Eli Lilly and Company (NZ) Limited v DHL Supply Chain Limited

[2021] NZHC 3163

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-2461

[2021] NZHC 3163

BETWEEN

ELI LILLY AND COMPANY (NZ) LIMITED

Plaintiff

AND

DHL SUPPLY CHAIN LIMITED

Defendant

Hearing:	9 November 2021
Appearances:	M Russell for the Plaintiff P Davies for the Defendant
Judgment:	24 November 2021

JUDGMENT OF ASSOCIATE JUDGE TAYLOR

This judgment was delivered by me on 24 November 2021 at 3:00pm

pursuant to Rule 11.5 of the High Court Rules

…………………………. Registrar/Deputy Registrar

Solicitors:

Kennedys (Melissa Russell), Auckland, for the Plaintiff

Fee Langstone (Pauline Davies), Auckland, for the Defendant

ELI LILLY AND COMPANY (NZ) LIMITED v DHL SUPPLY CHAIN LIMITED [2021] NZHC 3163

[24 November 2021]

Introduction

[1]    Eli Lilly and Company Limited is a pharmaceutical company. It creates and distributes pharmaceutical products for the treatment of diabetes, osteoporosis and other medical conditions. DHL Supply Chain Limited is a logistics provider. Since 2004 DHL has provided a range of services to Eli Lilly from its premises in Māngere pursuant to a Warehousing and Logistics Agreement.

[2]    On 11 February 2015, a DHL employee was operating a fork hoist in a DHL chiller room where Eli Lilly products were stored. At approximately 11.30 am, the fork hoist hit a sprinkler head. The sprinkler discharged water onto cartons below, some of which contained Eli Lilly products.

[3]    By statement of claim dated 15 December 2020, Eli Lilly pleads the products were damaged and seeks to recover its subsequent losses from DHL. It brings causes of action in breach  of  contract  and  negligence.  By  statement  of  defence  dated 12 March 2021, DHL says that any loss is subject to an allowance in favour of DHL of one per cent per annum of the average product holding per annum under their contract. DHL also pleads that Eli Lilly has not complied with the dispute resolution and limitation provisions of the contract.

[4]    By interlocutory application dated 4 November 2021, DHL seeks an order for particular discovery in respect of:

All documents contained with the file(s) of the plaintiff’s loss adjuster, Crawford, in relation to the investigation of the 11 February 2015 incident at the defendant’s premises at the corner of Manu Tapu Drive and Joseph Hammond Place, Māngere, for the period 19 February 2015 to 30 June 2015.

(the Crawford documents)

[5]    DHL relies on rr 8.19 and 8.25 of the High Court Rules 2016 (the Rules) and s 56 of the Evidence Act 2006. Its initial application, dated 10 August 2021, relied only on r 8.19 and ss 51(4) and 56 of the Evidence Act. However, upon Eli Lilly’s assertion of litigation and/or legal privilege in its notice of opposition, DHL amended its application to include the challenge to Eli Lilly’s claim of privilege under r 8.25.

[6]This Court must accordingly determine the following issues:

(a)Should Eli  Lilly be obliged to  discover the documents  pursuant  to r 8.19?

(b)Does Eli Lilly have a valid claim for privilege over the documents sought in DHL’s application for particular discovery?

Background

[7]    The incident took place on 11 February 2015. That evening DHL instructed Moyle Marine Surveyors Ltd (MMS) about the incident.1

[8]    Eli Lilly says that DHL undertook an inspection the following day which established the background facts in respect of the loss.2 Mr Stephen Moyle, of MMS, deposes that this is incorrect.  He says that he did carry out an initial inspection on  12 February but that:

…[his] instructions at that time, and the purpose of the initial inspection, were to determine what had happened, and to have an initial look at any stock that may have been damaged during the incident. By the time of the inspection some of the stock had been segregated but a final sort had not been done. [He] sighted the boxes of the stock that had been separated. [He] did not reach any conclusions at this inspection, including in relation to the background facts. Crawford was not involved during this initial inspection.

[9]    Then on 13 February, Eli Lilly says that its Quality Assurance Manager, Mark Williams, conducted an inspection.3 He produced a report following that inspection, dated 20 February 2015.

