IRS International Pty Limited v ContainerCo (NZL) Limited

[2025] NZHC 685

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-1074

[2025] NZHC 685

UNDER

Commerce Act 1986 and Fair Trading Act 1986

BETWEEN

IRS INTERNATIONAL PTY LIMITED

Plaintiff

AND

CONTAINERCO (NZL) LIMITED

First Defendant

QUBE LOGISTICS LIMITED
Second Defendant

METROBOX LIMITED

Third Defendant

SPECIALISED CONTAINER SERVICES (TAURANGA) LIMITED
Fourth Defendant

SPECIALISED CONTAINER SERVICES (CHRISTCHURCH) LIMITED

Fifth Defendant

Hearing:

On the papers

Counsel:

J D Every-Palmer KC, J Edwards and E B Boyle for Plaintiff

D J Cooper KC, S M Singh and D A Campbell for First Defendant R S Reed KC and S C Keene for Second to Fifth Defendants

Judgment:

28 March 2025

JUDGMENT OF O’GORMAN J

[Application by first defendant for leave to appeal]

This judgment was delivered by me on 28 March 2025 at 12 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

…………………………………

IRS INTERNATIONAL PTY LTD v CONTAINERCO (NZL) LTD [2025] NZHC 685 [28 March 2025]

[1]    By a judgment dated 5 December 2024, I granted an interim injunction in favour of the plaintiff (IRS) against the first defendant (ContainerCo) and the second to fifth defendants (together, QUBE).1 I also required the plaintiff to provide security for its undertaking as to damages.

[2]    Subject to the plaintiff’s undertaking as to damages and security, the interim injunction prevents ContainerCo from taking any steps to enforce payment of any increases in its Technician Access Licence (TAL) fee beyond the levels charged in 2023. The orders also prevent ContainerCo from denying access to its depots for the purposes of servicing customers’ reefers, if the reason is solely non-payment of any such increase in TAL fees.

[3]    Equivalent orders were made against the QUBE defendants, but they have not sought leave to appeal.

[4]    ContainerCo seeks leave to appeal on the basis of errors in law and fact, and it says the interests of justice are best served by granting leave to appeal. IRS opposes the application for leave to appeal. Both parties have filed submissions in support of the application and in opposition respectively, for determination on the papers.

Legal principles

[5]    The first defendant’s application for leave to appeal is governed by s 56(3) of the Senior Courts Act 2016, which provides:

56       Jurisdiction

(1)The Court of Appeal may hear and determine appeals —

(a)from a judgment, decree, or order of the High Court:

…

(2)Subsection (1) is subject to subsections (3) and (5) and to rules made under section 148.

1      IRS International Pty Ltd v ContainerCo (NZL) Ltd [2024] NZHC 3671 (Judgment).

(3)No appeal, except an appeal under subsection (4), lies from any order or decision of the High Court made on an interlocutory application in respect of any civil proceeding unless leave to appeal to the Court of Appeal is given by  the  High  Court  on  application  made  within 20 working days after the date of that order or decision or within any further time that the High Court may allow.

…

(6)If leave to appeal under subsection (3) or (5) is refused in respect of   an order or a decision of the High Court made on an interlocutory application, nothing in this section prevents any point raised in the application for leave to appeal from being raised in an appeal against the substantive High Court decision.

[6]    The approach for determining an application for leave to appeal an interlocutory decision was summarised recently in Bank of New Zealand v Christian Church Community Trust:2

There is a high threshold for leave to appeal an interlocutory order for a variety of reasons. Leave to appeal should only be granted where the significance or implications of an arguable error of fact or law, for the particular case or the applicant or as a matter of precedent, warrant the further delay which the appeal would involve. The overarching test is the interests of justice.

[7]    When the decision sought to be appealed against is the exercise of discretion, the appellant must ultimately establish that the Judge:3

(a)acted based on a wrong principle;

(b)failed to take into account a relevant matter or took into account an irrelevant matter; or

(c)was plainly wrong.

