RED STAG TIMBER LTD v JUKEN NEW ZEALAND LTD [2021] NZHC 2662

RED STAG TIMBER LTD v JUKEN NEW ZEALAND LTD [2021] NZHC 2662 [6 October 2021]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2017-404-2753[2021] NZHC 2662BETWEEN RED STAG TIMBER LIMITEDPlaintiffAND JUKEN NEW ZEALAND LIMITEDDefendantHearing: 17 and 18 May 2021Appearances: N F Flanagan, C Fleming and Ms Butcher for the PlaintiffA R Galbraith QC, C L Bryant, G Luen and C Lewis for theDefendantJudgment: 6 October 2021JUDGMENT OF GAULT JThis judgment was delivered by me on 6 October 2021 at 5:00 pmpursuant to r 11.5 of the High Court Rules 2016.Registrar/Deputy RegistrarSolicitors / Counsel:Mr N F Flanaghan, Mr D R Green and Ms C Fleming, Meredith Connell, AucklandMr A R Galbraith QC, Barrister, AucklandMs C Bryant, Ms G J Luen and Ms C Lewis (defendant's instructing solicitors), Hesketh Henry,Auckland[1] In this proceeding by Red Stag Timber Ltd (Red Stag) against JukenNew Zealand Ltd (JNL) alleging breach of the Fair Trading Act 1986 (FTA), thefollowing interlocutory applications require determination:(a) JNL's application for orders striking out Red Stag's pleading / grantingleave to apply for summary judgment / entering summary judgment fordefendant;(b) Red Stag's applications for discovery orders and a more explicitpleading.Factual background[2] Red Stag and JNL compete as producers and suppliers of timber for use in theconstruction of buildings. Since about 2007, JNL has manufactured, promoted andsupplied a product called "J-Frame" which is an engineered wood product comprisinglaminated veneer lumber (LVL).[3] It is common ground that wood products must meet the performancerequirements of the Building Code. Acceptance of compliance can be achieved indifferent ways, including by compliance with an acceptable solution (which is oftenbased on technical standards). But the parties interpret the technical standards verydifferently. Also, the standards changed over time, so the interpretations apply in twomain periods, before and after December 2012. It is unnecessary for the purposes ofthis judgment to address the detail of the various standards and of the interpretationdisputes relevant to J-Frame, but I will refer to some aspects later in this judgment.[4] Red Stag claims that JNL has since 2007 made misrepresentations aboutJ-Frame in breach of the FTA. Red Stag says that JNL's representations about J-Framegenerally relate to its class of preservative treatment and its compliance with thebuilding standards that set out the preservative treatment requirements for timberproducts according to their characteristics and uses. I will refer further to therepresentations later.[5] Red Stag's claim is that JNL's representations allowed JNL to obtain a greatershare of the framing timber market in New Zealand; if customers knew the trueposition about J-Frame's treatment and compliance with standards, far fewercustomers would have purchased it; and they would have purchased Red Stag'sproducts instead. Also, Red Stag says its sales of timber by-products were adverselyaffected and JNL's presence in the market with a non-compliant product caused a dropin the price of timber framing products generally.Procedural history[6] Red Stag commenced this proceeding on 17 November 2017. Its claim dividedJNL's conduct into different time periods:(a) 2008 to December 2012;(b) 5 December 2012 to 18 June 2015;(c) 18 June 2015 to 9 June 2017;(d) 9 June 2017 to late August 2017; and(e) late August 2017 to 31 August 2017.[7] JNL filed a statement of defence in December 2017. Then, in March 2018JNL applied to strike out the cause of action relating to the period from 2008 toDecember 2012 for lack of particulars.1 JNL also applied to have its limitation defenceheard as a preliminary question.[8] On 19 September 2018 Associate Judge Bell struck out the cause of action forthe period from 2008 to December 2012.2 He concluded that Red Stag had given noevidence to suggest any ground to believe that between 2008 and 2012 there weretreatment standards for JNL's products, that there were any labelling requirements,that JNL did not adhere to those standards and did not label its J-Frame correctly, and1 JNL also applied to strike out other aspects of the claim which are not in issue.2 Red Stag Timber Ltd v Juken New Zealand Ltd [2018] NZHC 2459.that JNL in any way misrepresented its J-Frame in trade.3 He made clear that thepleading of the cause of action failed for lack of particulars under r 5.26(b) of theHigh Court Rules 2016. That did not bar Red Stag from starting a fresh proceedingalleging FTA breaches between 2008 and 2012, so long as it was procedurallycompliant and also met substantive requirements (including any limitation rules).Separately, Associate Judge Bell declined JNL's application for its limitation defenceto be heard as a preliminary issue.[9] Neither party appealed. In March 2019 Red Stag filed an amended statementof claim with the first cause of action removed. But on 19 December 2019 Red Stagcommenced a separate proceeding including for losses arising during the period from2007 to December 2012. JNL applied to strike out that claim. Ultimately, in 2020Red Stag discontinued that separate proceeding and filed amended claims in thisproceeding reinstating its claim for losses prior to December 2012. The parties agreedthat time would stop running on the claim for losses prior to December 2012 on19 December 2019 (being the filing date for the 2019 proceeding).Issues[10] The issues to be determined are:JNL's applications(a) whether JNL requires leave for its strike out application;(b) if so, whether leave should be granted;(c) whether JNL should be granted leave to apply for summary judgment;(d) whether the claims are time barred under s 43A of the FTA(the substantive basis for both the strike out and summary judgmentapplications);3 Red Stag Timber Ltd v Juken New Zealand Ltd [2018] NZHC 2459 at [28].Red Stag's applications(e) whether a more explicit statement of defence should be ordered;(f) whether documents falling within seven specified categories arerelevant:(g) whether there are probative grounds for believing such documentsexist;(h) whether a further affidavit of documents should be ordered;(i) whether the Court should set aside JNL's claims for confidentiality; and(j) whether the Court should set aside JNL's litigation privilege claims inrespect of communications for the purpose of regulator investigations.Whether JNL requires leave for its strike out application[11] Red Stag says that JNL requires leave to apply to strike out pursuant to r 7.52,which provides that a party who fails on an interlocutory application may not applyagain for the same or a similar order without first obtaining leave. Mr Flanagan, forRed Stag, does not rely on JNL's earlier strike out application but on JNL'sunsuccessful application for an order that its limitation defence be determined as apreliminary question. He submitted that in the circumstances of this case,in substance, JNL is seeking a similar order, that is seeking to have its limitationdefence determined before trial.[12] For JNL, Ms Bryant submitted that r 7.52 does not apply here. JNL succeededin striking out Red Stag's claim for losses prior to December 2012 on proceduralgrounds. Its present application for a substantive strike out or summary judgment hasnot previously been determined. Associate Judge Bell only considered JNL'slimitation defence when considering whether to grant JNL's application for a split trial.In electing not to appeal the Associate Judge's exercise of his discretion not to order asplit trial, JNL did not accede to Associate Judge Bell's interpretation of section 43A.[13] I consider that r 7.52 does not apply. As Mr Flanagan acknowledged, JNL didnot fail in relation to its earlier strike out application. It succeeded on other,procedural, grounds. JNL did fail on its application under r 10.15 for an order that thelimitation issue be determined as a separate preliminary question. Associate JudgeBell declined that application. JNL could not repeat that application without leave.But I consider that JNL's strike out application is not seeking to do so. The earlierapplication under r 10.15 called for assessment of the factors weighing for and againstproceeding by way of a split trial. The application itself did not involve substantivedetermination of the limitation issue. That would have followed only if a split trialhad been ordered. JNL's current strike out application addresses that substantivelimitation issue on strike out grounds. It is not seeking a procedural order that JNL'slimitation defence be determined before trial. Even though the proposed strike outraises essentially the same factual and legal issues as the proposed preliminarydetermination would have done, and a strike out application may have the effect ofdetermining JNL's limitation defence before trial, in terms of r 7.52 the strike outapplication is not seeking the same or a similar order as the earlier application underr 10.15. Also, Associate Judge Bell made clear that a further claim by Red Stag wouldstill be susceptible to challenge on limitation grounds.