[10]   On 16 February 2015, Eli Lilly says that it notified its insurer, AIG, of the incident. Eli Lilly says that it has the benefit of an All Risks Policy which gives AIG the right of subrogation against third parties who cause Eli Lilly to incur losses of the type insured.4

1 Affidavit of Stephen Moyle dated 31 August 2021 (unsworn) at [3].

2      Affidavit of Rosemary Jean Bingham dated 24 August 2021 (unsworn) at [9]–[10].

3 Affidavit of Rosemary Jean Bingham dated 24 August 2021 (unsworn) at [11].

4 Submissions for Eli Lilly at [18].

[11]   On 19 February 2015, AIG appointed Crawford & Company Adjusters (UK) Ltd (Crawford). DHL says Crawford was appointed to undertake an initial investigation into the factual background of the incident, and in particular, the cause and extent of the damage.5 Eli Lilly says Crawford was not appointed to undertake “an initial investigation” into the cause of the loss because DHL (Mr Moyle) had already undertaken the 12 February inspection. Instead, Eli Lilly says the purpose of Crawford’s appointment was to gather evidence of the loss and to establish the quantum of Eli Lilly’s claim for the purpose of recovery proceedings.6

[12]   Eli Lilly says that on 5 March 2015, Crawford provided a preliminary report to AIG and referred to subrogation prospects against DHL.7

[13]   On 7 April 2015, Mr Peter Ziegler, of Crawford (for Eli Lilly) and Mr Moyle, of MMS (for DHL) undertook a joint inspection of the stock at DHL’s premises.8

[14]   Eli Lilly says that AIG instructed Kennedys solicitors in London to take recovery action against DHL on 6 May 2015.9 Further, that the Kennedys’ New Zealand office was instructed shortly thereafter. DHL says that Eli Lilly only first instructed Kennedys later, in July 2015.10

[15]   Eli Lilly says that on 7 August 2015, Crawford provided its final report to AIG.11 This report is said to have confirmed the quantum of the loss as $451,432.70.

[16]   On 9 September 2015, Kennedys sent its first demand letter for Eli Lilly, seeking payment of $451,432 from DHL.12

5 Affidavit of Tiffany Lynlie Utama affirmed 10 August 2021 at [5]; Affidavit of Rosemary Jean Bingham dated 24 August 2021 (unsworn) at [5].

6 Affidavit of Rosemary Jean Bingham dated 24 August 2021 (unsworn) at [12].

7 Submissions for Eli Lilly at [25].

8 Affidavit of Tiffany Lynlie Utama affirmed 10 August 2021 at [6]. Affidavit of Rosemary Jean Bingham dated 24 August 2021 (unsworn) at [13]. Affidavit of Stephen Moyle dated 31 August 2021 (unsworn) at [7]. Affidavit of Peter John Ziegler affirmed 5 November 2021 at [8].

9 Submissions for Eli Lilly at [28].

10     Affidavit of Tiffany Lynlie Utama affirmed 10 August 2021 at [8] and exhibit A.

11 Submissions for Eli Lilly at [27].

12     Affidavit of Tiffany Lynlie Utama affirmed 10 August 2021 at [9] and exhibit B.

Should the documents be discovered under r 8.19?

[17]   I propose to deal with the arguments in relation to r 8.19 fairly briefly as       I consider the main issue in this application is the application of s 56 of the Evidence Act 2006 and r 8.25.

[18]Rule 8.19 provides:

8.19 Order 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.

[19]   DHL submits that Eli Lilly’s affidavit is incomplete, and there are grounds for a belief that Eli Lilly is in control of a class of documents that should have been discovered.

[20]   It is widely accepted that the Court follows a four-stage approach in considering an application under r 8.19:13

(a)Are the documents sought relevant and, if so, how important will they be?

13     Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760 at [14]; [2018] NZAR 600 at [14].

(b)Are there grounds for belief that the documents sought exist?

(c)Is discovery proportionate (balancing the time and cost of discovery against the potential value of discovery)?

(d)Weighing and balancing these matters, in the Court’s discretion, applying r 8.19, is an order appropriate?

[21]DHL submits that applying the four stage test:14

(a)the Crawford documents are relevant to the proceedings, in particular to the quantification of loss. Relevance is not disputed;

(b)it is not disputed that the documents sought exist, and are within Eli Lilly’s possession and control;

(c)there is no issue over proportionality;

(d)in favour of making an order for discovery the potential value of the documents is extremely high as they are likely to contain information relevant to the basis and quantum of the claimed loss, that being the key matter in dispute between the parties.

