IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

COMMERCIAL PANEL	
CIV-2022-404-002048 [2024] NZHC 2768	

UNDER	the Commerce Act 1986	
BETWEEN	WINTON LAND LIMITED
First Plaintiff

SUNFIELD DEVELOPMENTS LIMITED
Second Plaintiff	
AND	KĀINGA ORA–HOMES AND COMMUNITIES
Defendant	

Hearing:	30 August 2024 plus memoranda received on 5 and 12 September
2024	
Appearances:	J D Every-Palmer KC and J P Rea for the Plaintiff
J E Hodder KC and K R Muirhead for the Defendant
No appearance for the Commerce Commission (Intervener)	
Judgment:	25 September 2024	

JUDGMENT OF GAULT J

This judgment was delivered by me on 25 September 2024 at 3.00 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar

……………………………………

WINTON LAND LTD v KĀINGA ORA–HOMES AND COMMUNITIES [2024] NZHC 2768 [25 September 2024]

[1]	In this proceeding, the plaintiffs (together, Winton) allege breach of s 36 of the Commerce Act 1986 by  Kāinga  Ora–Homes  and  Communities  (Kāinga  Ora).  The proceeding has an eight-week fixture allocated, commencing 1 September 2025.

[2]	In their respective interlocutory applications, Winton and Kāinga Ora each sought particular discovery. Winton also sought to set aside certain claims to privilege. Kāinga Ora also sought further particulars of Winton’s pleaded loss.

[3]	The issues narrowed considerably before and during the hearing, but the parties were unable to resolve them all. Counsel agreed to file further memoranda proposing draft orders in respect of the resolved and narrowed issues, which I have now also considered. In the end, only one issue remained in dispute – relating to the scope of Kāinga Ora’s continuing discovery obligation.

[4]	This judgment addresses that unresolved issue and the resolved issues that require orders by consent.

Factual background

[5]	Although the case is complex, for present purposes the background can be stated briefly, at least from Winton’s perspective, from Winton’s submissions  in support of its application.

[6]	Winton is a greenfield property developer specialising in developing integrated and fully master-planned communities including large-scale, mixed-use residential developments.

[7]	Kāinga Ora is a Crown entity whose statutory functions include the provision of housing and initiating, facilitating and undertaking urban development. Kāinga Ora has various powers under the Urban Development Act 2020 (UDA), including the power to facilitate or undertake specified development projects (SDPs).  Winton alleges that, in using these powers, Kāinga Ora is able to avoid or overcome obstacles to rezoning land which arise  in the standard Resource Management Act 1991 processes.

[8]	Winton alleges that Kāinga Ora utilises its powers under the UDA to its commercial advantage, and effectively prevents private developers from accessing the time, cost and risk advantages from the SDP process.

[9]	Winton is undertaking a greenfield  development known as Sunfield.  Sunfield is a sustainable, integrated master-planned community in South Auckland, which will comprise 4,400 individual homes, three retirement villages, a new four-hectare town centre and 250,000m2 of employment, education and healthcare buildings, with a renewable solar energy network.

[10]	On 5 October 2021, Winton requested Kāinga Ora to consider Sunfield for assessment as an SDP under the UDA. Kāinga Ora declined to assess Sunfield as a potential SDP, including on the basis that the development proposal did not give Kāinga Ora a sufficiently central role in the development. Winton alleges that Kāinga Ora’s refusal to use its statutory  powers to facilitate private developments  like Sunfield, instead reserving those powers for its own benefit, is a misuse of its market power.

[11]	Winton has also repeatedly observed Kāinga Ora over-paying for the purchase of land, thereby excluding private developers. Ferncliffe Farm near Tauranga is a recent example of Kāinga Ora successfully bidding by basing its valuation on an assumed rezoning. After securing Ferncliffe Farm, Kāinga Ora then selected the Tauranga area, where Ferncliffe Farm is located, for assessment as an SDP. Winton says that, as a result of its regulatory advantages and discriminatory access to the SDP process, Kāinga Ora is able to outbid other developers.