[14] Accordingly, JNL does not require leave for its strike out application.Whether leave should be granted for JNL's strike out application[15] It is therefore unnecessary to decide whether there are special circumstancesjustifying leave under r 7.52 (such as relevant facts emerging from Red Stag'sdiscovery). I merely note that I do not consider that seeking to bring the strike outapplication is an abuse of process, as Mr Flanagan submitted, given that r 7.52 has aleave element and Associate Judge Bell indicated a further claim by Red Stag wouldstill be susceptible to challenge on limitation grounds.Whether JNL should be granted leave to apply for summary judgment[16] JNL sought leave to apply for summary judgment when it filed its applicationdated 4 December 2020. It was required to do so because it had not applied forsummary judgment when its statement of defence was due back in December 2017.Delay is a relevant factor and given the lengthy delay, explanation is certainly required.But the merit of the proposed application and efficiency will also be factors. TheCourt's guiding principle is the just, speedy and inexpensive determination of theproceeding.[17] JNL says it brought its applications for strike out and summary judgmentpromptly after Red Stag commenced its separate proceeding in December 2019 andthen repleaded in this proceeding in 2020. JNL says its application also took accountof documents provided by Red Stag on discovery in December 2019, which support alimitation defence. Despite the proceeding having been on foot since 2017, JNL saysthe proceeding is still at a preliminary stage. Although discovery was completed in2019, JNL says Red Stag has not engaged with the evidence and is unable to quantifyits claim. It says that summary judgment is appropriate, and no useful purpose will beserved by allowing Red Stag's claims to continue towards trial at considerable furtherexpense to JNL and the taxpayer. Ms Bryant submitted this is one of those relativelyrare cases where leave to apply for summary judgment should be granted afterdiscovery because discovery brought to the surface Red Stag's knowledge, and therewas no subsequent delay by JNL.[18] Mr Flanagan submitted there was delay even after Red Stag filed its thirdamended statement of claim on 8 July 2020 and its fourth amended statement of claimon 11 November 2020. He submitted the application is made on the basis of limitationarguments that JNL first put forward in its December 2017 statement of defence andin its application for a preliminary question in March 2018, and that Red Stag's 2019discovery and 2020 pleading amendments did not change the ultimate grounds.He also submitted that the application has no merit and indeed is an abuse of processgiven it is clear that Red Stag has an arguable cause of action since there is a relevantdispute of fact as to timing of Red Stag's knowledge.[19] In this summary judgment leave context as well, I do not consider thatreference to abuse of process adds anything. The merit of the proposed application isa factor. Applying ordinary principles to whether leave to seek summary judgmentshould be granted, I take into account the following factors.[20] Dealing first with delay, the position differs as between the two time periodsin the claim. In relation to the claim for losses prior to December 2012,JNL understandably did not initially apply for summary judgment. It applied insteadto strike out, albeit in March 2018 rather than when its defence was due in December2017. Its strike out application was successful in September 2018. After the cause ofaction resurfaced in the separate December 2019 proceeding, JNL applied again(to strike out and for summary judgment) in that proceeding. In July 2020 Red Stagsought to discontinue that proceeding and filed its third amended statement of claimin this proceeding. JNL's subsequent delay before filing the application was not fullyexplained but was relatively minor in the context of this procedurally messy dispute.Red Stag contributed to that delay.[21] In relation to the claim for losses after December 2012, JNL applied to have itslimitation defence heard as a preliminary question rather than for summary judgment(or strike out). Associate Judge Bell said JNL recognised there were disputed issuesof fact.4 JNL no longer accepts there are relevant disputed issues of fact, in part dueto Red Stag's discovery in December 2019. The delay was not fully explained but,as indicated, at least from July 2020 it was relatively minor. Also, if leave were to begranted in respect of the earlier period, that may weigh in favour of leave for the latterperiod on efficiency grounds.[22] As indicated, the merits are also relevant. An apparently strong case forsummary judgment may justify leave even when there has been delay that is not fullyexplained. That may well assist in the just, speedy and inexpensive determination ofthe proceeding. On the other hand, leave may be declined when there is no realprospect of summary judgment. But the merits may not be immediately obvious atthe leave stage. As the stark difference between the respective submissions suggests,that is the case here. This is not a case where leave should be declined on the basisthat the application has no merit.[23] Finally, in this limitation context, the difference between strike out andsummary judgment may be more apparent than real, in which case the strike out4 Red Stag Timber Ltd v Juken New Zealand Ltd [2018] NZHC 2459 at [37].application may weigh against the need for leave to pursue the summary judgmentapplication. On the other hand, to the extent there is any difference requiring separatedetermination, there is some efficiency gain in considering the two applicationstogether.[24] Balancing these factors, I consider that leave to apply for summary judgmentshould be granted. Delay is a factor, but I am required to consider the merits of thelimitation issue in the context of the strike out application in any event.[25] I now turn to the substance of JNL's limitation argument.Whether the claims are time barred under s 43A of the FTA[26] JNL raises its limitation defence by way of both strike out and summaryjudgment. Before addressing the substantive issue, I summarise the differentapproaches on strike out and summary judgment applications, which are not in dispute.The difference between an application to strike out and summary judgment is thatstrike out is usually determined on the pleadings alone whereas summary judgmentrequires evidence.Approach on strike out[27] The approach on strike out applications under r 15.1(1) on the ground ofno reasonably arguable cause of action is well established.5 The Court proceeds onthe assumption that the facts pleaded in the statement of claim are true. Before theCourt may strike out proceedings, the causes of action must be so clearly untenablethat they cannot possibly succeed. The jurisdiction is to be exercised sparingly, andonly in a clear case where the Court is satisfied it has the requisite material, but is notexcluded by the need to decide difficult questions of law requiring extensive argument.[28] A defence may give rise to a strike out. In the limitation context, the SupremeCourt has said that on a strike out application, the defendant must demonstrate that theplaintiff's case is so clearly statute-barred that the plaintiff's claim can properly be5 Attorney-General v Prince and Gardner [1998] 1 NZLR 262 (CA) at 267, approved in Carter HoltHarvey Ltd v Minister of Education [2016] NZSC 95, [2017] 1 NZLR 78 at [10].regarded as frivolous, vexatious or an abuse of process.6 There must be no reasonablepossibility that the case was brought within time. If there is, the matter must go totrial, with the limitation point being a defence to be assessed on the basis of all theevidence led at trial. Where the defence requires a factual foundation not evident inthe statement of claim and the facts are contested, the matter will not be suitable forstrike out.[29] Partial strike out is contemplated by r 15.1(1), and available with caution whereit would promote the efficient resolution of the proceeding.7Approach on summary judgment[30] The principles applying on a summary judgment application are also wellsettled. The Court may give judgment against a plaintiff if satisfied that none of itscauses of action can succeed,8 that is, there is no real question to be tried.9 The onusis on the applicant. The Court must be left without any real doubt or uncertainty.It will not normally resolve material conflicts of evidence or assess the credibility ofdeponents.10 Applications for summary judgment will be inappropriate where thereare disputed issues of material fact or where material facts need to be ascertained bythe Court and cannot confidently be concluded from affidavits.11Section 43A time bar[31] The key issue relevant to both the strike out and summary judgmentapplications is whether Red Stag's claim is time barred under s 43A of the FTA, whichprovides:43A Application for order under section 43A person may apply to a court or the Disputes Tribunal for an orderunder section 43 at any time within 3 years after the date on which the6 Commerce Commission v Carter Holt Harvey Ltd [2009] NZSC 120, [2010] 1 NZLR 379 at [39],citing Murray v Morel & Co Ltd [2007] 3 NZLR 721 at [33].7 Body Corporate 360683 v Auckland Council [2017] NZHC 1785 at [31]-[37]; and Auckland CityCouncil v Effuzi (International) Ltd HC Auckland CIV-2009-404-6044, 19 October 2011 at [103].8 High Court Rules 2016, r 12.2.9 Pemberton v Chappell [1987] 1 NZLR 1 (CA) at 3.10 Krukziener v Hanover Finance Ltd [2008] NZCA 187, (2008) 19 PRNZ 162 at [26].11 Westpac Banking Corp v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA) at [62].loss or damage, or the likelihood of loss or damage, was discoveredor ought reasonably to have been discovered.