Chorus used ‘flattery’ in bid

and dismissive’’ view of Creative’s intellectual property was ‘‘a most unusual dynamic’’.

He also said Creative talked up its relationship with Chorus so it could claim Chorus had a fiduciary duty to act in the interest of Creative after the relationship soured.

Justice Dobson said in his judgment that the flattery began when Chorus, Creative and the council banded together to submit to a Crown Infrastructure Partners initiative in February last year. Creative asked Chorus for help after the council’s previous submission to the initiative, which it helped develop, was unsuccessful.

Creative shareholder director Dayal Phillips, who has since died, said at a hearing in September that he had disclosed ‘‘valuable information’’ to Chorus in February about Creative’s ‘‘innovative’’ approach to analysing broadband services.

Phillips said Chorus ‘‘responded appreciatively’’ to the ‘‘new insights’’ at the February meeting, and acknowledged the value of the concepts. Chorus’ then head of contract management, Michael Lott, thought the meeting indicated the council had access to funding outside of government grants, which could allow Chorus to work on Marlborough’s regional development.

Dobson’s judgment showed Lott sent an email to Chorus staffers titled ‘‘Opportunity with Marlborough District Council’’, but after negative responses, including one saying ‘‘feels a bit like a deep regional rabbit hole to me’’, he suggested Chorus not put much effort into discussions.

A non-disclosure agreement was signed by Chorus on February 13.

Later that month, representatives met again, and Creative said Lott thought their approach was ‘‘very thorough’’ and ‘‘unique’’.

But behind closed doors, Chorus finished a plan for rolling out fibre to the Marlborough Sounds. This could be achieved with a grant from the council, and included features Chorus thought the council found important.

On March 12, Phillips emailed several confidential documents to Lott. In an internal email that evening, Lott said he was unsure the documents were ‘‘really decipherable’’.

A Chorus employee replied: ‘‘We’re basically going to say that we think his design sucks and would advise everyone to avoid it like the plague.’’

A third meeting was held in Blenheim on March 19, attended by Marlborough mayor John Leggett and council chief executive Mark Wheeler.

Creative said Chorus dished out ‘‘positive and complimentary observations’’. Chorus shared its plan at the meeting, but Wheeler said the council would not spend more funds developing its own design.

On April 11, Phillips discovered Chorus was attempting to bid on its own for the government initiative using what he thought was Creative’s ‘‘confidential information’’.

Chorus argued at the High Court in September that Creative’s information was not of value to it.

Justice Dobson agreed, dismissing the proceeding and ordering each party to cover its own costs. But he said in his decision last month that Chorus tried to sway the council using ‘‘grossly misleading flattery’’.

‘‘Offering the glowing support for Creative’s concept was to flatter Creative and [the council], in the hope that [the council] would provide funding for Chorus to install additional infrastructure,’’ he said.

Creative’s communications director, Brendon Burns, said the company was reviewing the judgment.

A council spokesman said the council was not part of the case, had not taken legal action against Chorus, and Chorus had not secured a contract to extend broadband to rural Marlborough.