Croser v Focus Genetics Limited Partnership

[2019] NZHC 627

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2019-485-164

[2019] NZHC 627

BETWEEN

DAMIEN LEIGH CROSER and KIRSTEN LOUISE CROSER

Plaintiffs

AND

FOCUS GENETICS LIMITED PARTNERSHIP

Defendant

Teleconference:

26 March 2019

(further memoranda received 26, 27 and 28 March 2019)

Counsel:

C Stevens and T Mijatov for Plaintiffs

S M Bisley and P J Niven for Defendant

Judgment:

29 March 2019

JUDGMENT OF CHURCHMAN J

Introduction

[1]        By application dated 25 March 2019, the plaintiffs applied without notice for an interlocutory injunction in the following terms:

(a)the defendant must provide to the plaintiffs, within 24 hours of service of the Court’s judgment on the defendant, all data held on Sheep Genetic Australia (SGA), including raw data, Australian Sheep Breeder Values (ASBVs), linkage and parenting data, and index values held for the plaintiffs’ sheep (together “SGA data”);

(b)the defendant must, within the same 24-hour period, give consent to SGA restoring public website access to the SGA data forthwith;

CROSER & ANOR v FOCUS GENETICS LIMITED PARTNERSHIP [2019] NZHC 627 [29 March 2019]

(c)in respect of all breeding decisions made by the plaintiffs following provision of SGA data to them pursuant to these orders, the plaintiffs must maintain full records of all breeding decisions made in respect of all sheep in the same manner they have done during the course of the parties’ relationship; and

(d)in respect of any sales of sheep following provision of SGA data to the plaintiffs pursuant to these orders, the plaintiffs must maintain full sales records of all sheep sold in the same manner or they have done during the course of the parties’ relationship.

[2]        Rather than being terms of an interlocutory injunction against the defendant, the last two matters referred to in the plaintiffs’ application are, in effect, conditions that the plaintiffs were willing to bind themselves to should the injunction be granted.

Background

[3]The plaintiffs own and operate a sheep farm called Kiranda in South Australia.

[4]        Damien Croser is a fourth-generation sheep farmer who has been farming for 30 years. In addition to being a sheep farmer, Kirsten Croser is also a qualified and practising veterinarian.

[5]Kiranda is a modest size sheep operation having some 3,000 breeding ewes.

[6]        The defendant is a limited partnership headquartered in Napier, New Zealand specialising in livestock genetics. Its owner is Landcorp Farming Limited which is a very substantial Government-owned farming enterprise.

[7]        The defendant conducts business in Australia. It has entered into business arrangements with farmers in a number of Australian States, including New South Wales, Victoria and South Australia. Sheep that are the product of the defendant’s breeding programme can either be multiplier or flock sheep (these are commercial breeding stock), or elite sheep. Elite sheep are sheep that have had their physical and genetic attributes collected, recorded and submitted to SGA by the owners of the

sheep. The SGA then applies its breeding values programme to the data on the sheep and arrives at something called “Australian Sheep Breeding Values” or “ASBVs”.

[8]        ASBVs are publicly available and give farmers important information about sheep that they are contemplating purchasing.

[9]        ASBVs on the SGA website are updated every two weeks and can go up or down as new data is entered.

[10]      There is a significant difference in the cost and effort involved in raising elite sheep as opposed to multiplier sheep. Extensive and ongoing information is required to be gathered and recorded in a centralised database in relation to elite sheep. This has an effect on the value of elite sheep as compared to multiplier sheep. Because of the availability of the extensive genetic data in respect of elite sheep, farmers will pay a significant premium for such sheep as opposed to multiplier or flock sheep for whom such data is not available.

[11]      In March 2013, the plaintiffs commenced discussions with representatives of the defendant about entering into an agreement with the defendant whereby they would breed sheep utilising genetic material provided by the defendant.

