TODD POHOKURA LIMITED V SHELL EXPLORATION NZ LIMITED AND ANOR HC WN CIV-2006-485-1600

TODD POHOKURA LIMITED V SHELL EXPLORATION NZ LIMITED AND ANOR HC WN CIV-2006- 485-1600 28 January 2010IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY CIV-2006-485-1600BETWEEN TODD POHOKURA LIMITED Plaintiff AND SHELL EXPLORATION NZ LIMITED First Defendant AND OMV NEW ZEALAND LIMITED Second Defendant Hearing: 26 January 2010 Counsel: J A Farmer QC and A S Olney for plaintiff L J Taylor & O J Meech for first defendant T C Stephens and R Brier for second defendant Judgment: 28 January 2010RESERVED JUDGMENT OF DOBSON J (Todd's applications for leave to amend Statement of Claim and for lifting of confidentialty constraint on a Shell document)[1] Todd's third Amended Statement of Claim in these proceedings was filed on 23 October 2009. On 23 December 2009, Todd made application for leave to further amend its Statement of Claim to add an eleventh cause of action. This amendment would allege a breach of s 36 of the Commerce Act 1986 (the Act) against Shell. The application annexed a draft of the proposed terms of this further cause of action in the following terms:ELEVENTH CAUSE OF ACTION against the first defendant – breach of section 36 Commerce ActTodd repeats paragraphs 1 to 101 above and says further: 1. Because of its position in the Gas Market, including:(a) the size of the participating interests held by it and its interconnected bodies corporate at Maui (83.75%), Pohokura (48.00030%) and Kapuni (50%), and those three fields produce a substantial proportion of oil gas produced in New Zealand (87.7% in 2008); (b) the requirement for an affirmative vote from SENZL (or the applicable interconnected bodies corporate) in order to: (i) make joint venture decisions at Maui, Pohokura, and Kapuni (ie negative control); and (ii) in particular, to approve draft Work Programmes and Budgets submitted by the (sic) itself, as Pohokura operator, pursuant to Article 6.3(A) of the PJVOA. (c) SENZL's appointment as operator at Pohokura; (d) its Alignment Agreement with OMV; and (e) weak competitive constraints on SENZL; SENZL has a substantial degree of market power in the Gas Market. 2. SENZL has taken advantage of its substantial degree of market power by procuring the inclusion in the 2006, 2007, 2008, and 2009 Work Programmes & Budgets annual production limits (referred to in those documents as "total production available" and "total production available (contingent)["]) that were less than Total Production Available (refer paragraphs 36, 43, 45, and 47 above) for the purpose of preventing or deterring Todd from engaging in competitive conduct in the Gas Market, namely marketing its full share of Total Available Production. 3. Shell has profited substantially from its wrongful conduct. Accordingly Todd claims: (a) declarations that the conduct of SENZL referred to in paragraph [2] above contravenes section 36 of the Commerce Act, and that the Offtake Documents are unenforceable. (b) an injunction pursuant to section 81 of the Commerce Act prohibiting SENZL and OMV from giving effect to the Offtake Documents. (c) damages pursuant to section 82 of the Commerce Act or an inquiry into damages pursuant to High Court Rule 384. (d) exemplary damages pursuant to section 82A of the Commerce Act. (e) an account of profits. (f) interest.(g) costs.[2] The existing pleading includes, in the fifth cause of action, a claim that certain offtake rules setting the procedure by which the joint venturers determine the level of production from the Pohokura field are, inter alia, in breach of the Act. Subsequent causes of action plead that work programmes determined for the joint venture for the 2006 to 2009 years were invalid on grounds including that Shell breached the Act. In the eighth cause of action, Todd separately pleads that the offtake rules and the work programmes in each of the 2006 to 2009 years constitute contracts, arrangements or understandings within the meaning of ss 27, 29 and/or 30 of the Act, and that they have been arrived at in breach of those provisions. In the ninth cause of action, Todd pleads that there has been a further breach of s 27 of the Act, via s 30 of the Act, in that the offtake documents are deemed to have the purpose, effect or likely effect of substantially lessening competition in the gas market. In the tenth cause of action, Todd alleges that the offtake documents constitute exclusionary provisions contrary to s 29 of the Act. [3] It is suggested for Todd that the prospect of an additional claim for breach of s 36 of the Act has arisen out of the proposed evidence for Shell. Todd infers from factual briefs served on behalf of Shell from Messrs Jackson and Bansal, admissions that Shell had an anti-competitive purpose in certain offtake rules introduced for Pohokura. That purpose being to limit the production available to Todd. Perhaps more particularly, Todd's new initiative responds to a brief served from Professor Hausman of MIT. Todd takes from the totality of the proposed evidence in Shell's briefs, and in particular the economic analysis from Professor Hausman, that Shell's case will be:• to deny that it has any market power in respect of the New Zealand gas market; and• that the offtake regime reflected in the documents under challenge in the proceedings has raised prices in the gas market but only to a relatively small amount so that Todd could not make out any substantial lessening of competition.