Redcoats Limited v Day
[2023] NZHC 1502
•16 June 2023
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2023-485-000188
[2023] NZHC 1502
BETWEEN REDCOATS LIMITED
Plaintiff
AND
CHRISTOPHER DAY
First Defendant
AND
ANDCO REALTY LIMITED
Second Defendant
Hearing: 24 May 2023 Appearances:
D G Dewar and J Pietras for Plaintiff S Iorns and J Sylvester for Defendants
Judgment:
16 June 2023
JUDGMENT OF CULL J
[1] Redcoats Limited (Redcoats) obtained an injunction restraining Mr Day from undertaking any private business or employment that competes with Redcoats within a 15 kilometre radius of Redcoats’ business premises for a period of three months.1 Andco Realty Ltd (Andco), Mr Day’s intended employer, was also restrained from employing Mr Day in any capacity to undertake work that competes with Redcoats with the same restrictions as imposed on Mr Day.
[2] Mr Day and Andco (the defendants) apply to set aside the without notice restraining orders.
1 Redcoats Limited v Day [2023] NZHC 1037.
Redcoats Ltd v Day & Ando Realty Ltd [2023] NZHC 1502 [16 June 2023]
Background
[3] The background facts are summarised in the judgment of Gendall J delivered on 3 May 2023 and I adopt them for the purposes of this judgment.
[2] Redcoats operates a real estate agency in Wellington, Lower Hutt and elsewhere, trading as The Professionals Redcoats. Andco in turn operates a real estate agency in the same general areas under the name Lowe & Co.
[3] On 19 September 2014, Redcoats, as real estate agents and Mr Day as the salesperson, entered into a contract for services for Mr Day to act as a real estate salesperson for Redcoats (the Contract). The Contract contained a restraint of trade clause against Mr Day requiring him not to compete against Redcoats in the event of him leaving them as a salesperson, although that restraint was short, only some three months and it was limited to a 15 kilometre radius from Redcoats’ place of business.
[4] Evidence before the Court in support of this application from John Stewart Ross, a director of Redcoats, and Charles Lindsay, manager of the Redcoats Wellington office, indicates that Mr Day was Redcoats’ leading Central Wellington sales agent up to 11 April 2023 when he announced that he was resigning. They say that for the nine year period from the commencement of his Contract, Mr Day benefitted from considerable mentoring, training, and professional development as he came to the Redcoats team in 2014 with limited real estate experience.
[5] When Mr Day announced on 11 April 2023 that he was resigning from Redcoats, he gave 20 days’ notice with a stated termination date he calculated of 30 April 2023.
[6] Of particular interest here is clause 2.2 of the Contract. This requires that, for termination in circumstances such as the present, 20 working days’ notice in writing from the salesperson of his intention to terminate is required. This obligation, Redcoats say, was not in any way waived, and the contractual notice period in any event will now only expire on or about 10 May 2023.
[7] After receiving his 11 April 2023 notice of resignation, Redcoats say they learned that Mr Day was to go and work for Andco in its competing Lowe & Co real estate business, at which point Redcoats reminded Mr Day he was required not to compete for a three month period.
[4] The defendants have filed affidavit/affirmation evidence since Gendall J made the restraining orders. The relevant facts are as follows.
[5] Mr Day has been a real estate salesperson, independently contracting to Redcoats since 2014. When Mr Day began as a contractor, Redcoats was based in Wellington central and the Hutt Valley. It operates under the Professionals real estate group.
[6] In mid-2019, Mr Day was offered and accepted a shareholding in Wellington City & Suburbs Realty Ltd, an entity which operates on behalf of Redcoats in Wellington.
[7] In 2021, following discussions with the Redcoats’ agents, Mr Day personally leased an office in Karori. He says he found the premises, arranged the lease, signed it in his personal name and paid the rent from his personal account. Redcoats was not involved in the use of this office, other than through Mr Day. Mr Day also says that it was Professionals, not Redcoats, who contributed to signage for the office and had the benefit of their brand in a prominent location at no cost to them.
[8] Mr Day approached Andco about working for their agency as he wished to change agencies. Andco says expressly that it did not induce Mr Day to breach his contract with Redcoats.
[9] On 11 April 2023, when Mr Day gave notice to his Redcoats’ colleagues that he intended to leave Redcoats and begin working for Andco, they suggested to Mr Day that his shares in Wellington City & Suburbs Realty Ltd be purchased for $1. There is a dispute about whether the restraint of trade clause in Mr Day’s contract was mentioned at this stage.
