The Coca-Cola Company v Frucor Soft Drinks Limited

[2012] NZHC 966

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV2010-404-006703 [2012] NZHC 966

UNDER  the Trademarks Act 2002

Fair Trading Act 1986

BETWEEN  THE COCA-COLA COMPANY Plaintiff

ANDFRUCOR SOFT DRINKS LIMITED First Defendant

ANDPEPSICO, INC Second Defendant

Hearing:         15 March 2012

Appearances: B W F Brown QC and G F Arthur for Plaintiff

A H Brown QC and A L Ringwood for Defendants

Judgment:      9 May 2012

(RESERVED) JUDGMENT OF ANDREWS J

This judgment is delivered by me on 9 May 2012 at 3pm pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

Solicitors:           A J Park Law, PO Box 949, Wellington 6140

Bell Gully, PO Box 4199, Shortland Street, Auckland 1140

Counsel:            A H Brown QC, PO Box 2815, Shortland Street, Auckland 1140

B W F Brown QC, PO Box 5161, Lambton Quay, Wellington 6015

THE COCA-COLA COMPANY V FRUCOR SOFT DRINKS LTD & ANOR HC AK CIV 2010-404-006703 [9

May 2012]

Introduction

[1]      Two  interlocutory  applications  require  determination.     The  first  is  an application by the first and second defendants for an order that the plaintiff provide inspection to the defendants of the documents listed in parts 1 and 3 of the plaintiff’s list of documents (PepsiCo’s inspection application).   In particular, the defendants seek an order requiring the plaintiff to provide inspection to Australian solicitors instructed by the second defendant.

[2]      In   the   second   application,   the   plaintiff   challenges   the   claims   as   to confidentiality made by the first and second defendants in respect of documents listed in part 3 of their lists of documents (Coca-Cola’s confidentiality application). For the reasons set out later in this judgment, I do not consider it appropriate to consider and determine this application at this time.

General background

[3]      The  Coca-Cola  Company  (Coca-Cola)  issued  this  proceeding  (the  New Zealand proceeding) on 7 October 2010.  Coca-Cola alleges that a particular bottle in which the first defendant, Frucor Soft Drinks Ltd (Frucor), and the second defendant, PepsiCo Inc (PepsiCo) have sold cola and soft drinks in New Zealand, is the same or similar to the “contour” shaped bottle in respect of which Coca-Cola has three registered trademarks in New Zealand.

[4]      Coca-Cola alleges that  Frucor and  PepsiCo’s use of the bottles infringes Coca-Cola’s three trademarks, constitutes passing off, and constitutes conduct in trade that is misleading and deceptive, or likely to mislead or deceive consumers, and is in breach of the provisions of the Fair Trading Act 1986.  Coca-Cola seeks declarations, injunctions, delivery up or destruction of infringing products, damages, interest, and costs.

[5]      On 14 October 2010 Coca-Cola issued proceedings in the Federal Court of Australia (the Australian proceeding) against PepsiCo, PepsiCo Australia Holdings Pty Ltd (PepsiCo Australia) and Schweppes Australia Pty Ltd (Schweppes).  In the Australian proceeding Coca-Cola alleges that each of the respondents had infringed

four of Coca-Cola’s trademarks registered in Australia in respect of the contour bottles by selling cola products in bottles that are substantially identical or deceptively similar to Coca-Cola’s contour bottles. Coca-Cola also alleges that the defendants’ conduct constitutes passing off, is misleading or deceptive or likely to mislead or deceive, and is in breach of provisions of the Trade Practices Act 1974 (Cth).

[6]      In the New Zealand proceeding, the solicitors on the record for Frucor and PepsiCo are Bell Gully.  Mr Andrew Brown QC is instructed as senior counsel.  In the  Australian  proceeding,  the  solicitors  on  the  record  for  PepsiCo,  PepsiCo Australia, and Schweppes are the Australian firm of solicitors, Allens Arthur Robinson (Allens).