[4] Todd now argues that this definition of the nature of Shell's defence raises the prospect that Todd might not make out the causes of action based on s 27 via s 30 and s 29 of the Act. This may arise in circumstances where any lessening of competition resulting from the defendants' conduct is held not to be "substantial" for the purposes of s 27, but nonetheless that Shell had taken advantage of its market power in implementing the offtake regime, being conduct contrary to s 36 of the Act. [5] The application to amend is strenuously opposed by Shell, and its opposition is supported by OMV. A decision is required as a matter of urgency, given that the seven week fixture of the proceedings is due to commence on 15 February next.Adjournment of trial required?[6] A principal ground for Shell's opposition is that it could not adequately prepare its defence to a claim of breach of s 36 in less than three months, and that, in light of the protracted history and importance of achieving a resolution in the proceedings, an adjournment would not be warranted. Shell has filed an affidavit from Professor Hausman in which he details the extent of further information he considers necessary to undertake the analysis of why, in his view, Shell does not have market power, and other economic issues that would be raised by an allegation of breach of s 36. [7] Todd's application has not been supported by any affidavit, nor has there been any affidavit filed in response to that from Professor Hausman. Instead, Mr Farmer QC mounted a thorough attack on the accuracy of Professor Hausman's projection of the work that would be required on behalf of Shell. He argued that:• Professor Hausman's brief of evidence demonstrates that he has already turned his mind to whether Shell has market power; and• the further information Professor Hausman claims would need to be researched is already reflected in the detail of a brief of proposed evidence from Mr David Hunt, who has been jointly retained by Shell and OMV to describe the nature of the New Zealand gas market, the need for and place of"swing" in the gas market, and the effects (if any) of the Pohokura production arrangements on the gas market. [8] Mr Farmer urged rejection of Professor Hausman's opinion about the period reasonably required for him to adequately prepare an economic analysis supporting Shell's defence to a new allegation of breach of s 36. Mr Farmer suggested that, if at all, a slight delay to the start of the trial would be all that would be necessary. Further, Shell could reasonably be expected to respond to the new cause of action by additional evidence by, say, the beginning of March. Such additional evidence would be in response to the evidence that has yet to be settled for one of the economic experts retained by Todd, Dr Veljanovski. Mr Farmer did tender a four page document described as a proposed outline of the evidence that Dr Veljanovski would give on s 35 issues. That document is a mixture of "will say" summaries, and Todd's argument in support of the inclusion of a claim for breach of s 36. Mr Taylor rejected this submission, and the projection of what an economist called by Todd might say, as inadequate to counter the measured analysis of the independent expert who has considered carefully the scope of relevant information, and formally deposed as to what he considers necessary. Mr Taylor argued that it is not for Todd, in a situation such as the present, to tell Shell what is adequate for Shell's expert economist to respond to a new cause of action. [9] The restrictive trade practices proscribed by Part 2 of the Act include practices substantially lessening competition, including contracts, arrangements or understandings that have that purpose or effect (s 27) and taking advantage of market power (s 36). Allegations of breach of these provisions are by no means mutually exclusive, and there are frequent examples of allegations of breach of both provisions (or, in the case of s 36, its pre-2001 predecessor). In preparing for a case invoking the provisions of Part 2 of the Act, it is obviously important for defendants to know the extent of allegations made in respect of their allegedly anti-competitive conduct. That is particularly so in briefing economic experts retained. [10] In this case, I accept Mr Taylor's point that the references in Professor Hausman's existing brief to his opinion that Shell does not have market power in the New Zealand gas market are in the nature of asides, in the context of an analysis forthe purposes of ss 27, 29 and 30. Further, the references do not address the issue of market power in the thorough way that would be required for the proposition, fundamental to any case under s 36, that Shell enjoyed a substantial degree of power in a market. Even allowing for some extent of overstatement by Professor Hausman in the time that would be required for Shell to adequately prepare its defence, I do not consider that a