[10] There were verbal exchanges between Mr Day and the agents of Redcoats between 11 April 2023 and 16 April 2023. Mr Day alleges those exchanges were threatening and aggressive, including that he was told if he left Redcoats, he would lose his house.
[11] On 24 April 2023, Redcoats advised Mr Day of his contractual obligations, by reference to the restraint of trade clause in his contract.
[12] Mr Day replied by email on 27 April 2023 confirming that he was unpersuaded about leaving Redcoats and that he was intending to commence in competition with Redcoats on 1 May 2023 under the “Lowe & Co” brand. This was followed by a letter on 28 April 2023 from the lawyer acting for both defendants, informing Redcoats he had been instructed to deal with all “litigation and enforcement matters”.
[13] On 1 May 2023, Mr Day commenced his employment with Lowe & Co. Advertisements had been prepared displaying Mr Day with Lowe & Co signage.
[14]Redcoats obtained the restraining orders on 3 May 2023.
Interim injunction decision
[15] After addressing the principles applicable to the interim injunction application, Gendall J granted the relief sought by Redcoats on the basis that Mr Day ignored warnings provided to him by Redcoats of his obligations under his contract following his resignation. He had commenced employment with Andco on 1 May 2023. Gendall J found that this was in direct breach of the limited restraint of trade clause he had agreed to under his contract and the requirement under at cl 2.2, that he provide 20 working days’ notice, rather than the 20 days’ notice he gave.
[16] The Judge was satisfied from the evidence provided by Redcoats that it had a real prospect of succeeding in a claim for a permanent injunction at trial and there was a serious question to be tried, namely whether there was a clear breach of contract by Mr Day. The Judge accepted that damages would be an inadequate remedy here. In his view, the balance of convenience also favoured an interim order being granted to compel Mr Day not to continue the actions he commenced on 1 May 2023 and to oblige Andco “as his new employer” to similarly comply.
[17]The Judge made the following orders:
[18]Orders are now made as follows:
(a) An order is made against the first defendant, Mr Day, restraining Mr Day from undertaking any private business or employment which directly competes with that of the plaintiff Redcoats within a 15 kilometre radius of the plaintiff’s Wellington business premises at 27 Buller Street, Te Aro, Wellington, for a period of three months commencing from 2 May 2023, ending on 10 August 2023.
(b) That the second defendant, Andco, refrain from employing the first defendant, Mr Day, in any capacity to undertake work that competes with the plaintiff Redcoats, in the same terms as are set out in paragraph 1 above.
(c) Leave is reserved for any party on 48 hours’ notice to apply to this Court to set aside the order made here against it.
Grounds for setting orders aside
[18]The defendants’ grounds for seeking to set aside the orders are:
(a)The restraint of trade clause in Mr Day’s contract is not reasonable or necessary and there is no serious question to be tried;
(b)The balance of convenience does not favour Redcoats as there was no irreparable harm caused to Redcoats to warrant injunctive relief;
(c)The overall justice of the case favours the defendants, as Redcoats’ agents have acted in bad faith and/or with malice, threatening Mr Day that they would “take his house” if he left Redcoats, they have prevented Mr Day from working after the 20 days’ notice was given, and have interfered with Mr Day’s selling his shares in Wellington City & Suburbs Realty Limited;
(d)Redcoats has inappropriately sought an injunction rather than applying first for mediation or arbitration to resolve the contractual dispute, which has led to a miscarriage of justice.
[19] Redcoats opposes the application to set aside the restraining orders and refutes each of the grounds advanced, contending that the restraint of trade clause is reasonable and necessary, the balance of convenience favoured Redcoats because of Mr Day’s breach of contract, and the overall justice of the case favours Redcoats.
[20] Redcoats sought interim injunctive relief out of commercial necessity, not malice in the face of the first defendant’s respective wilful breach and the second defendants aiding and abetting Mr Day’s breach of contractual obligations with Redcoats. It submits damages were not an appropriate remedy in these circumstances.
