Fmi Building Innovation Limited v Glasscorp Limited
[2025] NZHC 2963
•8 October 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2024-404-002136 [2025] NZHC 2963
BETWEEN FMI BUILDING INNOVATION LIMITED
Plaintiff
AND
GLASSCORP LIMITED
First Defendant
QUANEX IG SYSTEMS, INCORPORATED
Second Defendant
Hearing: 1 October 2025 Appearances:
S Lowery and D van Hout for the Plaintiff B Foster for the First Defendant
J Wilson and A Chunkath for the Second Defendant
Judgment:
8 October 2025
JUDGMENT OF MOUNT J
This judgment was delivered by me on 8 October 2025 at 12 pm, Pursuant to Rule 11.5 of the High Court rules.
Registrar/Deputy Registrar
Date: ……………………………
Solicitors:
Russell van Hout, Auckland McElroys, Auckland
Bell Gully, Auckland
FMI BUILDING INNOVATION LIMITED v GLASSCORP LIMITED [2025] NZHC 2963 [8 October 2025]
Introduction
[1] FMI Building Innovation Ltd has filed proceedings against Glasscorp Ltd and Quanex IG Systems, Inc seeking damages for allegedly defective components used to manufacture double and triple glazed windows and doors.
[2] The parties have largely agreed questions of discovery. At case management, the parties identified three categories of documents that were not agreed.
[3] The parties reached agreement on the third category of documents during the hearing on 1 October 2025 and I will make orders accordingly below. That leaves two categories of disputed documents in which the plaintiff seeks discovery of a relatively narrow set of additional documents from the second defendant.
[4] The first defendant abides the decision of the Court on the two disputed categories and broadly supports the second defendant’s submissions.
Background
[5] The plaintiff FMI manufactures double and triple glazed windows and doors, technically known as insulated glass units. There are four components to an insulated glass unit:
(a)two or three glass panes;
(b)a spacer bar, which separates the glass panes and seals them together creating an airtight space between the glass;
(c)a primary sealant, which creates an airtight seal between the glass and the spacer bar; and
(d)a secondary sealant, which provides structural support and holds the spacer bar in place.
[6] In 2010, the plaintiff began purchasing a type of spacer bar known as a T- Spacer directly from the second defendant’s predecessor entity. From around 2013,
the plaintiff began purchasing T-Spacers from the first defendant, Glasscorp Ltd, the New Zealand distributor.
[7] On 16 August 2024, the plaintiff filed proceedings against the defendants. The claim is that the T-Spacers suffer from a defect that means excess moisture enters the space between the glass. This is said to be exacerbated when the T-Spacer is used with a polysulfide secondary sealant manufactured by an Italian company.
[8] The plaintiff alleges eight causes of action including breach of contract, negligence, negligent misstatement, breach of the Fair Trading Act 1986 and breach of warranty.
[9] The third cause of action, pleaded against the second defendant, alleges that Quanex knew from at least 2011 that the T-Spacer suffered from the defects alleged and failed to warn the plaintiff, and/or take corrective measures. Among other things, it is pleaded that a window manufacturer in the United States filed proceedings against the second defendant’s predecessor entity in Michigan, involving broadly similar allegations about a comparable product. Based on that litigation, and customer or user complaints and claims, the plaintiff alleges that the second defendant had a duty to warn and/or inform FMI of the defects and problems so that FMI could take steps to avoid loss. FMI also claims the second defendant should have taken reasonable steps to recall the T-Spacer from the market.
[10] The second defendant denies that the T-Spacers were defective, or that there was any duty to warn. It says the T-Spacer is not defective when stored properly, correctly incorporated into an insulated glass unit in accordance with relevant guidance and industry best practice, and when the insulated glass unit is manufactured and installed using compatible components in accordance with industry best practice. Mr Lowry described this as the “user error” defence.
The disputed discovery
[11] The second defendant accepts its knowledge will be a relevant issue in the proceedings. Evidence will be relevant if it tends to show what the second defendant knew regarding the alleged defect, and when it knew it.
[12] The parties have agreed that the following categories of documents will be discovered:
14.Documents related to FMI, Quanex or Glasscorp’s awareness of the alleged Defect, and when they became aware;
…
17.Documents related to the performance or durability of the T-Spacer, including but not limited to:
(a)Performance and/or durability testing of the T-Spacer, whether on its own or in combination with other IGU components;
(b)Performance and/or durability testing of T-Spacer IGUs manufactured by FMI from 2010 onwards (including any third party / independent certifications, approvals, assessments or evaluations of those IGUs);
(c)The T-Spacer’s compliance with the New Zealand Building Code and/or international building standards and/or testing standards;
(d)Customer and/or end user claims (including warranty claims) or complaints relating to the alleged Defect in the T-Spacer IGUs from 2010 onwards and any internal or external communications regarding the substance of the complaint or the response to the complaint;
(e)A list of any court proceedings (including the case name/docket number/court) involving the alleged Defect in the T-Spacer, where the matter giving rise to the proceeding arose during or after 2010.
