Crusader Meats New Zealand Limited v New Zealand Meat Board HC WN CIV 2004-485-2147
[2008] NZHC 2320
•13 May 2008
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV 2004-485-2147
BETWEEN CRUSADER MEATS NEW ZEALAND LIMITED
Plaintiff
ANDNEW ZEALAND MEAT BOARD Defendant
Hearing: 28 April 2008
Appearances: I Millard QC Counsel for the plaintiff
M Flynn and T Wood Counsel for the defendant
Judgment: 13 May 2008 at 3.30 pm
JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL
This judgment was delivered by Associate Judge Gendall on 13 May 2008 at
3.30 p.m. pursuant to r 540(4) of the High Court Rules 1985.
Solicitors: McCaw Lewis Chapman, Hamilton, for Plaintiff
McElroys, Auckland, for Defendant
CRUSADER MEATS NEW ZEALAND LIMITED V NEW ZEALAND MEAT BOARD HC WN CIV 2004-
485-2147 13 May 2008
Introduction
[1] The defendant applies for orders requiring the plaintiff to answer or better answer certain interrogatories.
[2] The defendant served a notice on the plaintiff dated 20 June 2007 for the plaintiff to answer a large number of interrogatories, all with respect to the plaintiff’s claim for special damages. In all, the defendant sought answers to about 122 questions.
[3] On 17 December 2007, the plaintiff filed an affidavit (Affidavit of Ms Anne Kelly (“Ms Kelly”) dated 14 December 2007) answering these interrogatories. Ms Kelly is the General Manager of the plaintiff. It is said that it took the plaintiff around 190 hours to complete these answers. What is clear is that they amount to more than 170 pages, including primary answers running to 25 pages of single- spaced typing supported by a Schedule, 15 appendices and 13 annexures.
[4] The defendant is not satisfied with some of the answers to these interrogatories and brings this application seeking orders directing the plaintiff to:
a) provide full and particular answers to specified interrogatories; and
b)further clarify and/or precisely identify the evidence upon which it relies in answer to specified interrogatories.
[5] The plaintiff opposes this application.
Background Facts
[6] The plaintiff is a relatively small meat processing company. It commenced operation in 1996. It says its business focus was on providing chilled lamb exports to the European Union (EU) on the basis that these command a premium over frozen exports to the EU, which in turn command a premium over equivalent exports to non-EU countries.
[7] Meat exports to the EU are regulated by a quota system controlled by the defendant. The defendant allocated a quota to exporters which initially permitted them to export chilled and/or frozen sheep meat.
[8] In the first few years of its operation (1996 to 1999), the plaintiff says that it experimented with a variety of modes of processing meat through its plant. Thus in the October 1998 to September 1999 financial year, I understand that the plaintiff was killing on its own behalf but also did “significant process killing”. Then, in
2000, the plaintiff had apparently shifted entirely to killing on its own behalf.
[9] This proceeding arises from amendments the defendant made to the quota system in 2000. Until then, quotas entitled exporters to export chilled and/or frozen sheep meat without imposing separate quotas for chilled meat and frozen meat. In
2000, however, the defendant imposed restrictions on the export of chilled lamb within the total quota. For the calendar years 2000, 2001 and 2002 (inclusive), the allowed quotas of chilled lamb exports were based on the 1999 calendar year exports of chilled meat to the EU. Essentially an exporter was restricted to exporting to the EU a certain percentage (beginning in 2000 at 118%) of its actual 1999 chilled lamb EU export volumes (and, within this, exports to France were also limited to a percentage of actual 1999 exports to France). Such restrictions however were removed from the 2003 quota year for that year and following years.
[10] The plaintiff first brought these proceedings in 2004. Essentially, the plaintiff alleges that the defendant acted in breach of its statute and in breach of a general duty (misfeasance in a public office) in imposing the restrictions on chilled exports and in the manner in which it did so. In the alternative, the plaintiff says that even if the restrictions were lawfully imposed, the defendant acted in breach of its statute in not adequately providing for companies like the plaintiff which were on major growth paths such that using an artificially low year, such as 1999 was for the plaintiffs, as a base year for quota calculation for each of 2000, 2001 and 2002 was unlawful.
[11] The plaintiff claims that had it not been for the 2000 restrictions, it would have utilised more of its total quota on chilled lamb exports. The claim essentially is
for the difference in margin between chilled and frozen exports with respect to the quantity of chilled meat the plaintiff estimates it would have sold for the years 2000 to 2002 but for the restrictions, and with respect to the flow on effects in 2003 and
2004 from the loss of clients and export base (its “lost reputation and lost market”). The plaintiff alleges that the defendant’s breaches caused it to suffer losses amounting to $6,488,899.00 (including the costs of issuing discontinued judicial review proceedings).
[12] In its submissions the plaintiff details the history of the proceedings so far. It is useful to summarise this here, in the following way:
• The claim was brought on 7 October 2004 and on 21 January 2005 the defendant filed its statement of defence (despite having agreed on 19
November 2004 to file it by 17 December 2004);
• On 16 March 2005 and 24 March 2005 the defendant and plaintiff
(respectively) gave initial discovery;
• On 5 April 2005 and 2 May 2005 the plaintiff and defendant
(respectively) sought inspection;
• On 4 August 2005 the plaintiff sought further discovery;
• The plaintiff suggests that at least by 2 September 2005, the defendant had engaged accounting experts to consider the plaintiff’s discovered documents;
• On 14 November 2005 the defendant sought further discovery, not including invoices for 1997-1999 or 2005. This was provided on 25
November 2005;
• On 20 January 2006 the defendant provided the further discovery after two agreed deadlines had expired;
• On 14 February 2006, the defendant filed an Application for Particular
Discovery of accounting records (again not including documents from
1997-1999 or 2005). The plaintiff responded by affidavit dated 13 March
2006 and its third supplementary list, but noting that “it had limited resources and records and that some of the sought documents did not exist”;
• On 12 April 2006 – 18 months after the proceedings were commenced – the defendant applied to strike out the plaintiff’s claim. The defendant then withdrew this application after the exchange of submissions;
• The defendant then sought disclosure from the plaintiff of documents held by Ferrier Hodgson and ANZ Bank. The plaintiff says these were “barely relevant” and the fact that this involved third parties meant the plaintiff did not comply with this until 21 March 2007;
• On 27 March 2007, the plaintiff says it “sought answers to a small number of interrogatories” which were given on 19 June 2007. The defendant objected to one interrogatory on the basis of relevance, but this dispute was eventually resolved with the defendant supplying a further supplementary list of documents on 10 December 2007;
• On 20 June 2007 – it seems probably outside previous timetable order deadlines – the defendant issued interrogatories, and it seems that for the first time they raised the alleged relevance of the periods 1997 to 1999 and 2005.
[13] As I have already noted, on 17 December 2007 the plaintiff filed its detailed affidavit answering these interrogatories. At this time the plaintiff also filed an amended statement of claim, reducing the amount claimed in this proceeding by around $4.7 million.
The law relating to interrogatories
[14] Interrogatories are provided for in rr 278-289 of the High Court Rules.
[15] Rule 278 sets out the general ability for a party by notice to require another party to “answer specified interrogatories relating to any matter in question in the proceeding” between them. The Courts have held that this rule was not intended to
alter the common law with respect to interrogatories: Attorney-General v Wang NZ Ltd [1990] 3 NZLR 148. As such, “any matter in question” does not permit interrogatories on matters of law or mixed fact and law or on disputed assumptions of fact: Westpac Banking Corp v Hart (1987) 1 PRNZ 719. Moreover, the Courts will not permit interrogatories aimed at ascertaining evidence as opposed to facts: Evans v Harris (1992) 6 PRNZ 329. In Wilson v Broadcasting Corporation of New Zealand (1987) 1 PRNZ 368, 369 Heron J held that the interrogatories sought “not the establishment of primary facts, but evidence of those facts, by seeking peripheral details of the first meeting by referring to the place and those attending”.