Applicable legal principles and law
[21] Under r 7.49 of the High Court Rules 2016, the Court has jurisdiction to vary or rescind an interlocutory injunction order on the application by any party affected, if that party considers the order or decision is wrong.2 In the case of a without notice judgment, it is appropriate for an aggrieved party to make an application for review before appealing in the first instance.3 On an application, a Judge may vary or rescind the order or decision if satisfied that the order or decision is wrong.4
[22] Gendall J reserved leave for any party on 48 hours’ notice to apply to the Court to set aside the orders made. On a reconsideration of such orders, the Court must consider whether, in the circumstances as they now stand, the orders previously made ought to stand, in particular, whether there remains a serious question to be tried and if so, whether the balance of convenience favours relief continuing.5
Issues
[23] As with the making of the interlocutory orders, the same considerations apply on an application to set aside. The following four issues encompass the grounds of the defendants’ applications in my view and are as follows:
(i)Is there a serious question to be tried as to whether the restraint of trade clause in cl 18 of Mr Day’s contract was valid and enforceable?
(ii)Was the Court’s jurisdiction ousted by the contractual dispute resolution and/or arbitration clause?
(iii)Does the balance of convenience still favour Redcoats and would damages be an appropriate remedy?
2 High Court Rules 2016, r 7.49.
3 Jessica Gorman and others McGechan on Procedure (Online ed, Thomson Reuters, accessed 18 May 2023) at 7.49.03. See Kiwi Co-op Dairies Ltd v Capital Dairy Products Ltd (1989) 1 PRNZ 622 at 627.
4 High Court Rules, r 7.49(6)(a).
5 Jacanna Holdings Ltd v Pacific Auto Carrier (NZ) Ltd [2020] NZHC 3308 at [32] (footnotes omitted).
(iv)Does the overall justice of the case favour Redcoats?
Is there a serious question to be tried?
Restraint of trade clause
[24] The defendants allege that Mr Day’s restraint of trade clause is invalid and unenforceable. They rely on “the general rule” that a restraint of trade clause is prima facie void as being contrary to public policy.6 However, the defendants acknowledge that a restraint of trade is enforceable, if the plaintiff has a legitimate proprietary interest to protect through a restraint of trade agreement and the restraint is reasonable in the circumstances between the parties at the time the contract was entered into.
[25] Mr Day entered into a contract for services as a licensed real estate salesperson and independent contractor on 19 September 2014 with Redcoats. Clause 18 of the contract contained the restraint of trade, the subject of these proceedings. It states:
18.0 RESTRAINT OF TRADE
Without in any way detracting from or affecting the validity of the foregoing (and so as to be severable there from), following the ceasing of his employment with the Agent upon any grounds referred to above, then, the Salesperson shall not set himself up or engage in private business or undertake other employment or employment which is directly or indirectly in competition with the Agent, or copy, prepare, acquire or memorise any list of customers or clients of the Agent or undertake any duty role or employment which involves the performance of the tasks or functions referred to above for a period of 3 months from the date of ceasing employment and within a radius of 15 kilometres of the Principal Office or of any Branch Office of the Agent with whom you are engaged. This Clause is entered into for the benefit of the Agent, and pursuant to the Contracts (Privacy) Act 1982 the parties hereto agree that a benefit is hereby conferred upon the Agent pursuant to this clause.
[26] In his affidavit for Redcoats, Mr Ross explains that the restraint clause is intended to protect Redcoats’ goodwill in the interim time it takes to recruit and promote people to replace the salesperson leaving. He says:
His promise not to work in competition against us for a limited period is an important part of the protection of our goodwill as it gives us time to recruit and promote people in his place.
6 Blackler v NZRFL [1968] NZLR 547; Armourguard Security Ltd v Geraghty [1998] 2 NZELC 95,739 (HC); Fuel Espresso v Hsieh [2007] NZCA 58, [2007] 2 NZLR 651; BYOF Holdings Pty Ltd v Bencho Ltd [2014] NZHC 1560.
[27] The concern of Redcoats, as Mr Lindsay deposes, is that Mr Day’s intention to immediately start trading as Redcoats’ main opposition deprives Redcoats of the three months restraint period it is entitled to, to replace and promote people in Mr Day’s stead.
[28] The essence of the defendants’ application is that the restraining order protects Redcoats’ ability to compete rather than protecting any proprietary interest. While conceding that goodwill can be a valid interest, Mr Iorns submits that the orders are really to ensure that they are able to compete with Andco. He points to the lack of confidential information, which is a legitimate proprietary interest, the lack of existing business, client relationships, unique business model or marketing that Redcoats can say will be used by Mr Day in competition. The following statement in Mr Lindsay’s affidavit, he says, reinforces that submission:
Mr Dickason and Mr Eggers are servicing the Karori area, as our website shows, and we will be using the restraint period to continue to promote our Karori business without improper competition from Mr Day.
