NEW ZEALAND BLOOM LIMITED v CARGOLUX AIRLINES INTERNATIONAL S.A. [2014] NZHC 536

NEW ZEALAND BLOOM LIMITED v CARGOLUX AIRLINES INTERNATIONAL S.A. [2014] NZHC 536 [21 March 2014]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV 2011-404-007008[2014] NZHC 536BETWEEN NEW ZEALAND BLOOM LIMITEDPlaintiffAND CARGOLUX AIRLINESINTERNATIONAL S.A.DefendantHearing: 26 November 2013Appearances: B D Gustafson and J D Ryan for plaintiffP R Jagose and J W Upson for defendantJudgment: 21 March 2014JUDGMENT OF ASSOCIATE JUDGE ABBOTTThis judgment was delivered by me on 21 March 2014 at 4pm,pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDateSolicitors:Claymore Partners Ltd, AucklandChapman Tripp, WellingtonCounsel:B D Gustafson, Auckland[1] The plaintiff, New Zealand Bloom Limited, exports flowers. It places orders through freight forwarders, who in turn arrange transport on appropriate airlines forthe particular export market. NZ Bloom's flowers were transported to the UnitedStates by the defendant, Cargolux Airlines International S.A., from July 2004 to December 2006.[2] Some years ago several airlines, including the defendant, Cargolux Airlines International S.A., entered into agreements in relation to fuel and security surcharges. Those agreements have led to action against the airlines involved, by regulatory authorities in various jurisdictions, for anti-competitive behaviour. Thishas included action by New Zealand's Commerce Commission against several of theairlines, including Cargolux. This proceeding follows a settlement of theCommission's claim against Cargolux, as part of which Cargolux admitted breaching s 27 of the Commerce Act 1986 (the Act), by entering into and giving effect to price fixing arrangements.[3] In this proceeding, NZ Bloom claims that the surcharges to which the cartel of airlines agreed in breach of the Act were included in freight charges that it has paid. It seeks an order against Cargolux, as a member of the cartel, for compensation pursuant to s 82 of the Act. Cargolux is defending the claim on various grounds.[4] One of the substantive issues between the parties is whether s 82 of the Act allows NZ Bloom to claim from Cargolux surcharges included in the freight charged by other members of the cartel for goods they carried for NZ Bloom, as distinct from surcharges that might have been imposed for goods that Cargolux carried. There is also a procedural issue as to whether NZ Bloom has given sufficient particulars of the alleged breaches of the Act, and the losses it says it has suffered by reason of such breaches.[5] These issues are before the Court in an application by Cargolux first for determination of a separate question as to the scope of s 82, and secondly for an order that NZ Bloom provide a more explicit statement of claim, giving further particulars of the alleged breaches and causation.[6] NZ Bloom does not oppose the application for a separate question. It accepts that a decision on that question will determine whether there is any need for further amendment of pleadings, by joinder of other cartel members or settling the scope of the losses claimed, and will clarify the scope of discovery. NZ Bloom does oppose the application for particulars, however, contending that the particulars are unnecessary to understand the claim, and that, in any event, it is unable to provide further particulars (at least before discovery) and that an order would be unjust.Determination of a separate question[7] NZ Bloom claims that Cargolux caused it loss of:(a) $40,774.70 in the form of surcharges charged and paid on goods carried by Cargolux; and(b) $338,426.06 in the form of surcharges on all goods carried for it by cartel members.[8] NZ Bloom seeks an order for compensation under s 82(1)(a) of the Commerce Act 1986 in the sum of $338,426.06 or alternatively (if Cargolux is only liable to compensate NZ Bloom for losses suffered in respect of cargo that it carried) in the sum of $40,774.70.[9] Section 82(1)(a) of the Act reads:82 Actions for damages for contravention of Part 2(1) Every person is liable in damages for any loss or damage caused by that person engaging in conduct that constitutes any of the following—(a) A contravention of any of the provisions of Part 2...[10] Cargolux contends that even if it is assumed for the present application that NZ Bloom can show that it has suffered loss by reason of conduct contravening Part 2 of the Act, there is a question as to whether s 82(1)(a) permits recovery from Cargolux of surcharges imposed for the transport of cargo on other airlines.