Ho Wiles Limited v Bar's Products International Limited
[2025] NZHC 431
•7 March 2025
REDACTED VERSION
Redactions to paragraph [16] only
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-991
[2025] NZHC 431
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 PlaintiffBAR’S LEAKS (AUSTRALIA) PTY LIMITED
Third Plaintiff
BAR’S LEAKS AUSTRALIA LP
Fourth PlaintiffAND
BAR’S PRODUCTS INTERNATIONAL LIMITED
Defendant
Hearing: 21 February 2025 (by AVL) Appearances:
J T Kohu-Morris and C Fu for Plaintiffs J M Glover and L Carter for Defendant
R A Idoine for Non Party (Grayson Wagner Limited)
Judgment:
7 March 2025
JUDGMENT OF ASSOCIATE JUDGE LESTER
(discovery) (REDACTED VERSION)
This judgment was delivered by me on 7 March 2025 at 2.00pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
……………………………………
HO WILES LIMITED v BAR’S PRODUCTS INTERNATIONAL LIMITED [2025] NZHC 431 [7 March 2025]
[1] Discovery in intellectual property litigation between competitors, of its nature, gives rise to confidentiality concerns. The assumption is that counsel will manage confidentiality issues by agreeing to counsel/expert-only disclosure, only when that is essential. It is also expected that counsel will seek agreement or an order that confidential documents can be disclosed to a party only when disclosure is important.
[2] Those assumptions are based on counsel having to temper their client’s natural desire to claim confidentiality and counter-party’s counsel only seeking agreement to disclose counsel-only documents to their clients when being able to take instructions on such documents is important to trial preparation.
[3] In what should be the relatively few cases where counsel or expert-only material needs to be disclosed to a party in whole or in part, the strict obligations limiting a party’s use of documents obtained on discovery come into play. Of course, those obligations apply to all discovery documents but become particularly important where confidential material is involved.
[4] In this case, the distrust between the parties as to the potential misuse of discovery material led me to requiring, in a judgment of 14 November 2024, the principals of each party to provide written undertakings to the Court that they would only use discovery material for the purpose of this proceeding.1
[5] This judgment is yet another chapter in the parties being unable to agree on issues of confidentiality.
[6] In recent judgments concerning challenges to confidentiality between these parties,2 I commented that the process of assessing confidentiality, in particular, requests that a document can be shown to a party, are not straightforward in isolation because they require an understanding of the significance of the document to trial strategy. This is because the test for assessing confidentiality involves the balancing of “respective prejudices” to each party.3 That exercise requires knowing the
1 Ho Wiles Ltd v Bar’s Products International Ltd [2024] NZHC 3378 at [107].
2 Ho Wiles Ltd v Bar’s Products International Ltd [2024] NZHC 3493 at [5].
3 Talley’s Group Ltd v Biomex Trustees [2021] NZHC 2922 at [40].
significance placed on the documents by the party wanting confidentiality to be lifted, balanced against the potential harm a loss of confidentiality may cause.4
[7] Before turning to the issues counsel have helpfully agreed on, the parties should recognise that whether confidentiality is properly claimed, is an assessment made by counsel. While it will generally be the client that identifies a desire for confidentiality, whether in all the circumstances such can properly be maintained is a matter for counsel.
[8] I do not repeat the background to this proceeding, which can be found in an earlier judgment of mine.5
Document HOW.01200
[9] This is a copy of minutes of a meeting of the plaintiffs’ (collectively referred to as HOW), board of directors from March 2019. HOW considers the document is mostly irrelevant apart from four discussion items which relate to HOW’s product line sales strategy, margin mix across product lines and the future of HOW and BAR’s BUGS product lines and business. This document was provided on a counsel-only basis.
[10] HOW says the document is highly sensitive and contains top level planning and strategic thinking.
[11] However, BPI says the document is highly relevant to the question of HOW’s promotion of the BAR’s LEAKS line relative to BAR’s BUGS. One of BPI’s counterclaims is an allegation that HOW neglected the BAR’s LEAKS line relative to BAR’s BUGS.
[12] During the hearing on 21 February 2025, I noted the document is now six years old. Any “product line sales strategy” will have been and gone. The way in which HOW in fact marketed its product in the years following March 2019 will be known to the market place. Similarly, margin mix information is also stale.
4 Payment Express Ltd v Paymark Ltd [2019] NZHC 2027 at [19].
5 Ho Wiles Ltd v Bar’s Products International Ltd [2024] NZHC 1281 at [1]-[6].
[13] Counsel for HOW says the issues can be explored in cross-examination. If that is the case, the information will be disclosed in open court in any event.
