct by which Winstone is said to have taken non-specific advantage of its substantial market power to detriment competing plasterboard suppliers.
[3] Winstone denies any contravention but also affirmatively pleads (albeit without particulars, while criticising the Commission for its as-anodyne denial) the Commission’s claims for pecuniary penalties under s 80 are time-barred. Section 80(5) provides:
Proceedings under this section may be commenced within 3 years after the matter giving rise to the contravention was discovered or ought reasonably to have been discovered. However, no proceedings under this section may be commenced 10 years or more after the matter giving rise to the contravention.
‘Discovered’ in this context means “known”.1
1 Commerce Commission v Carter Holt Harvey Ltd [2009] NZSC 120, [2010] 1 NZLR 379 at [29] (in relation to discoverability of loss or damage in terms of s 43(5) of the Fair Trading Act 1986).
[4] The Commission will contend it discovered (or came to know of) the matters giving rise to those alleged contraventions in the course of a competition study it was required by the Minister to carry out under pt 3A of the Commerce Act from 22 November 2021 into “any factors that may affect competition for the supply or acquisition of key building supplies used to build the major components of residential buildings”.2
[5] The competition study focused on three key building supply “case studies”, including plasterboard.3 It found “competition in the supply of plasterboard is not working well”,4 pointing to Winstone’s “GIB brand holding around 95% market share over a long period” and its “market share of over 90% of the wholesale supply of plasterboard in New Zealand for many years”,5 referring to the Commission’s 2013–2014 investigation into complaints Winstone acted anti-competitively in the manufacture and supply of its plasterboard. Its 2022–2024 investigation into Winstone followed.
[6] The Commission’s earlier investigation reviewed, among other things, Winstone’s agreements with major merchants and rebates provided in them.6 Taking into account “the cumulative effect (or likely effect) of Winstone’s agreements with all major merchants”,7 the Commission did “not believe that Winstone’s rebate agreements have resulted in a substantial lessening of competition”,8 and was “[un]able to establish breach of section 36 on the basis of the counterfactual test”.9 By ‘the counterfactual test’, the Commission meant “it appears that a firm, acting rationally, would offer loyalty rebates in the way Winstone does if it did not have substantial market power …”.10
2 Commerce Commission Residential building supplies market study: Final report (Commerce Commission, 6 December 2022) at [1.6].
3 At [1.23].
4 At [A7].
5 At [A8] and n 795.
6 Commerce Commission Investigation into Winstone Wallboards Limited (Commerce Commission, 22 December 2014) at [9].
7 At [58].
8 At [116].
9 At [118].
10 At [125].
Approach to tailored discovery
[7] Processes of discovery and inspection desirably are to be “proportionate to the subject matter of the proceeding”.11 Standard discovery requires each party to disclose all documents in its control on which they rely, adversely affect any party’s case or support another party’s case.12 Tailored discovery must be ordered when the interests of justice require an order involving more or less discovery than standard discovery would involve.13
[8] Unless I am satisfied otherwise, the interests of justice are presumed to require tailored discovery in proceedings in which, among other things, the parties agree there should be tailored discovery,14 as they do here. I have no basis to be satisfied otherwise. Tailored discovery even of extensive scope is available “where it is proportionate to what is at stake and reasonably necessary [for the purposes of the proceeding]”.15
Discussion
[9] Inferentially, the affirmative defence is, the Commission knew or ought to have known—of Winstone’s entry into and giving effect to plasterboard supply arrangements with merchants, and its impugned exercises of market power to detriment competitors, giving rise to the alleged contraventions—earlier than 1 November 2021 (or such arrangements were entered into or given effect, or exercises asserted, earlier than 1 November 2014). The two sought categories of tailored discovery relate to those prospects.
[10] To the parties’ considerable credit, these are the only unagreed categories for tailored discovery, the very substantial agreed balance of which is recorded in consent memoranda. Their agreement includes for the Commission’s discovery of its documents obtained from and records of communications with third parties in the
11 High Court Rules 2016, r 8.2(1)(a).
12 Rule 8.7.
13 Rule 8.8.
14 Rule 8.9(f).
15 Biggs v Biggs [2018] NZCA 546, referring to Blackley v Blackley [2018] NZHC 2011 at [20] (referring to Dixon v Kingsley [2015] NZHC 2044 at [20], adding in particular “[s]uch discovery must not be unduly onerous”).
course of or relied on in either (a) its 2013–2014 and 2022–2024 investigations relating to the market for plasterboard in New Zealand and Winstone’s practices or (b) its 2021–2022 competition study so far as they relate to plasterboard.
