Oxygen Air Limited v LG Electronics Australia Pty Limited
[2018] NZHC 2912
•9 November 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2015-404-2184 [2018] NZHC 2912
BETWEEN OXYGEN AIR LIMITED
Plaintiff
AND
LG ELECTRONICS AUSTRALIA PTY LIMITED
Defendant
Hearing: 1 November 2018 Appearances:
M Black for the Plaintiff
R Hollyman and T Mahood for the Respondent
A J Holmes on behalf of A Steel for subpoenaed witnessJudgment
9 November 2018
JUDGMENT OF GORDON J
This judgment was delivered by me
on 9 November 2018 at 12.30 pm, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date:
Solicitors: Craig, Griffin & Lord, Auckland
T Mahood, Auckland
Counsel: M Black, Auckland
B Hollyman, Auckland
A Steel, Auckland
A Holmes, Auckland
OXYGEN AIR LTD v LG ELECTRONICS AUSTRALIA PTY LTD [2018] NZHC 2912 [9 November 2018]
Introduction
[1] The plaintiff, Oxygen Air Limited (Oxygen), has served subpoenas issued by the Registrar on three witnesses requiring them to attend and give evidence at trial. One of the subpoenas also requires the witness to produce documents at the trial.
[2] The Court has before it two applications to set aside those subpoenas.
[3] The defendant, LG Electronics Australia Pty Limited (LG), applies to set aside all three subpoenas. One of the witnesses, Geoffrey Lim, has made a separate application to set aside the subpoena served on him.
[4] The applications are opposed by Oxygen, which also seeks a direction under r 9.10 of the High Court Rules that each of the three witnesses gives oral evidence at the trial.1
[5] The applications were to have been heard on 29 October 2018, which was to have been the first day of the trial. On that day, the trial was adjourned. The applications therefore proceeded on a pre-trial basis.
Factual background
[6] The background to the proceeding is helpfully set out in the judgment of Davison J2 on Oxygen’s application for a review of the decision of Associate Judge Bell3 in relation to security for costs. I adopt the summary from the judgment of Davison J for the purposes of this judgment:
[3] The defendant, LG Electronics Australia Pty Ltd (“LG”), is the manufacturer and supplier of various heating, air conditioning and related products in New Zealand and the Pacific Islands. The plaintiff, Oxygen Air Ltd (“Oxygen Air”), is a company formed in mid-2009. It formerly distributed and installed LG air conditioning and heat pump systems in New Zealand, but is no longer actively trading.
1 The application by LG was to set aside four witness subpoenas. However, counsel for Oxygen advised that the fourth witness, Vishal Lal, had not in fact been served with a subpoena. At the commencement of the hearing, Mr Black, for Oxygen, was nevertheless seeking an oral evidence direction in relation to Mr Lal as there was no brief of evidence for him. That application was abandoned during the hearing.
2 Oxygen Air Ltd v LG Electronics Australia Pty Ltd [2018] NZHC 2504.
3 Oxygen Air Ltd v LG Electronics Australia Pty Ltd [2018] NZHC 945.
[4] LG and Oxygen Air signed a written supply and distribution agreement in February 2010. In September 2015, Oxygen Air brought proceedings against LG. It alleges, in its first cause of action, that LG breached the 2010 supply and distribution agreement in a number of ways. Among other things, it says that LG breached an obligation to act in good faith in its dealings with Oxygen Air; failed to deliver products in a timely manner; supplied products to other distributors in breach of the exclusivity clause; failed to remedy or address product warranty claims; and failed to provide training and technical support.
[5] In its second and third causes of action, Oxygen Air alleges breach of a further agreement by which it says LG granted Oxygen Air distribution rights to LG’s solar panel products. Finally, Oxygen Air’s fourth cause of action alleges that LG engaged in misleading and deceptive conduct in breach of the Fair Trading Act 1986.
[6] LG in its statement of defence admits that the parties entered into a supply and distribution agreement in February 2010, but denies having breached that agreement. It also denies the existence of an agreement granting Oxygen Air exclusive distribution rights for LG’s solar panel products, and breach of the Fair Trading Act.
[7] LG also raises a counterclaim for breach of contract and breach of fiduciary obligations by Oxygen Air. It says, among other things, that Oxygen Air failed to pay overdue invoices following the supply of goods by LG; failed to hold the proceeds of on-selling LG’s goods on trust for LG; and failed to promote, distribute and market LG’s products. LG also contends in its counterclaim that a clause in the supply and distribution agreement amounts to an unreasonable restraint of trade.
