HO WILES LIMITED BARS LEAKS NZ LIMITED BAR’S LEAKS (AUSTRALIA) PTY LIMITED BAR’S LEAKS AUSTRALIA LP AND BAR’S PRODUCTS INTERNATIONAL LIMITED

[2024] NZHC 3378

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-991

[2024] NZHC 3378

UNDER

the Contractual Remedies Act 1979 the Fair Trading Act 1986

the Trade Marks Act 2002

BETWEEN

HO WILES LIMITED

First Plaintiff

BARS LEAKS NZ LIMITED
Second Plaintiff

BAR’S LEAKS (AUSTRALIA) PTY LIMITED

Third Plaintiff

BAR’S LEAKS AUSTRALIA LP
Fourth Plaintiff

AND

BAR’S PRODUCTS INTERNATIONAL LIMITED

Defendant

Hearing:	29 October 2024 (by AVL)
Appearances:	C L Elliott KC and M Ashmore for Plaintiffs J M Glover and L Carter for Defendant
Judgment:	14 November 2024

JUDGMENT OF ASSOCIATE JUDGE LESTER

(further discovery judgment)

This judgment was delivered by me on 14 November 2024 at 11.30am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

…………………………………………………

HO WILES LIMITED v BAR’S PRODUCTS INTERNATIONAL LIMITED [2024] NZHC 3378

[14 November 2024]

Introduction

[1]                 This judgment concerns a further discovery dispute between the parties with each challenging the adequacy of discovery by the other and/or redactions or claims of confidentiality. Accordingly, much of these introductory comments are taken from an earlier judgment also concerning discovery issues from 22 May 2024 which I refer to in this judgment as the “May Judgment”.1

[2]                 This proceeding is a dispute over trademarks. The plaintiffs, collectively referred to as “HOW”, say they own the BAR’S BUGS trademark.

[3]                 The defendant, BAR’S Products International Limited (BPI), says it owns that trademark along with the BAR’S LEAKS trademark. BPI’s counterclaims are for what it says are HOW’s misuse of the BAR’S BUGS trademark and HOW failing to comply with the obligation under its Licence Agreement with BPI to promote BAR’S LEAKS.

[4]                 HOW and BPI (or their predecessors) have been in business together for approximately 50 years. The Licence Agreement between them dates from 1979 and it is common ground that in many respects it is outdated, including that the range of products the Licence Agreement covers has been overtaken. The products sold under the above trademarks are automotive maintenance or cosmetic products.

[5]                 At its most basic, HOW says that, by what it calls the ‘security agreement’ made in 2014, BPI agreed to transfer the BAR’S BUGS trademark to it on a specified event which has now occurred. In the alternative, HOW says BPI is estopped from denying HOW is entitled to the BAR’S BUG trademark.

[6]                 BPI says the Licence Agreement is at an end, which is disputed by HOW. On BPI’s case, HOW’s continued use of the BAR’S BUGS trademark is a breach of BPI’s rights and it says further that because HOW acted as if it owned BAR’S BUGS trademark, it neglected the BAR’S LEAKS trademark — indeed BPI asserts HOW actively repressed products with the BAR’S LEAKS trademark. BPI raises a clean

1      Ho Wiles Ltd v BAR’S Products International Ltd [2024] NZH 1281.

hands defence in relation to the estoppel claim relying in part on its claim HOW repressed BAR’S LEAKS products.

[7]                 There is no dispute between the parties as to the relevant principles which I set out in the May Judgment. Given the matters in issue between the parties in some respects cover decades of dealings, proportionality is a key factor.

Counterclaim defendants’ application for increased security

[8]                 This proceeding was commenced in May 2021 with BPI filing counterclaims in August 2021.

[9]                 The parties agreed in October 2021 that because BPI is an overseas company, it would pay security by three equal tranches of $25,000 as follows:

(a)by 1 October 2021, the first payment to cover the steps up to the inspection of documents;

(b)by 28 February 2022, the second payment to cover the steps until delivery of the plaintiffs’ evidence; and

(c)the third payment to cover other steps including the trial (due four weeks before the commencement of the trial).