[12]	Winton has brought this proceeding against Kāinga Ora alleging that Kāinga Ora has breached s 36 of the Commerce Act by:

(a)	declining or restricting access to the SDP process for a private developer that does not wish to provide Kāinga Ora with benefits and advantages;

(b)	outbidding developers like Winton and offering to purchase rural land suitable for greenfield developments on uncommercial terms; and

(c)	otherwise attempting to force developers such as Winton down the supply chain – forcing developers to complete parts only of greenfield developments, rather than having control over the entire development.

[13]	Winton seeks declarations that Kāinga Ora’s conduct is unlawful and in breach of the Commerce Act, an order requiring Kāinga Ora to consider Sunfield for assessment as an SDP, and relief for loss and damage suffered as a result of Kāinga Ora engaging in this conduct.

Winton’s application – scope of Kāinga Ora’s continuing discovery obligation

[14]	In respect of this unresolved issue, Winton seeks orders requiring Kāinga Ora:

(a)	to provide continuing discovery of five categories of documents;

(b)	to discover any other documents required to be discovered in order for Kāinga Ora to comply with its discovery obligations; and

(c)	to file and serve an updating discovery affidavit.

[15]	Rule 8.18 of the High Court Rules 2016 provides:

8.18	Continuing obligations

(1)	Each party against whom a discovery order is made has a continuing obligation to give discovery and offer inspection at all stages of the proceeding, even if that party has filed and served an affidavit of documents that complies with this subpart.

(2)	A party must discover a document if, in the course of complying with an order for tailored discovery, that party becomes aware of a document that is not required to be discovered under the order, but that—

(a)	adversely affects that party’s own case; or

(b)	adversely affects another party’s case; or

(c)	supports another party’s case.

[16]	Winton relies on r 8.18(1) and says that where events in issue continue beyond the date that the affidavit of documents is filed, the parties are expected to provide updating discovery relating to such matters. Winton says that as new relevant documents come into existence, they need to be discovered.

[17]	I accept that Winton’s pleading alleges that Kāinga Ora continues to engage in conduct in contravention of s 36 of the Commerce Act.1 However, Kāinga Ora’s opposition raises two issues:

(a)	it disputes that there is a blanket continuing obligation to provide updating discovery, relying on Body Corporate 366611 v Downer New Zealand Ltd (Downer);2 and

(b)	it says that the tailored discovery order in this case explicitly limits the date range for the relevant categories of documents to “the date on which any discovery order is made”.

[18]	I deal with these two issues in turn.

Updating discovery

[19]	In Downer, an application for further discovery relied in part on r 8.18. Downer contended that the plaintiffs had failed  to comply with their obligation  under r 8.18(2) because Downer itself had provided documents which indicated that there were further documents that were required to be discovered under the tailored discovery order made in the proceeding. Associate Judge Bell said:
[42] In my view, that gives r 8.18(2) too wide an application. The words, “in the course of complying with an order for [tailored] discovery” are a qualification. If the rule means what Downer says, those words could be struck out. In my judgment, the rule is directed at the stage where a party subject to an order for tailored discovery prepares an affidavit of documents and, while carrying out discovery, becomes aware of other documents which fall outside the terms of the tailored discovery order but still satisfy the adverse documents test. Clearly those documents must be disclosed, but it is casting the matter too wide to say that compliancewith an order for tailored discovery extends after the affidavit of documents has been filed and served. There are

1	I note that the amended statement of claim was dated after the discovery order.
2	Body Corporate 366611 v Downer New Zealand Ltd [2019] NZHC 2656 at [42].

continuing discovery obligations under r 8.18(1), that does not expand the duty under r 8.18(2).

[20]	This is addressed in McGechan on Procedure:3

HR8.18.01 Relationship between r 8.18(1) and (2)

Rule 8.18(1) provides for continuing discovery obligations, but r 8.18(2) itself does not apply after the affidavit of documents has been filed and served. Rather, it applies to the situation where a party who is subject to an order for tailored discovery is preparing an affidavit of documents and, while carrying out discovery, becomes aware of other documents which fall outside the terms of the tailored discovery order but still satisfy the adverse documents test: Body Corporate 366611 v Downer New Zealand Ltd [2019] NZHC 2656 at [42].