new cause of action alleging breach of s 36 could be reasonably accommodated within the timing of the existing fixture. It follows that allowing the amendment would lead to an adjournment of the present fixture. [11] At Todd's instigation, I am to sit on the case with a Lay Member. For that and a range of other reasons, even a short deferral of the start date of the trial is now a practical impossibility. Shell is adamantly opposed to the injustice it sees in any lengthy adjournment. Mr Taylor's written submissions on Shell's behalf reviewed the history of the proceedings since their commencement in July 2006, reflecting an early interim injunction granted in favour of Todd, the allocation of a fixture for October 2007 and various difficulties in timetabling interlocutory steps, exchanges of evidence and the eventual allocation of a second trial date to start on 15 February next. The first causes of action under the Act were added in October 2006, with subsequent amendments in December 2008 and October 2009. [12] Although the quantum of damages sought is not explicitly pleaded, Shell treats the case it is facing on the basis of the economic evidence proposed for Todd to indicate a range of damages between $137.5 million and $321.2 million as at June 2010. I infer that the quantum of Todd's claim is increasing more or less consistently over time. The proceedings relate to the operation of a gas resource that is significant to the whole New Zealand gas market, so there is a compelling commercial interest for the joint venturers to achieve resolution, whether that be in this Court or, more likely, at an appellate level. [13] Accordingly, I accept that Shell should not be required to go on with the existing fixture, having to face a new claim of breach of s 36 of the Act, and that the adjournment Shell would therefore be entitled to is not warranted in the overall interests of justice. I consider that to be a first important reason against granting the leave now sought.Delay justified?[14] Todd's initiative to add the further cause of action has been taken, in relative terms, very close to the commencement of the substantive hearing. The proceedings have required intensive interlocutory supervision over the last 18 months, and the scope and nature of the factual, legal and economic issues arising have been under on-going review by the respective teams of advisers. Mr Farmer's explanation that the prospect of a new cause of action alleging breach of s 36 arises out of an analysis of some of the briefs of evidence served for Shell, is less than satisfactory. As Mr Stephens succinctly submitted on behalf of OMV, the matters now identified as triggering an analysis for Todd that renders an additional cause of action under s 36 tenable are all within the scope of contentions which Todd has maintained from the outset. Accordingly, if Todd had had the courage of its convictions in the more general allegations it has made from the outset, a claim under s 36 ought to have been within contemplation. There is nothing in the nature of a "blinding revelation" from Professor Hausman's analysis that introduces an additional aspect of the case warranting allegations of breach of s 36. [15] The defendants are justified in characterising Todd as a "very seasoned litigant" and it is certainly well-resourced and well-advised. I am inclined to accept criticisms advanced by Messrs Taylor and Stephens to the effect that the prospect of the sort of allegations Todd now wishes to raise under s 36 ought to have been apparent to it, at least from the time it considered breaches of any provisions in Part 2 of the Act. Certainly, the proposed allegations quoted in paragraph [1] above are not rendered a realistic prospect only because of matters traversed in the evidence proposed on behalf of Shell. I have not overlooked the further point that both Messrs Taylor and Stephens dispute what Mr Farmer suggests Todd is entitled to take from the terms of Messrs Jackson and Bansal, and Professor Hausman's briefs. [16] It follows that any cause of action under s 36 of the Act could have been added at an earlier point in the proceedings, and certainly when leave was not required to do so. It also follows that Mr Taylor is justified in his submission that there is no adequate explanation for the delay. There is also force in his submissionthat the extent of the delay relative to the history of the proceedings is extreme. Unexplained and/or extreme delay in seeking amendment to introduce a new cause of action is a relevant factor against granting such leave.Potential merits of additional claim?