…
18.Documents related to the compatibility of the T-Spacer with polysulfide secondary sealants, including but not limited to:
(a)Performance and/or durability testing of the T-Spacer with polysulfide secondary sealants;
(b)The creation of Quanex’s bulletin entitled “Secondary Sealant Use With Super Spacer Systems”, referenced at paragraph 57(e) of the 2ASOC, and the basis for the recommendations therein about polysulfide secondary sealants;
(c)Customer and/or end user claims (including warranty claims) or complaints relating to the performance of the T-Spacer in combination with polysulfide secondary sealant and/or the alleged Defect in T-Spacer IGUs incorporating the polysulfide secondary sealant from 2010 onwards and any
internal or external communications regarding the substance of the complaint or the response to the complaint;
(d)A list of any court proceedings (including the case name/docket number/court) concerning the performance of the T-Spacer in combination with polysulphide secondary sealant and/or the alleged Defect in T-Spacer IGUs incorporating polysulphide secondary sealants, where the matter giving rise to the proceeding arose during or after 2010.
[13] In addition to this material, the plaintiff seeks key documents from the court proceedings. The plaintiff seeks to add the words in italics below to the existing categories 17(e) and 18(d):
17. …
(e)A list of any court proceedings (including the case name/docket number/court) involving the alleged Defect in the T-Spacer, where the matter giving rise to the proceeding arose during or after 2010 and in relation to each such proceeding, the following documents:
(i)Any statement of claim (or equivalent document) that articulates the complaint;
(ii)Any statement of defence (or equivalent document);
(iii)Any judgment, award or order determining the claim or disposing of it;
(iv)Any document(s) settling the claim.
…
18. …
(d)A list of any court proceedings (including the case name/docket number/court) concerning the performance of the T-Spacer in combination with polysulphide secondary sealant and/or the alleged Defect in T-Spacer IGUs incorporating polysulphide secondary sealants, where the matter giving rise to the proceeding arose during or after 2010 and in relation to each such proceeding, the following documents:
(i)Any statement of claim (or equivalent document) that articulates the complaint;
(ii)Any statement of defence (or equivalent document);
(iii)Any judgment, award or order determining the claim or disposing of it;
(iv)Any document(s) settling the claim.
[14]The second defendant objects to discovery of those additional documents.
Legal test
[15] The relevant legal principles are not in dispute. Rule 8.9(a) of the High Court Rules 2016 establishes a presumption in favour of tailored discovery where the costs of standard discovery would be disproportionately high in comparison with the matters at issue in the proceeding. Tailored discovery may involve more or less discovery than standard discovery, depending on what the interests of justice require in each case.1
[16] The concept of proportionality is central to tailored discovery. In Commerce Commission v Cathay Pacific Airways Ltd, Asher J said:2
[13] The starting point … must be an analysis of the issues. Discovery categories will reflect the issues and will only be ordered for the discovery of documents that are relevant to those issues. … Discovery orders that are essentially of a “fishing” nature are not part of tailored discovery. Orders will not be granted where the categories do not relate to a pleaded relevant issue, but rather a non-pleaded issue which might be pleaded should discovery reveal documents that support such a pleading.
…
[18] To determine the proportionality arguments in relation to tailored discovery of particular categories it is necessary to consider the chances of finding relevant documents in the discovery exercise and their degree of relevance. This should then be balanced against the cost of carrying out that discovery process. Broader considerations such as the amount at issue, the resources of the parties, and delay to the proceedings may also be relevant…
[17] Proportionality is also one of the overriding objectives under new r 1.2(2)(b) in the forthcoming amendments to the High Court Rules.3 I agree with counsel that this further confirms the centrality of the proportionality principle.
Discussion
[18] The plaintiff submits the additional documents are likely to be relevant to the issue of knowledge in two respects. Primarily, they will tend to show the extent of the
1 High Court Rules 2016, r 8.8.
2 Commerce Commission v Cathay Pacific Airways Ltd [2012] NZHC 726.
3 High Court (Improved Access to Civil Justice) Amendment Rules 2025, r 1.2(2)(b).
second defendant’s knowledge of allegations made by customers and/or end users about defects in the T-Spacers. The plaintiff says a bare list of case names and docket numbers will not show the detail of the claims or the second defendant’s knowledge about them.