Legal principles
[7] On an application to set aside a witness subpoena, the following principles apply:
(a)Although subpoenas are administratively issued by the registry, the Court may control cases of abuse and prevent wrongful use of subpoenas.4 The Court possesses an inherent, discretionary jurisdiction to set aside subpoenas.5
(b)In order to succeed in setting aside a subpoena, the applicant must show it was irregularly issued, illegally procured or is being used oppressively for an improper purpose (these grounds may overlap).6 In
4 MacKenzie v MacKenzie [2018] NZHC 1744 at [27].
5 At [27]; citing Re Golightly [1974] 2 NZLR 297 (SC).
the absence of such abuse, the sole question is “whether or not any admissible evidence can be properly given in answer to the witness summons”.7
[8] In considering whether leave should be granted to adduce oral evidence from a proposed subpoenaed witness, the following are relevant principles:
(a)One of the purposes of the rules dealing with the exchange of witness statements is so as to avoid any party being ambushed by evidence which it has not considered;8
(b)The scheme of the rules suggests that oral evidence-in-chief is the exception rather than the general rule;9
(c)The party seeking a direction would need to provide evidence covering at least the inability (despite effort) of obtaining a signed brief from the proposed witness.10 In O’Connell v Muharemi (No 4), Heath J said:11
[16] If a witness declines to give a witness statement he or she should be advised that evidence can be compelled by subpoena. At the very least there should be evidence of requests made, preferably in writing, of the witness to ascertain whether a statement, or at least an indication of the nature of the evidence to be given, can be provided in anticipation of being called under subpoena. If necessary, a subpoena can be extracted from the Court and served on the witness before that request is made so that the witness can clearly be seen to be acting in aid of the Court process.
(d)Witnesses should be approached to provide witness statements at a time prior to the deadline for exchanging those statements (although in some cases, there may be good reason why that is not possible).12 In NZX Ltd v Ralec Commodities Pty Ltd, Dobson J stated “exceptional
7 At [28]; citing Re Golightly, above n 5, at 302.
8 O’Connell v Muharemi (No 4) HC Auckland CP546/SD01, 13 May 2003 at [8]; Commerce
Commission v Giltrap City Ltd (2000) 14 PRNZ 450 (HC) at [6].
9 O’Connell v Muharemi (No 4), above n 8, at [8]. See also NZX Ltd v Ralec Commodities Pty Ltd
[2016] NZHC 799 at [12]-[13].
10 Commerce Commission v Giltrap City Ltd, above n 8, at [7].
11 O’Connell v Muharemi (No 4), above n 8.
circumstances may require the Court to also have regard to attempts to procure a brief after the deadline for serving them has passed”;13
(e)At the time briefs are served for a party which is also applying for leave to adduce evidence from subpoenaed witnesses, the party must serve a notice on the other parties informing them that the party intends to call the person as a witness and include in the notice, the name of the intended witness, the steps taken to obtain a brief, the reasons for the intended witness not providing a brief, an explanation of the relevance of the evidence and details of the evidence that the witness is expected to give;14 and
(f)The party applying also needs to show why the evidence of the witness is necessary to the case.15
The test under r 9.10
[9] Mr Hollyman, for LG, submits that there are two primary questions that the Court is required to answer when considering whether leave should be granted to adduce oral evidence from a proposed subpoenaed witness:16
(a)First, has the party exhausted all reasonable attempts to have the witness produce a brief?
(b) Second, is the evidence necessary?
[10] A question arises as to whether the Court is to take into account any “interests of justice” considerations. The prior form of the High Court Rules, which applied until February 2013, included r 441G which contained provisions in relation to oral evidence-in-chief. In NZX Ltd v Ralec Commodities Pty Ltd, Dobson J referred to the earlier rule and noted as follows:
13 NZX Ltd v Ralec Commodities Pty Ltd, above n 9, at [17].
14 High Court Rules, r 9.7(6).
15 Commerce Commission v Giltrap City Ltd, above n 8, at [7]; NZX Ltd v Ralec Commodities Pty
Ltd, above n 9, at [18].
16 Relying on NZX Ltd v Ralec Commodities Pty Ltd, above n 9.
[9] Among other contingencies, r 441G contemplated that evidence-in- chief may be adduced from a person who had not provided a written brief with the leave of the trial judge, which leave could be granted if the evidence relates to new or further matters that could not reasonably have been included in the witness's written statement, or its admission is required in the interests of justice (applying subrule (l)(b) and (2)(c) and (d)).
[11] The current rule, r 9.10, is in the following terms:
9.10 Oral evidence directions
(1)After the preparation and service of the chronologies of facts, the parties must bring significant facts that are disputed to the attention of the court.
(2)The obligation in subclause (1) may be discharged at a case management or issues or pre-trial conference, or at another time, but must, in any event, be discharged not later than 15 working days after service of the chronologies of fact has been completed.
(3)The court may, before the giving of evidence, and either before or at the trial or hearing, direct that evidence be given orally (an oral evidence direction).
[12] It can be seen that there is no “interests of justice” test for the admission of oral evidence. But, in my view, that does not mean that the Court cannot consider the interests of justice. Rule 1.2 of the High Court Rules sets out the objective of the rules as follows:
The objective of these rules is to secure the just, speedy, and inexpensive
determination of any proceeding or interlocutory application.
(Emphasis added)
[13] In Schmidt v Bank of New Zealand Ltd, Jeffries J stated:17
Procedural rules are the servants of Court proceedings to achieve just, speedy and at the least cost, expedition of cases. The construction of Court rules should always be approached with care but with a readiness to apply them to meet the justice of the case which is manifest before a Court … Procedural rules are to a very significant degree generalised in their words, for they are to cover all situations for which they are to be applied …
[14] In my view, if any irregularity can be cured and the interests of the parties can be sufficiently protected, a discretion to admit the evidence can be exercised. While I
accept Mr Hollyman has correctly identified the two questions that must be answered, there is room for interests of justice considerations.
