Booths Logistics Limited v Millard

[2025] NZHC 2338

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2025-412-059 [2025] NZHC 2338

BETWEEN  BOOTHS LOGISTICS LIMITED

Plaintiff

AND  ROSS JAMES MILLARD

First Defendant

AND  BARBARA MARY MILLARD

Second Defendant

AND  MELX LINEHAUL LIMITED

Third Defendant

AND  RICKY JADE RODGERS

Fourth Defendant

AND  ASHLEY MARY RODGERS

Fifth Defendant

24 July 2025

Hearing:

Counsel:                   R J Gordon for the Plaintiff

M J Hammer and B S Rorrison for First, Second and Third Defendants

Judgment:                19 August 2025

JUDGMENT OF HARLAND J

Introduction

[1]                 This judgment determines an opposed, on notice application for two injunctions, sought by the plaintiff against the first and second defendants. The application is filed in the context of a proceeding in which it is alleged that the first

BOOTHS LOGISTICS LTD v MILLARD [2025] NZHC 2338 [19 August 2025]

and second defendants have breached the terms of a restraint of trade deed entered into as part of an agreement for the sale and purchase of their business to the plaintiff. The two remaining causes of action comprise an allegation that the third to fifth defendants have induced the first and second defendants to breach certain provisions of the restraint of trade obligations to the plaintiff. The third cause of action against all defendants alleges unconscionable conduct amounting to a breach of s 7 of the Fair Trading Act 1986.

[2]                 As the statement of claim for the substantive proceeding was filed at the same time as the application for an interim injunction, the defendants did not file a statement of defence to the latter until after the hearing of this application, although it was clear regardless from the first and second defendants' response to this application that, so far as they are concerned, the claim against them will be defended.

[3]                 The application for injunctive relief was accompanied by an affidavit from Mr Dallas Vince, the plaintiff's Chief Executive Officer, and an undertaking as to damages. The notice of opposition by the first and second defendants was accompanied by affidavits from Mr Millard (the first defendant) and Mr Rodgers (the fourth defendant). Mr Vince filed a brief affidavit in reply.

[4]                 I have decided to dismiss the application. This judgment sets out my reasons for doing so.

Factual background

[5]                 The first and second defendants (Mr and Mrs Millard) owned and operated a trucking business through Summerland Express Freight Ltd and Summerland Management Services Ltd (collectively referred to as "the business") until it was sold to the plaintiff, Booths Logistics Ltd (Booths) in August 2022. At the time of sale, the business largely operated in the South Island, having started some 30 years prior, over which time it operated as a general freight and fruit cartage business. The business was sold because Mr and Mrs Millard wanted to retire.

[6]                 At the time of the sale, the business was operating about 90 trucks. Mr and Mrs Millard's son-in-law and daughter, who are the fourth and fifth defendants (Mr and Mrs Rodgers), were also employed by the business.

[7]                 The agreement for sale and purchase of the business included the sale of the assets of the business and goodwill. The purchase price amounted to $12.3 million, comprising a goodwill component of $2.7 million.

[8]                 As part of the agreement for sale and purchase, a restraint of trade deed (the deed) was also entered into. It appears as sch 5 to the agreement for sale and purchase. The deed forms the basis of the plaintiff's claim against the defendants, both in the substantive proceedings and in relation to this interlocutory application for injunctive relief. Mr and Mrs Millard are referred to, collectively, as the "covenantor" in the deed. The deed records that the covenantor has entered into the deed in consideration of the purchase of the business by the purchaser (Booths) under the agreement for sale and purchase.

[9]                 The deed provides for four separate restraints, three of which form part of the plaintiff’s application and two of which are relevant to this application. I refer to the restraints collectively as "the restraint". There is a restraint on competition (cl 2), a restraint on solicitation of contractual counterparties/employees (cl 4) and a restraint on the use of any name associated with the business or confidential information (cl 6).1 The term of the restraint period is for a period of six years from the date of the agreement and the territory to which it applies is the South Island of New Zealand. Clause 7 of the restraint includes an acknowledgement that the undertakings given in cls 2, 4 and 6 were reasonable and had been given for the protection of the purchaser, namely Booths.2

[10]              After the sale of the business to Booths, Mr and Mrs Rodgers, who had both been employed in the business, continued to work for Booths. Mrs Rodgers continued in her role as an administrative assistant and Mr Rodgers moved from an employed

1      Clause 6 is not discussed in any more detail as it does not add anything material to the issues in contention in this proceeding.

