NEW ZEALAND BLOOM LIMITED V CARGOLUX AIRLINES INTERNATIONAL S.A. HC AK CIV 2011-404-007008

NEW ZEALAND BLOOM LIMITED V CARGOLUX AIRLINES INTERNATIONAL S.A. HC AK CIV 2011- 404-007008 [13 November 2012]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV 2011-404-007008[2012] NZHC 3012BETWEEN NEW ZEALAND BLOOM LIMITEDPlaintiffAND CARGOLUX AIRLINESINTERNATIONAL S.A.DefendantHearing: 17 April 2012Appearances: B D Gustafson and J D Ryan for plaintiffP R Jagose and J W Upson for defendantJudgment: 13 November 2012JUDGMENT OF ASSOCIATE JUDGE ABBOTTThis judgment was delivered by me on 13 November 2012 at 5 pm,pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDateSolicitors:Claymore Partners Limited, PO Box 1382, Shortland Street, Auckland 1140Chapman Tripp, PO Box 993, Wellington 6140Counsel:B D Gustafson, PO Box 1297, Shortland Street, Auckland 1140[1] In this proceeding the plaintiff, NZ Bloom Limited (NZ Bloom) is seeking compensation from the defendant, Cargolux Airlines International S.A. (Cargolux), for an alleged contravention of Part 2 of the Commerce Act 1986 (the Act).[2] Cargolux has applied to strike out that claim on the grounds that it is time- barred, as the alleged contravention arose out of agreements entered into more than 10 years before the proceeding was commenced, and was discovered or was reasonably discoverable more than three years before commencement.1[3] NZ Bloom opposes the application on the grounds that the contravention for which it sues was not the entry into but the giving effect to those agreements, and that that was not reasonably discoverable until April 2011 when a settlement between Cargolux and the Commerce Commission concerning the contravention was reported by New Zealand news media.Background[4] NZ Bloom is a grower and exporter of flowers. From July 2004 to December 2006 it used Cargolux to fly its flowers to the United States. NZ Bloom claims that, unknown to it at the time, Cargolux added fuel and security surcharges to the freight charges (at least up until February 2006) in keeping with understandings reached in 2001 between Cargolux and competing air cargo carriers to exchange information and impose fuel and security surcharges (the agreements).[5] NZ Bloom says that it did not learn of Cargolux's involvement in theagreements until April 2011 when New Zealand news media carried reports of the settlement of a claim by the Commerce Commission against Cargolux for anti- competitive behaviour. NZ Bloom issued this proceeding on 2 November 2011 seeking an order for compensation under s 82 of the Act,2 contending that Cargolux's1 These time limits are prescribed by s 82(2) of the Commerce Act 1986.2 Section 82(1)(a) imposes civil liability for damages caused by a person engaging in conduct incontravention of any of the provisions of Part 2 of the Commerce Act.conduct breached the anti-competition provisions of Part 2 of the Act.3 causing it loss.[6] Cargolux has applied to strike out any claim based on entry into the agreements (which was clearly outside the 10 year long-stop provision in s 82(2)), and the claim based on giving effect to those agreements. In relation to the latter it says that NZ Bloom ought to have discovered the contravention of the Act well before November 2008 due to extensive and sustained global and domestic media coverage from February 2006 onwards of alleged cartel activity in relation to air cargo charges. Such media coverage included reference to Cargolux's involvement. It says that the claims are so clearly barred by s 82(2) that NZ Bloom's claim canproperly be regarded as frivolous, vexatious or an abuse of process.4Principles for strike out[7] The power of the Court to strike out a pleading that does not disclose a reasonable cause of action, or is frivolous, vexatious or otherwise an abuse of process is to be found in r 15.1 of the High Court Rules. The general principles that the Court applies are so well established they do not need to be repeated here; those principles may be found in the decision of the Court of Appeal in Attorney-General v Prince and Gardner,5 as endorsed by the Supreme Court in Couch v Attorney- General.6[8] The principles of particular application to the present case are:(a) Pleaded facts, whether admitted or not, are assumed to be true (save where an essential factual allegation is so demonstrably contrary to indisputable fact that the claim should not be allowed to proceed).7(b) The Court can take into account affidavit evidence of material and uncontroversial facts to assist its understanding of the pleaded facts.3 Specifically ss 27 and 30 of the Commerce Act.4 Murray v Morel & Co Ltd [2007] NZSC 27, [2007] 3 NZLR 721 at [33].5 Attorney-General v Prince and Gardner [1998] 1 NZLR 262 (CA) at 267.6 Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725.7 Attorney-General v McVeagh [1995] 1 NZLR 558 (CA) at 566.(c) The jurisdiction is exercised only in clear cases, where the Court can be certain that the claim cannot succeed.