[12]      The initial proposal was that the defendant would provide elite rams to the plaintiffs and they would be put over their commercial flock. However, an outbreak of Johne’s disease in Australia led to the enactment of regulations which restricted the importation of sheep into South Australia.

[13]      On 18 December 2013, the parties signed an agreement that the plaintiffs would establish a Focus Genetics multiplier flock. However, instead of the defendant providing rams to service the plaintiffs’ commercial flock, the plaintiffs paid for and were supplied embryos for implantation into the plaintiffs’ ewes. The lambs produced from these embryos would therefore contain 100 per cent genetic material provided by the defendant as opposed to only 50 per cent if rams had been used over the plaintiffs’ existing commercial flock.

[14]      The change in the nature of the genetic material supplied also changed the nature of the parties’ obligations.

[15]      The plaintiffs’ evidence was that they were required by the defendant to collect and forward extensive data in relation to the lambs born from the embryos supplied.

[16]      Some of this data was used to calculate the sheep’s ASBVs. Initially, the data was only submitted by the defendant to the New Zealand sheep database, Sheep Improvement Limited (SIL). From about November 2017, it was provided to SGA so that Australian farmers could compare the data from the sheep with that of other Australian elite sheep. Data dating back to 2014 was lodged was SGA. The defendant advised SGA that it was the owner of the sheep and their data.

[17]      The only contractual document signed by the parties is the December 2013 multiplier agreement. That document had both an “entire agreement” and “no variation other than in writing” clause but the plaintiffs contend that the actual contractual relationship between the parties which evolved was not that relating to the breeding of multiplier sheep but the breeding of elite sheep. The plaintiffs point to the fact that in 2016 and 2017 there were negotiations between the parties in an attempt to regularise the situation and formally document it by way of an elite breeder contract.

[18]      They also point to the fact that Kate Brabin, whose title was General Manager, Focus Genetics Australia, twice, in emails that were sent to the plaintiffs and others, acknowledged that the plaintiffs were in fact already “an elite breeder and not a multiplier”.

[19]      In an email of 16 January 2018 from Kate Brabin to the plaintiffs and others, she acknowledged that new elite breeder agreements had been tabled to the plaintiffs in both 2016 and 2017. In relation to the December 2017 agreement, the email says:

The tabled agreement deals with many of your concerns and further gives you as a partner greater liberty in the breeding decisions and cull conversation. Further it captures that you are in fact an elite breeder and not a multiplier. I did also discuss with you Damien in person post-November sale where I asked you to consider together with Kirsten if you wanted to continue down the Elite Path given your concerns of increased recording or if in fact you wanted to return the [sic] a pure multiplier.

[20]      The defendant, through their legal advisor, have vehemently denied that the plaintiffs are anything other than multiplier breeders. Ultimately the Court will have to decide whether the 2013 multiplier agreement governed the parties throughout the duration of their arrangement or whether that arrangement was replaced by a new arrangement which saw the plaintiffs, in effect, become, with the encouragement and support of the defendant, elite breeders.

[21]      It is not appropriate for the Court at this stage, without affidavits from the defendant, to attempt to resolve that issue beyond noting that the plaintiffs’ contentions are supported by some of the evidence they have filed, particularly in relation to the tasks that they were required to undertake, the costs they were required to incur, and in particular, the data that they were required to collect and forward to the defendant which they would not have been required to do if the multiplier agreement was the only basis of their contractual relationship.

[22]      There was also evidence of the plaintiffs being invoiced for data collection by the defendant, such as in 2017, when the plaintiffs paid AUD$17,696.68 in third party issue sampling data collection costs in relation to data that the defendant had sent to a laboratory.

Developments

[23]      Relationships between the parties soured. The plaintiffs link that to the appointment of Kate Brabin as General Manager of Focus Genetics Australia in May 2017. They say that after her appointment, what had been their free access to data on their sheep, started to be restricted.

[24]      On 19 July 2018, the defendant gave the plaintiffs a letter of termination of the December 2013 agreement. The letter noted that there was a long termination period and that the agreement terminated on the earlier of when the date rams born in 2018 had been sold under the terms of the agreement or 31 December 2019.