[17] Shell also opposed leave to add the additional cause of action on the basis that it was unmeritorious. The Court can only form a provisional impression of the relative tenability of a cause of action on such applications. Nevertheless, the discretion as to whether to grant leave may relevantly be influenced by any view that the Court may be able to come to. That view may be either that the additional cause of action is a clearly tenable one arising in circumstances where it could not reasonably have been pleaded before or, on the other hand, that the cause of action would be likely to face substantial difficulties such that the plaintiff is not substantially prejudiced by its inability to include it within the claims being determined. [18] Here, Professor Hausman has deposed in the affidavit opposing leave that he is unable to see how, on the existing evidence, Todd could establish that Shell has any substantial market power, given the incomplete nature of the data available. His brief previously expressed the view, in a tangential way at least, that Shell did not enjoy market power in the New Zealand gas market. In oral submissions, Mr Taylor foreshadowed significant differences as between Todd and Shell in the way they might propose the circumstances of the counterfactual necessary to test whether indeed Shell did enjoy any substantial market power. [19] Without expressing any view on that first threshold requirement for a cause of action under s 36, I was left unconvinced after a number of exchanges with Mr Farmer about the possible basis for the next proposition that Todd would need to establish to make out a claim under s 36. That is, that Shell had taken advantage of any market power it did enjoy, in the course of procuring the annual production limits at less than the total production available from the Pohokura field (see the proposed paragraph "2" as cited in paragraph [1] above). The gravamen of Todd's complaints in the proceedings relates to the imposition by the other joint venturers oflimits on production from Pohokura at less than the levels that Todd claims are available, and at which it ought to be entitled to produce. Todd argues that those constraints result from Shell and OMV reaching a common position on the terms of the offtake rules, and then those majority participants also agreeing on the annual production levels since the field began to produce. [20] There is no obvious, tenable link between the circumstances in which Shell and OMV have achieved those outcomes within the operation of the Pohokura joint venture, and Shell's position more generally in the New Zealand gas market. Mr Farmer accepted that if the proportionate interests of Todd and Shell in Pohokura were reversed, and assuming also that OMV and Todd agreed on such matters, then production would have proceeded in accordance with the wishes of those two as the majority venturers in Pohokura, irrespective of the positions that either Todd or OMV had elsewhere in the New Zealand gas market. Accordingly, there is likely to be a material difficulty for Todd in tenably particularising how any market power enjoyed by Shell in the New Zealand gas market has enabled it to procure production limits at Pohokura which could not be procured by it merely by virtue of its proportionate share in the Pohokura joint venture, in circumstances where Shell and OMV agree on those matters. [21] Mr Taylor was emphatic in his submission that not only could a breach of s 36 not be made out, but the cause of action is unnecessary. If Todd establishes breach by Shell of s 27, it is argued, by virtue of Shell's entry into, or giving effect to, an arrangement or understanding that substantially lessened competition in the New Zealand gas market, then Todd did not need any fresh claim under s 36 because it could not realistically add to the measure of damages to which Todd would be entitled. Alternatively, if Todd could not make out breach of s 27, then in the circumstances of the operation of this joint venture, there was no realistic scope for it to make out breach of s 36. I am not satisfied that the complementarity of the scope and prospects for relief under ss 27 and 36 is nearly as clear cut as Mr Taylor urges. However, in circumstances where the focus has been upon the consequences of actions agreed to between Shell and OMV but objected to by Todd in the operation of the joint venture, it is understandable that Todd has focused upon ss 27, 29 and 30. At the very least the prospects for relief under s 36 are more remote if anylessening of competition that Todd might make out is not substantial for the purposes of s 27, but Shell's position more widely in the market was then said to render it liable under s 36 in respect of its conduct within the Pohokura joint venture.Statute-barred?[22] Mr Taylor also raised a jurisdictional limit on the Court's ability to grant leave, submitting that leave can only be granted for a cause of action to the extent that the Court is satisfied that it is not statute-barred. Mr Taylor argued that this limitation on the Court's jurisdiction follows from the terms of r 7.77. Subrule (2) provides that an amended pleading may introduce a fresh cause of action "which is not statute-barred;". Subrule (4) also provides:(4) If a cause of action has arisen since the filing of the statement of claim, it may be added only by leave of the court. If leave is granted, the amended pleading must be treated, for the purposes of the law of limitation defences, as having been served on the date of the filing of the application for leave to introduce that cause of action.