(d) The Court will be slow to strike out summarily in areas where the law is confused or developing.(e) If any deficiency in the claim is capable of being remedied by amendment, the Court will generally give the plaintiff an opportunity to amend.8[9] Where an application is brought to strike out on the basis of a statutory time limitation, the following principles apply: 9(a) Where a cause of action is clearly statute-barred, the claim will be struck out as frivolous, vexatious or an abuse of process.(b) Where a defendant demonstrates that a claim is outside a limitation period, the defendant will be entitled to an order striking out the claim unless the plaintiff shows that there is an arguable case for an extension or postponement which would bring the claim back within time.The pleaded facts[10] NZ Bloom pleads the following facts. Cargolux contests many of them but accepts for the purpose of this application that the Court must assume that NZ Bloom will be able to prove them.[11] In 1997 the International Air Transport Association (IATA) passed a resolution to establish (subject to regulatory approval to be obtained) a fuel price index setting a threshold above which members could impose a surcharge. This8 Marshall Futures Ltd v Marshall [1992] 1 NZLR 316 (HC) at 323.9 Murray, above n 4, at [33] (which addressed postponement of the start of the period of limitationunder s 28 of the Limitation Act 1952).threshold price was established in 1999, but was not published after April 2000 because of concerns that it could breach antitrust laws.[12] In early 2001 the German airline Lufthansa published its own fuel price index and fuel methodology, reflecting the earlier IATA resolution.[13] In September 2001 Cargolux agreed with other air cargo carriers to exchangeinformation with a view to imposing fuel surcharges in line with Lufthansa's indexand methodology. It started imposing fuel surcharges in September 2001. About the same time Cargolux agreed with other carriers to impose a surcharge for security, and started imposing that surcharge.[14] The agreements were contracts, arrangements or understandings between the competing carriers which had the likely effect or purpose of substantially lessening competition in various markets. The agreements prohibited the cartel members from competing on price and allowed them to make superprofits.[15] Cargolux applied these surcharges to cargo that it carried to and from New Zealand up until February 2006.[16] From July 2004 to December 2006 NZ Bloom's freight forwarder in New Zealand arranged for Cargolux to carry NZ Bloom's flowers to Los Angeles,and Cargolux imposed the surcharges on that freight until February 2006. NZ Bloom ceased using Cargolux to carry its flowers in December 2006.Publicity about alleged air cargo price fixing[17] Although strike-out applications are generally determined on the basis of the pleading, the Court can also take into account evidence of material undisputed facts.10 The following facts are drawn from affidavits filed by the parties and are not controversial.10 McVeagh, above n 7.[18] In February 2006, there were press reports of investigations by overseas authorities into possible price fixing arrangements in relation to air cargo transport:(a) The Reuters news agency reported that Cargolux was one of several airlines contacted by authorities in Europe and the United States and asked to provide information relating to alleged cartel activity; and(b) The New Zealand Herald reported that authorities were investigatingEuropean and United States airlines about "possible price-fixing"regarding air cargo, and that Cargolux was one of several airlines asked for information.[19] In March 2006 the Australian Competition and Consumer Commission issued a press release referring to international investigations into allegations of price-fixing in the air cargo industry involving imposition of surcharges, and referred to several affected parties including Cargolux.[20] In June 2006 the New Zealand Herald published a report on a transatlantic investigation into an alleged cartel over airfares and surcharges and referred to the price-fixing probe announced in February, stating that it had spread to airlines in Asia.[21] In February 2007 the Christchurch Press carried a report of a class action in Australia against several international air freight carriers that related to fuel andsecurity surcharges and that "hundreds of exporters could be adversely affected byalleged international price-fixing", and the Dominion Post reported that theCommerce Commission had confirmed that it was looking at Air New Zealand as part of an investigation into an international air cargo cartel and that Air New Zealand had been named in the Australian class action which was similar to one taken in the United States the previous year. These reports were followed in the same month by a similar report in the Sunday Star Times mentioning the investigations undertaken the previous year by regulators in Europe and the United States probing possible price-fixing. That report also referred to importers in NewZealand contacting the Importers Institute for advice on whether to join the class action in Australia.