New Zealand Steel Ltd v Minister of Commerce and Consumer Affairs
[2017] NZHC 3232
•19 December 2017
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-Ā-TARA ROHE
CIV-2017-485-714 [2017] NZHC 3232
UNDER the Judicial Review Procedure Act 2016
and the Dumping and Countervailing
Duties Act 1988IN THE MATTER
of the exercise of powers under the
Dumping and Countervailing Duties Act
1988BETWEEN
NEW ZEALAND STEEL LIMITED Applicant
AND
MINISTER OF COMMERCE AND CONSUMER AFFAIRS
Respondent
Hearing: 5 December 2017 Counsel:
J E Hodder QC and K E Yesberg for Applicant
J Every-Palmer QC and N Butler for RespondentJudgment:
19 December 2017
JUDGMENT OF THOMAS J
Table of contents
Introduction ............................................................................................................. [1] Background.............................................................................................................. [4] Discovery ................................................................................................................ [16] The law ................................................................................................................... [18] Analysis .................................................................................................................. [30] Relevance ............................................................................................................ [30]
(i) Categories 1 and 2 ...................................................................................... [53] (ii) Category 3 ................................................................................................... [62] Proportionality .................................................................................................... [73]
NEW ZEALAND STEEL LIMITED v MINISTER OF COMMERCE AND CONSUMER AFFAIRS [2017] NZHC 3232 [19 December 2017]
Conclusion.............................................................................................................. [77]
Introduction
[1] In June 2016, the applicant, New Zealand Steel Limited (NZ Steel), submitted an application to the Ministry of Business Immigration and Employment (MBIE) alleging that galvanised steel coil imports were being subsidised by the People’s Republic of China and seeking an investigation under the Dumping and Countervailing Duties Act 1988 (the Act).1
[2] On 5 July 2017, the Minister of Commerce and Consumer Affairs (the Minister) made a decision that the import of galvanised steel coil was subsidised to de minimis levels only and the subsidisation was not causing material injury to the New Zealand industry (the Decision). NZ Steel seeks judicial review of the Decision.
[3] There has been some agreement between the parties as to discovery but the Minister as respondent opposes certain categories sought by NZ Steel. This decision deals with those disputed categories.
Background
[4] The Act implements aspects of New Zealand’s obligations under the World Trade Organisation (WTO) Agreement on the Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 and the WTO Agreement on Subsidies and Countervailing Measures.2
[5] The Chief Executive of MBIE (referred to as the Secretary in the Act) has the discretion to commence an investigation into an alleged subsidisation of goods
pursuant to a process set out in the Act.3 If the Minister determines that goods are
1 Now the Trade (Anti-dumping and Countervailing Duties) Act 1988. Amendments to the Act were made on 29 November 2017. The provisions of the Act in force at the relevant times apply to this judgment.
2 Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994
1868 UNTS 201 (signed 15 April 1994, entered into force 1 January 1995); and Agreement on Subsidies and Countervailing Measures (interpreting arts VI, XVI and XXIII of the General Agreement on Tariffs and Trade 1994) 1869 UNTS 14 (signed 15 April 1994, entered into force 1
January 1995).
3 Dumping and Countervailing Duties Act 1988, s 10.
being subsidised and causing material injury to the New Zealand industry, the Minister may impose countervailing duties on the subsidised goods.4 During the course of the investigation, the Minister may give a provisional direction for payment of duty in respect of the goods.5 These Ministerial decisions are informed by reports from MBIE.
[6] MBIE began its investigation on 19 December 2016, being satisfied NZ Steel had provided sufficient evidence in support of its allegations (the Initiation Report).6
Prior to that, as required under the Act, it had consulted with the Government of
China.7
[7] Of the seven Chinese manufacturers to whom MBIE sent a questionnaire, only one responded. Of eight trading intermediaries (exporters), only three responded to MBIE’s request for information. Six New Zealand-based importers were identified and all but one provided information.