[14] HOW’s counsel notes the document does not mention BAR’s LEAKS, but that may be the point. Sometimes what is not mentioned is just as important as what is mentioned.
[15] There being no real explanation as to how confidential information from six years ago remains truly confidential, there is a direction that document HOW.01200 may be shown by counsel to BPI, but in doing so, counsel are to again highlight the obligations that relate to seeing such information.
HOW’s redactions to two documents — HOW.01242 and HOW.01243
[16] Grayson Wagner Limited (Grayson) are industrial chemists who provided assistance to HOW in developing automotive products such as cleaners and polishers. Document HOW.01242 concerns “[REDACTED]” and the second document, HOW.01243, concerns [REDACTED] fuel additives.
[17] HOW has redacted what it describes as irrelevant material from the two documents, being technical information relating to formulation information and manufacturing methods. BPI’s counsel says that such formulas may be relevant as one of its allegations is that some of HOW’s new products are based on BPI’s formulations, effectively that HOW had a springboard in developing new products from information obtained from BPI.
[18] In the past, HOW has adopted a practice of supplying redacted material on an open basis and accompanying such material with an unredacted document on a counsel-only basis for BPI’s counsel to assess the reasonableness of the redactions. HOW has ceased that practice. HOW’s position is that it seeks to revert to the standard practice of providing documents in redacted form only. Counsel for HOW says HOW is entitled to the presumption that redactions have been validly made while HOW is prepared to consider reasonable requests to disclose an unredacted copy on a case-by-case basis. BPI submits that it would be more efficient and simpler for
HOW to continue to provide unredacted versions as it has in the past. The two documents referred to above are raised by way of example.
[19] In respect of the two documents that I have described, the real issue is whether the formulas disclosed in the documents are based on BPI products. If that is the case, then the redactions are not appropriate. If, however, the formulations are for products that have no connection with BPI products then the redactions are irrelevant.
[20] I suspect this may be an issue that counsel will need assistance on from their industrial chemist. HOW’s counsel is to confirm whether the formulas in the documents are based in any way on BPI’s formulas. If they are, then the redactions will need to be removed. If however, as I have said, the formulas are unrelated to BPI’s products then the redactions are to remain.
[21] As with claims to confidentiality, redactions are an area where a real responsibility rests with counsel. Redactions due to irrelevancy, particularly in respect of technical material, need to be carefully considered.
[22] Accordingly, absent any evidence that the formulas in the two documents are not related to any BPI products, I defer a ruling on these redactions. Nonetheless, the answer will be clear from the comments I have made above. If the formulas have nothing to do with BPI’s products then the redactions remain. If the formulas were based on BPI’s products then the redactions cannot survive.
Redactions going forward
[23] BPI has recently raised confidentiality issues in respect of some 60 documents where redactions were made on irrelevance and/or confidentiality.
[24] Both counsel need to have more confidence in the assessment and judgment of opposing counsel. That confidence must be based on knowledge that the redaction was made on a considered basis by counsel.
[25] However, it must be remembered that confidentiality is not a ground for non-disclosure of relevant documents in discovery.6 As the Court of Appeal observed:7
Relevant documents should generally be made available for inspection. The fact that they are regarded as being confidential and would not be made available were it not for the requirements of litigation, is immaterial.
[26] The prohibition on using documents for a collateral purpose can be sufficient to allay concerns about the disclosure of commercially sensitive information. It is an abuse of the Court’s processes for information required to be disclosed to another party for that other party to use it for an ulterior or collateral purpose. To do so would not only be an abuse of the Court’s process, but would amount to contempt.8
[27] Again, I have required both parties to provide an express acknowledgment of their legal obligations in respect of confidentiality.
[28] The point of the above observations is to emphasise that the Court expects parties to have confidence in the obligations surrounding discovery documents and that confidentiality should be an exception.
[29] I do not make a direction that the parties are to accompany redacted documents with an unredacted copy on a counsel-only basis, but counsel are to approach redactions on the above basis and to provide an explanation for the basis of a redaction, such that opposing counsel can understand why a redaction has been made.
BPI’s request for information regarding two of HOW’s documents
[30] The first request concerns HOW.01440 which is a table of HOW’s production records. This was ordered to be produced in a judgment of 14 November 2024.9 In a sense, this was not a matter of discovery, as I considered the original request by BPI to be more in the nature of an interrogatory. What BPI sought were production reports
6 Jessica Gorman (ed) and others McGechan on Procedure (online ed, Thomson Reuters) at [HR8.25.08].
7 Port Nelson Ltd v Commerce Commission (1994) 7 PRNZ 344 (CA) at 348.
8 NZX Ltd v Ralec Commodities Pty Ltd [2015] NZHC 241 at [27]; and NSK Ltd v General Equipment Co Ltd [2016] NZHC 1424 at [57].