[29] Mr Iorns submits the primary purpose of the restraint relied on by Redcoats is punitive and anti-competitive and therefore invalid.
[30] I deal first with the general submission that the restraint of trade clause is prima facie void. The defendants are correct to submit that an agreement that unreasonably restricts the ability of a person to carry on a trade, business or profession is unlawful and enforceable at common law,7 as the early authorities articulated.
[31] More recently, the Court of Appeal in Gordon v Christiansen8 has endorsed “the leading authorities of [the Court of Appeal] on the construction of restraint clauses in the context of the sale of a business, incorporating consideration for goodwill.”9 The Court in Gordon stated the principles of enforcement of restraint of trade clauses as follows:10
7 Herbert Morris Ltd v Saxelby [1916] 1 AC 688 (HL); and see Chris Noonan Competition Law in New Zealand (Thompson Reuters, New Zealand, 2017) at 233.
8 Gordon v Christiansen [2022] NZCA 130.
9 Brown v Brown [1980] 1 NZLR 484 (CA) at [498]-[499]; and Fletcher Aluminium Ltd v O’Sullivan
[2001] 2 NZLR 731 (CA) at [42].
10 Gordon v Christiansen, above n 8, at [21] (footnotes omitted).
To be enforceable, the clause must be no wider than the circumstances of the case reasonably require. In the first instance at least, the parties may be taken to have intended the restraint to be lawful, and thereby enforceable, if that construction is available on the words they have adopted. Thus the construction given the clause should reflect the purpose intended by the parties, but in extent be no wider than necessary to protect the legitimate proprietary interest acquired by the purchaser … assessed by reference to all the circumstances of the transaction, including the consideration paid.
[32] While this case does not involve the sale of a business, it involves the protection of goodwill associated with the plaintiff’s business and market presence in the Wellington region. Even in a case where the employment contract is part of a commercial arrangement in the sale of a business including its designs, the reasonableness of a restraint of trade clause has been held to be determined at the time the covenant was entered into and what the parties might reasonably have foreseen at the time of entering into the contract.11
[33] The Court of Appeal in Fletcher Aluminium Ltd v O’Sullivan reinforced that restrictive covenants or restraint of trade clauses are not to be confined to one or other of two categories, namely the sale of the goodwill of a business compared to covenants in employment contracts.12 The Court emphasised that the difference between the two derives from the fundamental proposition that a restraint of trade should be no wider than is required to protect the party in whose favour it is given.13 Thus, the Court says, the purchase of goodwill requires protection against the erosion of that goodwill. The employer requires protection against an employee taking advantage of the employer’s trade and commercial information acquired by the employee in the course of employment. In citing the English authorities, the Court said further, that even where there is no goodwill sold, the covenantee may have a legitimate interest that can be protected by restrictive covenant.14 It is, regardless of the context involved, the totality of the transaction between the parties that must be taken into account.15
[34] Mr Dewar for Redcoats submits that in the seven year period Mr Day contracted with Redcoats, he achieved a very high profile working under the
11 Fletcher Aluminium Ltd v O’Sullivan, above n 9, at [15]-[16].
12 At [29].
13 At [28].
14 At [30].
15 At [31].
Professionals’ brand. He contracted with Redcoats on the basis that when his contract ended, he would not work for three months within a 15 kilometre radius. Redcoats say that he achieved his high profile under the brand of Redcoats, which had well- established goodwill and market presence, while achieving and sustaining a very high income. Redcoats contends that Mr Day’s high personal profile did not represent a transfer to him of part of Redcoats’ goodwill nor did it disentitle Redcoats to protection of its goodwill.
[35] In support of its position that the restraint of trade clause is both reasonable and enforceable, Mr Dewar points to O’Brien v Discovery NZ Ltd,16 where a restraint of trade was reduced from three months to seven weeks, which was upheld in respect of Ms O’Brien’s employee status. A fine was also imposed for her breach of the restraint clause. Similarly, in Mike Pero Real Estate Ltd v Tafilipepe,17 a rebranding of a real estate business did not alter the effect of the relevant restraint of trade clause, which was enforced.
[36] I am satisfied that there is a serious question to be tried as to whether the restraint of trade clause in the circumstances was both reasonable and enforceable. My preliminary view is that it was, subject to the substantive proceedings being advanced in this matter. Mr Day appears to have acted in clear breach of the contract and I consider Gendall J was correct to uphold the restraint of trade clause on the interim basis he did.