[16] The leading statement on interrogatories is that of Lord Esher MR in Marriott v Chamberlain (1886) 17 QBD 154 (CA):
“The law with regard to interrogatories is now very sweeping. It is not permissible to ask the names of persons merely as being the witnesses whom the other party is going to call, and their names not forming any substantial part of the material facts; and I think we may go so far as to say that it is not permissible to ask what is mere evidence of the facts in dispute, but forms no part of the facts themselves. But with these exceptions it seems to me that pretty nearly anything that is material may now be asked. The right to interrogate is not confined to the facts directly in issue, but extends to any facts the existence or non-existence of which is relevant to the existence or non-existence of the facts directly in issue.”
[17] In W A Pines v Bannerman (1980) 41 FLR 175, 190 Lockhart J noted the four objects of interrogatories as being:
“a)To obtain admissions as to facts which will support the case of the interrogating party;
b)To obtain admissions which will destroy or damage the case of the party interrogated;
c) Interrogatories which are in the nature of a request for further and better particulars;
d)Interrogatories which seek to obtain accounts from a party occupying a fiduciary position.
[18] These purposes have been supplemented in the New Zealand context in light of what has been seen as the “interventionist” nature of our High Court Rules. Thus, in Bank of New Zealand v Gardner (1990) 2 PRNZ 278, 281-2 Master Hansen commented:
“It seems to me that within the context of the New Zealand rules there must be added to the four objects of interrogatories, listed by Lockhart J in W A Pines v Bannerman (supra), the aim and object of the rules generally and especially relating to interrogatories mentioned by Barker J at p 4 of Sunde [Sunde v Meredith Connell & Co HC AK A1479/85 19 September 1986], ie:
(1) The aim of the rules is to arrive at the truth.
(2) The rules are designed to assist the parties in coming to a recognition of the proper issues.
(3) Through that recognition to a settlement of disputes.
Certainly, even if the third object mentioned above is not met, if interrogatories answer objects one and two above, it seems to me they must be deemed necessary. The early crystallisation of issues if it does not lead to the promotion of settlement will certainly lead to a meeting of the aims of r 4, ie the just, speedy, and inexpensive determination of the proceeding.”
[19] In addition to r 279, which sets out the duties of a party served with a r 278
Notice to Answer, the Court has the power to order a party to answer interrogatories under r 282:
“282 Order to answer
(1) The Court may, at any stage of any proceeding, order any party to file and serve on any other party (whether the interrogating party or not)—
(a) A statement in accordance with rule 283 in answer to interrogatories specified or referred to in the order relating to any matter in question in the proceeding; or
(b) A statement as mentioned in paragraph (a) verified by affidavit.
(2) The Court shall not make an order under subclause (1) unless satisfied that the order is necessary at the time when the order is made.”
[20] Interrogatories must therefore relate to “any matter in question” and the Court must be satisfied that the interrogatory is “necessary”.
[21] Rule 283 establishes how a recipient of interrogatories must answer them:
“283 Contents of statement
(1) A statement in answer to interrogatories shall, unless the Court otherwise orders, conform to the requirements of this rule.
(2) A statement in answer to interrogatories shall deal with each interrogatory specifically either—
(a) By answering the substance of the interrogatory without evasion; or
(b) By objecting to answer the interrogatory on one or more of the grounds mentioned in rule 284 and briefly stating the facts on which the objection is based.
(3) The statement shall set out above or opposite to each answer or objection the interrogatory to which it relates.
[22] The authorities provide further guidance (see McGechan on Procedure at
HR283.01). A specific interrogatory requires a specific answer (Earp v Lloyd (1858)
70 ER 24) and it is insufficient to refer generally to specified books, affidavits or documents (Inglessi v Spartali (1861) 54 ER 747). Even if it is impossible to answer an interrogatory with “absolute precision”, the party is not exonerated from
providing any answer but must answer the question “as accurately as it can”:
Henwood v Radio NZ Ltd (1993) 7 PRNZ 160, 163.
[23] Interrogatories must be answered to the best of the party’s knowledge, information and belief – all three are required: Douglas v Morning Post (1923) 39
TLR 402 (CA); Foakes v Webb (1884) 28 Ch D 287. “Personal knowledge” includes the knowledge of employees and/or agents (to the extent that it is acquired during the course of their employment or agency), thus requiring the party to make proper enquiries of them: Alliott v Smith [1895] 2 Ch 111; Anderson v Bank of British Columbia (1876) 2 Ch D 644 (CA).
[24] It does not suffice for a party to simply answer ‘I do not know’ – it is the party’s responsibility to obtain that knowledge or to confirm that, despite enquiries, he/she has been unable to do so: BCNZ v Wilson & Horton Ltd HC AK CP1814/87
21 September 1992. The party must state what enquiries he/she has had made and what belief, if any, he/she has formed as a result of those enquiries: Sharpe v Smail (1975) 49 ALJR 130. In particular, where the knowledge of employees or agents is relevant, the party should say that he/she has made enquiries of them, and that his/her answers are the result of these enquiries: Commercial Bank of Australia Ltd v Whinfield [1920] VLR 225.
[25] If a party objects to an interrogatory, he/she must specifically state his/her objection and the grounds on which he/she objects: r 283(2)(b). The permissible grounds on which a party can object to interrogatories are set out in r 284:
“284 Objection to answer
(1) Subject to subclauses (2) and (3) and to rule 285, a party may object to answer any interrogatory on the following grounds but no other:
(a) That the interrogatory does not relate to any matter in question between him and the party requiring the answer:
(b) That the interrogatory is vexatious or oppressive: (c) Privilege:
(d) That the sole object of the interrogatory is to ascertain the names of the witnesses.
(2) It shall not be a sufficient objection that the answer to any interrogatory will determine a substantial issue in the proceeding.
(3) On an application under rule 280(1) or rule 282 in respect of any interrogatory, the Court may require the applicant to specify on what grounds he objects to answer that interrogatory and may determine the sufficiency of the objection and, if the Court determines that the objection is not sufficient, the applicant shall not be entitled to object to answer that interrogatory in a statement in answer to interrogatories.”
[26] In addition, as stated above, objections may be made on the basis that the questions do not meet the very nature of interrogatories (because, for example, they pose questions of law or seek to ascertain evidence): Wilson v BCNZ; McGechan on Procedure at HR284.1.
[27] The test of relevance is usefully summarised by Gresson J in Shore v Thomas [1949] NZLR 690, 695, as quoted by Master Hansen in Bank of New Zealand v Gardner (1990) 2 PRNZ 278, 283:
“It is not necessary that the answers should be conclusive on the questions at issue; it is enough that they should have some bearing on the question, and that they might have a tendency to establish, or form a step in establishing, the allegations made.”
[28] In terms of “oppressive or vexatious” interrogatories, the underlying principle is that “interrogatories will not be allowed if they exceed the legitimate requirements of a particular occasion … or place a burden on the party required to answer which is out of all proportion to the benefit to be gained by the applicant”: McGechan on Procedure at HR284.03(1), citing White & Co v Credit Reform Assn [1905] 1 KB 653 (CA). The term “oppressive” can be defined as meaning “contrary to the rules of justice or fairplay, and to be burdensome or wrongful”: Elston v State Services Commission (No 2) [1979] 1 NZLR 210, 215 per Jeffries J. McGechan on Procedure at HR284.03(1) defines “vexatious” interrogatories as those which are
“unreasonable or frivolous, or are more in the nature of a ploy to achieve delay or abuse the process of the Court”.
