Christensen v Gordon

[2020] NZHC 1486

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-710

[2020] NZHC 1486

IN THE MATTER

AND

of an application for interlocutory injunction

IN THE MATTER

of a claim for breach of contract and for assistance to breach of contract

BETWEEN

TONY CHRISTENSEN and ROSALINE

MARY CHRISTENSEN as trustees of the CHRISTENSEN FAMILY TRUST TWO

First Plaintiffs

WOODY ROBERT PURDOM, LEANNE GILLIAN RUBY CLOUGH and PROFESSIONAL TRUSTEE SERVICES

2019 LIMITED as trustees of the PURDOM FAMILY TRUST

Second Plaintiffs

AND

TIMOTHY PAUL GORDON

First Defendant

ALUMINATE SOLUTIONS LIMITED
Second Defendant

ANGELA GORDON

Third Defendant

Hearing:

17 June 2020

Appearances:

P Amaranathan for the Plaintiffs

E St John and S P Maloney for the Defendants

Judgment:

29 June 2020

JUDGMENT OF GAULT J

This judgment was delivered by me on 29 June 2020 at 4:00 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar: ……………………………………

CHRISTENSEN v GORDON [2020] NZHC 1486 [29 June 2020]

[1]                  The plaintiffs, trustees of the Christensen Family Trust Two and the Purdom Family Trust, seek an interim injunction restraining the defendants from breaching restraints of trade and disclosing confidential information. The plaintiffs are the current shareholders of Trans-Space Industries Ltd (Trans-Space). The restraints of trade and confidentiality obligations were included in agreements for sale and purchase of shares in Trans-Space between the  plaintiffs and the first defendant   (Mr Gordon).

Factual background

[2]                  Trans-Space manufactures, imports and installs operable (movable) walls and doors, including partitioning systems, aluminium doors, aluminium sliding doors, swing doors and other door systems, such as bi-fold doors. It has approximately 20 employees, including 14 full-time, and turnover of around $4.5 million per year.

[3]                  Mr Gordon was the majority shareholder, sole director and managing director of Trans-Space from September 2012 until he sold his shares to the plaintiffs in late 2019. He owned 100 per cent of the shares in Trans-Space until 2016 when he sold a 20 per cent shareholding to the Purdom Family Trust.

[4]                  The third defendant, Mrs Gordon, was employed by Trans-space as an estimator until 20 May 2020.

[5]                  Mr Purdom has worked in the Trans-Space business for 17 years, focused on installation until 2019.

[6]                  Mr Christensen joined Trans-Space in 2017, focused on manufacturing until recently.

[7]By agreements for sale and purchase dated 27 November 2019:

(a)the trustees of the Christensen Family Trust Two agreed to purchase 625 ordinary shares, being 50 per cent of the shares in Trans-space,

from Mr Gordon for $900,000 plus 50 per cent of Mr Gordon’s

$481,000 retained earnings in his shareholder current account; and

(b)the trustees of the Purdom Family Trust agreed to purchase 375 shares, Mr Gordon’s remaining 30 per cent shareholding, for $540,000 plus the other 50 per cent of Mr Gordon’s shareholder current account.

In aggregate, the purchase price for the 80 per cent shareholding was

$1.44 million plus the $481,000 shareholder current account.

[8]                  Both agreements included clause 7.3, which provided that Mr Gordon…