Moda Systems America LLC v Guardian Bandsaws Limited

[2020] NZHC 1476

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2020-404-000950

[2020] NZHC 1476

BETWEEN

MODA SYSTEMS AMERICA LLC

Plaintiff

AND

GUARDIAN BANDSAWS LIMITED

Defendant

Hearing:	On the papers
Counsel:	J E M Lethbridge for the Plaintiff
Judgment:	26 June 2020

JUDGMENT OF VAN BOHEMEN J

This judgment was delivered by me on 26 June 2020 at 6.45pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors/Counsel:
Martelli McKegg, Auckland

MODA SYSTEMS AMERICA LLC v GUARDIAN BANDSAWS LIMITED [2020] NZHC 1476 [26 June 2020]

[1]                  This application for an interim injunction by Moda Systems America LLC, a company registered in the United States of America, was filed on a without notice basis late on the afternoon of Friday, 26 June 2020.

[2]                  The application seeks, pending the trial and determination of the claim filed by Moda Systems against the defendants, Guardian Bandsaws Ltd, to restrain Guardian Bandsaws from communicating with or selling certain products to customers of Moda Systems in the United States, Canada and Mexico, from establishing any entity that would undertake those activities, and from using “Confidential Information” as defined in a Distributor Agreement dated 28 June 2018 to which Moda Systems and Guardian Bandsaws are parties, other than in accordance with the terms of the Agreement.

[3]                  The reason for the urgency is that there is a dispute between the parties as to whether:

(a)Moda Systems has a right of renewal of the Distributor Agreement and exclusive rights of distribution thereunder as from 28 June 2020, as Moda Systems contends; or

(b)the Distributor Agreement expires tomorrow, 27 June 2020, so that Guardian Bandsaws is entitled to sell directly to Moda Systems’ current customers and any new customers, as Guardian Bandsaws apparently contends.

[4]                  An unsigned affidavit by Richard Newcombe, the sole director of Moda Systems, has been filed in support of the application, together with a bundle of documents referred to in the affidavit, and an undertaking as to damages signed by Mr Newcombe. Moda Systems has also filed its statement of claim, together with a memorandum of counsel, Ms Lethbridge.

[5]                  It is apparent from correspondence included in the bundle of documents that Moda Systems’ solicitors have been communicating with solicitors for Guardian Bandsaws and that Guardian Bandsaws’ solicitors were aware that the application was

likely to be filed. They asked to be given immediate notice and served on a Pickwick basis.

[6]                  Moda Systems seeks the injunction on an interim interim basis to preserve the position until Monday, 29 June 2020. In her memorandum, Ms Lethbridge says further documents will need to be filed on 29 June 2020 and before any decision on whether to continue any interim interm orders is made. She says any orders made will be served on the solicitors for Guardian Bandsaws, together with the application and the statement of claim. She also says the final application will be filed on 29 June 2020 and served on a Pickwick basis to be dealt with in the usual way.

[7]                  From the documents that have been filed, I accept there is a serious issue to be tried. I am less certain as to whether damages would not be an adequate remedy since the issue in dispute appears to be about commercial opportunities.

[8]                  However, since the dispute over the renewal or expiry of the Distributor Agreement becomes acute over the weekend, I consider that the balance of convenience lies in preserving the status quo pending a further decision on Monday, 29 June 2020.

[9]                  Accordingly, I order that, until 5 pm on Monday, 29 June 2020 or any earlier order of the Court, Guardian Bandsaws Ltd is restrained from:

(a)Communicating directly with, or selling any “Products” or any products which compete with the Products, to any:

(i)“Customers” in the “Territory”; or

(ii)any of the entities listed in the Schedule to this decision, or any person which is a related entity to any entity referred to in (i) or

(ii) above;

(b)Establishing or in any way operating any subsidiary or related entity in the Territory which would do any of the things referred to paragraph (a) above;

(c)Using in any way the “Confidential Information”, as defined in the Distributor Agreement to which Moda Systems and Guardian Bandsaws are parties, in any way other than in accordance with the terms of the Distributor Agreement.

The capitalised terms referred to in this order are defined in the schedule to this decision.

[10]              I direct that this decision be served on the solicitors for Guardian Bandsaws and that the matter be placed in the Duty List for Monday, 29 June 2020.

G J van Bohemen J

Schedule