REMEDIATION (NZ) LIMITED v ENVIRO (NZ) LIMITED [2022] NZHC 2155

REMEDIATION (NZ) LIMITED v ENVIRO (NZ) LIMITED [2022] NZHC 2155 [29 August 2022]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2021-404-1140[2022] NZHC 2155BETWEEN REMEDIATION (NZ) LIMITEDtrading as REVITAL FERTILISERSPlaintiffAND ENVIRO (NZ) LIMITEDFirst DefendantENVIRO WASTE SERVICES LIMITEDSecond DefendantHearing: 19 July 2022Appearances: J Cameron/DeAnne Brabant for the PlaintiffGarry Williams/T Lindsay for the DefendantsJudgment: 29 August 2022JUDGMENT OF ASSOCIATE JUDGE C B TAYLORThis judgment was delivered by me on 29 August 2022 at 3:00pmpursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarSolicitors:Willis Legal (Justin Cameron), Napier, for the PlaintiffLindsay & Francis (Timothy Lindsay), Auckland, for the DefendantsCounsel:DeAnne Brabant/John Maassen, Wellington, for the PlaintiffGarry Williams, Richmond Chambers, Auckland, for the DefendantsTABLE OF CONTENTSParagraphIntroduction [1]BackgroundBackground to substantive dispute [3]Background to discovery dispute [31]Application for discovery orders [39]Affidavit of Joseph Buist (undated) [41]Enviro's notice of opposition to application for discovery orders [42]Affidavit of Marcus Dickey dated 21 April 2022 [43]Affidavit of Brian Clark dated 21 April 2022 [44]Reply affidavit of Andrew King dated 6 May 2022 [45]Revital's submissions [48]Enviro's submissions [54]Legal Principles [63]Analysis [66]Application for standard discovery [66]Scope of tailored discovery [67]The discovery of Enviro's internal communications in relation to the seven categoriesof documents for which tailored discovery is sought by Revital [69]The pleaded causes of action [69]First cause of action – breach of fiduciary relationship [71]Second cause of action – misleading or deceptive conduct under s 9 FTA [81]Third cause of action [85]Conclusion on the 7 categories of documents for which tailoreddiscovery is sought [88]The discovery of Enviro's communications with third parties in relation to the seven categoriesof documents for which tailored discovery is sought [89]Second cause of action – misleading or deceptive conduct [94]Third cause of action – breach of contract [96]Whether, after being modified by the answers to questions [67](a) and (b),the 7 categories of tailored discovery documents sought be Revital are allsufficiently relevant to the causes of action pleaded in the amendedstatement of claim to be discoverable? [97]Category 1: Pre-LOI documents [98]Category 2: Post-LOI to tender submission [102]Category 3: Post-tender submission [103]Category 4: Health and safety information [104]Category 5: Termination of the relationship [105]Category 5: TCC communications [106]Category 7: Site Exit [107]Approach to eDiscovery [109]Enviro's discovery categories [111]Result [113]Costs [114]Introduction[1] Remediation (NZ) Ltd, trading as Revital Fertilisers (Revital) claims againstEnviro (NZ) Ltd (ENZ) and Enviro Waste Services Ltd (ESL) (collectively, Enviro)for breach of fiduciary duty, misleading or deceptive conduct under the Fair TradingAct 1986 (FTA) and breach of contract. Enviro counterclaims for unpaid rent andtrespass. Revital, in turn, counterclaims for bailment against Enviro's counterclaim.[2] The parties are in dispute over the scope of discovery.BackgroundBackground to substantive dispute[3] Revital's version of events, as set out in its amended statement of claim, is asfollows.[4] Revital produces fertilisers and aggregates. ESL provides waste collection anddisposal services. ENZ is ESL's sole shareholder, and the two companies share thesame directors.[5] In 2008, Revital purchased an organics processing operation at Te Maunga,Tauranga. It leased the site from the Tauranga City Council (TCC). That year, theparties entered into a Green Waste Disposal agreement under which ESL wouldprovide green waste to Revital. Revital processed green waste at the Te Maunga site,turning it into BioGrow and Zespri certified compost.[6] On 17 September 2019, Catherine Taylor of TCC and Mr Kerry O'Neill ofRevital met to discuss the variation of Revital's lease and the potential surrender of itsresource consents for discharge to air and discharge to land. TCC asked for thesurrender of the consents as they created an unfair advantage in a then-upcomingRequest for Proposals for organics processing and waste collection. Revital did notagree to transfer its resources consents to TCC.[7] The following month, TCC again sought Revital's views regarding theassignment of the resource consents should Revital not be successful in its tender.Revital and TCC then agreed that the deed of variation of lease would state that Revitalwould assign its consents to TCC if Revital was not the preferred supplier at the endof the tender process. The deed permitted Revital to remain on the Te Maunga siteuntil 29 February 2021. It also provided the parties could negotiate, acting in goodfaith, an extension of the lease through to 28 November 2021.[8] In October or November 2019, ENZ contacted Revital and requested a meetingregarding the waste collection, transfer and disposal/proceeding tenders. It proposedsubmitting a joint tender in the TCC tender process. Enviro and Revital met atRevital's Cambridge offices on 4 November 2019. Revital says that at this meeting,Enviro advised Revital that it was considered a strategic partner in the tender process.[9] On 16 December 2019, TCC sought tenders in respect of refuse collectioncontracts in the region, with a closing date of 4 March 2020. Revital and Enviroentered discussions in January 2020 to partner on the green waste and food wasteaspects of the tender. On 16 January 2020, they formally agreed to party with eachother and jointly tender, and to formalise the partnership in an agreement.[10] Between 30 January 2020 and 11 February 2020, the parties negotiated andexecuted a letter of intent (LOI) that set out the terms of the partnership (or, ascontended Revital contends, the joint venture). Revital claims the LOI provided thebasis of the parties' relationship, the mechanisms for tendering, and details of theirrespective roles in the tender process. It included a good faith requirement to enterinto a sublease and service agreement within six months of the tender award date.[11] Between 19 February 2020 and 4 March 2020, Revital provided its tenderdocuments, supporting documentation, pricing, and proposals to ENZ for review andcomment. ENZ in turn provided documentation relating to green waste and food wastecollection and processing to Revital. Both made adjustments to each other'sdocuments to ensure they reflected the LOI's terms and the TCC requirements. Onesuch adjustment was Revital asking ENZ to adjust its pricing schedules for the tenderand seeking a reduced rent while green waste was being processed.[12] On 4 March 2020, ENZ submitted the tender for the parties. Revital says itwas not provided with a full version of the tender document, the final pricing, or theproposed rent between TCC and Revital for the Te Maunga site. In the ensuingmonths, Enviro acted for the parties and liaised with the company managing the tenderprocess and TCC regarding the tender documents. The parties then jointly presentedtheir prepared presentation in May 2020.[13] On 7 August 2020, TCC advised Enviro that the submitted tender wassuccessful. That same month, ESL advised Revital of the award, but not of the awarddate.[14] On 13 August 2020, ENZ wrote to Revital advising it was continuing to workwith TCC to finalise the head lease and service agreement required to provide thetendered services. ESL advised Revital that Revital could not deal directly with TCCas ESL and TCC remained in probity. Around this same time, the parties had somepreliminary discussions about ESL purchasing Revital. However, discussions haltedafter the parties failed to reach agreement on the purchase price.[15] Between September and October 2020, Revital sought updates regarding theprogress of Enviro's negotiations with TCC regarding the head lease for the site andrelated contracts. Enviro advised Revital it was continuing to negotiate with TCC andthat lease documents would be imminent. The following month, ESL and TCC enteredinto a head lease for the site and an organics processing contract. The lease includedpricing for rent to be paid between ESL and TCC of $75,000 per annum. Revital saysthis figure was higher that it had been led to believe the agreed rent was.