[22] New Zealand media carried three further reports during mid 2007 about the regulator action in the United Kingdom, the United States and Australia and the class action in Australia before the New Zealand Press Association reported, in November 2007, that the Commerce Commission was investigating price-fixing in relation to fuel surcharges but would not disclose the airlines it was investigating. In the same month the Sydney Morning Herald carried a report that Qantas had settled a claim in the United States relating to price racketeering and that several airlines includingCargolux were "under the microscope." The New York Times also reported thatregulators in the European Union had filed charges of price-fixing against three airlines in addition to eight charged previously; Cargolux was amongst those charged.[23] In early March 2008 the New Zealand Herald reported on a "global airlineconspiracy to push up freight costs", and The Independent reported allegations thatthirty airlines in the air cargo business had breached competition law, including freight into and out of Los Angeles, with potential relevance for freight forwarders. The Independent carried a follow-up report in May 2008 referring specifically to European competition law.[24] The New Zealand Herald referred in late June 2008 to the alleged price- fixing affecting produce air freighted to and from the United States and, on 17 July 2008, reported that the Commerce Commission was investigating allegations of price-fixing in the air cargo market, including fuel surcharges on flights to and from New Zealand and that the Commission would file proceedings if it concluded that there had been a breach of the Act. The report noted that United States' courts had already imposed substantial penalties for participation in a cartel that had "increased air cargo rates to and from the United States".[25] In December 2008, the Commerce Commission was reported as having filed charges against several air cargo carriers, including Cargolux.[26] On 5 April 2011 the High Court gave judgment on the CommerceCommission's prosecution on an agreed statement of facts and an admission byCargolux that it had entered into and given effect to price-fixing arrangements in breach of Part 2 of the Act.The grounds of the application and the opposition[27] Cargolux says that NZ Bloom's claim is time-barred by s 82(2) of the Act. That subsection needs to be read in the context of the section as a whole: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 of this Act:(b) Aiding, abetting, counselling, or procuring the contravention of such a provision:(c) Inducing by threats, promises, or otherwise the contravention of such a provision:(d) Being in any way directly or indirectly, knowingly concerned in, or party to, the contravention of such a provision:(e) Conspiring with any other person in the contravention of such a provision.(2) An action under subsection (1) may be commenced within 3 years after the matter giving rise to the contravention was discovered or ought reasonably to have been discovered. However, no action under subsection (1) may be commenced 10 years or more after the matter giving rise to the contravention.[28] Cargolux contends that this section requires NZ Bloom to have brought any action within three years of learning either of alleged collusive conduct in relation to air cargo affecting New Zealand markets, or of facts from which a reasonable person would have discovered those matters, and in any event no later than 10 years from the date of the alleged contravention. It says that the claims are clearly time-barred as:(a) NZ Bloom has pleaded that it (Cargolux) entered into the price-fixing agreements more than 10 years before it issued its proceeding; and(b) NZ Bloom either knew of the alleged contravention from the regular media reports, or knew enough from them to have caused a reasonable person to have discovered those matters, before November 2008.[29] In opposition NZ Bloom says:(a) Its claim is in respect of the surcharges charged to it between 18 July 2004 and 17 December 2006, and each charge was an individual contravention of the Act (by giving effect to the collusive agreements) that was within the 10 year long-stop period.(b) It could not have reasonably discovered the material facts and elements of the contravention before the High Court approved the terms of settlement between Cargolux and the Commerce Commission in relation to the contravention, and those matters were released to the public on 5 April 2011.