[19] Secondly, the plaintiff submits the documents may be relevant to the “user error” defence. The plaintiff submits that large numbers of complaints from end users in multiple locations would tend to undermine the defendants’ position that the plaintiff’s own conduct was the underlying cause of the problems in this case.
[20] The plaintiff seeks claim documents (statements of claim and defence, or their equivalent) and outcome documents (judgments or settlement agreements, or the equivalent). The plaintiff submits both types of documents are potentially relevant to show the extent of the second defendant’s knowledge about the size and seriousness of the alleged problem with T-Spacers.
[21] Some of the documents will be matters of public record, with the exception of settlement agreements, which are ordinarily confidential. The plaintiff submits confidential settlements, even if made without acceptance of liability, may, depending on the terms of settlement, be relevant to show the second defendant’s knowledge of the size and seriousness of the alleged problem. The plaintiff says that any questions of confidentiality attaching to settlement agreements can be dealt with in the usual way with reasonable restrictions on the use of and access to the discovered documents.
[22] The second defendant submits the disputed documents are not relevant to the proceeding, and discovery of the documents would not be proportionate. As to relevance, the second defendant submits category 14, quoted above at [12], adequately addresses its awareness of any relevant defects. Category 17(d) further addresses claims or complaints by customers and end users.
[23] As to causation, the second defendant submits none of the contested documents could be admissible for the truth of their contents. Statements of claim do no more than record allegations. Court judgments would not be admissible to prove the truth
of their contents.4 At most, any admissions in a statement of defence or settlement could potentially be relevant. It offers to confirm by affidavit that there were no such admissions. More broadly, it questions the possible relevance of other proceedings. Customer complaints are likely to be fact specific, and the T-Spacer is just one of a number of components in a constructed insulated glass unit. There are multiple points in such units where errors can occur during the manufacturing and installation process.
[24] In relation to settlement agreements, the second defendant submits it is difficult to understand how such agreements could be relevant. Their admission at trial would risk diverting the attention of the parties and the Court into a mini-trial on the merits of contested allegations in overseas litigation, and invite speculation about the basis for any particular settlement. Moreover, any settlement agreements would likely include provisions requiring notification to third parties about the disclosure of the agreement pursuant to a court order.
[25] As to proportionality, the second defendant submits that a list of proceedings with identifying details is sufficient discovery. It suggests the plaintiff should consider that list once provided, and decide whether it continues to disagree that there is nothing of relevance.
[26] The plaintiff responds that both claim and outcome documents would be admissible to show knowledge on the part of the second defendant, even if not admissible to prove the truth of their contents. The plaintiff accepts it would need to obtain admissible evidence from the relevant parties or entities if it wished to adduce evidence of the truth of any relevant allegations. It submits compliance with notification provisions for any settlement agreements would not be onerous.
Decision
[27] I am satisfied it is appropriate and proportionate to order discovery of the additional documents sought by the plaintiff in categories 17(e) and 18(d). Given the scope of the pleadings it is agreed that the second defendant’s state of knowledge of alleged defects is relevant. There is a reasonable prospect the proposed categories will
4 Evidence Act 2006, s 50.
include documents that tend to show the extent of the second defendant’s knowledge of the alleged defects.
[28] Claim documents will directly record and respond to the relevant allegations. Outcome documents will show what the second defendant did in response to the allegations, either voluntarily by way of agreement, or as required following proceedings. In this way, the documents can reasonably be expected to shed light on the nature and extent of the second defendant’s knowledge.
[29] The number of relevant documents is likely to be relatively small, and they are likely to be readily obtainable. I am satisfied that addressing any issues of confidentiality or notification arising from settlement deeds will not be unduly burdensome or impracticable. As the plaintiff accepted, there is a weaker case for discovery based on the causation issue. But I am satisfied that discovery based on the issue of knowledge is proportionate and appropriate, so it is unnecessary to decide whether the causation issue would separately justify discovery.
[30]I make orders accordingly.
[31] In addition, following the agreement of counsel, I order that documents in the following category are to be discovered:
Category 20
Documents related to internal and external audits, inspections, and/or reviews of:
(a)FMI’s IGU assembly lines; and/or
(b)FMI’s storage areas for the T-Spacer and/or IGUs; and/or
(c)FMI’s processes related to the storage, handling, selecting and/or installation of T-Spacers, sealants and/or or other components of T-Spacer IGUs; and/or
(d)FMI’s processes related to the storage, handling, selecting and/or installation of IGUs;
from 2010 onwards (including in relation to FMI’s implementation of any recommendations arising from audits or reviews).
Costs
[32] My preliminary view is that the parties have had relatively even success in this application and it is appropriate for costs to lie where they fall. If any party wishes to seek costs, memoranda should be filed within 10 workings days. Any reply should be filed within a further 10 working days.
Mount J
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