[16] Enviro and Revital met on 2 December 2020. There, Enviro confirmed theorganics processing contract and head lease had been executed. It advised it wasprocessing "back-to-back" contracts and these would be available to Revital beforeChristmas. In the weeks to come, Revital continued to pursue the service contract andsublease, emphasising the LOI required the finalisation of those agreements within sixmonths.[17] On 22 January 2021, the draft sublease for Te Maunga was provided to Revital.Revital rejected it on the basis that it did not address all the matters included in theLOI and did not reflect was what discussed in the December 2020 meeting. Furthernegotiations were entered, and further drafts exchanged. Revital continued to beconcerned that the draft versions of the proposed sublease did not address the mattersagreed in the LOI.[18] The parties remained in negotiations past 7 February 2021, being six monthsafter the date the tender was awarded. Revital says that, both before and after thatdate, it continuously and unsuccessfully sought from ESL the unredacted head leaseand service contract between ESL and TCC.[19] On 23 February 2021, Revital advised ESL it would reluctantly agree tooperate under the draft sublease and service agreement until such time as the subleaseand contract were finalised. Two days later, Enviro sought Revital's final position onthe sublease. Then, on 26 February 2021, Revital provided a marked-up sublease andpresented this as its final position.[20] On 28 February 2021, Revital's lease was to expire. To protect itself, itcontinued to pay rent to TCC. TCC initially accepted the monthly rent, butsubsequently refunded three months' rent. Around this same time, ENZ and Revitalsought to resolve their negotiation hurdles. ENZ indicated there were some provisionsof the LOI that it could no longer honour. Revital, in turn, said it wanted to negotiatea sensible agreement that worked for both parties and that addressed its key issues.[21] On 1 March 2021, Mr Paul Shaw, a health and safety consultant appointed byENZ, attended the Te Maunga site. He had not advised Revital he would do so. Heconducted an audit. Revital says the audit was not fulsome or complete, with Mr Shawfailing to interview staff or to review Revital's full health and safety systems.[22] Two days later, ENZ wrote to Revital, supplying Mr Shaw's report and allegingserious health and safety breaches at the site. Revital was given until 5 pm on 5 March2021 to remedy the breaches. Revital responded the same day, advising it did notaccept the position taken by ENZ or by Mr Shaw. It said it would provide acomprehensive response the next day.[23] Between 4 March 2021 and 25 March 2021, Revital corresponded and met withESL to discuss the alleged health and safety breaches and threatened prevention ofaccess to the Te Maunga site. On 11 March 2021, Revital provided a further auditor'sreport to ESL that concluded Revital was meeting its health and safety obligations onthe site. ESL rejected the report, insisting on another audit by a third-party health andsafety provider. Revital said it did not see the point of engaging a third health andsafety consultant. It said the best way forward was to have a site visit to determine ifthe issues raised in Mr Shaw's report were valid. ESL did not respond.[24] ESL withdrew from further negotiations on 29 March 2021, citing Revital'sserious breaches of health and safety laws and requirements; Revital's failure todemonstrate to ENZ's satisfaction it had taken steps to rectify the issues identified inMr Shaw's report; and that the LOI had expired on 7 February 2021.[25] ESL required Revital to immediately cease all activities at the Te Maunga site,advising it would be in contact to discuss Revital's exit. Revital responded, rejectingthe withdrawal from negotiations and repudiation of the LOI. It sought a meetingbetween the parties. ESL wrote back on 3 May 2021, reaffirming its position andsaying it was under no obligation to meet with Revital. On 24 May 2021, ESL gaveRevital 20 days' notice to vacate the site.[26] Between 31 March 2021 and 30 June 2021, Revital met with TCC and soughtits assistance to resolve matters with ESL. TCC attempted unsuccessfully to mediateand broker meetings between the parties.[27] On 5 July 2021, ESL filed a proceeding seeking possession of the site. In thecourse of that proceeding, the unredacted head lease and tender documents wereprovided to Revital. They revealed, among other things, that ESL has agreed an annualrent of $75,000 for the site.[28] On 12 November 2021, TCC advised Revital that because it was not asuccessful tenderer it must transfer its resource consents to TCC, pursuant to the deedof variation of lease. Revital took a different interpretation of the relevant clause andrefused to transfer the consents.[29] ESL's proceeding for possession was successful, with the Court finding on1 December 2021, on an interim basis, that ESL had better title to the site. Revitalwas required to exit the site within 14 days. Revital advised ESL it was unable to exitthe site within that timeframe and sought an extension of time.[30] Revital claims it has suffered loss of profits and other consequential losses suchas the cost of relocating from the site and securing alternative premises. It estimatesthe loss of profits as being around $24,000,000 over a period of 20 years. It has notyet quantified its consequential losses.Background to discovery dispute[31] The parties have unsuccessfully sought to resolve discovery issues betweenthem since September 2021. There have been three case management conferences todate and multiple rounds of correspondence. Trial is set down for 8 May 2023.[32] In a minute issued after the first case management conference on 1 October2021, Associate Judge Bell indicated that it would be "unlikely to be helpful to makea general discovery order".1 The following month, Enviro wrote to Revital andprovided a list of proposed tailored discovery categories. Those categories excludedthe parties' internal correspondence, and correspondence and documents with thirdparties. Enviro maintains its proposed categories are the limit of discoverabledocuments relevant to the issues in dispute.1 Remediation (NZ) Ltd v Enviro (NZ) Ltd HC Auckland CIV-2021-404-1140, 1 October 2021(Minute of Associate Judge Bell) at [5].[33] Revital did not respond to Enviro's discovery proposal until 22 February 2022— the day before the second case management conference. Its response was to file amemorandum repeating the appropriateness of standard discovery but in any eventattaching a schedule of its own proposed discovery categories. At the conference, Idirected the parties to endeavour to agree the scope of discovery within seven days.Failing such agreement, Revital was to apply to the Court for discovery orders.2[34] The parties engaged in discussions over the ensuing months. They continuedto disagree over the scope of discovery. On 5 April 2022, Revital filed the presentdiscovery application; on 11 April 2022 Enviro filed its notice of opposition.[35] Revital initially sought standard discovery. It subsequently abandoned thatpoint. It now seeks tailored discovery of documents falling within seven specifiedcategories, essentially comprising Enviro's internal documents and correspondenceand their correspondence or documents with certain third parties including TCC andMr Shaw in relation to the health and safety audit report.[36] Revital's pleaded causes of action in its amended statement of claim dated9 March 2022 are:(a) breach of fiduciary duty in Enviro's taking advantage of Revital's trustand confidence;(b) breach of s 9 of the FTA by way of misleading or deceptive conduct;and(c) breach of contract in respect of the LOI.