[32] Thus, on an application for an order under s 43, the three year time limit startsto run after the date on which the loss or damage, or the likelihood of loss or damage,was discovered or ought reasonably to have been discovered.[33] Ms Bryant submitted that time starts running when the plaintiff has actual orconstructive knowledge:(a) of the facts and circumstances which give rise to a tenable cause ofaction for contravention of the FTA;12 and(b) that it is more probable than not that the possible contravention hascaused, or will in future cause, more than minimal loss.13[34] Ms Bryant submitted that knowledge of the legal position is not required.By reference to Commerce Commission v Carter Holt Harvey Ltd,14 she alsosubmitted that ongoing conduct does not prevent time running.[35] Mr Flanagan submitted that the Supreme Court's test in CommerceCommission v Carter Holt Harvey requires actual or constructive knowledge that it ismore probable than not that there has been or will be loss occasioned by thecontravention (that is, false or misleading representations in breach of the FTA),which includes knowledge of the contravention.[36] It can be seen that the difference between the parties primarily relates to theneed for knowledge of the likelihood of "contravention". That involves a dispute asto knowledge of the proper legal interpretation of the building standards (bearing inmind that disputed interpretation underlies the entire dispute).12 Citing Commerce Commission v Carter Holt Harvey Ltd [2009] NZSC 120, [2010] 1 NZLR 379at [33]; and Houghton v Saunders [2014] NZHC 2229, [2015] 2 NZLR 74 at [658]-[660].13 Citing Commerce Commission v Carter Holt Harvey at [22]-[27].14 Commerce Commission v Carter Holt Harvey [2009] NZSC 120, [2010] 1 NZLR 379.[37] Commerce Commission v Carter Holt Harvey concerned an earlier limitationprovision contained in s 43(5) of the FTA, but s 43A is materially the same.Before turning to the facts of the case, the Supreme Court majority judgment given byTipping J addressed three points arising on the interpretation of the limitationprovision, two of which are relevant here: the proper compass of the expression"likelihood of loss or damage"; and what it means to "discover" loss or damage: whatdegree of awareness of the loss or damage does one need before being found to havediscovered it, and how likely must the suffering of loss or damage be before it can besaid to have been discovered.[38] In relation to "likelihood of loss or damage", Tipping J confirmed that thephrase encompassed knowledge of losses that were likely to arise in the future.15Time starts running when the applicant discovers or ought to have discovered that lossor damage has already occurred, or is likely to occur in the future.16[39] In relation to what it means to "discover", Tipping J first referred to the degreeof awareness and said that an applicant either is or is not aware of the loss or damage.17If there is doubt, the inquiry moves to whether the applicant ought reasonably to havebeen aware of it. As to how likely the occurrence of loss should be before it can besaid to have been discovered or that it ought to have been discovered, Tipping Jconsidered likelihood means that loss is more probable than not, in the context of bothpast and future loss.18[40] Tipping J added that:19As loss is not relevant for present purposes unless it was occasioned by acontravention of the Act, the words "as a result of a contravention of the Act"are necessarily implicit in this question. The same concept of probabilityshould apply, for present purposes, to the applicant's awareness that loss hasbeen occasioned by a contravention.15 Commerce Commission v Carter Holt Harvey Ltd [2009] NZSC 120, [2010] 1 NZLR 379 at[22]-[27].16 At [27].17 At [29].18 At [30].19 At [31].[41] Finally, Tipping J said that the use of the definite article in the phrase "the lossor damage" in the limitation provision did not require the applicant to have becomeaware of the actual loss or damage as ultimately established.20 The expression meanssome more than minimal loss or damage, without the need for any greater specificityas to the nature or amount of that loss or damage.21[42] Accordingly, in terms of the applicable test, Tipping J concluded that CarterHolt Harvey Ltd (CHH) must show that the Commerce Commission knew or oughtreasonably to have known, on or before 26 October 2003, that some person or personswere likely to have suffered loss or damage as a result of a probable contravention byCHH. That test reflected the facts of the case which involved a claim against CHH bythe Commission as regulator rather than by a person claiming to have suffered loss.Hence, the focus on awareness of existing or future loss. Also, the key allegedrepresentation by CHH was that timber met a particular grade (MGP10). The essentialissue was whether the timber did meet its represented grade. In that case, whetherthere had been a contravention depended on consideration of the average of anappropriately delineated population of timber sold. Tipping J concluded that CHH'sargument that the Commission was aware of the contravention was based on a smallsample from which it could not be said that the average would probably contravenethe standards. Hence, the strike out failed on final appeal.[43] Tipping J's reference to knowledge of "probable contravention" should beunderstood in that context, that is referring to knowledge that the timber on averagedid not meet its represented grade. That the timber did not in fact meet its representedgrade on average was the relevant element of the cause of action (FTA contravention).That is consistent with the general approach to limitation, where knowledge of the(factual) elements of the cause of action is required. I do not consider Tipping J wasreferring to knowledge of the legal result. Although not explicit in the judgment,the conclusion is consistent with Ms Bryant's submission that the plaintiff need notknow that the facts and circumstances contravene the FTA (which will not bedetermined until judgment).20 Commerce Commission v Carter Holt Harvey Ltd [2009] NZSC 120, [2010] 1 NZLR 379 at [32].21 At [34].[44] In Houghton v Saunders,22 the limitation issue also depended on awareness ofan alleged contravention of the FTA. Like this case, it did not involve a third partyregulator claim with the resulting focus on awareness of existing or future loss.Nevertheless, Dobson J considered that the approach in Commerce Commission vCarter Holt Harvey applied. Relevantly, Dobson J also said:[659] The ascertainment of loss suffered by a potential claimant is an issueof fact, the identification of which will generally be under the control of thepotential claimant. Ascertaining the elements of a cause of action under theFTA will likely require the application of the law to the facts, and in that sensecould be seen as different from determining the existence of a qualifying loss.In many cases, once loss has crystallised, its existence is a certainty.In contrast, a claimant will never know if a cause of action is successful untiljudgment has been obtained. It is common for limitation provisions to havetime running from the point at which a claimant knew, or ought reasonably tohave been aware, of the existence of all the elements of the cause of action.In the present context, Tipping J's requirement that the applicant be aware thatloss "has been occasioned by a contravention of the Act" cannot be takenliterally to require knowledge that the claim must necessarily succeed. Rather,that all elements for a tenable claim exist.[660] Accordingly, where the existence of loss or damage is not an issue,but reasonable discoverability of the elements to be made out in establishinga contravention of the FTA are, then time will run from the point where thoseelements were discovered, or ought reasonably to have been.[45] I agree that the approach in Commerce Commission v Carter Holt Harveyapplies where the issue is discovery or reasonable discoverability of an element of theclaim other than existing or future loss by a third party (being the issue in that regulatorclaim context). As Tipping J said, the same concept of probability applies to theapplicant's awareness that loss "has been occasioned by a contravention".23 Tipping Jmust have been referring to awareness of a contravention as well as that it caused loss.That is reinforced by the references later in his judgment to "probablecontravention".24 It would be inconsistent to apply the concept of probability to theawareness of causation but not to awareness of the contravention itself (at least in thesense arising in that case, as described).