[11] Cargolux seeks a separate and prior determination of this (legal) point as to whether surcharges imposed in respect of cargo carried by other airlines can be said to be loss caused by Cargolux for the purposes of s 82. It says as grounds for its application that a separate determination:(a) will not materially delay and may substantially progress final resolution of the proceeding;(b) will not materially extend and may substantially reduce the probable length of hearings if there is a split trial;(c) may substantially reduce the complexity of, number of potential parties to, and length of any subsequent hearing;(d) may lead to summary termination of the proceeding;(e) presents no demarcation difficulties in defining issues for determination at any subsequent hearing, or issue estoppel difficulties;(f) requires no witnesses or evidence at the first hearing; and(g) involves no duplication of findings or submissions at the second hearing.[12] NZ Bloom has not opposed the application, and has participated in the formulation of the proposed question.[13] The Court has discretion under r 10.15 of the High Court Rules to make an order for the decision of any question separately from any other question in the proceeding. It has been said that a determination of a separate question before trial isintended to "expedite proceedings by limiting or defining the scope of the trial inadvance or obviating the need for a trial all together."11 Innes v Ewing (1986) 4 PRNZ 10 (HC) at [18].[14] The usual starting point is that the most expeditious and efficient manner for dealing with a dispute is to have all matters in issue determined in the one trial.2 The onus is on the applicant to displace this presumption.3[15] The question requires a determination of the proper construction of s 82(1)(a). That is a discrete question of law.4 It does not require findings of fact.[16] I accept(a) the submission of counsel for Cargolux that the question does not raise the difficulties of demarcation or issue estoppel that were discussed in Haden v Attorney General;5(b) that a decision on the separate question will resolve or progress a significant issue in this proceeding, namely the quantum of loss, as it will determine whether this is a claim for $338,426.06 or for $40,774.70;6(c) that there will be advantages regardless of which way the question is answered:(i) if it is answered in Cargolux's favour, it will be unnecessary toestablish causation, or to assess quantum with respect to surcharges levied by other members of the cartel, or to join other carriers, so a determination on this basis will certainly save time, cost and unnecessary complexity; and(ii) if it is answered in NZ Bloom's favour, the answer will informthe scope of discovery and evidence, will clarify whether there2 See Turners & Growers Ltd v Zespri Group Ltd, HC Auckland CIV 2009-404-4392, 5 May 2010 at [10]; Karam v Fairfax NZ Ltd [2012] NZHC 887 at [58]; Clear Communications Ltd v Telecom Corporation of NZ Ltd (1998) 12 PRNZ 333 (HC) at 334.3 Clear Communications Ltd v Telecom Corporation of NZ Ltd, above n 2.4 As in Attorney General v Idea Services Ltd (2011) 21 PRNZ 94 (HC) at [41]; also Turners and Growers Ltd v Zespri Group Ltd, above n 2 at [18].5 Haden v Attorney General HC Wellington CIV 2010-485-2380, 4 November 2011 at [50].6 See para [7] above.is a need for the involvement of other parties in thisproceeding, and will "clear the way to trial".[17] The question has to be properly formulated. It must be clear, precise and formally defined to enable effective and expeditious resolution of the issue.7[18] The separate question proposed (essentially as discussed in the hearing but with some grammatical changes) is:Is it arguable as a matter of law and in terms of the Amended Statement of Claim dated 5 July 2013, that the defendant is liable for damages under s 82 of the Commerce Act 1986, in respect of loss or damage alleged to have been suffered by the plaintiff from its payment of Fuel and Security Surcharges levied in alleged pursuance of the Fuel and Security Agreements by airlines other than the defendant?The parties believe this formulation identifies the issue with sufficient clarity and precision.[19] The concern about a separate question is always that it may not fully resolve the relevant issue, and thereby result in unproductive delay.8 The risk in the presentcase is that the question of Cargolux's potential accessory liability could be answeredin an abstract way which, when applied, does not decide the viability of this aspectof NZ Bloom's claim. This can be addressed with the Court at the time of hearing the separate question. The parties are obviously of one mind in terms of wishing to achieve a practical outcome. I regard the potential risk as justified.[20] I am satisfied that an order for determination of a separate question, in the terms discussed, should be made.The application for a more explicit statement of claim[21] NZ Bloom's case is that the fuel and security surcharge agreements havebreached ss 27 and 30 of the Commerce Act 1986. Cargolux contends that NZ Bloom has failed to provide sufficient particulars as to how the agreements have7 Houghton v Saunders [2012] NZHC 1828, [2012] NZCCLR 31 at [38].8 Houghton v Saunders, above n 7.contravened those sections, and how those breaches have caused the alleged losses, particularly the losses attributed to surcharges paid to other carriers.