Intellihub Ltd v Genesis Energy Ltd
[2020] NZCA 344
•13 August 2020 at 9.00 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA285/2020 [2020] NZCA 344 |
| BETWEEN | INTELLIHUB LIMITED |
| AND | GENESIS ENERGY LIMITED |
| Hearing: | 27 July 2020 |
Court: | Collins, Peters and Whata JJ |
Counsel: | J D McBride and A W McDonald for Appellant |
Judgment: | 13 August 2020 at 9.00 am |
JUDGMENT OF THE COURT
AThe applications for leave to adduce further evidence are granted.
BThe appeal is dismissed.
CThe appellant must pay the first and second respondents costs for a standard appeal on a band A basis and usual disbursements. We certify for two counsel.
____________________________________________________________________
REASONS OF THE COURT
(Given by Collins J)
Introduction
Intellihub Ltd (Intellihub) and Advanced Metering Services Ltd (Vector) compete with each other to supply electricity meters. Genesis Energy Ltd (Genesis) is a retailer of electricity and other energy products. Approximately 45,000 Genesis customers use meters that are owned and operated by Intellihub.
In October 2019, Genesis entered into a contract with Vector for the supply of new meters and required Vector to decommission the Intellihub meters used by Genesis customers. Genesis agreed to defer the commencement of this project until 1 April 2020 because of the potential impact its new business arrangements will have on Intellihub.
On 18 March 2020, Intellihub commenced proceedings against Genesis and Vector. It also sought an interim injunction to prevent Genesis and Vector decommissioning Intellihub’s meters, pleading that Genesis is:
(a)intentionally causing harm to Intellihub by unlawful means (unlawful means cause of action); and
(b)in breach of an implied term of its contract with Intellihub whereby, according to Intellihub, Genesis is required to give three to five years’ notice to displace Intellihub’s meters (breach of contract cause of action).
No cause of action is pleaded against Vector.
In a judgment delivered on 24 April 2020, Katz J dismissed Intellihub’s application for an interim injunction.[1] The High Court Judge held:
(a)there was no serious question to be tried in relation to the unlawful means cause of action;
(b)there was a serious question to be tried in relation to the breach of contract cause of action;
(c)the balance of convenience weighed against issuing an interim injunction; and
(d)the overall justice of the case also weighed against issuing an interim injunction.
[1]Intellihub Ltd v Genesis Energy Ltd [2020] NZHC 807 [High Court judgment].
The issues raised by Intellihub’s appeal are encapsulated in the following questions:
(a)Did the High Court apply the correct legal test when determining there was no serious question to be tried in relation to the unlawful means cause of action?
(b)Did the High Court err when concluding there was no serious question to be tried in relation to the unlawful means cause of action?
(c)Did the High Court err when concluding the balance of convenience weighed against granting an interim injunction?
(d)Did the High Court err when concluding the overall justice also weighed against the granting of an interim injunction?
Background
The competitive nature of the New Zealand electricity retail market enables consumers to switch between retailers with relative ease. There is, however, an expensive infrastructure associated with the supply of electricity from retailers to consumers, which investors wish to protect. Meters, which are integral to determining what individual consumers are required to pay retailers for the electricity they consume, are an essential component of the infrastructure that underpins the electricity retail market.
The framework for the regulation of the New Zealand electricity industry is set out in the Electricity Industry Act 2010 (the Act). The Electricity Authority (the Authority) is created by the Act. Its functions include the promulgation of the Electricity Industry Participation Code (the Code) and the enforcement of certain parts of the Act and the Code.
The aims of the Code include:[2]
(a) ensuring competition in the electricity industry;
(b) maintaining a reliable supply of electricity to consumers; and
(c)ensuring the efficient operation of the electricity industry in New Zealand.
[2]Electricity Industry Act 2010, s 32.
On 14 February 2000, Mercury NZ Ltd (Mercury),[3] an electricity generator and retailer entered into a contract with Genesis whereby Mercury would supply metering services to Genesis. The terms of the contract included a termination clause which enabled Genesis to terminate its contract with Mercury by giving six months’ notice and for the displacement of no more than 50 per cent of Mercury’s meters in any 45-day period.
[3]Then named Mighty River Power Ltd.
In 2013, the Code was amended so as to require electricity retailers, such as Genesis, to have an “arrangement” with providers of metering equipment concerning the supply and maintenance of metering services. Pursuant to an exchange of letters in August and September 2013, Mercury continued to provide metering services to Genesis. It is Genesis’ case that this constituted an “arrangement” for the purposes of the Code, which was rolled over on an annual basis, as evidenced by letters from Genesis to Mercury in 2014, 2017 and 2018. Genesis accepts it cannot identify any termination provisions in this “arrangement”.