[46] I also agree with Dobson J that Tipping J in Commerce Commission v CarterHolt Harvey was not saying the claimant must be aware that the claim would succeed,22 Houghton v Saunders [2014] NZHC 2229, [2015] 2 NZLR 74.23 Commerce Commission v Carter Holt Harvey Ltd [2009] NZSC 120, [2010] 1 NZLR 379 at [31].24 At [39] and [54].but rather was saying the claimant must be aware of the elements of a claim, includingcontravention of the FTA (in the sense relevant in that case), causation and loss.Dobson J's reference to knowledge "that all elements for a tenable claim exist"acknowledges that ascertaining the elements of a cause of action under the FTA willlikely require the application of the law to the facts. That is particularly so here wherethe nature of the claim is complicated by the fact that whether each representation ofcompliance was in fact false depends on the proper interpretation of the standards(a question of law).[47] Ordinarily, knowledge of the elements of the claim would not requireknowledge of the legal strength of the claim – whether "tenable", "possible" or"probable". However, in this FTA context, one element of the claim is that the conductwas misleading, that is the representations of compliance with standards were false,on the basis that the standards required specified preservative treatment. In thiscontext, the claimant's knowledge of that particular element necessarily requires someappreciation of the preservative treatment requirements and therefore the properinterpretation of the standards.[48] As to the necessary level of that appreciation, the Supreme Court's decision inCommerce Commission v Carter Holt Harvey provides that knowledge of "probablecontravention" is required at least in respect of the factual elements of the claim.On one view, that same level of knowledge is required as to whether therepresentations are false even though the proper interpretation of the standards isintegral to whether the representations are false. The question is whether that featureof this case is sufficiently different from the issue in Commerce Commission v CarterHolt Harvey outlined above to require a different approach to knowledge of the properinterpretation of the standards; that is, Dobson J's lower threshold of knowledge thatthe elements for a "tenable" claim exist.[49] As indicated, the nature of the factual issue in Commerce Commission v CarterHolt Harvey did not call for consideration of the issue raised here. I consider thesignificance of the proper interpretation of the standards to whether the representationsare false (the contravention) is a material distinction in this case. Here, the correctinterpretation of the standards is unknown until determined by the Court. In the civilcontext, more probable than not is the substantive standard of proof. Thus,if knowledge of the probable contravention extends to knowledge of the probablemeaning of the standards as well as of the factual elements, it is effectively knowledgethat the claim will succeed. That would be a very difficult threshold to meet, whichseems inconsistent with the purpose of a limitation provision (avoiding the unfairprejudice of preparing a defence to a stale claim). I accept that, if there is doubt, theinquiry moves to whether the claimant ought reasonably to have known, but even thatwould be a difficult threshold in the context of the probable interpretation of thestandards. Claimants may or may not have taken legal advice on the properinterpretation. Another complication in this case is that alternative claims areadvanced based on different interpretations of the standards. The alternative claimshave different factual elements. In such a case, would the threshold be that theclaimant knew or ought to have known that the particular claim will probably succeedor only that one of the alternative claims will probably succeed?[50] For these reasons, I consider that Commerce Commission v Carter Holt Harveyis distinguishable insofar as knowledge of the proper legal meaning of the standardsis concerned. I consider that knowledge of the probable contravention does not extendto knowledge of the probable interpretation of the standards. Accordingly, the actualor constructive knowledge of the claimant that the defendant must show is knowledgeof the factual elements of the false representation claim to the more probable than notstandard but only knowledge that the claimant's alleged interpretation is tenable orarguable.[51] I turn to the application of the test to the facts of this case. JNL's argumentdifferentiates between the periods before and after December 2012. It is convenientto deal with the later period first since the claim for the earlier period was initiallystruck out and reinstated more recently.Period after December 2012[52] JNL's argument is that Red Stag's claim relating to conduct after December2012 is based on Red Stag's interpretation that the 2012 editions of NZS 3640,AS/NZS 1604.4 and B2/AS1 require LVL used in hazard class H1.2 conditions to betreated with Zelam's glueline treatment. For limitation purposes, JNL says Red Stagneeded to know that:(a) J-Frame was treated with boron, not Zelam's glueline treatment;(b) J-Frame was branded H1.2;(c) it was arguable J-Frame did not comply with NZS 3640 and/or B2/AS1;(d) J-Frame's presence in the market had caused, or would likely cause,Red Stag loss.[53] JNL says Red Stag had all of this information more than three years prior tothe issue of this proceeding on 17 November 2017, that is before 17 November 2014.JNL says that the material Red Stag had before that date, including documentationfrom CHH, shows that Red Stag was aware of the possible contravention, whichMs Bryant submitted is all that is required. She submitted Red Stag then had threeyears to bring its case but chose to pursue a regulatory pathway, and by the timeit issued this proceeding it was too late.[54] Red Stag disputes that it was familiar with treatment standards for LVL.The treatment standards for Red Stag's products required boron treatment and it hadno reason to question the fact that J-Frame also had boron treatment. It disputes theknowledge it is said to have acquired at a September 2014 conference. It says it onlyknew of CHH's concerns informally around the time of CHH's 6 November 2014letter – not receiving the letter until later – and knew that JNL rejected those concerns.Before that, Red Stag had no reason to investigate J-Frame. Red Stag's testing in earlyNovember 2014 was inconclusive.[55] Thus, Mr Flanagan submitted that Red Stag did not know of any more than amere possibility (if that) that JNL might have made false or misleading representationsabout J-Frame's treatment or compliance with relevant standards. He submitted thatas soon as Red Stag made its own enquiries and discovered it was likely that JNL hadcontravened the FTA – in December 2014 – it notified two clients and a representativeof the Timber Quality Scheme of its concerns.[56] In essence, Mr Flanagan submitted that in the face of sworn evidence fromMr Verry of Red Stag as to his knowledge, I could not say in a strike out or summaryjudgment context that Red Stag knew or ought to have known that JNL'srepresentations were false or misleading in breach of the FTA.[57] The evidence of Mr Verry of Red Stag focuses on saying that Red Stag did notknow that JNL's representations about J-Frame were false or misleading until around24 November 2014 at the earliest. As indicated, I consider that is not the correctquestion. The correct question is whether Red Stag knew of the other factual elementsof the claim (to the more probable than not standard) and that the claimedinterpretation was tenable.[58] Dealing first with the other factual elements, knowledge of some of the actsrelevant to the claimed FTA contravention of misrepresenting compliance are not indispute – knowledge that JNL represented J-Frame's compliance for hazard class H1.2and knowledge that the representations have caused loss. In the context of a claimthat J-Frame had to be treated with Zelam's glueline treatment to comply,the remaining factual question is whether Red Stag knew or ought reasonably to haveknown before 17 November 2014 that J-Frame was treated with boron, not Zelam'streatment. That seems a narrow factual question (which ought to be capable ofstraightforward resolution by interlocutory processes, with potential costconsequences if it is not).[59] Mr Verry's evidence does not explicitly address when he knew that J-Framewas treated with boron, not Zelam's treatment. It is necessary to infer from hisevidence Red Stag's knowledge of the underlying facts. It seems from his evidencethat Red Stag knew that J-Frame was treated with boron, but the timing of this is notclear, and there is no reference in his evidence to Zelam's treatment.