[29] In Re Securitibank (No 31) (1984) 1 PRNZ 514, 522 Barker J commented: “The circumstances must be relevant to deciding on oppression. What might be oppressive interrogatories in a simple action involving a small sum of money may not be considered oppressive in an action by a liquidator acting on behalf of numerous unsecured creditors, attempting to reconstruct something years after the event.”
[30] McGechan on Procedure at HR284.03 identifies various ways in which interrogatories have been held to be oppressive, including:
• Interrogatories which are unduly burdensome or unreasonable – Parker v Wells (1881) 18 Ch D 477 (CA) with respect to interrogatories “requiring a search through records and business books for several years” (compare Re Securitibank (No 31) above);
• Prolix interrogatories – Shore v Thomas [1949] NZLR 690;
• Interrogatories for a suspect motive – such as to gain access to material for another proceeding : Edmondson v Birch & Co Ltd [1905] 2 KB 523 (CA); and
• Interrogatories as to the evidence a witness will give or the contents of briefs of evidence or how the party intends to prove his/her case (Knapp v Harvey [1911] 2 KB 725; Hooton v Dalby [1907] 2 KB 18), but “it is not a valid objection to claim that the person interrogated is to appear as a witness” (BNZ v Gardner at 281) or that they could be cross-examined on the point (Martin v Martin (1990) 3 PRNZ 448).
[31] However, according to McGechan on Procedure at HR284.03(7):
“… the fact that it may be possible to glean the answers from material which has been discovered is not necessarily a good objection, particularly where that would require considerable effort: Wallis Bros Ltd v Canterbury Bye Products Ltd (1985) 5 PRNZ 590.”
[32] Lastly, r 287 provides for challenges to the sufficiency of answers supplied in response to interrogatories:
“287 Insufficient answer
Where a party fails to answer an interrogatory sufficiently, the Court may, without prejudice to its powers under rule 277,—
(a) If he has made an insufficient answer, order him to make a further answer verified by affidavit in accordance with rule 286; or
(b) Order him, or any of the persons mentioned in paragraphs (b) to (d) of rule 286(1) as the nature of the case requires, to attend to be orally examined.”
[33] The challenge is to sufficiency as opposed to veracity. The insufficiency must be of “substance and not the form of the answer or the precise dotting of i’s and crossing of t’s”: Lyell v Kennedy (No 3) (1884) 27 Ch D 1, 16 and 21, per Cotton LJ. The Lord Justice also held (at 15):
“When a man is required to answer interrogatories he may on a question of sufficiency refer to the whole of his affidavit in answer, and is not confined simply to those passages which purport to deal with a particular interrogatory.”
[34] McGechan on Procedure at HR287.02 provides examples of the types of answers which have been held to be insufficient:
“(a) Answers to interrogatories containing irrelevant information: Taylor v NZ Newspapers Ltd [1938] NZLR 198;
(b) Embarrassing answers (ibid);
(c) Overly involved answers: Lyell v Kennedy (No 3) (1884) 27 Ch D 1; [1881-5] All ER Rep 814 (CA), at p 28; pp 825, 826;
(d) Impertinent answers: Peyton v Harting (1854) LR 9 CP 9; and
(e) Perfunctory answers, such as “I am unable to say”, where there is no explanation of the inability to answer or in the absence of any objection to answer: Adams v Dickeson [1974] VR 77…”
Counsel’s Arguments and My Decision
[35] With these principles in mind, I turn now to the specific interrogatories under consideration in the present application. (I note that the defendant is now satisfied with respect to certain pleaded interrogatories and so these are no longer to be considered.) The interrogatories to be considered here effectively fall into four categories. The defendant first submits that specified interrogatories which make up categories 1, 2 and 3 noted below have been insufficiently answered in terms of r
287 and the established case law. These are said to be insufficiently answered in the case of each category respectively because:
(Category 1) - they refer to documents bulk discovered by the plaintiff –
interrogatories 1.3(3), 2.2(1)(b), 2.2(1)(c), 2.4(1)(c), 2.4(1)(d),
2.6(1)(c), 2.6(1)(d), 2.8(4), 2.11(4), 2.14(4), 5.5, 5.7, and 5.9; and
(Category 2) - they fail to specify the details of the enquiries made to locate documents – interrogatories 2.8(4), 2.11(4) and 2.14(4); and
(Category 3) - they do not provide adequate detail and/or have failed to provide the requested reconciliation – interrogatories 2.8(5)(b), 2.11(5)(b),
2.14(5)(b), 3.8(e), 5.5, 5.7, and 5.9.
[36] In addition, the defendant also makes submissions in opposition to the plaintiff’s objection to certain interrogatories in a fourth category under r 284 (on the grounds that they are irrelevant, oppressive or vexatious). For ease of reference, I will label this Category (4):
(Category 4) - interrogatories include interrogatories 3.1(e), 3.1(f), 3.2(e), 3.2(f),
3.3(e), 3.3(f), 3.4(e), 3.4(f), 3.5(e) and 3.5(f).
[37] These interrogatories are said by the defendant to be relevant and that the answers are needed by the defendant to assess the plaintiff’s claim.
[38] It is with respect to the interrogatories in this category (4) plus interrogatories
2.8(5)(b), 3.8(e), 5.5, 5.7 and 5.9 that the defendant seeks an order for full and particular answers. With respect to categories (1), (2) and (3) except interrogatories
5.5, 5.7 and 5.9, the defendant seeks an order for further clarification and/or precise identification of the evidence on which the plaintiff relies.
[39] The submissions made here for the plaintiff, however, are not easily assigned to any one of these categories. Therefore I will record the plaintiff’s submissions first in order to consider them alongside the defendant’s submissions for each of the four categories of interrogatories.
Plaintiff’s Submissions
[40] The plaintiff submits first that an order that the plaintiff “further clarify and/or precisely identify the evidence” on which the plaintiff relies “self evidently fails the rubric that interrogatories are not entitled to seek mere evidence of facts, rather than the facts themselves”. On this, the plaintiff goes on to contend that virtually all of the interrogatories asked seek answers which are merely evidence of facts in issue.
[41] The plaintiff also notes at one point that the interrogatories here all relate to the issue of damages and submits that “interrogatories on the quantum of damages are rarely allowed but have been allowed on particulars of special damages” (citing McGechan on Procedure at HR278.11(5)). The plaintiff does go on to acknowledge, however, that the interrogatories here do all relate to its claim for special damages. On the special damages issue the plaintiff contends then that “the general approach should avoid casting the net too wide to thereby get into evidence rather than primary facts”. However, I am of the view that it will usually be highly relevant to interrogate as to the basis on which substantial claims for loss of profits are quantified: see Telecom New Zealand Ltd v AMP NZ Property Commercial Ltd (“the Telecom case”) HC WN CIV-2004-485-613 4 July 2006 at [80].
[42] With respect to interrogatories seeking precise identification of documents, the plaintiff submits that it has precisely identified documents in the annexures to the Affidavit of Ms Kelly dated 17 December 2007. The plaintiff complains that interrogatories are not a substitute for proper inspection in this case by the Defendant. Furthermore, it is the plaintiff’s submission that the defendant seeks documents that the plaintiff has sworn do not exist and, although the defendant has not sought further discovery, some of the interrogatories essentially challenge the adequacy of the discovery provided. It is submitted that the defendant however, does not disclose here any proper basis to show that the discovery was deficient.