[23] Mr Taylor also argued that this constraint is consistent with the approach suggested by the Court of Appeal in The Ophthalmological Society of NZ Inc v Commerce Commission (2003) 16 PRNZ 873. In that case, the terms of the predecessor of r 7.77 were taken to require the Court to decide any limitation question at the time of an application for leave, as the Court is not able to grant leave if the fresh cause of action is statute-barred ([18]). [24] Because actions alleging breach of the Commerce Act have a three year time limitation, the original conduct by Shell in procuring the terms of the offtake rules and the decision in respect of the 2006 level of production are clearly statute-barred and as such could only be pleaded as matters of background, not as to any liability made out under the Act. Submissions for Shell (relying on references in a brief of evidence from Mr Hall of Todd) submitted that the 2007 work programme and budget would also be out of time as it was voted on at a meeting on 8 December 2006, more than three years before the present application for leave to amend was made.[25] Mr Taylor also criticised the application for advancing the terms of a new pleading only as a proposal without Todd being committed to its precise terms. That concern was suggested as relevant because the Court needed to be satisfied before granting leave that the whole of the cause of action was indeed not statute-barred. When Todd purported to reserve an entitlement to redraft the additional cause of action the Court could not be satisfied at the time of dealing with the matter that it was indeed granting leave to a cause of action it had jurisdiction to authorise. The concern is appropriate, but could not be decisive. Mr Farmer accepted that conduct alleged in 2006 would have to be deleted. He equivocated in respect of the allegations relating to the 2007 work programme and budget. Had I otherwise been inclined to grant leave, it would have been necessary to require an evidentiary basis for retaining the allegation in respect of 2007, given Shell's reliance on proposed evidence from a Todd executive which appears to date the relevant conduct in respect of the 2007 work programme as occurring more than three years before the application for leave to amend was filed.Public interest/undesirability of second proceeding[26] For Todd, Mr Farmer characterised its Commerce Act claims as public interest litigation in which, although Todd has its own obvious commercial interests, it is also seeking to enforce compliance with provisions of the Commerce Act that exist for the public benefit. If indeed the conduct of its joint venture partners has resulted in higher prices in the New Zealand gas market than are otherwise warranted, then it is in the public interest that Todd should be allowed the fullest range of arguments to advance the public interest in more efficient pricing in the New Zealand gas market, implicitly for the ultimate benefit of gas consumers. [27] Mr Farmer also emphasised the undesirability of leaving one claim "parked" for later determination. He suggested that course was the probable consequence of leave being declined, leading to unnecessary duplication of resources and the prospect of prejudice to those involved by virtue of issue estoppels arising. [28] As to the first of these two points, the public interest in any enhanced efficiency in the New Zealand gas market likely to result from Todd being successfulwith some or all of its claims under the Commerce Act is less than compelling. In the context of this application, I consider that the priority is to balance the respective interests of the opposing parties to the litigation in achieving the just and expeditious determination of what is a relatively complex piece of commercial litigation. Any incidental benefit accruing to the public from success by Todd cannot materially shift the balance I am required to strike between the interests of the parties to the litigation. [29] As to the second point, namely the disadvantages of leaving a factually and legally connected claim unresolved, that is always a relatively strong factor in favour of allowing amendment, so long as it can be achieved without unduly prejudicing the interests of other parties. However, it cannot be decisive. Nor am I persuaded by Mr Farmer's comments as to the probability that it would be separately pursued later. If Todd has any substantial success on its other Commerce Act causes of action on which it has focused since first amending its pleading, then there would be real issues as to the utility of pursuing any additional claims. So too, if Todd's existing claims under the Commerce Act are all unsuccessful. That could potentially occur on grounds that would require Todd to responsibly reflect on the utility of separately pursuing the additional matters raised by a claim under s 36.Disentitling conduct?[30] On Shell's part, Mr Taylor urged that Todd's recent conduct in respect of other preparations for trial ought also to count against it. In this regard, he cited the High Court of Australia decision on amendment to pleadings in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175. Without taking me to a passage in any of the judgments expressly adopting it, he cited from the summary of counsel's submissions a sequence of eight principles that were urged on the Court as guiding the Court's discretion in permitting amendments to pleadings in circumstances such as the present. The second of those eight principles was that "the moving party must be candid and offer to the Court a full and frank explanation for its late amendment" (177).