Moda Systems NZ Limited v McLaren Smart Processing Limited - [2022] NZHC 96

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV-2021-441-96

[2022] NZHC 96

UNDER
the Copyright Act 1994

the Fair Trading Act 1986
the Trans-Tasman Proceedings Act 2010

BETWEEN

MODA SYSTEMS NZ LIMITED

First Plaintiff

MODA IP LIMITED

Second Plaintiff

R G NEWCOMBE

Third Plaintiff

AND

MCLAREN SMART PROCESSING LIMITED

First Defendant

A R MCLAREN

Second Defendant

MULTIVAC AUSTRALIA PTY LTD

Third Defendant

Hearing: 3 February 2022

Appearances:

E C Gray and J E M Lethbridge for the Plaintiffs

K M Quinn and S A Rankin for the First and Second Defendants

Judgment:

4 February 2022

JUDGMENT OF COOKE J

(Interim injunction)

[1] By application dated 16 December 2021 the plaintiffs seek an interim injunction preventing the first and second defendants from producing and distributing certain rotary vacuum packaging machines together with associated orders.
MODA SYSTEMS NZ LIMITED v MCLAREN SMART PROCESSING LIMITED [2022] NZHC 96
[4 February 2022]

[2] The application was first called before me as Duty Judge at a telephone conference on 17 December 2021. Counsel for the first and second defendants, and for the third defendant were able to attend at this conference. I timetabled the defendants’ opposition to the application for an injunction and directed it be called in the Judge’s Chambers List on 25 January 2022.

[3] At the call in the Judge’s Chambers List the third defendant did not oppose orders being made against it. This was without admission of liability, or it accepting the Court jurisdiction, and it also opposed any orders as to costs. I made orders against the third defendant on that basis, and reserved the question of costs. I also altered the timetable on the application of the first and second defendants.

[4] The application has now been argued before me. It is supported by an affidavit of the third plaintiff, who is also the sole director of the first and second plaintiffs (together “Moda”). The opposition of the first and second defendants (together “McLaren”) is supported by an affidavit of the second defendant who is the managing director of the first defendant, and from Jed Graham a mechanical design engineer employed by the first defendant. Affidavits in reply were also filed by the third plaintiff and Alexsandr Sornikov, a design director employed by the first plaintiff.

Background

[5] Both Moda and McLaren are involved in producing and selling vacuum packaging machines. These machines used at factories, particularly meat processing plants, to vacuum pack produce for distribution. The produce proceeds along the equivalent of a conveyor belt with the vacuuming and sealing process occurring within the machine with the assistance of an operator. They are referred to as rotary vacuum machines as the product goes around in a circle within the machine during this packaging process. Such machines are important as vacuum packing significantly adds to the product’s shelf life. They are utilised in virtually all meat processing facilities globally and there are other forms of produce where such machines can…

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 96
Decision Date: 4 February 2022

CaseChat Overview and Summary

In the case of Moda Systems NZ Limited v McLaren Smart Processing Limited, the plaintiffs, Moda Systems NZ Limited, Moda IP Limited, and R G Newcombe, sought an interim injunction to prevent the defendants, McLaren Smart Processing Limited and A R McLaren, from producing and distributing certain rotary vacuum packaging machines, as well as associated orders. The third defendant, Multivac Australia Pty Ltd, did not oppose orders being made against it but opposed any orders as to costs. The primary legal issues were whether there was a serious question to be tried, and if so, whether the balance of convenience and overall justice favoured granting the interim injunction. The court found that there was a serious question to be tried as Moda had established an arguable case that certain elements of McLaren's new machine incorporated improvements made during their joint relationship, which were part of Moda's intellectual property rights. However, the court decided not to grant the interim injunction based on the balance of convenience and overall justice. The court found that McLaren would suffer significant financial loss if the injunction was granted, and that Moda would likely be made whole if it succeeded at trial. The court also noted that Moda had protection from the orders made against the third defendant and the undertaking offered by McLaren. Therefore, the application for an interim injunction was dismissed, and the question of costs was reserved. The court directed a further telephone conference to schedule the progress of the proceeding and the timing of the reporting referred to in McLaren's undertaking.

Orders