Between 2009 and 2016, Mercury undertook a programme of replacing its meters with an advanced metering infrastructure using MTRX meters, which operate on an intelligent “mesh” communication system, whereby individual meters communicate with each other and transmit metering information to a central point. This mesh system is used by Intellihub. One of the characteristics of the mesh system is that some meters are key to the transmission of metering information from other meters but, until meters are decommissioned, it is very difficult to determine which meters are essential to the overall efficacy of the system.
In December 2018, Mercury incorporated Metrix Ltd (Metrix). Thereafter, Mercury transferred ownership of the MTRX network of meters to Metrix. On 1 March 2019, Mercury sold its shares in Metrix to Intellihub Australia Pty Ltd for $270 million and on 7 August 2019, Metrix changed its name to Intellihub.
As a consequence of the transactions we have summarised at [12], Intellihub acquired approximately 460,000 MTRX meters and associated infrastructure. As previously noted, approximately 45,000 of the MTRX meters acquired by Intellihub are used by Genesis customers. This number changes on an almost daily basis however as consumers switch between electricity retailers.
In August 2018, Genesis commenced a process to change the meters used by its gas consumers and those of its electricity consumers who use MTRX meters. Intellihub, which had yet to acquire Mercury’s metering business, submitted a proposal to supply new meters to replace the MTRX meters used by Genesis customers. Mercury and Vector also submitted proposals to Genesis.
By March 2019, Vector had emerged as the likely provider. Further negotiations continued however. It was at this stage that Genesis asked Vector to exclude from its proposal the 45,000 meters, which by then were owned by Intellihub. Vector agreed. Genesis and Intellihub then endeavoured to reach a separate agreement over Intellihub’s meters. No agreement was able to be reached.
After evaluating the competing proposals, Genesis finally awarded the contract to Vector on 25 October 2019 and notified Intellihub on 22 November 2019 that the project to decommission the Intellihub meters used by Genesis customers would take approximately 12 months to complete.
Intellihub was concerned that the project would adversely affect:
(a)its share of the metering market and therefore its revenue; and
(b)its mesh information system and therefore the efficacy of its other meters.
In addition to commencing its proceedings in the High Court, Intellihub lodged a complaint with the Authority on 30 March 2020 alleging that Genesis was acting unlawfully because, in the absence of an “arrangement” between Genesis and Intellihub, Genesis was breaching the Code by requiring Vector to displace Intellihub’s meters. On 30 June 2020, the Authority notified the parties that Intellihub had not established a prima facie case of a breach of the Code by Genesis because the Authority was satisfied there was an arrangement between Genesis and Intellihub. Intellihub is challenging the Authority’s decision in the High Court.
Applications to adduce further evidence
The parties consented to their respective applications for leave to adduce further evidence at the hearing. Accordingly, leave was granted.
The threshold for an interim injunction
Mr McBride, senior counsel for Intellihub, contends the High Court erred when applying the serious question to be tried limb of the test that governs applications for an interim injunction. While acknowledging this ground of appeal was “not the strongest” available to Intellihub, Mr McBride nevertheless argued:
(a)that all that was required of Intellihub was to demonstrate that its claim was “not frivolous or vexatious”; and
(b)that the Judge erred when she said “it is a matter of common sense that if there is no tenable resolution of the issues of fact and law on which the plaintiff may be able to succeed at trial (the Klissers test) there cannot be a serious question to be tried”.[4]
“Not frivolous or vexatious”
[4]High Court judgment, above n 1, at [15].
The phrase “not frivolous or vexatious” can be traced to the speech of Lord Diplock in American Cyanamid Co v Ethicon Ltd.[5] When rejecting epithets such as “a probability”, “a prima facie case” and “a strong prima facie case” as apt descriptors of the appropriate threshold test for an interim injunction, Lord Diplock said such concepts led to confusion and that:[6]
The court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried.
[5]American Cyanamid Co v Ethicon Ltd [1975] AC 396 (HL).
[6]At 407.