2      Clause 7 also covers cl 5, but the plaintiff did not rely on this clause for the purposes of this application.

truck driver to an owner-driver, driving his own truck and working as a contractor through his new company, MELX.

[11]              On 21 July 2022, MELX Linehaul Ltd (MELX), the third defendant, was incorporated. Mr and Mrs Rodgers are the directors and shareholders in that company. Mr and Mrs Millard are not directors or shareholders of MELX and contend they are not employees or otherwise involved with the company.

[12]              Although the injunctions are only sought against Mr and Mrs Millard, it relies on the activities of MELX and Mr and Mrs Rodgers after the sale was completed and the alleged failure of the first and second defendants to procure compliance from them with the restraints in the deed.

[13]              On 4 October 2022, MELX entered into an agreement with Booths. Under this agreement, MELX operated as an independent contractor to Booths. MELX agreed to provide one or more approved vehicles at its expense for the purposes of providing delivery services for Booths. I infer that the approved vehicle was the vehicle referred to in Appendix A of the contract as "agreed truck and trailer equipment". This listed one truck, a 2022 Kenworth K200 6 x 4 Tractor unit.

[14]              In his affidavit, Mr Rodgers said that neither he nor Mrs Rodgers knew anything about the detail of the contract Mr and Mrs Millard had with Booths for the sale of the business. Mr Rodgers said he did not know the price or the terms of the contract and had nothing to do with it.

[15]              This is contrary to the assertion contained in Mr Vince's affidavit where he said:

I had also understood it that Mr and Mrs Rodgers were familiar with terms of the Restraint Deed. Partly this was because they were intimately involved in the Business before it was sold to Booths, and partly this was because they were the daughter and son-in-law of Mr and Mrs Millard. I had also had this confirmed to me by Booths' National Fleet Manager, Clive Jones. In answer to a specific question by me, he stated that he had discussed the terms of the Restraint Deed with Mr and Mrs Rodgers when they signed up to the Owner- Driver agreement (through MELX).

[16]              I place little weight on Mr Vince's assertion given it is based on a conversation he had with a third party who has not provided an affidavit in this proceeding. The assertion is therefore hearsay insofar as the truth of its contents is concerned.3

[17]              Mr Rodgers said he worked for other businesses through MELX as well as for Booths and that he told Booths about this because he had no reason not to be truthful with them. He said Booths knew about this other work and did not raise any objection to it.

[18]              But further, Mr Rodgers deposed that Mr Vince told him most of the Booths' drivers did better with two trucks, which was the reason he purchased a second truck sometime around October 2022. He said, when he asked Mr Vince what colour he should paint the truck (the first truck having been required to be painted in Booths' colours and signage), Mr Vince then told him they did not have enough work for the second truck. Mr Rodgers said he told Mr Vince he would have to find his own work for this truck, to which he says Mr Vince replied that was fair enough.

[19]              Mr Vince does not specifically deny these conversations even though he includes a general response in his reply affidavit that his lack of response to all of the defendants evidence should not be taken as agreement. Despite this, Mr Vince does go on to reply to some matters he says are "key matters" that are inaccurate or incomplete.

[20]              To drive the second truck, Mr Rodgers said he hired Josh Peterson, who had previously been a truck driver for Booths. Mr Rodgers said he told Booths he was going to employ Mr Peterson to stand in for him as the MELX driver with Booths while he drove the second truck he had purchased. He said "no one seemed to have a problem with this. Dallas told me that I could put whoever I wanted in the truck we were running for Booths". Mr Vince does not specifically respond to this evidence in his reply.

3      Evidence Act 2006, s 17.

[21]              In early December 2022, MELX purchased a third truck. Again, Mr Rodgers said this was with the knowledge of Mr Vince, who did not take issue with it. This truck transported loads for others, not Booths. Mr Rodgers said Craig Little approached MELX looking for a driving job after he left Booths for his own reasons. Mr Little was employed to drive this truck.

[22]              Mr Vince did respond to this evidence. He said he has some recollection of this conversation but all he said was "Mr Rodgers could continue to operate for Booths as an owner driver or he could not". He opined it would be fanciful to suggest Mr Rodgers was consulting him about his future plans to compete against Booths.

