Yashili New Zealand Dairy Co Limited v AsureQuality Limited
[2022] NZHC 332
•1 March 2022
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-294
[2022] NZHC 332
BETWEEN YASHILI NEW ZEALAND DAIRY CO LIMITED
Plaintiff
AND
ASUREQUALITY LIMITED
Defendant
Hearing: 24 February 2022 (by AVL) Appearances:
A E Murray for Plaintiff
A R Durrant for Defendant
Judgment:
1 March 2022
JUDGMENT OF ASSOCIATE JUDGE LESTER
YASHILI NEW ZEALAND DAIRY CO LIMITED v ASUREQUALITY LIMITED [2022] NZHC 332
[1 March 2022]
[1]This judgment concerns an application for further and better discovery.
[2] The one issue remaining between the parties in respect of discovery is the rump of an application by AsureQuality Limited (AQL) for a number of discovery orders and for further particulars.
[3] Since that application was filed, counsel have worked through AQL’s requests to the extent that the day before the hearing on 25 February 2022, AQL’s counsel advised that only one issue remained.
Background to underlying dispute
[4]I adopt Mr Durrant’s summary from para [2] of his submissions as follows.
[5] The underlying dispute in this proceeding relates to whether or not AQL breached any alleged duty owed to Yashili New Zealand Dairy Co Limited (Yashili) in relation to testing carried out on samples submitted by Yashili from three batches of its base powder. The claim relates to AQL’s certificates of analysis dated 22 November 2019 (batch 201732), 5 April 2020 (batch 201778), and 7 April 2020 (batch 201780).
[6] The issues between the parties include whether AQL failed to carry out the contracted testing services accurately and/or to a reasonable standard, whether AQL incorrectly reported the results of its testing or incorrectly certified to Yashili that the results of the testing carried out by AQL showed that the samples of base powder were within specification.
[7] There are a number of other issues but for present purposes it is sufficient to say that AQL disputes incorrectly testing or reporting its results to Yashili in respect of the above batches.
Legal principles – particular discovery
[8] These were not in dispute and, again, I adopt Mr Durrant’s summary of the principles from para [8] of his submissions.
[9] Pursuant to High Court Rule 8.19, the Court may order Yashili to file an affidavit and disclose documents in its control if there are grounds for believing that Yashili has not discovered documents that should have been discovered.1 The belief may arise from evidence, the nature or circumstances of the case, or from any document filed in the proceeding.
The documents sought
[10] The remaining category of documents sought is discovery of “all raw data for all testing done on the base powder batches and finished products at issue in this proceeding, including associated standard operating procedures (SOPs) / laboratory specific methods for testing undertaken by the laboratories.
[11] AQL says this information is relevant as Yashili’s claim alleges AQL incorrectly reported test results and breached its obligations in relation to the testing of the batches. Yashili’s pleading refers to testing carried out by the “Chaozhou Factory” and Eurofins on the base powder and finished products manufactured with the base powder which showed the product was not to specification.
[12] Accordingly, AQL asserts the test results from the pleaded laboratories are at the heart of Yashili’s claim. AQL submits it follows that the requested raw data and SOP relating to that testing are relevant by reference to the pleadings. AQL notes that Yashili has discovered test certificates which appear to be only brief reporting documents but it has not discovered the full raw data sitting behind each certificate.
Plaintiff’s position
[13] Yashili does not dispute that the material sought would be relevant but says the documents sought are not within its power and control. It also notes that as a preliminary point, AQL’s application for discovery in respect of the remaining disputed category is limited to “all raw data for all testing done on the batches of base powder and finished products”. The application did not seek SOPs or laboratory
1 Andrew Beck and others McGechan on Procedure: (online ed, Thomson Reuters) at [HR8.19].
specific methods for testing undertaken by the laboratories referred to in the pleading. Nor are these categories referred to in the affidavit in support.
[14] There is validity in the above point. However, as the request has now been made and given Yashili does not suggest its opposition in relation to these matters differs from its opposition to the application for the raw data, the present application should not turn on what is essentially a pleading matter. Had Yashili been in the position to provide the SOPs and laboratory method documents when requested, the fact such were not included in the application would be a matter for costs.
[15] Yashili’s short answer to the application is that it does not hold the requested information and it does not have the ability to require it to be provided. The information is held by Eurofins as an independent third party. Yashili also denies Eurofins is its expert in order to counter the applicant’s submission that Yashili’s expert ought to disclose the requested information to the plaintiff who would then discover it in the ordinary way. Information from the “Chaozhou Factory” has been requested by Yashili.
Control
[16] Rule 1.3 of the High Court Rules 2016 (the Rules) provides that control in relation to a document, means:
(a)possession of the document; or
(b)a right to possess the document; or
(c)a right, otherwise under these rules, to inspect or copy the document.
[17]McGechan on Procedure says:2
A document is in the control of the party, even in the possession of another, if the party has an enforceable right to access the document: Biggs v Biggs [[2018] NZHC 1592], [2018] NZFLR 580] at [228] citing
Dotcom v Attorney-General [2014] NZHC 1343.