[43] The plaintiff also contends that “[t]he interrogatories are vexatious and/or oppressive” and that this is partly due to a misconception by the defendant’s expert as to the nature of the plaintiff company, its ability to access information, and the reports it would have completed and retained. The plaintiff submits that the plaintiff is a “small private country company, privately owned by one person, with a very lean and flat management” structure and a “rather elementary accounting system” – and contrasts the defendant as “a large statutory corporation”.
[44] Ms Kelly further deposes to this general nature of the plaintiff company. She says it is effectively owned and controlled by one individual, a Mr John Ramsay, and that it uses a relatively flat organisational model such that it has no “significant middle management structure” dedicated to producing financial data (Affidavit of Ms Kelly dated 31 March 2008 at [4]). She says that the majority of its key management decisions are made on the basis of “extensive industry knowledge by key personnel as distinct from comprehensive written financial reports” (Affidavit of Ms Kelly dated 31 March 2008 at [5]). Until February 2003 it used a manual accounting system (Affidavit of Ms Kelly dated 31 March 2008 at [8]). Although it seems the plaintiff company has a relatively high turnover, it is said to be “very small by meat industry standards (less than 2% of New Zealand kill)” (Affidavit of Ms Kelly dated 31 March 2008 at [7]).
[45] It is evident from Re Securitibank (No 31), and I accept, that the circumstances of a particular proceeding, including the nature of the parties, must be seen as relevant to the consideration of whether interrogatories are oppressive.
[46] The interrogatories in question here are also opposed on the basis that requiring the plaintiff to answer them would unnecessarily and inappropriately delay the litigation. On this, it needs to be noted that the proceedings have now been in existence for over three and a half years.
[47] In any event, the plaintiff says that the information sought by the defendant is “irrelevant or so marginally relevant that the plaintiff should not be put to the expense of investigation. These are not primary facts by any stretch”. The plaintiff submits that the primary facts at issue in the proceedings – or, more specifically, in
the claim for special damages, to which all of the interrogatories relate – are as follows:
(a) What orders would the plaintiff have been able to fulfil in 2000, 2001 and 2002 but for the unlawful restriction in 2000?
(b) What orders did it fulfil in those years?
(c) What additional costs did it incur in those years acquiring chilled entitlements from others?
(d) In relation to the shortfall between (a) and (b), what was the loss in premium chilled v frozen?
(e) What ongoing impact would that have until the plaintiff could rebuild its market position (2 years claimed)?
[48] The plaintiff alleges that facts that are irrelevant here include:
• Facts relating to other markets, because in any event, it “was still profitable and desirable long term (because of some use it or lose it rules as to quota) [for the plaintiff] to maximise its use of EU quota”;
• The plaintiff’s financial strength, as there is no contention that the plaintiff would have increased its total throughput had the restrictions not been in place – just that the plaintiff would have supplied more chilled exports as opposed to frozen exports; and
• Facts relating to the years before 2000, because during this time the plaintiff was going through a development stage and was adopting various modes of operation. (The plaintiff contends that there is no dispute as to the quantity of chilled meat the plaintiff exported in 1999 as the chilled export restriction the defendant imposed in 2000 was based on the defendant’s own records of this.) The plaintiff also notes here that there is a “general allowance for the (diminishing) loss of market share in 2003 and 2004”.
[49] The plaintiff contends broadly that the lack of relevance is borne out by the defendant’s own conduct. I understand this to be a reference to the lack of
investigation the plaintiff says the defendant has undertaken of the discovered documents, in particular, File 18. In this respect, I note the remarks of Ms Kelly in her Affidavit dated 31 March 2008 (at [25] to [26]). She says that the defendant’s agents have only visited once to inspect the File 18 documents, that two men “spent less than an hour” inspecting the documents and only requested “a copy of one set of export documents and one set of sales confirmation documents”.
[50] The plaintiff submits further that the exercise is made more oppressive by what it says are earlier delays. In this respect, the plaintiff details the history of the proceedings (as summarised above). It is the plaintiff’s submission that the defendant’s conduct during this history illustrates:
• That the years 1997 to 1999 and 2005 are “not relevant or, if at all relevant, are so marginally relevant that interrogatories requiring a detailed troll through accounting records and their considerable collation and analysis is oppressive”. The plaintiff submits that if they were relevant, the defendant (guided by forensic accountants) would have sought the information “far earlier”;
• The question to be asked as to why the earlier records are unlikely to be available. This is particularly so in that they were not sought until June
2007 and the Inland Revenue Department only requires records to be kept for a limited period. The plaintiff says that it “lies ill in the mouth” of the defendant’s representatives to say that the plaintiff “should have kept the records when even the defendant did not previously consider them to be relevant”;
• The long delays in this proceeding such that further delays caused by the plaintiff having to answer the requested interrogatories would “further deny or delay the Plaintiff’s entitlement to have its case heard”. The plaintiff submits that “[w]hat may not have been oppressive if raised early on can become so, because of the delay (if only as it makes tracing information that much more difficult)”; and
• The possible question that “the better resourced Defendant [is] simply trying to burn off the small Plaintiff especially as the Defendant has not
bothered to inspect the invoices listed in the Answers. It has simply taken a low cost approach to its position and seeks to impose high costs on the Plaintiff”.
Sufficiency of answers
[51] The defendant submits that the interrogatories they seek fit within the objective of interrogatories (per Marriott v Chamberlain) in that their “purpose is to obtain admissions and information supporting the Meat Board’s prospective defence, established by its denial that there is no basis for The plaintiff to quantify its loss of profit claim at $4,692,100”. The defendant contends that the questions are relevant to a central issue (the justification of the plaintiff’s alleged lost profits), and that it suffices that they have some bearing on this question and may have a tendency to assist in establishing the allegations made (per Shore v Thomas [1949] NZLR 690,
695). The defendant submits that the answers are insufficient in substance and not only in form (per Lyell v Kennedy).
[52] The defendant also contends that the fact that the interrogatories go to the justification or quantification of the damages claim does not preclude them – that “such inquiries are standard in a claim for loss of profits” as per the Telecom case at [80]. I am of the view that this correctly states the law and do not propose to consider this point further.
[53] The defendant submits that the interrogatories are specific and therefore specific and precise answers are required: Parker v Wells (1881) 18 Ch D 477 (CA); Earp v Lloyd [1858] 70 ER 994. Although counsel for the defendant before me acknowledged that a considerable amount of work had been done by the plaintiff in assembling its earlier answers to the 122 interrogatories administered by the defendant, he contended that the plaintiff has still failed in its obligation to properly attempt to answer the questions as accurately as possible even if total precision cannot be achieved (per Henwood v Radio NZ Ltd).
[54] The defendant further submits that the answers to these interrogatories are not evident from the defendant’s review of the discovery material provided and thus the interrogatories are necessary and relevant (as in the Telecom case).
[55] However, on this, it needs to be noted that in the Telecom case, the Court commented that the defendant had filed an affidavit confirming that all of the discovery material had been reviewed and that it had not contained the sought information, and that the plaintiff did not contest this (at [57] and [58]). This is the opposite situation to that which prevails in the present case where the plaintiff deposes that the defendant has undertaken very little inspection of the discovered documents and the defendant has not sought to comment on this. In addition, earlier authority only establishes that it will not necessarily be a good objection to an interrogatory that discovered material may contain the answers (especially when it will be onerous to find the answers): Wallis Bros Ltd v Canterbury Bye Products Ltd. I am of the view that, where proper inspection of discovered documents is likely to lead to the answers with relatively little effort, answers to interrogatories which rely on this may well be sufficient.
Category (1) – reference to documents bulk discovered
[56] The defendant says that the plaintiff has answered these interrogatories “by reference to certain files contained in the plaintiff’s various lists of documents alone. Because the ‘files’ referred to have been ‘bulk discovered’ by the plaintiff it is not clear what documents the plaintiff is referring to as forming its answer”.