[23]              After he bought the third truck, Mr Rodgers says he drove up to Palmerston North to meet with Mr Vince, where they had a conversation at the gate of the Booths depot. Mr Vince asked him how many trucks he had, and Mr Rodgers said he told him about the sort of third party work he was undertaking with the second and third trucks, which was mostly for Hynds moving concrete/gravel. Mr Rodgers said Mr Vince did not raise any issue with this but asked if Booths could use his second and third trucks to assist during the fruit season. Mr Vince did not respond to this in his reply affidavit.

[24]              Soon after, in about March 2023, Mr Rodgers said Mr Vince started to talk to him about MELX running a fleet of flat-deck trucks for Booths. Mr Rodgers said he told Mr Vince he was open to the suggestion and could sell "some of my gear to do that for them", but he said nothing came of the discussions even though they took place over several months. Mr Vince did not respond to this in his reply affidavit.

[25]              Mr Rodgers' evidence was he thought Booths was happy for him to operate the second and third trucks which were painted in MELX colours as he was not targeting Booths' customers in operating them. He also said Booths often gave MELX extra work for his second and third trucks if they had overflow work and needed help. He attached invoice records showing that on 18 and 19 December 2022 Booths was invoiced for work done by MELX's second and third trucks over the Christmas to New Year period but, as Mr Gordon submitted, Mr Rodgers was still engaged in an owner- driver relationship with Booths at that point.

[26]              Mr Rodgers also attached a series of texts between Mr Vince and others at Booths between 27 September 2022 and 1 August 2023 which he said showed how MELX and Booths worked together over this period. Mr Vince's response to this was that they were naturally in regular contact over this time as Mr Rodgers was still working for Booths under an owner-driver contract, but this did not amount to agreeing to MELX setting up in competition with Booths.

[27]              Matters came to a head on 1 August 2023 when Mr Rodgers sent a text to Mr Vince about a truck he had been interested in buying from Booths after he heard it had been sold to another owner-driver. Mr Rodgers attached the text response from Mr Vince to his affidavit, which was:

… it's just that we want to have our OD's [sic - owner-drivers] working solely for us. Blair [the driver who bought the truck] does. The conflict will always be with your gear mate.

[28]              Mr Rodgers said this was the first time Mr Vince had ever made it seem that the other jobs he was doing might be a problem for Booths. Mr Rodgers said he was confused about this because he had been trying to help with the plan he had discussed with Mr Vince about him operating a flat-deck truck for Booths but Mr Vince had not actioned anything in relation to it.

[29]              There is a dispute about how much Booths (through Mr Vince) knew about the operation of these trucks and/or how much they acquiesced or encouraged the operation of these trucks for other businesses. There is also a dispute about the extent to which MELX would give overflow work to Booths and how much MELX would assist Booths if they had overflow work and needed assistance. The resolution of factual disputes is not a matter to be determined at this interlocutory stage, but it does have a bearing on the legal tests I must apply. I return to this point in my analysis.

[30]              In August 2023, on different days, Mrs Rodgers resigned from her position with Booths and Mr Rodgers/MELX gave notice to terminate its owner-driver contractual arrangements with Booths. Mr Rodgers said that, after receipt of MELX’s termination of the owner-driver agreement, Mr Vince sent him an email offer to join Booths as the flat-deck manager and he also sent an email about how much he and Booths had enjoyed working with him. Mr Rodgers did not accept this offer. Mr Vince does not respond to this in his affidavit in reply.

[31]              Mr Rodgers also said that, since MELX’s contract with Booths ended, Booths kept sending loads to MELX which he would deliver whenever he could to help out. As opposed to the work which occurred before the contract was terminated, there are no invoices or text messages in evidence laying that out.

[32]              There is also a dispute between Mr Rodgers and Mr Vince about Booths’ knowledge of MELX’s intended operations after parting ways. Mr Vince deposed that, when Mr and Mrs Rodgers resigned from Booths, “they had let me know that they would be continuing to operate the one truck that they had been operating as an Owner- Driver”. Mr Vince went on to say that Booths agreed to this but only on the basis that MELX would not be directly competing with Booths for the same customers. Mr Rodgers denies that any such conversation took place and said that Booths knew Mr Rodgers was operating three trucks at the time. Mr Vince did not respond to this in his reply affidavit.

[33]              MELX now operates seven freight trucks, which Mr Rodgers said do not compete with Booths because MELX focuses on flat-deck trucking, mainly carrying supplies to the civil construction and engineering industries, whereas Booths transports general freight, a market that does not interest MELX. As well, Mr Rodgers said that, contrary to Mr Vince’s assertion, MELX does not provide freight storage services. Mr Rodgers said he has never approached any of Booths customers directly but three (Pure Pac Ltd, Hinton's Ltd and Titus Transport Ltd) approached MELX for assistance on limited but specific occasions.