[60] Mr Verry acknowledges that Red Stag knew earlier in November 2014 thatCHH was concerned that J-Frame did not comply. But this does not necessarily meanRed Stag knew or ought reasonably to have known the underlying factual basis forCHH's concern, in particular that J-Frame was treated with boron, not Zelam'streatment. Nor does Red Stag's testing in early November 2014, except that a5 November 2014 email with photographs of samples indicates that Red Stag knew itwas doing "Boron Penetration test of LVL Frame". This document does not refer toZelam's treatment. Nor does it show Red Stag knew or ought reasonably to haveknown the standards arguably required that J-Frame be treated with Zelam's gluelinetreatment. The requisite knowledge may be inferred from reading together all therelevant documents, including this email and official information released toRed Stag's lawyers earlier in 2014. Alternatively, it may be inferred that Red Stagought reasonably to have known. But, having regard to the high thresholds referredto for strike out and summary judgment, I consider such inferences should not bedrawn on the current applications. Such inferences might well be appropriate at trialbut, in the circumstances of a strike out or summary judgment, I consider that JNLfalls short of showing that Red Stag knew (or ought reasonably to have known) before17 November 2014 that J-Frame was not treated with Zelam's treatment and that thestandards arguably required that. In relation to the period after December 2012,I cannot say there is no reasonable possibility that the case was brought within time.In strike out terms, JNL has not shown that Red Stag's claim is so clearly statute-barred that it can properly be regarded as frivolous, vexatious or an abuse of process.In summary judgment terms, I cannot say there is no real question to be tried or noreal doubt or uncertainty.[61] Given my conclusion, it is unnecessary to decide whether ongoing conductprevents time running in the circumstances of this case.Period prior to December 2012[62] As mentioned, Red Stag's original claim for the period prior to December 2012was struck out in 2018. Its reinstated claim was filed on 19 December 2019. JNL saysthe effect of s 43A must be assessed by reference to the date three years before thereinstated claim; that is, before 19 December 2016.[63] JNL's argument is that Red Stag's claim for the period prior to December 2012is based on its interpretation of earlier editions of NZS 3640, AS/NZS 1604.4 andB2/AS1, as well as NZS 3602 and NZS 3604, to the effect that they:(a) did not recognise a boron treatment for LVL hazard class H1.2; and/or(b) required boron treated LVL to comply with the penetration requirementfor solid timber in NZS 3640.[64] JNL says the first proposition is based on an analysis of publicly availabledocuments and the claim is out of time for the same reasons as the later period.JNL says the second proposition requires Red Stag to know that J-Frame was nottreated to comply with the penetration requirement in NZS 3640. JNL and its certifierhad confirmed this to CHH in August and November 2014. Again, JNL says that CHHnotified Red Stag of its concerns prior to 17 November 2014. Red Stag knew CHHhad obtained independent testing which showed that complete sapwood penetrationwas not achieved or always achieved. Red Stag's own testing in early November 2014was consistent with this finding.[65] Again, I consider the focus should be on when Red Stag knew or oughtreasonably to have known the factual elements of the claim (to the more probable thannot standard) and that the claimed interpretation was arguable. The relevant acts forthe period prior to December 2012 are that J-Frame was treated with boron and thatcomplete sapwood penetration was not achieved or always achieved.[66] Red Stag does not dispute that it was aware of these facts before 19 December2016; that is, three years before the claim for the earlier period was reinstated on19 December 2019. Instead, it says that its reinstated claim is not a new cause ofaction as it is essentially the same as its claim for the later period (and 17 November2014 remains the relevant date). I turn to address this issue.Whether Red Stag's amended pleading in relation to losses to December 2012 raisesa new cause of action for limitation purposes[67] What constitutes a fresh cause of action in this context is well established.In ISP Consulting Engineers Ltd v Body Corporate 89408, the Court of Appeal said:25The relevant principles set out in Ophthalmological Society of New ZealandInc v Commerce Commission26 were summarised in Transpower New ZealandLtd v Todd Energy Ltd:27(a) A cause of action is a factual situation the existence of which entitlesone person to obtain a legal remedy against another (Letang v Cooper[1965] 1 QB 232 at 242-243 (CA) per Diplock LJ);(b) Only material facts are taken into account and the selection of thosefacts "is made at the highest level of abstraction" (Paragon Financeplc v D B Thakerar & Co (a firm) [1999] 1 All ER 400 at 405 (CA)per Millett LJ);(c) The test of whether an amended pleading is "fresh" is whether it issomething "essentially different" (Chilcott v Goss [1995] 1 NZLR 263at 273 (CA) citing Smith v Wilkins & Davies Construction Co Ltd[1958] NZLR 958 at 961 (SC) per McCarthy J). Whether there is sucha change is a question of degree. The change in character could bebrought about by alterations in matters of law, or of fact, or both; and(d) A plaintiff will not be permitted, after the period of limitations hasrun, to set up a new case "varying so substantially" from the previouspleadings that it would involve investigation of factual or legalmatters, or both, "different from what have already been raised and ofwhich no fair warning has been given" (Chilcott at 273 noting that thistest from Harris v Raggatt [1965] VR 779 at 785 (SC) per Sholl J wasadopted in Gabites v Australasian T & G Mutual Life AssuranceSociety Ltd [1968] NZLR 1145 at 1151 (CA)).[68] Ms Bryant submitted that Red Stag's original causes of action were based onJ-Frame's alleged failure to comply with the 2012 editions of the relevant standards,and the essential argument is that Zelam's glueline treatment is the only permittedtreatment for LVL in hazard class H1.2. As JNL did not use this treatment, J-Framedid not comply, and representations that it did were a breach of the FTA. The allegedmisrepresentations regarding compliance with the 2012 editions or the acceptablesolution were necessarily made, and losses were necessarily caused, thereafter.25 ISP Consulting Engineers Ltd v Body Corporate 89408 [2017] NZCA 160, (2017) 24 PRNZ 81 at[21].26 The Ophthalmological Society of New Zealand Inc v Commerce Commission CA168/01,26 September 2001 at [22]-[24].27 Transpower New Zealand Ltd v Todd Energy Ltd [2007] NZCA 302 at [61].Similarly, alleged misrepresentations made prior to December 2012 related to whetherJ-Frame complied with earlier editions, and loss can only have been caused by JNL'sconduct in the earlier period. The essential nature of the claim for the period prior toDecember 2012 is not the same as the claim for the period after December 2012. Everychange in standard requires a separate cause of action.[69] Mr Flanagan submitted that Red Stag did not put forward any new legal basisfor its claim in 2019 – its claim remained breach of ss 9, 10 and 13 of the FTA bymaking false and/or misleading representations about J-Frame's compliance withapplicable treatment standards, including by omitting to label J-Frame as having anenvelope treatment pattern. The basic claim is that JNL represented J-Frame compliedwith standards for hazard class H1.2 when it did not comply – consumers would haveunderstood that meant full penetration when J-Frame did not have full penetration.By adding NZS 3604 and NZS 3602 to its claim, Red Stag simply clarified it. Theapplicable standards are all intrinsically linked and cannot be assessed in isolation.The relevant acceptable solution B2/AS1 reinforces that link by referring to each ofthe standards either directly or indirectly. The claim's particulars did not change itsessential character. The only change in December 2012 was the introduction of aglueline treatment requirement under NZS 3640 (which JNL says did not apply toJ-Frame in any event).[70] Finally, Mr Flanagan submitted that JNL cannot say it had no fair warning ofRed Stag's claim given the original proceedings filed on 17 November 2017 andAssociate Judge Bell's signal when striking out that a claim for conduct in the earlierperiod might be reintroduced.[71] Dealing with the last point first, I do not accept that the original 2017 cause ofaction for the period prior to December 2012 amounts to fair warning in this context.It was struck out for lack of particulars. Associate Judge Bell made clear that anyreintroduction was subject to limitation rules.