(c) In the alternative, it could not have reasonably discovered the material facts and elements of the contravention before 15 December 2008 (the date that the Commerce Commission filed proceedings against Cargolux in relation to the contravention) because prior to that date the media reports (as produced by Cargolux) referred wholly or principally to investigations by foreign regulators in other jurisdictions, and such evidence as there was as to investigations by the Commerce Commission into surcharges on cargo shipped in and out of New Zealand did not refer to Cargolux.(d) It had no direct dealings with Cargolux (it contracted Cargolux'sservice through a broker), and did not have the staff resources to investigate the media reports.(e) Cargolux has not shown that the claim cannot succeed, as the facts needed to established reasonable discoverability are contested and cannot be resolved summarily.Issues in this application[30] The issues for determination in this application are:(a) Whether the claim has been commenced more than 10 years after the matter giving rise to the contravention;(b) Whether the claim has been commenced within three years of discovery of the matter giving rise to the contravention, or within three years of the date when the matter giving rise to the contravention ought reasonably to have been discovered;(c) Whether Cargolux has shown that the claim is statute-barred on one of these grounds (which will require consideration both of whether Cargolux has established that NZ Bloom could reasonably have discovered the contravention and whether that places an onus on NZ Bloom to show why it could not, by exercise of reasonable diligence, have discovered the contravention); and(d) The over-arching question of whether all of these matters can be determined on this summary application.The contravention[31] NZ Bloom claims that Cargolux has engaged in conduct that constitutes a contravention of s 27(2) of the Act. That section reads:27 Contracts, arrangements, or understandings substantially lessening competition prohibited(1) No person shall enter into a contract or arrangement, or arrive at an understanding, containing a provision that has the purpose, or has or is likely to have the effect, of substantially lessening competition in a market.(2) No person shall give effect to a provision of a contract, arrangement, or understanding that has the purpose, or has or is likely to have the effect, of substantially lessening competition in a market.Was the claim commenced outside the 10 year long-stop period?[32] The ground based on the long-stop limitation period derives from NZBloom's pleading that Cargolux entered into a contract, arrangement, orunderstanding that has the purpose or effect of substantially lessening competition, in September or October 2001. On its own that would be a contravention of s 27(1), and would be statute-barred. However, whilst that is part of NZ Bloom's pleading, itis not the basis for its claim. Its claim is that Cargolux gave effect to that agreement each time it rendered an account with a surcharge, and that this occurred betweenJuly 2004 (when its broker first engaged Cargolux to carry NZ Bloom's flowers) andFebruary 2006 (when the broker ceased using Cargolux).[33] It is a contravention of s 27(2) to "give effect to" a provision of an agreementwhich has the purpose or effect of lessening competition. The phrase "give effect to"is defined as follows:2 Interpretation(1) ...Give effect to, in relation to a provision of a contract, arrangement, or understanding, includes—(a) Do an act or thing in pursuance of or in accordance with that provision:(b) Enforce or purport to enforce that provision[34] This definition has been interpreted widely.11[35] It is clear, both on NZ Bloom's pleadings and from the evidence in support ofthe opposition, that the earliest date on which Cargolux's liability to NZ Bloom arosewas the date on which Cargolux first imposed a surcharge on freight carried for NZ Bloom, namely July 2004, which is well within the 10 year long-stop period.11 Tradestock Pty Ltd v TNT (Management) Pty Ltd (1977) ATPR 40-056 (FCA) at [17571]; see alsoJD Heydon QC Trade Practices Law (looseleaf ed, Thomson Reuters) at [40.70].Was the contravention discovered or reasonably discoverable more than three years before commencement?[36] NZ Bloom submits that it did not discover that Cargolux had imposed thesurcharges until release of this Court's decision following the settlement of the Commerce Commission's infringement proceeding in April 2011. The Court is unable to go behind that contention on this summary application. Accordingly, thereal issue is whether Cargolux's contravention ought reasonably to have beendiscovered earlier and, in particular, before 2 November 2008. This is a more complex issue.The test[37] The law in relation to reasonable discoverability is probably still developing. The concept features in the Limitation Act 2010 and has been considered recently in cases dealing with s 43(5) of the Fair Trading Act 198612. Nevertheless, the concept has been considered sufficiently in other similar contexts to provide guidance on the principles to be applied in the context of s 82 of the Act. Those principles include:13(a) The concept of reasonable discoverability introduces an objective element, with the test being: 14...how a person carrying on a business of a relevant kind would act if he had adequate but not unlimited staff and resources and were motivated by a reasonable but not excessive sense of urgency.