[34]              In his reply, Mr Vince was clear. He said the idea that Mr Rodgers and MELX do not provide the same sort of freight transport services as Booth is simply false. He said both businesses operate some haulage work and, as well, Booths has a very significant flat deck operation. He said providing transport services to the construction industry is the second largest commercial sector Booths operates in. Mr Vince said, if either Mr Rodgers or Mr Millard had ever said, following MELX ending its contract with Booths, that they would be competing with Booths, Booths would have objected to it at the time. But Mr Vince deposed that Booths only learned of this from other sources in late 2023.

[35]              As can be seen from the detail outlined above, there are factual disputes between the parties about what occurred and what reasonably had been inferred from what was or was not said. These are not matters that can be resolved in the context of this application.

[36]              On 21 December 2023, Booths gave notice to Mr and Mrs Millard, MELX and Mr and Mrs Rodgers of what it contends were breaches of the deed. Thereafter, there have been attempts to resolve the issues between the parties, all to no avail. The last attempt to resolve matters was in February 2025.

[37]These proceedings were issued on 3 July 2025.

The injunctions sought and opposition to them

[38]Booths seeks two injunctions against Mr and Mrs Millard. They are:

(a)   An interim injunction restraining them from:

(i)being engaged or investing in, or participating in any way, in any business which operates a core or substantial part of its business in freight transport services or freight storage services within the South Island (including but not limited to MELX or any other business owned or operated by MELX and/or Mr and Mrs Rodgers);

(ii)canvassing, soliciting, or accepting orders for any services similar to, or competing with any services supplied by the business during the 24 months prior to 1 August 2022, including but not limited to freight transport services and freight storage services, or inducing or endeavouring to induce any person to cease being a customer of Booths;

(iii)canvassing, soliciting, or enticing away any material contractual counterparty who, during the 24 months before 1 August 2022, supplied products or materials to the business; and

(iv)using or disclosing to any other person, or using in any way, any “Confidential Information” (including the know-how, trade secrets, technical processes, contractual arrangements with customers or suppliers, and other information relating information relating to the business’ business and assets),

except with the prior consent of Booths, and in all the above cases, at any time before 7 June 2028 (the date the deed expires).

(b)     A mandatory injunction providing that Mr and Mrs Millard must procure that MELX, Mr Rodgers and Mrs Rodgers will not undertake any of the following actions:

(i)being engaged or investing in, or participating in any way, in any business which operates a core or substantial part of its business in freight transport services or freight storage services within the South Island (including but not limited to via MELX);

(ii)canvassing, soliciting, or accepting orders for any services similar to, or competing with any services supplied by the business during the 24 months prior to 1 August 2022, including but not limited to freight transport services and freight storage services, or inducing or endeavouring to induce any person to cease being a customer of Booths;

(iii)canvassing, soliciting, or enticing away any material contractual counterparty who, during the 24 months before 1 August 2022, supplied products or materials to the business; and

(iv)using or disclosing to any other person, or using in any way, any “Confidential Information” (including the know-how, trade secrets, technical processes, contractual arrangements with customers or suppliers, and other information relating information relating to the business’ business and assets),

except with the prior consent of Booths, and in all of the cases above, until 7 June 2028.

[39]              For the purposes of this application, the restraint is comprised of two relevant sets of obligations on Mr and Mrs Millard, being:

(a)   obligations of personal restraint, limiting what they each do; and

(b)     obligations to "procure" MELX and Mr and Mrs Rodgers to be restrained, limiting what those other parties (not being signatories to the restraint) might do.

[40]Mr and Mrs Millard, in opposition, submit:

(a)   they are not in breach of the deed personally;

(b)     any loss of custom for Booths has been as a result of issues with its own performance, which none of the defendants have influenced;

(c)   MELX is not a "controlled party" under the deed;

(d)     they are not failing or refusing to procure Mr and Mrs Rodgers to comply with the deed;

(e)   Booths had knowledge of and:

(i)consented to Mr and Mrs Rodgers' involvement in the MELX business; and/or

(ii)represented expressly (including by its conduct) that it did not take issue with Mr and Mrs Rodgers' operations in MELX;

(f)   MELX is not in competition with Booths and is not soliciting Booths’ customers;

(g)     as it relates to Mr and Mrs Rodgers and MELX, the deed is:

(i)void; and/or

(ii)unenforceable,

as it is not reasonable in scope or duration as it relates to Mr and Mrs Rodgers and MELX and it goes beyond protecting Booths' legitimate commercial interests.

