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Vector Gas Contracts Ltd v Contact Energy Ltd

Vector Gas Contracts Ltd v Contact Energy Ltd

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IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2014-485-10564 [2014] NZHC 3171

IN THE MATTER
of an application pursuant to article 27 of

the First Schedule of the Arbitration Act
1996 for non-party discovery

BETWEEN

VECTOR GAS CONTRACTS LIMITED First Applicant

VECTOR GAS LIMITED Second Applicant

SHELL (PETROLEUM MINING) COMPANY LIMITED

Third Applicant

TODD PETROLEUM MINING COMPANY LIMITED

Fourth Applicant

AND

CONTACT ENERGY LIMITED First Respondent

GENESIS ENERGY LIMITED AND OTHERS

Second Respondents

GREYMOUTH PETROLEUM HOLDINGS LIMITED AND OTHERS Third Respondents

MIGHTY RIVER POWER LIMITED AND OTHERS

Fourth Respondents

OMV NEW ZEALAND LIMITED AND ANOTHER

Fifth Respondents

TRUSTPOWER LIMITED AND ANOTHER

Sixth Respondents

MITSUI E&P AUSTRALIA PTY LIMITED

VECTOR GAS CONTRACTS LIMITED v CONTACT ENERGY LIMITED [2014] NZHC 3171 [5 December
2014]

Seventh Respondent

NEW ZEALAND OIL & GAS LIMITED AND OTHERS
Eighth Respondents

ORIGIN ENERGY NEW ZEALAND LIMITED
Ninth Respondent

ORIGIN ENERGY RESOURCES NZ LIMITED AND OTHERS
Tenth Respondents

Hearing: 2 December 2014

Counsel:

B A Scott for First and Second Applicants
L J Taylor QC with A P Parker for Third Applicant
D J Cooper with K J Dobbs for Fourth Applicant

T C Stephens with S J Fairbrother for First, Second, Third, Fifth, Ninth and Tenth Respondents

L Clark for Seventh Respondent (abides)
No appearance for Fourth, Sixth and Eighth Respondents

Result
Judgment:

5 December 2014

Reasons
forJudgment:

11 December 2014

REASONSFOR JUDGMENT OF THE HON JUSTICE KÓS (Non-party discovery)

[1] The applicants are parties to the Kapuni Gas Contract.1 Pricing for each tranche of gas must be agreed. The applicants do not agree price. Where there is disagreement, a fair and reasonable price is to be set by arbitrators. Three arbitrators have been appointed.2

[2] What the applicants do agree is that it would be most helpful in setting a fair and reasonable price for their gas – i.e. a market price – to have evidence of other

1 Two Vector companies are the buyers; Shell and Todd are the sellers.
2 The Hon Michael McHugh QC, AC, former Judge of the High Court of Australia, Mr John
Sheahan QC of the New South Wales Bar, and Emeritus Professor Lew Evans of Wellington.

sales prices in cognate gas markets. And, for reasons explained shortly, prices for the supply of LPG.

[3] The arbitrators agree. They have approved the making of an application to this Court for judicial assistance to obtain such evidence. It takes the form of an application for non-party discovery. It is made against other participants in markets for sale of natural gas (in annual quantities of more than 20 T), and LPG (in volumes greater than 1000 tonnes, unless for export). Those participants are the respondents.

[4] The respondents do not agree.3

Background

[5] Vector Gas Contracts Ltd and Vector Gas Ltd (Vector) are the buyer parties under a gas supply contract for production for the Kapuni Gas Field. The contract was entered in 1967. Shell and Todd, the other applicants,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] NZHC 3171
Decision Date: 5 December 2014

CaseChat Overview and Summary

In the case of Vector Gas Contracts Ltd v Contact Energy Ltd, the High Court of New Zealand granted an application for non-party discovery. The applicants, parties to the Kapuni Gas Contract, sought documents from various respondents to assist in setting a fair and reasonable price for gas. The Court had to decide several issues, including the limits of its jurisdiction to grant non-party discovery, the relevance of the sought-after documents, the necessity of non-party discovery, and the adequacy of confidentiality protection. The Court found that non-party discovery was necessary and relevant, as the existing market information was incomplete. The Court also determined that the proposed confidentiality measures were adequate, with some modifications. Ultimately, the Court granted the application for non-party discovery with the specified terms and conditions.

Orders