Pernod Ricard New Zealand v Lion-Beer Spirits & Wine (NZ) Limited HC Auckland CIV 2011-404-1664

[2011] NZHC 1770

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2011-404-1664

BETWEEN  PERNOD RICARD NEW ZEALAND LIMITED

Plaintiff

ANDLION-BEER SPIRITS & WINE (NZ) LIMITED

First Defendant

ANDINDEVIN GROUP LIMITED Second Defendant

Hearing:         18 November 2011

Appearances: D J Cooper and V A East for plaintiff

M R Crotty and S P Pope for first defendant

Judgment:      1 December 2011

JUDGMENT OF ALLAN J

In accordance with r 11.5 I direct that the Registrar endorse this judgment with the delivery time of 3.30 pm on Thursday 1 December 2011

Solicitors:

Bell Gully, Auckland [email protected]

Russell McVeagh, Auckland [email protected]

PERNOD RICARD NZ LIMITED V LION (NZ) LIMITED HC AK CIV 2011-404-1664 1 December 2011

[1]      Before the Court for determination are two interlocutory applications.  First there is an application by the first defendant for an order directing production of the plaintiff’s confidential documents to certain named representatives of the first defendant, subject to their giving written undertakings.

[2]      The second is an application by the plaintiff for an order directing that the first defendant give discovery of internal documents relating to the arrangements it made to pay the purchase price for certain assets to the plaintiff in December 2010. Both applications are opposed.

The proceeding

[3]      This case is concerned with the sale of certain of the plaintiff’s assets to the defendants in late 2010.  The assets included wine brands, bottled wine (referred to as “finished goods”), bulk wines, vineyards, plant and equipment.   The sale of finished goods to the defendants triggered an excise liability to New Zealand Customs, under the Customs and Excise Act 1996, and the Customs and Excise Regulations 1996.  Pursuant to s 76(3) of the Customs Act, the parties are jointly and severally liable.

[4]      The contractual documents are silent as to which party bears the ultimate liability for exciseable unfinished goods.  New Zealand Customs recovered excise of

$10,997,196.88 from the plaintiff in respect of excise owing on finished goods sold to the defendants.   The plaintiff claims that it ought to be reimbursed by the defendants, who deny liability.

[5]     The plaintiff pleads five causes of action:   breach of an implied term, rectification, unilateral and common mistake, and contribution and recoupment.

[6]      In their counterclaim, the defendants plead four causes of action.  The first concerns undisclosed guaranteed margin arrangements entered into by the plaintiff with a major customer.  The second relates to so-called “stock loading” arising from

artificially high sales to major customers in the period leading up to the effective settlement date, so reducing the defendants’ sales and profits post-completion.

[7]      The third cause of action on the counterclaim is concerned with undisclosed accrued discounts, pursuant to which the defendants must allegedly make reimbursement to certain retailers of sums paid prior to settlement to the plaintiff.

[8]      The fourth cause of action is relatively minor in character;   it relates to a claim for transportation costs incurred by the defendants. As I understand it, liability is not disputed on this cause of action but the amount concerned is the subject of a claim to a set off by the plaintiff.

[9]      The proceeding has been set down for trial on 23 April 2012.

The confidentiality issue

The problem

[10]     The plaintiff is a producer and distributor of alcoholic beverages.  The assets sold by the plaintiff to the defendants comprised a portion only of the plaintiff’s liquor assets.  The plaintiff remains the first defendant’s principal competitor in the New Zealand liquor industry.

[11]     Each party has given discovery.   Given the defendants’ counterclaims, the plaintiff  has  discovered  a  number  of  documents  which  it  considers  to  be commercially sensitive.     They include internal documents, as  well as communications  with  major  customers  in  relation  to  pricing,  sales  terms  and margins.   The first defendant also supplies its own competing products to those customers (Progressive and Foodstuffs) and competes against the plaintiff for their custom, and more widely in the New Zealand liquor market.

[12]   Because the parties are trade competitors, the plaintiff has claimed confidentiality over such discovered documents as it considers to be commercially sensitive.  For its part, the first defendant made similar confidentiality claims over a

number of its discovered documents.  The plaintiff has claimed confidentiality for

639 out of a total of 2588 discovered documents (25%), while the first defendant has claimed confidentiality for 657 out of a total of 2699 discovered documents (24%). Each party has claimed confidentiality for broadly similar reasons:  they address the parties’ assessment of the value and pricing of assets, they contain trade secrets, they disclose the parties’ commercial strategies, or they otherwise contain information of a confidential nature.

