Ho Wiles Limited v Bar's Products International Limited [2024] NZHC 1281 (22 May 2024)

Last Updated: 14 June 2024

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-991 [2024] NZHC 1281

UNDER	the Contractual Remedies Act 1979 the Fair Trading Act 1986 the Trade Marks Act 2002
BETWEEN	HO WILES LIMITED First Plaintiff BARS LEAKS NZ LIMITED Second Plaintiff BAR’S LEAKS (AUSTRALIA) PTY LIMITED Third Plaintiff BAR’S LEAKS AUSTRALIA LP Fourth Plaintiff
AND	BAR’S PRODUCTS INTERNATIONAL LIMITED Defendant

Hearing:	14 May 2024
Appearances:	C L Elliott KC and C Brown for Plaintiffs J M Glover, S Patterson and L Carter for Defendant
Judgment:	22 May 2024

JUDGMENT No. 1 OF ASSOCIATE JUDGE LESTER

(Discovery)

This judgment was delivered by me on 22 May 2024 at 3:30 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

.........................................................

HO WILES LIMITED v BAR’S PRODUCTS INTERNATIONAL LIMITED [2024] NZHC 1281 [22 May 2024]

Introduction

• [1] This is a dispute over trademarks. The plaintiffs, collectively referred to as “HOW”, say they own the BAR’S BUGS trademark.

• [2] The defendant, BAR’S Products International Limited (BAR’S), says it owns that trademark along with BAR’S LEAKS. BAR’S counterclaims are for what it says are HOW’s misuse of the BAR’S BUGS trademark and HOW failing to comply with its obligations in its Licence Agreement with BAR’S to promote BAR’S LEAKS.

• [3] HOW and BAR’S (or their predecessors) have been in business together for approximately 50 years. The Licence Agreement between them dates from 1979 and it is common ground that in many respects, the Licence Agreement is outdated, including that the range of products the Licence Agreement covers, has been overtaken. The products sold under the above trademarks are automotive maintenance or cosmetic products.

• [4] At its most basic, HOW says that, by what it calls the ‘security agreement’, BAR’S agreed to transfer the BAR’S BUGS trademark to it on a specified event which has now occurred. HOW, in the alternative, says BAR’S is estopped from denying HOW is entitled to the BAR’S BUG trademark.

• [5] BAR’S says the Licence Agreement is at an end, which is disputed by HOW. On BAR’S case, HOW’s continued use of the BAR’S BUGS trademark is a breach of BAR’S rights and BAR’S says further that because HOW acted as if it owned BAR’S BUGS trademark, it neglected the BAR’S LEAKS trademark — indeed BAR’S asserts HOW actively repressed the BAR’S LEAKS trademark. BAR’S raises a clean hands defence in relation to the estoppel claim.

• [6] Both HOW and BAR’S have sought discovery. Counsel are agreed on the relevant principles, both referring to the well-known four-stage test from Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd.¹ The four stages are:

1. Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760, [2018] NZAR 600 at [14].

(a) Are the documents sought relevant, and if so, how important will they be?

(b) Are there grounds for belief that the documents sought exist? This will often be a matter of inference. How strong is that evidence?

(c) Is discovery proportionate, assessing proportionality in accordance with Part 1 of the Discovery Checklist in the High Court Rules?

(d) Weighing and balancing these matters, in the Court’s discretion applying rule 8.19, is an order appropriate?

• [7] As I will address in more detail when dealing with the particular categories of discovery sought by each party, the focus of submissions was on relevance and proportionality. This arose because many of the categories of documents sought were expressed in very open terms, often without a date range being specified. Discussions with counsel during the hearing helped to focus some of the categories and again, this will be discussed below when identifying the parties’ true areas of concern.

• [8] In respect of some categories of documents, I suggested what was really being sought was an explanation as to why documents did not exist and counsel were content with the idea that where that issue arose a direction could be made for an explanation to be provided rather than a bare statement under oath that documents in a category do not exist.

Discovery sought by HOW

• [9] Three broad categories of documents are sought by HOW. The first was dealt with by Mr Elliott KC, counsel for HOW, under the heading: “BAR’S LEAKS launch documents”. That is said to involve three sub-categories, two of which I need to address.

• [10] The third sub-category is labelled “Status of Substance Documentation”. BAR’S provided additional discovery on this category, which HOW is reviewing.