[7]      In an affidavit sworn on 15 February 2012 Mr Philip John Kerr, a partner in the Sydney office of Allens, said that Allens had been instructed by PepsiCo to advise it in relation to both the New Zealand and Australian proceedings.  He further said that instructions to Bell Gully and Mr Andrew Brown in relation to the New Zealand proceeding are given by Allens, in accordance with instructions received from PepsiCo.   Likewise, advice regarding the conduct of the New Zealand proceeding is given by Bell Gully and Mr Andrew Brown to Allens, who in turn provide advice to PepsiCo.  Mr Andrews Brown advised that he is also instructed on behalf of PepsiCo in the Australian proceeding.

[8]      On 1 February 2011, Associate Judge Faire made orders for discovery and inspection in the New Zealand proceeding, as follows:

Each party shall file and serve affidavits of documents by 27 April 2011. Inspection shall be completed by 18 May 2011[.]

Those orders were amended  on  17  June 2011, to  provide that  the affidavits  of documents were to be filed and served by 30 August 2011, and inspection was to be completed by 20 September 2011.

[9]      Coca-Cola’s list of documents, verified by an affidavit sworn on 7 September

2011, was filed on 16 September 2011.  Frucor’s list, verified by an affidavit sworn

on 13 September 2011, was filed on 15 September 2011.  PepsiCo’s list, verified by

an affidavit sworn on 2 December 2011, was filed on 16 December 2011.

[10]   In both applications, the dispute centred on documents listed in Part 3 (documents in the party’s control for which confidentiality was claimed) of each of the lists of documents.

New discovery rules

[11]     The High Court Rules covering discovery and inspection were amended with effect from 1 February 2012.   The amended rules change the basis on which documents are to be disclosed.   Under the former rr 8.17 and 8.18, a party was required to give discovery of all documents that were or had been in the party’s control and related to a matter in question in the proceeding.   The amended rule (r 8.7) provides that the party must give discovery of all documents that are or have been in the party’s control and are documents on which the party relies, or that adversely affect the party’s own case, or adversely affect another party’s case, or support another party’s case.

[12]     The amended rules do not contain any transitional provisions.  The order for discovery was made under the former rules, and the two applications were also made under  the  former  rules.    The  amended  rules  are  now  in  effect.    However,  the amended rules do not have any impact on the determination of the applications.  This is because the applications were brought under the former r 8.31 (as to claims to confidentiality) and r 8.33 (as to inspection), which are in the same, or broadly similar, terms as the new rules 8.25 and 8.27, respectively.

PepsiCo’s inspection application

Background

[13]     On 8 August 2011 Bell Gully, on behalf of PepsiCo, proposed a regime for discovery and inspection of confidential documents.   Such documents were to be governed by a “lawyers’/experts’ eyes only” regime. The proposed regime included:

Subject to the provision of appropriate confidentiality undertakings, such documents may be inspected by retained external solicitors, counsel and independent experts.

[14]     On behalf of Coca-Cola, A J Park (Coca-Cola’s solicitors in the New Zealand proceeding) advised on 23 August 2011 that the proposed regime was agreed.

[15]     On 12 October 2011 Bell Gully provided A J Park with a draft confidentiality undertaking, and on 18 October 2011 A J Park advised that the draft confidentiality undertaking was acceptable.

[16]     On 20 October 2011 Bell Gully provided A J Park with six undertakings signed by Mr Andrew Brown, Mr Ringwood (solicitor on the record for PepsiCo and Frucor) and three solicitors and a legal secretary from Bell Gully.  Also provided were three undertakings signed by Mr Kerr and two solicitors from Allens. All three were identified only as being “of Sydney, Solicitor”, and A J Park did not pick up that they were from the firm representing PepsiCo in the Australian proceeding.

[17]     The three Allens solicitors were specifically referred to in a letter from Bell

Gully to A J Park, dated 26 October 2011:

PepsiCo’s Australian  lawyers,  [Allens],  are  also  engaged  by  PepsiCo  to provide advice and assistance to PepsiCo in relation to the New Zealand proceedings.  The relevant lawyers at Allens have provided confidentiality undertakings in relation to the plaintiff’s confidential documents.   Allens have indicated that there will be support staff at their firm who may need to handle confidential documents for the purpose of copying and filing etc, and have asked whether the parties can agree that confidential documents can be provided to support staff for such purposes without first having to require such people to sign a confidentiality undertaking, provided they have been made aware of the confidential nature of the documents and the requirement not to disclose them to anyone other than the person they are assisting. Could you please let us know whether you agree to this arrangement (which would also apply to Bell Gully and AJ Park).