[13]     The  parties’ lawyers  and  independent  experts  have  given  confidentiality undertakings on terms that require that confidential documents will not be disclosed to that party or its employees.  The undertakings are in the same terms and are the subject of agreement between the parties and their legal advisers.

[14]     The first defendant’s application would, if granted, permit access to all of the plaintiff’s confidential documents by three of the first defendant’s in-house counsel (Richard Amos, Chantal Freeman and Joseph Biddles), as well as two other executives  of  the  first  defendant,  namely  Gavin  Hucker  and  Jeffrey  Sutton. Mr Hucker  is  the  first  defendant’s  finance  director;    Mr  Sutton  is  its  national marketing manager.

[15]     The first defendant’s application is opposed by the plaintiff, which argues that it is cast too broadly, and is calculated to cause the plaintiff prejudice.  It may result, Mr Cooper argues,  in  the disclosure of confidential  information  which  the first defendant does not need in order to prepare or run its case.  Alternatively, it may result in the inadvertent disclosure of the plaintiff’s confidential information more widely within the first defendant’s business.  In other words, there is a risk that the five named employees of Lion might unwittingly disclose the plaintiff ’s confidential information to others within the first defendant.

[16]     In short, the argument for the plaintiff is that the first defendant is not entitled to an order for the blanket inspection of the plaintiff’s confidential documents by named executives of the first defendant.   Rather, the proper course is for the first defendant to identify a particular document or documents which require analysis or investigation that is beyond the capability or knowledge of the lawyers and experts

currently permitted access to the documents concerned.   But to grant the present application, Mr Cooper argues, would be to negate the current confidentiality arrangements.   He contends that the plaintiff’s approach represents the orthodox method of dealing with applications for party access to confidential documents, and that there is no warrant for the blanket approach advocated by the first defendant.

[17]     Ms Pope for the first defendant argues that the restrictions sought to be continued by the plaintiff are exceptional;  the plaintiff therefore bears a heavy onus to establish there is a continuing need for them.  She says also that the plaintiff has not laid a sufficient evidential foundation for the argument that it would be seriously prejudiced by the making of the orders sought, particularly where confidentiality undertakings have been proffered and where three of the identified employees of the first defendant are solicitors, and therefore officers of the Court.   There is no suggestion of any practical risk of inadvertent or improper further disclosure. Moreover, she argues, the documents must be disclosed to the first defendant in order that it might prepare its case in respect of the accuracy of the plaintiff’s contractual warranties.   The first defendant’s employees require access to certain documents associated with that aspect of the counterclaim in order to make informed decisions in relation to the case.   Indeed, certain of the documents concerned will need to be put to the first defendant’s witnesses at trial.

[18]     Finally, the first defendant says it will agree to a reciprocal arrangement with the  plaintiff  in  respect  of  the  inspection  of  the  first  defendant’s  confidential documents by representatives of the plaintiff.

[19]     For the purposes of the present argument, counsel for the first defendant have grouped the plaintiff’s confidential documents into six categories.  They have taken the view that by reason of the present confidentiality undertakings they are unable to discuss even these categories with representatives of their client.

[20]     Counsel for the plaintiff reject the analysis of counsel for the first defendant. They argue that the first defendant’s legal advisers and experts have had access to all of the plaintiff’s confidential documents and it is for the first defendant through its advisers to make a case for wider disclosure of the plaintiff’s confidential documents

on a case by case basis.  In other words, it is not permissible for the first defendant simply to group large numbers of documents together and argue in general terms that further disclosure is needed in order to assist the first defendant to make appropriate pre-trial decisions and to prepare for trial.

[21]     Against that background, it is necessary to consider briefly the approach adopted in recent comparable cases.