[22]   I am not persuaded by DHL’s submission as set out in [19] above, that Eli Lilly’s affidavit of documents is incomplete and therefore warrants an order pursuant to r 8.19. I deal with the issue of Eli Lilly’s treatment of the Crawford documents as privileged in its affidavit below in paragraphs [23] to [25]. Accordingly, I will not make an order for discovery of the Crawford documents under r 8.19.

Does Eli Lilly have a valid claim for privilege over the Crawford documents?

[23]   As a preliminary question, I deal with whether Eli Lilly has adequately claimed privilege for the Crawford documents in the list of documents in its affidavit of documents dated 16 June 2021 (the Affidavit).

14     Assa Abbloy NZ Ltd v Allegion (New Zealand) Ltd, above n 13.

[24]   Having reviewed the Affidavit, I consider that privilege has been adequately claimed for the Crawford documents. This is for the following reasons:

(a)DHL would clearly have been aware that Eli Lilly had involved its insurers in the incident and that Crawford was involved as the loss adjuster. If not clear earlier, the meeting between Mr Moyle of MMS and Mr Ziegler of Crawford on 7 April 2015 would have made this clear;

(b)The parties are both commercially sophisticated major international companies. It would not be unreasonable for Eli Lilly, when preparing the Affidavit, to expect that DHL would anticipate Eli Lilly’s references to “confidential communications between Kennedys, Eli Lilly and its agents”, in category P1 of the Affidavit, and references to “communications between Kennedys, Eli Lilly and its agents” and “communications between Eli Lilly’s experts and/or its agents” in category P2 of the Affidavit, would include correspondence between Eli Lilly’s insurers and Crawford.

[25]   As is noted in counsel’s submissions on behalf of Eli Lilly,15 DHL has taken the same approach in its affidavit of documents dated 4 June 2021, in that the section relating to privileged documents does not include any specific reference to DHL’s insurer or parties engaged by DHL’s insurers in relation to assessing the loss, such as MMS.

Does Eli Lilly have a valid claim for privilege over the documents sought in DHL’s application for particular discovery?

[26]   Section 56 of the Evidence Act 2006 provides a privilege in respect of preparatory materials for proceedings:

56       Privilege for preparatory materials for proceedings

(1)Subsection (2) applies to a communication or information only if the communication or information is made, received, compiled, or

15 Submissions of counsel at [31].

prepared for the dominant purpose of preparing for a proceeding or an apprehended proceeding (the proceeding).

(2)A person (the party) who is, or on reasonable grounds contemplates becoming, a party to the proceeding has a privilege in respect of—

(a)a communication between the party and any other person:

(b)a communication between the party’s legal adviser and any other person:

(c)information compiled or prepared by the party or the party’s legal adviser:

(d)information compiled or prepared at the request of the party, or the party’s legal adviser, by any other person.

[27]   Section 51(4) of the Act extends the privilege where agents are involved, providing that:

A reference in this subpart to a communication made or received by a person or an act carried out by a person includes a reference to a communication made or received or an act carried out by an authorised representative of that person on that person’s behalf.

[28]   Where a person establishes that they have the privilege conferred by s 56, they have the right to refuse to disclose in a proceeding the communication, the information or any opinion formed by a person that is based on the communication or information.16

Legal Principles

[29]   The courts’ approach to s 56 claims have been summarised recently in the following two decisions:

(a)Minister of Education v James Hardie New Zealand.17 Fitzgerald J summarised the privilege as follows:

[6]It is common ground that a claim for privilege under the section accordingly requires:

(a)that at the date the document was prepared, litigation was reasonably apprehended; and

16     Evidence Act 2006, s 53.

17     Minister of Education v James Hardie New Zealand [2019] NZHC 3487.

(b)that the document was prepared for the dominant purpose of preparing for litigation.

[7]Whether litigation is reasonably apprehended is a question of fact. The applicable test is an objective one of “whether a reasonable person in the position of the party in question, and possessed of the same information at that time, would have regarded the future commencement of litigation as probable”.18 There must be a “real likelihood” of litigation.19 A “mere possibility” or “vague apprehension” that litigation could occur in the future is insufficient.20

(b)White v James Hardie New Zealand.21 Whata J affirmed Fitzgerald J’s statement of principle in Minister of Education, and continued:22

The “dominant purpose” test should be applied with some rigour.23 Whether documents were prepared for the dominant purpose of preparing for litigation is a matter of fact, but the fact documents were “made available to lawyers in the context of possible litigation does not of itself establish that this was the dominant purpose for which they were prepared”.24

[30]   If a party challenges a claim to privilege or confidentiality made in an affidavit of documents, the party may apply to the court under r 8.25 of the Rules for an order setting aside or modifying the claim.