[57] The defendant maintains that the plaintiff’s answers contravene the requirement for specific and substantial answers to specific interrogatories (Earp v Lloyd) which are “not perfunctory or evasive” (Hawkins v Ayers (1995) 9 PRNZ
138, 140). The defendant submits that, in response to questions requiring the plaintiff to specify documents, the plaintiff needed to refer to the page number of the document within the relevant bulk listed file (Inglessi v Spartelli). The defendant says that it was possible for the plaintiff to do this. According to the defendant, it is not acceptable for the plaintiff to “merely rely upon reference to discovered documents, especially where this would require the defendant to glean answers which would require considerable effort” (citing Wallis Bros Ltd v Canterbury Bye Products Ltd and The Order of St John Northern Regional Trust v Gemini 10
Limited & Ors HC AK CIV-2002-404-1559 2 July 2002 at [31]).
[58] On this issue it is also illuminating to note Ms Kelly’s description of the discovered documents (Affidavit dated 31 March 2008 at [19] to [24]). In particular I
note that she states that File 18 “listed the Export Documentation by date and original number” (Affidavit dated 31 March 2008 at [20]). Ms Kelly says further that under the “unique identifiers” on the File 18 documents there were included completed invoices, completed export entries, bills of lading, and documents of origin (DOOs) (Affidavit dated 31 March 2008 at [23]). (DOOs are “Documents of Origin” sent by exporters to the defendant for certification so that the defendant is able to monitor exports).
[59] I turn now to consider the specific unanswered interrogatories. The interrogatories in para 1.0 relate to documents which support the plaintiff’s claimed frozen and chilled margins for each month of the claim years. The defendant seeks further clarification of interrogatory 1.3(3) which asks what “other evidence” (my emphasis) the plaintiff relies on. The plaintiff’s answer was: “Yield information – the yield folder has been discovered – file 20 Plaintiff’s First Supplementary List of 20
May 2005”. The defendant says that this file is “an eastlite worth of documents” and that it cannot link the plaintiff’s answers to the contents of this file. The plaintiff says that this question seeks evidence, that the question does not ask that the documents be itemised and that the file is small.
[60] I am satisfied that this specific interrogatory does go beyond an attempt to isolate and establish the primary facts so as to clarify the plaintiff’s claim or to help the defendant to advance its defences. In my view, it is seeking peripheral evidence and goes beyond the nature of interrogatories. In addition, the interrogatory is general – it does not require that documents be specified – and so a general answer is permissible: Gordon & Co v Bank of England (1844) 8 Jur 1132.
[61] Paragraph 2.0 of the interrogatories contains questions relating to the chilled entitlements purchased by the plaintiff in 2000 as set out in a primary document (labelled T55). Interrogatories 2.2(1)(b) and 2.2(1)(c) ask the plaintiff to specify the source documentation it relies on to quantify its total plant production (TPP) figure and the cost to purchase additional quota figure in the T55 document. The plaintiff answered the first interrogatory by referring to DOOs sent to the defendant. The plaintiff says that they did not keep these documents but “kept a spreadsheet showing the co-efficient amount of each sale from the DOO against each company to track how much we had used” which figures were subsequently “checked against Meat NZ reports” and that these are part of File 18. Interrogatory 2.2(1)(c) was
answered by saying that these source documents include invoices which are part of File 5. Ms Kelly further deposes for the plaintiff that the TTP figures are contained in the annexures to her 14 December 2007 affidavit, that File 5 “only contains 137 documents [and that] they have been discovered” and that the defendant has the documents in any event (Affidavit dated 31 March 2008 at [48](3) and (4)).
[62] The defendant submits that the plaintiff is required to state the documentation that establishes the figures; that it cannot link “what was reviewed of File 18” with the figures in T55 and that the plaintiff should have provided these links. It goes on to say that it cannot find any invoices in File 5 to support the ‘cost to purchase additional quota’ figure; and that the plaintiff should have identified the document numbers in File 18 and File 5.
[63] Interrogatories 2.4(1)(c) and 2.6(1)(d) repeat the question in 2.2(1)(d) for the
2001 and 2002 years; interrogatories 2.4(1)(d) and 2.6(1)(c) repeat the question in
2.2(1)(c) for these years. The plaintiff’s answers are the same for each year and the defendant and plaintiff repeat their submissions above.
[64] Interrogatories 2.8(4), 2.11(4) and 2.14(4) ask the plaintiff to itemise documentation supporting the plaintiff’s attempts to purchase additional quota from other meat producers in the 2000, 2001 and 2002 years respectively. The plaintiff answers each question:
“Some of the original documents will have been included in the previous Discovery. Unfortunately some of the documents have not been located. However the cost was recorded on spreadsheets at the time. The documents are within File 5…”
[65] The plaintiff maintains that this is an adequate response – that File 5 only contains 137 documents and that the documents not included either never existed or cannot be located. Ms Kelly says she personally reviewed all the documentation (Affidavit dated 31 March 2008 at [48](9)). The defendant says, again, that it cannot find invoices in File 5 to support the figures, that invoices must exist, that document numbers are required, that the spreadsheets referred to cannot be found, and that in any event it needs the source documents and not the spreadsheets.
[66] Interrogatories 5.5, 5.7 and 5.8 relate to the sales of chilled product the plaintiff told the defendant it expected to sell in 2000, 2001 and 2002. It asks how the plaintiff calculated these amounts (answered: “an accumulation of projected sales”), what information it relied on (“advice from customers”) and why it believed that sales at this level were possible (“advice from customers”). The defendant contends that the answers are insufficiently specific. The defendant submits that details of the customer’s advice should have been specified and that the plaintiff should have provided “the documents that show the accumulated sales, by reference to documents within a list if already discovered and who prepared that figure”. It is said that this information is needed “to see what evidence supports their sales claims” (my emphasis). The defendant contends that it is information that “even this small-ish company” would be expected to have.
[67] The plaintiff says that the questions were answered and that “[m]ore is impossible and so vexatious and oppressive”. Ms Kelly deposes that the “projected sales” figures were estimates and the requested documents do not exist (Affidavit dated 31 March 2008 at [48](28)). The plaintiff submits that it is a small, hands-on, “number 8 fencing wire” operation and that “record keeping is not their forte”. The plaintiff says that they had hand-written ledger accounts until 2002 and that they simply do not have the documents that the defendant is seeking. They submit that they cannot be asked to do the impossible.
[68] In weighing up all these arguments, I reach the conclusion here that the plaintiff is simply unable to locate some documents and that this is probably a consequence of the nature of their accounting system. I find the evidence of Ms Kelly in this respect credible and I must reject comments by the defendant that seem to imply that the plaintiff does have documents it says it does not have. Moreover, it goes without saying that it is impossible for the plaintiff to precisely identify documents that never existed or no longer exist. As such, the plaintiff cannot be ordered to do so and this will simply be an embarrassment for the plaintiff at trial. I acknowledge that it is typically insufficient to answer specific interrogatories with a general answer (Earp v Lloyd). However, where documents do not exist, a general answer such as “advice from customers” may be as accurate an answer as is possible (per Henwood v Radio NZ Ltd).
[69] I am also satisfied that, in the circumstances of this case, references to documents in File 5 or File 18 are sufficiently specific. This is not a situation where, for example, the plaintiff has merely referred to “numerous letters passed between us and the other parties interested” (as in Inglessi v Spartelli at 748). The files are appropriately indexed and I do not consider that it would be excessively difficult for the defendant to identify the appropriate documents. (I note again the issue which remains as to the extent of the inspection done by the defendant.) I consider that the plaintiff’s failure to specify document numbers here is, if anything, a failure of form not substance (per Lyell v Kennedy).