[18]     On behalf of Coca-Cola, AJ Park expressed concern as to disclosure to the solicitors at Allens, in a letter dated 28 October 2011:

I refer to your letter of 26 October 2011 and the undertakings as to confidentiality  from  various  solicitors  at  [Allens].    There  are  obviously issues with regard to the ability of those solicitors and their staff to ensure that the documents are only used for the purposes of the New Zealand litigation and specifically that the documents and the information contained

therein is not used for the Australian proceedings.    They cannot compartmentalise  their  knowledge  between  New  Zealand  and Australia. That seems to us to be a real practical difficulty.  We require your advice as to how the Australian solicitors propose to deal with this issue.

[19]     Those concerns were rejected by Bell Gully on behalf of PepsiCo.   It was noted that Allens were not seeking to inspect the documents in connection with their role  as  PepsiCo’s  solicitors  in  the Australian  proceeding,  but  rather  as  external lawyers retained by PepsiCo in connection with the New Zealand proceeding.  It was further noted that Coca-Cola and PepsiCo are parties in both proceedings and that most of Coca-Cola’s discoverable documents in the New Zealand proceeding would also be discoverable in the Australian proceeding.   Any documents which related only to the New Zealand proceeding would either be entirely irrelevant to the Australian proceeding (in which case they would be of no interest or use to Allens in the Australian proceeding) or they would have some relevance to the Australian proceeding and would therefore be discoverable in that proceeding, also.  Bell Gully did not, therefore, consider there to be any proper basis for a concern that Allens might use documents discovered in the New Zealand proceeding for the purpose of the Australian proceeding.

[20]     Without derogating from that position, Bell Gully proposed as follows:

(a)       As  regards  documents  discovered  by  Coca-Cola  only  in  New Zealand, [Allens] only seek to inspect such documents for the purpose of the New Zealand proceeding, and if it will resolve the matter they would accordingly be prepared to give an express (as opposed  to the implied) undertaking not to use those documents except for the purposes of the New Zealand proceeding.

(b)       As  regards  documents  discovered  by  Coca-Cola  in  both  New Zealand and Australia, [Allens] would be free to use such documents for the purpose of the Australian proceedings, but would use the copy of the document discovered in Australia for the purpose of the Australian proceedings, and not the copy of the document discovered in New Zealand.

[21]     No agreement has been reached.   To date, there has been no inspection of

Coca-Cola’s discoverable documents.

Discussion

[22] At issue is whether Coca-Cola’s documents can be inspected by Allens. It is convenient to consider this issue by reference to the matters raised by Coca-Cola in opposition: namely that it is not necessary for Allens to inspect Coca-Cola’s documents, that to permit Allens to inspect would be to facilitate a breach of the Lawyers and Conveyancers Act 2006 (the LCA), that it would lead to a possible misuse of Coca-Cola’s documents, and that the confidentiality undertakings could not be enforced against Australian solicitors. Coca-Cola also contends that the fact that the discovery regimes in New Zealand and Australia are not coterminous is a further reason for not permitting inspection by Allens.

Not necessary for Allens to inspect Coca-Cola’s documents

[23]     On behalf of Coca-Cola, Mr Brendan Brown QC submitted that Bell Gully is retained by PepsiCo and Frucor, and is fully able and competent to inspect Coca- Cola’s documents, and to advise PepsiCo in respect of them.  In the circumstances, he submitted, there is no need for Allens to inspect the documents and, in the light of the other matters raised by Coca-Cola, it is not appropriate for Allens to do so.

[24]     In  response,  Mr Andrew  Brown  submitted  for  PepsiCo  that  it  is  indeed necessary for Allens to inspect Coca-Cola’s documents in order to advise PepsiCo and Frucor.   He submitted that PepsiCo is entitled to instruct solicitors of its own choice, and Coca-Cola’s opposition on this ground amounts to dictating how the defendants will conduct their defence to the New Zealand proceeding.   He further submitted that similar arrangements, where Australian solicitors are instructed for a party in both the Australian and New Zealand jurisdictions, and have a key role in advising the party across both jurisdictions, are now commonplace.