The authorities

[22]     It  is  routine  in  commercial  litigation  for  confidentiality  issues  to  arise between the parties.  Usually, an accommodation is reached whereby the owner of the documents or information is able to preserve confidentiality whilst affording access on a restricted basis to representatives of the opposing party.   Sometimes, however,  confidentiality  questions  require  resolution  by  the  Court.    A  leading

authority is Port Nelson Ltd v Commerce Commission.1   That was not a case between

trade competitors.   The Commission had issued proceedings against Port Nelson alleging contravention of ss 27 and 36 of the Commerce Act 1986, and seeking interim injunctions.  In this Court, the Judge had declined to restrict the production of some 55 documents on confidentiality grounds.  On appeal, Port Nelson accepted that not all of the documents concerned necessarily fitted under the confidentiality umbrella.  The Court of Appeal did not consider individual documents.  Delivering

the judgment of the Court, McKay J said:2

We have not looked at the individual documents. We agree in broad terms with the Judge's approach in the above passages. 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 the litigation, is immaterial. An order for non-disclosure can only be made when the Court is satisfied in terms of rule 312 that such an order  is  "necessary”.  It  must  be  either  apparent  from  the  document  in question or shown by other evidence that disclosure would be likely to prejudice the party in some significant way. Even the possibility of prejudice may be sufficient, but that will depend on the seriousness of the possible prejudice and on the significance of the document to the issues in the proceeding, and the extent to which limited disclosure may enable the concerns of both parties to be accommodated.

It follows that the documents must be approached on a one by one basis. This is the responsibility of counsel. In the vast majority of cases counsel should be able to agree whether or not a document is such as to require special protection, bearing in mind the restrictions on the use of discovered documents which apply in any event. Where there is some genuine point of difference which warrants referral to the Court, then the Judge can decide. Such referrals should be rare where experienced counsel are involved.

[23]     The Court of Appeal directed that the High Court Judge must consider the 55 documents on a case by case basis, and to determine in each instance whether the interests of justice in ensuring that the Commission was able to prepare and present its   case   outweighed   Port   Nelson’s   interest   in   safeguarding   its   confidential information in a competitive market.

[24]     That approach reflected the outcome in the Court of Appeal’s earlier decision in New Zealand Railways Corporation v Auckland Regional Council,3  where the respondents had applied for a review of a decision of the appellant not to sell a plot of land to the respondents under s 40 of the Public Works Act 1981. The respondents sought discovery of documents which had come into being since the impugned decision, arguing that they would shed light on the reasons for the decision, and also documents containing valuations obtained by the appellant.   In this Court those orders were granted, subject to a restriction on the valuations which were to be seen

only by counsel and two named officers of the respondents.

[25]     The Court of Appeal held that the valuations were relevant, but that access ought to be restricted:4

There is however considerable force in Mr Salmon’s submission as to confidentiality.   Having regard to the nature of their case, the purpose for which valuation material could be of use to the respondents must be limited, and it is unlikely that counsel will need to discuss it with their clients’ representatives.   Should a particular need arise, it can be addressed at the time.  But the need for a general disclosure to those representatives is not apparent.  The problem is not necessarily met by the conditions which Gault J attached to disclosure of other material.  The valuation material obviously has special commercial importance and sensitivity.   No matter how conscientious and honourable, executives of the respondents could be placed in a most invidious position by being made privy to some of it.   That possibility  ought  to  be  avoided  as  much  as  it  can  be.    Mr Salmon’s submission, for which he found support in the judgment of Barker J in TD

Haulage Ltd v NZ Railways Corp (1986) 1 PRNZ 668, 676, achieves that result, provided that leave is reserved to apply to the High Court Judge for any relaxation of the restriction that he may be satisfied is necessary. And of course the question of production at the hearing will need to be addressed at that stage.

[26]     In  the  foregoing  passage,  the  Court  noted  the  difficulty  inherent  in  a requirement that an opposing party have access to confidential information, on the basis that the information be used only for the purposes of the proceeding.  It will often, as Mr Cooper submits, be impossible for an employee of a trade competitor to completely exclude from his or her mind for all purposes, other than the litigation itself, confidential information obtained on discovery.

[27]     That consideration appears to have been determinative in the judgment of Dobson J in Todd Pohokura Ltd v Shell Exploration NZ Ltd.5   There, in hard fought high profile litigation between parties to a joint venture, Shell had discovered 75

Eastlight files by which it claimed confidentiality for some 15 files.  Inspection of those documents had been restricted to Todd’s external legal advisers and appropriate experts  retained  by them  in  relation  to  the case,  they having  given  appropriate confidentiality acknowledgements.   In the application before the Court, Todd’s solicitors wished to disclose Shell’s confidential documents to Todd executives, who were providing them with instructions in the case.

[28]     The competitive relationship between Shell and Todd was intense.  Dobson J accepted that there was a risk that opportunities could arise for one party, if and when  appraised  of  the  detail  of  weakness  in  the  market  position  of  the  other.6

Counsel for Shell instanced a number of examples of Shell’s ongoing tactics and

strategic thinking that may well have been reflected in the documents in dispute.