[22] The application is made under r 5.21 of the High Court Rules:5.21 Notice requiring further particulars or more explicit pleading(1) A party may, by notice, require any other party—(a) to give any further particulars that may be necessary to give fair notice of—(i) the cause of action or ground of defence; or(ii) the particulars required by these rules; or(b) to file and serve a more explicit statement of claim or of defence or counterclaim.(2) A notice must indicate as clearly as possible the points on which the pleading is considered defective.(3) If the party on whom a notice is served neglects or refuses to comply with the notice within 5 working days after its service, the court may, if it considers that the pleading objected to is defective or does not give particulars properly required by the notice, order a more explicit pleading to be filed and served.(4) Even if no notice has been given under this rule, the court may on its own initiative order a more explicit pleading to be filed and served.[23] The agreements are pleaded as follows:21. The Fuel Agreement:21.1 Was a contract, arrangement or understanding between the Cartel Members; and21.2 Had the likely effect or purpose of substantially lessening competition in:(a) The Asian Market;(b) The United States Market; and(c) The European Market.22. The Security Agreement:22.1 Was a contract, arrangement or understanding between the Cartel Members; and22.2 Had the likely effect or purpose of substantially lessening competition in:(a) The Asian Market;(b) The United States Market; and(c) The European Market.[24] The effect of the agreements and the losses are pleaded as follows:24. The Fuel Agreement and the Security Agreement have caused NZ Bloom loss:24.1 NZ Bloom was charged and paid Fuel Surcharge and the Security Surcharge on the Cargolux Export Shipments of $40,774.7 as set out in Schedule 2; and24.2 NZ Bloom was charged and paid Fuel Surcharge and the Security Surcharge on the Cartel Export Shipments of $338,426.06 as set out in Schedule 2.Cargolux's submissions[25] Counsel for Cargolux argued that it is insufficient for the pleading merely to recite the wording of a relevant section of the Act.9 He contended that NZ Bloom's "highly generalised" pleading that the agreements have the likely effect or purpose of substantially lessening competition is merely a conclusory statement, reflecting the language of the statute, and does not give fair notice of its claim. He submitted that this pleading could mean one of several proscribed purposes or effects,10 each of which is a different matter, requiring identification of the material facts for each proscribed purpose or effect that NZ Bloom is claiming.11 Further, it does not address how the agreements have substantially lessened competition in the identified markets (the facts and economic considerations on which NZ Bloom relies).129 TV3 Network Ltd (in rec) v Television New Zealand Ltd HC Auckland CP 929/91, 18 December 1992 at 12; Commerce Commission v Fletcher Challenge Ltd (1999) 6 NZBLC 102,752 (HC) at 102,768.10 For example, did the arrangement have the purpose of lessening or of hindering or of preventing competition in the market: refer s 3(1) of the Act.11 Relying on TV3 Network Ltd (in rec) v Television New Zealand Ltd , above n 9 at 16.12 Which the Court will be asked to take into account in assessing the competitive functioning of the market, with and without the agreements; ANZCO Foods Waitara Ltd v AFFCO New Zealand Ltd [2006] 3 NZLR 351 (CA) at [242] – [245].[26] Counsel noted that NZ Bloom relies on admissions made by Cargolux in the Commerce Commission penalty proceeding and findings of the Court in that proceeding as support for the recitation in its pleading of the statutory elements of s 27. He submitted that NZ Bloom cannot rely on them as determinative of a fact in issue in this proceeding as they are not admissible as evidence of anti-competitive conduct,13 and can at best be a part of the factual matrix in this proceeding (with the weight to be given to that evidence to be determined). He acknowledged that theCourt's reasoning could be persuasive in this proceeding, but it is not conclusive ofthe result, given that:(a) the findings were based on its admissions rather than on judicial analysis of the facts; and(b) the admissions were only in respect of facts that were necessary for the Commission to obtain relief, and were made with a view to achieving settlement.