[8] The Government of China provided general comments relating to the alleged subsidy programmes. MBIE also considered investigations by other authorities in Australia, the United States and WTO reports.
[9] In the first quarter of 2017, NZ Steel provided three further submissions to
MBIE. NZ Steel is the only primary steel producer in New Zealand.
[10] On 10 May 2017, MBIE issued a report declining to impose provisional measures on galvanised coil steel from China during the period of the investigation (the Provisional Measures Report) and gave interested parties until 23 June 2017 to make comments on it. NZ Steel provided comments on the Provisional Measures Report, including on MBIE’s preliminary conclusion that the galvanised steel coil was being subsidised to de minimis levels only.
[11] On 9 June 2017, MBIE released a draft report containing the essential facts and conclusions (the EFC Report).8 NZ Steel commented on the EFC Report. It drew
4 Section 14.
5 Section 16.
6 Section 10.
7 Section 10(9).
8 Pursuant to s 10A of the Act.
MBIE’s attention to a June 2017 European Commission report (EC Report) concerning what it believed was a closely related product (hot-rolled steel) and a manufacturer which had cooperated with the EC investigation, but not with MBIE’s investigation.
[12] The EC Report found an overall subsidy rate of 38.6 per cent in relation to that manufacturer. In its submission to MBIE, NZ Steel said the findings of the EC Report ought to be applied to that manufacturer and any other non-cooperating manufacturers. The EC Report also concluded that state-owned commercial banks were public bodies. This was relevant to the allegation that loans to manufacturers from state-owned commercial banks should be taken into account when deciding whether manufacturers were in receipt of subsidies.
[13] MBIE provided a briefing paper to the Minister on 3 July 2017 which was included its final report (the Final Report). The Decision followed the recommendation in the Final Report, deciding that the goods were subsidised to de minimis levels only and by reason thereof the subsidisation was not causing material injury to the New Zealand industry.
[14] In broad terms, NZ Steel does not consider MBIE dealt sufficiently with the material contained in NZ Steel’s submissions. It considers MBIE disregarded key findings in the EC Report without any meaningful consideration of the findings. It also questions reliance on some evidence and believes it relied too heavily on other evidence.
[15] Furthermore, NZ Steel believes there is a political context to the Decision, maintaining that the Government of China had made clear and public statements regarding its dissatisfaction with the New Zealand Government’s decision to launch the investigation.
Discovery
[16] The Minister has agreed to provide tailored discovery in relation to:
(a) materials before the Minister in making the Decision; and
(b) materials relied on by MBIE in preparing the Final Report.
[17] At issue are the orders sought by NZ Steel for discovery of the following
(together the further categories):
(a) correspondence relating to MBIE’s investigation, including internal correspondence and correspondence between government agencies and Ministers, and correspondence with foreign governments or organisations (Category 1);
(b) working documents, including drafts of the various reports
(Category 2); and
(c) material considered and/or relied on by MBIE in preparing the various reports (the Reports), being the EFC Report, the Provisional Measures Report and the Initiation Report (Category 3).
The law
[18] The ambit of discovery in judicial review proceedings is generally not considered to be as wide as that which takes place in other civil proceedings. The general approach to discovery in judicial review is to ask:9
… can this court fairly and effectively adjudicate upon the issues raised on these pleadings … without the additional material which is sought by this application for discovery?
[19] Mr Hodder QC, appearing for NZ Steel, questioned whether Hammond J’s seminal description of discovery in judicial review cases reflects the current position. In his submission, the more recent case of Northland Environmental Protection
Society Inc v Chief Executive of the Ministry for Primary Industries dispelled the
9 Wellington International Airport Ltd v Commerce Commission HC Wellington CP151/02, 25 July
2002 at [45].