[21]	Rules 8.18(1) and 8.18(2) have different purposes. Rule 8.18(1) is concerned with continuing discovery within the scope of the discovery order. Rule 8.18(2) is concerned with discovery of documents outside the scope of a tailored discovery order that meet the adverse documents test in that sub-rule. As Downer indicates, the obligation in relation to such documents in r 8.18(2) is limited by the words “in the course of complying with an order for tailored discovery”. It is not itself an obligation to undertake continuing discovery.

[22]	I observe, however, that the limiting words “in the course of complying with an order for tailored discovery” in r 8.18(2) may apply where the scope of a tailored discovery order gives rise to a continuing obligation to give discovery under r 8.18(1) and, in the course of complying with  that  order, adverse  documents  are identified. In that limited sense, r 8.18(2) may have continuing  application.  The passages referred to in Downer and McGechan on Procedure do not suggest otherwise. However, it is unnecessary to address this further on this application.

[23]	Here, Winton relies on r 8.18(1), not r 8.18(2). While r 8.18(1) does not expand the duty under r 8.18(2) except in the narrow sense I have suggested, it is also true that r 8.18(2) does not narrow the obligation under r 8.18(1). Unlike r 8.18(2), r 8.18(1)

3	Jessica Gorman and others McGechan on Procedure (online ed, Thomson Reuters).

refers to a “discovery order” rather than a “standard discovery order” or “tailored discovery order”, as it would need to if it only applied to one type of discovery order.4

[24]	The extent of the continuing discovery obligation under r 8.18(1) depends on the scope of the discovery order, reflecting the issues in the case. Where issues are ongoing, care is needed with the scope of discovery orders to ensure that continuing discovery is practical and proportionate. Otherwise, continuing discovery could impact upon pre-trial steps and never end.

Scope of the tailored discovery order in this case

[25]	The remaining issue is whether the tailored discovery order in this case explicitly limits the date range for the relevant categories to documents up to the date on which the discovery order was made, such that subsequent documents do not fall within the scope of the discovery order and r 8.18(1) has no application.

[26]	The tailored discovery order included the following date range:

The applicable time period for each category is 7 August 2020 to the date on which any discovery order is made unless otherwise stated.

[27]	The order was made by consent on 16 April 2023.5

[28]	Winton submitted that the definition of the applicable time period for each category as ending on “the date on which any discovery order is made” merely reflects the reality that the discovery order could only apply to documents in existence at that date, and does not override the continuing discovery obligation in r 8.18(1). Winton also relied on the following paragraph in the joint memorandum dated 6 April 2023 seeking the discovery orders by consent:
The tailored discovery categories are subject to the parties’ continuing discovery obligations, including the obligation under r 8.18(2) to discover certain documents not required to be discovered under a tailored discovery order.

4	See Everest Serviced Apartments Ltd v Body Corporate 511909 [2021] NZHC 1725 at [38]; Body Corporate 355492 v Queenstown Lakes District Council [2022] NZHC 658 at [26]; and Affordable Housing Ltd v Body Corporate 396511 [2023] NZHC 776 at [26].
5	Winton Land Ltd v Kāinga Ora–Homes and Communities HC Auckland CIV-2022-404-2048, 16 April 2023 (Minute).

[29]	Winton submitted this paragraph supports its position that the inclusion of the date range within the tailored discovery order did not extinguish the parties’ obligation under r 8.18(1) to provide discovery of documents within the categories set out in the order after the “end date” specified.

[30]	Kāinga Ora submitted that the parties had agreed a “hard stop” end date “unless otherwise stated”. Kāinga Ora pointed to specific categories where different  dates were stated, albeit there is only one instance of an end  date  after  April  2023. Kāinga Ora emphasised the scale of its discovery in support of a “hard stop” end date.

[31]	As the discovery order was made by consent and the terms were negotiated between the parties,  it is appropriate to apply the principles of contractual interpretation. In particular, “[i]nterpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract”.6

[32]	Apart from the joint memorandum and its schedule of agreed tailored discovery categories, there was no evidence of the parties’ negotiations. The joint memorandum stated that the parties engaged extensively about the scope of the discovery categories.