[15] With that framework in mind, I will examine the position for each witness. I
first set out the general position of both LG and Oxygen.
LG’s position
[16] Mr Hollyman submits that it was an abuse of process to serve all three witness subpoenas because of a failure to comply with r 9.7(6) of the High Court Rules.18
[17] In relation to Mr Lim, who was served with a subpoena duces tecum, Mr Hollyman submits there is a further abuse of process as it amounts to a collateral attack on previous orders of Associate Judge Bell in relation to discovery.
[18] In relation to Oxygen’s application for oral evidence directions, Mr Hollyman first submits that Oxygen has not followed the procedure mandated in r 9.7(6) in that the notice served on LG did not include the information required to be provided. However, he did accept that the Court may excuse non-compliance with the formal requirements of the rule as to the content of the notice if LG had otherwise complied with the rules, including the manner in which those rules are to be interpreted.
[19] In that regard, Mr Hollyman submits that Oxygen did not take, let alone exhaust, reasonable attempts to obtain evidence from the proposed subpoenaed witnesses before subpoenas were issued. No meaningful, if any, steps were taken before the date for service of Oxygen’s briefs on 25 June 2018. There are no relevant exceptional circumstances in this case and the evidence is not necessary.
Oxygen’s position
[20] Mr Black, for Oxygen, submits in relation to the two witnesses who are former employees of LG, that there is evidence which suggests they were told not to speak to representatives of Oxygen. All three witnesses can give evidence that is directly relevant to matters in issue. The evidence is therefore necessary.
Geoffrey Lim (subpoena duces tecum)
Mr Lim’s involvement
[21] In his affidavit sworn 25 October 2018 in support of the application to set aside his subpoena, Mr Lim deposes that he is a director of I Fix 4U Services Limited which until 13 June 2018 was known as I Fix 4U Limited. Mr Lim says that I Fix 4U was, and remains, a general service agent for LG.
The subpoena
[22] The subpoena of 8 October 2018 was issued in the following terms:
2. You are ordered to bring with you and produce at the same time and place any records and any information held relating to the period from January 2010 to 14 August 2015 of the following:
2.1 LG’s invoices and summaries of the same to I Fix 4U Limited for the purchase of LG air-conditioning units from LG NZ Limited.
2.2 All LG warranty and installation records, including parts purchased from LG for air-conditioning units.
[23] In response to those two specific categories, Mr Lim’s evidence in his affidavit is as follows:
(a)I do not have any invoices or summaries of invoices (such as statements) for the purchase of LG air-conditioning units from LG NZ Limited in my possession. I Fix 4U Services never purchased any new air-conditioning units from LG NZ Limited.
I Fix 4U Services was focussed on the sale of new Panasonic air- conditioning units, not LG products.
(b)It would take an extremely long time for me to identify, locate and review all of I Fix 4U Services’s LG warranty and installation records, and records of parts supplied from LG for the repair of air- conditioning units, let alone locating “any records and any information held” relating to warranty and installations carried out over a five year period (January 2010 to 14 August 2015).
There are potentially thousands of records that could fall into this category. Many of those records only exist in hardcopy … We do not operate a co-ordinated filing system, so even retrieving these records to review them would be a very time-consuming task …
… My best estimate is that it would take me hundreds of hours to complete this exercise.
[24] Mr Hollyman submits that the subpoena amounts to a collateral attack on discovery orders made by Associate Judge Bell on 29 May 2018. He submits:
(a)The tailored discovery order in the proceedings (April 2016) excluded individual transactional documents (invoices, shipping documents and similar);
(b)The question of non-party discovery has been the subject of correspondence and canvassed in various court appearances. It culminated in an application by Oxygen dated 23 May 2018 for further and better discovery of all documents relating to air-conditioning products supplied by LG to parties other than Oxygen (the application included a request for discovery from LG of non-party documents); and
(c)On 23 May 2018, LG’s application for further and better discovery was heard. During that hearing, in relation to its application, Oxygen:
(i)agreed that LG did not need to provide additional transactional documents;
(ii) agreed that the hearing that was to follow later that week of
Oxygen’s application for discovery, could be vacated; and
(iii) did not pursue its application for further and better discovery.
[25] In his minute dated 29 May 2018, Associate Judge Bell reserved leave to Oxygen saying that, “[i]f there are some loose ends, I reserve leave to reinstate the hearing if matters unravel”. LG has not sought to reinstate its application, nor sought leave for non-party discovery from I Fix 4U.
[26] Mr Black submits that the Court should not overlook that discovery orders were made early on in the proceeding, that not every aspect of discovery was “closed down” and that even now further discovery was being made by LG.
Oxygen’s changed position on documents sought
[27] At the hearing, Oxygen changed its position in relation to the two categories of documents. The Court was advised that Oxygen no longer required Mr Lim to produce any documents falling under the description in 2.2 of the subpoena.19 In relation to 2.1, Oxygen’s position was that it should be amended to read:
Summaries of LG’s invoices to I Fix 4U Limited for the purchase of LG air- conditioning units from LG NZ Limited.
