AMP Services (NZ) Limited v Visser - [2016] NZHC 134

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CIV-2015-463-175 [2016] NZHC 134

BETWEEN
AMP SERVICES (NZ) LIMITED

Plaintiff

AND

JOHN M VISSER

Defendant

Hearing: 3 February 2016

Counsel:

B Scott and J Graham for plaintiff
R Latton for defendant

Judgment:

11 February 2016

JUDGMENT OF KATZ J

This judgment was delivered by me on 11 February 2016 at 2:00pm
Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors: Chapman Tripp, Wellington
Mark Copeland Lawyer, Rotorua

Counsel: Rob Latton, Barrister, Auckland

AMP SERVICES (NZ) LIMITED v VISSER [2016] NZHC 134 [11 February 2016]

Introduction

[1] AMP Services (NZ) Limited (“AMP”) is a financial planning, insurance and investment firm. It alleges that the defendant, John Visser, is in breach of a restraint of trade provision that he agreed to when he sold his client book to AMP in June
2014. AMP seeks an interim injunction to compel Mr Visser to comply with the restraint provisions until its claims against him are heard and determined. The injunction application first came before Lang J on 18 December 2015.1 He granted an “interim interim” injunction on a Pickwick basis, until the matter could be fully heard.

[2] The key issue I must determine, having now heard fully from both parties, is whether the current injunction should continue and, if so, on what terms. This requires me to consider:2

(a) whether there is a serious question to be tried;

(b) whether the balance of convenience favours granting the injunction;

and

(c) whether, standing back and looking at all matters in the round, the overall justice of the case favours the grant of the injunction sought by AMP.

[3] I will consider each issue in turn, after outlining the factual background.

Factual background

[4] Mr Visser has had a longstanding relationship with AMP of over 30 years duration. Through his company, John Visser Financial Services Ltd (“JVFS”), he contracted to provide financial advisory services on AMP’s behalf. Over a number
of years he built up a large book of clients in the Rotorua region and further afield.

1 AMP Services (NZ) Ltd v Visser [2015] NZHC 3313.
2 Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129 (CA) at 141-142.

[5] AMP, JVFS, Mr Visser, and his wife (who was also a JVFS shareholder and director) entered into a sale and purchase agreement for Mr Visser’s financial advisory business on 5 June 2014. In broad terms, JVFS sold AMP its existing client book, including its goodwill and client servicing rights. The price mechanism under the sale and purchase agreement was calculated on the basis of a four year multiple of client revenues.

The contractual documentation

[6] The sale and purchase agreement included a four year non-compete and non-solicitation restraint of trade clause in the following terms:

13.1 Restraint of Trade – Vendor and Guarantors

As further consideration for the Purchaser agreeing to purchase the Assets from the Vendor on the terms contained in this Agreement, the Restrained Persons each undertake to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] NZHC 134
Decision Date: 11 February 2016

CaseChat Overview and Summary

The High Court of New Zealand was asked to decide whether AMP Services (NZ) Limited could compel John Visser to comply with the restraint of trade provision that he agreed to when he sold his client book to AMP in June 2014. AMP sought an interim injunction to enforce the restraint of trade provisions until its claims against Visser were heard and determined. The key issue that the court had to determine was whether the current injunction should continue and, if so, on what terms. The court had to consider whether there was a serious question to be tried, whether the balance of convenience favoured granting the injunction, and whether, standing back and looking at all matters in the round, the overall justice of the case favoured the grant of the injunction sought by AMP.

The court found that there was a serious question to be tried that Visser had breached the restraint clause in the sale and purchase agreement. Visser conceded that there was a serious question to be tried that he had breached the non-compete clause. The court also found that there was a serious question to be tried that Visser had breached the non-solicitation limb of the restraint clause. The court found that the balance of convenience favoured granting the injunction. The court found that AMP had a strong claim that the restraint of trade clause had been breached by Visser, and that it was enforceable in its terms. The court also found that Visser's claims that the restraint was unenforceable, or that he was entitled to breach it due to AMP's own breaches of contract, were relatively weak. The court found that the overall justice of the case favoured granting an injunction. The court granted the injunction application and ordered that, until further order of the Court, Visser be restrained from undertaking any work for, being engaged by, or in the provision of services for, or soliciting or contacting directly or indirectly any Client of the plaintiff without the plaintiff's express written permission. The court also ordered that Visser be restrained from undertaking any of the "Restricted Business" as defined in clause 13.1 of the agreement for sale and purchase, except for persons located in the area of New Zealand that is south of a 15 km radius of Palmerston North and north of Warkworth. The court reserved costs, to be determined following the substantive determination of the proceedings.

Orders