[37] Enviro contends that while Revital has abandoned its substantive applicationfor standard discovery, its tailored discovery application is of such breadth as toamount to a request for standard discovery in another guise. It says Revital's proposed2 Remediation (NZ) Ltd v Enviro (NZ) Ltd HC Auckland CIV-2021-404-1140, 23 February 2022(Minute of Associate Judge Taylor) at [6].discovery categories are not targeted and it is unclear what each category seeks inrespect of the issues raised in the pleadings.[38] Enviro says Revital's abandonment of its application for standard discovery"at the eleventh hour" justifies an award of increased costs in its favour.Application for discovery orders[39] Revital's application seeks orders for standard discovery pursuant to r 8.7 ofthe High Court Rules 2016. Should Enviro oppose the order, Revital seeks an orderrequiring Enviro to file an affidavit addressing proportionality and estimating thelikely volume and cost of undertaking standard discovery. In the alternative, if theinterests of justice require an order for tailored discovery, Revital seeks the order bemade in respect of the following categories of documents:3(a) Category 1: Pre LOI communications and documentation;(b) Category 2: Post LOI to tender submission communications anddocumentation;(c) Category 3: Post tender submission communications anddocumentation;(d) Category 4: Health and safety documentation;(e) Category 5: Termination of the parties' relationship communicationsand documentation;(f) Category 6: TCC communications; and(g) Category 7: Site exit communications and documentation.[40] The orders are sought on the following grounds:43 Application for discovery orders dated 5 April 2022 at [1]–[3].4 At [4].(a) The Plaintiff and the Defendants, despite exchanging discoverycategory lists and meeting with each other have not reached anagreement regarding discoverable documents;(b) While HCR 8.9 in the first instance has a presumption towards tailoreddiscovery, the Plaintiff submits that that presumption is displaced forthe following reasons:(i) Unless the Defendants prove otherwise, that the costs ofstandard discovery are not disproportionately high incomparison with the matters at issue in the proceeding; and(ii) The total sum exceeds $2,500,000, with the damages claimbeing $25m based on the estimated loss of profits based onEBITDA over a period of 16–20 years that the contract wasto run and loss of business at the Site.(c) Standard discovery in this case is not onerous given the limited periodof time and scope of the relationship, negotiations, and transactionsthat occurred between 4 September 2020 and 1 December 2021.Accordingly, standard discovery in this case would be lessburdensome that tailored:(i) The searches required under both tailored and standarddiscovery will be the same or similar as tailored discovery;(ii) The recovery process for obtaining the documents understandard discovery would not differ from that of tailoreddiscovery;(iii) Unless, proven otherwise, the costs of undertaking standarddiscovery, considering the matters are limited in time, scope(which can be addressed with keyword searches), should notdiffer between standard or tailored discovery. Essentially, thesame documents will be captured.(d) Should tailored discovery be ordered the categories set out inparagraph [3] are appropriate for the following reasons:(i) The categories are relevant and are closely connected with theevents and transactions that occurred between the parties;(ii) Non-objective material, including internal correspondence, isrelevant when considering the common objective of a jointventure, the parties' understanding of the common objective,and ultimately proving the existence of a joint venture;(iii) Health and Safety documentation, including the instructionsprovided to the auditor, is relevant given the audit fell on thefirst day of ESL's lease and in the period where the partieswere still negotiating the service agreement and sublease.Health and Safety was the primary basis for requiring RNZ toexit and the Site and also the refusal to engage in furthercontractual negotiations. Ultimately, the audit was used toterminate the parties' joint venture/partnership.Affidavit of Joseph Buist (undated)[41] Mr Joseph Buist, Chief Financial Officer of Revital, has made an undatedaffidavit in support of the application for discovery orders. He says the internalcorrespondence between ESL and ENZ is sought by way of discovery to understandwhich party was involved in which part of the negotiations and decision-making withRevital. He says the LOI was signed by ESL, as were the Head Lease and Contractwith Tauranga City Council. He deposes that from what he understands the exerciseof collecting, collating, and undertaking relevance checks would be no different ifstandard discovery processes were to be applied. He says he understands the costdifference between standard and tailored discovery is negligible.5Enviro's notice of opposition to application for discovery orders[42] Enviro opposes the application for discovery orders on the following grounds:6Order 1 (standard discovery)(a) because Revital's claim is for an estimated $24 million, tailored discoveryis the presumptive approach pursuant to HCR 8.9(d);(b) this Court has already indicated in its Minute dated 1 October 2021 that,regardless of the presumptive rule in HCR 8.9(d), it is "unlikely to behelpful to make a general discovery order";(c) standard discovery would require disclosure by Enviro of significantlymore documents than tailored discovery;(d) the interests of justice require an order for tailored discovery and standarddiscovery is otherwise inappropriate;(e) Revital has not discharged the onus of establishing why this presumptionshould be displaced in this case and tailored discovery not ordered;Order 2 (that Enviro file an affidavit on proportionality)(f) there is no basis for requiring Enviro to file an affidavit addressingproportionality when the presumptive approach is for tailored discovery;(g) the onus is on Revital to displace this presumption; and(h) the affidavit evidence Revital has filed in support of its application doesnot displace the presumption in favour of tailored discovery.5 Affidavit of Joseph Jeremiah Paul Buist (undated) at [9]–[11].6 Defendants' notice of opposition to plaintiff's application for discovery orders dated 5 April 2022at [3].Order 3 (Revital's categories of documents)(i) Revital has not established that its proposed categories of documents arerelevant to the pleaded issues in dispute;(j) Revital's proposed categories of tailored discovery documents:(i) are broad and are effectively standard discovery;(ii) seek large numbers of irrelevant documents, including (interalia) internal communications which are irrelevant to theobjective meaning of any agreement or relationship betweenthe parties; and/or(iii) are disproportionate to the potential significance of anydocument likely to be found.(k) Revital's proposed categories otherwise amount to a fishing expedition.Affidavit of Marcus Dickey dated 21 April 2022[43] Mr Marcus Dickey, associate at Lindsay & Francis (lawyers for Enviro), hasmade an affidavit in support of Enviro's notice of opposition. He deposes Enviro hassought to resolve discovery issues with Revital since September 2021, but the partieshave as yet been unable to agree. He highlights that in a minute issued after thisproceeding's first case management conference, Associate Judge Bell indicated itwould be unhelpful to make a general discovery order. He deposes Enviro's view isRevital's proposed discovery categories are either too broad or of unclear relevance.They include discovery of Enviro's internal documents and documents betweenEnviro and TCC — documents that are not relevant to establishing a commonobjective between Enviro and Revital.7Affidavit of Brian Clark dated 21 April 2022[44] Mr Brian Clark, IT Manager for Enviro, has also made an affidavit in supportof Enviro's notice of opposition. He deposes he will be responsible for organising andcollating Enviro's electronic discovery. He says he does not accept Mr Buist'sevidence that standard discovery and tailored discovery are not qualitatively different(and that the cost difference would be negligible). He says the tailored discoverycategories Revital seeks are extremely broad, and that his initial representative7 Affidavit of Marcus Dickey in support of notice of opposition dated 