[27] He relied on the distinction made in an earlier penalty proceeding14 between an admission of a fact (which could be used as part of the evidence for the court to consider in subsequent proceedings) as distinct from an admission of breach, which is not an operative admission.[28] In summary, counsel submitted that the key point remained, whether NZBloom's case as pleaded meets the procedural requirements.[29] Counsel added that this generalised pleading was even more unacceptable because NZ Bloom has not made clear whether it is relying on the allegation of substantial lessening of competition as a matter to be proved as fact under s 27 or on the deeming provisions in s 30. He argued that it should be required to do so given that the two sections proscribe distinct purposes and call for proof of differentmatters. Additionally, he took issue with NZ Bloom's failure to support its pleadingthat the agreements prohibited cartel members from competing on price (which13 Evidence Act 2006, s 50.14 Commerce Commission v NZ Milk Corporation Ltd [1994] 2 NZLR 730 (HC) at 732.seems to be a reference to the proscription on price fixing in s 30) with particulars as to the price fixing elements (fixing, controlling or maintaining) that are said to apply, or how it says that relates to the services supplied by competitors in the market.[30] Counsel submitted, therefore, that if NZ Bloom intends to rely on the deeming provision in s 30, it must plead that case explicitly, so that Cargolux knows whether it needs to address the particular facts to be proven in a price fixing case or those needed for a claim under s 27 (the latter would not be needed if NZ Bloom was relying only on the deeming provisions of s 30). He said that this should be clarified now, as NZ Bloom could not expect to obtain discovery on matters relevant to a price fixing allegation if it was not advancing a case for a deemed purpose or effect of lessening competition.[31] In summary, Cargolux's argument on the pleadings of breach is that thecurrent pleading does not make clear how the agreements had the likely effect, orpurpose of "substantially lessening competition in a market" (rather than just plead aconclusion), or, if it is alleged that the agreements are deemed15 to have that likely effect or purpose, how it contends that the agreements have fixed, controlled or maintained the price for goods or services (the matters that have to be proved for finding a deemed lessening of competition). Cargolux seeks particulars of the pleading in paragraphs 21 and 22, accordingly:(a) as to the contended impact of the agreements on competition in the pleaded markets (by comparison to the state of competition without the agreements16); and(b) in respect of any contention that the agreements are deemed to contravene s 27 because of price fixing (under s 30), what carriers are said to be in competition with each other in each of the pleaded markets, and what purpose or effect (fixing, controlling, maintaining, or providing for one of these) is being alleged in relation to the price of the commonly supplied services.15 Under s 30(1) of the Act.16 Referring to ANZCO Foods Waitara Ltd v AFFCO New Zealand Ltd, above n 12 at [242] –[249].[32] Cargolux also seeks particulars of the facts on which NZ Bloom relies to support its pleading in paragraph 24 that entry into the agreements has caused it loss in terms of s 82 of the Act (an essential element of the cause of action). Counsel submitted that the present allegation that surcharges levied under the agreement caused NZ Bloom loss is insufficient. He contended that the claim did not state what effect the levying of surcharges had on the price that NZ Bloom paid, and argued that Cargolux is entitled to particulars stating how the contravening conduct (entry into the agreements) was a substantial or material factor in the pleaded losses.17 He said that NZ Bloom had to go further than its present assertion that the surcharges would not have been levied but for the agreements, and spell out how NZ Bloom contends that the surcharges (which in Cargolux's case were levied on freightforwarders) have flowed through to the price that NZ Bloom paid for the services, particularly in relation to such charges levied by other airlines. Without these further particulars it is unclear whether NZ Bloom is contending that Cargolux has a direct (primary) liability, or an accessory (secondary) liability, and, in the latter case, identifying which of several forms of accessory liability is being advanced.