[28] In other words, Oxygen no longer seeks copies of the actual invoices.
Decision on abuse of process
[29] In my view, the application in relation to Mr Lim can be disposed of very simply. The subpoena, as it relates to the production of documents, is an abuse of process and should be set aside for the following reasons:
(a)It goes behind the orders of Associate Judge Bell and is contrary to the position adopted by Oxygen in relation to third party discovery; and
(b)It would require Mr Lim to create (or at least obtain) a document which he does not have, covering five and a half years of transactions.
[30] Further, such a summary as is now sought, already exists and is in the hands of Oxygen. To explain. I was provided with copies of two letters from the solicitors for LG to counsel for Oxygen. The first, dated 28 May 2018, includes the following:
3. In our letter of 14 December 2017 … LG offered to generate a report detailing a consolidated report showing all air-conditioning transactions within New Zealand and the Pacific Islands. That report (which is in addition to the reports already provided under 33.1 and
33.2 of the tailored discovery order) would contain:
19 Set out at [22] above.
a. the date an order (for new units or warranty units) was placed;
b. an invoice reference;
c. item model number;
d. customer name and customer shipped to (including their locality);
e. shipment timestamp;
f. order quantity; and
g. sales order amount.
[31] The second, dated 14 June 2018, contains the following:
2. At the hearing of LG’s application for particulars and discovery on 29
May 2018, LG agreed to confirm the scope of the consolidated delivery report. To that end:
i.The air conditioning transaction summary report includes all sales of heating and air-conditioning units by LGEAP within the Territory (as defined in the distribution agreement) from February 2010. This report also specifically includes heating and air-conditioning units supplied as a replacement for warrant and/or service returns.
[32] The Court was advised that the relevant entries for each individual business or entity supplied by LG (including I Fix 4U) could easily be extracted and a separate report produced for each. That, in fact, was done in the course of the hearing. The information, the Court was told, included details of both new and second-hand units and items.
[33] The evidence already exists, and it is in the hands of Oxygen through the process of discovery.
[34] However, there is still the question of whether Mr Lim should be permitted to otherwise give oral evidence in the absence of a brief of evidence (pursuant to any new subpoena). I now address that issue.
Efforts to obtain a brief of evidence
[35] Eddy Rotteveel, the sole director and shareholder of Oxygen, swore an affidavit on 29 October 2018 which includes evidence as to attempts to obtain briefs
from various witnesses. In relation to Mr Lim, Mr Rotteveel says that he first came to his attention about one month prior to the date of the affidavit. Mr Rotteveel says he was talking, in passing, to one of his staff members who told him he used to work for Mr Lim at I Fix 4U for approximately a year from 2017 (no month is stated).
[36] Mr Rotteveel says that he then asked Mr Black to get input from Mr Lim about alleged breaches of exclusivity involving I Fix 4U selling LG’s air-conditioning products. Mr Rotteveel says he was present in Mr Black’s chambers when Mr Black attempted to contact Mr Lim by telephone on or about the week of 8 October 2018. It seems that Mr Black was not able to speak to Mr Lim. Mr Rotteveel says Mr Black reported to him that Mr Lim was not available and that he, Mr Black, would have to try to contact him at another time. Mr Rotteveel recalls Mr Black giving a brief explanation on the telephone to the person Mr Black was speaking to about why he wanted to talk to Mr Lim, namely about I Fix 4U selling LG’s air-conditioning products.
[37] Mr Rotteveel says that as the trial date was soon approaching, it was considered necessary to issue a subpoena for Mr Lim to ensure that he would give evidence as they could not make direct contact with him. The subpoena was issued by the Court on 8 October 2018, but was not served on Mr Lim until 17 October 2018.
[38] On 24 October 2018, solicitors for Mr Lim wrote to the solicitors for Oxygen addressing a number of matters, including the requirement to produce documents. The letter states that prior to being served with the subpoena, no approach was made by Oxygen or its legal representatives inquiring as to whether Mr Lim was prepared to give evidence (nor was he approached to provide any documents). The letter further stated that Mr Lim did not wish to be obstructive but was naturally concerned at the prospect of giving evidence and producing documents in court.
[39] I note that in his affidavit Mr Rotteveel refers to a telephone conversation between Mr Black and Mr Steel, then counsel for Mr Lim, following receipt of the
24 October 2018 letter. Mr Steel has sworn an affidavit deposing that the conversation was on a without prejudice basis. I therefore put that evidence to one side. It should not have been included in Mr Rotteveel’s affidavit.
Adequacy of efforts to obtain a brief
[40] Mr Black submits that, in considering efforts to obtain a brief by the date for the service of the plaintiff’s briefs, the Court needs to take into account there was a hiatus in the proceedings from 4 May 2018 to 25 September 2018. That is because, he says, on 4 May 2018, Associate Judge Bell ordered that the proceedings be stayed unless and until Mr Rotteveel provided an undertaking as directed, in relation to security for costs. That position only changed on 15 September 2018 with the issuing of the judgment of Davison J, on a review of the decision of Associate Judge Bell, quashing the order that Mr Rotteveel give an undertaking.