Submissions for DHL

[31]   Ms Davies submits that Eli Lilly did not reasonably apprehend litigation at the time Crawford was instructed, nor were the Crawford documents created for the

18 E Sport Yachting Ventures Ltd v Southern Spars Ltd HC Auckland CIV-2008-404-1120, 29 July 2011 at [21], citing Commerce Commission v Caltex New Zealand Ltd HC Auckland CL33/97, 10 December 1998 at 3; Public Trust v Hotchilly Ltd HC Wellington CIV-2009-485-704, 31 March 2010 at [20]; Guardian Royal Exchange Assurance of New Zealand Ltd v Stuart [1985] 1 NZLR 596 (CA) at 606 and Laurenson v Wellington City Corporation [1927] NZLR 510 at 511.

19 Financial Markets Authority v Hotchin [2014] NZHC 2732 at [46], citing United States of America v Phillip Morris Inc [2004] EWCA Civ 330.

20 Pernod Ricard New Zealand Ltd v Lion-Beer, Spirits & Wine (NZ) Ltd [2012] NZHC 2801 at [30]– [33]; Financial Markets Authority v Hotchin, above n 19, at [46]; United States of America v Phillip Morris Inc, above n 19; E Sport Yachting Ventures Ltd v Southern Spars Ltd, above n 18, at [21].

21 White v James Hardie New Zealand [2020] NZHC 2202.

22 At [144].
23 Beckham v R [2015] NZSC 98, [2016] 1 NZLR 505 at [84].

24 Primero Maritime Ltd v Southern Spars Ltd [2019] NZHC 469, at [10], adopting the principles articulated in E Sport Yachting Ventures Ltd v Southern Spars, above n 18, at [22].

dominant purpose of litigation. Consequently, privilege cannot be claimed under s 56 and r 8.25 in respect of the Crawford documents.

[32]   More specifically, in response to Eli Lilly’s claim that it reasonably apprehended litigation from the date of the incident, Ms Davies submits:

(a)Eli Lilly could not have reasonably apprehended litigation at this time, nor by the time Crawford was instructed on 19 February 2015. At most, litigation was a mere possibility, or vaguely apprehended. At this time, Eli Lilly knew only of the occurrence of the incident and of the information gathered by Mr Williams on 13 February 2015.

(b)Eli Lilly was in a contractual relationship with DHL. Accordingly, it would have had at least some expectation that DHL might meet the claim of its own volition. Eli Lilly did not ascertain DHL’s position until after Kennedys sent the 9 September 2015 letter of demand.

(c)Proceedings were issued over five years after the date of the demand. It is hard to see how litigation could have been more than vaguely apprehended almost six years previously.

(d)The Crawford emails of 19 and 27 February 2015 respectively do not support Eli Lilly’s claim that litigation was reasonably apprehended:

(i)The 19 February internal Crawford email was created on the same day of Crawford’s instruction. It had not yet visited the site, nor reported to its principal. The email was not sent to Eli Lilly. Its purpose was to note the information that needed to be gathered and supports DHL’s case that the Crawford attendances were likely investigatory in nature.

(ii)The 27 February 2015 email from Crawford to Eli Lilly merely speculates that Eli Lilly’s insurer might take a recovery action against DHL.

(e)The emailed instruction from the insurer to Kennedys UK on 6 May 2015 only referred to a plan to review “the possibility of subrogation”.

[33]   Second, in response to Eli Lilly’s claim that the documents were created for the dominant purpose of litigation, Ms Davies submits:

(a)The dominant purpose of Crawford’s work was to investigate the circumstances of the incident, to report the facts so that Eli Lilly’s insurer could determine the policy response and assess the extent of any loss.

(b)At most, litigation was one of several purposes for which the documents were prepared, and where there are dual or mixed purposes, the “dominant purpose” test is not satisfied.

(c)The circumstances here are relevantly different to those in General Accident Fire & Life Assurance Corp Ltd v Elite Apparel Ltd.25 In that case, the insurer had acted promptly, engaging lawyers within a few days following the incident. Here, Kennedys were instructed three or more months after the incident.