[72] I accept that whether the amended pleading is essentially different is a questionof degree. Here, the claim for the earlier period involves the same legal basis; that is,false or misleading representations in breach of the FTA. I also accept that, althoughthe pleading of new facts is in theory capable of creating a fresh cause of action, it willbe rare that factual matters are so vital as to affect the essence of the case brought.28At a level of generality, the claims for the two periods involve the same allegedrepresentations; that is, compliance with applicable preservative treatment standards.It is necessary, however, to view the representations in context; that is, by reference tothe prevailing standards. In that sense, the effect of the alleged representations variesover time and raises different factual interpretation issues. In particular, whereas theclaim for the later period focuses on not using Zelam's glueline treatment, the claimfor the earlier period involves the separate factual elements that J-Frame was nottreated to comply with the penetration requirement and complete sapwood penetrationwas not achieved or always achieved (in the alternative to the claim that the standardsdid not recognise boron treatment).[73] Even so, I consider on balance that the claim for the period prior to December2012 is not essentially different to the claim for the later period. Over both periods,the primary claim is that JNL used boron treatment, which was not compliant, eventhough the argument for the later period is that the standards required Zelam's gluelinetreatment (for LVL in hazard class H1.2). It is the alternative claims that raiseadditional factual allegations regarding penetration. The alternative claims aresomewhat different, but I consider that applying the essential difference test theyshould not be characterised as new causes of action. Also, while assessment ofwhether the representations were false depends on the prevailing standards, I do notconsider that every change in standard requires a separate cause of action.[74] Accordingly, 17 November 2014 remains the knowledge date applicable to theclaim for the period prior to December 2012. In the context of the claim for the periodafter December 2012, I have already concluded that JNL has not shown that Red Stagknew (or ought reasonably to have known) before 17 November 2014 that J-Framewas not treated with Zelam's treatment and that the standards arguably required that.Zelam's treatment is irrelevant to the claim for the period prior to December 2012.But in this strike out and summary judgment setting, even if I could infer that Red Stagknew (or ought reasonably to have known) before 17 November 2014 that J-Frame28 Commerce Commission v Visy Board Pty Ltd [2012] NZCA 383 at [145]-[146].was treated with boron and that the standards arguably did not recognise a borontreatment for LVL hazard class H1.2, I consider that JNL falls short of showing thatRed Stag knew (or ought reasonably to have known) that J-Frame was not treated tocomply with the penetration requirement, that complete sapwood penetration was notachieved or always achieved and that the standards arguably required boron treatedLVL to comply with the penetration requirement for solid timber in NZS 3640. Thereis also an alternative referring to omitting a label for envelope treatment. Accordingly,I cannot say in relation to the period prior to December 2012 that there is no reasonablepossibility that the case was brought within time.Damages[75] JNL also says that if Red Stag's claim for conduct before December 2012 isstruck out, its entire claim for damages must be struck out because the counterfactualthat underpins its damages claim relies on representations made by JNL in, or around,2007. That counterfactual includes that J-Frame would not have entered into themarket.[76] I have concluded that the claim for conduct before December 2012 should notbe struck out. I accept that if it were, Red Stag would need to replead its damagesclaim. But I could not say that any repleaded damages claim is untenable. It is notappropriate to engage on an assessment of the competing factual contentions on astrike out or summary judgment application. As Ms Bryant acknowledged, Red Stagshould have an opportunity to replead.Conclusion[77] For these reasons, JNL's strike out and summary judgment applications do notsucceed.Whether a more explicit statement of defence should be ordered[78] Turning to the first of Red Stag's applications, it seeks an order that JNL fileand serve a more explicit pleading.[79] Mr Flanagan submitted that, among other things, the amended statement ofdefence fails to state clearly what is admitted and what is denied. In response, JNLwas critical of Red Stag's pleading. Irrespective of fault, the difficulties arehighlighted by the different approaches taken to the relevance of certain categories ofdocuments in the context of the discovery application, referred to in the next sectionof this judgment.[80] The current pleadings are complex. As the claim (that JNL's representationsof compliance were false) depends on the proper interpretation of the standards,Red Stag has pleaded its various interpretations. While the proper interpretation ofthe standards is a question of law, I accept given the nature of the claim that Red Stagpleaded its various interpretations in an attempt to be helpful. It did so in the form ofa schedule. Each column of the schedule was referred to in the body of the fourthamended statement of claim. However, in part, these references were included inparticulars. JNL pleaded to the allegations in the body of the fourth amendedstatement of claim, including as to its competing interpretation of the standards,but not to the schedule. The result is that the detail of the competing interpretationsmasks the extent to which underlying facts are in dispute.[81] In any event, while the pleadings are less than ideal, having resolved thedifferences as to relevance of certain categories of documents during the hearing, I seeno utility in ordering either party to replead now.Particular discovery[82] Following standard discovery, Red Stag seeks an order under r 8.19 forparticular discovery by JNL of seven categories of documents, summarised as follows:(a) internal correspondence regarding interpretation of building standardsand requirements;(b) internal correspondence and documents about the treatment of J-Frame;(c) internal correspondence and documents about the testing, auditingand/or certification of J-Frame;(d) internal documents regarding JNL's marketing of J-Frame;(e) customer documents and communications;(f) regulator documents and communications; and(g) all relevant documents pre-dating 2012;[83] It is common ground that the Court adopts the four stage approach set out inAssa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd:29(a) Are the documents sought relevant, and if so how important will theybe?(b) Are there grounds for belief that the documents sought exist? This willoften be a matter of inference. How strong is that evidence?(c) Is discovery proportionate, assessing proportionality in accordancewith Part 1 of the Discovery Checklist in the High Court Rules?(d) Weighing and balancing these matters, in the Court's discretionapplying r 8.19, is an order appropriate?Relevance[84] It is also common ground that with standard discovery under r 8.7 the test forrelevance is the adverse documents test; that is:(a) documents on which the party relies; or(b) documents that adversely affect that party's own case; or(c) documents that adversely affect another party's case; or29 Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760, [2018] NZAR600 at [14].(d) documents that support another party's case.[85] As Mr Galbraith QC for JNL emphasised, this requires "actual and direct"relevance on the pleadings,30 unlike the former Peruvian Guano test.31[86] Before turning to the seven categories of documents in dispute, some furtherbrief background is necessary.[87] In 2014, Red Stag raised complaints regarding JNL's treatment of J-Frame withthe Timber Quality Scheme and with MBIE. Subsequently, Red Stag made furthercomplaints to the Commerce Commission, various industry bodies and others.The Commission issued a compliance advice letter in June 2017.[88] Meanwhile, in June 2015 JNL obtained a CodeMark and amended its brandingand marketing to remove reference to the acceptable solution and NZS 3640.[89] Also, in 2016 Red Stag made a new complaint of criminal conduct, claimingJNL provided so-called golden samples to Scion for use in durability trials, and madepublic allegations of golden sampling in 2017. The Commerce Commissionconducted a second investigation into this complaint. MBIE also undertook a separateinvestigation into this complaint. MBIE confirmed the outcome of this investigationin July 2017, recording that the samples used were representative. This goldensampling complaint is not raised in this proceeding.[90] One consequence of the messy history of this proceeding is that JNL gavediscovery in 2019, based on a pleading that has been superseded.[91] Another difficulty is that, although it is common ground that relevance isdetermined by reference to the issues on the pleadings, there is considerabledisagreement as to what underlying facts are in issue, particularly in relation to30 Pyne Gould Corporation Ltd v Bath Street Capital Ltd [2020] NZHC 1247 at [13]; and Sellman vSlater [2018] NZHC 3057 at [46], citing Chatfield & Co Ltd v Commissioner of Inland Revenue[2016] NZCA 614, (2016) 27 NZTC 22-084.31 The Compagnie Financiere et Commerciale Du Pacifique v The Peruvian Guano Co (1882) 11QBD 55 (CA) at 63. Under the Peruvian Guano test, the obligation was to disclose documentsthat were or might be relevant to issues in the proceeding, or may lead to a train of inquiry.Red Stag's alternative interpretation claims. That is at least in part due to the complexform of the current pleadings, already mentioned.32 But it is clear JNL admits thatJ-Frame:(a) was treated with boron, not Zelam's glueline treatment; and(b) was not treated to comply with the complete sapwood penetration(penetration to the central ninth) requirement in NZS 3640 for solidwood.