Detection Services Limited v Pickering - [2017] NZHC 709

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-3135 [2017] NZHC 709

BETWEEN
DETECTION SERVICES LIMITED

First Plaintiff

DETECTION SOLUTIONS LIMITED Second Plaintiff

DETECTION SERVICES PTY LIMITED Third Plaintiff

DETECTION SOLUTIONS PTY LIMITED

Fourth Plaintiff

STEPHEN CARL JOHN SIMMONS Fifth Plaintiff

AND

CHRISTOPHER LORRAINE PICKERING

First Defendant

CONTINUED OVERLEAF

Hearing: 7 March 2017

Appearances:

Mr S C Dench for the Plaintiffs
Mr A R B Barker for the Defendants

Judgment:

12 April 2017

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

This judgment was delivered by me on
12.04.17 at 10 a.m, pursuant to

Rule 11.5 of the High Court Rules. Registrar/Deputy Registrar

Date……………

DETECTION SERVICES LIMITED & Ors v PICKERING & Ors [2017] NZHC 709 [12 April 2017]

AND AQATAR LIMITED
Second Defendant

AND JAKE VAN DER PEYL
Third Defendant

Background

[1] This proceeding arises out of the development of a system for detecting water leakages in high pressure lines. During the period when development of the system was carried out, the first defendant, Mr Pickering, was the general manager of the first plaintiff, Detection Services Limited (DSL). The second defendant, Aqatar Limited, is a company that Mr Pickering incorporated.

[2] Broadly, the substantive dispute between the parties concerns the question of who owns both the technology and know-how that was developed and acquired in the creation of the leakage detection process. It also concerns the manufacture of a prototype of the equipment, which was part of the process. The plaintiffs, and in particular Mr Simmons, who is the person behind the corporate plaintiffs, assert that the system was devised, developed and created by Mr Simmons and Mr Pickering in a joint development for DSL.

[3] Mr Pickering, on the other hand, claims that he or his company solely owned the system and the rights in it. It is alleged against Mr Pickering that he wrongly appropriated the system and refused to allow the plaintiffs to use or access the system unless they purchased it from him or his company.

[4] Consistent with their claim that it was a joint development, the plaintiffs assert that a fiduciary relationship existed between the two sides. They allege that, as a result, Mr Pickering was required to act loyally and in the interests of developing a system for the plaintiffs in conjunction with them. He was thus precluded from appropriating the development and from preferring his own interests in relation to it.

[5] The fiduciary relationship was said to arise from the trust and friendship that existed between Mr Pickering and Mr Simmons; that the development was in the nature of a joint venture and that Mr Pickering held an additional position of trust as general manager of the first plaintiff. He was therefore well placed to complete the development without close supervision and without disclosing his intentions or actions. There are other particulars given in the statement of claim as to how the

fiduciary duty came into existence and the ways in which Mr Pickering and the second defendant breached…

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.

Continue reading Detection Services Limited v Pickering

Details

AGLC: Detection Services Limited v Pickering [2017] NZHC 709
Case: [2017] NZHC 709
Decision Date: 12 April 2017

CaseChat Overview and Summary

This case concerns the ownership of a system for detecting water leakages in high pressure lines. The plaintiffs, Detection Services Limited and others, claim that the system was developed jointly with Mr Pickering, who was their general manager at the time. They assert that Mr Pickering appropriated the system and refused to allow them to use it unless they purchased it from him. The defendants, Mr Pickering and his company Aqatar Limited, claim that the system was solely their development. The court was required to decide whether the defendants were estopped from raising this issue in the current proceedings, based on an earlier decision by the Employment Relations Authority (ERA) that the system was a joint development. The plaintiffs argued that the ERA's decision gave rise to an issue estoppel and that the defendants should be precluded from asserting inconsistent contentions in the current proceeding. However, the court found that the issue was not suitable for determination as a separate question, as it would not resolve all the issues at trial or end the litigation. The court noted that even if the estoppel was found to apply, a trial would still be necessary to quantify Mr Pickering's interest and to determine whether he was justified in refusing to hand over the system without conditions. The court also noted that the inquiry in the High Court would travel beyond the terrain visited by the ERA. Therefore, the court dismissed the application for a separate question to be determined and ordered the plaintiffs to pay costs to the defendants on a 2B basis.

Orders