Submissions for Eli Lilly

[34]   Ms Russell, for Eli Lilly, asserts the s 56 privilege over the Crawford file. She submits that litigation was always likely here due to the nature of the incident and the contractual arrangements between the parties. She elaborates that not only was DHL liable to Eli Lilly for breach of contract, but Eli Lilly’s insurance policy meant that its insurer would look to DHL to recover any payment under the policy. She notes that DHL itself considered at an early stage that subrogated action by Eli Lilly’s insurer was likely.

[35]   More specifically, Ms Russell submits that litigation was reasonably apprehended by both Eli Lilly and DHL from the date of the incident, 11 February

25     General Accident Fire & Life Assurance Corp Ltd v Elite Apparel Ltd (1987) 1 PRNZ 41 (CA).

2015. To support the claim that Eli Lilly’s apprehension of litigation was present from this date, Eli Lilly refers to:

(a)an internal Crawford email dated 19 February 2015, which records:26

The contract between Eli & DHL should be obtained – we recently concluded a successful subrogation… [in] Turkey where DHL assumed responsibility for loss or damage to goods whilst in their warehouse.

(b)an email dated 27 February 2015 from Crawford to Eli Lilly, which records:27

…the intention will be to take recovery action against DHL to recover any losses of Eli Lilly and/or its insurer, in the event you have a valid claim.

(c)email correspondence between Crawford, JLT Speciality Ltd, AIG and Kennedys between 1 – 6 May 2015 which shows that on 6 May 2015, upon receipt of Crawford’s report, AIG instructed solicitor Tony Hannon of Kennedys London to review the possibility of a subrogation proceedings against DHL.

[36]   Ms Russell submits further that not only was Eli Lilly’s apprehension of litigation present from 11 February 2015, but it was also reasonable because:

(a)The cause of the loss, being DHL’s breach of contract, was obvious from the outset and confirmed by DHL in its report.

(b)The cause and extent of the loss was investigated two days later by Eli Lilly’s Quality Assurance employee, Mr Williams.

(c)The extent of the loss was large, and it was accordingly apparent the dispute would not be easily reconciled.

26     Affidavit of Rosemary Jean Bingham dated 24 August 2021 (unsworn) at exhibit B.

27     Affidavit of Rosemary Jean Bingham dated 24 August 2021 (unsworn) at exhibit A.

(d)The relationship between the parties was governed by a contract which imposed onerous obligations on DHL and allowed Eli Lilly (or its insurer) to recover losses from DHL (or its insurer). The insurer and Crawford discussed subrogation at the outset.

(e)Litigation was not merely one of several possible outcomes but was the likely outcome.

[37]   The reasonableness of Eli Lilly’s apprehension of litigation is said to be bolstered by DHL’s similar apprehension. Ms Russell says that evidence of this is to be found in:

(a)an email sent in March 2015, in which DHL’s insurance broker warned its loss adjuster by email, “Eli Lilly are quite aggressive with recoveries and need to be prepared”; and

(b)the fact that DHL also claimed litigation privilege from the date of the incident in the schedule to its affidavit of documents dated 14 June 2021 for “Communications of information made, received, compiled or prepared for this proceeding or an apprehended proceeding from February 11 2015, to present.” In relation to this point, Ms Davies submits that the reference in DHL’s documents to “February 11 2015” was a mistake which has subsequently been rectified.

[38]   Ms  Russell  further  submits  that  the  Crawford  file  was  prepared  from  19 February 2015 for the dominant purpose of the apprehended litigation. She submits:

(a)Mr Zeigler of Crawford, Eli Lilly’s loss adjuster, is a senior adjuster, who handled claims likely to result in litigation. His investigation included matters that would lead to evidence which might prove to be useful in the litigation.

(b)Eli Lilly’s insurer instructed Kennedys shortly after the joint inspection and following Crawford’s final report on material damage.

(c)AIG’s subrogation rights crystallised at the time of the incident, because Eli Lilly’s insurance policy is a contract of indemnity.

(d)The four-month period of time between the incident and Eli Lilly’s instruction of solicitors does not indicate that litigation was not contemplated at an early stage. She cites General Accident Fire & Life Assurance Corp Ltd v Elite Apparel Ltd, where insurance assessors prepared their report before solicitors were engaged.28 Litigation privilege was upheld.