The threshold test for an interim injunction was first articulated in New Zealand in Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd, where Davison CJ said:[7]
The threshold question in each case must be whether the plaintiff has established that there is a serious question to be tried. In order to determine that question the Court must consider – first, what each of the parties claims the facts to be; second, what are the issues between the parties on these facts; third, what is the law applicable to those issues, and, fourth, is there a tenable resolution of the issues of fact and law on which the plaintiff may be able to succeed at the trial: see Shotover Gorge Jet Boats Ltd v Marine Enterprises Ltd [1984] 2 NZLR 154, 157. In American Cyanamid Lord Diplock said at pp 406-407:
“… where the legal rights of the parties depend upon facts that are in dispute between them, the evidence available to the court at the hearing of the application for an interlocutory injunction is incomplete. …
“It is no part of the court’s function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations.”
[7]Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129 (HC) [Klissers HC judgment] at 133.
The judgment of Davison CJ was upheld by this Court. Cooke J explained the general three-step approach that should be followed when considering applications for interim injunctions, when he said such applications should be determined by assessing:[8]
(a) whether there was a serious question to be tried;
(b)the balance of convenience; and
(c)where the overall justice lies.
[8]Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129 (CA) at 142.
Thus, for the past 35 years the general approach required of courts in New Zealand when considering applications for an interim injunction involves the application of the three-step analysis articulated by this Court in Klissers. There is no merit in engaging in microscopic dissections of any theoretical differences between a claim being “not frivolous or vexatious” and there being “a serious question to be tried”. In New Zealand the first limb of the test for an interim injunction requires the applicant to demonstrate that there is a serious question to be tried.
A tenable resolution of the issues
Mr McBride argued that the Judge erred by referring to the need to determine if Intellihub had demonstrated that a tenable resolution of the issues in its favour may lead to it succeeding at trial. He submitted that the “tenable resolution” test resulted in the Judge trespassing beyond appropriate boundaries when reaching definitive conclusions about the unlawful means cause of action in circumstances where it was inappropriate for her to do so.
The “tenable resolution of issues of fact and law” phrase can be found in the High Court judgment in Klissers and can be traced to the judgment of the Supreme Court of Victoria in Henry Roach (Petroleum) Pty Ltd v Credit House (Vic) Pty Ltd.[9] It is a concept that can also be found in some of the first New Zealand judgments that considered American Cyanamid such as Sutton v The House of Running Ltd[10] and Shotover Gorge Jet Boats Ltd v Marine Enterprises Ltd.[11]
[9]Klissers HC judgment, above n 7, at 133; and Henry Roach (Petroleum) Pty Ltd v Credit House (Vic) Pty Ltd [1976] VR 309.
[10]Sutton v The House of Running Ltd [1979] 2 NZLR 750 (SC).
[11]Shotover Gorge Jet Boats Ltd v Marine Enterprises Ltd [1984] 2 NZLR 154 (HC).
We are satisfied that all the High Court Judge was conveying when she referred to the “tenable resolution of the issues” concept was that, if Intellihub could not show a tenable basis upon which it might be able to succeed at trial, then it will have failed to demonstrate there is a serious question to be tried. The approach taken by the Judge therefore did not depart in any material respect from the correct application of the serious question to be tried test. Accordingly, there is no merit in the first ground of appeal.
Was there a serious question to be tried in relation to the first cause of action?
Modern manifestations of the unlawful means tort can be traced to Mogul Steamship Co Ltd v McGregor, Gow & Co[12] and Allen v Flood.[13]
[12]Mogul Steamship Co Ltd v McGregor, Gow & Co [1892] AC 25 (HL).
[13]Allen v Flood [1898] AC 1 (HL).
The core elements of the unlawful means tort were summarised by Lord Hoffmann in OBG Ltd v Allan.[14] This Court has accepted the law of New Zealand reflects the elements of the tort as described by Lord Hoffmann.[15]
[14]OBG Ltd v Allan [2007] UKHL 21, [2008] AC 1.
[15]Diver v Loktronic Industries Ltd [2012] NZCA 131, [2012] 2 NZLR 388 at [100]–[103]; and Greenbaum v Southern Cross Hospitals Ltd [2019] NZCA 438 at [21].
In explaining the narrow ambit of the tort Lord Hoffmann stressed:[16]
The common law has traditionally been reluctant to become involved in devising rules of fair competition … It has largely left such rules to be laid down by Parliament. In my opinion, the courts should be similarly cautious in extending a tort which was designed only to enforce basic standards of civilised behaviour in economic competition, between traders or between employers and labour. …
[16]OBG Ltd v Allan, above n 14, at [56].
The core elements of the unlawful means tort were said by Lord Hoffmann to be:[17]
(a)“wrongful interference with the actions of a third party in which the claimant has an economic interest”; and
(b)“an intention thereby to cause loss to the claimant”.