[33] Lastly, as to timing, counsel for Cargolux submitted that:(a) the particulars should be provided in advance of a hearing on the separate question, to ensure that the question is answered on the basis of the facts for trial rather than hypothetical facts; and(b) the particulars should be provided before further discovery (its obligation is to plead its claim before discovery as precisely as it is able18) as they could limit the scope of discovery, thereby saving timeand costs. (Counsel submitted that NZ Bloom's contention that theparticulars should be provided after discovery was tantamount to an admission that its claim is speculative).17 Relying on Twin Bright Shipping Co SA v Tauwhareparae Farms Ltd HC Gisborne, CIV 2003- 416-1, 4 December 2003 at [25].18 Commerce Commission v Fletcher Challenge Ltd, above n 9, at 102,767.NZ Bloom's submissions[34] Counsel for NZ Bloom submitted that there is no need for the further particulars to inform Cargolux of its claim as the existing pleading provides asufficient "road map"19 to allow Cargolux to prepare for trial:(a) The pleading of breach is straight-forward, and the nature of the case being advanced in relation to the alleged likely effect or purpose is clear (particularly when read in the context of the statement of claim as a whole20), thus satisfying the criteria for particulars in Commerce Commission v Qantas;21(b) The case on causation was sufficiently answered by the pleading that the agreements resulted in NZ Bloom paying the surcharges, the amounts of which had been identified in a schedule to the amended statement of claim. Counsel submitted that this gave Cargolux sufficient information as to the case it had to meet, and anything more was simply directed towards the proof of that claim.[35] Counsel acknowledged NZ Bloom's reliance on Cargolux's admissions in the earlier penalty proceedings (as recorded in the Court's judgment22) as to the purpose or likely effect of the agreements. Counsel further accepted that there are limitations on the use of those admissions in this proceeding, but argued that they are admissible nonetheless, and for the purposes of the present application can be relied upon aspointing Cargolux to the basis for NZ Bloom's contentions, particularly given thatCargolux will have investigated those matters before making admissions.[36] As to the particulars sought of causation, counsel for NZ Bloom submittedthat Cargolux is sufficiently informed of NZ Bloom's case, namely that it was asignificant participant in the cartel, its participation was a causative factor in the19 Price Waterhouse v Fortex Group Ltd CA 179/98, 30 November 1998 at 17.20 NZ Bloom has identified the parties to the understanding, the agreements or understandings reached, the markets affected, the collaboration with other carriers and the changes imposed on it.21 Commerce Commission v Qantas Airways Ltd (1992) 5 PRNZ 227, 230.22 Commerce Commission v Cargolux Airlines International S.A. HC Auckland, CIV 2008-404- 8355, 5 April 2011.surcharge agreements being implemented by cartel members,23 and its participation has caused NZ Bloom to pay higher freight charges to other cartel members as wellas to itself. He challenged Cargolux's contention that NZ Bloom had not alleged that Cargolux had imposed charges on goods carried for NZ Bloom, and pointed to particulars to paragraph 15 of the amended statement of claim and the charges identified in schedule 2 to the claim. He submitted that the present case was analogous to a claim for damages against a dishonest assistor, where the assistor cannot limit liability by claiming it did not receive the proceeds of the breach.24[37] Counsel also submitted that it was premature to address particulars regarding causation, as that point could be determined at the hearing of the preliminary question.[38] Counsel then submitted that it was not appropriate to order particulars, in any event, given that NZ Bloom was not in a position to provide the further particulars sought (at least ahead of discovery). He acknowledged that as a general rule, it is no answer that facts are within the knowledge of the party seeking the particulars,25 but submitted that the general rule gives way where the party from whom the particulars are sought does not have the information, and the party seeking them is not genuinely embarrassed by the lack.26 He argued that this case is analogous toPickard v Ambrose27 where the Court declined orders for particulars where the plaintiff relied on information provided by one of the defendants and any further information was held by the defendants. He said that Cargolux could not be genuinely embarrassed by lack of particulars in circumstances where it knew that NZ Bloom did not have those particulars,28 and that the purpose and likely effect of the agreements, and what they did to prices, is within its own knowledge and control. In those circumstances, he submitted that it would be unjust to make an order with which NZ Bloom could not comply, given that its failure to do so would lead to a potentially successful application to strike out.23 In paragraph [23] of the amended statement of claim, NZ Bloom pleads that the cartel could not have maintained surcharges if Cargolux had not agreed to be a part of it, as that would have undercut its competitors.24 Relying on Lintas NZ Ltd v Murphy [1986] 2 NZLR 436 (HC).25 Public Trustee v Mahar HC Wellington, CP 818/88, 7 February 1990 at 4.26 McGechan on Procedure, HR 5.21.06.27 Pickard v Ambrose HC Wellington CIV 2003-091-143,14 April 2008.28 McGechan on Procedure (Brookers, online looseleaf ed) at 51.21.06.