[10]              This matter was originally set  down  for  a  two  week  trial  to  commence 19 August 2024. However, that fixture was vacated after it became apparent claim and counterclaim could not, despite counsels’ best efforts, be heard within the time allocated. Counsel now consider it would be safer to allow a four week hearing, albeit not all of that time may be required.

[11]              The expectation that discovery would be completed before 28 February 2022 when the second tranche was to be paid has proved to say the least, to have been optimistic. The parties continue to be mired in discovery arguments.

[12]              HOW seeks increased security, essentially on the grounds the case has expanded in scope and complexity. HOW says defending the counterclaim will require more resources and therefore security should be increased accordingly.

[13]              An increase in security of $10,000 was offered on an open basis which HOW considers inadequate. HOW seeks that security be increased to $140,000, being an increase of $65,000.

[14]              Ms Glover, counsel for the defendant, submitted the offer of a $10,000 increase was made out of pragmatism to try and avoid this application. I do not consider the offered increased security reflects the changed complexion of the case. It is enough to say that the hearing time has gone from two weeks to four weeks to confirm that an increase in security is warranted.

Positive defence versus counterclaim

[15]              Ms Glover submits that the counterclaims will only take up some two days of the hearing. That submission assumes that a brightline can be drawn between the positive defences and the counterclaims. The positive defences are extensive, covering alleged defaults or events over an extended period.

[16]              Ms Glover submits had the defendant only raised positive defences then, while those defences may add significantly to the hearing time, such would not warrant the ordering of security against a “pure” defendant. Ms Glover’s submission, while not put in exactly these terms, amounts to saying that because a good part of the hearing time will be taken up with the positive defences, in any event, such should be put to one side when considering what additional time is going to be required to hear the counterclaims based on the same evidence.

[17]              As Mr Elliott KC, counsel for HOW,  submitted, it cannot be the case that     a defendant can load its evidence in support of its counterclaims into what are labelled positive defences in order to minimise security for costs by saying the bulk of the time to be taken by the defence does not relate to counterclaims.

[18]              Mr Elliott produced the following table to support his claim that security should be increased to $140,000:

Procedural Step	Days
2C (50%)	3B (50%)
List of Documents on discovery	3.5	1.25
Inspection of Documents	3	0.75
Preparation of Briefs of Evidence, list of issues, authorities, and agreeing common bundle	6.875	6.875
Common Bundle	0.25	0.25
Preparation for hearing	6.875	6.875
Appearance at hearing	10	10
Second Counsel	5	5
Total Days	35.5	31
Estimated costs per day (Category 2 = $2,390/day) (Category 3 rate = $3,530/day)	$84,845	$109,430
Estimated disbursements	$15,000	$15,000
Likely Expert Fees	$15,000	$15,000
Total costs/disbursements/experts’ fees recoverable by successful party	$149,835	$174,430

[19]              Security  is  claimed  on  the  basis  of  50 per cent  of  scale  representing   the assumption that the counterclaims will take half of the hearing time. In my view, the estimated disbursements are conservative given the hearing fee alone for a four week hearing is $40,560. Hearing fees are $2,080 for each half-day or part half-day after the first half-day. For a 20 day hearing that means hearing fees are payable for

19.5 hearing days.

[20]              Ms Glover makes the valid point that security for costs is forward looking and it is generally inappropriate to make an order for security for costs for steps that have already been incurred.2 Here, HOW has prepared its briefs but it has been called on to provide further discovery and it seeks further discovery. Ms Glover submits that the counterclaims are largely unchanged but,  even if that is correct, the reality is  that counsel are agreed that the original estimate of a two-week hearing, which must have been a significant factor in the amount of security, has been overtaken by events.