notion that discovery in judicial review proceedings was limited to what was
“necessary”.10
[20] That case concerned an application for discovery of emails in respect of the plaintiff’s application for judicial review of a range of decisions made by the Ministry of Primary Industries relating to the export of ancient swamp kauri. At issue was the plaintiff’s submission the discovery would be relevant to show the actual knowledge and belief of decision makers in respect of certain matters on the basis that knowledge was central to the pleading of unreasonableness of the decisions. Woodhouse J discussed the discovery principles relevant to a judicial review as follows:11
[10] I referred earlier to the first defendant’s submission that the discovery sought must be shown to be necessary, or what is truly required, and my conclusion that the discretion is not circumscribed in these ways. Mr Martin cited cases which he submitted supported the submission. The foundation, at least in relation to the authorities cited, is the decision of Hammond J in Wellington International Airport Ltd v Commerce Commission. However, the requirement for “necessity”, and different ways of expressing a similar concept, appears to have derived from r 300 of the High Court Rules before the 2008 amendment. As Mr Martin quite properly noted, r 300, directed to particular discovery, included a provision that the Court could not make an order “unless satisfied that the order is necessary”, but the requirement for necessity was not repeated in the current particular discovery rule, r 8.19. Quite apart from the changes to the High Court Rules, it does not seem to me to be appropriate that the wide discretion provided in s 10(1) justifies what would amount to a mandatory requirement for an applicant to establish necessity. The only mandatory requirements are the broad concepts in s 10(1) and relevance which arises because of the nature of the application. As Priestley J observed in the passage cited above, discovery may be declined because it is unnecessary. But that is a different consideration.
[21] Mr Hodder stressed the reason Woodhouse J rejected the necessity test was because it relied on r 300 of the old High Court Rules, which has since changed. He also referred to Woodhouse J’s confirmation of the role of the rule of law in discovery to enable a plaintiff to be adequately equipped with the information it needs to
prosecute an application for judicial review.12
10 Northland Environmental Protection Society Inc v Chief Executive of the Ministry for Primary
Industries [2016] NZHC 406.
11 Citations omitted.
12 At [30] and [31].
[22] I am not sure Hammond J’s analysis rested solely on r 300 of the High Court Rules. For example, when discussing what he described as the critical test of whether discovery was necessary for disposing fairly of the proceeding, he was not relying on the High Court rule necessarily but also discussing “the leading appellate judgments”.13
[23] In any event, a new discovery regime for the High Court was implemented in
2012.14 Key reforms included a requirement on the parties to cooperate at an early stage to seek to achieve a consent position as to the scope and method of discovery. The Peruvian Guano test for discovery was dispensed with and replaced by either an adverse documents test (standard discovery), or tailored discovery where specific discovery categories are ordered.
[24] Tailored discovery must be ordered when the interests of justice require an order involving more or less discovery than standard discovery will involve.15 There is a presumption of tailored discovery where, amongst other things, the cost of standard discovery would be disproportionately high in comparison with the matters at issue in the proceeding or where the total of the sums in issue in the proceedings exceed $2,500,000.16
[25] The concept of proportionality is important, applying to the determination of whether tailored discovery is appropriate,17 and what the categories of tailored discovery should be.18
[26] As far as judicial review is concerned, the Judicial Review Procedure Act 2016 provides that a judge may, at any case management conference or at any other time, require a party to make discovery, produce documents or both.19 The purpose of any case management conference (and implicitly the purpose of any orders or directions
made) is to ensure that any application may be determined in a convenient and
13 Wellington International Airport, above n 9, at [42].
14 High Court Amendment Rules (No 2) 2011.
15 High Court Rules 2016, r 8.8.
16 Rule 8.9.
17 Rule 8.9(a) and sch 9, cl 1.
18 Schedule 9, cl 3(2)(a)(i).
19 Judicial Review Procedure Act 2016, s 14(2)(h).
expeditious manner and that all matters in dispute may be effectively and completely determined.20
[27] It is not apparent, therefore, that there is any real difference in respect of the tests for discovery whether the matter is one of judicial review or an ordinary civil proceeding. The reason discovery might not be appropriate in a judicial review case, or where appropriate discovery might be very limited, would simply reflect the issues in the case and the context of judicial review proceedings which are often brought as a matter of urgency.