[31] On 16 December 2009, I heard argument on a range of interlocutory matters in these proceedings. On that occasion, Mr Farmer sought an extension to the timetable for provision of reply briefs from Todd's witnesses, including economists. No reference was made to the prospect of an application to further amend the Statement of Claim but the present application to do so was filed a week later on 23 December 2009. Mr Taylor suggested that it was "inconceivable" that Todd did not have a new s 36 cause of action in mind when seeking that extension, but failed to acknowledge it in any way to the Court. Mr Taylor urged that this circumstance should be treated as a lack of candour on Todd's part, and be added to the matters weighed against Todd in assessing whether leave be granted. [32] In responding to this, Mr Farmer acknowledged that an additional cause of action invoking s 36 of the Act was under consideration by Todd's legal advisers on 16 December 2009, but it still awaited input from relevant economists and senior counsel. I did amend the timetable to afford Todd more time for its reply briefs, but the revised deadline of 20 January 2010 for the relevant reply briefs has now passed by a week, without any of the economists' briefs being served. Mr Farmer advised that two of the three economists, Messrs Murray and Sweeney, will have completed briefs which will be able to be served by the end of this week, and that the third economist, Dr Veljanovski, will have completed a brief by early next week. [33] It was implicit in Mr Taylor's criticism that the further time now taken is because the briefs will be addressing s 36 issues on which Todd ought not to assume it will be granted leave to advance. From Mr Farmer's brief outline of the content of the economists' reply briefs, it seems that only Dr Veljanovski is proposing to traverse an economic analysis relevant to s 36. It is certainly unusually cavalier for a plaintiff in proceedings such as the present to unilaterally breach a recently amended timetable where the other parties to the litigation are strenuously pressing for compliance, even if only in part on an assumed liberty to take more time so as to address a new cause of action for which leave has not been granted. The more responsible course would be to complete the reply briefs so far as a reply is required on the existing scope of issues raised by the pleadings, leaving as a matter incidental to the obtaining of leave to plead a new cause of action the timing for service of a supplementary brief addressing the s 36 issues.[34] I am not to be taken as accepting in other respects the explanations proffered for Todd's non-compliance with the amended timetable. There is simply no present point in considering a sanction for non-compliance. The imperative is to ensure that the delay continues for as short a period as possible. [35] I would not rely on the extent and circumstances of delays in Todd's service of its reply evidence as conduct disentitling Todd from the opportunity to make a late amendment to its Statement of Claim. However, the additional pressure created for Shell and OMV in preparing their case that is caused by these delays is material, and contributes to my view on the appropriateness of an adjournment of the trial, should leave to amend have been granted. [36] Having weighed all these factors, I am satisfied that the case is a compelling one against the grant of leave. Todd's application is accordingly dismissed.Costs[37] In the end, the grounds for opposing leave to amend are strong, if not compelling. There is no adequate reason why an expansion of the pleading under the Commerce Act could not have been pursued when leave was not required, and if leave had now been granted, an adjournment of the proceedings would have followed. [38] Preparation for the argument has no doubt been a material distraction from other trial preparation, and Shell has settled with Professor Hausman a separate affidavit addressing the concerns it would raise. In those circumstances, Shell is entitled to costs from Todd on its successful opposition to the application, on a 3B basis. [39] Although not directly affected by the proposed additional cause of action, OMV established that it would also have been prejudiced by the amended pleading, had leave been granted. Mr Stephens' short submissions were cogent and relevant. OMV is entitled to an order against Todd as to one half of the costs to which Shell is entitled.Application to set aside confidentiality[40] On 22 January 2010, Todd applied to revisit an order as to confidentiality of one Shell document, that was covered by the terms of a judgment on confidentiality dated 12 August 2009. Because the issue had already been determined, the application also sought leave to bring it. Shell opposed leave and as to the merits of the application also opposed any relaxation of the extent of confidentiality previously ordered. [41] The document in question was apparently prepared in