[39] In summary, NZ Bloom's argument was that Cargolux's argument wasunduly technical, and the reality was that it had sufficient information to be able to respond to the claim. However, even if the Court was prepared to entertain some aspects of the technical argument, it should not exercise its discretion to orderparticulars given that the information was in Cargolux's knowledge or control.DiscussionParticulars of the alleged breaches[40] Counsel are agreed that pleadings should inform the Court and opposite party of the case that has to be met, so as to enable it to determine the evidence to be prepared, and prevent unreasonable or unfair surprise (generally by limiting and defining the issues).29 This requires that a statement of claim show both the generalnature of the plaintiff's claim to the relief sought,30 and give sufficient particulars of the circumstances to inform the Court and the party against whom relief is sought ofthe plaintiff's cause of action.31[41] The Court of Appeal in Price Waterhouse v Fortex Group Ltd has put this general requirement succinctly in the following passage:32What we are saying is that both the Court and opposite parties are entitledto be advised of the essential basis of a claim or defence, and all necessary ingredients of it, so that subsequent processes and the trial itself can be conducted against recognisable boundaries. Neither the Court nor opposite parties should be placed in the position of having to deal with a proposition of whose substance adequate notice has not been given in the pleadings.[42] Counsel for NZ Bloom relied on the further comments of the Court of Appeal to the effect that the statement of claim is an abbreviated statement, and there is often difficulty determining the level at which that abbreviation should be set, and further:33In marginal cases, it is better to avoid generalities and rules of thumb, and toreturn to principle. The pleader and Court simply ask "in the circumstances29 TV3 Network Ltd (in rec) v Television New Zealand Ltd, above n 9.30 High Court Rules, 5.26(a).31 High Court Rules, 5.26(b).32 Price Waterhouse v Fortex Group Ltd, above n 19 at 18.33 At 19.of this claim, is that statement sufficiently detailed to state a clear issue andinform the opposite party of the case to be met?". This is not, under modernpractice, simply some minimum which a Defendant needs so as to be able to plead. It is intended to supply an outline of the case advanced, sufficient to enable a reasonable degree of pre-trial briefing and preparation. Discovery and interrogatories are only an adjunct, not a substitute for pleading.[43] Counsel for Cargolux submitted that although there are no special rules of pleading for competition law cases, particular nuances on the general principles can be found in the decided cases, including:(a) Allegations that agreements had an anti-competitive purpose or effect contrary to the Commerce Act must be stated with particularity and care.34(b) This requirement to plead contravening conduct with particularity extends to identifying possible permutations of relevant sections of the Commerce Act that the defendant is alleged to have contravened, and how and why conduct is contrary to the regime.35[44] In particular the statement of claim should be specific in addressing the particular elements of the Act that are said to be contravened (particularly where there could be various ways of contravening the relevant section or (as in this case) sections:36When the Commission alleges that certain arrangements are for the purpose of substantially lessening competition then the particulars must be of the way in which that occurs. It is not enough to say that the pleading includes aspects of anti competitive behaviour. The Act is specific in dividing matters between purpose and effect. It may well be that a particular action can be for the purpose of lessening competition and may have that effect, but the casting of an open textured net across a transaction and a parroting of theAct's provisions is not pleading in any sensible or meaningful way.34 Commerce Commission v Fletcher Challenge Ltd, above n 9 at 28; Re Security Bank Ltd (In Receivership and in Liquidation) (No 25) HC Auckland A355/81, 10 October 1983, at 11.35 TV3 Network Ltd (In Receivership) v Television New Zealand Ltd, above n 9 at 17; Commerce Commission v Fletcher Challenge Ltd, above n 9 at 19; and Petrocorp Exploration Ltd v New Zealand Refining Co Ltd (1992) 7 PRNZ 53 (HC).36 Commerce Commission v Fletcher Challenge Ltd, above n 9 at 28.