[28] The considerations in all cases are relevance and proportionality.
[29] Relevance is determined by the issues as pleaded:21
The starting point in such a consideration of appropriate tailored discovery orders 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. Except in exceptional circumstances, these issues will be discernible from a review of the pleadings. 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.
Analysis
Relevance
[30] NZ Steel is particularly concerned about the findings of several foreign regulatory investigations (FRIs), including the EC Report, to which MBIE had access and how they were dealt with in the Reports and Decision. In the statement of claim it pleads that MBIE had access to the findings from reputable counterpart regulators concerning overlapping or adjacent investigation periods, the same or similar products and manufacturers, and the same or similar subsidy programmes. The FRIs were, with few exceptions, made following in-country verification visits to China (which were
not undertaken in the present case) and which all found countervailable subsidisation
20 Section 13(2).
21 Commerce Commission v Cathay Pacific Ltd [2012] NZHC 726 at [13]. See also Commissioner of Inland Revenue v Kamal [2015] NZHC 3095 at [31]; Wellington International Airport, above n
9, at [40]; and Intercity Group (NZ) Ltd v Nakedbus NZ Ltd [2013] NZHC 1054 at [17].
in the Chinese steel sector. NZ Steel claims these were not taken into account by MBIE or the Minister as relevant and material evidence, were excluded from the best information available and provided an overwhelming weight of evidence which was (unreasonably) not reflected in the Final Report and the Decision.
[31] The second main focus of NZ Steel’s position is that the EC Report was highly relevant, should have been applied to manufacturers not cooperating or responding to MBIE’s questionnaire and that it was misunderstood by MBIE.
[32] NZ Steel claims MBIE excluded or excessively discounted indirect or circumstantial evidence, including comparable FRI findings. This all resulted in MBIE’s failing to provide the Minister with a fair, accurate and adequate Final Report on the best available information. Furthermore, that in producing the Final Report, MBIE gave excessive and unjustified weight to material provided by the Chinese Government and the only cooperating Chinese manufacturer.
[33] Mr Every-Palmer QC appeared for the respondent. In his submission, the Final Report considered the EC Report and explained its views on subsidisation. He noted the discussion of the EC Report in the Final Report and MBIE’s conclusion that the findings would not cause it to change its view. He noted the short time scale for MBIE to be able to do this. In any event, he said the Final Report observed that, even if the tax exemptions and tariff reductions claimed on behalf of one of the Chinese producers were assumed, the total subsidy would still be significantly below the de minimis level. In Mr Every-Palmer’s submission, therefore, the Final Report considered the EC Report and explained why it did not change its earlier analysis.
[34] NZ Steel’s statement of claim pleads that the Decision was unlawful and reviewable on the following grounds:
(a) MBIE (and hence the Minister) asked the wrong question and improperly elevated the standard of proof;
(b)MBIE (and hence the Minister) failed to take account of all relevant and available evidence;
(c) MBIE (and hence the Minister) erred in law in determining whether an entity “possesses, exercises or is vested with governmental authority” and incorrectly determined that certain state-owned entities were not public bodies;
(d)the Final Report (and hence the Decision) was not based upon adequate reasoning;
(e) the Final Report (and hence the Decision) contained material errors of fact and law in relation to the “like goods” determination;
(f) the Final Report (and hence the Decision) treated evidence in a manner that was incoherent and inconsistent; and
(g) the Final Report (and hence the Decision) was unreasonable because
the overwhelming weight of evidence supports a finding that galvanised steel coil from China is subsidised.
[35] Mr Hodder emphasised the context. Whilst acknowledging that some grounds of appeal are questions of law, in his submission it was important to see how the investigation had evolved. He said, as pleaded in the statement of claim, the Minister is required to ask the right question – whether the preponderance of material evidence points towards a finding of subsidisation – and, in answering that question, to make appropriate use of indirect, circumstantial and inferential evidence, as well as direct evidence, including comparable FRI findings.