[92] I turn to the seven categories of documents.Internal correspondence regarding interpretation of building standards andrequirements[93] Mr Flanagan submitted that JNL's internal correspondence regarding theinterpretation of the pleaded building standards and requirements is relevant.He acknowledged the different test for admissibility of internal correspondence in thecontext of disputed interpretation of building standards, but submitted that does notaffect relevance for discovery, citing Westgate Town Centre Ltd v Auckland Council,which in turn cited Attorney-General v Institution of Professional Engineers NZ Inc.33[94] Mr Galbraith accepted that a document did not have to be admissible to berelevant, but he submitted that relevant has a recognised legal meaning, that islogically capable of being probative, and that documents in this interpretation categorycould not be relevant here.[95] In Attorney-General v Institution of Professional Engineers NZ Inc, documentscontaining legal advice were held to be relevant not because such advice would tendto prove anything of consequence in the proceeding, but because it will be relevant ina wider common usage sense; if that were not the case, there would be no point in theconcept of legal advice privilege.34 Mr Galbraith took issue with this. I consider the32 At [80]-[80] above.33 Westgate Town Centre Ltd v Auckland Council [2021] NZHC 858 at [33]; and Attorney-General vInstitution of Professional Engineers NZ Inc [2018] NZHC 74, [2018] NZAR 275 at [28].34 Attorney-General v Institution of Professional Engineers NZ Inc at [28]-[30].explanation for documents containing (or seeking) legal advice often being relevantis rather because they record instructions or other underlying facts that are relevant.In any event, in the context of this FTA misrepresentation case where the relevance ofthe proper interpretation of the pleaded building standards and requirements is whetherthe representation was false, I do not consider that internal correspondence regardingJNL's view of the proper interpretation is of actual and direct relevance.[96] Mr Flanagan also submitted there is a specific FTA allegation in relation tohow the standards are understood irrespective of strict compliance; that is, even if thestandards can be interpreted such that J-Frame complied, consumers and the industryunderstood the standards to require complete sapwood penetration and therefore JNL'srepresentations gave that false impression. On this narrow basis, I accept that internalcorrespondence containing consumer or industry views of the proper interpretation ofthe pleaded building standards and requirements may be relevant.Internal correspondence and documents about the treatment of J-Frame[97] Mr Flanagan submitted that the relevance of this category turns on the scopeof JNL's admissions to Red Stag's allegation, in the alternative to its primary claim,that AS/NZS 1604.4 requires penetration in the sapwood of treated veneers.He submitted this category of documents would be relevant if JNL denies that itssapwood was not treated. He also submitted there is an issue about the extent to whichJNL's boron treatment "migrates" into the inner veneers of J-Frame when wet, anddocuments relevant to that are discoverable.[98] As indicated, JNL admits that J-Frame was not treated to comply with acomplete sapwood penetration requirement. Its compliance case is based on itsinterpretation that the standards do not require complete sapwood penetration forJ-Frame. JNL admits that if there is a complete sapwood penetration requirement,it did not comply.[99] JNL says, however, that prior to 1 September 2017 J-Frame was treated tocomply with the penetration requirement for hazard class H1 in AS/NZS 1604.4.JNL says this means test samples must show evidence of penetration of boron in thesapwood of each veneer. JNL says its testing for compliance with the penetrationrequirements of AS/NZS 1604.4 is not in issue.[100] I accept that the Court may adopt one of a number of possible interpretationsof the standards, but it does not follow that all treatment documents are relevant.That depends on whether there is a factual issue. Whether there is a factual issue hereis not clear. If, as JNL understands, Red Stag's alternative claim is that even AS/NZS1604.4 requires penetration in the central ninth part of the framing, JNL admitsJ-Frame does not have such penetration. But if Red Stag's alternative claim allegesthat J-Frame's test samples do not show evidence of penetration of boron in thesapwood of each veneer, there is a factual issue and documents relating to JNL's testsamples in that respect would be relevant. Red Stag should clarify if this is alleged.[101] Mr Flanagan also submitted there is an allegation that JNL did not test thedurability of J-Frame until at least 2015, and so documents in this category are at leastrelevant for that period. JNL's response to this allegation is unclear but I read it as anadmission that it did not test the durability of J-Frame until February 2015.The relevance of Red Stag's allegation to treatment is also unclear. But I accept thereis an issue as to whether JNL tested the durability of J-Frame in the remainder of2015.35 Documents relating to the durability testing of J-Frame in that period in 2015are therefore relevant.Internal correspondence and documents about the testing, auditing and/orcertification of J-Frame[102] Mr Flanagan submitted that JNL has put its testing, auditing and certificationregime in issue and must disclose all documents relevant to testing. I accept thatinsofar as JNL has put its testing, auditing and certification regime in issue, suchdocuments are relevant. But, as indicated in relation to the treatment category, insofaras Red Stag's case is that J-Frame is non-compliant because it does not meet thecomplete sapwood penetration (penetration to the central ninth) requirement for solidtimber, JNL admits that J-Frame does not have complete sapwood penetration. It alsoadmits that it has never tested for complete sapwood penetration. For these reasons,35 In context, I do not read "at least" as meaning that Red Stag alleges JNL did not test after 2015.I do not consider that documents about the testing, auditing or certification of J-Frameare relevant, unless Red Stag alleges that J-Frame's test samples do not show evidenceof penetration of boron in the sapwood of each veneer, as indicated.36[103] There is also the exception for documents relating to the durability testing ofJ-Frame from February to December 2015, already mentioned.37Internal documents regarding JNL's marketing of J-Frame[104] Red Stag seeks all internal documents about JNL's marketing insofar as theyrelate to J-Frame's treatment, labelling and/or compliance with the pleaded standards,the Building Code and Acceptable Solution B2/AS1. Mr Flanagan submitted theymight be evidence of consumer's perceptions or understandings or useful incross-examination of JNL's witnesses to test their evidence. They may also be relevantto JNL's denial that customers would not have purchased J-Frame if they knew it didnot comply. I accept that documents evidencing consumer's perceptions orunderstandings in relation to J-Frame's treatment, labelling or compliance are relevant.JNL says they have been discovered, but counsel would review whether there are anyadditional documents in this category.Customer documents and communications[105] JNL does not dispute the relevance of this category. The issue is whether alldocuments have been disclosed. Mr Galbraith referred to JNL's affidavit of documentsindicating that such documents that exist have been disclosed. He submitted that thesmall number of documents disclosed in this category did not indicate there weremore. J-Frame was mainly sold to a few customers.[106] Mr Flanagan also submitted that JNL's affidavit of documents does not saywhether the necessary searches have been done to capture correspondence via JNL'sinfo email address and website. Mr Galbraith agreed to follow up this aspect.Assessing the adequacy of discovery of documents in this category also overlaps withthe application to set aside confidentiality, addressed below.36 At [100] above.37 At [101] above.Regulator documents and communications[107] Mr Flanagan submitted that JNL's blanket rejection of the relevance ofdocuments in this category is insufficient, and they need to be assessed for relevance.As Mr Galbraith submitted, the golden sampling allegations, which were the subjectof the second round of regulatory investigations, are outside the scope of thisproceeding. He accepted that documents from the earlier labelling investigations maybe relevant, but believed they had been dealt with.All relevant documents pre-dating 2012[108] Mr Flanagan submitted that JNL is wrong to dispute the relevance ofdocuments pre-dating December 2012 on the basis that Associate Judge Bell struckout that part of the claim.