Discussion

[41]              The legal principles that apply to interim injunctions are not in dispute and are based on the principles outlined in the UK case American Cyanamid Co v Ethicon Ltd4 adopted in New Zealand by Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd.5 The Court must consider whether there is a serious case to be tried before considering the balance of convenience. Finally, the Court steps back to consider the overall justice of the case. As I will explain, I find that, while there is a serious case to be tried in this case, the balance of convenience and the overall justice of the case require the injunctions sought by Booths not be granted.

Is there a serious question to be tried?

[42]              As best I can understand, the key issues at trial will be the interpretation of the deed and whether or not any issues of consent estoppel or acquiescence arise as a result of Booths alleged actions in relation to Mr and Mrs Rodgers and the operation of MELX's business post August 2023. The starting point for the discussion for this application is therefore the terms of the deed itself.

[43]              The context to the signing of the deed is important. This was a commercial agreement for sale and purchase of a successful and prominent trucking business for a significant amount of money. Both Booths and Mr and Mrs Millard were represented by lawyers and, given the nominated amount of the purchase price for the goodwill of the business, the deed of restraint was an understandably necessary part of the agreement.

4      American Cyanamid Co v Ethicon Ltd [1975] AC 396.

5      Harvest Bakeries Ltd v Klissers Farmhouse Bakeries Ltd [1985] 2 NZLR 129.

[44]              Ms Hammer, for Mr and Mrs Millard, referred to the longstanding principle that restraint of trade provisions are prima facie void and unenforceable, requiring the person seeking to enforce a restraint to establish it is reasonable.6 Importantly however, even at this interlocutory stage of the proceeding, Mr and Mrs Millard's notice of opposition does not raise the reasonableness of the restraint as being an issue in contention.

[45]              Mr Gordon, for Booths, referred to Brown v Brown,7 and emphasised the commercial nature of this contract as supporting the restraint’s enforceability, distinguishing it from restraints in contexts which are more carefully restricted such as employment contracts.8 But, as the reasonableness or otherwise of the restraint is not an issue at this stage of the proceeding, it is not necessary to consider the detail in Brown v Brown any further which, in any event, is highly fact specific.

[46]              I now examine the terms of the deed and the evidence that relates to each alleged breach of the restraint.

Definitions

[47]Clause 1 of the deed provides the following definitions:

(a)   Controlled Party means:

(i)an entity in respect of which the Covenantor, alone or in conjunction with a related party of the Covenantor, has the direct or indirect capacity to control decisions about the financial or operating policies of that entity, and includes the direct or indirect capacity to control the composition of the board or other governing body of that entity; and

(ii)any person who is a Relative of the Covenantor;

(b)   Restrained Sectors means a freight transport service or freight storage service;

[48]              It is common ground that Mr and Mrs Rodgers fall within the definition of "controlled parties" in the restraint. It is not however accepted that MELX comes

6      Western Work Boats Ltd v Kelly [2016] NZHC 2577.

7      Brown v Brown [1980] 1 NZLR 484 (CA).

8      Mason v Provident Clothing and Supply Co Ltd [1913] AC 724.

within the definition as it is argued that Mr and Mrs Millard do not have any capacity to control decisions about the financial or operating policies of MELX.

[49]              I accept Booths’ argument that the agreed terms of the deed do not distinguish between the type of trucks used by competing businesses, given the definition of "restrained sectors" which is defined as "a freight transport service or freight storage service". The definition also makes the size of the relative businesses irrelevant.

Alleged breach of restraint on competition

[50]Clause 2 of the deed provides:

Restraint on competition

The Covenantor will not, and will procure that no Controlled Party will, at any time during the Restraint Period, within the Territory, directly or indirectly in any capacity be engaged or invest in, or participate, (whether on tis own account or as a consultant to or a partner, trustee, beneficiary under a trust, shareholder, director, agent, employee or in any other way whatever), in any business which operates a core or substantial part of its business within any of the Restrained Sectors, except with the prior consent of the Purchaser.

[51]              I first note there is no evidence at all of Mrs Millard actively breaching the restraints in the deed. But Booths also rely on the fact there is no evidence of her taking steps to "procure" compliance from Mr and Mrs Rodgers and MELX, who Booths say are clearly "controlled parties".