2      Monnery v Parsons [2023] NZHC 1595 at [73].

[21] While Ms Glover does not accept that the counterclaims will take up 50 per cent of the hearing time, she submits that if that is correct (and that being the basis of Mr Elliott’s table set out at [18] above), then if security was set at 60 per cent of scale costs, security would be just under $90,000 in total (60 per cent of $149,835) and she notes that BPI has already offered to pay security of $85,000.

[22]              The 60 per cent figure is adopted by Ms Glover as it was used by HOW’s solicitors when they sought increased security in a letter sent in August 2024. The sum then sought by way of increased security  was said to be about 57 per cent to   66 per cent of estimated scale costs said by HOW’s solicitor to be well in line with security ordered in other cases. Hence, Ms Glover submits the offer of increased security that BPI has already made is consistent with what HOW previously sought.

[23]              The difficulty with that approach is that it does not reflect the basis upon which the parties agreed security at the outset. $75,000 was always going to be more than 60 per cent of 2B costs for a two week hearing.   Ms Glover also maintains that        a 2B costs calculation is appropriate rather than 2C.

[24]              That this case has expanded from two to four weeks is testament to its complexity. It may well be that further steps are categorised as 2C. That previous steps have been categorised as 2B does not prevent subsequent steps being treated differently.

[25]              I fix the increase in security at a further $50,000. That will mean total security is $125,000. I do not pretend to achieve mathematical certainty in justifying that figure. However, I have taken into account that not all of the further steps may attract costs at scale 2C. I also note that briefs have already been prepared and that security may well be the only means of recovery available to HOW if it is successful, there being evidence that the only asset BPI held has been transferred to a related company for a nominal sum. That said, BPI does not suggest that an increase in security will bar it from pursuing its counterclaim. I also take into account that security, when originally agreed, was not at 60 per cent of anticipated 2B costs for a two week hearing.

[26]              The application seeking increased costs did not address the staging of the further payments. The  last  tranche  of the agreed security  was not  paid because  the August 2024 fixture was vacated. I direct that the last tranche of $25,000 is to be paid within 20 working days of the date of this judgment.

[27]              A further tranche of $25,000 is to be paid when a fixture date is set with the final payment of $25,000 to be paid four weeks before the commencement of the trial.

Costs in relation to increased security for costs

[28]              HOW has succeeded in its application for increased security for costs which should be reflected in the overall costs outcome of the cross-application.

HOW’s application for production of unredacted documents

[29]              In the May Judgment, HOW sought discovery in relation to BPI’s allegation that HOW over an extended period deliberately neglected the BAR’S LEAKS’ products.

[30]Under the Licence Agreement between the parties, HOW agreed:3

… to endeavour to show a proportionate increase in sales within the territory being developed over each preceding year’s comparable to the average increase of other territories assigned in the world.

[31]              In short, HOW sought discovery of the business BPI had with its other international licensees or distributors as that would provide a yard stick in relation to how HOW’s sales history of BAR’S LEAKS’ products compared to “other territories assigned in the world”.

[32]              I accepted Mr Elliott’s submission that the discovery was necessary to provide a yard stick for that comparison exercise. I observed that while the material was relevant, there could be difficulties in directly comparing different markets — some adjustment to reflect different market conditions would be required.

3      Ho Wiles Ltd v BAR’S Products International Ltd, above n 1 at [26].

[33]              HOW complains that the material provided is either an aggregate of data prepared by BPI rather than the source documents ordered to be discovered, or the material has been “redacted into irrelevance”.

[34]              HOW accepts that the profits generated by the licensees or distributors of BPI are not relevant. HOW submits the prices that items were sold for is relevant, that is, the revenue generated needs to be disclosed in order for HOW to determine if it had under-performed relative to other distributors.

[35]              Discovery of this material has already been ordered. The only issue here is the extent of redactions by BPI and the extent of disclosure of some documents.