HOW reserves its position on the third sub-category of discovery. Accordingly, I record that the application insofar as it concerns that category, remains alive.

• [11] The context of the “BAR’S LEAKS Launch” category of discovery is BAR’S counterclaim that:

HOW have “engaged in a deliberate strategy of neglecting the BAR’S LEAKS range of products ...

• [12] BAR’S says that:

Since at least 1997, [BAR’S] has offered [HOW] additional BAR’S LEAKS products to expand the BAR’S LEAKS range in New Zealand and Australia.

BAR’S pleads 20 specific products offered between 1997 and 2012.

• [13] HOW does not dispute it was offered additional BAR’S LEAKS products but says that when it sought information from BAR’S from which it could satisfy itself that the products were “viable commercial products”, it was fobbed off by BAR’S. BAR’S accepts requests for information were received but says the requests were for information HOW was not entitled to demand and in reality, the requests were HOW putting up barriers to taking on the products.

• [14] In any event, the focus of HOW’s discovery application is aimed at ascertaining that the offered products were not “paper products”, that is, they were not products that physically existed, only conceptually or at perhaps a preliminary or prototype stage, but were real in the sense they could be supplied.

• [15] Mr Elliott made it clear this was not an allegation that BAR’S was somehow acting dishonestly in offering products that did not exist but if the products were in fact not at a stage where they could be readily supplied, then BAR’S cannot complain of them not being purchased by HOW.

• [16] HOW sought the following two sub-categories of documents said to arise under the BAR’S LEAKS Launch category:

(a) communications and invoices with third party agents who would assist in the development of the BAR’S Leaks new products (such as chemists or product formulators) and communications, invoices and packaging for actual products launched and sold by [BAR’S] or its licensees or distributors internationally (the Development Documentation); and

(b) communications about the capital investments [BAR’S] alleges it put into machinery, materials and product development and the litigation protecting the marks (the Capital Investment Documentation).

• [17] It is necessary to explain the background to BAR’S whose full name is BAR’S Products International Ltd. BAR’S separated from what became BAR’S USA many years ago. BAR’S USA retained the United States and Canadian markets and BAR’S retained the rest of the world. BAR’S USA was the manufacturer of the products, or at least controlled their manufacture. BAR’S sourced product or ingredients from BAR’S USA until 2004.

• [18] In 2004, a dispute arose between BAR’s and BAR’S USA arising from BAR’S USA selling BAR’S products labelled under the name ‘Rislone’ into the Australian market. That dispute was resolved in a settlement reached in 2014.

• [19] During the hearing on 14 May 2024, Mr Elliott clarified that HOW did not seek what might be called “evidence of ability to supply” documents for products offered by BAR’S prior to BAR’S dispute with BAR’S USA in 2004 as HOW accepts BAR’S USA had the ability to manufacture the offered products. This “evidence of ability to supply” really captures both of the sub-categories noted at [16].

• [20] While I am satisfied that HOW is entitled to pursue the issue of whether BAR’S was able in fact to supply the offered products, I do not consider the breadth of discovery HOW seeks is proportionate. I discussed with counsel that evidence from BAR’S that it was in fact supplying the specified products, either at the time of offer to HOW or immediately thereafter, would be evidence that the products existed and could be supplied by BAR’S. How BAR’S sourced or manufactured and products

and the other details sought by HOW are not relevant if in fact the product existed and was being sold to other licensees of BAR’S.

• [21] Accordingly, in respect of this category, I decline to order the scope of discovery sought by HOW, but I direct that BAR’S is to first specify the dates on which the products listed at paragraph [218] of its counterclaim were offered to HOW. In respect of those products offered to BAR’S after BAR’S dispute with BAR’S USA (that is after 2004), it is to discover manufacturing, stock or sales records that establish it was in fact manufacturing or supplying the specified product. I appreciate this description of the discovery to be provided is in general terms but its focus is to establish that the particular products were not “paper products” (to use Mr Elliott’s expression), but were able to be supplied at the time they were offered to HOW or, within such further time as would be reasonably expected to apply in this particular market. For example, a warehouse record showing there were 10,000 stock units held for a particular item will probably suffice or, similarly, sales records that showed say, the six months following the offer to HOW, 2,000 units were sold internationally. The specifics will depend on the nature of the item. Given the focus of what HOW wants to confirm through this discovery, counsel should be able to resolve this directly. Leave is reserved to apply further if any issues arise.