[70] Moreover, I am also of the view that the identification of some of these documents is more in the nature of evidence here than primary facts. This is especially so where, as I understand it, the spreadsheets set out the figures – the primary facts – on which the claim is quantified.
Category (2) – Failure to Specify Enquiries
[71] The defendant submits here that the plaintiff was required to specify the enquiries it made to identify documents relevant to the quantification issue and/or the nature and structure of its business, and that it has failed to do so. This is based on the following authorities, discussed above:
• Douglas v Morning Post (requirement to answer interrogatories to the best of one’s knowledge, belief and information);
• Henwood v Radio NZ Ltd (requirement to make proper enquiries of one’s employees and agents to locate the documents); and
• Sharpe v Smail and Wilson v Broadcasting Corporation of New Zealand
(requirement to state in answers the enquiries made).
[72] Interrogatories 2.8(4), 2.11(4) and 2.14(4) are pleaded by the defendant under this category as well. The defendant submits that the plaintiff (or Ms Kelly) was required “to specify the steps taken to locate the documents, who she enquired with etc”. With respect to interrogatory 2.11(4), the defendant also contends that it is seeking “an answer that specifies the invoices” establishing the figure and that its review of File 5 has not disclosed invoices establishing or linking back to this figure.
[73] I am of the view that, to the extent that a failure to specify enquiries made is a failure of substance and not form, it must be because a failure to swear to having made such enquiries indicates that the answers may not be made to the party’s best information (per Douglas v Morning Post), and thus they may not arrive at the truth (an objective of interrogatories per Bank of New Zealand v Gardner). In the context of the plaintiff company’s flat management structure here – consisting of the owning shareholder, Ms Kelly as General Manager and four office clerks – there is a reasonable argument that there was less need here for Ms Kelly to make specific enquiries of other staff to determine what documents the plaintiff company had. As General Manager of the plaintiff, given its tight-knit structure, Ms Kelly is likely to be fully familiar with all the documents in question. This can be compared to the interrogated party in, for example, Sharpe v Smail (“the trustee of the estates of two bankrupts who formerly carried on business in partnership as stockbrokers”) – and in respect of which the Australian High Court commented (at 379):
“The answer given to these interrogatories is insufficient. It does not state that proper — or indeed any — inquiries have been made and it is quite consistent with the answer given that if the defendant had made inquiries he could have obtained further information which he might have believed to be true.”
[74] I am satisfied that Ms Kelly making further enquiries here would have been highly unlikely to have led to the discovery of further information. Ms Kelly deposed that the documents do not exist (see Affidavit of Ms Kelly dated 31 March
2008 at [48](9)), not that she does not know whether the plaintiff has the documents. Therefore, I am satisfied that this ground does not establish that the plaintiff’s answers were insufficient in substance.
Category (3) – lack of adequate detail and/or reconciliation
[75] It is submitted by the defendants that the answers to these interrogatories fail to provide adequate detail and/or have failed to provide the reconciliation that is requested. It is the defendant’s submission that this information has not been provided previously and is not evident in the documents that the plaintiff has discovered.
[76] The defendant contends that reconciliation of the specified quota costs and the financial statements is necessary so that the defendant can reconcile the amount claimed by the plaintiff with its financial statements and “verify the legitimacy of the quota purchase quantum in each year”. The defendant submits that the answers sought do not involve opinion but instead involve material facts directly in issue (per Marriott). The defendant contends that the plaintiff’s answers are not specific and substantial (per Earp v Lloyd and Hawkins v Ayers).
[77] For all these interrogatories, the plaintiff submits first that they have disclosed all they can, secondly, that they have indicated where the information can be found, and thirdly, that it will simply be up to the plaintiff to prove the figures at trial.
[78] Interrogatory 2.5(5)(b) asks the plaintiff to specify how the stated costs to purchase additional quota in 2000 reconcile with the plaintiff company’s 2000 financial statements. The plaintiff’s answer was that:
• The 2000 claim year did “not necessarily match” the plaintiff’s financial year (which is balanced as at 30 September, whereas the quota years are calendar years);
• “[T]he majority, if not all, of the …figure will be part of ‘Export costs
$255,512’”;
• “Because of the changes in systems and accountants since 2000 it is not now possible to get an exact breakdown of the $255,512”. It is further said that the manual accounting system makes this more difficult.
(Affidavit of Ms Kelly dated 31 March 2008 at [48](10)).
[79] The defendant says that the “question here is how does the [costs to purchase additional quota figure] relate to the entries in their Financial Statement for that year”. It says that it needs to know where the figure appears in the statement, and that a requisitely specific answer would provide “references to all invoices that total the …figure and an explanation as to what the balance of the $255,512 is made up of”. The defendant says that changing accountants and the different year bases should have no effect.
[80] Interrogatories 2.11(5)(b) and 2.14(5)(b) repeat this question in terms of the
2001 and 2002 years respectively. The plaintiff’s answer states, again, that the year bases do not correlate and that a majority or all of the figure will be included in the “Export Costs” or “Export Quota” figures. The plaintiff answered that a “significant part of the costs was the exchange of EU quota for chilled entitlement … As this was a non-cash transaction it was not recorded in the annual financial statements”, which only record cash items. The defendant repeats its submissions for interrogatory 2.8(5)(b) and also questions what is meant by the statement that it was a “non-cash transaction”. It asks why the equivalent purchase in 2000 was not a non-cash transaction. The defendant submits that the plaintiff is:
“basically saying that the cost to purchase additional quota…has not been included in their financial statement. This suggests they did not incur this cost, firstly because it should be in their financial statement, secondly because there should be invoices supporting it.”
[81] In response, the plaintiff says that the practice had changed from 2000 in that in 2001 and 2002 the plaintiff just simply exchanged quota (from, for example, Affco Limited). The plaintiff contends that it has tried to answer the questions for the crucial year of 2000 but that, for reasons outlined, the modus operandi changed and therefore some of the records are unavailable. The plaintiff submits that the defendant’s questions are “very wide-ranging” and that it is impossible to give more, asking “[h]ow does one reconcile a non-cash transaction with figures derived from cash movement?!?”. The plaintiff says that this is an example of the defendant asking questions to make life harder for the plaintiff.
[82] Again, I accept from the material before the Court and the plaintiff’s submissions that the source documentation here simply does not exist and so it is impossible for the plaintiff to specify these documents in their answers to the defendant’s interrogatories. I am of the view that the plaintiff has answered these interrogatories as accurately as it is able. Furthermore, the defendant’s interrogatory does not actually ask for invoices to be specified and so a more general answer may have been appropriate in any event.
[83] Interrogatory 3.8(3) asks what prices the plaintiff expected to receive for its estimated chilled sales volumes for each month of 2000, 2001 and 2002. Part (b)
asks the plaintiff to itemise the documents which support these answers. Part (e) asks the plaintiff if there is “any other information which The plaintiff relies upon to justify its estimates”, to which the plaintiff replied:
“We rely on communications (verbal and written) with customers. The majority of our business with overseas clients is done initiated by phone. Some documents (written communiqué) from French Clients advising their requirements have already been discovered – See File 5 and 6…”
[84] Ms Kelly further deposes that the plaintiff did not retain notes of the conversations, that the plaintiff does not keep files for individual clients, and that sale details are recorded in the sales confirmation documents (Affidavit dated 31
March 2008 at [48](27)).