11 April 2022 to plaintiff'sapplication for discovery orders dated 5 April 2022 (dated 21 April 2022) at [1]–[14].searches based on those categories have returned around 376,000 documents. He saysthis figure is the approximate pool of documents that will need to be reviewed byEnviro's lawyers. Mr Clark says it is more time and cost efficient for targeted searchesto be made because there will be a significant amount of otherwise irrelevant materialthat will need to be located and reviewed if standard discovery is ordered.8Reply affidavit of Andrew King dated 6 May 2022[45] Mr Andrew King, founder and director of Legal Innovate, has made anaffidavit in reply to Enviro's notice of opposition. He deposes he has over 20 years'experience in coordinating discovery exercises. He says that since 2011 he hasprovided regular training sessions on how to apply the High Court Discovery Rulesand eDiscovery best practices, and that he has written more than 250 articles on thelatter subject.9[46] Mr King says Mr Clark's initial data set of approximately 376,000 documentswould not be considered large by today's standards — if anything that is a conservativefigure. He deposes that document volumes have increased considerably with theproliferation of electronic information. He says manual review of all the documentsis unnecessary. Discovery best practices would involve continuous refinement ofsearch parameters to isolate relevant material, with the aid of sophisticated softwaretools. He says Mr Clark has not substantiated his concerns as to time and cost ofdiscovery.10[47] Mr King says tailored and standard discovery have the same starting point asfar as the practical steps taken to identify, review and produce the discoverabledocuments. He says the amount of key discoverable documents may be considerablyless than the "approximately 376,000 documents" that Enviro has identified. Heproposes a potential search approach to help meet the tailored discovery categoriesRevital has identified and says the more the parties work together the greater theefficiencies that can be achieved. He deposes the appropriate use of eDiscovery tools8 Affidavit of Brian Clark in support of notice of opposition dated 11 April 2022 to plaintiff'sapplication for discovery orders dated 5 April 2022 (dated 21 April 2022) at [1]–[9].9 Affidavit of Andrew James King in reply to defendants' notice of opposition to discovery ordersaffirmed 6 May 2022 at [1]–[8].10 At [13]–[24].will give the parties assurance they have complied with their discovery obligationsand met the requirements of the High Court Rules 2016.11Revital's submissions[48] Ms DeAnne Brabant, for Revital, submits that the areas of dispute are theappropriate approach to eDiscovery; the discovery of internal correspondence; andEnviro's communications with TCC. As to the first issue, Ms Brabant says electronicprocesses and available technology can be applied to locating and assessing therelevance of documents. She says that if the principles of eDiscovery are engagedwith, there is no requirement for every document discovered to be manually reviewedby Enviro's legal team. The use of appropriate eDiscovery tools can effectivelymanage the issue of costs and proportionality.12[49] As to the second issue, Ms Brabant submits Revital is entitled to internalcorrespondence for each category of documents sought, on the basis thecorrespondence is relevant and relates to matters at issue in the pleadings. She saysinternal correspondence will be relevant to proving the existence of the contended jointventure, evidence of the mutual meeting of the minds, the definition of the commonobjective, the parties' understanding of the common objective and the progress beingmade towards the common objective. She says exclusion of the internalcorrespondence would prejudice Revital's claim.13[50] On the third issue, Ms Brabant says the communications between Enviro andTCC are relevant because Revital pleads a joint venture with Enviro. Central to thatjoint venture was the tendering for the green waste and food waste processing at theTe Maunga site. She submits one or both of ENZ and ESL assumed responsibility asa fiduciary or as an agent for entering into obligations with the TCC on behalf ofRevital. She submits Revital is entitled to documents relating to the negotiation of therelevant contracts, and surrounding communications.1411 At [25]–[39].12 Synopsis of submissions for the plaintiff in relation to discovery dated 14 July 2022 at [11]–[21].13 At [22]–[33].14 At [34]–[40].[51] Ms Brabant turns to address the individual categories of documents. She saysCategory 1 is limited in scope and date, seeks documents that are relevant to thepleadings, and that it is appropriate to disclose the documents in this category. Shesubmits these are documents that are relevant to the allegation of a pre-contractualjoint venture entered into before the LOI was signed (with fiduciary duties arisingfrom that time).15[52] As to Category 2, Ms Brabant reiterates internal documents producedregarding the tender preparation are relevant to the second cause of action formisleading and deceptive conduct, and to the breach of fiduciary duty claim. OnCategory 3, she says relevant date range was when Enviro was exclusively negotiatingwith TCC on behalf of Revital. Category 4, relating to health and safety information,is relevant to establishing the cause of action for breach of contract and in terms of thetermination of the joint venture. Category 5 is relevant to the claim Enviro breachedits fiduciary obligations in terminating the joint venture unreasonably. Category 6 isrelevant to the joint venture issue. And Category 7, relating to the site exit, is relevantto all causes of action.16[53] Concluding, Ms Brabant submits Enviro's objections to Revital's proposeddiscovery categories are unsustainable. She says Enviro has not considered therelevance of the requested information and has not accounted for eDiscovery bestpractices. She says it is appropriate to make an order in terms of the categories ofdocuments proposed at [3] of Revital's discovery application, such order incorporatingMr King's proposed search terms. She says Revital seeks 2B costs.17Enviro's submissions[54] Mr Garry Williams, for Enviro, submits that Enviro does not accept Revital'scriticism of Mr Clark's proposed approach to eDiscovery. He says the key point fromMr Clark's evidence is that a significant number of documents will be caught byRevital's proposed discovery categories. A much smaller number will be caught byEnviro's proposed discovery categories. He says that even if some duplicative,15 At [41]–[45].16 At [46]–[55].17 At [56]–[59].irrelevant, privileged or confidential documents are removed from the review process,there will remain a significant number of materials to be reviewed by Enviro's legalteam. He says Mr King's evidence that the pool of potentially discoverable documents"would not be considered large by today's typical documents" misses the point — therelevant question is whether the discovery exercise is proportionate and appropriatefor the proceeding and issues in dispute.18[55] Mr Williams says relevance is fundamental to determining appropriatediscovery categories. The key issue, then, is whether Enviro's internal correspondenceis relevant to Revital's three pleaded causes of action. On the first cause of action,Mr Williams submits there is a significant dispute as to whether there was a fiduciaryrelationship between Enviro and Revital, under which Enviro owed Revital duties andobligations. Enviro says there was no joint venture, only a commercial contractingrelationship. Mr Williams submits Enviro's internal correspondence andcommunications with third parties will, at best, only evidence its subjectiveunderstanding of the relationship between the parties and is therefore irrelevant todetermining objectively whether the relationship was fiduciary in nature. There istherefore no basis for the disclosure of those documents in relation to the first causeof action.19[56] On the second cause of action, Mr Williams submits an objective test is appliedto determine whether a party has engaged in misleading or deceptive conduct for thepurposes of s 9 of the FTA. To