[36]              Firstly, the preparation of aggregate documents, that is, spreadsheets by BPI does not meet the discovery order. In making that comment I have assumed the spreadsheets were prepared for the purposes of meeting the discovery order. If that assumption is wrong then the documents are discoverable, but also the source material from which they were created is discoverable. I see no basis for this material being redacted other than in respect of the profit made by the distributors which Mr Elliott accepts is not relevant to the “yard stick” exercise.

[37]              BPI submits that the material redacted from the documents is irrelevant. If that is the case then irrelevant material cannot harm BPI’s case and should be disclosed.

[38]              In the May Judgment, I directed that BPI provide a start date in respect of its counterclaim and that is agreed to be 17 August 2015. However, in addition to the counterclaim, BPI alleges by way of positive defence that HOW had been deliberately neglecting the BAR’S LEAKS’ brand since the late 1990s. If that allegation is to be maintained then BPI must provide discovery from that date range.

[39]              I record here that, in terms of the counterclaim, it was agreed at the hearing on 29 October 2024 that the counterclaim in respect of the period of neglect begins     on 17 August 2015.

[40]              Ms Carter, counsel for BPI, who presented submissions in respect of this aspect of the argument submitted that the price charged by BPI to its distributors was not relevant. However, HOW’s obligation is to show a “proportionate increase in sales”. Whether that is measured in terms of volume or value is not clear. Further sales are influenced by the prices charged by BPI to its distributors.

[41]              The intent of the May Judgment was clear. BPI is to provide discovery of material that will permit HOW to compare its sales performance with BPI’s other territories signed around the world. The redactions made by BPI prevent that happening.

[42]              Accordingly, there is an order that BPI is to provide unredacted copies of the documents referred to at paragraphs [1](b)(i) and [1](b)(ii) of the application dated 27 September 2024 save to the extent that those documents record the profits made by those licensees and distributors.

[43]              If the spreadsheets I have referred to were recently prepared for the purposes of meeting the May Judgment then BPI is to provide discovery of the documents from which those spreadsheets were prepared.

[44]              In the first instance, BPI is to provide that discovery by way of disclosure.     I direct that disclosure is to be made within 20 working days of the date of this judgment. Leave is reserved for HOW to seek that disclosure is to be confirmed by affidavit and any issues arising from BPI complying with the orders made in the  May judgment on this issue.

Costs in relation to application for production of unredacted documents

[45]              HOW has succeeded in this aspect of its application which should be reflected in the final costs award.

HOW’s application to set aside confidentiality

[46]              Pursuant to r 8.25 of the High Court Rules 2016 (the Rules), HOW challenges the claim to confidentiality made by BPI in respect of three categories of documents.

The Court may, in dealing with such an application, set aside, modify or dismiss the confidentiality claim or make such orders in respect of the documents as it thinks just.4

[47]              In Payment Express v Paymark, Gault J observed that the previous rule that confidentiality should be ordered only when necessary had been relaxed. The interests of justice in ensuring that a party is able to prepare and present its case must be balanced against the interests of the other party in safeguarding its confidential information in a competitive market.5

[48]              The party claiming confidentiality bears an initial onus to make out the requirements for its confidentiality claim. Once that is done, there is a balancing exercise in relation to prejudice. At that balancing stage, to the extent there is an onus that is on the applicant to seeking aside the confidentiality claim.6

[49]              However, where a document forms a substantial part of a case for or against  a party, a party will almost always be given access. This is because a party needs to be able to consult with its legal advisers, receive advice and give instructions based on an accurate understanding of the state of affairs. The parties, even commercial parties, cannot be expected to litigate where some central facts are hidden from them. The Court must balance the interests of the party claiming confidentiality in protecting their legitimate commercial interests with the interests of the other party in a fair trial.

[50]Against that background, I now consider the claims for confidentiality.

The Rislone settlement agreement

[51]The Rislone settlement agreement was subject to the May Judgment.

