IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2017-404-633 [2017] NZHC 1679
BETWEEN FINEWOOD UPHOLSTERY LIMITED
Plaintiff
AND
FLETCHER HEYWOOD VAUGHAN Defendant
Hearing: 23 June 2017 Counsel:
ZG Kennedy and MD Toulmin for plaintiff
DM Salmon for defendantJudgment:
23 June 2017
Reasons:
20 July 2017
REASONS FOR JUDGMENT OF FITZGERALD J [Granting leave to appeal interlocutory order]
This judgment was delivered by me on 20 July 2017 at 4 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors: MinterEllisonRuddWatts, Auckland
LeeSalmonLong, Auckland
Finewood Upholstery Limited v Vaughan [2017] NZHC 1679 [20 July 2017]
Introduction
[1] The plaintiff (“Finewood”) commenced these proceedings against the defendant (“Mr Vaughan”) in April 2017. Finewood and Mr Vaughan were parties to an agreement concerning the design and manufacture of commercial furniture (“Agreement”). Mr Vaughan purported to terminate the Agreement in February this year. Finewood disputes the validity of that termination, hence these proceedings. Pending resolution of the proceedings, Finewood sought an interlocutory injunction preventing Mr Vaughan from taking any action inconsistent with the terms of the Agreement.
[2] By judgment dated 2 June 2017, I declined to grant the injunction.1 On
14 June 2017, Finewood applied for leave to appeal my judgment to the Court of Appeal. There is no dispute that, in light of s 56(3) of the Senior Courts Act 2016 (“Act”), leave is required.
[3] I heard Finewood’s application for leave to appeal on Friday, 23 June 2017. At the conclusion of that hearing, I delivered judgment granting leave to appeal. These are my reasons for doing so.
Background to judgment and application for leave to appeal
[4] The factual background to the present proceeding is fully set out in my judgment of 2 June 2017. It is not repeated here.
[5] The reasons why I declined Finewood’s application for an interim injunction
may be summarised as follows:
(a) While I found that there was a serious question to be tried on the merits (i.e. whether or not Mr Vaughan’s termination of the Agreement was valid), I did not consider there was any real prospect of Finewood obtaining the relief it sought at trial, namely specific
performance of the Agreement or in the alternative, a permanent
injunction prohibiting Mr Vaughan from acting outside the Agreement in a manner contrary to its terms.
(b)This was against the backdrop of my finding that the Agreement was sufficiently analogous to a contract for personal services, in respect of which the courts are generally hesitant to grant specific performance, or the permanent prohibitory injunction sought by Finewood.
(c) The approach described at (b) above is particularly so where the evidence demonstrates that the parties no longer enjoy a workable relationship. I was satisfied on the evidence before me that the parties’ relationship has irretrievably broken down.
(d) The losses claimed by Finewood sounded in a remedy in damages.
And while the Agreement contains limitation and exclusion of liability provisions,…
Keep reading for free
Create a free CaseChat account to read Finewood Upholstery Ltd v Vaughan and more:
- Read every judgment in full
- Ask AI and get answers linked to paragraphs
- See how each paragraph was cited in later cases
- Download judgments as PDF or Word
One click creates your free account or signs you in.
By continuing you agree to the Terms and Privacy Policy.
- Case
- [2017] NZHC 1679
- Decision Date
CaseChat Overview and Summary
The legal issues in this case revolve around the grant of an interlocutory injunction in the context of a contract for personal services. The court must consider whether the plaintiff has a serious question to be tried on the merits and whether there is a real prospect of obtaining the relief sought at trial. The court must also weigh the interests of justice and consider the adequacy of damages as an alternative remedy. Furthermore, the relevance of limitation and exclusion of liability provisions to the assessment of the adequacy of damages is an issue that has not been considered by the New Zealand courts.
The court granted leave to appeal because the grounds of appeal raised by Finewood were not frivolous or vexatious. The proper approach to interim and final injunction applications in the case of personal services contracts is reasonably well settled, but there is limited Court of Appeal authority on the question of granting interim and final prohibitory relief in such contracts. The relevance of limitation and exclusion of liability provisions to the question of adequacy of damages has not been considered by the New Zealand courts. The granting (or otherwise) of the interim injunction is of significant importance to Finewood, as it may be unable to recover all of the losses which it says it has or will suffer as a result of Mr Vaughan’s termination of the agreement. Finally, the factors weighing in favour of granting leave to appeal outweighed the inevitable delay of an appeal.
The final orders of the court are that leave to appeal is granted to Finewood, and costs are to be assessed on a costs 2A basis unless the parties are unable to agree, in which case memoranda not exceeding five pages in length may be filed. Finewood’s memorandum is to be filed within 10 working days of these reasons for judgment, with Mr Vaughan’s memorandum to be filed within a further five working days. The court will then determine costs on the papers.
Orders
Orders of the court
Full text does not contain this section.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Full text does not contain this section.