Intech Inc v Anura Ltd - [2022] NZHC 574

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2021-404-002270

[2022] NZHC 574

BETWEEN
INTECH INC

First Plaintiff

AND

WAREHAM STEAMSHIP CORPORATION

Second Plaintiff

AND

ACRA-CUT INC

Third Plaintiff

AND

ANURA LIMITED

(formerly named ORION MARINE LIMITED) First Defendant

AND

ZHANG YUN

Second Defendant

continued overleaf…

Hearing: 11 February 2022 & 18 February 2022

Appearances:

C Elliott QC & K Crossland for the Plaintiff

G Illingworth QC & A Hyde for the First, Second, Third & Fourth Defendants

Judgment:

25 March 2022

JUDGMENT OF VAN BOHEMEN J

This judgment was delivered by me on 25 March 2022 at 3.00pm and
re-delivered by me 28 March 2022 in accordance with High Court Rules 2016, r 11.10

Solicitors/Counsel:
C Elliott QC, Auckland
G M Illingworth QC, Auckland Shieff Angland Lawyers, Auckland Heritage Law, Auckland
Keegan Alexander, Auckland

…………………………

Registrar/Deputy Registrar

INTECH INC v ANURA LIMITED [2022] NZHC 574 [25 March 2022]

continued from previous page…

AND

DARREN PAUL LEYBOURNE

Third Defendant

AND

VLADAN ZUBCIC

Fourth Defendant

AND

STRYDA MARINE LIMITED

Fifth Defendant

AND

WARREN FARR

Sixth Defendant

Introduction

[1] The plaintiffs are companies incorporated in the United States of America. John (Jack) Baker, who is resident in Massachusetts, says the three companies form a family enterprise which he controls. The plaintiffs have brought a proceeding against the defendants, who are engaged in the design, manufacture and sales of amphibious systems for boats, in relation to work the plaintiffs say they commissioned from the defendants between 2018 and 2021.

[2] The plaintiffs plead six causes of action alleging breach of contract, breach of express trust, breach of institutional constructive trust, misuse of confidential information, breach of copyright, and inducement to breach contract.

[3] In their substantive claim, the plaintiffs seek a series of orders against the defendants, including permanent injunctions restraining the defendants from using the intellectual property in amphibious systems designed, manufactured and sold by the defendants, as well as other orders and damages.

[4] Pending determination of their substantive claim, the plaintiffs seek interim orders requiring the defendants:

(a)to deliver to them the intellectual property in systems designed by the defendants at the plaintiffs’ instruction; and

(b)to set aside a notional royalty on the sales of the principal amphibious system sold by the first defendant.

[5] The plaintiffs also seek preservation and inspection orders to ensure the effectiveness of the above orders.

Plaintiffs’ allegations

[6]The plaintiffs allege that:

(a)In a contact made with the defendants between 2016 and 2018, the first to fourth defendants agreed to design, test and manufacture:

(i)a next generation of the first defendant’s existing S25 amphibious system, which the plaintiffs call the Modified S25; and

(ii)new amphibious systems for larger vessels, which are called the S65, S80 and S95 systems.1

(b)In a variation to the above agreement made in March 2018, the first to fourth defendants agreed to transfer all of the first defendant’s remaining rights in the S25 and Modified S25 systems in return for Mr…

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: [2022] NZHC 574
Decision Date: 25 March 2022

CaseChat Overview and Summary

The plaintiffs, companies controlled by John Baker, sought interim relief against the defendants, a group of companies engaged in the design, manufacture and sales of amphibious systems for boats, in relation to work the plaintiffs say they commissioned from the defendants between 2018 and 2021. The plaintiffs pleaded six causes of action alleging breach of contract, breach of express trust, breach of institutional constructive trust, misuse of confidential information, breach of copyright, and inducement to breach contract. Pending determination of their substantive claim, the plaintiffs sought interim orders requiring the defendants to deliver intellectual property and to set aside a notional royalty on the sales of the S25 system. The defendants opposed the plaintiffs’ application for interim orders. The court found that it was arguable that there was a serious issue to be tried in relation to the S25 system but not in relation to the S65, S80 and S95 systems. The court found that the balance of convenience and overall justice did not favour making the interim orders sought by the plaintiffs. The court dismissed the plaintiffs’ application for interim orders and reserved leave to apply for increased costs.

Orders