[41] However, two points are relevant. First, the order of Associate Judge Bell was expressed to take effect only from 2 July 2018.20 The date for the service of Oxygen’s briefs was 25 June 2018. Oxygen therefore could, and did, serve briefs by 25 June
2018.
[42] Second, it cannot be said, in my view, that Mr Rotteveel’s evidence was in the nature of reply evidence such that it might have been served at the date for reply briefs (1 October 2018) in response to LG’s evidence (served on 25 August 2018). The supply of air-conditioning products by LG to companies other than Oxygen is at the heart of Oxygen’s claim. I Fix 4U was identified in discovery by LG as a company receiving heating and air-conditioning units supplied by LG.
[43] There was also no suggestion that there were any difficulties in locating the company. It has premises in Auckland.
[44] I am not satisfied that all reasonable attempts were made to procure a brief from Mr Lim. There were no efforts prior to 25 June 2018. There was an attempt to contact Mr Lim by telephone in or about the week of 8 October 2018. According to Mr Rotteveel, the message left for Mr Lim was simply that Mr Black wanted to talk to Mr Lim about I Fix 4U selling LG’s air-conditioning products. There is no evidence
20 In his minute dated 11 May 2018, Associate Judge Bell further directed that his earlier timetable directions would continue to apply and Oxygen would still be required to serve its evidence.
that Mr Black mentioned court proceedings, let alone Mr Lim providing a statement and giving evidence in those proceedings. There are no exceptional circumstances.
[45] I will nevertheless go on to consider the second question of whether Mr Lim’s evidence is necessary, applying any relevant interests of justice considerations.
Necessity
[46] Oxygen has served two ‘will say’ statements for Mr Lim on LG. The first, which is dated 11 October 2018, records the belief that the witness will say first that he is the director of I Fix 4U Limited and secondly, the statement simply reproduces the two classes of documents as set out in the subpoena duces tecum.
[47] The second statement of 18 October 2018 runs to two paragraphs and states:
(a)That Mr Lim is a director of I Fix 4U. It continues, I Fix 4U “is a retail appliance store which sells new and second-hand products including air-conditioning units. It also repairs second-hand units and repairs units under warranty”.
(b) “I Fix 4U has sold and distributed LG air-conditioning products”.
There is then reference to the two categories of documents (originally)
sought.
[48] Mr Black submits that the evidence from Mr Lim is necessary on a material issue in dispute, namely the nature and extent to which LG sold new or second-hand air-conditioning products other than to Oxygen.
[49] In my view, oral evidence from Mr Lim is not necessary. Necessity imposes a more stringent test than mere relevance. 21 Evidence as to the extent to which LG sold air-conditioning products (to businesses or entities other than Oxygen) will be apparent from the summary I have referred to. Witnesses called by Oxygen (two are
21 Hawkins v Davison (No 2) (1990) 3 PRNZ 700 (HC) at 703.
from LG) may be examined on its contents. It is not necessary for Mr Lim to give evidence about the contents of the summary.
[50] I also do not consider that there are any interests of justice considerations that would weigh in favour of Mr Lim giving oral evidence under subpoena. All such considerations point the other way.
Martina Rangihuna
[51] Ms Rangihuna was previously employed by LG. Her role included the sale of
LG solar panels.
Efforts to obtain a brief of evidence
[52] In his affidavit, Mr Rotteveel deposes that he first attempted to contact
Ms Rangihuna on 22 May 2018 when Oxygen and its legal representatives were speaking with potential witnesses. Mr Rotteveel does not annex a copy of his email to Ms Rangihuna to his affidavit, but states that he said in the email that Oxygen was in the final stages of the case and it would be going to court in October. He said he asked her if she would be willing to support the contents of the letter she provided as it would be helpful. I will return to the contents of the letter shortly.
[53] Mr Rotteveel continues that Ms Rangihuna explained to him that she could not attend the hearing, because working full time and being a mother did not allow any spare time. Mr Rotteveel says that following this email correspondence he called and spoke with Ms Rangihuna. He says that she reiterated that she was busy with work commitments and being a mother. She also said to him that she did not want to spend time writing a witness statement.
[54] Mr Rotteveel deposes that he tried to contact Ms Rangihuna again by telephone approximately eight weeks prior to the date of his affidavit. Mr Rotteveel says that this conversation was of the same nature as the conversation in or about May or June
2018. Again, Ms Rangihuna told him she did not want to put aside the time with her busy schedule to come to court.
[55] Finally, Mr Rotteveel says that on or about 8 October 2018, while he was in Mr Black’s office, Ms Rangihuna was contacted by telephone. He said that Mr Black explained to her that the trial was starting at the end of the month and he asked her to give evidence about her letter. Mr Black told her it was necessary to give direct evidence about the letter and counsel would accommodate her in relation to the time she would need to attend at court.
[56] Mr Rotteveel says from what he heard, it appeared that Ms Rangihuna was unwilling to come to court again because of her work and family commitments.
Mr Black told her he would need to issue a summons for her to come to court.