[17]At [47].
Baroness Hale also provided a succinct summary of the tort when she said it involved “the defendant … deliberately striking at his target through a third party. But the means used to strike must be unlawful …”.[18]
[18]At [306].
An application of the currently recognised core elements of the tort will require Intellihub to establish at trial that:
(a)Genesis intentionally committed acts which interfered with the freedom of Vector to deal with Intellihub.[19]
(b)Those acts were unlawful as against Vector and provide a cause of action by Vector against Genesis, save for the qualification that it is not necessary for Vector to have actually suffered loss.[20]
(c)Intellihub must have an “economic interest” in Vector.[21]
(d)Genesis must have intended to cause loss to Intellihub.[22]
(e)Intellihub must have suffered loss.
[19]At [51].
[20]At [49] and [51].
[21]At [47].
[22]At [62].
The case advanced by Intellihub is that:
(a)Genesis has unlawfully instructed Vector to decommission Intellihub’s meters. The unlawfulness is said to arise from Genesis’ failure to act in accordance with an arrangement under the Code.
(b)Genesis is intentionally harming Intellihub via Vector.
(c)If Intellihub meters are decommissioned it will lose any possibility of entering into an arrangement with Vector to enable Vector to use Intellihub meters.
The High Court was satisfied that, on the facts that were presented, Intellihub was unable to seriously argue that:
(a)Genesis had attempted to interfere with Vector and that Genesis’ alleged unlawful acts restrict the ability of Vector to deal with Intellihub if it wished to do so.
(b)Intellihub has an “economic interest” in Vector.
As a consequence, the Judge concluded “Intellihub’s reliance on the unlawful means tort is misconceived. The tort is not apt for the current circumstances”.[23]
[23]High Court judgment, above n 1, at [50].
Mr McBride argues that the Judge erred when she determined there was not a serious question to be tried in relation to the unlawful means cause of action. He submits:
(a)The law in relation to unlawful means is still evolving. It was therefore wrong for the Judge to attempt to define the untested perimeters of the tort in the context of an application for an interim injunction.
(b)Properly construed, the pleadings and evidence relied upon by Intellihub demonstrate the existence of a serious question to be tried in relation to the unlawful means cause of action.
Did the High Court err in its approach to the unlawful means cause of action?
Mr McBride maintains Lord Hoffmann’s criteria are “imprecise”[24] and the exact requirements of the tort are still to be tested in New Zealand. Issues identified by Mr McBride as requiring future resolution include:
(a)whether what constitutes an unlawful act has been cast too narrowly in Lord Hoffmann’s formulation;[25]
(b)whether it is necessary to show the defendant was “targeting” the applicants;
(c)what an “economic interest in the third party” actually means; and
(d)whether it is necessary to confine the tort to cases in which the defendant has interfered with the freedom of the third party to deal with the plaintiff.[26]
[24]Citing Hazel Carty “The Economic Torts in the 21st Century” (2008) 124 LQR 641 at 641.
[25]Referring to Lord Nicholls in OBG Ltd v Allan, above n 14, at [150].
[26]Citing AI Enterprises Ltd v Bram Enterprises Ltd 2014 SCC 12, [2014] 1 SCR 177 at [87].
We will refrain from engaging in a detailed analysis of the perimeters of the tort. We adopt this cautious approach because we are focussing upon whether the High Court erred when declining to issue an interim injunction. Trite though it may appear, we emphasise that courts considering applications for an interim injunction are normally required to apply the law as it currently stands and are confined to the pleadings and facts presented at the time the application is determined. Bearing in mind these fundamental qualifications, we shall briefly explain why we do not accept that Intellihub’s application for an interim injunction is the appropriate forum for testing and expanding upon the existing perimeters of the unlawful means tort and why Katz J was right when she ruled that Intellihub’s claim does not fit within the current criteria of the tort.
The ingredients of the unlawful means tort were cast narrowly in OBG Ltd v Allan because the House of Lords was satisfied that regulation of economic competition is best left to Parliament. The Authority, which is a statutory entity, provides mechanisms for resolving disputes between participants in the electricity market. The Supreme Court of Canada has also emphasised the narrow limits of the unlawful means tort.[27] We can find no authority to support the notion that unlawful means is a broad and evolving tort.
[27]At [29]–[35].
The suggestion the tort may not necessarily require a plaintiff to show the defendant was “targeting” the plaintiff is difficult to accept. One of the essential elements of the tort requires a plaintiff to demonstrate the defendant is intentionally causing harm to the plaintiff via an intermediary and is doing so by employing unlawful means. Baroness Hale’s succinct description of the tort in OBG Ltd v Allan encapsulates these basic requirements.