[25]      The letter also indicated a willingness on the part of the defendant to enter into a new and different contractual relationship with the plaintiffs. The proposal was that the plaintiffs produce prime lambs and become a maternal ewe breeder. The letter also

contained the comment that it was important to note that “The Agreement will continue on its current terms until the date of termination”.

[26]      The observation raises the issue of what the status quo was in relation to the plaintiffs’ ability to access their data. They allege that until Kate Brabin inappropriately began to restrict their access to data, they had free access to it. I am prepared to accept that, for the purposes of this application, the status quo was that the plaintiffs could access their data. On that basis, the plaintiffs could be said to be seeking an injunction that preserved the status quo.

[27]      Following the letter of termination, the plaintiffs were unable to access the ASBVs for the Kiranda sheep using the SGA website. The plaintiffs discovered that Kate Brabin had subscribed herself as the owner of the “Kiranda” property and as owner of the sheep whose records were held on the SGA website. The defendant has apparently arranged to remove the plaintiffs’ data from the public access section of the SGA database.

[28]      The plaintiffs complain that in relation to ram sales scheduled after the letter of termination that the defendant would not provide them with the necessary data on their own stock which would have enabled them to know whether the rams were tier 1, tier 2, or tier 3. They say that the defendant incorrectly classified their stock and made misrepresentations to potential purchasers about the nature and availability of their elite stock. They also say that the defendant was responsible for culling 50 per cent of the rams which was a much higher figure than the usual 20 per cent culling.

[29]      There is some support for the allegations made by the plaintiffs in the affidavit of Ryan Bateman who deposes to having been discouraged by representatives of the defendant from purchasing elite stock from the plaintiffs and having been provided with false information about the availability of the plaintiffs’ stock.

[30]      The plaintiffs also complain that because the data on their rams is no longer available on the SGA website, customers who brought rams from them in good faith since 2013 in the expectation that they would be able to follow the progress of the rams’ breeding values on the SGA website, now do not have access to this data.

Urgency

[31]      The sheep at Kiranda are mated in the last two weeks of March. Prior to the mating, teasers (vasectomised rams) are run with the ewes to encourage them to ovulate. The sheep are not randomly mated but are mated pursuant to a mating plan. The purpose of such a plan is to ensure that the sheep are not inbreed by mating with close relatives and also that the genetic value of the flock will be maintained or enhanced. It is necessary to have access to the SGA data on the flock for a mating plan to be produced. Mating the sheep randomly without a mating plan would have a significant adverse effect on the breeding integrity and value of the lambs produced.

Legal correspondence

[32]      On 31 December 2018, the plaintiffs’ Australian solicitor, Despina Anagnostou, wrote an 18-page letter to Alistair McMecham, General Counsel of Landcorp Farming Limited (the defendant’s parent entity). Amongst many other issues raised that letter requested the data on the plaintiffs’ sheep so that a breeding plan could be created.

[33]      Mr McMecham replied by email of 18 January 2019 but that did not address the many substantive issues raised in the 31 December letter.

[34]      Ms Anagnostou wrote again to Mr McMecham on 29 January 2019. That letter cancelled any contractual relationship between the parties on the basis of breach by the defendant. That letter prompted a response from Buddle Findlay, the solicitors for the defendant, of 12 February 2019. That letter cancelled the multiplier agreement and denied that there was any other contract between the parties.

[35]      The letter asserted exclusive ownership in the data relating to the Kiranda flock and the plaintiffs’ request for access to it was rejected. The letter denied any breaches by the defendant but did not address substantively the many matters raised in the letter of 31 December 2018.

[36]      By letter of 15 February 2019, Craig Stevens, counsel for the plaintiffs, replied to Buddle Findlay’s letter of 12 February 2019. Attached to that letter were emails

from Kate Brabin to the plaintiffs including the email of 16 January 2018 where she had acknowledged that the plaintiffs were “in fact an elite breeder and not a multiplier”.