[52]              For Mr Millard, it is alleged he actively breached cl 2 and omitted to comply with his obligation to procure compliance with the deed. Mr Vince’s affidavit outlines the basis for Mr Millard’s alleged breach:

I was further surprised to have reported to me that not only did Mr Millard appear to be supporting this, but he was actually working in the MELX business too. I came to learn of this over November and December 2023, from a combination of conversations with Booths' staff and customers on the ground, my speaking with Mr Millard and Mr Rodgers, and my first-hand observations when visiting the Cromwell area. I have seen first-hand MELX trucks undertaking work for past and current customers of Booths, and I have seen Mr Millard in MELX branded clothing driving one of their trucks.

[53]In response, Mr Millard said:

I don't work for MELX. Really early on, I carted a few loads for Ricky when he really needed help. I wasn't paid to do this, I was just helping out. I didn't think there would be any issue with me doing this because Booths didn't have a problem with MELX and because the loads I drove for Ricky were scrap metal out of Dunedin, timber and empty containers out of Christchurch - I never carted any of those things in my own Business, so I didn't think there would be any problems. I never carted any fruit or produce since we sold to Booths, and I haven't carted anything in a long time now. If this is still a worry for Booths, I can give Booths an undertaking that I will not cart anything for anybody until this all gets sorted out.

[54]              Booths also refer to the Millard's Family Trust financing a truck and trailer unit for MELX. In his affidavit, Mr Millard explains the background to the purchase of the Legend truck Mr Vince has taken issue with. I do not need to canvas that background for the purposes of this application; however, I do note this is relevant to the part of cl 2 relating to directly or indirectly investing in a competing business, which will be another issue for trial.

[55]              Mr Rodgers denies that either he, Mrs Rodgers or MELX received any money from Mr and Mrs Millard from the sale of the business to Booths, but he acknowledged the Millard Family Trust gets paid a monthly amount by MELX for a loan it provided MELX to enable it to purchase a truck when Mr Rodgers was an owner-driver for Booths. This arrangement, he said, was on a purely commercial basis and was well known to Booths who had not taken any issue with it, I infer, until after MELX gave notice to terminate its agreement with Booths.

[56]              As to the allegation that funds from the purchase price paid to Mr and Mrs Millard by Booths were on-paid to Mrs Rodgers (and their other children), there is no credible basis upon which to infer that those funds found their way into MELX.

[57]              There are difficulties with the evidence provided by Mr Vince and Mr Millard. Mr Vince's evidence contains several hearsay statements which carry little weight. Insofar as his evidence relates to seeing Mr Millard in MELX branded clothing driving a MELX truck, it is unclear how often Mr Vince has seen this kind of activity, which is relevant to how significant this aspect of the alleged breach is. As for Mr Millard's evidence, it displays a considerable lack of understanding about the extent of the

restraint, although it does support the inference that his role and assistance driving trucks for MELX has been minimal, a factor relevant to the balance of convenience, which I come to later.

[58]              As to the Millard Family Trust’s provision of a loan to MELX to purchase a truck, this could be interpreted as an investment, but I did not receive sufficient argument on the point.

[59]              Importantly however, there is no evidence Mr and Mrs Millard did anything to procure the compliance by Mr and Mrs Rodgers and MELX with cl 2. This is important because the contractual obligation is not to not procure a breach by controlled parties, but instead to procure there is no breach by controlled parties.

Alleged breach of restraint on solicitation

[60]Clause 4(c) of the deed provides:

4     Restraint on solicitation of contractual counterparties/employees

The Covenantor will not, and will procure that no Controlled Party will, at any time during the Restrained Period directly or indirectly in any capacity:

(a)canvass or solicit or accept orders for any services similar to or competing with any services which have been supplied by the Vendors (or any one of them) as part of the Business at any time during the 24 months preceding the date of Completion from any person who has done business with the Vendors (or any one of them) as part of the Business during the 24 months before the date of Completion or induce or endeavour to induce any such person to cease being a customer of the Purchaser after the date of this Deed;

(b)canvass, solicit or entice away from the Business any material contractual counterparty who during the 24 months preceding the date of Completion supplied products or materials to the Vendors (or any one of them) as part of the Business; or

(c)solicit or employ any officer, employee or contractor of the Vendors (or any one of them) as part of the Business or the Purchaser.