(b) The concept requires the exercise of reasonable, not exceptional, diligence.1512 By the Supreme Court in Commerce Commission v Carter Holt Harvey Ltd [2009] NZSC 120,[2010] 1 NZLR 379 and by this Court in Houghton v Saunders (2011) 2 PRNZ 509 (HC) and Hunt vMacartney HC Auckland CIV-2010-404-001881, 25 August 2010.13 See Hook v Gulf Harbour Town Centre Ltd (in liq) HC Auckland CIV-2002-404-001931, 2 March2007 at [38]–[43] for a review of authorities which provide helpful guidance.14 Paragon Finance plc v DB Thakerar & Co (a firm) [1999] 1 All ER 400 (CA) at 418, cited withapproval in Amaltal Corp Ltd v Maruha Corp [2007] 1 NZLR 608 (CA) at [155].15 Amaltal, above n 14, at [159]–[161] (although in Amaltal the Court of Appeal was having toconsider reasonable discoverability in the circumstances of the fraud exception under s 28 of theLimitation Act 1950.)(c) It is not enough to show that a plaintiff might have discovered a breach by pursuing an enquiry in some collateral matter; a defendant must show that there has been something to put the plaintiff on enquiry in respect of the matter in question, and that if enquiry had been made it would have led to the discovery of the real facts.16(d) The "matter giving rise to the contravention" refers to conduct incontravention of the Act rather than the legal consequences of those facts (such as loss).17(e) Time will begin to run at the point when reasonable enquiries would have led to knowledge of the relevant facts.18 In the s 82 context this means the giving rise to the contravention, rather than when it obtains the facts needed to prove its claim.19The arguments for reasonable discoverability[38] Counsel for Cargolux submitted that a reasonable person in NZ Bloom'sposition would have been put on enquiry from February 2006 when both international and local media started carrying reports of the alleged cartel activity affecting air freight, including mention of Cargolux: the press reports showed that in the 12 months after reports started appearing, the conduct was widespread amongstthe world's major air cargo carriers, including Cargolux, and that it extended to New Zealand at least to the extent that by early 2007 there were reports that Air New Zealand was possibly implicated and that the Commerce Commission was looking into the possibility that it was affecting the market in New Zealand.[39] Counsel noted NZ Bloom's claim that between July 2004 and December2006 it had incurred costs of $314,265.24 in shipping its flowers to Los Angeles (an average of over $10,000 per month through that period) and argued that a reasonably16 Laws of New Zealand Limitation in civil proceedings at [306], approved in Amaltal, above n 14, at[152]–[154] and applied to s 82 in Hook, above n 13, at 68.17 Murray v Eliza Jane Holdings Ltd (1993) 6 PRNZ 251 (CA); see also Hook, above n 13, at [40] and[43], citing Stratford v Phillips Shayle-George (2001) 15 PRNZ 573 (CA).18 Stratford v Phillips Shayle-George, above n 17.19 Hook, above n 13, at [73].diligent small business, such as demonstrated by these facts, would be looking for opportunities for cost reductions or savings, particularly where there was a prospect that part of its costs might have been imposed unlawfully. He argued that this was simple business commonsense, and that a reasonably diligent businessman would, at the least, have enquired of the broker as to the makeup of its charges and as to the airline that was carrying its flowers. This was particularly so as reports emerged that air cargo to and from Los Angeles was potentially affected.[40] Counsel submitted that the media reports were sufficient to have put NZ Bloom on enquiry in 2006 but, in any event, certainly before the earliest of the dates that NZ Bloom acknowledges awareness of facts that might have led to a train of enquiry (being 15 December 2008 when the New Zealand Herald reported that the Commerce Commission had filed proceedings against Cargolux with respect to the imposition of fuel surcharges). That enquiry would have identified Cargolux as its carrier and the components of the charges rendered to it.