[11] I apprehend the slight mismatch in agreed and unagreed references to the discoverable scope of the investigations or study if as to Winstone or plasterboard is immaterial. Both categories expressly exclude:
… internally created Commission documents, except to the extent they are original source documents containing evidence obtained from a third party (e.g., notes or transcripts of interviews, meetings and phone calls).
But the agreement also accommodates either party’s “right to make an application … regarding the scope of discovery (including to vary the scope of discovery)”, among other things, as is the present application.
[12] The matters pleaded to give rise to the alleged contraventions are Winstone’s entry into and giving effect to particularised plasterboard supply arrangements with major building supply merchants on various dates commencing 1 April 2014 until 31 December 2022, and its particularised conduct in markets for plasterboard manufacture, distribution and supply from “no later than 1 April 2016, to 31 December 2022”. The Commission pleads Winstone’s plasterboard supply arrangements with major building supply merchants included rebates from some date “before 23 August 2013” and “from at least 1 April 2015” rebates of particular volumetric, tiered, retroactive and retrospective quality.
[13] If those matters gave rise to the alleged contraventions is for proof at trial. For time-limitation purposes, what is material is when the Commission had or should have had knowledge of the matters themselves.16 Evidence filed by the Commission in opposition to Winstone’s application identifies, in both its investigations and study processes, it adopted an initial information-gathering phase for subsequent assessment. The Commission’s analysis of those matters if giving rise to the alleged contraventions is not something on which it can rely at trial as establishing any fact or tending to prove or disprove anything of consequence to the determination of the
16 Commerce Commission Carter Holt Harvey Ltd, above n 1, at [29]: “[I]t is concerned with the subject matter of that knowledge”.
proceeding in respect of the matters giving rise to the alleged contraventions;17 neither is it adverse to any party’s case or supportive of Winstone’s case in respect of such matters. It is just a derivative analysis, however competent or experienced. Prejudice otherwise to one or other party is not the test.
[14] The parties’ agreement to the Commission’s discovery of its documents obtained from and records of communications with third parties thus should be taken to include documents, produced by or for either of the two specified deliberative groups constituted within the Commission, originating any fact relating to plasterboard or Winstone obtained by the Commission for the purposes of its 2013–2014 and 2022–2024 investigations and 2021–2022 competition study. By “originating”, I mean the fact’s initial specification in a document in the Commission’s control. By “initial”, I exclude the Commission’s subsequent analysis of that fact. For completeness, with those qualifications, I consider the inclusion to be proportionate to what is at issue, reasonably necessary for discovery and not unduly onerous.
[15] Such facts first may appear in internal Commission documents obtained on the “desktop review” sought by Winstone. To my mind, documents in the Commission’s control initially recording facts elicited from searches of accessible databases would fall within the Commission’s already-accepted obligation to discover “internally created Commission documents … to the extent they are original source documents containing evidence obtained from a third party”, the ‘third party’ being the owner of the database (however publicly available). Other documents in the Commission’s control initially recording facts otherwise elicited also may be accommodated within that description. If that is not agreed, I would order in terms of the inclusion I articulated at [14] above.
Result
[16] To the extent of the inclusion articulated at [14] above, if required, Winstone’s application is successful. I invite counsel to propose any formal wording as may be necessary to capture the inclusion within the agreed tailored discovery order.
17 Evidence Act 2006, ss 6(a) and 7(3).
Costs
[17] In my preliminary view, given the essentially clarificatory nature of my decision, costs on Winstone’s application should lie where they fall or fell; that is, be borne by the party incurring them.
[18] If either party disagrees, and they cannot otherwise agree, costs are reserved for determination on short memoranda each of no more than five pages—annexing a single-page table setting out any contended allowable steps, time allocation and daily recovery rate—to be filed and served by Winstone within 10 working days of the date of this judgment, with any response or reply to be filed within five working day intervals after service.
—Jagose J
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