[36] In Mr Hodder’s submission, MBIE and/or the Minister did not dig down into the information available. NZ Steel is genuinely perplexed by the Decision and seeks the information to ascertain how and why this happened.
[37] In my assessment, grounds of review (a) and (c)–(e) inclusive do not require the additional material NZ Steel seeks. They involve questions of law and/or issues where the further categories will not assist. These grounds of appeal are matters for submission. For example, how the EC Report was dealt with, NZ Steel’s contention that MBIE’s “public bodies” analysis relied on what it considers to be an outlier report by the Australian Anti-Dumping Review Panel without discussing the conventional position reflected in subsequent WTO and other domestic regulatory decisions; the reliance on generalised comments from the Government of China; and reliance upon what NZ Steel contends are unverified responses from a single cooperating manufacturer. The situation is as the Court of Appeal described in Commerce Commission v Powerco Limited:22
… if the Commission’s report does not adequately address these matters or explain the Commission’s approach, that is a matter Powerco can advance by way of submission. This is not a case where there is insufficient material before the Court on which it can fairly resolve the matter.
[38] That leaves grounds (b), (f) and (g) which essentially allege the Minister did not properly consider all relevant matters.
[39] In submitting that the documents sought in the further categories would provide context, Mr Hodder referred to Air Nelson Limited v Minister of Transport.23
That case concerned the substantive judicial review hearing into a challenge by Air Nelson to two separate decisions of the Minister of Transport increasing the charges for the use of Nelson Airport. Of particular relevance was the issue of whether one of the decisions could be impugned because information about Air Nelson’s opposition to the price increase was not made known to the Minister when he made the decision. This required consideration of the extent to which information known to officials of the Ministry of Transport needed to be communicated to the Minister
making the decision. A paper had been prepared for the Minister by a Ministry advisor.
22 Commerce Commission v Powerco Ltd CA123/06, 9 November 2006 at [29].
23 Air Nelson Ltd v Minister of Transport [2008] NZCA 26.
The paper noted Air Nelson’s objection to the increase but did not set out the reasons for the objection. The Minister’s affidavit said he had considered the paper, agreed with the reasoning and recommendations, and therefore accepted the proposal.
[40] The grounds for seeking judicial review were mistake of fact, failure to take into account a relevant consideration and abdication of discretionary power. The Court of Appeal concluded the paper did not provide the Minister with a fair and accurate picture of the matters which Air Nelson had raised during the consultation which were relevant to the decision.24
[41] The Court then considered whether the matters needed to be drawn to the Minister’s attention on the basis of counsel for the Ministry arguing this was unnecessary because the information had been taken into account by officials in preparing their advice to the Minister. The Court said:
[53] We accept Mr Gedye’s submission that the failure to provide a “fair, accurate and adequate report” meant that the decision made by Mr Parker in this case was flawed. It is not enough that officials in the Ministry were aware of Air Nelson’s objections. Mr Parker needed to be given a sense of the context in which the first decision was made, and contents of the correspondence which passed between Air Nelson and the Authority preceding the decision. This included the bases upon which Air Nelson opposed the need for price increases …
[54] The Minister needed to be apprised of these matters by his officials, at least in general terms, so that he could consider them and, if he thought it necessary to do so, request further information about them. These matters were in terms of CREEDNZ “so obviously material” that their omission from the Minster’s direct consideration meant his decision was flawed.
[55] The particular ground of judicial review on which this finding is made is secondary to the finding itself. We think the failure of the Pfiffner paper to mention the matters to which we have referred is probably best characterised as having led to the Minister’s failing to take into account relevant considerations. This Court adopted a similar characterisation of the ground of review in CREEDNZ: at 172. We make it clear that we make no criticism of the Minister himself in this regard: the failure to take into account these considerations resulted from the failure of officials to make him aware of them.