[8]    “Plainly wrong” has been described as plainly wrong on the facts, or one that no reasonable judge could have reached on the facts after correctly directing himself or herself in law, or outside the permissible boundaries of the exercise of the

2      Bank of New Zealand v Christian Church Community Trust [2024] NZCA 246 at [9]. See also

Greendrake v District Court of New Zealand [2020] NZCA 122 at [6]–[7].

3      Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 at [32]; NZ Tax Refunds Ltd v Brooks Homes Ltd [2013] NZCA 90, (2013) 13 TCLR 531 at [12]–[13]; and NZ Fintech Ltd v Credit Corp Financial Solutions Pty Ltd [2019] NZHC 1210 at [29].

discretion.4 It is insufficient to persuade the appeal court that it might have exercised the discretion in a different way.5

[9]    I am conscious that I am being asked to review those issues in respect of my own decision. That process is standard because of the efficiency of achieving a reasoned analysis of the leave to appeal criteria, with the safeguard that (if declined by the High Court) leave may be sought from the Court of Appeal.6

Grounds for leave application

[10]   ContainerCo submits that it is in the interests of justice in this case to grant leave to appeal based on:

(a)arguable errors of law;

(b)arguable errors of fact;

(c)delay not being a relevant factor; and

(d)the importance of the issues at stake and the interests of justice.

Analysis

Arguable errors in law

[11]ContainerCo alleges that the following amount to errors in law:

(a)An interim injunction is a remedy only available in limited circumstances where there is demonstrable need. It is a remedy granted before there has been any finding on the merits of the underlying claim and therefore should not be granted as a matter of course or as a matter of preference.

4      Williams v Department of Internal Affairs [2012] NZHC 418 at [35], referencing Society for the Promotion of Community Standards Inc v Waverley International (1988) Ltd [1993] 2 NZLR 709 (HC) at 725; and Solicitor-General v Kelly CA215/06, 7 December 2006 at [19].

5      Electricity Corp of New Zealand Ltd v New Zealand Electricity Exchange Ltd [2005] 3 NZLR 634 at [65].

6      Senior Courts Act 2016, s 56(5).

(b)IRS does not need, and is therefore not entitled to, an interim injunction.

(c)IRS can provide security presently for the amounts in issue and can therefore pay those amounts over time.

(d)The judgment erred in indulging IRS’s preference and that of its parent and funder, Daikin, for an interim injunction. A preference is not a sufficient ground for the grant of interim injunction.

(e)The judgment erred by neglecting to consider whether IRS had established that it needs an interim injunction. The analysis in the judgment moves directly from a finding that there was a serious issue to be tried, to assessing the balance of convenience and overall justice, without regard to whether any rational need existed.

(f)In the alternative, the judgment erred when considering the balance of convenience and the interests of justice, by failing to take into account that IRS has not proved that it has any rational need for an interim injunction.

[12]   In making the above arguments, ContainerCo submits that, as a matter of law, an interim injunction may only be granted when there is a “demonstrable need”.    For authority, it relies on a reference in McGechan on Procedure to the way in which the parties’ respective needs for protection can form part of the balance of convenience analysis,7 and the following paragraph from a High Court decision in support of that argument:8

[43]    However, even if breach of fiduciary duty can be made out at trial, it is necessary to identify what the substantive relief might be in order to consider the question of interim relief, not least because of the issue of Parliamentary privilege. The serious question to be tried needs to extend to the claimed substantive relief underpinning the need for an interim injunction.

7      Jessica Gorman and others McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR7.53.02].

8      Maniapoto v Maniapoto Māori Trust Board [2022] NZHC 455 (emphasis added).

[13]   I accept the plaintiff’s submissions that the reference in the above passage is about the “serious question to be tried” requirement, emphasising that this must extend to the substantive relief sought. It does not change the well-established requirements for an interim injunction by imposing a separate legal threshold requirement of “demonstrable need”.9 Such considerations may nevertheless arise under the broader discretionary questions of balance of convenience and overall interests of justice,10 as they did in this case.

[14]   I do not consider there is any reasonably arguable doubt about the legal principles for interim injunctions, with those tests explained and applied by the  Court of Appeal on a regular basis.