• [22] Before moving off this category, I mention that Mr Elliott submitted the discovery sought was to establish that BAR’S was offering a “viable commercial product”. That was why discovery was sought of the Development Documentation, in particular, regulatory verification or testing. Mr Elliott went so far as to say that:

... the Development Documentation is required to prove that [BAR’S] actually developed the alleged new BAR’S LEAKS products (as it says it did, which [HOW] denies), that those products exist and met required testing or regulatory standards (i.e. they are safe to use and do what they say they do) and that they are currently, or have previously been, sold elsewhere in the world. These documents are necessary, indeed critical, for [BAR’S] claims to be properly assessed and tested at trial.

• [23] BAR’S says it has collated approximately 900 material safety data sheets for products, the large number representing the range of jurisdictions in which the products have been sold and the different languages spoken as well as different product

specifications over time. It says it has offered to provide one material safety data sheet in respect of each relevant product. It remains willing to do that.

• [24] I consider this offer by BAR’S is sufficient to address HOW’s desire for evidence that the offered products satisfy testing or regulatory standards. In a particular case, there may be an argument as to whether the safety data sheet is relevant to New Zealand. However, that can be assessed on a product-by-product basis. If it is clear that the only safety data sheet that BAR’S can supply is not relevant to the New Zealand market, then BAR’S will know it will need to provide further discovery that the offered products in fact met regulatory/safety requirements for Australasia because if they did not, then they could not be sold in those markets. Leave is reserved in that regard should it be required.

• [25] I do not accept discovery around BAR’S Capital Investment Documentation in respect of machinery, packaging, warehousing and so on is required. How BAR’S sourced its product is not relevant. The issue that HOW seeks to explore is BAR’s ability to supply.

International Licensee or distributor documents

• [26] In its counterclaim, BAR’S refers to cl 13 of the Licence Agreement as follows:

Pursuant to clause 13 of the 1979 written licence agreements, the licensees agree to diligently devote their time to the development of sales of Bar’s Products, in accordance with good business standards and to use their best efforts to distribute, procure, and promote sales and create a demand for Bar’s Products, and agree further to endeavour to show a proportionate increase in sales within the territory being developed over each preceding year’s comparable to the average increase of other territories assigned in the world.

• [27] HOW’s request for discovery focuses on the second part of cl 13 stating after the comma following “BAR’S products”, in the fifth line.

• [28] Recall the counterclaim alleges HOW deliberately neglected the BAR’S LEAKS product.
• [29] HOW seeks the following documents in this category:

(j) Documents relating to [BAR’s] alleged intentional licensing activities including marketing materials and documentation relating to BAR’S alleged oversight and control of the said materials and the licensees’ alleged activities (referred to in the correspondence as category 7).

(k) Documents relating to royalties, purchases and sales of BAR’S BUGS and BAR’S LEAKS products by international licensees or distributors (referred to in the correspondence as category 5(a)).

• [30] Mr Elliott submitted this material is required as it will provide a yardstick in relation to HOW’s sales history of BAR’S LEAKS products. BAR’S alleges HOW failed to diligently devote its time to the development of sales of the BAR’S LEAKS’ products. While there can be difficulties in directly comparing different markets, I accept this material is relevant.

• [31] The allegations in the counterclaim are not restricted to a time period. Accordingly, it is difficult for me to put a timeframe around the scope of discovery to be provided by BAR’S in this category.

• [32] Should the discovery be limited to the BAR’S LEAKS products which HOW was actually marketing? There would seem little relevance or point requiring BAR’S to provide discovery in relation to products that HOW was not selling.

• [33] Accordingly, I am satisfied that documents in this category are discoverable. Ms Glover, counsel for BAR’S, is to advise Mr Elliott if the allegations of breach of cl 13 of the Licence Agreement can be restricted to a particular time period. Given limitation issues,² I should have thought this would need to be particularised in any event. If Ms Glover limits the period of breach then the required disclosure will be limited to that period.

• [34] Counsel are to confer on the issue of whether the discovery should include data relating to products not sold by HOW. If agreement on that issue cannot be reached then counsel may request a telephone conference with me. However, in the first instance BAR’S are directed to provide discovery of the international licensee

² BAR’S pleads a breach of cl 13 as a counterclaim and not part of its clean-hands defence.

documents for the products sold by HOW for the period of alleged breach it asserts, such to be specified by Ms Glover within five working days. Again, leave is reserved to apply further if issues arise in respect of this category.