[25]     I accept that PepsiCo is entitled to be advised by solicitors of its choosing. This ground, alone, is not grounds to deny inspection by Allens.

Permitting Allens to inspect would be to facilitate a breach of the Lawyers and

Conveyancers Act 2006

[26]     For Coca-Cola, it was submitted that in providing advice to PepsiCo in the New Zealand proceeding, Allens is in breach of s 24 of the LCA which provides, as relevant:

(1)      A person commits an offence—

(a)       who, for gain or reward ... and not being a lawyer or an incorporated law firm, carries out work of a kind described in paragraph (a) of the definition of “reserved areas of work”

...

[27]     “Lawyer”  in  the  present  context  means  a  person  who  holds  a  current practising certificate as a barrister, or barrister and solicitor of the New Zealand High Court.  “Reserved areas of work” as defined in s 6 of the LCA includes work carried out in giving legal advice to any person in relation to the direction or management of proceedings before a New Zealand court, to which that person is a party.   It was submitted that to permit Coca-Cola’s documents to be disclosed to Allens for the purpose  of  enabling Allens  to  advise  PepsiCo  in  relation  to  the  New  Zealand proceeding would be to facilitate a breach of the LCA.

[28]     For PepsiCo, it was submitted that Coca-Cola’s assertion of a breach of the LCA is misconceived, as it ignores the fact that Allens is practising law in Australia, not New Zealand. Allens are not subject to the Act.

[29] Further, it was submitted that r 14.6(d)(iii) of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 expressly allowed Mr Andrew Brown to receive instructions from “a member of the legal profession in an overseas country”. It was submitted that, in circumstances where counsel can be instructed by overseas solicitors, it would be strange if counsel in New Zealand could inspect any other party’s documents, but is forbidden then to disclosure relevant or key documents to instructing solicitors.

[30]     In the context of the present application, I accept PepsiCo’s submissions and do not consider that disclosure of documents to Allens is likely to facilitate a breach of the LCA.

Disclosure of Coca-Cola’s documents to Allens would lead to a possible misuse of

the documents

[31]     For Coca-Cola, it was submitted that if documents discovered by it in the New Zealand proceeding were disclosed to Allens, there would be a very real risk of an inadvertent or deliberate use of the documents in the Australian proceeding.  Mr Brendan Brown stressed that this submission was not intended to cast any doubt as to the integrity of Allens, its partners, or solicitors.   However, he submitted, on a practical level, where Mr Kerr has a key role in both proceedings, there must be a concern as to his ability, and that of the other solicitors working on the proceedings, to compartmentalise their knowledge of the documents discovered in the individual proceedings.   He submitted that one could not help but be concerned as to their capacity to ensure that they did not, subconsciously, strategise the proceedings with reference to each other.

[32]     For PepsiCo, Mr Andrew Brown submitted that this argument was a “straw man”, completely lacking in any substance.  This is because the issues raised in the two proceedings are essentially the same, and Coca-Cola is plaintiff in both.  Coca- Cola’s documents relevant to the Australian proceeding will be discovered in that proceeding.     Its  documents  relevant  to  the  New  Zealand  proceeding  will  be discovered in that proceeding.   Any documents relevant to both proceedings (he suggested internal Coca-Cola documents relating to PepsiCo’s use of the bottle in issue  as  an  example) will  be  discovered  in  both  jurisdictions.   Any documents discovered by Coca-Cola in the New Zealand proceeding that are not also disclosed in the Australian proceeding will, by definition, not be relevant to the Australian proceeding.

[33]     Accordingly, he submitted, there is no basis for any concern that Allens may misuse any documents  disclosed solely in  the  New  Zealand  proceeding  for  the purposes of the Australian proceeding.  Further, he referred to Mr Kerr’s statement in his affidavit that Allens only seek to inspect documents discovered in  the New Zealand proceeding for the purpose of that proceeding, and has no intention of using those documents for the purpose of the Australian proceeding.  The Allens solicitors have offered to give an express undertaking, already implied, not to use material obtained on discovery for any other purpose.

