AMP Services (NZ) Limited v Visser

[2015] NZHC 3313

IN THE HIGH COURT OF NEW ZEALAND

ROTORUA REGISTRY

CIV-2015-463-175

[2015] NZHC 3313

BETWEEN

AMP SERVICES (NZ) LIMITED

Plaintiff

AND

JOHN MICHAEL VISSER

Defendant

Hearing:	18 December 2015 (Heard at AUCKLAND)
Appearances:	B Scott and J Graham for plaintiff R J Latton for defendant
Judgment:	18 December 2015

(ORAL) JUDGMENT OF LANG J

[on application for interim injunction]

AMP SERVICES (NZ) LTD v VISSER [2015] NZHC 3313 [18 December 2015]

[1]        In this proceeding AMP Services (NZ) Limited (AMP) seeks an interim injunction against Mr Visser preventing him from soliciting his former clients and from operating an insurance agency in competition with AMP.

[2]        AMP filed the proceeding on 16 December 2015, and initially sought the injunction on a without notice basis. I directed that the proceeding was to be served on Mr Visser forthwith and that it was to be called before me in Auckland today.

[3]        Mr Latton has appeared on Mr Visser’s behalf today. He does so having only recently received instructions and in a position where he must necessarily advance his client’s arguments from the bar. I acknowledge that this is a significant handicap for both Mr Latton and Mr Visser.

[4]        The proceeding has its genesis in an agreement for sale and purchase that AMP entered into with Mr Visser on 5 June 2014. Under this agreement AMP paid Mr Visser the sum of $1,149,600.00 in July 2014. Thereafter Mr Visser continued to work from AMP’s offices under an agreed arrangement pursuant to which he promoted and sold AMP products. This arrangement did not work out, and Mr Visser has tendered his resignation from that position. He has now set up another insurance agency through which he sells insurance products that I infer to be in competition with those offered by AMP.

[5]        AMP obtained several benefits from the agreement for sale and purchase. The first was that it purchased Mr Visser’s existing register of clients. This provided AMP with an income stream in relation to the policies purchased by Mr Visser’s clients. In addition, AMP received the benefit of restraint of trade provisions and non-solicitation provisions.

[6]        The restraint of trade provisions exist for four years and are in the following terms:

13.1Restraint 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 the Purchaser that none of them will be paid for a period of 4 years from the Completion Date within New Zealand, except with the prior written consent of the Purchaser:

a        Either directly or indirectly carry on or in any way assist or be interested in either alone or in partnership with or as manager, agent, director, trustee, financier, shareholder or employer of any

person in any business similar to the Business, including offering any Financial Advisory Services to any prospective client or new client (“Restricted Business”); or

b        either directly or indirectly, or whether through another company, business or contractual arrangement or on behalf of any other person or as a trustee or procure any third party to carry on the Restricted Business; or

c        directly or indirectly for any Restrained Person or on behalf of or in conjunction with any person, solicit or entice any of the employees or contractors of the Purchaser to terminate their employment or independent contractor arrangements (as applicable) with the Purchaser.

[7]The non-solicitation provisions provide as follows:

13.2Non-Solicitation of Clients

As further consideration for the Purchase agreeing to purchase the Assets from the Vendor on the terms of this Agreement, the Restrained Persons undertake to the Purchaser that no Restrained Person will for a period of 4 years from the Completion Date within New Zealand either directly or indirectly, or whether through another company, business or contractual arrangement or on behalf of any other person or as a trustee or procure any third party to:

a        provide any Financial Advisory Services to any Client;

b        attempt or encourage or persuade nay Client to terminate or restrict their relations with AMP or (prior to transferring to the Purchaser) the Vendor;

c        perform any work for or provide any services to any Client; or

d        derive income from any revenue stream associated with ay Client;

except with the prior written consent of the Purchaser.

[8]        I have set the application for an interim injunction down for hearing in the High Court at Rotorua on 3 February 2015. AMP seeks to be protected pending that hearing in terms of both clauses 13.1 and 13.1.

[9]        Mr Visser, through Mr Latton, has indicated that he would be prepared to undertake in the interim not to solicit business from any clients of AMP whether or not those clients were named in the register of clients that he sold to AMP. He is not at this stage, however, prepared to offer an undertaking not to operate a business in competition with AMP.

[10]      Mr Latton points out that there is no urgency to the situation, and that AMP has known for at least a month that Mr Visser is operating an agency of his own. Furthermore, he points out that damages will be relatively simple to calculate because Mr Visser will undoubtedly have records of the new business that he generates between now and 3 February. For that reason he submits that the balance of convenience lies in the status quo, and that the Court should not make interim orders.

[11]      At issue in the hearing on 3 February 2016 will be whether or not the monies that AMP paid Mr Visser arguably justified a restraint of trade in terms of clause 13.1. I do not propose to enter into that debate, because it must necessarily await the evidence to be provided by Mr Visser.  I consider, however, that the terms of clause

13.1 are clear. In consideration of the monies that he received from AMP, Mr Visser undertook not to operate, either directly or indirectly, any business that competed with AMP for a period of four years. It is obvious that the business he is currently operating is in breach of that provision. Rather than deal with the matter on a basis that any breach could be remedied by an award of damages, I consider that it is far simpler to simply give effect to the terms of the two clauses now. It will be for the Judge who hears the application on 3 February 2016 to determine whether or not the interim orders that I now make should continue.

[12]      Another factor that informs this decision is that Mr Latton advises me that Mr Visser still has more than half of the money he received from AMP. I am therefore satisfied that he has the means to support himself and his family during the six week period leading up to the hearing.

[13]      I therefore make orders that Mr Visser is not to operate in business in any way that contravenes clauses 13.1 and 13.2 of the agreement for sale and purchase dated 5 June 2014. I make an order in relation to Clause 13.2 in case my decision prompts Mr Visser to withdraw his offer to provide an undertaking not to solicit AMP’s clients.

Costs

[14]      Costs in relation to the present application are reserved and should be determined once the application for interim injunction on 3 February 2016 has been determined.

Postscript

[15]      I understand that counsel were endeavouring to agree upon a timetable for the filing of documents in anticipation of the hearing on 3 February 2016. In case they were not able to reach agreement, I now direct that documents in opposition to the application are to be filed and served no later than 20 January 2016. Affidavits in reply (if any) are to be filed and served no later than 22 January 2016.

[16]      The plaintiff’s submissions are to be filed and served no later than 22 January 2016. The defendant’s submissions are to be filed and served no later than 28 January 2016.

Lang J