[109] JNL says that it did not limit its searches to the period after December 2012but Red Stag's amended claim (when discovery was conducted) was forrepresentations made, and losses suffered, after December 2012 and therefore therewere very few relevant documents from the earlier period.[110] Given Red Stag has reinstated that part of the claim pre-dating December 2012,this issue overlaps with the strike out and summary judgment applications.JNL accepted that if its application were unsuccessful, it would need to give furtherdiscovery of documents relevant to new matters raised in the more recent statement ofclaim.Whether there are probative grounds for believing such documents exist[111] When the categories of irrelevant documents are put to one side, the groundsfor believing further documents exist are considerably reduced. There are grounds forbelieving that some further documents exist but, as indicated, during the hearingcounsel for JNL agreed to follow up some categories. Also, JNL acknowledged thatit would need to carry out further discovery based on the more recent pleadings if itsstrike out application did not succeed.Whether a further affidavit of documents should be ordered[112] But for the need to carry out further discovery to address the more recentpleadings since the strike out application has not succeeded, I would decline to ordera further affidavit of documents. Given that need, however, a further affidavit ofdocuments is appropriate.Whether the Court should set aside JNL's claims for confidentiality[113] JNL placed confidentiality restrictions on a large number of documents in itsaffidavit of documents. Those restrictions limited inspection to agreed counsel and onterms to be agreed. Subsequently, inspection has been extended to an independentexpert. Red Stag seeks to set aside those confidentiality restrictions on the followingcategories of documents:(a) documents containing information available to the public;(b) documents containing common knowledge of the industry;(c) documents containing information of which Red Stag has generalknowledge; and(d) documents created by JNL more than two years ago.[114] Mr Flanagan relied on Payment Express Ltd v Paymark Ltd,38 whereI considered a similar issue. In that case, I noted that the party claiming confidentialitybears an initial onus to make out the requirements for its confidentiality claims.Once that is done, there is a balancing exercise in relation to prejudice. Mr Flanagansubmitted that in this case JNL has not discharged the initial onus, and that itsconfidentiality claims are overly broad.[115] Mr Flanagan indicated that Red Stag particularly wanted JNL's customercomplaints. He submitted that Red Stag was restricted in its preparation because the38 Payment Express Ltd v Paymark Ltd [2019] NZHC 2027.documents show the effect of JNL's representations and that statements were madedue to resistance in the market.[116] A document by document review was not sought, and the categories ofdocuments where confidentiality is sought to be set aside are inapt insofar asdocuments may contain confidential and non-confidential information. With suchdocuments, redacting confidential information may be feasible. I also do not considerthat a brightline rule for documents created more than two years ago is appropriate.Documents more than two years old may still be confidential and more recentdocuments may not be. But I accept that JNL's confidentiality claims appear broad.Documents that contain only information available to the public, common knowledgein the industry or known to Red Stag would not have the necessary quality ofconfidence.39 Mr Galbraith agreed they should look at what is sought.[117] In terms of the balancing exercise in relation to prejudice, it would not beappropriate to determine the balance in the abstract. But I make some generalobservations in the expectation that experienced counsel can resolve outstandingissues, with leave reserved to apply to modify a specific confidentiality claim ifcounsel are unable to reach agreement on a particular document or more specificcategory of documents.[118] First, some documents will be more confidential than others. I accept thatdisclosure of JNL's highly confidential information, such as trade secrets, would createa real risk of prejudice to JNL. That is particularly so since, at least in the application,Red Stag seeks to set aside JNL's confidentiality claims without accepting anyrestrictions beyond those inherent with documents disclosed on discovery.Mr Flanagan's submissions seemed to accept that inspection would be on the basis ofappropriate undertakings from the representatives of Red Stag given access includingat least its CEO, Mr Verry. JNL's concern about misuse of its confidential documentsis heightened by its experience of Mr Verry's public statements about J-Frame andapproaches to JNL's customers. I expect that risk could be managed where otherfactors favour disclosure.39 Payment Express Ltd v Paymark Ltd [2019] NZHC 2027 at [24], citing A B Consolidated Ltd vEurope Strength Food Co Pty Ltd [1978] 2 NZLR 515 (CA) at 521.[119] Secondly, in the context of the issues in this case and on the basis of a generalcontention that disclosure of confidential documents is necessary to enable Red Stagto prepare adequately for trial, I consider there is relatively little risk of prejudice toRed Stag in its preparation and conduct of the proceeding. Access by a representativeof Red Stag to less highly confidential documents, such as historic financialdocuments, may be appropriate on terms so as to maximise its visibility of the conductof the proceeding. But, as Mr Galbraith submitted, JNL's confidentiality claims donot prevent Red Stag's counsel from discussing the general position with Red Stag andproviding advice. Counsel should be able to obtain proper instructions. This FTA caseis unlike Warner-Lambert Co v Glaxo Laboratories Ltd, where the circumstancescalled for disclosure of technical information to an authorised officer able to makemajor decisions on its behalf such as whether to continue or abandon a patentinfringement action.40 Also, this is not a case where Mr Verry's role as a witness aboutmarket acceptance or otherwise would appear to be compromised.[120] For these reasons, I am not prepared to set aside JNL's confidentiality claims,but will reserve leave as indicated.Whether the Court should set aside JNL's litigation privilege claims in respect ofcommunications for the purpose of regulator investigations[121] Red Stag seeks to set aside JNL's privilege claims over communications andinformation relating to investigations into J-Frame by MBIE and the CommerceCommission.[122] In relation to the regulatory investigation documents, the dispute was moreabout relevance, which I have already addressed. The position is also complicatedwhere an industry expert had one role in the investigation context and has another rolein the proceeding. Insofar as there are relevant regulatory investigation documents,I accept that litigation privilege only applies if the document was created for thedominant purpose of the anticipated proceeding. Documents created for two equallyimportant purposes do not satisfy the dominant purpose test. Also, insofar as experts40 Warner-Lambert Co v Glaxo Laboratories Ltd [1975] RPC 354 (CA) at 360-361.have changed roles, litigation privilege only applies if the document was created by orfor the party claiming privilege.[123] On this basis, once the relevance of any documents in this category isconfirmed in JNL's further affidavit, I expect counsel can resolve any residuallitigation privilege disputes. In these circumstances, I am not prepared to set asideJNL's privilege claims but will reserve leave.Result[124] I make the following orders:(a) I grant leave for JNL to apply for summary judgment.(b) JNL's strike out and summary judgment applications are dismissed.(c) Red Stag's application for an order that JNL file and serve a moreexplicit pleading is dismissed.(d) JNL is to file and serve a further affidavit of documents within eightweeks, with leave reserved to file a joint memorandum seeking variedtimetable orders if necessary.(e) Red Stag's application to set aside JNL's confidentiality claims isdismissed, with leave reserved to apply to modify a specificconfidentiality claim if counsel are unable to reach agreement on aparticular document or more specific category of documents.(f) Red Stag's application to set aside JNL's privilege claims is dismissed,with leave reserved.(g) I will convene a case management conference on the first available dateafter 1 December 2021 to consider timetable directions towards trial.The parties are to file memoranda (ideally a joint memorandum) at leastone clear day before the conference.[125] Each party has had some success. If costs cannot be agreed, I will receivememoranda not exceeding four pages within 21 days and determine costs on thepapers.________________________________Gault J