[37]      By letter of 27 February 2019, Buddle Findlay responded to the letter from Craig Stevens. It suggested mediation. It did not respond to the issues raised in the 31 December 2018 letter, nor did it alter the defendant’s position on the supply of the data.

[38]      By letter of 4 March 2019, Ms Anagnostou wrote to Buddle Findlay. She noted their failure to engage with the issues raised in the letter of 31 December 2018; she made certain offers to address the undertakings that Buddle Findlay had required; she noted that the plaintiffs had collected and paid for data that the defendant now claimed ownership of and she again requested the data for the purposes of imminent mating.

[39]      On 15 March 2019, Ms Anagnostou also wrote to SGA Australia requesting access to the data and noting that representations alleged to be made by the defendant to SGA to the effect that they were the owners and/or breeders of the sheep at Kiranda were false. SGA remained unwilling to provide the data.

[40]      By email of 18 March 2019, Craig Stevens wrote to Buddle Findlay once again requesting provision of the data.

[41]      By email of 19 March 2019 from Buddle Findlay to Craig Stevens, the request for the data was refused.

The without notice application

[42]      The plaintiffs say that they urgently need access to the SGA data in order to be able to mate their sheep. They point to the fact that the time has almost expired for successful mating to occur and indicate that any significant delay in mating will mean that, given the gestation time of the lambs is about five months, that the lambs will be born at the end of August at the earliest, pushing the lambs into spring.  Unlike   New Zealand where spring brings fresh grass growth, in South Australia the spring can be dry. Lactating ewes need palatable grass which the plaintiffs say they will not

get that late in the season. They say delay in mating would also mean they would need to supplement feed the lambs in summer, and they refer to other potential health issues for both the ewes and lambs. They say that their farming system is built around mating at this time of year and that their sheep who do not have Focus Genetics breeding have already been mated. The plaintiffs have undertaken to keep full breeding records and full sales records of any sales of the progeny from the imminent mating.

[43]      Although the applications were made without notice, they were served on the defendant on a Pickwick basis on 25 March 2019, the same day that they were filed at Court.

[44]      Given the claimed urgency, upon receipt of the application the Court scheduled a hearing by way of teleconference for the following morning, 26 March 2019.

[45]      Counsel for the defendant, Mr Bisley and Mr Niven, were able to participate in that teleconference. They also subsequently filed memoranda on 26, 27 and 28 March and provided the Court with copies of cases supporting their position.

[46]The defendant opposes the issue of an injunction on a number of grounds:

(a)the alleged delay by the plaintiffs in commencing the proceedings;

(b)the alleged reluctance of Courts to issue mandatory interim injunctions;

(c)the adequacy of damages;

(d)the orders sought were wider than necessary and they assert that, while opposing any injunction, all that the plaintiffs really need is for the data to be provided to their expert to prepare a breeding plan; and

(e)the plaintiffs have overstated the prejudice from being unable to optimise the crop of lambs from the proposed mating and the risks from inbreeding.

Relevant law

[47]      High Court Rule 7.46 permits the determination of an application without notice. However, the Court must be satisfied that requiring the applicant to proceed on notice would cause undue delay or prejudice to the applicant.1

[48]      HCR 7.46 provides that if a Judge determines that an application can properly be dealt with without notice, the Judge may make the orders sought or may make any other order that the Judge thinks just in the circumstances or dismiss the application.

[49]      HCR 7.53 permits an application for an interlocutory injunction to be made by a party before or after the commencement of the hearing of a proceeding.

[50]      HCR 7.23(2) requires that an applicant who makes an application without notice must file a memorandum setting out:

(a)the background to the proceeding;

(b)the grounds on which each order is sought;

(c)an explanation of the grounds on which each order is sought without notice; and

(d)all information known to the applicant that is relevant to the application.