9 Ho Wiles Ltd v Bar’s Products International Ltd, above n 1.
for HOW’s New Zealand and Australian factories from April 2015 to June 2017. Mr Elliott KC, counsel for HOW, in that hearing accepted that aggregate production figures were relevant and that they would be provided. I noted in the 14 November 2024 judgment that if the costs of production were being claimed as reliance to support HOW’s estoppel cause of action, then details of those costs would need to be discovered.10
[31] HOW produced a table with production information, however, BPI considers it is hard to interpret. Products are referred to by product codes without explanation.
[32] HOW has agreed to provide information as to what each product code relates to and what volume or unit measures are recorded.
[33] The significance of the dates April 2015 and June 2017 is that BPI says that either on 2 March 2015 or 14 July 2017, communications it had with HOW made its position clear, such that any alleged estoppel based on prior representations by BPI came to an end, that is, reasonable reliance ended on one of those dates depending on the Court’s assessment of each communication. Mr Kohu-Morris, counsel for HOW, resisted having to provide a month-by-month breakdown of the production figures between the above dates as sought by BPI.
[34] I am satisfied a monthly breakdown is not required. If the communication on 2 March 2015 was enough to bring reasonable reliance to an end, that of itself means production thereafter is irrelevant. However, if it was not until 14 July 2017 that the advice from BPI was such that reasonable reliance came to an end, the levels of production in each of the intervening months are not in themselves relevant but rather the total production in that period.
[35] There may be an issue whether the table provided is quite clear as to the period that it covers, but that is a matter that can be dealt with between counsel. It is clear that the table is to cover the period pleaded as to when reasonable reliance came to an end.
10 Ho Wiles Ltd v Bar’s Products International Ltd, above n 1, at [96].
[36] Accordingly, provided that the aggregate production figures have been provided along with the further clarification sought and agreed to be provided, no further order is required. I decline BPI’s application for monthly data.
Document HOW.01441 — Table of Products
[37] This Table was created in response to a further order that HOW was to set out the products it sold from 2014 onwards which bore trademarks associated with BPI. In respect of each product, HOW was to identify what trademarks were on those products.
[38] This order was in the nature of an interrogatory but was designed to achieve a proportionate approach to BPI’s discovery request, particularly when at this stage all that is in issue is liability in respect of BPI’s counterclaim that HOW misused its trademarks.
[39] BPI complains that the Table does not explain whether the trademarks used were stylised and if so, which stylisation was used. Nor does it explain their size or whether they were used with other trademarks. Again, at this stage, the only issue is liability. Once ownership of the trademarks in issue is determined, then the nature and extent of the misuse will be relevant to quantum. I decline to order that HOW provide the further detail sought by BPI — such can be revisited at the quantum stage.
[40] BPI also points out that the information provided is incomplete in that it does not refer to products relating to BAR’s REACTOR, BAR’s LEAKS RUST or the Subaru brake cleaner product which featured the BAR’s LEAKS trademark. Mr Kohu-Morris submitted that in respect of the first two products, there were minimal or no sales in the period covered by the Table.
[41] Ms Carter, who argued this aspect of the application on behalf of BPI, noted that whether or not there were sales, offering products featuring BPI’s trademark was itself a breach. Mr Kohu-Morris will consider that point. He also submitted that the Subaru brake cleaner product had not been disclosed because it was sold only in Australia. I am not aware of a geographic restriction being placed on the information that was to be provided.
[42] Mr Kohu-Morris is to address the above three points and if they cannot be resolved, leave is reserved to apply further.
Adequacy of BPI’s undertakings regarding contacting third parties
[43] The paranoia as to the misuse of confidential information has gone so far that HOW seeks an order that BPI be required to undertake that if it contacts a third party it has not already contacted, it will provide an affidavit before the trial. The affidavit would set out the relevant third parties it has contacted and confirm that those third parties were not contacted using information from HOW’s discovery.
[44] BPI’s counsel had previously said that they would suggest to BPI that it keep a record of where it obtained the details of the third parties it contacts.
[45] Mr Kohu-Morris explained that HOW’s concern was less with BPI contacting people who may be potential witnesses. It is a legitimate use of discovery information for BPI to contact individuals whose identities it learns from HOW’s discovery if the contact is to obtain information in respect of this proceeding.