[29]     Viewed  overall  (and  without  identification  of  particular  documents),  the

Judge formed the impression that Shell was entitled to be concerned to preserve confidentiality of the disputed documents.7     He further held that the confidential

5 Todd Pohokura Ltd v Shell Exploration NZ Ltd HC Wellington CIV 2006-485-1600, 12 August

2009.

information concerned was not of a type that could be “mentally ring-fenced” and

not misused in contexts outside the litigation.8

[30]     Dobson  J  further  upheld  the  submission  for  Shell  that  Todd  had  not established any significant degree of prejudice in the preparation of its case.  He was not persuaded that Todd’s case was likely to be materially weakened by Todd’s advisers missing a point that might otherwise have been elucidated from a firsthand analysis of Shell’s confidential documents by Todd executives.9   He concluded:10

In the end, there has to be a balance struck.   Here, vigorously contested litigation has arisen in the course of an ongoing significant joint venture for exploitation of gas and condensate.   The litigation has to be kept in perspective and should not be managed in a way that jeopardises the future of that significant venture.  In short, the price for Todd is that it must run its case with whatever modest impediment eventually follows from Todd executives being kept away from the content of Shell’s confidential documents.

Discussion

[31]     Pernod Ricard and Lion are competitors in the liquor industry, and are indeed the two major suppliers in certain relevant markets.  The disclosure by one party of commercially sensitive documents to the other party, is of itself calculated to result in a degree of harm to the disclosing party.  In determining for the purposes of r 8.31 and s 69 of the Evidence Act 2006 where the balance ought to be struck, the Court is required to determine whether the public interest in the disclosure in the proceeding of the communication or information is outweighed by the public interest in preventing harm to a person from whom disclosure was sought.

[32]     The  solicitors  and  counsel  for  Lion  have  had  access  to  all  of  the  639 documents for which Pernod Ricard claims confidentiality.  While the starting point is that it must lay a proper evidential foundation for a confidentiality claim, it is not suggested here by Lion that the claim is ill founded.  Rather, Lion seeks to disclose

all 639 admittedly confidential documents to five named Lion employees.

8 Todd Pohokura Ltd, fn 5 at [20]..

[33]     I do not accept that Lion’s proper preparation requirements involve such blanket disclosure in a case where the parties are trade competitors, and where disclosure is sought to persons who include Lion’s national marketing manager. Given the confidential status of the documents is not challenged, it is for Lion to demonstrate that particular documents within Pernod Ricard’s confidential discovery ought to be disclosed to additional Lion representatives.   That will involve a document by document analysis of the degree of confidentiality of the document concerned, coupled with an explanation of the purpose for which disclosure of that document to a named person or persons is required by Lion.  Unless and until that

occurs, the case falls, in my view, within the same class as Todd Pohokura Ltd.11   On

the information currently available to the Court, there is the clear risk of commercial harm to Pernod Ricard on the one hand if all 639 documents are disclosed to the five named  Lion  representatives,  while  on  the  other  the  Court  has  only the  general contention on behalf of Lion that disclosure is necessary to enable it to prepare adequately for trial.  In other words, the Court has insufficient detail to conduct the document by document inquiry which the established approach requires.

[34]     Accordingly, Lion’s application is dismissed.  The Court remains willing to entertain a further application that contains appropriate particulars of the individual documents (or possibly groups of documents) sought to be disclosed, and detailed reasons why disclosure is required to enable Lion to prepare for trial.

Further discovery

[35]     Although several discovery categories were earlier in dispute, there remains now only one contentious issue. Pernod Ricard seeks discovery of:

Internal Lion documents relating to the arrangements it made to pay the purchase price to Pernod Ricard in December 2010, including any correspondence  with  Lion’s  finance  department,  regarding  making  funds available, any monthly cash flow forecasts showing Lion’s anticipated payment of the purchase price, any settlement funds sheets showing where the components of the purchase price were to be financed from (and any drafts thereof), and any correspondence with Lion’s lenders relating to anticipated draw downs in order to pay the purchase price.

11 Todd Pohokura Ltd, fn 5.

[36]     The application is resisted by Lion, which argues that: (a)      Lion has fulfilled its discovery obligations;

(b)the requirements for an order for such further discovery have not been made out;

(c)       in   the   circumstances    the   further   discovery   sought   would   be oppressive.

