TASMAN INSULATION NEW ZEALAND LTD v KNAUF INSULATION LTD [2013] NZHC 2167

TASMAN INSULATION NEW ZEALAND LTD v KNAUF INSULATION LTD [2013] NZHC 2167 [23 August 2013]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2011-404-8141[2013] NZHC 2167UNDER The Trade Marks Act 2002IN THE MATTER OF Infringement of New Zealand trade markregistration number 105507BETWEEN TASMAN INSULATION NEWZEALAND LIMITEDPlaintiffAND KNAUF INSULATION LIMITEDFirst DefendantAND ECO INSULATION LIMITEDSecond DefendantAND BUILDFORENXTGEN LIMITEDThird DefendantHearing: 21 August 2013Counsel: J G Miles QC and K W McLeod for the PlaintiffC L Elliott QC, J A Hazel and B Cain for the DefendantsJudgment: 23 August 2013JUDGMENT OF BROWN J[On Interlocutory Application re Objection to Plaintiff's Intended Evidence]This judgment was delivered by me on 23 August 2013at 4 pm, pursuant to r 11.5 of the High Court RulesRegistrar/Deputy RegistrarSolicitors: A J Park, AucklandJames & Wells Solicitors, AucklandCounsel: J G Miles QC, AucklandC L Elliott QC, AucklandProcedural developments[1] Consequent upon my Minute (No 3) of 16 August 2013 the following steps were taken:(a) The defendants filed a fourth amended defence and counter-claim dated 16 August 2013;(b) The defendants filed a memorandum dated 16 August 2013 identifying in greater detail the asserted deficiencies with theplaintiff's discovery of documents, particularly with reference to thedisclosure of market surveys which the plaintiff had conducted;(c) The defendants filed a memorandum dated 19 August 2013identifying objections to the plaintiff's intended evidence;(d) The plaintiff filed a memorandum dated 20 August 2013 in response to the matters raised by the defendants.The current dispute[2] Arising from those memoranda there were three categories of issues potentially alive at the pre-trial hearing at 2.15 pm on Wednesday 21 August 2013:(a) The defendants' objection to the plaintiff leading survey evidence which had been, or was to be, disclosed so close to trial commencing on 2 September 2013;(b) The defendants' objection to other particular aspects of the briefs already served by the plaintiff;(c) The defendants' complaint about the non-compliance by the plaintiff with the rules relating to discovery of documents and the continuing obligation to update lists of documents. With reference to that objection the plaintiff sought the leave of the Court to rely on recentlydiscovered documents if, and to the extent to which, there had been failure of compliance by the plaintiff with the discovery rules.[3] Among the attachments to the plaintiff's further memorandum of 20 August were an updated list of documents referred to in the plaintiff's third supplementaryaffidavit of documents dated 1 August 2013 and a draft fourth supplementary list of documents.[4] Mr Elliott QC for the defendants generously indicated that the defendants were prepared to not pursue issues of less than major non-compliance with the discovery rules given the steps since taken by the plaintiff to rectify the extent of disclosure in the material attached to its most recent memorandum.[5] With reference to the list of evidential objections detailed in schedules A andB of the defendants' memorandum of 19 August 2013, given that I did not have thebriefs available to me at that point in time, it was agreed that the plaintiff wouldreflect on the defendants' objections, that I would be supplied with bundles of the plaintiff's and defendants' briefs a couple of days prior to commencement of the trialand that the evidential objections that remain to be resolved would be determined at the commencement of the trial.[6] That left for consideration the defendants' primary matter of concern namelythe asserted late disclosure of a number of market surveys upon which the plaintiff intends to rely at trial. There are four market surveys in issue. They comprise two EARTHWOOL surveys, a BATTS survey and the Ophir survey.[7] The plaintiff has indicated that it is not intending to rely on the Ophir survey but it has referred to that survey in the briefs of evidence it has served because that is said to be a requirement indicated by the authorities to which I refer below.New Zealand litigation practice as to market survey evidence[8] In a number of jurisdictions practice notes have been promulgated concerning the conduct and admission into evidence of market survey evidence. Recent examples are Practice Note CM13 in the Federal Court of Australia dated 1 August2011 and Tribunal Practice Notice (2/2012) in the United Kingdom Intellectual Property Office.