Bayer New Zealand Limited v Ministry for Primary Industries [2020] NZCA 463 (1 October 2020)

Last Updated: 6 October 2020

IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA

CA273/2020 [2020] NZCA 463

	BETWEEN	BAYER NEW ZEALAND LIMITED Appellant
	AND	MINISTRY FOR PRIMARY INDUSTRIES Respondent

Court:	Brown and Goddard JJ
Counsel:	S V McKechnie and A R Winsley for Appellant E N C Lay and D J Watson for Respondent T C Goatley and E F R Bello for Frucor Suntory New Zealand Limited
Judgment: (On the papers)	1 October 2020 at 10.00 am

JUDGMENT OF THE COURT

1. Frucor Suntory New Zealand Ltd is joined as second respondent in this appeal subject to the following conditions:

(a) it must file and serve its written submission by 20 October 2020;

(b) it may attend the hearing of the appeal; and

(c) it may make oral submissions if the Court decides that the Court would benefit from such submissions at the time of the hearing.

2. Costs on the application for joinder are reserved to be dealt with at the hearing of the appeal.

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REASONS OF THE COURT

(Given by Brown J)

Introduction

• [1] This appeal by Bayer New Zealand Ltd (Bayer) against a declaration made by the High Court^[1] is scheduled for hearing on 28 October 2020. Frucor Suntory New Zealand Ltd (Frucor) has applied for an order for joinder as second respondent in the appeal. The application is opposed by Bayer. The respondent, Ministry for Primary Industries (MPI), abides the Court’s decision on the application.
• [2] The appeal concerns the appropriate regulatory classification of Bayer’s product, Berroca Forward. Bayer challenges the High Court’s decision refusing to make the declarations sought by Bayer and granting a declaration sought by MPI that Berroca Forward is a non-compliant formulated caffeinated beverage (FCB) under the Australia New Zealand Foods Standards Code (the Code). On 5 June 2020 the respondent filed a memorandum giving notice of intention to support the judgment on other grounds.

The application for joinder

• [3] On 4 June 2020 Frucor filed in this Court a notice of appearance. Bayer having taken the position that Frucor did not have rights of appearance, on 27 August 2020 Cooper J directed that Frucor should apply for joinder as a respondent if it wished to participate in the appeal. Hence the present application under r 48(1) of the Court of Appeal (Civil) Rules 2005.
• [4] In an affidavit in support of the application Mr Erceg, the sales director of Frucor, explains the potential impact of the proceedings on Frucor. In particular it is said that this Court’s decision on the appeal could significantly affect how beverage manufacturers in New Zealand (including Frucor) produce and market FCBs, that is, whether in compliance with the strict requirements of the Code or in accordance with the New Zealand Food (Supplemented Food) Standard 2016.
• [5] Bayer resists the application on the grounds that:

(a) Frucor’s interests are not directly affected by the appeal;

(b) Frucor did not play an active role in the High Court hearing;

(c) the nature of Frucor’s intended role is unclear; and

(d) Frucor’s participation is not required for the consideration of the appeal.

Analysis

• [6] We have had the benefit of detailed written submissions from Bayer and Frucor with reference to the application. We recognise that it is not common for persons who have not been active participants in a first instance hearing to participate in an appeal.
• [7] However the present case is a little out of the ordinary. Frucor made the original complaint to MPI in respect of the regulatory classification of Berroca Forward. Frucor (along with three other organisations) was served with the originating documentation in the High Court proceedings. A minute of Associate Judge Johnston of 27 August 2019 directed that any of the non-parties who had been served could file and serve an appearance within ten working days.
• [8] On 9 September 2019 Frucor duly filed in the High Court proceeding a notice of appearance reserving its rights in the event that another person became a party to the proceeding or that a party took a step in a proceeding that was against Frucor’s interests. However, as Bayer notes, Frucor did not play an active role in the hearing.
• [9] The proceeding was brought under the Declaratory Judgments Act 1908, s 4 of which states:

4 Effect of declaratory orders

Any declaration so made on any such originating summons shall have the same effect as the like declaration in a judgment in an action, and shall be binding on the person making the application and on all persons on whom the summons has been served, and on all other persons who would have been bound by the said declaration if the proceedings wherein the declaration is made had been an action.

• [10] We consider that it follows from the fact of service on Frucor and the notice of appearance filed by Frucor in the High Court that the High Court judgment is res judicata so far as Frucor is concerned.
• [11] In these circumstances we consider it is appropriate that Frucor should have an opportunity to be heard in relation to issues that may affect it arising from the appeal and MPI’s notice of intention to support the judgment on other grounds. Indeed it might well have been argued by Frucor that in these circumstances it was a party to the High Court proceedings, albeit one that took no active role, and should therefore have been named as a respondent and served when Bayer’s appeal was filed.^[2] But this point was not taken by Frucor, so we need not decide it.
• [12] In its written submissions Frucor recognised that in order to ensure the appeal should not be needlessly elongated, Frucor could be permitted to appear on the appeal and speak only to matters that might affect it or that relate to different arguments from those addressed by MPI. We consider that whether Frucor should have the opportunity to make oral submissions in addition to its written submissions is a matter for consideration by the hearing panel. Consequently, as a condition of joinder we direct that Frucor may only make oral submissions if the Court decides at the time of hearing it would benefit from such submissions.

Result

• [13] Frucor Suntory New Zealand Ltd is joined as second respondent in this appeal subject to the following conditions:

(a) it must file and serve its written submission by 20 October 2020;

(b) it may attend the hearing of the appeal; and

(c) it may make oral submissions if the Court decides that the Court would benefit from such submissions at the time of the hearing.

• [14] Costs on the application for joinder are reserved to be dealt with at the hearing of the appeal.

Solicitors:
Simpson Grierson, Wellington for Appellant
Crown Law Office, Wellington for Respondent
Bell Gully, Auckland for Frucor Suntory New Zealand Limited

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^[1] Bayer New Zealand Ltd v Ministry for Primary Industries [2019] NZHC 789.

^[2] See r 31(1)(b) of the Court of Appeal (Civil) Rules 2005.