Review of the Crawford documents

[39]   The Court is entitled to request that the documents for which privilege is claimed are produced to the Court for inspection so it can assess the claim to privilege in regard to them.29 I have requested the Crawford documents and they have been provided to the Court.

Discussion

Was litigation reasonably apprehended at the time the Crawford documents were prepared?

[40]   Having regard to the submissions of counsel and my review of the Crawford documents, I consider that litigation was only a possibility at the time the Crawford documents were prepared. The focus of Eli Lilly, its insurers AIG, and Crawford was to investigate and quantify the damage to Eli Lilly’s stock caused by the incident. While there are statements that indicate consideration was being given to ultimate recovery action against DHL by the insurers relying on their rights of subrogation

28     Above n 25.

29     High Court Rules 2016, r 8.25(2); NZX Ltd v Ralec Commodities Pty Ltd [2015] NZHC 241 at [86] and [102].

under the policy, these statements in my view do not reach the threshold of establishing that litigation was probable.30

[41]   While recovery from DHL by the insurer under its rights of subrogation was addressed at various times in the Crawford documents, they do not support a reasonable apprehension of litigation by Eli Lilly during that period.  I agree with  Ms Davies’ submissions that a number of the statements relied on by Eli Lilly as showing that litigation was reasonably apprehended were made early in the investigation by Crawford. These statements were made before the detailed results of the Crawford investigation were available on which Eli Lilly might have based a reasonable apprehension of litigation. They were of a general nature relating to recovery against DHL and subrogation rights, rather than foreshadowing a specific likelihood of litigation occurring in the current claim.31 The statements relied on by counsel for Eli Lilly as demonstrating a reasonable apprehension of litigation are taken from a much larger context of communications related to quantifying the damaged stock and the value thereof.

[42]   As Ms Davies has submitted for DHL, one outcome may have been a settlement of any claim against DHL by negotiation between the parties, given Eli Lilly appears to have been a multi-national customer of DHL. In that instance resort to litigation would not have been necessary. This is to some extent borne out by the period of five years during which attempts, (as I was advised by counsel), were made to settle the claim before proceedings were issued.

Were the Crawford documents prepared for the dominant purpose of preparing for litigation?

[43]   Even if it could be said that Eli Lily had a reasonable apprehension of litigation at the time the Crawford documents were created (which I do not accept), I consider the claim to privilege fails under the “dominant purpose test”. The best that could be said is that preparing for litigation was one of the purposes for which the Crawford documents were created. All investigations of claims of this nature may lead eventually to the issue of legal proceedings. Accordingly, it was to be expected that

30     Guardian Royal Exchange Assurance of New Zealand Ltd v Stuart, above n 18.

31 DHL submissions at [38].

part of the information compiled in the investigation would cover the causes of the damage and potential causes of action against the relevant parties from whom recovery under rights of subrogation could be made.

[44]   On review of the Crawford documents, one of the purposes for which the Crawford documents were prepared of at least equal importance to preparing for litigation against DHL was investigating the claim, quantifying the damage, and quantifying the value of the loss to Eli Lilly. I do not accept Ms Russell’s submissions32 that effectively investigation of the number of packets damaged had been undertaken by Mr Williams, Eli Lilly’s QA employee, and hence the focus of Crawford’s work was to support recovery from DHL. A significant amount of detailed work was carried out by Crawford in investigating and quantifying the quantity and value of the damaged goods for the purposes of AIG responding to Eli Lilly’s claim. This was certainly an equally important purpose of preparing the Crawford documents as the purpose of supporting recovery litigation against DHL, and indeed was arguably the dominant purpose of preparing them.

[45]   Accordingly, the “dominant purpose” test is not met in respect of the Crawford documents.

Decision

[46]   For the reasons I have given, Eli Lilly’s claim to privilege under s 56 of the Evidence Act 2006 and r 8.25 is not upheld and accordingly the Crawford documents are to be discovered by DHL.

[47]   As the successful party, DHL is entitled to costs. However, there are various issues raised in the submissions of both parties as to the conduct of the application by the other party. I therefore reserve my decision on costs, and I direct the parties to attempt to agree costs.

[48]   If costs cannot be agreed, memoranda (not exceeding three pages) may be filed on the following timetable:

32 At [53].

(a)by DHL to be filed and served within 10 working days of the date of this judgment;

(b)by Eli Lilly in reply within a further five working days;

(c)by DHL in reply if required, within a further three working days.

……………………………. Associate Judge Taylor