[42] Mr Hodder relied on this decision, noting in particular the need for the Minister to be given a sense of context from the contents of correspondence which had passed
between Air Nelson and the Authority preceding the decision. Similarly in this case, in his submission, there was the need to know what was not in the Final Report and therefore not referred to the Minister. He said if the issue is whether the Final Report is fair, the answer cannot simply be determined by considering the Final Report, as the respondent in this case would have it.
[43] Mr Hodder sought to distinguish the situation in Commerce Commission v Powerco Limited, a case on which Mr Every-Palmer relied.25 The respondents in that case were gas distributors who took judicial review proceedings against the Minister of Energy and the Commerce Commission as a result of the Minister’s actions concerning the imposition of a price control on gas distribution. The Commerce Commission had undertaken an inquiry and reported to the Minister. The decision concerned an appeal against, inter alia, the refusal to make a further discovery order.
[44] There were five causes of action, three claiming the Commission had acted unlawfully and/or unreasonably in respect of the cost benefit analysis undertaken by the Commission. Two of the causes of action raised process claims of failure to give any or adequate reasons and failure to consult.
[45] Powerco had sought documents including internal emails, internal memoranda, meeting notes, drafts of documents and correspondence in relation to the application of the transfer cost ratio. The documents were internal to the Commission. Powerco had made an initial application for further discovery which was unsuccessful (MacKenzie J decision). There was no appeal from that decision.26 An appeal was taken of a later discovery decision by Wild J.27
[46] The Court of Appeal said:
[23] We consider that Wild J was right to decline to order further discovery. The Commission’s role under s 56 is to report to the Minister on whether or not control should be imposed. The proper focus of judicial review is on the Commission’s report because that reflects the Commission's decision and its decision making process. What went before that is not likely to be relevant to show that the Commission's decision was unreasonable when made. The observations of this Court in ENZA Ltd v Apple and Pear Export Permits
25 Powerco, above n 22.
26 Powerco Ltd v Commerce Commission HC Wellington CIV-2005–485-1066, 10 March 2006.
27 Powerco Ltd v Commerce Commission HC Wellington CIV-2005–485-1066, 9 June 2006.
Committee [2001] 3 NZLR 456 (CA) per McGrath J at [22] are accordingly apt:
In the present case we were satisfied that … the committee had put its position sufficiently before the Court to enable the issues raised by ENZA in its proceedings to be properly addressed by the High Court. The record of its deliberative material, while technically relevant in terms of discovery principles was not in our view of a nature likely to inform the Court materially on the reasons for the committee’s decisions, as opposed to the dynamics of how it got to them.
[47] In Mr Hodder’s submission, this was an example of a “tribunal” case. He maintained there is a distinction between tribunals (including bodies such as the Commerce Commission) and Ministries such as MBIE. Furthermore, in his submission, the issues in the case concerned an error of law and that was the real basis for the decision to decline discovery.
[48] Mr Every-Palmer said Powerco, similarly to NZ Steel in this case, sought the “how and why” documents, being the internal documents. Like NZ Steel, Powerco’s pleadings incorporated the adequacy of reasons and maintained the documents sought would be very relevant in deciding whether the Commission (and the Minister) erred.
[49] Mr Every-Palmer then referred to Air New Zealand Limited v Commerce Commission (No 4) to highlight the concerns about getting into the “how and why”, noting the argument in that case was presented on a “proper context” argument, but discovery was refused.28
[50] In the Air New Zealand case, Air New Zealand and Qantas Airways appealed against a Commerce Commission determination. The Commission had been assisted in reaching its determination by two economists, one who assisted during the investigative phase and the other who peer reviewed the Commission’s model. Air New Zealand and Qantas applied for an order requiring the Commissioner to produce all correspondence with the two economists, all reports prepared by them (including drafts) and all notes of telephone attendances or meetings. It was accepted that Minutes of meetings with Commissioner members should not be produced.