[61]              Mr Vince deposed that MELX is undertaking work for former customers of the business, including but not limited to Pure Pac Ltd, Hintons Ltd and Titus Ltd. Mr Rodgers said he never approached any of Booths’ customers directly, however he did accept he had done work for those companies. Attached to Mr Rodgers’ affidavit is a

letter from Titus Transport Ltd confirming that they had used MELX because of dissatisfaction with Booths’ services. Mr Rodgers further said that this is not the work MELX wanted to do and it does not comprise a big part of their business, he only did it because he wanted to help.

[62]              The relevance of this as a defence is unclear, given the clause appears to prohibit accepting orders from the business’ customers, not just canvassing or soliciting from them, but this is ultimately a matter for trial.

Former employees

[63]              As explained above, MELX now employs two former employees of the business as drivers.

[64]              There is a dispute about whether Booths acquiesced to MELX’s employment of these former drivers. The evidence establishes the conversation about this issue with respect to the first employee acquired, Mr Peterson, arose prior to MELX terminating its contract with Booths. It is unclear when Booths came to know that the second employee, Mr Little, had also been employed by MELX. For the time MELX remained in an owner-driver arrangement with Booths, they may not have had as much of an issue with the employment of these two drivers. But it must be noted, on the face of cl 4(c), there is an absolute prohibition on employment of any such person. So, at trial, the only issue will be whether Booths acquiesced or, by its actions, consented to this occurring.

Advising a competitor

[65]              Mr Vince deposed that Mr Millard has been advising Vowles Transport Ltd on its potential entry into the market for trucking central Otago stone fruit. It is not clear from Mr Vince's affidavit where this information has been obtained from and it is specifically denied in Mr Millard's response.

[66]              There is insufficient evidence upon which to reach a conclusion that this allegation supports the plaintiff's claim at this interlocutory stage. This is a matter that will need to await the substantive hearing.

Failure to "procure"

[67]              Ms Hammer submitted that Mr and Mrs Millard have not failed or refused to procure Mr and Mrs Rodgers or MELX to do anything they are required to do. Mr and Mrs Millard rely on the alleged knowledge of and consent by Booths to Mr and Mrs Rodgers' involvement in MELX and/or by conduct not taking any issue with it. This is relevant for the purposes of cl 2 which allows Booths to waive the obligation.

[68]              Clause 2 requires Mr and Mrs Millard to refrain from participating in any business which operates a core or substantial part of Booths’ business, except with Booths' consent. Clause 4 requires Mr and Mrs Millard to refrain from canvassing, soliciting or accepting orders for any services similar to or competing with services provided by the business. Both clauses also require that Mr and Mrs Millard procure a controlled party will not do the same.

[69]              What does "procure" mean? There is no definition provided in the deed. Mr Gordon referred to the Attorney-General's reference (No 1 of 1975) to assist with the meaning of to "procure".9 This was a criminal case where the court grappled with the meaning of procure in the context of the parties' provisions applying in England at the time.10 In that case, the court held procure meant "… to produce by endeavour. You procure a thing by setting out to see that it happens and taking the appropriate steps to produce that happening". Relying on this case, Mr Gordon submitted that the meaning of procure requires action rather than inaction, namely, it is a positive obligation imposed on Mr and Mrs Millard under the deed. But does the definition of "procure" in a criminal context apply to a commercial one?

[70]              Whilst the parties did not refer me to any case law on this, in the UK case Nearfield Ltd v Lincoln Nominees Ltd and Lincoln Trust Company (Jersey) Ltd,11 the court was required to consider the interpretation of a joint venture agreement which imposed a duty on the defendants to procure that the balance of a loan was repaid. The plaintiff sought enforcement of this obligation when the defendants failed to do so.

9      Attorney-General's reference (No 1 of 1975) [1975] QB 775.

10     Section 66(1)(d), Crimes Act 1961 is the equivalent applicable provision in New Zealand.

11     Nearfield Ltd v Lincoln Nominees Ltd and Lincoln Trust Company (Jersey) Ltd, [2006] EWHC 2421 (Ch).

[71]Peter Smith J commenced by stating that:12

…the normal meaning of the word procure is to "see to it". Thus, a person agreeing to procure that someone else performs a contractual obligation first is required to attempt to procure that person complies with the obligation and in the event that he fails to comply to pay damages.

[72]              If this analysis applies to these facts, it supports the view that an obligation to procure requires a party to achieve the result of the procurement, rather than to merely take reasonable steps to achieve it. This is not a matter that should be definitively determined in this application as this case is potentially distinguishable on its facts but, at the very least, it establishes that "to procure" means to take reasonable steps to ensure something occurs and supports the conclusion I have reached that there is a serious question to be tried.

