Carpet Barn Hamilton Limited v Jobe - [2017] NZHC 2920

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2017-419-168

[2017] NZHC 2920

IN THE MATTER of an appeal against the decision of the District Court at Hamilton

BETWEEN

THE CARPET BARN - HAMILTON- LIMITED

Appellant

AND

BIANCA HELGA MARIA JOBE

Respondent

Hearing: 27 November 2017

Counsel:

M D Branch and K F Shaw for Appellant T M Braun for Respondent

Judgment:

27 November 2017

JUDGMENT (NO.2) OF BREWER J

This judgment was delivered by me on 27 November 2017 at 4:00 pm pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors:

THE CARPET BARN HAMILTON LTD v JOBE [2017] NZHC 2920 [27 November 2017]

Harkness Henry (Hamilton) for Appellant Whitfield Braun (Hamilton) for Respondent

[1] In my judgment delivered on 25 October 2017,1 I allowed Carpet Barn’s appeal:

[44] The appeal is allowed. I make the following interim interlocutory orders:

(a)Ms Jobe is restrained from:

(i)intentionally soliciting or diverting any clients, customers or employees of Carpet Barn; and

(ii)being concerned with any business that is in competition with Carpet Barn in a capacity that does, or might reasonably be expected to, assist such competition.

(b)The period of this restraint shall expire at 2:15 pm on 2 February 2018 unless Carpet Barn has previously filed an application for its extension, in which case the restraint will continue until further order of the Court.

(c)A condition for any extension of the period of this restraint is that Carpet Barn must satisfy the Court that it has, prior to its application, taken all reasonable steps to advance its substantive proceeding.

[45] Leave is reserved to Ms Jobe to make application, on five days’ notice, to rescind or vary the restraint on the grounds:

(a)of economic hardship; and/or

(b)of the unreasonable declining by the majority shareholders of a sale of her shares to a third party; and/or

(c)of unreasonable delay by Carpet Barn in advancing its substantive proceeding.

[2] These orders were not in the form sought by Carpet Barn in the District Court and which Carpet Barn asked me to make on appeal. In particular, Carpet Barn sought to prevent Ms Jobe from working at all for a competitor, Flooring Design. As I explained in my Judgment, I was concerned to make the restraints as least restrictive as reasonable.

1 The Carpet Barn Hamilton Ltd v Jobe [2017] NZHC 2608.

[3] Almost immediately, the parties began to dispute the ambit or interpretation of [44](a)(ii). Ms Jobe continued to work for Flooring Design but changed the scope of her work. This led to the current application by Carpet Barn for a further interim injunction and a finding that Ms Jobe is in contempt of Court.

[4] I explained to counsel at the beginning of today’s hearing that my intention in making the restraints set out in [44](a) was to remove Ms Jobe from direct competition with Carpet Barn. However, I did not extend the restraint to involvement in any capacity with a competitor.…

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: [2017] NZHC 2920
Decision Date: 27 November 2017

CaseChat Overview and Summary

In the High Court of New Zealand, Carpet Barn Hamilton Limited appealed a decision of the District Court at Hamilton, seeking an extension to an interim non-compete and non-solicitation order against Ms Jobe. The original order restrained Ms Jobe from directly soliciting or diverting clients, customers, or employees of Carpet Barn and from being involved in any capacity with a business in competition with Carpet Barn. Ms Jobe, who had begun working for a competitor, Flooring Design, sought clarification on the extent of the restraint, leading to this appeal. The primary legal issues were the interpretation of the non-compete and non-solicitation orders and whether Ms Jobe's conduct, which included changing the scope of her work at Flooring Design, constituted a breach of the court-imposed restraints. The court considered the intent behind the original order, which was to limit Ms Jobe's direct involvement in competition with Carpet Barn, rather than preventing her from working for a competitor entirely. The court clarified that the restraints did not cover indirect competitive involvement, such as performing "backroom" tasks. After negotiations between the parties, the court issued a further interim interlocutory order that Ms Jobe must refrain from direct contact with customers, potential customers, or installers, avoid involvement in flooring product installation, and not be on the shop floor during business hours. The court also addressed the issue of costs, ruling that while Ms Jobe had acted in reliance on legal advice, she was ultimately responsible for complying with the court's orders. The court awarded costs to Carpet Barn on a costs in the cause basis, finding that the litigation was unnecessary and could have been avoided with better communication between the parties. The court declined to extend the period of the restraint, stating that the primary purpose of the restraint period was to allow Carpet Barn time to resolve the dispute substantively, which had not been affected by Ms Jobe's conduct.

Orders