[51] I agree with Mr Every-Palmer that the cases on internal deliberations are directly analogous. The Commerce Commission in those cases was carrying out its statutory functions of making recommendations in exactly the same way as MBIE did in the present case.
[52] Turning then to consider the further categories.
(i) Categories 1 and 2
[53] NZ Steel seeks internal and inter-agency correspondence (Category 1) to provide “important context” to the investigation process and factors which influenced MBIE’s reasoning and conclusions. In particular, NZ Steel believes inter-agency correspondence is highly likely to disclose the extent to which political considerations impacted upon the investigation.
[54] NZ Steel says such correspondence is also likely to shed light on whether MBIE was asking the right questions and furthermore internal correspondence would disclose some important procedural decisions, for example the decision by MBIE not to undertake a verification visit to China.
[55] In Mr Hodder’s submission, the current application could be described as legitimate fishing on the basis NZ Steel does not know what it does not know.
Mr Every-Palmer categorised this as impermissible fishing because it does not relate to any pleaded ground of review but might reveal material which could form the basis of a new ground. He referred to Mr Jones’ affidavit and his reference to media reports about a visit to New Zealand by a Chinese official and comments on the investigation.29 Mr Every-Palmer pointed out there is no pleaded ground of review regarding political interference in the Decision, saying in any event that MBIE is not a party to the proceeding and there is no pleading to the effect it was improperly influenced by any such considerations. Furthermore, the affidavit already filed on behalf of MBIE sets out the steps taken by MBIE in accordance with the Act and further affidavit evidence would be filed.
[56] The issue in this case as pleaded is in essence an alleged failure to take account of relevant evidence. This encompasses the need for MBIE to provide a fair, accurate and adequate Final Report for the Minister. The purpose of the Final Report was to address whether imported galvanised steel coil was being subsidised and, if so, whether it caused or threatened material injury to the New Zealand industry. That is a factual enquiry dependent on the evidence. I do not consider the correspondence sought in Category 1 (to the extent it is not included in Category 3 – material considered and/or relied on in preparation of the Reports) will assist resolution of the issues as identified by the pleadings.
[57] Working documents (Category 2) are sought on the basis they will provide important context because the Final Report provides a summary only of MBIE’s findings and, in NZ Steel’s submission, does not adequately disclose the reasoning and justification. For example, NZ Steel suggests the Final Report contains several conclusory statements on critical issues, the EC Report being an example. Category 2 would also shed light on material MBIE disregarded or determined was irrelevant.
[58] Mr Every-Palmer suggested the drafts of various reports were sought in order for NZ Steel to be able to request the Judge at the substantive hearing to make inferences. That situation could only be answered, in his submission, by direct evidence. Therefore, he said, if this category of discovery is granted, then viva voce evidence will be required.
[59] In Mr Every-Palmer’s submission, the various MBIE reports will stand or fall on their own merits. An applicant should not be entitled to trawl through deliberative material to search for apparent inconsistencies or changes in approach which can then be used to challenge the Decision.
[60] In my assessment, the material in Category 2 goes to the internal deliberative process of MBIE and is not appropriately discoverable. The authorities consistently say that, except in special circumstances, a tribunal cannot be required to disclose evidence of its deliberative process. Those authorities are applicable by analogy to the deliberative process of MBIE and I find no special circumstances to justify a deviation from the general rule they expound.
[61] Categories 1 and 2 are not required to be discovered.
(ii) Category 3
[62] Material considered and/or relied on in preparing the Reports (Category 3) is claimed to be relevant as it will disclose the development of MBIE’s reasoning throughout the course of its investigation.
[63] The evidence in opposition to the application includes an affidavit from Alexander McPhail. He was part of the MBIE Trade Remedies team and responsible for the investigation and preparation of all the Reports. He described each Report as being self-contained. In his opinion, the investigation process is clearly set out in the Reports and the public file.
[64] The Initiation Report primarily dealt with the information provided by NZ Steel. The purpose of the Report was to assess the accuracy and adequacy of the evidence provided to establish whether there was sufficient evidence to justify initiating an investigation.