[34]     I accept PepsiCo’s submission.   In the light of the broad similarity of the issues raised in the two proceedings, and the fact that Coca-Cola is plaintiff in both proceedings, I do not see any real risk of misuse.  I also accept the force of PepsiCo’s submission that documents disclosed in the New Zealand proceeding but not the Australian proceeding will not, by definition, have any relevance to that proceeding.

Confidentiality undertakings could not be enforced against the Australian solicitors

[35]     For  Coca-Cola,  it   was   submitted  that   the   inspection   of   confidential documents is only possible as a result of the executed Undertakings as to Confidentiality.   Those undertakings are given to the High Court of New Zealand and to the opposing party.  While any breach of the undertakings by New Zealand barristers or solicitors is readily dealt with by the High Court, the Court does not have supervisory jurisdiction over overseas lawyers.  Nor does the Court have ready enforcement powers over overseas residents.  In the circumstances, it was submitted, it should only be where there are compelling reasons to do so that the Court should order disclosure of documents to overseas lawyers.

[36]     On behalf of PepsiCo, Mr Andrew Brown referred me to the decision of Chillwell J  in  Soft-Tech  International  Pty  Ltd  v  Ball,[1]   which  held  that  material obtained from the execution of an Anton Piller order in New Zealand could be inspected both by the plaintiffs’ solicitors and counsel in New Zealand, and its solicitors and counsel in Australia.   He submitted that in the present case, as was noted in Soft-Tech, the undertakings given by the Australian solicitors would be

enforceable (if necessary) by appropriate proceedings in Australia. He further submitted that any breach of an undertaking given to a New Zealand court would be an issue for disciplinary proceedings under New South Wales’ Revised Professional Conduct and Practice Rules 1995, made under the Legal Profession Act 2004 (NSW).

[1] Soft-Tech International Pty Ltd v Ball (1990) 2 PRNZ 254 (HC).

[37]     In Soft-Tech, the plaintiffs had obtained and executed an Anton Piller order against the defendant in New Zealand, claiming breach of a distribution agreement

relating to computer software.  The plaintiff had also issued proceedings in Australia

against other defendants, claiming infringement of copyright in the same software. Soft-Tech then sought orders that the yield from the Anton Piller order could be inspected by its solicitors and counsel both in New Zealand and in Australia, and that it could be used in both proceedings.  The applications were opposed on grounds that included that the Australian solicitors and counsel were beyond the jurisdiction of the New Zealand Court, and that any undertaking given by them would not be enforceable.

[38]     Chillwell J granted both orders.   He observed that an undertaking given in favour of the opposing party could be enforced by appropriate proceedings in Australia, and he took judicial notice of the fact that the standards of the legal profession in the Australian jurisdiction were “on a par with” those in New Zealand.[2]

[2] At 266.

[39]     I am satisfied that the undertakings provided by the Allens solicitors provide adequate protection.   I accept that the professions in New Zealand and Australia adhere to similar professional standards.  This is reinforced by the provisions of the Trans-Tasman Mutual Recognition Act 1997, pursuant to which a solicitor entitled to practise in Australia may be registered to practise in New Zealand.

The discovery regimes in New Zealand and Australia are not coterminous

[40]     Mr  Brendan  Brown  also  submitted  that  the  fact  that  discovery  in  New Zealand is carried out under the test for relevance set out in  Peruvian Guano,[3] whereas  discovery  in  the  Australian  proceeding  is  of  defined  categories  of documents, is a further reason why the Allens solicitors should not be permitted to inpsect documents disclosed in the New Zealand proceeding under the broader relevance test.  In response, Mr Andrew Brown submitted for PepsiCo that when the categories of documents required to be discovered in the Australian proceeding are examined, it is clear that they are equivalent to those required to be disclosed in the

New Zealand proceeding.  Accordingly, he submitted, there is no real difference in

the applicable regimes.

[3] Compagnie Financière et Commerciale du Pacifique v Peruvian Guano Co (1883) 11 QBD 55 (CA) [Peruvian Guano], at 63.

[41]     A copy  of  the  categories  of  documents  that  Coca-Cola  was  required  to discover in the Australian proceeding was annexed to Mr Kerr’s affidavit.  Having reviewed that document, I accept that there is little, if any, real difference in the scope of recovery required in each jurisdiction.