The Rislone settlement agreement

• [35] As touched on above, there was a disagreement between BAR’s and BAR’s USA relating to BAR’s USA selling what were BAR’S BUGS/BAR’s LEAKS products in Australasia under the Rislone name. There was apparently 10 years of hard-fought litigation between BAR’S and BAR’S USA which ultimately settled in 2014.

• [36] The settlement agreement is sought because HOW says it will:

...directly inform the extent to which, if at all, [BAR’s] exercised any control over the trade marks.

• [37] Mr Elliott notes the presence of the Rislone product in the market has negatively impacted the performance of the HOW group sales.

• [38] Ms Glover submits the terms of the settlement agreement are not relevant. It is not in dispute BAR’S USA’s Rislone’s products are still being sold in Australasia. It is readily ascertainable from the market place that those products do not bear any BAR’S trademarks. The Rislone products originally had a BAR’S LEAKS logo.

• [39] Mr Elliott says this issue is relevant to the breach of cl 13 of the Licence Agreement by BAR’S summarised at [26] above.

• [40] In short, HOW alleges that BAR’S allowed a major competitor to remain in the Australasian market.

• [41] The difficulty with that submission is unless the terms of the separation agreement between BAR’S USA and BAR’s permitted BAR’S to prevent BAR’S USA from selling BAR’S products under a different label, BAR’S did not have the ability to force BAR’S USA from not selling re-branded BAR’S products.
• [42] Unless BAR’S had the ability to prevent BAR’S USA selling re-branded BAR’S products, then the settlement agreement is not relevant. At the heart of HOW’s argument is that BAR’S did not look after its licensees interests in Australasia when it failed to obtain agreement from BAR’S USA not to sell re-labelled products in that market.

• [43] Counsel submitted that a number of documents form the BAR’S and BAR’S USA litigation have already been discovered.

• [44] If it is the case that the separation agreement between BAR’S USA and BAR’S prohibited BAR’S USA from re-labelling products and selling them offshore, then the settlement agreement should be disclosed, subject to confidentiality being addressed. However, if BAR’S never had the ability to prevent BAR’S USA from entering the Australasian market under a different name, then it is not clear to me what obligation HOW is saying BAR’S owed it, that was breached.

• [45] As to the terms of the separation agreement between BAR’S and BAR’S USA, such should be disclosed at least to the extent that it concerns this issue. I direct the separation agreement be discovered.

• [46] I will say something about confidentiality at the conclusion of this judgment.

• [47] I am conscious that the directions I have given are subject to a number of caveats and further clarification. That is a result of the discussions during the hearing on 14 May 2024 that identified that HOW wanted to explore. If the above rulings and observations are not sufficient to allow any of these issues to be addressed, leave is reserved for counsel to seek a continuation of the hearing by AVL if necessary.

Discovery sought by BAR’S

Categories 3, 4, 13, 14 and 15

• [48] The first categories of documents sought concern HOW’s negotiations regarding the possible or actual sale of named automotive products from other suppliers in Australasia prior to 1 January 2023.
• [49] Ms Glover submitted BAR’S only learnt that HOW had negotiations with other suppliers because such is referred to in HOW’s statement of claim. HOW pleads due to “encouragement support and assurances” given by BAR’S, HOW failed to pursue, or refused to pursue, commercial opportunities, including the sale of automotive products listed in the statement of claim.

• [50] The short answer to HOW’s objection to producing these documents is that HOW’s pleading at para [54] of its second amended statement of claim is denied. At its most basic, discovery is required of matters in issue. HOW has pleaded turning down certain business opportunities as, in essence evidence of reliance and detriment. That pleading is denied therefore HOW is required to give discovery in relation to this disputed issue.

• [51] Accordingly, I direct HOW is to give discovery of category 3 of sch 1 to the application for discovery by BAR’S. This category overlaps with category 4 of sch 1 which concerns documents relating to meetings between HOW and distributors regarding two of the products listed in category 3. For the avoidance of doubt, category 4 documents are also to be discovered for the same reason as category 3.