[15]   Beyond the above question about the correct legal framework, ContainerCo submits that it amounts to an error of law not to “sufficiently account for”:

(a)the precedent effect of allowing IRS and its parent and funder, Daikin, to “game the interim position by making distinctions without a difference”;11

(b)the effect of granting an interim injunction — it gives IRS an illegitimate competitive advantage by allowing it to undercut ContainerCo’s prices by deferring full payment of the TAL; and

(c)the nature of the interim injunction — requiring ContainerCo to provide services (which require continual investment and involve the incurring of risk) without proper payment for them until a future uncertain date.

[16]Questions of weight do not amount to errors of law.12

9      This differs from the statutory requirement in s 15 of the Judicial Review Procedure Act 2016 that an interim order in judicial review proceedings must be “necessary … to preserve the position of the applicant” before any of the discretionary factors may be taken into account: see Gorman and others, above n 7, at [JR15.04].

10     NZ Fintech Ltd v Credit Corp Financial Solutions Pty Ltd, above n 3, at [29]–[30].

11     Judgment, above n 1, at [41(e)].

12     NZ Fintech Ltd v Credit Corp Financial Solutions Pty Ltd, above n 3, at [30].

[17]   Furthermore, my judgment reinforced that parties “should not be permitted to game the interim position by making distinctions without a difference”,13 but went on to explain my assessment of the evidence why there were real practical and commercial reasons for the position taken by the parent company,14 and the consequent cash flow risks and pressures that might cause IRS to exit the market prior to trial absent injunction orders (to the detriment of its employees and the shipping lines).15 Those assessments were about the applicant’s need for protection on the facts, and were not questions of law.

[18]   I do not accept that the effect of the interim injunction is arguably to confer an “illegitimate competitive advantage” by allowing IRS to undercut ContainerCo’s prices by deferring full payment. As referred to in the judgment, if successful, then ContainerCo will be entitled to enforce payment of the full invoiced amounts, plus interest for delay. It is protected by the undertaking and security for those sums. As is appropriate in a competitive market, it is the plaintiff that takes the risk in setting its own prices for customers in the interim. ContainerCo’s arguments seem focused on the intended effect of its pricing decision on IRS as a competitor (the very subject matter of the competition law claims), rather than the commercial impact of a delay in receiving the disputed invoice payments (the subject matter of the interim injunction application). In any event, I do not see any reasonable argument that this amounts to an error of law.

[19]   The same applies for ContainerCo’s submissions about the nature of the interim injunction. The orders do not compel the provision of services in any wider sense than addressing the timing of payment for the disputed part of the invoices, with security protecting the time value implications of delay.

[20]   For the above reasons, I do not accept that ContainerCo has identified any arguable errors of law.

13     Judgment, above n 1, at [41(e)].

14     At [41(f)].

15 At [42].

Arguable errors of fact

[21]   The following errors of fact are alleged in sub-para 4(i) of the application for leave:

(a)proceeding on the basis that IRS was reliant on Daikin in order to fund its undertaking as to damages or continue offering its services without an interim injunction (IRS’s evidence was that it could pay any damages itself or through parent company support);

(b)accepting that “if the interim injunction is not granted, then IRS’s pricing will no longer be competitive as a PTI Service provider”;16

(c)finding that any decision to exit the market by IRS as a result of an interim injunction not being granted would have implications for the strength of its undertaking as to damages;17

(d)finding that refusing to grant an interim injunction would prejudice ongoing access to after-hours repair services;18 and

(e)finding, without evidence as to the terms of the contracts between IRS and the shipping lines, that shipping lines could reasonably expect that the position prior to the 2024 changes should continue in the interim.19

[22]In respect of the above issues:

(a)The allegation in [21(a)] above mischaracterises my analysis.

(i)I accepted that the plaintiff would be able to meet any damages if the claim was unsuccessful (particularly with the benefit of the security that has been offered by its parent for the outcome

16     At [41(d)].

17     At [41(e)].

18     At [41(i)].

19     At [41(i)].

of the litigation).20 I did not make any determination that IRS would have been unable to do so without security being paid by its parent.