[33]	Since the claim includes allegations of ongoing conduct, it might be inferred that discovery of some categories of documents at least would need to extend beyond the date of the discovery order. The joint memorandum dated 6 April 2023 also indicates that the parties gave some consideration to  their  continuing discovery obligations, albeit the nature of that consideration is unclear given the specific reference to r 8.18(2) which, as indicated, applies only in the course of complying with an order for tailored discovery. Moreover, reliance on continuing discovery obligations under r 8.18(1) depends on the applicable date range since, as also

6	Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 (HL) at 912 as cited in Bathurst Resources Ltd v L & M Coal Holdings Ltd [2021] NZSC 85, [2021] 1 NZLR 696 at [41].

indicated, r 8.18(1) only requires continuing discovery of documents that fall within the scope of the discovery order.

[34]	Given the scale of discovery in this case, particularly for Kāinga Ora, I consider the scope of the relevant agreed tailored discovery categories is limited to the period ending on the date on which the discovery order was made, that is, 16 April 2023. Otherwise, there would be no purpose to the stated end date in the  order.  Further, if the parties did not intend the date of the order to be the end date, they would have needed to agree some alternative end date (or other limit) to avoid the onerous and impractical consequences of repeated discovery up to, and even during,  trial.  Also, the joint memorandum acknowledged that “following discovery it may be necessary, given the complexity of this particular case, to agree further categories or to seek additional discovery”.

[35]	My conclusion does not preclude an application for variation of the tailored discovery order under r 8.17. Indeed, this possibility also supports giving effect to the agreed end date. Any such variation would need to be limited to continuing matters arising on the amended pleadings and  proportionate,  applying  the  approach  in Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd with any necessary modifications.7

[36]	Given the submissions already filed and the current timetable, a formal application for variation  should not be required.  I direct  the parties to confer and file a joint memorandum within seven days in relation to the scope of any updating discovery and, if the scope is not agreed, proposing next steps.

Result

[37]	I make the following orders by consent:

(a)	the orders in  the Schedule to the joint memorandum of counsel regarding Diligent Boards Records dated 5 September 2024;

7	Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760, [2018] NZAR 600 at [14]; applied in Lyttleton Port Co Ltd v Aon New Zealand [2016] NZHC 2996 at [7].

(b)	orders 1 to 3 in Schedule One, and orders 1 to 4 in Schedule Two, to the joint memorandum of counsel dated 11 September 2024; and

(c)	a confidentiality order in respect of the confidential information highlighted  yellow  in   the  joint   memorandum   of   counsel   dated 11 September 2024.

[38]	As indicated, I direct the parties to confer and file a joint memorandum within seven days in relation to the scope of any updating discovery and, if the scope is not agreed, proposing next steps.

[39]	The applications are otherwise dismissed.

Costs

[40]	I urge the parties to take a reasonable and proportionate approach to finalising costs. The costs principles applicable under the High Court Rules are settled.  They provide guidance to the parties to assist in the quantification of costs in a cost-effective way.

[41]	If costs cannot be agreed, memoranda (not exceeding three pages) may be filed within 20 working days, and I will determine costs on the papers.

Gault J

Solicitors / Counsel:
Mr M Colson KC, Barrister, Wellington
Mr J Every-Palmer KC, Barrister, Wellington
Mr AIC Denton and Mr J Rea (plaintiffs’ instructing solicitors), Wilson Harle, Auckland Mr J E Hodder KC, Barrister, Wellington
Ms V L Heine KC, Barrister, Wellington
Ms C J Cuncannon and Ms K R Muirhead (defendant’s instructing solicitors), Wellington Mr B Hamlin, Barrister, Wellington (Ben.Hamlin@cliftonchambers.co.nz)
Mr M Tilley and Ms T Garimella, Commerce Commission, Wellington (Michael.Tilley@comcom.govt.nz; Tanuvi.Garimella@comcom.govt.nz)