[52]              BPI separated from what became BAR’S USA many years ago. BAR’S USA retained the United States and Canadian markets while BPI retained the rest of the world. BAR’S USA was the manufacturer of the products, or at least controlled their manufacture. BPI sourced products or ingredients from BAR’S USA until 2004.

4      High Court Rules 2016, r 8.25(3).

5      Payment Express v Paymark [2019] NZHC 2027 at [18] and [19].

6      Pernod Ricard (NZ) Ltd v Lion – Beer, Spirits & Wine (NZ) Ltd, Auckland CIV-2011-404-1664, 1 December 2011 at [33] and Payment Express Ltd v Paymark, above n 5, at [21].

[53]              In 2004, a dispute arose between BPI and BAR’S USA arising from BAR’S USA selling BAR’S products labelled “Rislone” into the Australian market. That dispute was resolved in a settlement agreement reached in 2018 (incorrectly dated 2014 in the May Judgment).

[54]              HOW sold BAR’S labelled products into Australia and accordingly BAR’S USA selling the same products under the Rislone name on that market impacted on HOW.

[55]              HOW sought a copy of the settlement agreement reached between BPI and BAR’S USA on the basis it would “…directly inform the extent to which, if at all [BPI] exercised any control over the trademarks”.

[56]              Because the counterclaim alleges that HOW failed to “show a proportionate increase in sales”, Mr Elliott submitted in the May 2024 hearing that any arrangements made between BPI and BAR’S USA in respect of the Australian market would be relevant to BPI’s counterclaim discussed above because if BPI allowed a major competitor to remain in the Australian market, that could not be ignored in assessing HOW’S increase in sales.

[57]              HOW seeks orders that the confidentiality arising from the May Judgment now be removed.

[58] There is a wider context to the settlement agreement. HOW alleges that in 2014 it reached the agreement with BPI, referred to at [5] above, under which BPI agreed to transfer the BAR’S BUGS’ trademark to HOW. Mr Elliott submits that one of the reasons for that agreement being reached in the first place was because of the adverse effect of the Rislone products being sold by BAR’S USA in the Australasian market. Mr Elliott submits under the settlement agreement BPI benefits from royalty provisions related to the success of a substantial direct competitor to its exclusive licensee, HOW.

[59]              I accept Mr Elliott’s submission that the document is significant to a number of aspects to the case. BPI alleges in its claims that there is an implied duty of good

faith in the licensing agreement. If that is  right, the duty is owed  by both parties.  Mr Elliott points out that under the settlement agreement with BAR’S USA, BPI permitted a direct competitor to HOW to sell BAR’S products labelled as Rislone products into the Australasian market while now claiming HOW breached the licensing agreement by failing to achieve a “proportionate increase in sales”.

[60]              These factors are also relevant to HOW’s first cause of action against BPI that it acted unconscionably and inconsistently with the licensing agreement.

[61]              I asked Ms Carter to consider in what respects BPI could be prejudiced through the disclosure of the document. Ms Carter was not able to point to anything specific. I accept that BPI’s agreement with BAR’S USA requires it to keep the agreement confidential but such is not a barrier to it being ordered to produce the document on an open basis.

[62]              Ms Carter referred to the possibility that HOW may want to expand its trading overseas and to the possibility that the settlement agreement may assist HOW in that regard. However, the settlement document goes back to 2014. There is no evidence that HOW is intending to expand overseas. Ms Carter relied on HOW seeking to trademark certain devices internationally as suggestive of an intention to expand internationally. I accept Mr Elliott’s submission that such of itself is not evidence of an intention to expand internationally, only of an intention to protect the brands or Brands’ logos or devices.

[63]              Accordingly, I am satisfied that the claim for confidentiality should be set aside and I direct accordingly. That order is subject to a condition that I set out at the conclusion of this judgment.

Identity of BPI’s corporate licensees

[64]              In respect of specified documents, HOW seeks an order setting aside the claim to confidentiality in relation to the identities of the corporate licensees only named in identified documents which overlap with those disclosed for the purposes of the yard stick exercise discussed above.