[51]      I am satisfied that the memorandum filed by counsel and the affidavit evidence of Damien Leigh Croser, Kirsten Louise Croser, Bayden Wilson, Hayden Biddle, Gerald Martin, Despina Anagnostou and Ryan  Bateman meet the requirements of     r 7.23.

[52]The plaintiffs have also filed an undertaking as to damages as required.

[53]      Although the injunction application was served on a Pickwick basis and counsel for the defendant were, as it transpired, able to address the issues raised by the

1      HCR 7.46(3)(a).

plaintiffs both in the teleconference hearing and, to a lesser extent, in the memoranda filed subsequently, I must treat this matter as without notice application. The defendant has effectively been deprived of filing affidavit evidence in response to the substantial affidavit evidence filed by the plaintiffs.

[54]      I accept that, as Lord Hoffmann noted in National Commercial Bank Jamaica Ltd v Olint Corporation Ltd that “Any notice is better than none”.2 But notice on a Pickwick basis does not convert this to an on notice application.

[55]      The legal test to be applied in relation to an application for an interlocutory injunction is well known. The leading authority remains the Court of Appeal decision in Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd, where the Court of Appeal endorsed the two-step approach of arguable case and balance of convenience. Cooke J said:3

…the balance of convenience can have a very wide ambit. In any event the two heads are not exhaustive. Marshalling consideration under them is an aid to determining, as regards the grant or refusal of an interim injunction, where overall justice lies. In every case a Judge has to finally stand back and ask himself that question … [A]n interlocutory decision of this kind is essentially discretionary and its solution cannot be governed and is not much simplified by generalities.

Arguable case

[56]      Is there an arguable case or “serious question to be tried” as it is sometimes termed?4 It is clear that there is a fundamental dispute as to whether the parties’ contractual rights are solely contained in the multiplier agreement (as contended by the defendant) or whether the basis of their contractual relationship includes unwritten terms as contended for by the plaintiffs.

[57]      As detailed above, there is evidence upon which it is possible that the Court might conclude that the signed multiplier agreement does not accurately and comprehensively document the contractual arrangements which evolved between the parties and that the defendant has acknowledged at times that the plaintiffs were in

2      National Commercial Bank Jamaica Ltd v Olint Corporation Ltd [2009] UKPC 1405 at 1408[F].

3      Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129 at [142].

4      See American Cyanamid Co v Ethicon Ltd [1975] AC 396 (HL).

fact elite sheep breeders rather than multiplier breeders and should therefore be estopped from denying that.

[58]      It is also arguable that the defendant breached their contractual relationship with the plaintiffs in relation to misrepresentations of the type covered by Ryan Bateman in his affidavit and also that the defendant has, at various times, wrongly alleged that it was the owner either of Kiranda or of the stock of that property. Accordingly, I find that there is an arguable case and that there are serious legal questions to be tried.

Balance of convenience

[59]      The plaintiffs will clearly suffer some detriment if they are obliged to mate their sheep without a breeding plan based on the SGA data. There is a possibility of inbreeding with the potential adverse consequences that would cause; there is the devaluation of the progeny of the mating because data relating to them is not available and the lost opportunity in being able to maintain or enhance the breeding values of the flock. There is a significant potential loss of reputation for the plaintiffs as breeders of high quality sheep.

[60]      It is possible that the Crosers could avoid some of the adverse consequences by electing not to breed this season. However, that would mean that they would not obtain any income from that part of their flock and it is clear that they have invested significantly in that asset. Although counsel’s submissions referred to potential economic consequences as being “financially crippling”, beyond accepting that the financial losses of not breeding a significant part of their flock for a season would be significant, it is difficult to know what the concept of “financially crippling” would actually mean in practice. No estimate of actual likely financial loss was provided.

[61]      However, I accept that if the plaintiffs were forced to mate without a proper mating plan, there are real risks in relation to inbreeding and there would be a significant effect on the potential value of the progeny of the ewes which would continue into subsequent generations of stock.