that extent, the subjective views of the parties areirrelevant. Enviro's internal correspondence is irrelevant to whether there hasobjectively been a breach — it will only be evidence of subjective intention or belief.He says the same principles apply to correspondence between Enviro and thirdparties.20[57] On the third cause of action, Mr Williams submits the well-establishedprinciples of contract interpretation are relevant to determining the scope of tailored18 Defendants' submissions in opposition to application for orders relating to discovery dated 18 July2022 at [29]–[33].19 At [34]–[48], principally citing Paper Reclaim Ltd v Aotearoa International Ltd [2007] 3 NZLR169 (SC) at [31].20 At [49]–[51], principally citing Red Eagle Corporation Ltd v Ellis [2010] 2 NZLR 492 (SC) at[28]; and Juken New Zealand Ltd v Red Stag Timber Ltd [2022] NZCA 184.discovery. He submits these principles mandate the exclusion of Enviro's internalcorrespondence and communications are irrelevant to the objective meaning of theLOI. Again, they will only evidence Enviro's subjective belief or intent. And, again,the same applies to correspondence with third parties. The documents Revital seekswill not prove anything relevant to the objective interpretation of the LOI.21[58] Mr Williams submits that because the documents Revital seeks are irrelevantto the issues raised by its three pleaded causes of action, they are inadmissible underss 7(2) and 8 of the Evidence Act 2006. Their probative value is outweighed by therisk their admission will needlessly prolong the proceeding. He says similarconsiderations apply at the discovery stage — the documents are inadmissible andEnviro therefore should not be compelled to discover them.22[59] Next, Mr Williams submits that Revital's proposed categories are too broadand risk capturing virtually every document Enviro holds that mentions the Te Maungasite. Such discovery would be unduly burdensome for Enviro and would require it tosearch for and review many irrelevant materials. This in turn would result in delayand wasted cost. As well, Mr Williams says, Revital's proposed discovery categoriesessentially only require discovery by Enviro. The one-sided nature of the proposalsmust be relevant to the proportionality balancing exercise.23[60] Mr Williams submits Revital's proposed discovery categories represent animpermissible fishing expedition. Enviro's internal correspondence andcommunications with third parties do not go to the disputed issues. He submitscompliance with the proposed categories will provide very little, if any, materialbenefit to the parties or the Court. Even using appropriate eDiscovery methods,reviewing documents could be very time consuming. Given the relative proximity tothe May 2023 hearing, there would be a risk of delay to evidence-related deadlines ifdiscovery is not completed promptly. Mr Williams says such delay could potentiallybe fatal to the fixture date.2421 At [52]–[59], principally citing Bathurst Resources Ltd v L&M Coal Holdings Ltd [2021] NZSC85, [2021] 1 NZLR 696 at [46], [68] and [75].22 At [60]–[62].23 At [63]–[67].24 At [68]–[72].[61] In Mr Williams' submission, the only discovery required is that proposed byEnviro. Enviro's proposed categories have been framed by reference to the pleadingsand issues in dispute; are far more proportionate than Revital's proposed categories;and permit discovery of relevant documents from both parties.25[62] Should Revital's application be dismissed, Mr Williams says, Enviro seeks 2Bcosts with a 50 per cent increase under r 14.6(3)(b) of the High Court Rules. Hesubmits increased costs are justified because the discovery issues have been going formore than 10 months; Revital continued for months to insist on standard discoverynotwithstanding the presumption for tailored discovery and Associate Judge Bell'sindicate standard discovery would not be appropriate; and Revital only belatedlyconceded that tailored discovery was the appropriate way forward. In these ways,Revital pursued unnecessary steps that lacked merit and, without reasonablejustification, failed to accept a legal argument.26Legal principles[63] Rule 8.8 of the High Court Rules provides:8.8 Tailored discoveryTailored discovery must be ordered when the interests of justicerequire an order involving more or less discovery than standarddiscovery would involve.[64] The starting point in considering a tailored discovery order is the issues raisedin the pleadings; "fishing" for irrelevant material is generally impermissible.27 TheCourt is afforded a broad discretion as to the appropriate directions,28 but relevanceand proportionality remain key principles.29 Discovery will only be made ofdocuments relevant to the pleaded issues.3025 At [73]–[75].26 At [76]–[80].27 Commerce Commission v Cathay Pacific Airways Ltd [2012] NZHC 726 at [13] and [26]; andNathans Finance New Zealand Ltd (in rec) v AIG Insurance New Zealand Ltd [2013] NZHC 3137at [34].28 James Hardie New Zealand Ltd v White [2020] NZCA 142 at [54].29 Farrelly v Wellington City Council [2019] NZHC 1875 at [16] and [20]; and CommerceCommission v Cathay Pacific Airways Ltd, above n 27, at [12].30 Farrelly v Wellington City Council, above n 29, at [21].[65] The proportionality assessment involves a balancing exercise, under which itis necessary to consider the chances of finding relevant documents against the cost ofcarrying out the discovery process. The amount at issue, the parties' resources andany delay to the proceedings may also be relevant considerations.31AnalysisApplication for standard discovery[66] Revital, in its submissions, abandoned the pursuit of an order for standarddiscovery. Consequently, I do not deal with the section of Revital's applicationrelating to standard discovery in this judgment.Scope of tailored discovery[67] The issues to be determined in this proceeding are:(a) the discovery of Enviro's internal communications in relation to theseven categories of documents for which tailored discovery is soughtby Revital;(b) the discovery of Enviro's communications with third parties in relationto the seven categories of documents for which tailored discovery issought by Revital;(c) whether, after being modified by the answers to the questions at [67](a)and (b), the seven categories of tailored discovery documents sought byRevital are all sufficiently relevant to the causes of action pleaded inthe amended statement of claim to be discoverable; and(d) the appropriate approach to eDiscovery.[68] I will deal with each of these in turn.31 Commission v Cathay Pacific Airways Ltd, above n 27, at [18].The discovery of Enviro's internal communications in relation to the seven categoriesof documents for which tailored discovery is sought by RevitalThe pleaded causes of action[69] The scope of discovery is to be determined by reference to the issues as definedin the pleadings. Revital's three pleaded causes of action are:(a) Breach of fiduciary duty. Revital alleges that Enviro "acted in badfaith" and "unconscientiously took advantage" of Revital's trust andconfidence in circumstances where Enviro knew or ought to haveknown that Revital was in a weak position and unable to adequatelylook after its own interests.(b) Breach of s 9 of the FTA. Revital claims that Enviro engaged inconduct that is misleading or deceptive, or likely to mislead or deceive,in breach of s 9 of the FTA.(c) Breach of contract. Revital alleges that Enviro breached the essentialterms of the LOI.[70] The discoverability of Enviro's internal communications in relation to theseven categories of documents for which tailored discovery is sought by Revital canbe tested against each of the causes of action.First cause of action — breach of fiduciary relationship[71] Ms Brabant submits that the first cause of action pleads the parties entered intoa joint venture that gave rise to fiduciary duties. She submits this joint venture wasformalised in the LOI and fiduciary duties established under the pre-contractual jointventure remained intact following the formation of the joint venture and the LOI.Accordingly, she submits the internal correspondence of Enviro is relevant to provingthe existence of a joint venture, and the breach of fiduciary duties.