We accept the scope of the “economic interest in a third party” element of the tort may evolve on a case by case basis. Any modification to this aspect of the common law can only occur, however, after all material facts in each case are established. We are far from that point in this instance.
Mr McBride submitted that it is seriously arguable New Zealand’s approach to the tort may ultimately align with the decision of the Supreme Court of Canada in which it decided not to adopt the “freedom to deal with the third party” control mechanism found in Lord Hoffmann’s formulation of the tort.[28]
[28]At [87].
We think it is premature to say New Zealand law might evolve in the manner advocated by Mr McBride. Any change to the law as articulated by the House of Lords can only occur once all facts have been determined.
The High Court Judge applied the ingredients of the tort as articulated by the House of Lords in OBG Ltd v Allan to the pleaded facts when determining that the unlawful means cause of action was not seriously arguable. The methodology adopted by the Judge cannot be criticised.
Do the facts support Intellihub’s unlawful means cause of action?
In an effort to address some of the flaws in the case that were exposed in the High Court judgment, Intellihub now submits that:
(a)Genesis and Intellihub can be classified as competitors; and
(b)Genesis’ alleged unlawful conduct has the effect of preventing Vector from dealing with Intellihub.
The assertions that we have summarised at [46] are, however, not pleaded by Intellihub in its second amended statement of claim. Nor are those assertions supported by the evidence. To the contrary, the second amended statement of claim specifically alleges that Intellihub and Vector are competitors. Furthermore, Intellihub does not plead that Genesis has prevented Intellihub and Vector from entering into commercial arrangements. When pressed on this lacuna in his client’s case, Mr McBride suggested that at some stage in the future Vector may wish to enter into a commercial arrangement with Intellihub, which would involve Vector making use of Intellihub’s meters. There is, however, no evidence to support this theoretical possibility.
The High Court Judge correctly focused upon what Intellihub had pleaded and the supporting evidence. The Judge would have erred had she entertained Intellihub’s speculative idea that at some point in the future Vector may wish to enter into a commercial relationship with Intellihub over the use of Intellihub’s meters.
Nothing placed before us causes us to depart from the High Court Judge’s conclusions that Intellihub cannot seriously argue that:
(a)Genesis has attempted to interfere with Vector so as to restrict the ability of Vector to deal with Intellihub; and
(b)Intellihub has some form of economic interest in Vector.
The Judge did not find it necessary to comment upon another weakness in Intellihub’s case, namely that Intellihub faces considerable difficulty in showing that Genesis was trying to harm Intellihub. We will also refrain from making definitive findings on this element of the tort. Suffice to say:
(a)there is nothing to suggest that Genesis and Intellihub compete in the same market; and
(b)it is difficult to understand why Genesis would wish to harm Intellihub when it is in Genesis’ interests to have competition between Intellihub and Vector in relation to the supply of meters.
We accordingly conclude that there can be no criticism of the High Court Judge’s decision that these essential elements of the wrongful means tort are incapable of being seriously argued. The second ground of appeal also lacks merit.
Balance of convenience
The High Court found there was a serious question to be tried in relation to the breach of contract cause of action. Genesis and Vector have not challenged that aspect of the High Court’s decision.
The High Court held that the balance of convenience weighed against issuing an interim injunction. All parties accept this conclusion involved the exercise of judicial discretion and that to succeed in its third ground of appeal Intellihub must show the High Court erred in law, took account of an irrelevant matter, failed to take account of a relevant matter or was plainly wrong.[29]
[29]NZ Tax Refunds Ltd v Brooks Homes Ltd [2013] NZCA 90 at [13].
Mr McBride submitted the High Court erred in the following ways when concluding the balance of convenience weighed against issuing an interim injunction by:
(a)not giving precedence to preserving the status quo;
(b)misunderstanding the basis upon which Intellihub was arguing that damages would fail to provide an adequate remedy;
(c)overestimating the impact of an interim injunction upon Genesis and Vector;
(d)failing to give proper consideration to the intangible and reputational harm that Intellihub would suffer if its meters are decommissioned; and
(e)effectively endorsing Genesis’ breach of contract.
Status quo
The Judge accepted that preservation of the status quo was a factor that favoured the granting of an interim injunction.