[62]      Overall, I am satisfied that damages would not be an adequate remedy for the plaintiffs.

[63]      I must now turn to consider whether damages would be an adequate remedy for the defendant.

[64]      I accept that the intellectual property in genetic data is a valuable asset of a business such as that run by the defendant. However, if an interim injunction is granted, the potential losses for the defendant would appear capable of calculation in money terms. The undertakings offered by the plaintiffs as to the collection or preservation of data will assist the defendant in calculating any ultimate financial loss sustained by the defendant should it be successful in the substantive proceedings.

[65]      The financial position of the two parties in unequal. There was no suggestion that any financial losses to the defendant from the grant of the injunction would be “crippling”. In comparison with the plaintiffs, the defendant has the backing of a very substantial business enterprise. There was no suggestion of irremediable damage either to their reputation or in any other respects.

[66]      I conclude that any loss that they suffer by the grant of an interim injunction is capable of being met by damages.

Mandatory/prohibitory injunction

[67]      The defendant argues that granting the injunction in the terms sought will essentially resolve the dispute between the parties and that the injunction sought is in the nature of a mandatory injunction. They rely on cases such as Pukewhero Farms Ltd v The Northern Wairoa Co-operative Dairy Company Ltd5 as authorities for the proposition that the granting of mandatory injunctions are rare and that plaintiffs need to bring the Court to a high degree of assurance that their case will ultimately be successful.

5      Pukewhero Farms Ltd v The Northern Wairoa Co-operative Dairy Company Ltd, 2 October 1989 CP 86/89 Gault J; also Fidelity Life Assurance Co Ltd v Pilkington [2010] NZCA 424; Soft-Tech International Pty Ltd v Ball (1990) 3 PRNZ 683.

[68]In Soft-Tech International Pty Ltd v Ball, Eichelbaum CJ stated:6

Mandatory injunctions are relatively uncommon, interim mandatory injunctions are rare indeed, and interim mandatory injunctions have any effect of a final order and involving the payment of a sum of money which normally would be described as a debt, in my experience are completely novel.

[69]      The Court was satisfied in that case that the order sought, although couched as an interim mandatory injunction, in substance amounted to a final order. That is an unsurprising conclusion as what the plaintiffs were seeking was a direction that royalties paid by the defendant into its solicitors’ trust account rather than to the plaintiff, be directed to be paid to the plaintiffs.

[70]      The Fidelity Life Assurance Co Ltd v Pilkington case also involved a mandatory interim injunction for the payment of money. However, in the High Court, the insurance company had been directed to pay to the plaintiff a monthly figure of

$7,000 under an income protection policy. The actual insured figure was $11,000 per month but the High Court had capped it at 10 months at $7,000 because of a $70,000 underwrite provided by a third party.

[71]      The Court of Appeal upheld the granting of a mandatory interim injunction notwithstanding it involved the payment of a sum of money. The Court of Appeal also held that the test for the grant of prohibitory and mandatory injunctions was the same.7

[72]      The Pukewhero Farms Ltd v The Northern Wairoa Co-operative Dairy Company Ltd case related to a meeting where resolutions were passed authorising a proposed amalgamation of two co-operative dairy companies. The Court was satisfied that the grant of an interim injunction would effectively give the plaintiff the relief it sought in its substantive proceedings because the defendant would have to recommence the voting procedure again because it was now no longer possible to comply with certain time limits. The decision rested on that ground rather than a distinction between mandatory and prohibitory injunctions.

6      At p 684.

7 At [26]. The Court quoted with approval a statement to that effect that had been made by Fisher J in Telecom New Zealand Ltd v Clear Communications Ltd (1997) 6 NZBLC at 102,335.