[72] Ms Brabant submits that action taken by Enviro in respect of negotiating theterms of the head lease and service contracts with TCC and decision-making regardingterms that Revital was bound by in those documents are equally relevant. Thedecisions and steps taken to terminate the relationship between Enviro and Revital, inparticular to cease to negotiate the sublease and service head of agreement betweenthe parties, also supports disclosure of internal correspondence.[73] Ms Brabant seeks to distinguish the Diagnostic Medlab decision.32 Shesubmits that that case is not relevant as it is a judicial review proceeding and is limitedin its scope and application. She submits that the Court's finding about internalcorrespondence in that specific situation does not provide any assistance in the presentcase. Ms Brabant instead relies on Commercial Factors Ltd v Scenic Hotel GroupLtd.33 In that case the plaintiff, CFL, was a financier that entered into an arrangementwith the defendant, Scenic Hotel Group, a substantial New Zealand hotel operator. Itacquired the hotel complex and the parties entered into an interim arrangement whilethey discussed the terms of a joint venture arrangement. A company was establishedfor that purpose with equal shareholdings. The relationship broke down and litigationfollowed. CFL sought, among other things, a declaration that Scenic Hotel Group andCFL were joint venture partners in respect of the hotel, and a declaration that the jointventure had been validly terminated. The Court found that the contractual jointventure had come into existence no later than June 2011, at which time Scenic HotelGroup was successful in its tender for the hotel.[74] Ms Brabant submits that Osborne J, in his conclusion, considered a "plethoraof evidence" including emails and handwritten notes of telephone calls. She submitsthat the decision highlights that internal correspondence is relevant and appropriatewithin the scope of an application for discovery orders in circumstances where theissues require determination of the existence of a joint venture, and fiduciary dutiesthat arise and continue until all the steps necessary to bring the affairs of the jointventure to a conclusion fairly have been taken. She submits that unlike a claim forbreach of contract, establishing whether the nature of the relationship was one of ajoint venture (or partnership) requires an understanding of the subjective intention andunderstanding of the parties.3432 Diagnostic Medlab Ltd v Auckland District Health Board HC Auckland CIV-2006-404-4724, 30October 2006.33 Commercial Factors Ltd v Scenic Hotel Group Ltd [2020] NZHC 2370.34 At [230]–[237].[75] Mr Williams submits that it is disputed whether any fiduciary relationshipexisted.35 However, these submissions are more appropriate to trial issues than presentdiscovery issues.[76] Mr Williams refers to Raph Engle Concepts Ltd v SCL Holdings Ltd36 and toFirm PI 1 Ltd v Zurich Australian Insurance Ltd.37 In the Raph Engle decision theissue was whether the relationship between the parties was one of dependence by onecontracting party on another to perform a contract on its terms, or whether it gave riseto a fiduciary relationship. He submits that in that decision the High Court held itneeded to consider the conduct of the parties in the wider context around the time offormation of the contract said to give rise to a fiduciary relationship to ascertain theobjective meaning intended by the parties.38 As to the "wider context", the Courtreferred to the objective approach adopted by the Supreme Court in Firm PI 1 Ltd, inwhich the relevant background was held to be "all the background knowledge whichwould reasonably have been available to the parties in the situation in which they wereat the time of the contract".39[77] Mr Williams submits the Court in Raph Engle adopted an objective approachto determining the existence of a fiduciary relationship. He submits that at bestEnviro's internal correspondence and communications with third parties will only beevidence of Enviro's subjective belief. This is irrelevant to an objective determinationas to whether a fiduciary relationship existed between the parties. Accordingly, thereis no basis for ordering disclosure of Enviro's internal communications in relation tothe first cause of action.[78] Mr Williams' further submissions at [43]–[46] relate to trial issues rather thanthe discovery issues at hand.35 Defendants' submissions in opposition to application for orders relating to discovery, above n 18,at [38]–[40].36 Raph Engle Concepts Ltd v SCL Holdings Ltd [2015] NZHC 1415.37 Firm PI 1 Ltd v Zurich Australian Insurance Ltd [2014] NZSC 147, [2015] 1 NZLR 432.38 Raph Engle Concepts Ltd v SCL Holdings Ltd, above n 36, at [50].39 At [41], citing Firm PI 1 Ltd v Zurich Australian Insurance Ltd, above n 37, at [60] (emphasisadded).[79] Mr Williams submits that Ms Brabant's reliance on the Scenic Hotel Groupdecision as highlighting the relevance of internal correspondence in proving theexistence of a joint venture is misplaced for the following reasons:(a) it was common ground in that case that a pre-contractual joint ventureexisted between the parties,40 unlike the present case where theexistence of a joint venture or other fiduciary relationship is contested;(b) the overwhelming majority — if not all — of the correspondencereferred to by Osborne J is between the parties rather than internalcorrespondence privy to only one party as alleged by Revital; and(c) Revital cites the decision as authority for the proposition thatestablishing the nature of the relationship between the parties requiresan understanding of the subjective intention and understanding of theparties — relying on [230]–[237] of the judgment. Mr Williamssubmits that these paragraphs do not address this issue at all, and in anyevent, that proposition is inconsistent with the Raph Engle decision.[80] My conclusion on this issue is that Mr Williams' submissions are correct, andinternal communications of Enviro are not within the test propounded in Firm PI 1Ltd as being reasonably available to the parties in the situation they were in at the timeof the contract. I also accept Mr Williams' submissions noted at [79](c) above that theScenic Hotel Group decision is not authority for the proposition that establishing thenature of the relationship between the parties requires an understanding of thesubjective intention and understanding of the parties. Consequently, there is nojustification for disclosure of these in respect of the first cause of action.Second cause of action — misleading or deceptive conduct under s 9 FTA[81] In relation to internal communications of Enviro in respect of the second causeof action, Ms Brabant submits that the internal communications are relevant toEnviro's deliberate withholding of information during the negotiation of the sublease40 Commercial Factors Ltd v Scenic Hotel Group Ltd, above n 33, at [243].and service agreement with TCC, that Enviro knew that the redacted terms of the headlease would be detrimental to Revital, as were other terms which bound Revital thatwere not in keeping with the agreed basis for those contracts in the LOI. She alsosubmits that the communications are relevant to Enviro's failure to consult Revitalduring the negotiations.[82] In relation to this cause of action, Mr Williams submits that it is wellestablished the test for whether conduct is misleading or deceptive is an objective one,and he relies on the decision in Red Eagle Corporation Ltd v Ellis.41 He also refers tothe recent decision of Juken New Zealand Ltd v Red Stag Timber Ltd.42 That caseconcerned an unsuccessful appeal against a refusal to grant discovery of internaldocumentation in an FTA case. The Court of Appeal held that the internaldocumentation was irrelevant to the objective test under s 9 of the FTA:43The critical issue on liability is whether the representations were misleadingor deceptive or likely to mislead or deceive. The question of whether Juken'sconduct was misleading or deceptive in breach of the FTA must be determinedobjectively. The subjective views held from time to time (one way or theother) by Juken personnel are not relevant to this assessment.