[65]              Mr Elliott submitted that the principals of have had long experience in selling car-care products in Australasia and New Zealand and attended international conferences and conventions. They know the industry and a number of the international licensees and distributors.

[66]              I note that in the application, relaxation of the confidentiality sought was only in relation to licensees — not distributors. I note, however, that the submissions presented on behalf of HOW seek the names of distributors as well as licensees.

[67]              I intend to deal with the application as it is drafted. That is in relation to licensees.

[68]              As I noted earlier in respect of the information relevant to the “yard stick” documents, adjustment to that raw information will be required in order to carry out any useful comparison between different international markets. Messrs Wiles of HOW are knowledgeable in this field. Knowledge about a particular licensee, its scale, its professionalism and other aspects of its trading will be relevant to assessing the usefulness or otherwise of the “yard stick” information. The data in relation to other BPI licensees, as I have said, of necessity will have to be adjusted and explained to take into account the different market circumstances. Knowledge of the nature of the particular licensee will be part of that exercise.

[69]              Accordingly, there are orders in terms of paragraphs [1](c)(i), (ii) and (iii) of the application dated 27 September 2024.

Costs on HOW’s application to set aside confidentiality

[70]              HOW has succeeded in this part of its application which should be reflected in the overall costs award.

BPI’s application for discovery

[71]              BPI has sought orders for further and better discovery alleging confidentiality claims made by HOW should be set aside.

[72]              The application originally concerned over 20 categories of documents. It seems HOW was prepared to provide discovery of some of those documents prior to the application being made as HOW prepared a further affidavit of documents dated 16 September 2024, including many of the requested documents. However, it was not served until after BPI made its application on 26 September 2024.

[73]              Accordingly, while a number of categories of documents sought by BPI are no longer relevant, the fact that BPI had to make the application will be relevant in respect of costs.

[74]              In addition, shortly before the hearing on 29 October 2024, a further affidavit was filed by HOW on 25 October 2024 addressing further categories. Mr Geoffrey Wiles has deposed that in respect of a number of the remaining categories sought by BPI, no further documents exist.7 BPI while expressing some scepticism about some of those claims, accepts Mr Wiles’ evidence that no further documents exist.

[75]I now turn to the remaining categories.

(a)Grayson Wagner documents

[76]              Grayson Wagner have been industrial chemists for HOW for approximately 30 years.

[77]              In respect of the ‘arrangement’, to use a neutral term, made in 2014 between HOW and BPI which is noted at [5] and [58] above, HOW says if that arrangement is not in fact enforceable as a contract then nonetheless it founds an estoppel. HOW, in reliance on what it says was an assurance that the BAR’S BUG trademark would be assigned to it says it incurred costs developing products which it intended to market under the promised trademark.

[78]              BPI says that material from HOW’s industrial chemist is relevant to this reliance claim. Instructions and costs incurred in relation to the development of these products should be discovered. Mr Elliott does not dispute that proposition and says

7      The affidavit provided by Mr Wiles while dated 25 October 2024 is unsworn. This judgment assumes that the affidavit will be sworn in the form that it was filed and served.

these documents have been provided. He described the instructions HOW gave to Grayson Wagner to develop new products as being “front and centre” to the reliance claim and HOW has no reason not to discover the documents.

[79]              Accordingly, there is no dispute as to the relevance of the documents sought by BPI. HOW says it has discovered 157 documents from Grayson Wagner including invoices, emails and reports. HOW says Grayson Wagner documents that do not relate to the development of new products are not relevant to the reliance argument (there is a separate category of documents sought from Grayson Wagner addressed below).

[80]              Ms Glover noted there is no affidavit from HOW providing an explanation in respect of this aspect of disclosure from Grayson Wagner which she says is significant and such an affidavit is required when various explanations have been offered by HOW for not producing this material.