[46] HOW’s concern is more about BPI learning about its clients. However, this to me seems a concern more apparent than real. HOW sells car care products and engine additives, among a range of other products. Where its products are displayed is not confidential, nor is the identity of likely retailers of its products.
[47] I decline to make the directions sought by HOW in respect of this issue. I also doubt there is jurisdiction to require it. Again, BPI is already under an obligation not to misuse the information.
HOW’s access to BPI Document 1147
[48] HOW sought and obtained an order that its counsel be able to show to HOW’s principals the identity of BPI’s corporate licensees. One of BPI’s counterclaims is a failure by HOW to provide sales of BAR’s LEAKS’ products. HOW denies that
claim and says that when compared to other licensees around the world its performance stacks up. The issue came before me in May 2024, where I said:11
[30] Mr Elliott submitted this material is required as it will provide a yardstick in relation to HOW’s sales history of BAR’S LEAKS products. BAR’S alleges HOW failed to diligently devote its time to the development of sales of the BAR’S LEAKS’ products. While there can be difficulties in directly comparing different markets, I accept this material is relevant.
[49] The issue was not fully resolved and came before me again in November 2024 where I said:12
[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 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.
[50] HOW accepts that profit/unit, profit and the margin percentage columns are confidential, but says the remainder of the information should be shown to HOW’s principals. HOW relies on the 14 November 2024 judgment which provides:13
[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.
11 Ho Wiles Ltd v Bar’s Products International Ltd, above n5, at [30].
12 Ho Wiles Ltd v Bar’s Products International Ltd, above n 1, at [40]-[42].
13 Ho Wiles Ltd v Bar’s Products International Ltd, above n 1, at [68].
[51] Ms Carter submits the paragraphs relied on by HOW, set out at [49] above, do not relate to what the directors of HOW should be permitted to see, rather they dealt with the appropriateness of redactions of the document.
[52] As to what HOW’s directors were entitled to see in dealing with that issue, I recorded in the 14 November 2024 judgment that HOW also sought an order setting aside the claim for confidentiality. That passage is set out at [50] above.
[53] This information covers the period 1996 to 2013. HOW’s counsel accept that profit/unit, profit and margin percentage columns should not be disclosed. I cannot see a good reason why the balance of information, some of which is nearly 30 years old, should not be disclosed.
[54] There is a direction that HOW may disclose to Messrs Geoff and Tim Wiles document BPI 1147, save for the columns dealing with profit/unit, profit and margin percentages. The whole point of this disclosure was to permit the “yard stick” assessment referred to in the paragraphs from the 14 November 2024 judgment referred to at [49] and [50] above.
[55] I recorded in the judgment of 14 November 2024, that BPI had to disclose the Rislone Settlement Agreement (the Agreement).14 I do not repeat the reasons for that here. HOW has sought further discovery of documents relating to the Agreement, in particular, discovery relating to the royalties to be paid to BPI under that Agreement. BPI considers those documents to be irrelevant and advises there are no non-privileged internal communications regarding the settlement.
[56] BPI has agreed in correspondence that it will provide a further discovery affidavit confirming that the documents sought by HOW do not exist and explaining why.
[57] Mr Kohu-Morris points out that the Agreement provides for the certification of quarterly royalty amounts. Apparently royalties were paid as a lump sum covering
14 Ho Wiles Ltd v Bar’s Products International Ltd, above n 1 at [63].
a number of territories for which a fee was payable and not broken down in a way that will identify those relating to this particular Agreement.
[58] HOW needs to see the further affidavit from BPI before deciding if this issue can be pursued further.
[59] There is a direction that BPI’s affidavit is to list with particularity the privileged documents it holds relating to the Agreement as well as explaining why there are no non-privileged documents, It is also to address its ability to obtain information from its counterparty to the Agreement and if it is able, to obtain relevant information it will need to be discovered. This affidavit is to be filed within 15 working days.
[60] The 14 November 2024 judgment also dealt with applications for further discovery, in particular, challenges to redactions and confidentiality. The parties must recognise that confidentiality will be the exception rather than the rule. That is because the obligations on parties, reinforced in this case by the undertakings already referred to, are seen as providing adequate protection to the parties. A deliberate breach of those obligations will have serious consequences for the party involved. That counterparties will see information a party would rather keep confidential is a fact of life in intellectual property litigation. The parties must recognise that and proceed accordingly.
Costs
[61] Costs are reserved. There has been a measure of shared success. If no costs memoranda are filed within five working days of the date of this judgment (no more than five pages), then there is no order as to costs.
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)
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