[65] The Provisional Measures Report dealt with NZ Steel’s request that provisional measures be imposed on the allegedly subsidised imports during the remaining period of the investigation. By this stage, information had been requested from identified importers, intermediary exporters, Chinese manufacturers and the Government of China. The provisional conclusion was that the aggregate level of subsidisation which could reasonably be identified was 0.02 per cent, leading to the conclusion there were no grounds for the imposition of provisional measures in order to prevent material injury being caused by subsidised imports during the remaining period of investigation.
[66] The EFC Report concluded the levels of subsidy determined in the investigation was de minimis and that material injury to an industry was not being caused by goods which were subsidised.
[67] The introduction to the Final Report noted it was based on the EFC Report. It annexed a summary of comments made on the EFC Report and MBIE’s response.
[68] In Mr Hodder’s submission, MBIE had essentially formed its view by the time of the Provisional Measures Report when it concluded the level of subsidy was de minimis. The view essentially did not change from then on. It is for this reason the material before MBIE at that stage is sought.
[69] Given the different Reports released at various stages, and that they culminated in the Final Report, it is difficult to see the logic of discovery being considered relevant for materials relied on by MBIE in preparing the Final Report but not relevant for material relied on by MBIE in preparing the earlier Reports. Indeed, the Final Report itself says it is based on the EFC Report and it is the EFC Report which is required pursuant to s 10A of the Act.
[70] The Reports are not simply draft reports, they are reports required by the Act. Furthermore, starting with the Provisional Measures Report, they begin analysing the evidence, including the responses to the inquiries initiated by MBIE. The Provisional Measures Report conclusion that the aggregate level of subsidisation was de minimis remained effectively unchanged. Documents considered for the purposes of the Provisional Measures Report must be relevant to the Final Report.
[71] It may well be that there is little further documentation to be released under this category. It could be considered somewhat artificial for MBIE to withhold materials under the agreed tailored discovery which would only be released if further Category 3 discovery were ordered.30
[72] I am satisfied the Category 3 documents, the documents considered and/or relied on by MBIE in preparing the Reports, should be discovered to address the grounds of the judicial review alleging a failure to take into account relevant considerations. Similar to the situation in Air Nelson Limited, MBIE was required to provide a fair, accurate and adequate report to the Minister. This requires consideration of the material relevant to those Reports and thus those documents are
discoverable.
30 The application suggests the respondent accepts it should provide all material relied on in the Final
Report, even if it was also relied on in an earlier Report.
Proportionality
[73] The issue before the Court will be the judicial review of the Decision. It is not an appeal into the merits of the Decision or an inquiry into the process.
[74] The discovery must be appropriate to the subject matter of the Decision.31 The further categories sought relate solely to the investigation, a period from June 2016 to July 2017. The time period is therefore limited and a large amount of material has already or will be provided as per discovery earlier agreed to by the parties. Although Mr Hodder is concerned that the Minister will not be able to provide evidence of MBIE’s investigation process there will be further affidavit evidence as to the decision-making process from both the Minister and those within MBIE.
[75] Discovery of Category 3 documents is relevant, proportionate and in the interests of justice.
[76] If there are any issues of privilege as alluded to on behalf of the Minister, then they can be addressed in due course.
Conclusion
[77] For the reasons given, the application is granted to the extent that Category 3, the material relied on or considered by MBIE in preparing the Reports, is to be discovered. In respect of the other two categories sought, the application is dismissed.
[78] In the circumstances, it would seem appropriate for costs to lie where they fall. If the parties wish to be heard on costs, the applicant is to file and serve a memorandum by 16 February 2018, with any response 14 days thereafter. A decision will be made
on the papers.
31 High Court Rules 2016, r 8.2(1)(a).
Thomas J
Solicitors:
Chapman Tripp, Wellington for Applicant
Crown Law, Wellington for Respondent
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