[9] Although there is no equivalent practice direction in New Zealand the approach of the Courts has been to adopt various judicial expositions of the suitable practice for the design of, conduct of and disclosure of market survey evidence. Well known examples are Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd1and Auckland Regional Authority v Mutual Rental Cars (Auckland Airport) Ltd.2 In both those decisions reference was made to a list of requirements for the validity of survey evidence recorded by Whitford J in Imperial Group plc v Philip Morris Ltd.3The parties' contentions[10] Mr Miles QC for the plaintiff took the position that the plaintiff had complied with those requirements. However the real point of contest between the parties concerned the apparent practice of claiming privilege for all market survey material until the point in time is reached where the market survey material is deployed in briefs of evidence. Mr Miles submitted that that was and continued to be the New Zealand practice and he submitted that the defendants appeared to have adopted the same practice because there was a reference in the defendants' list of documentsdated 28 May 2013 to a survey which the defendants had carried out in or about February 2012.[11] However in support of his argument that all four surveys should be excluded from evidence received at trial Mr Elliott advanced a more nuanced argument which was two pronged:(a) First, that market survey evidence should be released from privilege once a party has a settled intention to use the survey (and that the plaintiff in this case had such a settled intention at a point prior to service of its briefs).1 Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129.2 Auckland Regional Authority v Mutual Rental Cars (Auckland Airport) Ltd [1987] 2 NZLR 647.3 Imperial Group plc v Philip Morris Ltd [1984] RPC 293 at 294.(b) Secondly and alternatively, that in any case the surveys were being released too close to trial for the defendants to have a fair and proper opportunity to prepare for trial.[12] In support of the first proposition Mr Elliott referred to a 'without prejudice' communication from the plaintiff's solicitors to the defendants' solicitors dated7 June 2013 (a redacted version of which was annexed to the plaintiff'smemorandum of 20 August 2013) which letter described, albeit reasonably succinctly, the nature and results of both the EARTHWOOL surveys (the questions for which were attached to the letter) and the BATTS survey (the question presentation for which was also attached to the letter). It was Mr Elliott's submission that the disclosure of that information in the 'without prejudice' letter of7 June 2013 represented a settled intention on the part of the plaintiff to use the surveys in evidence and as such the plaintiff was required at that time to abandon the privilege which had been asserted in relation to the material.[13] In support of the second contention he referred to the list of conditions detailed in the judgment of Lockhart J in the unreported case of Greynell Investments Pty Ltd v Hunter Douglas Ltd which is quoted in the ARA case, in particular to the requirement that the complete record of data and responses concerning the surveyshould be "supplied to the applicant in reasonable time in advance of the hearing".[14] He explained that the market survey material in respect of the EARTHWOOL and Ophir surveys had only been released from privilege and provided to the defendants when the plaintiff served the briefs of evidence of Professor Brodie and Mr Elsom on 30 July 2013 (refer my Minute of 1 August 2013 at [11]). Furthermore the market survey material in relation to the BATTS market survey would not beprovided until service of the plaintiff's witness statements in response which were tohave been served on 19 August 2013 (refer my Minute of 1 August 2013 at [12]) but which had not been served because the plaintiff elected not to do so when the defendants were not in a position on that date to serve their briefs.[15] Mr Elliott submitted that the defendants were seriously prejudiced in their preparations for trial by the receipt of the market survey material so close to trialthrough the medium of the plaintiff's briefs of evidence. He referred in particular tothe difficulty in obtaining a market survey expert witness in the short period prior to trial and he foreshadowed the possibility of an application to adjourn the fixture.[16] For the plaintiff Mr Miles submitted that the course which had been followed was simply a reflection of the New Zealand litigation practice relating to market survey evidence. However notwithstanding the date of formal provision of the market survey material he challenged the contention that the defendants were prejudiced because he contended that the defendants had been well aware of the nature of the likely survey evidence from the disclosure of the key elements of both the EARTHWOOL surveys and the BATTS survey in the 'without prejudice'communication of 7 June 2013. He emphasised the importance for the plaintiff of the BATTS survey evidence and indicated that if that evidence were to be excluded because of the proximity of the trial then for its part the plaintiff would have to consider an application for an adjournment of the fixture.[17] Mr Elliott makes the point that it is one thing to know the content of the survey questions and the analyses of the responses but it is also important to have early access to information concerning the survey methodology. Mr Miles responds that the defendants have been aware of the EARTHWOOL surveys' methodology since service of the initial briefs in July and that the methodology for the BATTS survey is essentially similar.