[37] The construction accorded to the clause reflects the parties’ purpose and intention at the time it was entered into to protect the legitimate branding interest of Redcoats with its brand, the Professionals, albeit that Mr Day was an independent contractor with the Professionals. The reasonableness of the restraint of trade clause and its breach is a serious question to be tried.
16 O’Brien v Discovery NZ Ltd [2022] NZERA 15.
17 Mike Pero Real Estate Ltd v Tafilipepe [2017] NZHC 685.
Goodwill
[38] The further aspect of Mr Day’s contract with Redcoats which I consider has relevance, is that Mr Day became a shareholder in Wellington City & Suburbs Realty Limited, for which he paid $100,000. This company, although not a licensed real estate agency, received extra remuneration for the Wellington administration as part of a separate arrangement and Mr Day was one of the shareholders entitled to a share of the profits.
[39] Redcoats contends that the fact that Mr Day was one of a selected number of real estate agents to be given this additional source of income, reinforces the nature of the proprietary interest in the business, which Mr Day acquired, alive to the covenant in his contract with Redcoats, not to go into competition for a three month period.
[40] Mr Dewar argues that the nature of goodwill and its owner’s right to protect it have reinforced the importance of enforcing such clauses. Gallen J in C E Elley Ltd v Burgess18 upheld the ability of a business to protect its goodwill, when a business takes into its employment a person that will acquire a close personal acquaintance with the clients from whom the business of the firm arises.19 Gallen J noted that “where the opportunity to infringe upon goodwill has arisen out of the employment itself, then there must be strong reasons to support a clause designed to restrict such activity.”20
[41] I consider it is seriously arguable that the nature of Mr Day’s interest in the shareholding in Redcoats’ associated company Wellington City & Suburbs Realty Limited is a proprietary interest in Redcoats’ brand and business, which is relevant to the overall assessment of the reasonableness and enforceability of the restraint of trade clause in the substantive proceedings.
Dispute resolution and/or arbitration?
[42] The defendants submit that before a Court can make orders in relation to the contract between the parties, it must ensure that those orders are not inconsistent with
18 C E Elley Ltd v Burgess (1997) 7 TCLR 582.
19 Fitch v Dewes [1921] 2 AC 158 at 164.
20 C E Elley Ltd v Burgess, above n 18, at 590–591.
the dispute resolution clause, which sets out an agreement as to how the parties would resolve disputes relating to the contract. Mr Iorns contends that cl 14 of Mr Day’s contract is a valid arbitration agreement and the Court’s power to intervene in disputes is limited to circumstances provided in sch 1 of the Arbitration Act 1996.
[43] While this is a matter that can be raised in the substantive hearing, I consider that the Court was entitled to make interim injunctive orders here. The Court retains the power to grant interim measures under art 9, sch 1 of the Arbitration Act 1996. It is correct that a plaintiff has the burden of proving that an award of damages is not an adequate remedy, that there is a reasonable possibility that the applicant will succeed on the merits of the claim, and that the harm of an injunction outweighs the harm that is likely to result to the respondent if injunction remedies are granted.
[44] On this basis, I consider that those provisions in the Arbitration Act almost mirror the requirement on a plaintiff seeking injunctive relief under the High Court Rules. That case was made out by the plaintiffs. I consider it was relevant that in the first communication from Mr Day on 11 April 2023 and in the subsequent correspondence from his legal advisor, no reference was made to cl 14 or a suggestion for dispute resolution. Mr Day was advising Redcoats that he wished to terminate the contract and begin working for Andco. Further, in the letter from the defendants’ barrister on 28 April 2023, Mr Waymouth advised that he had instructions to act for Andco and in particular Lowe & Co with respect to “all litigation and enforcement matters and for Chris Day as regards his departure by way of resignation from engagement as a salesperson on April 11th 2023.”
[45] The defendants did not rely on cl 14 in their correspondence or indicate that dispute resolution was a course they wished to follow. Mr Day intended to start with Lowe & Co in the same premises but with changed signage on 1 May 2023, less than 20 working days from his notice of termination.
[46] For the purposes of this setting aside application, I consider that reliance on the arbitration clause does not assist the defendants in the circumstances.
The balance of convenience
[47] Gendall J found that the balance of convenience also favoured an interim order being granted to compel Mr Day not to continue his actions and to oblige Andco as “his new employer” to similarly comply.
