Sheppard Industries Ltd v Specialized Bicycle Components Inc - [2011] NZCA 346

For a Court ready (fee required) version please follow this link

IN THE COURT OF APPEAL OF NEW ZEALAND

CA805/2010
[2011] NZCA 346

BETWEEN SHEPPARD INDUSTRIES LIMITED
First Appellant

AND AVANTI BICYCLE COMPANY LIMITED
Second Appellant

AND SPECIALIZED BICYCLE COMPONENTS INCORPORATED
Respondent

Hearing: 23 June 2011

Court: O'Regan P, Glazebrook and Arnold JJ

Counsel: B D Gray QC and T J G Allan for Appellants
A H Brown QC and N M Alley for Respondent

Judgment: 26 July 2011 at 2.30 pm

JUDGMENT OF THE COURT

A The appeal is allowed.
BWe answer the preliminary question as indicated in [53] below.
CThe respondent must pay the appellants costs for a standard appeal on a band B basis plus usual disbursements. We certify for two counsel.

REASONS OF THE COURT
(Given by Arnold J)

A mediation gives rise to a disputed settlement

The first and second appellants (collectively Sheppard) distributed bicycles and other cycling products manufactured by the respondent, Specialized Bicycle Components Ltd (Specialized), under a distribution agreement entered into in 1999. In 2007, a dispute arose between them in which Specialized alleged that Sheppard had copied some of its products. The dispute was resolved and the parties entered into a written settlement agreement in August 2009 (the 2009 Deed).
Subsequent to that, Specialized became concerned that Sheppard was copying its cycling gloves and, on 3 December 2009, again issued proceedings against Sheppard alleging copying. On 4 and 8 February 2010 the parties participated in a mediation in respect of this second dispute. The mediation was conducted by the Hon Barry Paterson QC under a written mediation agreement dated 4 February 2010. Sheppard say that the mediation was successful in the sense that the parties reached an oral agreement as to the settlement of the dispute and Sheppard has performed it, at least in part. Specialized denies that. Its stance is that the mediation agreement provides that there can be no settlement unless a written and signed settlement agreement is completed and, as this has not happened, there has been no settlement.
Sheppard filed a statement of defence in the proceedings on 17 March 2010. It pleaded accord and satisfaction, alleging that the parties entered into an oral settlement agreement on 8 February 2010, and estoppel. Sheppard also applied for an order staying the proceeding or otherwise restraining Specialized from continuing with it. In support of the application, Sheppard filed two affidavits. One was from Mr Christopher Darlow, an Auckland practitioner who acted for Sheppard at the mediation, and the other from Mr John Struthers, the managing director of both appellants who was also present at the mediation on 4 February 2010.
In his affidavit, Mr Darlow said that the mediation meetings which took place on 4 and 8 February 2010 dealt with the copying dispute as well as other matters in dispute between the parties. He said that on the afternoon of 8 February 2010 “the parties reached agreement on all issues between them”. He then identified the terms of…

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.

Keep reading for free

Create a free CaseChat account to read Sheppard Industries Ltd v Specialized Bicycle Components Inc and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2011] NZCA 346
Decision Date: 26 July 2011

CaseChat Overview and Summary

In the Court of Appeal of New Zealand, Sheppard Industries Ltd and Avanti Bicycle Company Ltd (collectively Sheppard) appealed against Specialized Bicycle Components Incorporated's (Specialized) decision to deny that an oral settlement agreement was reached during a mediation. Specialized argued that the mediation agreement contained a 'no settlement unless in writing' clause, precluding any evidence of the mediation. The appeal raised questions regarding the interpretation of the mediation agreement and the applicability of s 57 of the Evidence Act 2006.

The Court of Appeal found that it was not possible to contract out of s 57(3)(b), which allows evidence necessary to prove the existence of a settlement agreement. Furthermore, the mediation agreement did not explicitly state that a written and signed settlement agreement was the only way to settle the dispute. The Court of Appeal allowed the appeal, permitting Sheppard to adduce evidence of the mediation to support their contention of a binding oral settlement agreement. The Court of Appeal also held that the respondent must pay the appellants' costs for a standard appeal on a band B basis plus usual disbursements.

Orders