B        The appeal against the order of $2,000 for compensatory damages against the first and fifth respondents is dismissed. There being no cross-appeal, that order stands.
C        We set aside the award of $1,000 additional damages against the fifth respondent, and award $20,000 as additional damages under s 121(2) of the Copyright Act 1994 against the fifth respondent and $20,000 as exemplary damages against the first respondent. The total damages payable jointly and severally by the first and fifth respondents is therefore $22,000.
D        The issue of costs in this Court and the High Court is reserved for further submissions if necessary.

____________________________________________________________________

REASONS OF THE COURT

(Given by Asher J)

Table of Contents

Para No
Introduction  [1]
Development of the franchises  [5]
Termination of the franchise agreements  [13]
The decision  [18]
Restraint of trade claim against Mrs McNeill  [31]
Approach to the restraint of trade clause   [36]
     Protectable interest  [43]
     Public interest  [50]
     Reasonableness of term and geographic boundary  [53]
Was there a breach of the restraint of trade clause?  [56]
Remedy  [68]
Breach of the equitable duty of confidence  [74]
Did the documents have the requisite quality of confidence?  [76]
The policy documents  [81]
Information  [85]
Breach of confidence in relation to the policy documents  [86]
Damages for breach of confidence  [87]
Breach of the contractual requirement of confidence and
   breach of copyright  [91]
Damages for contractual breach and breach of copyright
The Judge’s assessment  [93]
Our assessment of compensatory damages  [97]
     Approach to assessment of additional damages for breach of copyright
           under s 121  [102]
     The facts of the breach of copyright[112]
Quantum of the award[117]
Exemplary damages[120]
Conclusion  [125]
Result  [129]

Introduction

The appellants, under the name of Safe Kids in Daily Supervision Ltd (“Skids”), operate a significant New Zealand franchise whereby franchisees carry on the business of caring for children before and after school. There are 60 franchises throughout New Zealand. The respondents, Mrs Barbara McNeill, her daughter Mrs McNeill-O’Keeffe, and related companies, have been associated with Skids in various capacities including as a Skids head franchise, franchisee or associated person.
The franchise arrangements between the appellants and respondents ceased around Christmas 2009. The majority of the respondents in various ways were involved in starting up a new business, Kids Choice Ltd. That company now…

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.

Continue reading Skids Programme Management Ltd v McNeill

Details

AGLC: Skids Programme Management Ltd v McNeill [2012] NZCA 314
Case: [2012] NZCA 314
Decision Date: 23 July 2012

CaseChat Overview and Summary

Safe Kids in Daily Supervision Ltd, Skids, brought an action in the High Court against the respondents, who were associated with a previous Skids franchisee, for breach of copyright and breach of confidence. The respondents had set up a competing after school childcare business, Kids Choice Ltd. The High Court awarded Skids $3,000 in damages, comprising $2,000 in compensatory damages and $1,000 in additional damages. The Court of Appeal allowed the appeal against the amount of damages, finding that the sums awarded for additional damages and exemplary damages were too low. The Court of Appeal awarded Skids $22,000 in total damages against the first and fifth respondents. The Court of Appeal dismissed the appeal against the order of $2,000 for compensatory damages. It set aside the award of $1,000 additional damages against the fifth respondent and awarded $20,000 as additional damages under s 121(2) of the Copyright Act against the fifth respondent and $20,000 as exemplary damages against the first respondent. For the avoidance of doubt, the Court of Appeal recorded that the total judgment sum payable by the first and fifth respondents, either jointly or severally, was $22,000. The Court of Appeal reserved the issue of costs for further submissions if necessary.

Orders