[48] Mr Iorns submits that the balance of convenience heavily weighs in favour of Mr Day. He points to the evidence from Mr Day about his lack of liquidity, due to his buying and renovating a house at the top of the market. He submits that if the injunction is not set aside, it will mean that Mr Day has no personal income for at least six months and this has the potential to “ruin him”. Mr Iorns challenges the finding that damages would be an inadequate remedy here.
[49] The balance of convenience, also described as “the balance of risk of doing an injustice,”21 has been described as the guiding principle in granting an interlocutory injunction.22 Although Mr Day will be placed under financial pressure for the three months of the restraint of trade and will require some further months to generate income, there are two factors that count against the balance of convenience favouring Mr Day.
[50] The first is his course of conduct. Mr Day has undertaken a course of conduct “with his eyes open” by giving notice that he was switching agencies on less than 20 working days’ notice. Although Mr Day had obtained the premises in Karori under his own name, the signage was provided by the plaintiff and branded “Professionals”. Prior to 1 May 2023, when Mr Day commenced his “employment” with Lowe & Co, photographs of Mr Day with Lowe & Co signage were already being marketed. Mr Day’s intention was to work from the same premises out of which he operated for Professionals but rebranded as Lowe & Co.
[51] Thus, Mr Day arguably, in breach of the contractual restraint of trade clause, intended to commence with the plaintiff’s competitor on less than 20 working days’ notice and from the same premises.
21 McLaughlin v McLaughlin [2019] NZHC 2597 at [37].
22 Eng Mee Yong v Letchumanan [1980] AC 331 at 337.
[52] The Court will generally not allow a defendant to avail itself of circumstances it has brought about itself. In New Zealand Farmers’ Co-operative Association of Canterbury Ltd v Farmers Trading Co Ltd (No.1),23 Chilwell J said that a defendant cannot create its own inconvenience and then have it taken into account in balancing the scales of convenience – at least not when it embarks upon the questionable conduct with its eyes open.24 I consider that is the first factor that counts against Mr Day here.
[53] The second is the issue of damages being an adequate remedy. I agree with Gendall J that damages would be an inadequate remedy here, particularly when Mr Day was planning to continue operating from the same office but with different signage. I consider any assessment of damages would be difficult in those circumstances, particularly where there would inevitably be an overlap of clients between the two agencies, including the identification of when sales were negotiated and with which agency Mr Day was engaged at the relevant time.
[54]The balance of convenience favours Redcoats.
Overall justice
[55] Lastly, is the Court’s consideration of the overall justice of the case. The defendants argue that the overall justice of the circumstances and facts here strongly weigh in favour of setting aside the restraining orders because of the conduct of Redcoats. This is an argument that alleges the plaintiff has not approached the Court with clean hands and is attempting to use a restraint clause as a punitive measure.
[56] The conduct complained of involved a number of unpleasant exchanges between Mr Day and Mr Lindsay and Mr Dickason from Redcoats. These exchanges included threats that Mr Day was going to “be done out of” his shares, in rather strong language, and that he was going to lose his house. It also involved an immediate demand of the repayment of money advanced to Mr Day by Redcoats.
23 New Zealand Farmers’ Co-op Assn of Canterbury Ltd v Farmers’ Trading Co Ltd (No.1) (1979) 1 TCLR 18.
24 At 28.
[57] There is no escaping the fact that these exchanges were unhelpful, even though they were responses to a sudden change of circumstances. While unfortunate in their intemperance, I nevertheless consider the overall justice of the circumstances favours Redcoats. I make this “robust” assessment bearing in mind that interim relief may well have the effect of a final judgment in so far as the enforcement of the restraint of trade clause for three months is concerned.25
[58] I consider the defendants’ actions and intentions to commence private business or employment from Mr Day’s office ignoring the restraint of trade clause and changing signage to Lowe & Co after 1 May, on less than 20 working days notice, does not favour the defendants in the overall assessment of justice.
Result
[59]The application to set aside the interim orders of 3 May 2023 is declined.
Costs
[60] In the event the parties cannot agree on costs, memoranda of no more than three pages with a schedule may be filed, with the plaintiff filing and serving its memorandum within 10 working days of this judgment and the defendants’ memorandum in reply to be filed and served within a further 10 working days thereafter.
Cull J
Solicitors:
Thomas Dewar Sziranyi Letts, Lower Hutt for Plaintiff Upper Hutt Law, Upper Hutt for Defendants
25 McKay Electrical (Whangarei) Ltd v Hinton [1996] 1 ERNZ 501 (CA) at 507.
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