[81]              Given HOW’s acceptance that Grayson Wagner material relating to the development of new products is relevant to reliance and given there is evidence HOW has provided different explanations in respect of this category of documents, I direct that HOW is to provide an affidavit specifically confirming that all documents within HOW’s power and control relating to work undertaken by Grayson Wagner in reliance on the alleged promise in respect of BAR’S BUGS have been discovered and that all appropriate checks of databases, files and so on and for deleted material have been undertaken to confirm all such material has been identified.

[82]              While BPI has made a non-party discovery application against Grayson Wagner directly, it is not clear what Grayson Wagner’s position is in respect of that application. What, if any, documents that might be in the possession of Grayson Wagner would fall within HOW’s control as defined in r 1.3(1) of the Rules is unclear, but if Grayson Wagner does not co-operate with the non-party discovery application then Mr Wiles’ affidavit is to also address the steps he has taken to source material from Grayson Wagner that HOW is entitled to call for. I direct that affidavit is to be provided within 15 days of the date of this judgment.

(b)Yammer messages

[83]Yammer is an internal messaging service.

[84]              HOW has apparently asserted that no documents have been discovered from Yammer because it was:

Used primarily by HOW’s sales representatives to take pictures of HOW products in various stores. They would then assess how they were being presented, and, if one store was doing a better job than another store, advise them to change the layout and presentation. It was part and parcel of HOW’s ongoing brand management efforts’.

[85]              BPI submits that these “brand management efforts” are relevant to HOW promoting BAR’S LEAKS and BAR’S BUGS products in the market place. I agree. Given the allegation that HOW neglected BAR’S LEAKS, HOW’s promotional material is relevant. I direct this material is to be discovered.

(c)Repco Range Review documents

[86]              A “Range Review” is a document prepared by HOW and is in effect a proposal to a retailer as to the products HOW proposes to sell, which products it intends to no longer supply. The May Judgment required the Range Reviews HOW provided to another retailer of automative products to be discovered. At the hearing, Mr Elliott did not dispute the relevance of those documents.

[87]              I am satisfied that the Repco Range Reviews should also be discovered. Given the allegation that HOW engaged in a deliberate strategy of neglecting the BAR’S LEAKS products, how HOW was marketing those products to a major retailer and the proposals it was making to supply or delete products is relevant. I direct this material is to be discovered.

(d)Full discovery of what products HOW sold, under what trademarks and when

[88]              Ms Glover submitted that BPI does not have transparency on the full range of products being sold by HOW and under what trademarks.

[89]              Given BPI’s counterclaim goes back to the late 1990s, the potential scope of this category of discovery, in my view, is disproportionate. That is not to say that the information sought by BPI should not be provided. BPI’s submissions make it clear that what BPI wants to know is the products HOW sold that bore BPI’s trademarks or were otherwise associated with BPI, manufactured by BPI, or contained ingredients supplied by BPI. Mr Elliott understood that HOW had already identified the products that it sold.

[90]              BPI says it is uncertain as to what products HOW was selling and what trademarks those products carried. I am far from satisfied that BPI can discover its way to clarity in respect of these issues.

[91]              HOW’s position is that the documents requested do not exist or would need to be created. That may well be the case because what BPI is really asking has the flavour of an interrogatory rather than a request for discovery.

[92]              That said, the priority is to mark an end to interlocutory disputes in this proceeding.

[93]              Accordingly, I direct that HOW is to set out which products it has sold from 2014 onwards which bear one of the trademarks BPI asserts that it owns, or the products otherwise associated with BPI, manufactured by BPI, or contained ingredients supplied by BPI and in respect of each product, identify what trademarks were on those products and the period each product was on the market. This information is to be provided within 20 working days.

[94]              As to the revenue from those products, I leave that issue to one side. Breaking down revenue product by product, year by year may well be a substantial task. Whether the disclosure provided by HOW to date makes it such that BPI can undertake that exercise I do not know. However, I do record that the parties have agreed to leave the quantum aspect of their respective claims to await liability findings at trial.