[41] Counsel argued that Cargolux had done enough to establish a case for reasonable discoverability before 2 November 2008, and that it was for NZ Bloom to advance a case for postponing the start of the three year period.20[42] This last submission raises two points. The first is whether Cargolux has discharged its onus to show that the matter giving rise to the contravention was reasonably discoverable before 2 November 2008. The second is whether it is then for NZ Bloom to show that the matter was not reasonably discoverable at that time and, if so, whether it has done so.Has Cargolux shown reasonable discoverability more than 3 years before commencement of the proceeding?[43] I accept, as a starting point, that a person can be put on enquiry (for the purpose of the test of reasonable discoverability) by media publication of facts. This may depend on the detail within the report (specific information that goes to the20 Relying, by analogy, on comments by Millet LJ in Paragon Finance, above n 14, at [418] and inMurray v Morel & Co Ltd [2007] NZSC 27, [2007] 3 NZLR 721 at [32] and [34].matter in issue) and the nature of and apparent sources for the report. Thus in GD Searle & Co v Gunn21 a researched magazine article was considered sufficient to alert the plaintiff to the possible cause of ectopic pregnancies and infertility which was the basis of her claim, and in Burmeister v Registrar-General of Land22 time was found to run from the date that the plaintiffs read a detailed article alerting them to a finance scam. Similarly, in Hook v Gulf Harbour Town Centre Ltd23 the Court found that the publication of facts in issue in newspaper articles did not necessarily constitute knowledge of those facts, but the article was a consideration in determining the reasonable discoverability of the facts.[44] Counsel for Cargolux was critical of NZ Bloom's failure to state what itknew, and when it learned, of material facts. However, NZ Bloom has submittedthat it learned of these matters with the release of this Court's judgment in April2011, and acknowledged in submissions (by implication) that it was aware of the report in December 2008 that the Commerce Commission was laying charges against various parties, including Cargolux, over surcharges. That is as far as the pleaded facts go.[45] Counsel for NZ Bloom submitted that Cargolux had not shown that NZ Bloom had actual knowledge of the agreements, or that Cargolux had been giving effect to them in the charges rendered to it as a result of those agreements, and had not established that the various media reports put it on enquiry:(a) No inference could be drawn that NZ Bloom's representatives musthave seen media reports other than those in the New Zealand Herald or the Sunday Star Times, being the only publications in regular circulation in the Auckland area.(b) It could not be taken for granted that its representatives would have seen the reports in those two newspapers (so as to put NZ Bloom on notice), or that the terms of the reports necessarily put it on enquiry as to anti-competitive activity affecting the freight charges rendered to it,21 GD Searle & Co v Gunn [1996] 2 NZLR 129 (CA).22 Burmeister v Registrar-General of Land [2011] 2 NZLR 678 (HC).23 Hook, above n 13.or that any enquiry that might have been made would have led to discovery of those facts.(c) In particular, there was not a sufficient basis from which to draw an inference that NZ Bloom (through its representatives) had knowledge and experience of the Commerce Commission such that the NewZealand Herald's report on 16 February 2006 put it on enquiry, or thatany enquiries made at that point would have elicited facts as to the agreements and particularly as to their application in the charges rendered to it.(d) The reports lack sufficient particulars to justify a finding of reasonable discoverability as prior to December 2008 they referred to investigations into alleged cartel activities in overseas jurisdictions, byoverseas regulators, and any reports on the Commerce Commission'sinvestigation did not mention Cargolux (until December 2008).(e) NZ Bloom did not have the staff or resources to enquire into such general allegations.[46] I have already accepted that a media report can be a basis for knowledge of facts to put a party on enquiry. However, in previous cases where this has been found24 it has been accepted or found that the party had this knowledge. That is not the case here. I do not consider it appropriate to draw an inference of knowledge of the content of the reports merely from the fact that they appeared in a publication circulating generally in the area where the party is resident, let alone from reports published elsewhere. Whilst I accept that NZ Bloom has not been explicit as to what reports its representatives did or did not see at the time, it is for Cargolux to satisfy me that there is no basis on which NZ Bloom could contend lack of awareness of the essential factual components of the contravention. In that respect the comments of the Supreme Court in Commerce Commission v Carter Holt Harvey Ltd are apposite24 Refer paragraph [43] above.