IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE
CIV-2024-470-40
[2024] NZHC 2112
UNDER Part 7 of the High Court Rules 2016 IN THE MATTER OF
an application for interim relief
BETWEEN
TCC BAYFAIR LIMITED
First Plaintiff
TCC TAURANGA CROSSING LIMITED
Second PlaintiffAND
SARAH SWAN
Defendant
Hearing: On the papers Counsel:
K W Clay for Plaintiffs
D M Fraundorfer for Defendant
Judgment:
31 July 2024
JUDGMENT OF O’GORMAN J
This judgment was delivered by me on 31 July 2024 at 12.30 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
…………………………………
Solicitors/Counsel:
K W Clay, Christchurch
Canterbury Legal, Christchurch D M Fraundorfer, Tauranga
JK Hamilton, Tauranga
TCC BAYFAIR LIMITED v SWAN [2024] NZHC 2112 [31 July 2024]
[1] This proceeding was commenced on 28 March 2024. TCC Bayfair Ltd (TCC Bayfair) and TCC Tauranga Crossing Ltd (TCC Crossing) pursue claims of breach of contract by Sarah Swan, who entered into two consecutive agreements with TCC Bayfair, and one with TCC Crossing. Under those contracts, Ms Swan was engaged to carry out services such as providing cosmetic treatments for TCC patients. The contracts included a non-solicitation clause, and other clauses that addressed confidential information and intellectual property.
[2] On or about 5 December 2023, Ms Swan emailed the plaintiffs to terminate the contracts, providing 30 days’ written notice. By agreement, the TCC Crossing contract was terminated immediately, with effect from 5 December 2023. The TCC Bayfair contract was terminated after 7 December 2023.
[3] The two causes of action in the plaintiffs’ statement of claim allege that, in breach of contract, the defendant:
(a)solicited or dealt with the plaintiffs’ patients or former patients during the six-month restraint period, by providing cosmetic services through her own business; and
(b)made use of the plaintiffs’ confidential information and intellectual property to market and promote her new business using before and after photographs of the plaintiffs’ clients.
[4] At the same time the proceeding was commenced, the plaintiffs filed a “without notice” application for an interim injunction. They sought to prohibit the defendant from soliciting or dealing with any of their patients or former patients (from within the prior 12-month period), and that the defendant disclose the names of any such clients with whom she had had communications or provided services since the dates of termination. The application also sought disclosure of financial documents relating to such services.
[5] On 28 March 2024, Johnstone J declined to deal with the interlocutory application on a without notice basis, so it was listed for mention on 9 April 2024.
[6] On 5 April 2024, counsel for the defendant filed a memorandum noting that the contracts have arbitration provisions, so at that stage the defendant did not submit to the Court’s jurisdiction. Counsel for the defendant also advised that there was an active matter before the Employment Relations Authority about whether the defendant was an employee of the plaintiffs rather than an independent contractor.…
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- Case
- [2024] NZHC 2112
- Decision Date
CaseChat Overview and Summary
The court was required to decide whether to make an order for costs on the interlocutory application for an injunction. The plaintiffs argued that they should be treated as the successful parties in the interlocutory application, while the defendant argued that no order for costs was appropriate as the interlocutory application had not been determined. The court accepted that the default position in r 14.8 of the High Court Rules did not apply, given that the Court did not determine the merits of an opposed interlocutory application. The interlocutory application was effectively treated as withdrawn because it had been resolved by agreement. The court also accepted that there were "special reasons" not to fix and order costs at this stage, as the appropriate award of costs for the injunction-related steps was better assessed in the context of the overall merits once the outcome of the proceeding was known.
The court decided that costs should be reserved (other than those already ordered to lie where they fall). If the proceeding is transferred to the District Court, then s 96 of the District Court Act 2016 will apply and a District Court Judge will have jurisdiction to determine these reserved cost issues at a suitable time.
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