[37]     On the date of completion of the transaction, 22 December 2010, Pernod Ricard provided both Lion and the second defendant with a completion settlement statement.   It showed a figure of $10,997,196.88 (plus GST) as being payable by Lion and the second defendant for excise in respect of finished goods supplied as part of the transaction.  On settlement, Lion and the second defendant paid Pernod Ricard everything owing in respect of the transaction, except for the excise amount.

[38]     In  its  statement  of  claim  Pernod  Ricard  says  that  Lion  understood  and intended that at completion, Lion would be responsible for payment of excise on finished goods supplied by Pernod Ricard.   Lion denies this allegation, which is accordingly in dispute.

[39]     Mr Crotty argues, however, that the documents sought cannot be relevant, because they involve post contract conduct, and that whilst they may evidence the subjective intention of Lion, they would not go to the common intention of the parties as at the date of the contract.  Insofar as the true interpretation of the written agreement between the parties is concerned, he says that it is the common intention of the parties which must be the focus of the Court’s consideration.

[40]     Mr Crotty also drew the Court’s attention to what he said were inadequacies in the plaintiff ’s rectification pleading, but I do not consider it necessary to take into account matters which can be cured by amendment if there is a pleading defect.

[41]     Pernod   Ricard   pleads   rectification.      The   legal   principles   governing rectification were conveniently discussed by Tipping J in Westland Savings Bank v Hancock:12

The most appropriate starting point is the decision of our Court of Appeal in Dundee Farm Ltd v Bambury Holdings Ltd [1978] 1 NZLR 647. The judgment of the Court was delivered by Richmond P who said at p 651:

"Before doing so we record the fact that there is no dispute between counsel as to the legal principles which govern this case. They are to be found in the judgment of Simonds J in Crane v Hegeman-Harris Co Inc [1939] 1 All ER 662. A passage from that judgment was adopted as a correct statement of the law by the Court of Appeal in Joscelyne v Nissen [1970] 2 QB 86, 95; [1970] 1 All ER 1213, 1220. The relevant portion is as follows:

'. . . in order that this court may exercise its jurisdiction to rectify a written instrument, it is not necessary to find a concluded and binding contract between the parties antecedent to the agreement which it is sought to rectify . . . [I]t is sufficient to find a common continuing intention in regard to a particular provision or aspect of the agreement. If one finds that, in regard to a particular point, the parties were in agreement up to the moment when they executed their formal instrument, and the formal instrument does not conform with that common agreement, then this court has jurisdiction to rectify, although it may be that there was, until the formal instrument was executed, no concluded and binding contract between the parties' ([1939] 1 All ER 662,

664)."

[42]     Later in his judgment, Tipping J summarised the elements of the cause of action as follows:

(a)      Whether there is an antecedent agreement or not, the parties must have formed and continue to hold a single corresponding intention on the point in question;

(b)Such intention must have continued to exist in the minds of both or all parties, right up to the moment of execution of the formal instrument

of which rectification is sought;

12 Westland Savings Bank v Hancock [1987] 2 NZLR 21 (HC) at 26.

(c)      While  there  need  be  no  formal  communication  of  the  common intention by each party to the other or outward expression of accord, nevertheless each party must have held and continue to hold the intention on the point in question, corresponding with the same intention held by the other party;

(d)The document sought to be rectified does not reflect that matching intention, but would do so if rectified in the manner requested.

[43]     Subsequent conduct may be both relevant and highly persuasive as to what a party’s intention was, at and leading up to the execution of the instrument in question.13    The fact that a party has acted as if the document stood in the form to which it is sought to be rectified, is strong evidence of the existence of an intention on the part of that party to contract in those terms.14

[44]     Mr   Crotty   submits   that   recent   contractual   interpretation   cases   have emphasised the need to  establish the common  intention of the parties, and that therefore, only documents which are mutual or common will be relevant.15

[45]     While there may indeed be a question as to the proper scope of discovery in the context of a claim involving contractual interpretation, the approach must be different when the statement of claim includes, as here, a prayer for rectification.  In Wholesale Distributors Ltd v Gibbons Holdings Ltd, Thomas J pointed out that the prohibition on admission of extrinsic material bearing only on the meaning intended or  understood  by  one  party,  was  subject  to  an  exception  where  rectification  is

pleaded.16

[46]     Although, in order to succeed on a claim for rectification, a plaintiff must establish that the common intention of the parties is not reflected in the contractual documents, that requirement does not render irrelevant a document in which a party

may have acted in accordance with a subjective intention alleged by its opponent.