(although that case was addressing s 43(5) of the Fair Trading Act 1986, and was dealing with discoverability of loss or damage):25[29] For present purposes, the concept of discovery entails finding something out, in the sense of becoming aware of it. An applicant discovers the loss or damage when he or she acquires knowledge of it. In the Court ofAppeal there was some discussion about the "extent" of knowledge required.Extent in this context is not concerned with the quality of the necessary knowledge. Rather it is concerned with the subject-matter of that knowledge. Is that subject-matter the certainty of loss or damage, the possibility of its having occurred, or some intermediate position? It is neither necessary nor desirable to attempt some qualitative description of the knowledge inherent in the concept of discovery. Put simply, an applicant either is or is not aware of the loss or damage. Furthermore, if there is any doubt about whether the applicant was actually aware of the loss or damage, the inquiry then moves to whether the applicant ought reasonably to have been aware of it. The Court will then have to consider whether a reasonable person, situated as the applicant was, ought to have known that loss had occurred. No further refinement is required on either of these aspects of the matter.[47] The Supreme Court commented that it was necessary to determine how likely the occurrence of loss should be before it could be said to have been discovered or that it ought to have been discovered, and adopted the test that the loss should be more probable than not, adding:26[31] Adopting this standard represents an appropriate reconciliation of the interests of applicants and defendants, both for actual knowledge and for constructive knowledge. Time should not start running when past loss is just a mere possibility or something that could well have happened...[48] I accept the submission of counsel for NZ Bloom that this is the appropriate standard for determining the likelihood of discovery, and that in the absence of clear facts it is a matter for trial. I do not regard possible inferences from media reports asmeeting this test. Nor is it a matter of drawing adverse inferences from NZ Bloom'sfailure, at this stage, to state explicitly what it knew and when. It is for Cargolux to persuade me, on this application, that there is no arguable case that the facts that give rise to its claim (the matter giving rise to contravention) were discoverable before 2 November 2008 (being three years before 2 November 2011 when it filed this proceeding). It has not been able to do so.25 Commerce Commission v Carter Holt Harvey Ltd [2009] NZSC 120, [2010] 1 NZLR 379 at [29].26 At [31].[49] In light of this finding, I do not need to consider whether there is an arguable case for postponement of that starting point. I accept that if Cargolux had established its case that NZ Bloom ought reasonably to have discovered the facts prior to 2 November 2008, it would then be for NZ Bloom to establish a case for postponement.27 That may be a matter for trial.Suitability for summary determination[50] Reasonable discoverability is essentially a factual question. It is implicit in the above reasons that I do not consider a key factual question such as this should be determined in this summary context. There may be cases where it will be clear enough to determine summarily (for instance, I have referred to cases where a party admits that it has read reports of facts going to the heart of the substantive issue). Inthe present case there will be a need to examine what NZ Bloom's representativesknew and when, what it could have done with the resources available to it, and what such enquiries could have revealed. For example, what could an enquiry of the broker have produced?[51] At this stage I cannot say whether discovery of the facts of the contravention was anything more than a mere possibility. I am not persuaded that discovery wassomething that "could well have happened".28 I cannot be satisfied to the degree of certainty required29 that NZ Bloom's claim is definitely statute-barred.Decision[52] Cargolux's application is dismissed.[53] NZ Bloom is entitled to costs on a scale 2B basis together with disbursements as fixed by the Registrar.[54] I make the following timetable orders:27 Murray v Morel, above n 20, at [34].28 Commerce Commission v Carter Holt Harvey Ltd, above n 25, at [3].29 Houghton v Saunders (2011) 2 PRNZ 509 (HC) at [113].(a) Cargolux is to file and serve its statement of defence by 12 December 2012; and(b) Counsel are to confer on discovery and file a joint memorandum (or separate memoranda if there are matters on which they cannot agree) by 19 December 2012 stating whether standard or tailored discoveryis sought and the scope of such discovery, the parties' proposals for listing and exchange, and a timetable.[55] Interlocutory timetable orders will be made upon receipt of the memorandum (or memoranda), which will include allocation of a case management conference.____________________Associate Judge Abbott