[83] Mr Williams submits this approach is applicable in the present case and internalcommunications of Enviro will only be evidence of its subjective intention or belief.[84] My conclusion on this issue is that Mr Williams' submissions are correct andEnviro's internal communications are not relevant to the issue of whether Enviro'sconduct has been misleading or deceptive for the purposes of the FTA. Accordingly,they are not discoverable.Third cause of action — breach of contract[85] In relation to the third cause of action, being breach of the LOI, Mr Williamssubmits that the general admissibility of internal and third party documentation of the41 Red Eagle Corporation Ltd v Ellis, above n 20, at [28].42 Juken New Zealand Ltd v Red Stag Timber Ltd, above n 20.43 At [14].type Revital is seeking to discover was addressed in the Supreme Court in BathurstResources Ltd v L&M Coal Holdings Ltd.44 He relies on the following description:45 evidence of what a party subjectively understood or intended as to themeaning of the contract will not be admissible if that was not communicatedto the other party prior to contract formation. An undeclared understanding orintention as to the meaning of a contract is not evidence that would have beenavailable to the notional reasonable person having all of the informationreasonably available to the parties at the time. It is not therefore relevant tothe task of contractual interpretation.[86] Mr Williams submits that internal correspondence between Enviro employeesis irrelevant to the objective meaning of the LOI because it will only be evidence ofEnviro's subjective belief or intent.[87] My conclusion on this point is that Mr Williams is again correct and Enviro'sinternal communications are not relevant to interpretation of the LOI and whetherEnviro has breached the LOI.Conclusion on the seven categories of documents for which tailored discovery issought[88] As will be apparent from the conclusions I have reached at [80], [84] and [87],Enviro's internal communications are not sufficiently relevant to the three causes ofaction pleaded to justify their discovery.The discovery of Enviro's communications with third parties in relation to the sevencategories of documents for which tailored discovery is sought.[89] Ms Brabant submits that Revital pleads a joint venture with Enviro and thatcentral to that joint venture was the tendering for the green waste and food wasteprocessing at the Te Maunga site, over which Revital held the lease. Ms Brabantsubmits that after the award of the tender in August 2020, Enviro commencednegotiations with TCC regarding the head lease and service contract tendered for inthe request for proposals. Terms regarding the provision of services by Revital werealso included in those negotiations with TCC as ESL was under probity with TCC.She submits the head lease and service contracts negotiated and agreed between ESL44 Bathurst Resources Ltd v L&M Coal Holdings Ltd, above n 21.45 At [68].and TCC contained provisions which expressly bound Revital or dictated how thecompany would operate. The LOI stated the matters that were required to be includedin the lease and the service contracts, and the attendant subcontract and sublease.[90] Ms Brabant submits Enviro bound Revital to the head lease and servicecontract to terms relating to price, sublease terms, and requirements to abide by adevelopment contract. She submits those terms severely impacted Revital's ability tonegotiate appropriate terms in the subcontract and sublease, which resulted in noagreement being reached between the parties before ESL commenced its lease withTCC. Ms Brabant submits Revital is therefore entitled to the documents relating tothe negotiation of the contracts, particularly as to the terms agreed to by TCC and ESLwhich severely limited the company's ability to negotiate favourable terms for itselfwithin the six month period as specified in the LOI.[91] Mr Williams submits that Enviro's communications with TCC are no differentto internal communications of Enviro in relation to the first cause of action and willonly be evidence of Enviro's subjective intention or belief. Accordingly, they shouldnot be discoverable as the test for breach of the FTA is objective.46[92] In my view, there is a distinction between Enviro's communications with thirdparties, and in particular TCC, and Enviro's internal communications in relation torelevance to the first cause of action. The communications with third parties are notrelevant to establishing whether a joint venture existed and a fiduciary relationshipexisted, and in that sense are the same as Enviro's internal communications. But inrelation to breach of fiduciary duty by Enviro, in my view, these communications arerelevant. In relation to breach, they do not suffer from the same problem as internalcommunications in that they do not have to be reasonably available to both parties atthe time of entering into the LOI which allegedly created the fiduciary relationship(the Firm PI 1 test). The communications, particularly in relation to the negotiationof the head lease and service contract between TCC and ESL, will shed light on issuesrelating to the alleged breach and accordingly are discoverable.46 Defendants' submissions in opposition to application for orders relating to discovery, above n 18,at [51].[93] In conclusion on this issue, my view is that communications with third partiesare relevant to the first cause of action, being a breach of the fiduciary duty by Enviro.Second cause of action — misleading or deceptive conduct[94] As has been noted at [82] above, whether Enviro's conduct was misleading ordeceptive under s 9 of the FTA must be judged objectively. I consider the same pointsmade above, relating to communications with third parties in respect of the first causeof action, apply to the second cause of action. Communications between Enviro andTCC and other third parties will shed light on its conduct and dealings with thoseparties versus conduct and dealings with Revital. While Enviro's communicationswith third parties would not have been available to Revital, and to that extent onlyrepresent Enviro's position, they can nevertheless be relevant to an objectiveassessment of Enviro's conduct under s 9 of the FTA.[95] I am of the view that communications with third parties are relevant to thesecond cause of action and accordingly are discoverable.Third cause of action — breach of contract[96] While, as noted at [85] above, internal communications are not relevant to theobjective interpretation of a contract, communications with third parties after the LOIwas entered into are relevant to an allegation of breach of contract. In particular,Revital alleged that Enviro breached the LOI in not negotiating the terms the LOIrequired it to negotiate with TCC in respect of the head lease and the service contract.The communications with TCC and other third parties after the date the LOI wasentered into are relevant to this allegation and in my view are therefore discoverablein relation to the third cause of action.Whether, after being modified by the answers to questions [67](a) and (b), the sevencategories of tailored discovery documents sought by Revital are all sufficientlyrelevant to the causes of action pleaded in the amended statement of claim to bediscoverable?[97] I deal with each of these categories in turn.Category 1: Pre-LOI documents[98] It is unclear whether Revital has pleaded that a pre-contractual joint ventureexisted. Mr Williams pointed to [27] and [93] of the amended statement of claimwhich, he submitted, show that the basis of any joint venture that existed was the LOI.However, in my view this language is not completely unequivocal in that it refers toformalising the joint venture agreement between the parties, implying at least thatthere is an argument, which Revital is making, that the joint venture existed before theLOI.