Powerhouse Ventures Limited v Martin - [2019] NZHC 686

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-000083

[2019] NZHC 686

BETWEEN
POWERHOUSE VENTURES LIMITED

First Applicant

AND

SOLAR BRIGHT LIMITED

Second Applicant

AND

PATRICK MARTIN

First Respondent

AND

NICOLA JANE MARTIN

Second Respondent

Hearing: 19 February 2019

Appearances:

G E Slevin for Applicants P J Shamy for Respondents

Judgment:

3 April 2019

JUDGMENT OF DUNNINGHAM J

[1] On 15 February 2018, Powerhouse Ventures Ltd (PVL) applied for an interim injunction, without notice, on behalf of itself and Solar Bright Ltd (SBL). The applicants claimed there had been a breach by the respondents of a Shareholders and Subscription Agreement (SSA) by transferring intellectual property that was owned by SBL to the first respondent. The interim injunction was sought to restrain the respondents from disposing of that property until the claim under the SSA was resolved through arbitration. That interim injunction was granted on 15 February 2018 by Davidson J.

POWERHOUSE VENTURES LIMITED v MARTIN [2019] NZHC 686 [3 April 2019]

[2] The parties did not, however, go to arbitration. Instead, SBL has pursued the return of its intellectual property in related proceedings brought under s 141 Companies Act 1993, and in the Employment Relations Authority, but not in reliance on its rights under the SSA. Furthermore, PVL now applies to discontinue as an applicant in these proceedings.

[3] The respondents have applied for the interim injunction to be rescinded, alleging false statements and non-disclosure by the applicants. They also say that it should be rescinded because no party has pursued their rights to have their dispute under the SSA resolved by arbitration, despite those disputes forming the basis for the interim injunction being granted.

[4] The respondents do not oppose discontinuance by PVL, but take issue with the conditions on which PVL proposes to discontinue, saying it should also include the discharge of the interim injunction orders.

[5]At the hearing the essential issues for me to determine were:

(a)Should the interim injunction be rescinded for any of the reasons raised by the respondents, including because the applicants no longer intend to proceed to arbitration under the SSA?

(b)If an injunction remains in effect should the first applicant be granted leave to withdraw on the conditions set out in its applications, or on any other conditions?

[6] However, in the period between these applications being heard, but before this judgment issued, SBL’s originating application under s 141 of the Companies Act 1993 (the Companies Act proceedings) was granted leave to proceed by way of an originating application,1 and was then determined in SBL’s favour.2 This has obvious consequences for the need to continue the interim injunction orders, as Osborne J determined that the transaction assigning the intellectual property to the

1 Solar Bright Ltd v Martin [2019] NZHC 300.
2 Solar Bright Ltd v Martin [2019] NZHC 447.

first respondent, Mr Martin, was validly avoided by SBL and he made orders requiring the property to be transferred back to…

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] NZHC 686
Decision Date: 3 April 2019

CaseChat Overview and Summary

Powerhouse Ventures Limited (PVL) and Solar Bright Limited (SBL) sought an interim injunction against Patrick Martin and Nicola Jane Martin, restraining them from disposing of intellectual property that was owned by SBL. PVL claimed that the respondents had breached a Shareholders and Subscription Agreement by transferring the intellectual property to the first respondent. The interim injunction was granted on 15 February 2018 by Davidson J. The respondents applied to rescind the interim injunction, alleging false statements and non-disclosure by the applicants, and arguing that it should be rescinded because no party had pursued their rights to have their dispute under the Shareholders and Subscription Agreement resolved by arbitration, despite those disputes forming the basis for the interim injunction being granted. PVL also applied to discontinue as an applicant in these proceedings. The essential issues for the court to determine were whether the interim injunction should be rescinded for any of the reasons raised by the respondents, and if an injunction remained in effect, whether the first applicant should be granted leave to withdraw on the conditions set out in its applications, or on any other conditions. The court found that the interim injunction was discharged because the orders of Osborne J had overtaken the need for the interim injunction orders to continue. The application for leave to discontinue was moot as a consequence of the court's decision to discharge the interim injunction. The court reserved costs on all issues in these proceedings, to be determined on the papers unless the court heard from counsel.

The interim injunction is discharged. Costs on all issues in these proceedings are reserved. If costs cannot be agreed, the parties seeking costs should file any memoranda within 20 working days. The parties opposing such an award should file a response within a further 10 working days. Costs will be determined on the papers unless the court heard from counsel.

Orders