13 Westland Savings Bank, fn 12 at 31.

14 Dudding v WLD Ltd HC Auckland CIV 2003-404-7254, 14 May 2004.

15 Wholesale Distributors Ltd v Gibbons Holdings Ltd [2008] 1 NZLR 277 (SC) at [53] and [73]-[74],

Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] 2 NZLR 444 (SC) at [31].

16 At [134] and per Tipping J at [51]. See also the judgment of Wilson J in Vector Gas Ltd at [126].

[47]    Here, Pernod Ricard alleges that it always intended that Lion would be responsible for excise.  It claims that Lion had the same subjective intention.  If that is so, then they have a common intention which might provide the foundation for a rectification claim. As Rodney Hansen J observed in Dudding,17 the subjective post- contract conduct of an opposing party may therefore be relevant.  It follows in my view that any document which provides evidence of a subjective intention on the

part of Lion which accords with that of Pernod Ricard, will be relevant.

[48]     Mr Crotty submits that Pernod Ricard has presented no evidence to indicate that the documents sought actually exist.   If there are no such documents, then of course discovery will not prove to be a challenging task.   It is plain enough that Pernod Ricard’s request is for documents which, on their face, demonstrate a continuing intention on the part of Lion to provide for the amount of the excise as part of the overall purchase price.

[49]    Lion argues that, even if the documents sought are held to be relevant, compliance would in all the circumstances amount to oppression.  Mr Crotty points out that the order sought by the plaintiff is very broadly drafted and not limited to documents relevant to Lion’s understanding and intention.   Rather, Pernod Ricard seeks all internal Lion documents relating to the arrangements it made to pay the purchase price to Pernod Ricard in December 2010.

[50]     Regardless  of  any  link  to  the  pleaded  issues,  the  Court  must,  when considering an oppression claim, balance considerations of time and cost against the probative value of the documents sought.18   It is said on Lion’s behalf that the time and cost that will be incurred by Lion in searching for, reviewing and discovering the documents sought, would amount to oppression when measured against the potential value of the documents.

[51]     The difficulty with Lion’s oppression argument is that there appears to be no

evidence before the Court to support it.  In-house legal counsel for Lion, Mr Biddles, swore an affidavit on 13 October 2011.  In that affidavit he said:

17 Dudding fn 14.

18 BNZ Investments Ltd v Commissioner of Inland Revenue [2008] 1 NZLR 598; Simunovich

Fisheries Ltd v TVNZ Ltd [2008] NZCA 350 at [141].

Documents relating to payments in December 2010

[12]     I confirm that internal Lion documents relating to the transaction, including in December 2010, were included in the documents searched for by Lion and provided to its solicitors for review as to relevance to the issues in the proceedings. Where relevant, the documents have been discovered.

[52]     On its face, that passage suggests that Lion has identified all the documents relating to the payments made in December 2010 and provided them to its solicitors for review as to relevance.   In other words, far from being oppressive, the further discovery exercise would appear to be quite limited, given that Lion has already identified all documents relating to the payments made in December 2010.

[53]     Presumably  not  all  such  documents  have  been  discovered,  because  the solicitors are likely to have determined that certain of them are irrelevant to the issues in dispute in the proceeding.  There is nothing in any other affidavit from Lion to suggest that the further discovery sought by Pernod Ricard would be oppressive.

[54]     The amount at stake in this case is substantial.  The discovery sought would appear to involve the making of inquiries of identified persons within fairly narrow parameters.   I am not satisfied that the exercise would be of such magnitude that, balanced against the probative value of the documents sought, it would be oppressive to make an order.

[55]     The plaintiff’s application accordingly succeeds.

Result

[56]     I decline Lion’s application for modification of the current confidentiality arrangements, on the basis there is no warrant for the blanket production of all confidential documents to five of Lion’s representatives, including Lion’s national marketing manager.   A modified  application  on  a document  by document  basis would enjoy greater prospects of success.

[57]    There will be an order directing Lion to make further discovery of the documents sought by Pernod Ricard in paragraph 1(d) of its notice of application dated 30 September 2011.

[58]     Costs are reserved. Counsel may file memoranda if they are unable to agree.

Confidentiality

[59]     Certain of the documents appearing on the court file contain information that is commercially confidential.  I make an order that, until further order of the Court, the file is not to be searched without the leave of a Judge, by any person other than the solicitors and counsel acting for the parties.

C J Allan J