(ii)However, I accepted that its assessment of interim trading risks and cash flow would be different if the injunction were not ordered.21 In particular, IRS took the position that it may need to exit the market in those circumstances, and such a step would have corresponding implications for IRS’s income.22

(iii)Accordingly, the fact that IRS had offered an undertaking as to damages and considered itself able to meet those liabilities on its own (if the injunction were granted) did not necessarily contradict its assertion that it may need to exit the market without an interim injunction.

(b)I did not make any finding  that IRS  would be uncompetitive as a  PTI service provider. In [39(b)] and [41(d)] of the Judgment, I did acknowledge the submissions on those issues made by IRS. My comment was that the risk of the substantive outcome does not change depending on the interim orders.23 However, I accepted there were interim trading risks and cash flow implications (as referred to above). This included the evidence of Peter Labbad, Managing Director of IRS, that one customer had refused to continue paying the levies. My finding was not that exit by IRS was inevitable, but rather that not granting the orders “would lead to cashflow risks and pressures that might cause the plaintiff to exit”, which I consider was an available conclusion on the evidence.24

20     At [41(g)].

21     At [41(g)].

22     At [41(d)].

23     At [41(e)].

24 At [42].

(c)My wording at [41(e)] of the Judgment in reference to the undertaking as to damages was intended to be in the sense referred to in [22(a)(iii)] above. ContainerCo argued that IRS’s undertaking implied it was sufficiently profitable to continue providing the PTI services and fund the increased levy amount pending trial, whereas I did not accept that such a conclusion necessarily followed. I accepted that IRS might (for its own reasons) make different assessments of interim trading risks and cash flow under the different scenarios.

(d)The uncontradicted evidence of Mr Labbad was that “IRS is the only business in the New Zealand market offering after hours or emergency reefer services nationally”. In a situation of IRS potentially exiting the market and consequent employment disruptions, I considered it appropriate to consider the potential impact on non-parties, particularly any disruptions to existing arrangements (the status quo).25 I do not agree that this amounts to an error of fact given the evidence.

(e)My consideration of the impact on shipping lines was not dependent on the contractual terms as between the shipping lines and ContainerCo. The concern was about the status quo and their ongoing access to existing after-hours repair services and their choice of PTI service provider at agreed standing rates (whether their expectations or assumptions were contractually enforceable or not). This was vulnerable to being impacted if failing to grant the interim injunction risked causing IRS to exit the market prior to trial.

[23]   In any event, the above factors were only part of the overall assessment of the balance of convenience and the interests of justice. I am unable to identify any arguable error such that the exercise of discretion was plainly wrong.

25     Judgment, above n 1, at [41(i)].

Delay

[24]I accept that delay is not particularly relevant in this case.

[25]   Granting leave to appeal would not delay or disrupt the substantive determination of the proceeding. The trial of the substantive case is fixed for February 2027, and the parties can continue preparing for that, whether or not this interim injunction appeal proceeds.

Importance and interests of justice

[26]   Overall, standing back and assessing the matter in a pragmatic and realistic way, I do not consider the interests of justice are served by granting leave.

[27]   ContainerCo does not contend that there was any arguable error in relation to serious question. The test for granting an interim injunction is well-established and does not require clarification. ContainerCo is effectively seeking a reassessment of balance of convenience issues on the same evidence, without any implications of public importance.

[28]   The interim issue is whether the disputed invoice amounts should be paid in full but subject to refund if the plaintiff is successful, or held back but the corresponding amount secured in an interest bearing account. Under the interim orders that I made, ContainerCo is protected by security (including for the time value of delayed payment), and ContainerCo has not asserted any cashflow dependency on those sums.

[29]   My assessment is that the appeal does not raise any issue of public importance, and the implications for this particular case do not warrant the costs and time that the appeal would involve for the parties, or as a use of Court of Appeal resources.

Result

[30]The application for leave to appeal is dismissed.

[31]   I consider that costs should follow the event. If costs cannot be agreed, counsel may address the issue in brief memoranda.

O’Gorman J

Solicitors/Counsel:

Russell McVeagh, Auckland

J D Every-Palmer KC, Wellington Dentons, Auckland

D J Cooper KC, Auckland Webb Henderson, Auckland R S Reed KC, Auckland