Mr Black reported to him after the conversation that Ms Rangihuna was still unwilling to come but if she was summonsed to do so, then she would have to come.
[57] Ms Rangihuna has sworn an affidavit dated 25 October 2018 in support of LG’s application to set aside the subpoena. She sets out her evidence in relation to Oxygen’s attempts to contact her. What she says differs from what is said by Mr Rotteveel.
[58] The first contact she mentions is an email from Mr Rotteveel dated
26 September 2018 which she annexes to her affidavit. The email includes the following:
I thought I would give you an update
we are getting close to this court case now and LG (markus lambert) is saying that you had nothing to do with solar and you were not part of it and it was only him that dealt with customers etc, naturally we have plenty of evidence that says otherwise including your statement that you wrote, unfortunately LG now are just digging a bigger hole for themselves by denying this.
We really need you to testify and explain what you did whilst employed at LG in court. Your help would be so much appreciated and im happy to pay for your time (and I know time is precious because of your family and commitments etc).
[59] In her affidavit, Ms Rangihuna says she replied to the email saying that she had nothing more to say that was likely to help him or Oxygen and she did not want to be involved in the proceedings. Ms Rangihuna did not annex a copy of that email to her affidavit.
[60] The second contact, Ms Rangihuna says, was a telephone message which
Mr Black left for her on 18 October 2018. She says he did not mention a subpoena. He simply talked about Ms Rangihuna appearing in court. She says she was very surprised when she was then served with the subpoena at work the following day.
Abuse of process
[61] Mr Hollyman submits that Oxygen made inadequate attempts to obtain a brief before 25 June 2018; the purpose of the rules is, in part, to avoid trial by ambush; and to permit the subpoena to stand would be an abuse of process and would materially prejudice LG.
[62] The Court is not in a position to resolve the conflict in the evidence regarding the attempts by representatives of Oxygen to obtain a brief of evidence from
Ms Rangihuna, but it is not necessary to do so. Even on its best case, and on the basis of Mr Rotteveel’s evidence, there was what I consider an inadequate attempt on
22 May 2018. The further attempt by telephone around the end of August 2018, and the phone call on or about 8 October 2018, both after the due date for evidence, were similarly inadequate.
[63] That then leads me to the letter which I have referred to above. It is written and signed by Ms Rangihuna and it is addressed to Oxygen for the attention of Mr Rotteveel. It is undated but Ms Rangihuna, in her affidavit, refers to it being written in 2015. The letter contains Ms Rangihuna’s address and mobile telephone number. The letter reads, in part, as follows:
Dear Eddy,
I would like to share some information with you around my time working at
LG Electronics NZ – February 2012 – January 2014.
During 2013, my role as B2B Account Manager saw me involved with the introduction and the sale of LG Solar Panels to the NZ market. Selling LG Solar Panels in NZ was a new product line for LG NZ and with that came with many challenges – lack of training, resources and support. At this time, I was the main person involved with selling solar panels to our customers.
…
I believe Oxygen Air facilitated several meetings between Oxygen, Mr Brian Kim of LG, and management from Harrisons, to negotiate and broker a reduced pricing structure for Harrisons and to negotiate sell through support for Harrison’s supply of solar panels. Several meetings took place however, I was excluded from these meetings but was aware of the parties meetings and agendas.
In the preceding weeks it was LG’s ‘management’ decision to supply Harrisons direct with Solar panels and thereby bypassing Oxygen. There was never mention or discussion of a trial period for Oxygen whilst I was at LG NZ.
[64] In response to Ms Rangihuna’s assertion that she was busy and had no time to write a statement, Oxygen could have either prepared a draft brief of evidence based on her letter and sent it to her or alternatively prepared a one paragraph brief annexing the letter and confirming its contents.
[65] Oxygen did neither.
[66] But there is another consideration. In his email of 26 September 2018 to
Ms Ranighuna, Mr Rotteveel says that he had spoken to other ex-LG staff and it seemed that LG had indicated to the ex-staff quite strongly that it is a breach of contract if they dare talk about anything about LG.22
[67] Ms Rangihuna does not contradict that statement in her affidavit. There is at least an arguable basis for Oxygen to submit that, even if it had pressed Ms Rangihuna for a statement in the way that I have suggested in [64] above, she would not have signed the statement. It is a slender argument but it is nevertheless a relevant matter which I do take into account.
[68] The efforts to obtain a brief of evidence were inadequate. But I bear in mind the possibility that Ms Rangihuna may have been told not to talk about anything at LG.
[69] I also take into account that LG received a copy of Ms Rangihuna’s 2015 letter in the course of disclosure. It is therefore aware of what her evidence will be. It is not trial by ambush. The letter would not otherwise be admissible. Mr Hollyman made it
22 It is not suggested that the solicitors or counsel for LG were party to any such alleged approaches.
clear that LG would object to the letter being produced in the absence of evidence from its author.
[70] If, at trial after Ms Rangihuna has completed her evidence-in-chief, counsel for LG is not in a position to commence cross-examination immediately, there are means open to the trial judge to ensure that LG is not prejudiced, such as deferring cross- examination.