[45] The dispute in this case is whether the amended statement of claim is sufficiently detailed to present the issues clearly and adequately inform Cargolux of the case it has to meet.[46] I will deal first with the two aspects of the particulars sought of paragraphs 21 and 22 (the liability pleading) and then the particulars requested of causation (paragraph 24).[47] There is merit to Cargolux's contention that NZ Bloom has not pleaded thealleged breaches sufficiently fully to inform Cargolux of the case it has to meet. In this respect, the comments of this Court in Petrocorp Exploration Ltd v New Zealand Refining Co Ltd are apposite:37The particulars sought are the facts on which Petrocorp relies to reach its conclusion that the purpose and effect of the arrangement was to substantially lessen competition in the particular market referred to.I consider that Petrocorp is obliged to spell out more explicitly how and why the arrangement has had this purpose and effect. The allegation has been pleaded as a conclusion but, although it may be based to some extent on other paragraphs in the pleading which are not specifically referred to in para 8, the Refining Company is entitled to know the respects in which competition is substantially lessened as a result of the arrangement..The Refining Co is therefore entitled to an outline of the facts on which Petrocorp relies to substantiate the allegation in para 8. I do not have in mind detailed particulars but rather a more explicit pleading sufficient to identify the area of economic argument which the parties will join.[48] Counsel for NZ Bloom sought to distinguish Petrocorp on the grounds that in that case there was no linkage to other parts of the pleading that provided context. I do not accept that as a valid distinction. The linkage in this case to other parts of the statement of claim does not address the critical question of how the agreements are said to have the likely effect or purpose of substantially lessening competition in the market. The pleading in that respect is clearly conclusory, and the principles for proper pleadings require NZ Bloom to plead specifically which of the various permutations for liability under s 27 are being advanced in this case. Proper pleading also requires that NZ Bloom plead its contention or contentions as to how37 Petrocorp Exploration Ltd v New Zealand Refining Co Ltd, above n 35 at 55.the agreements have affected the market, in the sense mentioned in ANZCO v AFFCO38 and at least to the extent stated in the above passage from Petrocorp.Cargolux should not be required to await service of NZ Bloom's economic evidenceon this point to know what it must answer (through its own economic experts or otherwise).[49] I am sympathetic with NZ Bloom's argument that the information sought is likely to be within Cargolux's knowledge and control, as a consequence of thepenalty proceedings, and that NZ Bloom has no further information beyond that stated in the judgment in the penalty proceeding as to how the agreements had the proscribed effect or purpose, and that is unlikely to change prior to discovery. Nevertheless, NZ Bloom should still be in a position to state its case in a general way even if it does not currently have all the detail available to support its case (and needs discovery for this purpose). This further pleading should set out the permutations of potential liability on which NZ Bloom advances its case, and what the information says about the effect on the markets. I consider this step is necessary to establish the scope of discovery.[50] I also accept that NZ Bloom's current pleading should be more explicit as towhether it is relying on the deeming provisions of s 30(1). If so, it needs to plead the facts on which it relies to trigger the deeming provision. At this stage (and ahead of discovery) this may be no more than stating matters already pleaded to some degree in other parts of the statement of claim (as to parties, markets and effect of the agreements on prices), but it needs to be pleaded specifically in relation to what must be established under s 30(1). It will inform the parties as to the scope of discovery, which may then lead to further amendment of the pleading. However, at this stage, I consider that NZ Bloom can provide a more specific "road map" of this aspect of itscase.[51] It will be a matter for NZ Bloom to assess whether it is able to rely on any admissions by Cargolux in the penalty proceedings as factual support for its more particularised claim. However, if it chooses to do so, it will need to plead the specific admissions it intends to rely on (and the circumstances of the admissions),38 ANZCO Foods Waitara Ltd v AFFCO New Zealand Ltd, above n 12.mindful of the limited ways in which any admissions can be used. Again, this may also be a matter for further amendment of pleadings, after discovery, provided the amended statement of claim raises the fact in issue squarely.