2 Andrew Beck and others McGechan on Procedure: High Court Rules 2016 (online ed, Thomson Reuters) at [HR8.7.02].
[18] In Dotcom v Attorney-General, Winkelmann J concluded, in relation to one category of documents subject to the application, Mr Dotcom was entitled to that information as he had an entitlement pursuant to the principles of the Privacy Act. While that entitlement was not one that could be enforced through the Court, it was an entitlement “for which procedural pathways existed for enforcement.”3
[19] Here, the applicant does not assert that Yashili has a “procedural pathway for enforcement” that would give it access to the requested documents. Other than submitting Eurofins, as Yashili’s expert, ought to disclose the requested information to Yashili pursuant to the Code of Conduct for Expert Witnesses, AQL does not say Yashili can require production of the documents. Again, Yashili says Eurofins is not its expert.
[20] At the heart of AQL’s application is that Yashili has not done nearly enough to request the information. The applicant relies on Potter J’s decision in Inverness Medical Switzerland GMBH v MDS Diagnostics Ltd, where her Honour said:4
In a commercial cause where there is a relationship pursuant to which the defendant may reasonably be expected to gain access to relevant documents, then the defendant should take all reasonable steps to obtain that documentation and to make discovery. Fairness and openness in the discovery process demands as much.
[21] I agree with her Honour’s comment as to what the Court expects parties to do in the interests of securing the “just speedy and inexpensive determination of any proceeding or interlocutory application”.5 It is also consistent with r 8.2 of the High Court Rules, which provides:
8.2 Co-operation
(1)The parties must co-operate to ensure that the processes of discovery and inspection are—
(a)proportionate to the subject matter of the proceeding; and
(b)facilitated by agreement on practical arrangements.
(2)The parties must, when appropriate,—
3 Dotcom v Attorney-General [2014] NZHC 1343 at [76].
4 Inverness Medical Switzerland GMBH v MDS Diagnostics Ltd HC Auckland CIV-2007-404-748, 21 December 2007 at [37].
5 High Court Rules 2016, r 1.2.
(a)consider options to reduce the scope and burden of discovery; and
(b)achieve reciprocity in the electronic format and processes of discovery and inspection; and
(c)ensure technology is used efficiently and effectively; and
(d)employ a format compatible with the subsequent preparation of an electronic bundle of documents for use at trial.
[22] Yashili seeking to obtain relevant documents pursuant to its obligations to co-operate, is different from Yashili having an enforceable right to require a third party to produce documents. AQL’s point, however, is that Yashili has not, since this proceeding was issued, made a concerted effort to request the documents.
[23]The applicant recognising that, says at para 31 of its submissions:
If Yashili requests (or already has requested) the raw data and standard operating procedures from its experts and related entity, and those entities genuinely refuse to provide the requested documents, it would resolve this aspect of the discovery application. However, if the experts refuse to provide the data, it will give rise to future admissibility issues.
[24]As McGechan notes at [HR8.2.01]:6
There is a strong emphasis on co-operation in the rules relating to discovery and inspection.
[25] For that co-operation extends to taking practical steps to see that discovery is completed efficiently. I am satisfied that Yashili here should, through its solicitors, make a formal request to Eurofins for the documents sought by AQL. The alternative to requiring that practical step is AQL will have to apply for non-party discovery. To read down Yashili’s obligation of co-operation so that it did not have to make a formal call for the documents would be inconsistent with the approach adopted by Potter J in Inverness Medical7 and with r 1.2. I note her Honour’s comments pre-date r 8.2 being part of the Rules.
[26] I advised counsel during the hearing that I intended to direct that Yashili, through its counsel, make a formal request to Eurofins for the requested information
6 Andrew Beck and others, above n 1.
7 Inverness Medical Switzerland GMBH v MDS Diagnostics Ltd, above n 4.
on the basis that Yashili was involved in High Court proceedings with AQL, the documents sought were important to the litigation and it was in the interests of efficiency that the documents be provided voluntarily if that was possible. I now make that direction.
[27] I emphasise that Ms Murray, counsel for Yashili, was not in a position to consent to that direction but given para [31] of AQL’s submissions set out at [23] above, Ms Murray recognised that it would meet the applicant’s concerns. Yashili is to make that request through its solicitors within 10 working days of the date of this Judgment and provide a copy of that request to counsel for AQL.
[28] If the request is successful then the documents received by Yashili will be discoverable under its ongoing obligation to provide discovery. If Eurofins declines to make the information available, Yashili’s counsel is to advise AQL’s counsel accordingly.
[29] For the avoidance of doubt, this direction does not create any enforceable obligation on Eurofins. It has not been heard. The direction I make is to require Yashili to meet its obligation to co-operate in relation to discovery and to call for what will be important documents in the proceeding.
Costs
[30] I heard counsel briefly in respect of costs. I consider the applicant has been successful. Ms Murray accepted she understood that AQL was calling for it to make the request referred to at [23] above. Her instructions did not permit that to occur.
[31] Accordingly, the hearing (which lasted only half an hour), was brought about through those instructions.
[32]There is an award of costs in favour of the applicant on a 2B basis.
Associate Judge Lester
Solicitors:
Fee Langstone, Auckland DLA Piper, Auckland
2
2
0