[73]      The plaintiffs, in support of their argument that there was now, in effect, no distinction in approach to mandatory and prohibitory injunctions referred to National Commercial Bank Jamaica Ltd v Olint Corporation Ltd,8 Greymouth Holdings Ltd v Jet Trustees Ltd,9 and Jet2.com Ltd v Blackpool Airport Ltd.10

[74]      National Commercial Bank Jamaica Ltd v Olint Corporation Ltd was a decision of the Privy Council. An injunction had been sought by the plaintiff investment club against a bank to stop it from terminating the plaintiff’s banking facilities. The Privy Council held that in deciding, at the interlocutory stage, whether the granting or withholding an injunction is more likely to produce a just result, the basic principle is that the Court should take whichever cause seems likely to cause the least irremediable prejudice to one party or the other.11

[75]      The Privy Council did not accept that there should be a different approach as between prohibitory and mandatory injunctions. It said: “… arguments over whether the injunction should be classified as prohibitive or mandatory are barren …”.12

[76]      This approach was taken by the Queen’s Bench Division in Jet2.com Ltd v Blackpool Airport Ltd. In that case a low-cost airline sought an injunction requiring Blackpool Airport to remain open after normal operating hours to service its flights. Beatson J said:13

Although drafted in prohibitory language, the true nature of the injunction granted by Hamblen J is mandatory. However, as Lord Hoffmann stated in National Commercial Bank Jamaica Ltd v Olint Corporation Ltd [2009] UK PC 16 at [21], asking whether an injunction should be classified as prohibitive or mandatory “does not do justice to the complexity of a decision as to whether or not to grant an interlocutory injunction” and ([20]) “what matters is what the practical consequences of the actual injunction are likely to be”.

8      National Commercial Bank Jamaica Ltd v Olint Corporation Ltd [2009] UKPC 16, [2009] 1 WLR 1405.

9      Greymouth Holdings Ltd v Jet Trustees Ltd HC Auckland CIV-2011-404-5309, 19 December 2011 Rodney Hansen J.

10     Jet2.com Ltd v Blackpool Airport Ltd [2010] EWHC 3166 (Comn), [2010] All ER (D) 58.

11     Above n 2, at p 1409[D].

12     At p 1410[A].

13 Above n 10, at [34].

[77]      A similar approach was taken by the NZ High Court in the case of Greymouth Holdings Ltd v Jet Trustees Ltd. Rodney Hansen J said:14

The interim relief sought – the delivery of electronic records and the computer

– is a mandatory injunction, a form of relief granted only in special circumstances. However, I consider the circumstances warrant the grant of the relief sought in order to ensure that the interests of the Company and majority shareholders are not unfairly prejudiced pending trial.

[78]      Applying the principles from these cases, I accept that mandatory interim injunctions will be rare, especially if they either require the payment of a sum of money or effectively dispose of the substantive issue. However, the test to be applied, as set out by the Privy Council in National Commercial Bank Jamaica Ltd v Olint Corporation Ltd is the same for both mandatory and prohibitory injunctions. The Court should take the course which seems likely to cause the least irremediable prejudice to one party or another.

[79]      I have concluded that on the facts of this case, the granting of an injunction would result in the plaintiffs suffering the least irremediable harm. To put that in another way, the failure to grant the injunction would cause the plaintiffs irremediable harm but the defendant will suffer no irremediable harm if an injunction is issued. I also note that this is not a case where the grant of an interim injunction will finally dispose of the issues between the parties.

[80]      I am also satisfied that the balance of convenience favours the grant of an injunction. The potential prejudice of having to mate the sheep without access to the data is immediate and real whereas, for the reasons discussed above, any loss to the defendant is capable of being remedied by damages.

Delay

[81]      There is no doubt that if a plaintiff stands by while the act complained of is still taking place or has not yet taken place and is aware that his or her legal rights are being infringed, relief may be refused.15

14 At [48].

15     McGechan on Procedure (A Beck and others) HR 7.5309, citing Bates v Lord  Hailsham of      St Marylebone [1972] 3 All ER 1019.