anticipation of a meeting between the joint venture parties on 30 April 2004. It is undated. The Shell discovery reference is SHELL Conf_VO_2.56. [42] As explained by Mr Olney, an analysis of the proposed briefs of evidence reveals a potential factual conflict as to what transpired at the 30 April 2004 meeting. Mr Hall, a senior in-house lawyer with Todd, has apparently traversed in his brief what he recalls occurring at that meeting. Shell has not served a brief from any of its representatives who were present but, in terms acknowledging that he was not present, a brief from Mr Jackson for Shell apparently questions the accuracy of Mr Hall's recollection. Mr Olney now characterises certain of the content of the note prepared by Shell personnel in anticipation of the meeting as being consistent with what Mr Hall will say occurred at the meeting. [43] In these circumstances, Todd's solicitors wish to disclose the content of the document to Mr Hall. It is suggested it would be inappropriate for Mr Hall to be cross-examined about the accuracy of his recollection of what occurred at the meeting, without any access to Shell's preparatory document when Todd's counsel is likely to cross-examine Shell witnesses on the consistency between matters in the document, and those as recalled by Mr Hall. An unwarranted gap on a credibility issue could arise if Mr Hall's evidence had been completed in ignorance of this potentially material source of evidence as to what transpired. [44] In addition to Mr Hall, Mr Olney indicated that evidence is also being called from a second Todd representative who was at the 30 April 2004 meeting andTodd's solicitors now seek authority to disclose the document to Mr Hall and that other Todd attendee/witness, in preparation for their cross-examination at trial. [45] Mr Taylor opposed any revisiting of the previous confidentiality order on two grounds. First, on the basis that there had been no sufficient change of circumstances to warrant reconsideration. Second, he was concerned that Todd's real motive in wishing to disclose the document to Mr Hall was not because of the immediate factual contest as to what transpired at the meeting, but rather for the purposes of better enabling Mr Hall to advance an argument (or "submission") on conduct purportedly reflecting a position agreed between the parties to a contract, subsequent to that contract being executed, in aid of the interpretation of its terms. Mr Taylor anticipated Todd could wish to use the document in this way, applying the Supreme Court decision in Gibbons Holdings Ltd v Wholesale Distributors Ltd[2008] 1 NZLR 277. [46] I am not persuaded by either of these grounds of opposition. I consider the prospect of a factual conflict as to what transpired at the 30 April 2004 meeting to be a sufficient reason to reconsider the justification for confidentiality. [47] As to Mr Taylor's second concern, he has adequately flagged it and there will be adequate opportunity to challenge or confine any attempted reliance on the document as evidencing post-contractual conduct, for no inappropriate advantage to now be taken on behalf of Todd by virtue of Mr Hall having access to its content. [48] I accordingly direct that the document is excluded from the terms of confidentiality orders previously made, and instead is to retain its confidentiality but subject to supervised disclosure of it to Mr Hall and to the other Todd employee who is a witness in respect of the 30 April 2004 meeting. Before being shown the document, both those witnesses are to complete separate confidentiality undertakings addressed to Shell's solicitors, confirming that they will not take copies of the document, will not make any reference to it for purposes other than their giving evidence in these proceedings, and will not discuss the contents of the document other than with Todd's external legal advisers and each other.Shell and OMV concerns at inadequacies in Todd's discovery[49] By Memoranda dated 22 January 2010, counsel for both Shell and OMV have raised concerns about perceived inadequacies in Todd's discovery of documents in relation to gas reinjection and gas production at McKee and Mangahewa fields (M & M). In OMV's case, the concerns at inadequacies are supported by an affirmation of a petroleum engineer in Perth, Australia, retained to evaluate the data provided by Todd in relation to M & M. [50] Those Memoranda claim substantial concerns at the inadequacies in the information provided, and the prejudice caused to Shell and OMV by the delays in discovery issues being resolved. They treat the deficiencies in discovery as material breaches of directions that I have previously given. [51] Neither Messrs Farmer nor Olney had sufficient detailed knowledge to respond, the matter having been allocated to a partner of Mr Olney's, Mr McIntosh, who was not available. Although unsatisfactory, I adjourned consideration of these further concerns and will address them as other commitments allow after I have received more information from the parties.Dobson JSolicitors: Russell McVeagh, Wellington for the plaintiff Minter Ellison Rudd Watts, Wellington for the first defendant Simpson Grierson, Wellington for the second defendant