[71] I am therefore of the view that the issuing of the subpoena was not an abuse of process.
[72] I now turn to Oxygen’s application for a direction that Ms Rangihuna give oral evidence. Despite the inadequate efforts to obtain a brief, but because of my decision that the issuing of the subpoena was not an abuse of process, and the matters I took into account, I confine my consideration to whether the evidence is necessary.
Necessity
[73] Ms Rangihuna’s ‘will say’ statement dated 1 October 2018 (and served on LG the same day) is very short. The substance is contained in the following two paragraphs:
3. I was actively involved in the solar business and development. This included the [the sentence is not completed].
4. Attached is a letter which I wrote on behalf of the plaintiff about matters concerning Oxygen’s solar distribution with LG. I understand this is Document ID [reference given]. I expect that additional questions will arise in addition to what I have referred to in the letter.
[74] The evidence is relevant to the second and third causes of action. It passes the s 7 test.
[75] Mr Hollyman submits the evidence is not necessary in the sense that Oxygen is calling two former employees of LG, Mr Taylor and Mr Silcock who were the New Zealand Sales Manager and Marketing Manager respectively.
[76] However, Mr Black draws the Court’s attention to the dates that those two witnesses were at LG, namely April 2008 to late 2010 (Mr Taylor) and April 2008 until April 2011 (Mr Silcock). Ms Rangihuna’s evidence therefore covers a different time period from those two witnesses.
[77] I consider that the evidence does pass the “necessity” test. It covers events in a time period not already covered by former LG employees.
[78] I therefore grant Oxygen’s application for a direction that Ms Rangihuna give oral evidence at trial pursuant to her subpoena.
Tekura Aerenga
[79] Ms Aerenga is also a former employee of LG. She worked in sales and was involved with the distribution of LG’s orders, including air-conditioning/heat pumps.
Efforts to obtain a brief of evidence
[80] As with Ms Rangihuna, there is a conflict in the evidence in relation to attempts to contact Ms Aerenga to obtain a brief of evidence.
[81] Ms Aerenga has sworn an affidavit dated 25 October 2018 in support of LG’s application to set aside her subpoena.
[82] Ms Aerenga deposes that the only attempts that Oxygen, or its representatives, had made to contact her in the last year and a half were, first, when Geri Irwin, a staff member at Oxygen, tried to contact her on Messenger in or about March or April 2017.
Ms Aerenga says she rejected that friend request.
[83] The second occasion was when a private investigator contacted her in the couple of weeks before the date of her affidavit pretending to be a customer of hers and wanting to know where she lived so they could serve a subpoena on her.
[84] Ms Irwin has sworn an affidavit, dated 29 October 2018, on behalf of Oxygen. She says that, in assisting Mr Black to prepare the case, on 19 April 2018 she attempted to contact Ms Aerenga. She says it was difficult to find her whereabouts but she
managed to find her on Facebook. She says she then Facebook messaged her to give evidence on behalf of Oxygen. She says the message was delivered as shown by the tick next to the message.
[85] Ms Irwin’s description of what she said in her message is contradicted by the wording of the message, a copy of which she annexes to her affidavit. It simply says, “Hi There. I am looking for a Tekura who used to work at LG. Is this you? If so can you get in touch? Cheers Geri Oxygen Air”. This does not convey a request to give evidence.
[86] There is a second affidavit from another employee of Oxygen, Ophelia Opeti- Finau sworn 29 October 2018 regarding contact with Ms Aerenga. Ms Opeti-Finau has been employed as a sales administrator for almost five years with Oxygen. She says she is directly aware of, and involved at times with, the preparation of Oxygen’s case for trial.
[87] Ms Opeti-Finau says in about March 2018 she happened to meet Ms Aerenga at a work function and the conversation turned to Oxygen’s case against LG. She says Ms Aerenga expressed her unwillingness to come to court as a witness. She allegedly told Ms Opeti-Finau that she would be breaching her contract with LG. She also made a comment that she was scared and fearful about coming to court and that she would not come.
[88] Ms Opeti-Finau says she was again speaking to Ms Aerenga in early October
2018. Once again, Ms Aerenga made it clear to her she did not want to get involved and give evidence at trial. During this conversation, Ms Aerenga told Ms Opeti-Finau that both she and another person who had worked for LG alongside her, had been told by LG not to make contact with or answer any calls from Oxygen or Mr Rotteveel about the case. Ms Aerenga did not say who it was at LG who had told her that.
[89] In relation to this latter point, Ms Aerenga in her affidavit contradicts what is said by Ms Opeti-Finau regarding not contacting anyone at Oxygen. Ms Aerenga says that nobody warned her not to speak with anyone at Oxygen, but her employment
agreement with LG contained a confidentiality obligation not to discuss her employment with anyone.
Abuse of process
[90] Mr Hollyman relies on the same grounds as referred to in [61] above.
[91] As with Ms Rangihuna, the Court is not in a position to resolve the conflict in evidence regarding contact with Ms Aerenga. However, even accepting Oxygen’s case on this issue at its highest, the steps taken by Oxygen prior to 25 June 2018, the date for the filing of evidence, were clearly inadequate. There is simply the Facebook contact on 19 April 2018, with no reference to the proceedings or giving evidence, and the discussion in a social context with Ms Opeti-Finau in about March 2018.