[85] The defendant says that the plaintiff’s answer is not specific enough and that it does not allow the defendant to test from where the figures provided in response to interrogatory 3.8(3) are derived. The defendant says that the plaintiff should provide details of the communications and, where written, the document numbers should be identified. The defendant says that the plaintiff “should have notes of the verbal communications”. The plaintiff says that the defendant’s request “asks the impossible and is vexatious and oppressive”. It repeats its submission as to the small, private company nature of the plaintiff and its manual accounting system – that what the defendant asks of them is impossible given the nature of the plaintiff. It further submits that some documents are in the discovered document annexures but that the defendant “hasn’t bothered to check”.
[86] For the reasons given above with respect to interrogatory 1.3(3), I am satisfied that this question is also addressed at evidence rather than primary facts and is therefore outside the permissible scope of interrogatories. I note also that it might be preferable if the plaintiff directly identifed the documents concerned in Files 5 and 6 but I am satisfied nevertheless that the documents are sufficiently identified in substance and that it would not be excessively difficult for the defendant to identify the relevant documents from these relatively small files.
[87] The defendant makes submissions regarding interrogatories 5.5, 5.7 and 5.9 under this category as well as in Category 1. In particular, the defendant criticises Ms
Kelly’s statement that the plaintiff does not have details of conversations with its customers and that the plaintiff did not keep notes (Affidavit dated 31 March 2008 at [27] to 30]). The defendant says that this is not a complete answer and that it needs details of the advice received from customers so as to see the evidence that supports the plaintiff’s sales claims. The defendant says that the plaintiff’s “response indicates that there is no direct evidence of the estimated chilled production (and therefore sales) upon which they are basing their claim”. The plaintiff repeats its submissions above (at [67]) that at this point the request is impossible to answer and so is vexatious and oppressive, in light of the nature of the plaintiff company.
[88] Again I accept the evidence of the plaintiff that, as a result of the plaintiff’s management and record-keeping structure, the documents simply do not exist and that consequently the plaintiff cannot be ordered to identify them. The extent to which this documentation said to be non-existent is necessary to determine the plaintiff’s claim is therefore relevant only to whether the plaintiff can prove their claim at trial – as the defendant’s submissions seem to recognise. I am of the view that the plaintiff has done sufficient here to show that it has answered these interrogatories as accurately as it can.
Category (4) – r 284: relevance, and whether oppressive or vexatious
[89] Under this heading, the defendant opposes the plaintiff’s objections to the specified interrogatories on the grounds that they are irrelevant or oppressive or vexatious.
[90] First, the defendant maintains that the questions are relevant and that the answers are needed by the defendant to assess the plaintiff’s claim and assist it in advancing its defences. The defendant says that the present case is analogous to the Telecom case, in which there were proceedings claiming $6 million for lost profits and damaged property. The Court held that “a significant factor must be that the plaintiff’s claim is substantial” and noted that the lost profits claim was “complex and detailed” (at [39]). The defendant submits that, as in the Telecom case, each interrogatory here relates specifically to issues in question – “namely the failure by the plaintiff to set out the basis on which they have quantified their massive loss of profits claim”.
[91] The defendant says that the years 1997-1999 are “relevant in assessing the legitimacy of the loss of profits claimed” because it was during this period that the plaintiff company developed markets and constructed plant and its business grew to its current state. The defendant says that the sales value of chilled lamb during this period is relevant to enable the defendant to “fully understand the financial profile of the company and its market presence”. In addition, the defendant submits that the
2005 sales figures are relevant “to establish the level of market penetration following the claim period”. The defendant says that the plaintiff’s financial results in the years surrounding the claim period will help the defendant judge the achievability of the results the plaintiff claims.
[92] Secondly, the defendant maintains that the interrogatories sought are not oppressive (referring to the definitions cited above). With respect to locating the
1997-1999 documents, the defendant submits that the plaintiff should be able to find these documents because the proceedings were brought by the plaintiff in 2004 and, at that time, the plaintiff was still required for IRD purposes to have retained these documents. The defendant contends that these “documents being relevant to the proceeding should not have been destroyed, nor should the plaintiff have destroyed them”.
[93] The defendant says that the claim years (defined as 2000 to 2004) “cannot be looked at in isolation, as the plaintiff’s claim for loss of profits also rests on the financial resources and capabilities of the company both earlier and later which reflect on the viability of the loss of profits during the claim years”. The defendant says that the present proceedings involve a complex claim for a large sum of money and that in this context it is appropriate, and not oppressive, to interrogate on records back to 1997.
[94] The defendant says that the Telecom case is relevant here. In that case, the plaintiff objected to interrogatories as seeking excessive irrelevant detail requiring “a vast foray into the plaintiff’s business records”. The High Court commented (at
[62]):
“It seems disingenuous of the plaintiff to claim that it relies upon its business data for this period but that it is too onerous to provide business records for the same period to allow the first defendant to check the assumptions and
methodology adopted by the plaintiff in formulating its large loss of profits claim.”
[95] I note however that the Court in Telecom made this statement about a plaintiff which it described as “the largest listed company in New Zealand”, a company which had “significant resources available to it to enable the interrogatories to be answered” (at [60]). Moreover, the records at issue in that case were those relating to the plaintiff’s analysis of long-term trend data on which its loss of profits claim was quantified (at [61]). As such, it was to be expected that Telecom would be able to source the sought documents and data. But I am not persuaded that the Court’s comments in the Telecom case indicate that it may never be too onerous for any plaintiff to provide any document which relates even marginally to a basis on which a plaintiff has quantified a loss of profits claim. Sometimes, trawling through business records for multiple years will be seen as oppressive: see Parker v Wells. I consider that the comments in the Telecom case need to be considered in the circumstances of that proceeding and the exact nature of what was being sought there (per Re Securitibank (No 31)).
[96] Then, the defendant in quoting the words of r 284, “vexatious or oppressive”, submits that it is not open for the plaintiff to object to interrogatories on the grounds of both. However, I am not persuaded that this overly restrictive interpretation of r
284 is a correct one.
[97] In any event, the defendant says that the interrogatories here are not vexatious
– that they are not unreasonable, frivolous, or issued so as to achieve delay or that they are an abuse of the process of the Court. Rather, the defendant submits that they are highly relevant to the issue of the justification of the loss of profits claim, and that they are reasonable in the circumstances of the quantum and complexity of this claim.
[98] Interrogatories 3.1 and 3.2 request the sales value of chilled and frozen lamb respectively by dollar value and by kilogram. Interrogatories 3.3 and 3.4 request the metric tonnage and dollar value of sales of chilled lamb and frozen lamb, respectively, to Europe, Asia, the United States, New Zealand, Australia and any
other market of significance. Interrogatory 3.5 asks who were the plaintiff’s “top ten customers for chilled product by sales value and metric tonnage”.
[99] Paragraphs 3.1(e), 3.2(e), 3.3(e), 3.4(e) and 3.5(e) request this information for the 1997, 1998 and 1999 years. On this, the plaintiff answered:
“The years 1997 to 1999 had special factors operating including that The plaintiff was, in the early years, a process killer only and then was seeking to build up its own business. Not only are they not relevant, it is now impossible to locate sufficient of the invoices to make the time and effort worthwhile and to do so would be (I am advised) oppressive. This is beyond the period for when even IRD requires records to be kept.”
[100] Paragraphs 3.1(f), 3.2(f), 3.3(f), 3.4(f) and 3.5(f) request this same information for the 2005 year, to which the plaintiff answered:
“Similarly 2005 being the 3rd year after the claim is not relevant and the
invoices so numerous that to try to extract them would be onerous and (I am advised) onerous.”
[101] On these aspects, Ms Kelly deposes that:
• She was not aware that these years would be relevant to the proceedings and so the documents were not kept;
• Many of the documents will be in File 18 but that, because a lot will be missing, “even if I carried out the exercise it would be a partial exercise only and would be of dubious accuracy given the missing data”;
• The “so-called ‘financial profile of the company’ does not appear relevant because our claim is as to lost margins, chilled versus frozen”; and
• She estimates it would take over 100 hours to locate and collate this information.