• [52] Ms Glover grouped in her discussion of this general class of documents, items 13, 14 and 15 from her schedule. Category 13 refers to attachments to a discovered document. BAR’S seeks disclosure of the attachments which will refer to the automotive products being discussed. BAR’S is content for pricing information to be redacted. Similarly, an email of 5 March 2015 together with attachments, concerning a supplier, is sought to again identify the automotive products being discussed. Again, pricing information can be redacted. Correspondence is also sought subsequent to a specified document regarding the distribution of another identified automotive care product which is a product listed in item 3 of sch 1. There is likely to be overlap between categories 13, 14 and 15 and categories 3 and 4 — all are to be discovered.

• [53] HOW’s pleading is that it did not continue its discussions with these other agencies. As I have said, that pleading is denied and therefore discovery is required.
• [54] Ms Glover points to paragraphs [204] and [205] of the counterclaim. Paragraph [203] refers to cl 11 of the 1979 Licence Agreement which prohibits the licensees from engaging directly or indirectly in the manufacture or sale of other preparations similar to or competitive with the preparations covered under the Licence Agreement.

• [55] Paragraph [205] of the counterclaim pleads HOW breached this agreement. The products identified and said to amount to a breach of cl 11 of the Licence Agreement are not expressed to be definitive.

• [56] Mr Elliott did not suggest that disclosure of categories 3, 4, 13, 14 and 15 would be disproportionate, he only disputed relevance. Given I am satisfied these categories are relevant given the denial of HOW’s paragraph [54], I direct these documents are to be discovered.

Categories 5 and 6 — Workshop Hero Licence Agreements

• [57] Categories 5 and 6 are documents relating to the use by HOW of the BAR’S BUGS or BAR’S LEAKS trademarks in connection with Workshop Hero products.

• [58] Ms Glover submitted these documents are relevant to the pleading that HOW sold other products similar to or competitive with the preparations covered by the Licence Agreements. Ms Glover submitted the Workshop Hero products were intended to be caught within para [205] of the counterclaim, but accepts they are not expressly named in that paragraph. I have already mentioned that para [205] of the counterclaim, when it lists the products said to have been sold in breach of cl 11 of the Licence Agreement, does not purport to be an exclusive list.

• [59] Mr Elliott refers to the evidence of Mr Wiles of HOW, that BAR’S can see from HOW’s website what products are being sold by HOW and its packaging. Mr Elliott submits BAR’S does not need to see the Licence Agreements to know what products HOW is selling.

• [60] Returning to the issue of HOW’s reliance in its estoppel cause of action, Ms Glover says the dates of the Licence Agreements could indicate that HOW’s

actions in talking to other suppliers were not connected with representations from BAR’S. Mr Elliott characterises this as an attempt by BAR’S to introduce an unpleaded argument. Again, the short point is that BAR’S has denied HOW’s reliance/detriment pleading.

• [61] Ultimately, I am persuaded this disclosure should be provided. There is no suggestion the documents do not exist or that their discovery would be disproportionate. Ms Glover is content for the documents to be redacted if necessary. When and how HOW started using the BAR’S BUGS or BAR’S LEAKS trademarks on other products as if it owned them, is relevant to HOW’s case that it believed it was entitled to do so from the security agreement coming into effect above or on the basis of estoppel.

• [62] I direct HOW is to discover categories 5 and 6.

Category 7 — document showing HOW’s marketing budgets for BAR’S BUGS and BAR’S LEAKS

• [63] Ms Glover submitted this document is relevant to the issue of whether HOW set out to deliberately undermine the BAR’S LEAKS trademark. HOW says because it believed it owned the BAR’S BUGS trademark it is not surprising it put its energies into that trademark.

• [64] Mr Wiles for HOW says in his evidence there are no documents setting out HOW’s marketing budgets as there is no internal delineation between the two brands.

• [65] Discussions at the hearing on 14 May 2024 reached the point where it was common ground that HOW should discover marketing campaigns/strategies or directions given by HOW to advertising consultants in respect of marketing. This material (if it exists) may be relevant to the counterclaim that HOW sought to undermine the BAR’S LEAKS brand. If there are no documents held by HOW in this regard, it is to provide a brief explanation as to why there is no marketing material or how its marketing is undertaken so that the absence of documentation can be understood by BAR’S.

Category 8 — documents relating to HOW’s labelling of Subaru products

• [66] HOW pleads that it manufactures or has contracts to manufacture products using raw materials sourced from BAR’S to which it affixes the BAR’S LEAKS’ logo including for Subaru Australia. That pleading is essentially admitted.

