Redcoats v Day - [2023] NZHC 1037

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 1037

BETWEEN
REDCOATS LIMITED

Plaintiff

AND

CHRISTOPHER DAY

First Defendant

AND

ANDCO REALTY LIMITED

Second Defendant

Judgment on the
papers:
3 May 2023

JUDGMENT OF GENDALL J

[1] Before the Court filed late yesterday, 2 May 2023, is an application by the plaintiff (Redcoats) for an interim injunction against the first defendant, Christopher Day (Mr Day) and the second defendant, Andco Realty Limited (Andco). The application has been brought according to counsel for Redcoats, Mr Dewar, as a matter of urgency. He confirms that all Redcoats documents here have been supplied on a Pickwick basis to the solicitors acting for the defendants.

[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

REDCOATS LIMITED v CHRISTOPHER DAY [2023] NZHC 1037 [3 May 2023]

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.

[8] Redcoats say Mr Day has…

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: [2023] NZHC 1037
Decision Date: 3 May 2023

CaseChat Overview and Summary

In the High Court of New Zealand, Redcoats Limited applied for an interim injunction against Christopher Day and Andco Realty Limited. Redcoats, a real estate agency, sought to enforce a restraint of trade clause in a contract with Day, its former employee, who had resigned and begun working for Andco, a competing agency. The court was tasked with determining whether Redcoats had a serious question to be tried, the balance of convenience, and the overall justice of the position in granting the injunction. The court considered Redcoats' affidavits and the lack of response from the defendants. The court was satisfied that Redcoats had a real prospect of succeeding in a claim for a permanent injunction at trial, and the balance of convenience favoured granting the interim order.

The court granted the interim injunction, restraining Day from competing with Redcoats within a 15-kilometre radius of its Wellington premises for three months, and requiring Andco to refrain from employing Day in a competing capacity. The court reserved leave for any party to apply to set aside the ex-parte order on 48 hours' notice. Costs were reserved for later determination. The court briefly considered a memorandum from the defendants' counsel requesting a delay in the matter, but decided to proceed with the judgment due to the urgency of the circumstances.

Orders