Ngati Tama Custodian Trustee Ltd v Phillips - [2019] NZCA 647

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA160/2018
[2019] NZCA 647

BETWEEN	NGATI TAMA CUSTODIAN TRUSTEE LIMITED Appellant
AND	DAVID WILLIAM PHILLIPS Respondent

Hearing:	26 November 2018
Court:	Williams, Peters and Gendall JJ
Counsel:	D M Hughes and L A Player-Bishop for Appellant P M Webb and A C McCormick for Respondent
Judgment:	13 December 2019 at 11 am

JUDGMENT OF THE COURT

A The appeal is allowed.

BSummary judgment is granted to the appellant in terms of its application.
CThe respondent must pay the appellant costs in accordance with cl 4.1 of the settlement deed.

____________________________________________________________________

REASONS OF THE COURT

(Given by Williams J)

Introduction

Between 2009 and 2013, the parties in this appeal were engaged in litigation over the failure of a software start-up in which they had each invested substantial capital. They settled the litigation in early 2013 and executed a deed of settlement on 5 March that year. The deed provided that the respondent, David Phillips, agreed to discontinue the proceedings and to bring no further claims against the appellant, Ngāti Tama Custodian Trustee Ltd (Ngāti Tama), in relation to “the Dispute”.
Three years later in May and October 2016, Mr Phillips sent notices of “breach and infringement of copyright” to Ngāti Tama. They related to certain software and intellectual property rights in relation to the start-up he claimed had been acquired by various companies now controlled by him. Ngāti Tama responded by bringing summary judgment proceedings against Mr Phillips. Ngāti Tama claimed these notices breached the deed of settlement.
In the High Court, Courtney J dismissed the application for summary judgment.[1] Ngāti Tama now appeals. The sole issue in the appeal is whether the claims made by Mr Phillips in his notices are covered by the deed of settlement.

The facts

[1]Ngāti Tama Custodian Trustee Ltd v Phillips [2018] NZHC 304 [HC judgment].

Though the issue before us is narrow in the sense that it only relates to the construction of the deed of settlement, it is necessary to summarise the lengthy factual narrative that is the setting for the dispute and the proceedings referred to in the deed. That background assists in establishing what the deed purported to settle.

MyVirtualHome start-up

MyVirtualHome (MVH) is a software product. It allows users to create and manipulate on-screen a 3D image of any proposed or existing house design. It also integrates that capability with information about relevant products, services and prices for the construction or renovation projects reflected virtually on-screen. MVH was created by an Australian company called Creative Designer Software Pty Ltd (CDS). The software was built to run on the top of generic game development software called Auran Jet. Auran Jet was developed by the Auran group of companies[2] and licenced to CDS by Auran Technologies Pty Ltd in 2002.
[2]Auran Holdings Ltd, Auran Technologies Pty Ltd and Auran Developments Pty Ltd.
CDS was wholly owned by MyVirtualHome International Ltd (MVHI). CDS granted MVHI an exclusive licence…

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: [2019] NZCA 647
Decision Date: 13 December 2019 at 11 am

CaseChat Overview and Summary

In this case, the Court of Appeal of New Zealand considered an appeal by Ngati Tama Custodian Trustee Ltd (Ngati Tama) against a decision of the High Court to dismiss their application for summary judgment against David William Phillips (Phillips). The primary issue in the appeal was whether the claims made by Phillips in his notices of "breach and infringement of copyright" were covered by the deed of settlement executed by the parties in March 2013. The Court of Appeal found that the appeal should be allowed, and summary judgment granted to Ngati Tama. The Court held that Phillips' claims regarding the business systems IP were indeed covered by the settlement deed. The Court emphasised the importance of considering the context and background of the dispute when interpreting the settlement deed. The Court found that the ownership of the business systems IP was in dispute during the consolidated proceedings and was a matter that was still live during settlement negotiations. Therefore, the settlement deed applied to the present claim. The Court held that Phillips' claims, whether made directly or through a company he controlled, were barred by the terms of the settlement deed.

Orders