• [67] BAR’S plead that HOW is breaching the prohibition on manufacturing or selling similar or competitive products by creating the Subaru brake cleaner products. That is denied but again, that HOW produces the Subaru product is not in dispute — such being pleaded by HOW.

• [68] At para [263] of the counterclaim, BAR’S pleads that: “Since dates currently unknown”, HOW has used BAR’S LEAKS logo in an unauthorised manner including in relation to the Subaru brake cleaning. That pleading is admitted. HOW pleads it will provide further particulars after discovery. The pleading, as I have said, begins: “Since dates currently unknown”.

• [69] The grounds upon which Ms Glover pursued the Subaru documents related to the prominence of the BAR’S LEAKS brand. Disclosure is sought on the basis that there was a lack of prominence of the BAR’S LEAKS’ logo on the Subaru products and Ms Glover submits “A less prominent logo generates less goodwill”. It is perhaps ironic that BAR’s says HOW’s use of the logo contravened BAR’S rights yet it seeks discovery on the basis that material relating to the labelling design is relevant to HOW’s neglect of the BAR’S LEAKS brand as BAR’s says the logo was given insufficient prominence.

• [70] Mr Elliott submits there is no reference to the Subaru product in the pleadings relating to the alleged neglect of the brand.

• [71] The only live issue on the pleadings is when HOW started working with Subaru given para [263] of the counterclaim states that BAR’S does not know the relevant start date.

• [72] That is the extent to which, in my view, discovery in relation to the HOW’s dealings with Subaru is required. I direct HOW is to provide discovery of when its

dealings with Subaru began. If there had been a series of separate engagements then documents relating to the beginning and end of those periods of trade are to be discovered.

• [73] However, given BAR’S pleading does not put in issue anything further in relation to the Subaru products, no further discovery is warranted.

Category 9 — instructions given by HOW to its website designers

• [74] BAR’S seeks discovery of instructions given to HOW’s IT providers regarding changes made to HOW’s websites and email sign-offs in 2018 and 2019. The allegation is that HOW started to use, contrary to the Licensing Agreements, BAR’S BUGS as a “house” brand or corporate brand. The counterclaim pleads that HOW markets and promotes BAR’S LEAKS separately from BAR’S BUGS and in the particulars it pleads:

(i) From at least 2019, [HOW] stopped using the mark BAR’S LEAKS as their company logo, in letterheads, and in email correspondence.

• [75] In its pleading, HOW says:

Email signatures are updated in or about October 2019 and feature logos of all BAR’S LEAKS, BAR’S BUGS and Workshop Hero.

• [76] Mr Elliott says he has identified a need to re-plead HOW’s response to this issue but says it is unclear what, if any, relation HOW’s letterhead design has to the request for documents relating to the website.

• [77] Correspondence between HOW and its IT suppliers/web designers in 2018 and 2019 that concern the design of the website insofar as they touch on the prominence given to BAR’S LEAKS or BAR’S BUGS such should be discovered. Instructions given as to the prominence, size and location of the different marks is relevant to BAR’S claim that HOW has neglected the BAR’S LEAKS logo and to the allegation BAR’S BUGS has become the house or corporate brand for HOW. For that reason, instructions given in relation to the design of the letterhead is also relevant.
• [78] Accordingly, I direct discovery in relation to category 9 is to be provided. If this work was done in-house, then a brief narrative as to why there are no documents in this category should be provided.

Categories 10, 11 and 12 — HOW communications with Supercheap Auto

• [79] Supercheap Auto is a retailer of automotive products. HOW is a supplier of products to Supercheap Auto. HOW makes what is called an annual submission to Supercheap Auto which, I understand, records HOW’s intentions for its supply relationship with Supercheap Auto over the coming year, the introduction of new products, deleting other products, and so on. It is said that HOW made two separate submissions: one in relation to BAR’S BUGS and one in relation to BAR’S LEAKS. The BAR’S LEAKS documents falling into the “cooling” product category.

• [80] Ms Glover submits the submission documents are critical to show the relative importance that HOW placed on the two brands. Some BAR’S BUGS submissions have been discovered on a confidential basis but the equivalent BAR’S LEAKS documents are largely missing from HOW’s discovery.

• [81] Discovery is sought of these submissions in respect of the cooling category from 2010 to 2017. A submission is referred to in discovery document HOW.00682 which is sought but apparently that cannot be located. There is apparently reference in communications from HOW to Supercheap Auto referring to BAR’S LEAKS products being de-ranged and then potentially re-listed.