Overall assessment

[42]   Having considered the matters raised by Coca-Cola in opposition both separately and as a whole, I am satisfied that an order should be made that Coca- Cola is to provide inspection of its documents by PepsiCo’s solicitors and counsel, both in New Zealand and Australia.

Coca-Cola’s confidentiality application

Introduction

[43]      In the second application, Coca-Cola seeks an order under r 8.31(3) (now r 8.25(3)) setting aside the claims for confidentiality by PepsiCo and Frucor, and directing them to review the claims.  Coca-Cola also asks the Court to direct PepsiCo and Frucor to file and serve modified lists of documents claiming confidentiality for only those documents that meet the standard of confidentiality identified in the judgment of the Court of Appeal in Port Nelson Ltd v Commerce Commission.[4]

[4] Port Nelson Ltd v Commerce Commission (1994) 7 PRNZ 344 (CA).

[44]     As noted at the beginning of this judgment, I have concluded that it is not appropriate, at this stage, to consider and determine this application.  I set out below the relevant background and my reasons for taking this course.

Background

[45]     In  its  list  of  documents,  filed  on  15  September  2011,  Frucor  listed  no documents in part 1 of the list.  That is, Frucor says there are no documents in its control for which neither privilege nor confidentiality is claimed.   Approximately

600 documents were listed in part 3, for which confidentiality was claimed.  In her

affidavit verifying the list of documents on behalf of Frucor, Ms Joanna Louise

Hollins set out the basis for the claim of confidentiality as follows:

In Part 3 of the Schedule I list the documents that are in the control of [Frucor] and for which [Frucor] claims confidentiality.   The basis for the claim of confidentiality is that these documents contain information which is both confidential and commercially sensitive to [Frucor and/or PepsiCo] and/or their suppliers, and/or are documents which are otherwise treated by [PepsiCo] and [Frucor] as confidential vis-a-vis [Coca-Cola] by reason of the fact that [Coca-Cola] and [Frucor and PepsiCo] are trade competitors.

[46]     In  its  list  of  documents  filed  on  16  December  2011,  PepsiCo  listed  84 documents in part 1 (neither privileged nor confidential).  Approximately 1650 documents were listed in part 3, for which confidentiality was claimed. The basis for the claim for confidentiality, as set out in the affidavit of Ms Elizabeth Nickeson Bilus on behalf of PepsiCo, is in identical terms to that in the affidavit on behalf of Frucor.

[47]     There is no further elucidation or analysis of the claim to confidentiality. Further, the description of the documents in each list (in particular that of PepsiCo) gives little, if any, indication as to why the particular document is confidential or commercially sensitive.

[48]     On  behalf  of  Coca-Cola,  Mr  Brendan  Brown  submitted  that  instead  of applying the proper test for confidentiality, PepsiCo and Frucor had taken the view, and instructed their solicitors accordingly, that any documentation relating to their respective businesses which was not in the public domain was confidential and commercially sensitive vis-a-vis Coca-Cola.  He submitted that PepsiCo and Frucor should be directed to redo their list of documents, in accordance with the proper approach.

[49]     For PepsiCo, Mr Andrew Brown submitted that, given the intense nature of the competitive relationship between Coca-Cola and PepsiCo (who he described as being “perhaps the most acute trade rivals imaginable, on a global scale”) and the consequent “very high degree of sensitivity” over any access by Coca-Cola to PepsiCo and Frucor’s internal records, it is perfectly reasonable for PepsiCo and Frucor  to  adopt  a  “starting  point”  that  anything  not  in  the  public  domain  is

confidential as against Coca-Cola.   He submitted that access to any particular document could be considered, having regard to who it was at Coca-Cola that was seeking to see it.

[50]     He submitted, further, that the present parties are in a unique situation.  This was for two reasons.  The first is the unique trade rivalry involved.  The second is that  the  parties  agreed  that  commercially sensitive  material  could  be  treated  as confidential, and that such documents were to be governed by a “lawyers’/experts’ eyes only” regime, subject to confidentiality undertakings.   If lawyers wanted to show documents to one or more of their clients, they could make a request.