[92] However, there is the evidence from Ms Aerenga regarding her employment contract. As noted, she states that there was a confidentiality obligation not to discuss her employment with anyone. There is the further (albeit disputed) evidence from Ms Opeti-Finau that Ms Aeranga was told by somone at LG that she should not have contact with Oxygen about the case. The evidence on this issue is stronger in her case than in relation to Ms Rangihuna as it relates directy to Ms Aerenga rather than being in general terms.
[93] Although I consider the attempts to obtain a brief were inadequate, because of the evidence referred to in [92] above and because the trial judge will have the ability to defer cross-examination so as to limit any prejudice, I am of the view that the issuing of the subpoena was not an abuse of process.
[94] That leaves Oxygen’s application for an order that Ms Aerenga give oral evidence. As with Ms Rangihuna, despite the inadequate efforts to obtain a brief, but because of my decision on abuse of process and the matters I took into account, I confine my consideration to whether the evidence is necessary.
Necessity
[95] The ‘will say’ statement of Ms Aerenga dated 1 October 2018 (and served on
LG the same day) includes the following:
6. I can confirm [Mr Rotteveel] is correct in thinking LG was supplying other distributors. LG have sold or supplied new and second-hand air- conditioning units to their entities other than Oxygen Air during my employment at LG. LG would “make out” that the product they were selling were just seconds, but they were actually brand new units.
7. Examples of companies that I organised products to be sent to despite LG’s exclusive agreement with Oxygen include Icon Concepts and I Fix 4U.
[96] The first paragraph referred to above appears to have arisen from one of the conversations that Ms Opeti-Finau refers to in her affidavit. In the early October 2018 conversation, Ms Opeti-Finau says that Ms Aerenga said words to the effect that “Eddy was right about going forward with the case against LG”. Later in the conversation, she said, “I hope he wins”. Ms Aerenga allegedly said during this conversation that only Oxygen was allowed to sell LG air-conditioning units and that LG had been distributing new air-conditioning units as second-hand damaged units.
[97] In her affidavit, Ms Aerenga contradicts the substance of her ‘will say’ statement. She says that she does not believe that LG sold new units to anyone other than Oxygen. She says that she never said LG supplied new units to anyone other than Oxygen and called them seconds. She says she processed orders at LG and she does not think that LG’s systems would let you do that.
[98] The Court is not in a position to make an assessment of the truth of what is said by Ms Aerenga or what Ms Opeti-Finau says Ms Aerenga said to her. However, the subject matter is relevant to an issue in dispute. Whether it assists Oxygen in its case or LG in its case cannot be assessed at this stage.
[99] Is the evidence necessary? Mr Hollyman submits that the Court will not be assisted by what he describes as this broad-brush evidence. He submits that both Mr Rotteveel and Ms Irwin give detailed evidence on this issue. They refer to the transaction summary that I have mentioned.
[100] However, both Mr Rotteveel and Ms Irwin are from Oxygen. Ms Aerenga is able to give evidence from the other end of the sale and supply agreement, being a former employee of LG. I therefore consider the evidence is necessary.
[101] Whether counsel for Oxygen in fact chooses to call Ms Aerenga, having regard to what she says in her affidavit, as referred to in [97] above, will be an issue for counsel, bearing in mind the rules in relation to impeaching a witness for the party on whose behalf the witness is called. The trial judge will be in a position to control any matters arising on this issue.
[102] I grant Oxygen’s application for an order that Ms Aerenga give oral evidence at trial pursuant to her subpoena.
Result
[103] I make the following orders:
(a)The application on behalf of Mr Lim to set aside his witness subpoena is granted. The application by LG, to the extent that it relates to
Mr Lim’s witness subpoena, is also granted. Mr Lim’s witness subpoena is set aside.
(b)The application by Oxygen for a direction that Mr Lim give oral evidence at trial is refused.
(c) The application by LG to set aside the witness subpoenas for Martina
Rangihuna and Tekura Aerenga is refused.
(d) The application by Oxygen for a direction that Ms Rangihuna and
Ms Aerenga give oral evidence at trial pursuant to the subpoenas served on them, is granted.
Costs
[104] LG has been partially successful in its application, with one subpoena having been set aside and two upheld. My preliminary view is that costs should lie where
they fall. However, if the parties disagree, then LG may file a memorandum within
15 working days of the date of this judgment, with Oxygen to file a memorandum within a further five working days. Memoranda should not exceed four pages.
[105] In relation to Mr Lim, he has been successful in his application to have his subpoena set aside. My preliminary view is that he is entitled to costs. I encourage counsel for Mr Lim and counsel for Oxygen to agree costs and file a joint memorandum. Any joint memorandum is to be filed within 15 working days of the date of this judgment. In the event that counsel are not able to agree, counsel for Mr Lim is to file his memorandum within five working days of the date for the joint memorandum. Counsel for Oxygen is to file his memorandum within a further five working days. Memoranda are not to exceed four pages.
Gordon J
2
4
0