[18] It does appear to be the case that the New Zealand litigation practice concerning market survey evidence is as stated by Mr Miles and as is seemingly reflected in the affidavits of documents of both sides in this proceeding. However even if it is still the practice, it clearly can have very unsatisfactory consequences for the trial preparations of a party who is served with such evidence close to trial.[19] I am aware (and I take this opportunity to record for the assistance of other litigants) that an attempt has been made in a recent case to address the potential problem by the inclusion of a term in the timetable order that specifically addresses the timeframe for market survey evidence. The relevant provision in that timetable order stated:To remove any uncertainty as to market survey evidence by [X date] both sides are to advise each other whether they are to adduce market survey evidence. If a party does not give any notice, it will be treated as not intending to adduce survey evidence. If a party has not given evidence by [X date], it will not be able to give market survey evidence, unless the other side has given notice that it will adduce market survey evidence. [X date] is a cut off date for the parties to declare their intentions as to survey evidence, but if one party has given notice that it will adduce survey evidence then both parties will be entitled to give such evidence.[20] Adherence to the current New Zealand litigation practice concerning survey evidence may also need to be modified in the light of the general exclusion in s 8 of the Evidence Act 2006 which materially provides:8 General exclusion(1) In any proceeding, the Judge must exclude evidence if its probative value is outweighed by the risk that the evidence will—(a) have an unfairly prejudicial effect on the proceeding; or(b) needlessly prolong the proceeding....Decision[21] This evidential dispute is very important for the parties and I would have preferred to have had the opportunity to record my reasons in greater detail having regard to the forceful submissions made for both sides. However the responsibilities of being Duty Judge throughout this week (I having elected to add this matter to theDuty Judge's List in order to secure prompt resolution for the parties given the imminent trial) together with my view that it is important that the parties should have the opportunity to consider their positions at the earliest practicable point in time causes me to state my reasons today in reasonably summary form.[22] Had the BATTS survey been disclosed for the first time in the plaintiff'sbriefs of evidence in response then I would very likely have entertained the order sought by Mr Elliott in relation to the BATTS market survey evidence. I would have been much less inclined to do so in relation to the EARTHWOOL survey evidence given that the briefs of evidence were served at the end of July.[23] However in my view the telling consideration in this case is the fact that the plaintiff disclosed the forms of questions and a summary of the analyses of the answers to the questions by the survey respondents on 7 June 2013 in the 'without prejudice' letter of that date. From that point in time the defendants were not only aware that the surveys had been conducted but also, from the results obtained, that the surveys were likely to be deployed in evidence. In those circumstances the defendants then had the opportunity to obtain expert advice and, if necessary, conduct their own surveys.[24] The fact that the letter which disclosed the existence, nature and summary results of the EARTHWOOL and BATTS surveys was a 'without prejudice'communication is not in point to my mind. I can envisage that nice issues might have arisen if the surveys had never subsequently been deployed in evidence. Indeed there may even be an issue as to whether privilege continued to subsist in relation to those market surveys referred to in the letter upon its receipt by the defendants. Time precludes my considering that point and it is unnecessary to do so in any event because the resolution of the present dispute essentially turns on the issue of the extent of the prejudice which has been suffered by the defendants as a consequence of the dates of service of the briefs of evidence.[25] In these particular circumstances I do not consider that the defendants are prejudiced (or so sufficiently prejudiced) as to justify the order which Mr Elliott seeks, namely to prevent the plaintiff's leading the market survey evidence at trial.Consequently I decline the order sought that the market survey evidence is to be excluded from the trial.[26] It is apparent that there have been a number of not insignificant omissions and errors in the plaintiff's sequence of lists of documents. In substantial measure these appear to have been addressed in the material annexed to the plaintiff'smemorandum of 20 August 2013. At this point in time (Friday afternoon) I do not attempt to grapple with the issue of leave in relation to specific documents. Issues of leave and any related costs implications are held over to the trial when there will be sufficient time to address discovery issues in relation to particular documents on an individual basis.[27] Costs are reserved.________________________________Brown J