(Affidavit dated 31 March 2008 at [48](15)).
[102] I note for the sake of completeness that the plaintiff has provided its October, November and December 1999 monthly accounts to the defendant in additional discovery in late 2005 (Affidavit of Ms Kelly dated 31 March 2008 at [38]).
[103] The defendant however submits that:
“…the ‘shoulder years’ being 1997 – 1999 and 2005 are extremely important. The questions which relate to these years are necessary to establish how the plaintiff built up the market over this time and also to enable the defendant to verify their market penetration and capacity to achieve the chilled sales in the claim years that they claim they could have done…
While understood that the plaintiff was primarily a ‘process killer’ during
1997 – 1999 it is said that there was a gradual increase in chilled sales as the markets were developed.
Query whether the plaintiff are now saying that no revenue profile existed at all for chilled sales prior to the 2000 claim year. If so this would be at odds with their business profile set out in paragraphs 29 – 34 of the Stmt of Claim (para 34). Reference to ‘distribution agreements’ at para 34. These documents should have been kept as litigation was commenced late 2004. Should still have held these for IRD purposes at this point not requesting discovery…
[104] In my view, information here that relates to alternative, non-EU, markets is, at best, peripheral evidence and largely irrelevant to the present proceeding, in which the plaintiff claims for the difference in margin with respect to EU countries. The defendant has not made submissions regarding the relevance of this information and I consider here that the s 284 objection has been made out with respect to it.
[105] Nor am I of the view, in the circumstances of this case, that the interrogatories requiring financial information for the years 1997 to 1999 are directed at primary facts. This is because the plaintiff’s claim as I understand it is based on the difference in margin between chilled and frozen lamb exports. The plaintiff is not saying that it was in a position to increase its total production.
Therefore, the “achievability” of the plaintiff’s “but-for” sales of chilled meat exports during the claim years is primarily assessable on the basis of information as to its actual total exports in those years.
[106] Information as to the plaintiff’s major customers may be more relevant however. This is because it goes to the plaintiff’s chilled lamb market penetration in these years, and therefore the potential during the claim years, but, again, the plaintiff cannot supply what it does not have. In my view, a company like the plaintiff cannot be expected to have a record-keeping system equivalent to the likes of Telecom. As such, I consider that it is understandable that the plaintiff did not retain (to the extent it had even produced) the information which has been sought for the 1997 to 1999 years. This is so given the plaintiff’s belief as to the irrelevance of the years during which it was building its operation and varying its modes of killing, and in light of the fact that the request for this information was first raised in late
2005 (outside the period for which the Inland Revenue Department requires such records to be kept).
[107] Moreover, I am of the view that it would be oppressive to require the plaintiff to attempt to identify the partial documentation that does still exist – in my view, to do so would be to “place a burden on the [plaintiff] which is out of all proportion to the benefit to be gained by the [defendant]” (per McGechan on Procedure at HR284.03(1) and White & Co v Credit Reform Assn). As I see the position, the obtainable information would not produce a full and accurate picture and is therefore unlikely to be of much – if any – assistance.
[108] I am also of the view that this would be vexatious in the sense of being unreasonable and that the likely further delay to the proceedings to achieve this would be unwarranted. On these findings, I am not required to, and will not, consider whether the defendant’s interrogatories are vexatious in the sense that they are a ploy to achieve delay or an abuse of the process of the Court.
[109] With respect to the 2005 year, it is first necessary to clarify a point arising from the parties’ submissions. The reference in the plaintiff’s answer to 2005 being the “third year after the claim” is based on the damages claim for the difference in frozen and chilled margin for the years during which the chilled export restriction
was in place – 2000, 2001 and 2002. But the plaintiff also claims for the flow on effects in later years arising from the loss of clients and export base. These are based on what I understand are decreasing percentages of the calculated “loss of reputation” per year of the claim years (as set out in Schedule 2 to the amended statement of claim dated 14 December 2007 – 50 percent for 2003, 33 ⅓ percent in
2004 and 16 ⅔ percent in 2005). As such, 2005 is properly described by the defendant as a “shoulder year” of the claim period.
[110] I consider that the defendant’s position here is stronger with respect to the interrogatories seeking information relating to 2005 in the sense that it is not claimed by the plaintiff that it would be impossible to provide the information. However, it is said that it would require many hours of work and would be oppressive or vexatious. Moreover, the plaintiff disputes the relevance of this information on the basis of the time elapsed since the breaches and it says that the chilled lamb market was depressed at this time.
[111] For the same reasons as given for the 1997 – 1999 years, I am satisfied that the non-EU market information is insufficiently relevant.
[112] However, I consider that the information sought by the defendant as to the sales value of chilled and frozen lamb by dollar value and by kilogram, and the plaintiff’s top ten customers, must be considered to be of significant relevance to an assessment of the claimed reputational loss attributed to that 2005 year. In saying this I acknowledge that it may take some effort to locate and collate these answers and that this is somewhat burdensome in light of the nature of the plaintiff. However, I consider that the relevance of this information is such that it does not exceed the legitimate requirements of the proceedings to require the plaintiff to undertake this task. Nor do I find the request for this information unreasonable or frivolous or, in the nature of a ploy to achieve delay, or an abuse of the process of the Court.
Conclusion
[113] It will be apparent from my conclusions noted above that the defendant’s present application has been largely unsuccessful. The application by the defendant therefore fails, except as to interrogatories 3.1(f), 3.2(f) and 3.5(f) which are to be partly answered.
[114] So far as those interrogatories 3.1(f); 3.2(f) and 3.5(f) are concerned, an order is now made that:
a) The plaintiff will within 20 working days of the date of this judgment provide full and particular answers to those parts of interrogatories 3.1(f),
3.2(f) and 3.5(f) as follows: (i) 3.1(f)
What was the sales value of chilled lamb by dollar value and by the kilogram for the year 2005;
(ii) 3.2(f)
What was the sales value of frozen lamb by dollar value and by the kilogram for the year 2005;
(iii) 3.5(f)
Who were the plaintiff, Crusader’s top ten customers for chilled product by sales value and metric tonnage for the year 2005.
b) The plaintiff is to verify the answers by affidavit.
Costs
c) The plaintiff is to file with this Court and serve on all other parties to these proceedings a copy of its verified answers.
[115] As to costs, the plaintiff has succeeded here in opposing the majority of the interrogatories sought by the defendant. The defendant has succeeded only with respect to parts of three interrogatories. In my view the plaintiff is entitled to an order for costs therefore, but on a reduced basis. Costs are now awarded to the plaintiff on this application on the basis of 80% of the usual category 2B scale costs which apply, together with 80% of the disbursements (if any) incurred as approved by the Registrar.
Trial Directions
[116] Before me, counsel requested that certain additional directions towards a trial of this matter might be made. That said the following directions are now made:
a) The Registrar is directed to liaise with counsel for both parties to set this proceeding down for trial (3 weeks are required) at the first available date after 1 October 2008.
b)The standard trial directions in Rules 441B-I and Rules 441M-Q are to apply.
c) The default setting down date in Rule 434(5) is to apply.
d)Leave is reserved for either party to approach the Court on 48 hours notice to request further directions if required.
e) The Registrar is to allocate a pre-trial conference approximately 10 days after the date for service of the plaintiff’s witness statements and shall notify counsel of that date. Counsel are reminded of the matters that must be attended to for that pre-trial conference as prescribed in Rule 428(8) and (9) of the High Court Rules.
‘Associate Judge D.I. Gendall’
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