[99] As has been noted earlier, in the Raph Engle decision, in relation todetermining whether or not a fiduciary relationship existed or not, the Court adoptedthe objective test of contract interpretation from Firm PI 1, namely that the documentshave to be reasonably available to the parties at the time the joint venture giving riseto the fiduciary relationship was formed. Consequently, documents discoverable pre-LOI should exclude Enviro's internal communications and Enviro's communicationswith third parties in relation to the first cause of action, as neither of these werereasonably available to Revital at the time of formation of the joint venture (whetherit was formed by the LOI or pre-LOI)[100] As to the second cause of action, pre-LOI documents (excluding Enviro'sinternal communications) are relevant to breach of s 9 FTA (Enviro's conduct withthird parties such as TCC versus its conduct with Revital).[101] As to the third cause of action, breach of the LOI, Enviro's internalcommunications and communications with third parties are not relevant to theobjective interpretation of the LOI under the Bathurst Resources Ltd test.Category 2: Post-LOI to tender submission[102] As a result of my conclusions at [93], [95] and [96] above, these documents(excluding Enviro's internal communications) are relevant to breach of fiduciary dutyunder the first cause of action, to misleading or deceptive conduct by Enviro under thesecond cause of action, and to the alleged breach of the LOI.Category 3: Post-tender submission[103] I consider these documents (excluding Enviro's internal communications) arerelevant to all three causes of action. During the period Enviro was negotiating thehead lease and service contact with TCC, these documents could shed light on theissues of breach of fiduciary duty, misleading and deceptive conduct (by disclosingEnviro's engagement with TCC versus its engagement with Revital), and breach ofcontract in disclosing what negotiations Enviro undertook with TCC regarding thecritical elements of the LOI which it was to negotiate under the LOI and which affectedRevital.Category 4: Health and safety information[104] Given health and safety concerns identified by Mr Shaw, and Revital's allegedfailure to remedy these defects, which Revital alleges was Enviro's basis forterminating the joint venture negotiations, in my view these documents (excludingEnviro's internal communications) are relevant to the first cause of action, breach offiduciary duty, the second cause of action, breach of the FTA (being potentiallymisleading and deceptive if health and safety issues were not a genuine concern), andto the third cause of action, breach of contract in wrongly terminating the LOI.Category 5: Termination of the relationship[105] Ms Brabant submits that these documents are relevant to Revital's claim forbreach of fiduciary obligation as the fiduciary obligations will affect the manner inwhich the fiduciary relationship is terminated. I accept this submission andaccordingly I am of the view those documents (excluding Enviro's internalcommunications) are relevant.Category 6: TCC communications[106] This category is really subsumed into the earlier categories, as I havedetermined that correspondence with TCC and other third parties is discoverable underthese categories. It is not necessary to retain this as a separate category.Category 7: Site Exit[107] Ms Brabant submits that these documents are relevant to Enviro's causes ofaction relating to site exit, being unpaid rent and trespass alleged by Enviro. Revital'scounterclaim contains a breach of bailment cause of action. She submits that thesedocuments are relevant to these three causes of action and fall into the timeframewhere Revital was exiting the Te Maunga site.[108] I am of the view these documents (excluding Enviro's internalcommunications) are relevant to these causes of action and accordingly should bediscoverable.Approach to eDiscovery[109] There is conflicting evidence as to the correct approach to eDiscovery and thevolume of documents that a searching will produce. Mr Clark's affidavit evidencesuggests that searching under the categories proposed by Revital will produce anunmanageable number of documents. In Mr King's affidavit he advocates theapproach of using electronic search parameters which are iteratively refined to isolatethe documents sought. He maintains that this process will lead to accurate sourcing ofthe relevant documents.[110] In this regard, I do not make any orders beyond those that apply to the partiesunder cl 3 of pt 1 of sch 9 to the High Court Rules.Enviro's discovery categories[111] Mr Williams submitted that Enviro's proposed categories of tailored discoveryhave been agreed between the parties and therefore discovery orders should includethose categories.47[112] There will be considerable overlap between discovery in the categoriessuggested by Enviro at sch 2 to Mr Williams' submissions and the categories sought47 Defendants' submissions in opposition to application for orders relating to discovery, above n 18,at [12], citing Memorandum of counsel for the plaintiff dated 4 April 2022 at [9].by Revital (as modified by the terms of this judgment). It is suggested that a stagedprocess of discovery could be undertaken whereby the categories listed in sch 2 ofEnviro's counsel's submissions are discovered first, and then to the extent theadditional (now six) categories of documents allowed under Revital's categories (asmodified by this judgment) are discovered as a secondary exercise.Result[113] I make the following orders:(a) the parties shall, as a first stage, undertake tailored discovery of thedocuments set out in sch 2 of the submissions of counsel for Enviro;(b) to the extent that such documents have not already been discoveredunder [113](a), the parties undertake tailored discovery of the sixcategories of documents specified in Revital's application fordiscovery, modified as follows:(i) Category 1 — Pre-LOI documents — excluding all of Enviro'sinternal communications and documentation and excluding allEnviro's communications with third parties, except to the extentany of Enviro's communications with third parties are sought byRevital in relation to breach of s 9 of the FTA during the pre-LOI period.(ii) Category 2 — Post-LOI tender submission — excluding allEnviro's internal communications and documentation butincluding Enviro's relevant communications with third parties.(iii) Category 3 — Post-tender submission — excluding all ofEnviro's internal communications and documentation, butincluding Enviro's relevant communications with third parties.(iv) Category 4 — Health and safety documents — excluding all ofEnviro's internal communications and documentation, butincluding Enviro's relevant communications with third parties.(v) Category 5 — Termination of the relationship between theparties, excluding all of Enviro's internal communications anddocumentation, but including Enviro's relevantcommunications with third parties.(vi) Category 6 — This category is no longer needed, as set out at[106] above.(vii) Category 7 — Site exit, excluding all Enviro's internalcommunications and documentation, but including Enviro'srelevant communications with third parties.(c) the parties shall comply with cl 3 of pt 1 of sch 9 to the High CourtRules, including in particular cl 3(2) of pt 1, to:(i) refine the search criteria in respect of Enviro's categories asprecisely as possible; and(ii) refine the search criteria in respect of Revital's categories asprecisely as possible having regard to the date ranges, subjectmatter and individuals set in the search parameters.Costs[114] Enviro has sought increased costs against Revital with an uplift of 50 per cent.In particular, Mr Williams submits increased costs should be awarded against Revitalin relation to its late abandonment of its application for standard discovery.[115] My preliminary view is that:(a) Enviro should be awarded costs on a 2B basis but not increased costsagainst Revital in respect of Revital's application for standarddiscovery, which was only abandoned in its submissions; and(b) in relation to the outcome of the discovery orders, each party has beenpartially successful, so costs should lie where they fall.[116] If the parties are unable to agree costs:(a) counsel for Revital shall file a memorandum as to costs within10 working days of delivery of this judgment; and(b) counsel for Enviro shall file a memorandum as to costs within5 working days of Revital's memorandum...Associate Judge Taylor