The High Court did not err however, when determining that preserving the status quo was one of the factors that was required to be balanced with other considerations when deciding not to issue an interim injunction. The approach taken by the High Court was in accordance with this Court’s judgment in NZ Tax Refunds Ltd v Brooks Homes Ltd.[30]
[30]At [12].
Preservation of the status quo was not a requirement that needed to prevail over other considerations when assessing the balance of convenience.
Assessment of damages as an adequate remedy
Mr McBride submitted the High Court erred when it said:[31]
Intellihub does not allege that Genesis cannot displace the MTRX metering installations. Rather, it says it is entitled to more time before that occurs, or compensation in the absence of reasonable notice.
[31]High Court judgment, above n 1, at [88].
In this Court, Mr McBride submitted that Intellihub is alleging that Genesis cannot lawfully arrange for Vector to decommission Intellihub’s meters. That submission is a correct statement of Intellihub’s pleaded position in relation to the unlawful means cause of action.
In relation to the breach of contract cause of action, however, Intellihub pleads that Genesis is acting contrary to an implied term “that Genesis will not displace the MTRX Metering Installation, absent either reasonable notice or compensation”.
Thus, Intellihub’s position in relation to the breach of contract cause of action envisages that damages is an available remedy.
Impact of an injunction on Genesis and Vector
Intellihub takes issue with the weight that the Judge placed upon the impact of an interim injunction upon Genesis and Vector.
In fact, the High Court agreed with Intellihub that Genesis’ losses were capable of being compensated by an award of damages. It was the impact of an injunction upon Vector, an innocent third party, that the High Court said weighed against the issuing of an interim injunction.
We agree with the approach taken by the High Court. The evidence shows that Vector has incurred significant time and expense in preparing for the deployment of its meters and the corresponding decommissioning of Intellihub’s meters. Mr Hunter QC, senior counsel for Vector, properly emphasised that an injunction would seriously harm Vector’s relationship with its providers, its reputation in the marketplace and its ability to retain the staff it has employed for the project. While some of these potential losses may be addressed through an award of damages, the fact that Vector is an innocent third party, against whom no cause of action is alleged, is a factor that weighs against the granting of an interim injunction.
Potential impact on Intellihub’s business
The Judge found that the evidence for Intellihub about potential damage to the efficacy of its mesh network was “somewhat speculative” and “equivocal”.[32]
[32]High Court judgment, above n 1, at [76] and [88].
Mr McBride criticised the High Court’s assessment of Intellihub’s evidence. The reality is, however, that it is not possible to predict the degree to which Intellihub’s mesh network will be compromised through the decommissioning of the Intellihub meters used by Genesis customers. In addition, Genesis filed evidence from an independent expert that confirmed the decommissioning of Intellihub meters may result in localised problems but should not adversely affect the overall efficacy of its mesh network. We do not need to resolve the factual conflict raised by this aspect of the appeal. Suffice to record that the Judge evaluated the competing evidence and reached a conclusion that was reasonably available.
Endorsing a breach of contract
This is not a relevant consideration in the circumstances of this case because it presupposes Genesis has breached its contract with Intellihub. That is precisely the issue that needs to be determined when the High Court decides the second cause of action. It is not a factor that should be weighed when considering the balance of convenience at this interim stage.
We can see no basis upon which it can be properly asserted that the High Court erred in law, took account of an irrelevant matter, failed to take account of a relevant matter or was plainly wrong. There is, accordingly, also no merit in the third ground of appeal.
Overall justice
Before concluding that an interim injunction should not be issued, the Judge “stood back” and considered whether the overall interests of justice dictated a different result. She concluded they did not.
That assessment was a quintessential exercise of judicial discretion. The Judge exercised her overall assessment of the justice of the case after considering the matters that had been urged upon her concerning the balance of convenience. We are satisfied the Judge cannot be criticised for concluding the overall interests of justice weighed against an interim injunction being issued.
More than nine months have now passed since Intellihub was notified of Genesis’ intention to displace Intellihub’s meters. Intellihub has had a significant period of time in which to adjust to the new commercial relationship between Genesis and Vector. We also consider it significant that if Genesis has erred in a way that renders it liable to Intellihub it will be required to pay damages. There is no suggestion Genesis will be unable to meet any award made against it.
Result
The applications for leave to adduce further evidence are granted.
The appeal is dismissed.
The appellant must pay the first and second respondents costs for a standard appeal on a band A basis and usual disbursements. We certify for two counsel.
Solicitors:
Lee Salmon Long, Auckland for Appellant
Bell Gully, Auckland for First Respondent
Gilbert Walker, Auckland for Second Respondent
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