[73]              In this case, there is no direct evidence of Mr and Mrs Millard procuring anything in relation to the restraint of trade as it might apply to Mr and Mrs Rodgers and MELX, however their case is that they are not required to procure anything.

Conclusion

[74]              Because of the various factors I have outlined to this point, I am satisfied there is a serious question to be tried in this case.

Where does the balance of convenience lie?

[75]              This limb requires weighing the impact on the parties of granting or refusing to grant an order.13 In considering the balance of convenience, the court will pay particular attention to the question of whether damages would be an adequate remedy, as no irreparable prejudice is then done while awaiting determination of the substantive proceedings.14 Another relevant factor here is potential delay in issuing these proceedings.

12     Nearfield Ltd v Lincoln Nominees Ltd and Lincoln Trust Company (Jersey) Ltd, above n 11, at 37.

13     American Cyanamid Co v Ethicon Ltd, above n 4.

14     Western Boat Works v Kelly, above n 6 at [20], citing Cabco Group Ltd v Bartlett (2009) 6 NZELR 500 (HC) at [30].

[76]              There is merit in the argument advanced by Booths that the restraint was a necessary part of the purchase price for the goodwill of the business and, within the deed itself, there was an agreement that the term of the restraint was reasonable (cl 7). For these reasons, Booths submit the Court should be reluctant to interfere with the plain terms of the agreement, particularly given the commercial nature of the transaction, the experience and sophistication of the parties and the fact that Mr and Mrs Millard were legally represented throughout. These factors weigh in favour of Booths.

[77]              But I am not persuaded by Booths' argument that damages would not be an adequate remedy should breaches of the deed be established to a degree warranting relief. Mr Gordon submitted that the assessment of damages in breach of restraint situations is extremely difficult, and loss of goodwill is never readily measurable. And, he submitted, no amount of damages can fully compensate for lost opportunity. There is merit in the argument about lost opportunity, but it must be said that such assessment is not an impossible task, albeit imperfect. I agree with Ms Hammer’s submission that Mr Gordon’s suggestion, that Mr and Mrs Millard could buy out of the restraint to meet their obligation to procure it is not breached, indicates that damages could be a sufficient remedy.

[78]              The substantive proceedings also seek injunctive relief and there is nothing to suggest these proceedings cannot be progressed promptly to a hearing. These matters favour Mr and Mrs Millard.

[79]              Another factor that must be considered is the nature of the mandatory injunction sought by Booths at this early stage. Ms Hammer referred to case law establishing that interim mandatory injunctions are subject to broadly the same test as interim prohibitory injunctions, which require special, clear or rare circumstances to justify their imposition.15 I agree with Ms Hammer that an order requiring a party to take a positive step at an interlocutory stage may carry a greater risk of injustice if wrong than one that preserves the status quo.

15     Pilkington v Fidelity Life Insurance Co Ltd HC Wellington CIV-2007-485-2270, 14 April 2010 at [18].

[80]              As to the submission that Booths has delayed commencing its claim, I am not persuaded that this is a significant factor as it relates to the steps taken in 2024. But there has been a delay issuing proceedings this year. Although not determinative, this is a factor deserving of a small but not significant amount of weight favouring Mr and Mrs Millard. I also refer to my comment above at [57], that the evidence does not go so far as to support the view that Mr Millard has been repeatedly and extensively breaching the restraint. This also favours Mr and Mrs Millard’s position.

[81]              It appears the injunctions sought by the plaintiff are substantially the same as the restraint already in force. While Booths would argue they are necessary as the deed has not been complied with, I am not persuaded this alone is a reason to essentially reiterate a contractual obligation. Instead, Booths will need to await the outcome of the substantive proceedings which will shed more light on what obligations the restraint imposes on the different defendants.

[82]              I am therefore of the view that, in these circumstances, the balance of convenience favours Mr and Mrs Millard.

What is the overall justice of the case?

[83]              Standing back, I agree with Ms Hammer that the justice of the case requires, at this interlocutory stage, that the application for injunctive relief be dismissed. Here, the balance of convenience and the interests of justice align.

Result

[84]              The application is dismissed. This is in no way to express a concluded view on the outcome of the substantive proceedings. To the contrary, while declining their application for interim relief, I have found that Booths do in fact have a serious case to be tried.

Harland J

Solicitors:

MinterEllisonRuddWatts, Wellington Anderson Lloyd, Queenstown.