[82]      The plaintiffs deny the defendant’s contentions of delay. They point to the fact that the comprehensive letter of Ms Anagnostou of 31 December 2018 was never responded to in substance. While they acknowledge that the plaintiffs were aware that mating needed to occur in late March and they would need a breeding plan in place then, they say that it was only when SGA refused to provide the data on the basis that it belonged to the defendant and not them, that the situation became urgent.

[83]      The correspondence trail referred to above indicates that the request for the data was then promptly made and, after Buddle Findlay on behalf of the defendant, refused to provide that data, the proceedings were promptly issued.

[84]      I cannot see that there has been any delay that would justify a conclusion that the plaintiffs should be disentitled from obtaining an interim injunction.

Overall justice

[85]      I am also required to stand back and consider the overall justice. The plaintiffs submit that the overall justice now favours them “… in that there is disparity in bargaining power between the two parties”. That submission is based on the relative size and economic strength of the two entities. Implicit in that submission is that the defendant is using its much greater economic clout to harm the plaintiffs.

[86]      At this preliminary stage, I am not able to come to such a conclusion. However, I am able to accept that the economic effects on the plaintiffs of declining an interim injunction would proportionately be much greater than the economic effects on the defendant of granting an injunction.

[87]      In the present case, a consideration of the overall justice means that there are some parts of the injunction application where the level of injustice that would arise if the interim injunction is declined are greater than others.

[88]      The most severe and immediate consequences to the plaintiffs of a failure to grant an interim injunction relate to the imminent mating. While I accept that if public access to the data is not restored via the SGA website, the plaintiffs will sustain some economic loss in that potential purchasers of their stock will not be able to access

important data and therefore the prices realised by the stock are likely to be adversely affected, that loss is capable of being calculated and compensated for in damages, and is also less immediate than the loss that will occur if a mating plan is unable to be prepared and mating occur in the immediate future.

[89]      In the memorandum of 28 March 2019, counsel for the defendant suggested that if an interim order is made, it should be on the terms of the offer made by the defendant to the plaintiffs in a letter dated 27 March 2019 (after the teleconference hearing in this matter). The relevant passage of that letter conveyed the defendant’s position as being:

…it is willing to make the relevant data available to the Crosers, if it is subject to appropriate protection. In short, FG proposes to provide Ms Debbie Milne with access to the KIR flocks held with Sheep Genetics, using Matesel, to procure Pedigree, back Pedigree and Australian Sheep Breeding Values, on the terms described in our memorandum of counsel earlier today.

[90]      On the face of things, this offer has some similarities to the first order sought in the plaintiffs’ application. The plaintiffs declined this offer.

[91]      Overall, it is my view that justice in this case can be achieved by the making of a somewhat similar order albeit without the qualifications surrounding the defendant’s proposal. Accordingly, I order that:

Until further order of the Court–

(i)the defendant must provide to Ms Debbie Milne, the plaintiffs’ breeding plan consultant, within 24 hours of service of the Court’s judgment on the defendant, all data held on Sheep Genetics Australia (SGA) including raw data, Australian Sheep Breeder Values (ASBVs), linkage and parenting data, and index values held for the plaintiffs’ sheep (together “SGA data”). Such data is to be used by Ms Milne for the purpose of creating a mating plan; and

(ii)once the breeding plan has been implemented, Ms Milne will destroy or return the data provided.

[92]      This order is made on the basis that the plaintiffs will comply with the undertakings set out in the third and fourth paragraphs of their application.

[93]      This order is an interim order which will last until further order of the Court. I will refer this matter to the Registrar who will liaise with counsel as to a mutually convenient date for the hearing of the substantive claim at the earliest possible opportunity.

[94]      Costs in relation to this application are reserved and will be dealt with at the same time that costs in the substantive proceeding are resolved.

Churchman J

Solicitors:

Succeed Legal Limited, Wellington for Plaintiffs Buddle Findlay, Wellington for Defendant

Counsel:
C Stevens and T Mijatov, Capital Chambers, Wellington for Plaintiff