[52] I turn now to the request for particulars about causation. I accept that NZ Bloom has identified the basis of its claim in relation to causation, albeit in a rather vague form: namely, that the agreements resulted in imposition of surcharges on the freight forwarders which have been added to the charges that NZ Bloom has paid, and that the other airlines were unlikely to have participated or added surcharges if Cargolux (a major carrier in world terms) not been a party to the agreements, or put them into effect. However, as NZ Bloom has to provide further particulars of the alleged breaches, I consider that it should also make its case on causation more explicit by pleading those matters in paragraph 24, and making it clear whether it is contending that Cargolux has a primary or a secondary liability for surcharges imposed by other airlines, and if the latter the facts on which it is alleged that secondary liability arises. Again, this pleading will establish the issues for which Cargolux will be required to give discovery.[53] I am conscious of NZ Bloom's concern that an order to provide a morespecific statement of claim may not be capable of being met ahead of discovery. I have attempted to make clear that I consider that NZ Bloom can be more specific about the way in which it is formulating its claim, and that this should be done before the parties complete discovery (tailored discovery has already been given, but not on some of the matters that have been central to the disputes on this application, such as how the agreements have affected competition and/or prices, and how that has flowed through to the charges that NZ Bloom has paid). It is apparent from the very fact of this application and the arguments involved, that the parties and the Court will be assisted by further clarification of the pleading, at least to the extent that NZ Bloom can provide it at this time. The parties should then completediscovery on the basis of the clarified pleadings. This process will meet NZ Bloom'sconcerns.[54] The last point to address is whether both of these steps (amendment of pleadings and further discovery) should be completed before the separate question isdetermined. In my view the amended pleadings should be completed, but I do not see that it is necessary to complete all discovery before hearing the separate question. The two aspects of the case can proceed in tandem.Decision[55] For the reasons I have given I make the following orders:(a) The Court is to decide as a separate and prior question, the following:Is it arguable as a matter of law and in terms of the further Amended Statement of Claim to be filed by the plaintiff, that the defendant is liable for damages under s 82 of the Commerce Act 1986, in respect of loss or damage alleged to have been suffered by the plaintiff from its payment of Fuel and Security Surcharges levied in alleged pursuance of the Fuel and Security Agreements by airlines other than the defendant?(b) The plaintiff is to file and serve a further amended statement of claim incorporating the particulars ordered in this judgment, within 15 working days.(c) The defendant is to file and serve a statement of defence to the further amended statement of claim within a further 15 working days.(d) The parties are to file a joint memorandum within a further five working days advising the Court of the amount of time required to hear the separate question, and giving a proposed timetable for filing and service of a bundle of relevant pleadings and documents and theparties' submissions for the separate question. That memorandum isto be referred to a judge promptly on receipt, for making of the necessary orders.(e) The parties are also to file a joint memorandum at the same timesetting out the parties' proposals for a further order for tailoreddiscovery (or any other order for discovery required as a result of this decision). That can be done in the same memorandum as that covering the separate question, or separately. If there is any disputeover the terms of the orders, the Registrar is to arrange a telephone conference. Failing that, the memorandum will be referred to a judge for making of the appropriate orders.Costs[56] Although I have made an order that NZ Bloom provide further particulars of its claim, its reasons for opposing the application have been taken into account to some extent. In addition, the application for a separate question was supported by NZ Bloom. The applications have advanced the proceeding for both parties. In the circumstances, I consider it appropriate to make no order as to costs. They are to lie where they fall.____________________Associate Judge Abbott