• [82] All of these documents would appear to be relevant. Mr Elliott did not dispute relevance; rather, he assumed from Mr Wiles’ evidence that all relevant documents have been disclosed and had been accepted.

• [83] I direct Mr Wiles should explain whether, to his knowledge, submissions were provided to Supercheap Auto in the period 2010 to 2017 for BAR’S LEAKS in the cooling product category. If his understanding was such documents were produced, he should explain who produced them and why it is they cannot be located and in particular, addressing whether appropriate searches of computers and so on have been made to locate copies or drafts.
• [84] Ms Glover foreshadows the possibility of an application for non-party discovery against Supercheap Auto, but an explanation from Mr Wiles as to whether these documents ever existed is appropriate and is to be included in the further discovery affidavit that has been directed.

• [85] I have assumed discovery is not pursued in respect of category 12 which concerns correspondence between HOW and other retailers. If I have assumed wrongly, then category 12 documents appear relevant. Leave is reserved if this category needs to be addressed further.

Waiver of privilege — categories 17 and 18 in sch 1 (category 16 not being pursued)

• [86] This category will be subject to a separate judgment.

Category 19 — internal communications within HOW

• [87] Ms Glover submits that no management notes or other internal documents have been discovered by HOW. Mr Elliott submits that category 19 is catchall in nature being: “All relevant internal correspondence and documents, including management meeting minutes”.

• [88] Correspondence from the patent attorney acting for HOW in respect of internal documentation says it is HOW’s practice to speak in person and that relevant internal communications have already been discovered. BAR’S patent attorney’s response is:

1. Your client’s claim that there are no internal documents because they only communicated face to face stretches credibility. This is particularly the case given your client’s business is spread over Australia and New Zealand, and its key managers have often been (and we understand still are in the case of Tim and Greer) located in different countries. We invite your client to reflect on whether any further documents are required to be discovered in this respect.

• [89] In reply, HOW’s patent attorney re-iterated their position saying HOW is a small family-run business and its practice is to communicate verbally.

• [90] To be fair, Mr Elliott recognised the reasonableness of HOW’s expectation that there would be management notes dealing with the matters in issue. As to the breadth

of BAR’S request, Ms Glover’s submissions at para [38] set out broad categories in respect of which it might be expected there will be some internal documents.

• [91] BAR’S is entitled to more than the assertion of HOW’s patent attorney that there are no relevant documents covering nearly 20 years of events in respect of a company operating in Australasia. HOW is to revisit the discovery it has provided in respect of category 19 with particular regard to the categories of documents referred to at paragraph [38] of Ms Glover’s submissions. Mr Elliott will have already explained to HOW the extent to which HOW must search for relevant records.

• [92] The categories identified in Ms Glover’s submission, in all but one case, relate to records relating to decisions made by HOW. It may well be that decisions made in a small family-run company are made informally, but BAR’S is entitled to a fuller explanation as to why there are no documents in these categories as opposed to simply a claim that they do not exist.

Confidentiality

• [93] Insofar as the discovery that has been ordered in relation to both applications give rise to confidentiality issues, they are to be in the first instance discussed by counsel. Mr Elliott has tabled a proposed protocol for dealing with discovery.

• [94] In the event counsel cannot agree issues relating to confidentiality, leave is reserved in that regard.

Opposition to affidavit of Mr Omoto

• [95] I make no ruling in respect of the admissibility of Mr Omoto’s affidavit of 30 November 2023. In the hearing on 14 May 2024, I explained to counsel that my focus would be on determining the issues from the pleadings. I have not had regard to Mr Omoto’s affidavit.

Timetable

• [96] I did not hear counsel on when any further discovery should be provided, if it was ordered. The parties have a hearing in August 2024. I direct that discovery be

provided within 15 working days but with leave to seek that that be revisited should the need arise.

Costs

• [97] Costs for the moment are reserved. Counsel are free to file submissions in respect of costs if they wish to but I suggest that be deferred until all issues are resolved, including the waiver of privilege issue and the extent to which the above orders produce further documents or the need for further involvement of the Court.

Associate Judge Lester

Solicitors:

McVeagh Fleming, Auckland (for Plaintiffs) Woodroffe Lawyers, Auckland (for Defendant)

Copy to counsel:

C Elliott KC, Barrister, Auckland (for Plaintiffs) J M Glover, Barrister, Auckland (for Defendant)