[51]     On 15 March 2012, the day of the hearing of this application, Mr Andrew Brown filed supplementary submissions on behalf of PepsiCo and Frucor, advising that Coca-Cola’s solicitors had been advised by letter on 14 March that PepsiCo and Frucor would undertake a further review of the claims to confidentiality and commercial sensitivity, and would then filed amended lists of documents.   It was proposed that this be completed by 10 May 2012.

[52]     Mr Brendan Brown submitted for Coca-Cola that little comfort could be taken from this advice, and that it was possible the parties would have to return to Court to argue the matter in a few months’ time.  He suggested that the Court might prefer to “give guidance as to what is truly confidential”, in terms of the judgment in Port Nelson.

[53]     It is not appropriate for this Court to “give guidance” when such guidance has already been  given in the Court  of Appeal’s judgment in  Port Nelson.   As Mr Andrew Brown submitted, the Court of Appeal there accepted commercial sensitivity as  being  a  relevant  category  of  documents  for  which  confidentiality  could  be claimed.  On the claims for confidentiality, generally, the Court of Appeal said:[5]

[5] At 348–349.

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 documents 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 referral should be rare where experienced counsel are involved.

[54]     In his judgment in Todd Pohokura Ltd v Shell Exploration NZ Ltd,[6] Dobson J considered  an  application  by Todd  for  an  order  setting  aside  Shell’s  claim  for confidentiality in respect of documents comprising 15 Eastlight files out of its total

75 files of discovered documents.   He observed that there was an “intensely competitive relationship between Shell and Todd” and that “opportunities could arise for one, when appraised of the detail of a weakness in the market position of the other”.[7]   A Shell executive had analysed the confidential documents as falling within seven specific categories.[8]   Dobson J upheld the claim to confidentiality.

[6] Todd Pohokura Ltd v Shell Exploration NZ Ltd HC Wellington, CIV-2006-485-1600, 12 August 2009.

[7] At [13].

[8] See at [6]. It is not clear from the judgment if this analysis was provided at the time confidentiality was first claimed, or in response to the application.

[55]     In Pernod Ricard New Zealand Ltd v Lion-Beer Spirits & Wine (NZ) Ltd,[9] each party had claimed confidentiality for approximately 25 per cent of their discovered documents.  The parties were described as being each other’s “principal competitor in the New Zealand liquor industry”.[10]   Lion sought an order that documents for which confidentiality had been claimed by Pernod Ricard could be disclosed to named Lion employees.  Allan J noted that Lion had not submitted that Pernod Ricard’s claim for confidentiality was ill-founded.   He dismissed the application, on the grounds that Lion had not demonstrated that it was necessary for

documents to be disclosed to Lion employees to enable Lion to prepare for trial.

However, his Honour noted that the Court remained willing to entertain a further application.

[9] Pernod Ricard New Zealand Ltd v Lion-Beer Spirits & Wine (NZ) Ltd CIV-2011-404-1664, 1

December 2011.

[10] At [10].

[56]     In his supplementary submissions, Mr Andrew Brown advised that Frucor and PepsiCo proposed to conduct a document-by-document analysis, adopting the yardsticks outlined by the courts in Port Nelson, Todd Pohokura v Shell and Pernod Ricard v Lion.  He also advised that where confidentiality or commercial sensitivity is claimed, categories of documents would be created and outlined, as was done in Todd Pohokura v Shell and Pernod Ricard v Lion.   He also advised that where confidentiality could be dealt with by a greater use of redacting, then that would be done.

[57]     In the circumstances, I consider it appropriate to defer consideration and determination of Coca-Cola’s application to set aside Frucor’s and PepsiCo’s claims to confidentiality until such time as amended lists of documents have been filed and served.   In the event that the matter cannot be resolved between counsel, then the application may be brought on for further hearing.

Result

[58]     There will be an order that documents discovered by Coca-Cola may be disclosed to the Australian solicitors, Allens Arthur Robinson, instructed by PepsiCo and Frucor.

[59]     In accordance with my Minute of 15 March 2012, Coca-Cola’s application to set aside the confidentiality claims by Frucor and PepsiCo is to be called for mention in a Chambers List on the first available date after 10 May 2012, in order for the

Court to be advised whether the application requires further hearing.

Andrews  J