[95]I am not satisfied that BPI requires HOW’s revenue figures at this stage.

(e)Production reports for HOW’s New Zealand and Australian factories from April 2015 to June 2017

[96]              This information is sought from HOW on the basis that it is relevant to HOW’s reliance claim. Mr Elliott accepted that the timing of production expenditure was important and would be disclosed, however, I accept his submission that whether HOW produced the goods in one factory or another is not relevant. Mr Elliott accepts that aggregate production figures are relevant and they will be provided when possible. If these costs are claimed to support the reliance submission then when those costs were incurred and how much they were will need to be discovered. However, production reports and transfers of products between the plaintiffs are not relevant. Such could not amount to “cumulative reliance” simply because there were transfers between the plaintiffs.

[97]              Further discovery by HOW as described in the preceding paragraphs will have to be provided by HOW within 20 working days.

(f)Documents relating to HOW’s attempts to source TEC and PAL alternatives or ingredients from third parties

[98]              These documents are said to be relevant to an aspect of the wide ranging clean hands affirmative defence raised by BPI in response to the estoppel claim. BPI alleges HOW took steps to obtain the ingredients for BAR’S TEC and BAR’S PAL products from a source other than BPI, essentially to by-pass the licence agreement. The statement of defence alleges that from 2017 to 2020, HOW commissioned Grayson Wagner to carry out work to find alternatives for BAR’S TEC and BAR’S PAL ingredients. Mr Wiles says because BPI refused to continue to supply BAR’S TEC and BAR’S PAL on the usual commercial terms, HOW was left with no option but to seek alternative suppliers for raw materials.

[99]              However, Ms Glover points out that BPI only refused to supply after its termination of the licence agreement between the parties in early 2023.

[100]          Ms Glover refers to an invoice from Grayson Wagner in April 2020 which refers to fuel additive testing. The report arising from such testing is not discovered.

[101]          I am satisfied that this category of documents should be discovered. It is put in issue squarely by the statement of defence.

[102]          Mr Elliott submits that because the pleading that HOW sought to source alternatives to BAR’S TEC and BAR’S PAL products from third parties is not denied, there is no need to provide the discovery. I do not accept that submission. Exactly when such enquiries were made may prove to be relevant in terms of the broader dispute.

[103]I direct the documents are to be discovered.

Costs on BPI’s application for discovery

[104]          BPI has been largely successful in its application which should have a bearing on costs.

Remaining aspects

[105]          The remaining aspects of BPI’s application are adjourned. These concern challenges to confidentiality and to redactions made by HOW.

Condition to be met by all parties

[106]          It will be apparent from the cross-applications, challenging claims for confidentiality and redactions that there is substantial distrust between the parties.     I referred earlier in this judgment to the discovery directed in this judgment would be on a condition. That condition is as follows.

[107]          The principals of each of the parties are to provide a written undertaking to the Court confirming that they agree that they may only use information obtained through the discovery process for the purposes of this proceeding and that obligation continues beyond the conclusion of the proceeding. They are to undertake to comply with that obligation.

[108]          Counsel will no doubt explain to the parties the serious consequences of breaching that undertaking to the Court. I take this unusual step as it is apparent to

me that the distrust between the parties is driving unsustainable claims for confidentiality and redactions on both sides. That distrust is simply creating delay and cost. The short point is that confidentiality and redactions are exceptions to disclosure. The parties will have to get used to that reality but each party is entitled to confirmation that the information they provide will not be mis-used and that there will be consequences if the information is mis-used.

Costs

[109]          There has been shared success. If counsel cannot agree costs, memoranda may be filed within 10 working days.

Associate Judge Lester

Solicitors:

McVeagh Fleming, Auckland (for Plaintiffs) Woodroffe Lawyers, Auckland (for Defendant)

Copy to counsel:

C Elliott KC, Barrister, Auckland (for Plaintiffs) J M Glover, Barrister, Auckland (for Defendant)