Tyre Collection Services Limited v Le Roy - [2016] NZHC 403

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2016-409-000060 [2016] NZHC 403

BETWEEN
TYRE COLLECTION SERVICES

LIMITED Plaintiff

AND

MICHAEL BENNY LE ROY First Defendant

AND

JAMISON INVESTMENTS LIMITED Second Defendant

AND

TYRE RECYCLING SERVICES NEW ZEALAND LIMITED Third Defendant

Hearing: 8 March 2016

Appearances:

M S Henderson and G A Biggs for the Plaintiff
D J Ballantyne for the First, Second and Third Defendants

Judgment:

10 March 2016

JUDGMENT OF DUNNINGHAM J

[1] The plaintiff applies for an interim injunction:

(a) restraining the first and second defendants from having anything to do with tyre recycling or tyre collections on their own behalf, or on behalf of another party, for a period of three years from 26 January
2016 or until such further order of the Court, within the South Island of New Zealand; and

(b)restraining the third defendant from aiding, abetting, counselling or assisting the first and second defendants in that activity.

TYRE COLLECTION SERVICES LIMITED v LE ROY [2016] NZHC 403 [10 March 2016]

[2] The plaintiff also seeks an interim injunction restraining the defendants from disclosing or using any of the plaintiff ’s confidential information, including, but not limited to, its pricing and client database.

[3] The issues to be determined are:

(a) whether an interim injunction order should be granted, having regard to the claims made by the plaintiff and the balance of convenience; and

(b) if such an order is to be granted, on what terms should that be?

Factual background

[4] The plaintiff, Tyre Collections Services Limited (TCSL), is a tyre collection and recycling company based in Rolleston, Canterbury.

[5] The first defendant, Michael Benny Le Roy, is the sole director and shareholder of the second defendant, Jamison Investments Limited (“JIL”), which was engaged by TCSL to collect used tyres on its behalf.

[6] The third defendant is a company which was incorporated in November 2015. It is also in the business of collecting used tyres and its sole director and shareholder is Mr Le Roy’s stepdaughter.

[7] TCSL collects “end of life” tyres from throughout the South Island. The tyres are brought to a processing and storage yard in Rolleston from where most are baled and exported overseas where the rubber is “repurposed”, but others are delivered for reuse on farms, primarily in the Canterbury area. Although the tyre collection industry itself is unregulated, there are regulations which cover the storage and export of tyres and TCSL explains that it has worked hard on getting its processes correct and establishing a good name and positive relationships with its customers.

[8] In early 2014, Mr Shackleton, TCSL’s director, decided to engage an independent contractor to assist with the tyre collection work. He advertised and was approached by Mr Le Roy. Mr Le Roy set up a company, JIL, to undertake this work for TCSL. They entered a short-term contract, from 14 April 2014 to
25 July 2014 (the April contract), whereby JIL was contracted to collect tyres on behalf of TCSL and bring…

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: [2016] NZHC 403
Decision Date: 10 March 2016

CaseChat Overview and Summary

Tyre Collection Services Limited (TCSL) sought an interim injunction against Michael Benny Le Roy (the first defendant), Jamison Investments Limited (JIL) (the second defendant), and Tyre Recycling Services New Zealand Limited (TRSNZL) (the third defendant). TCSL was a tyre collection and recycling company based in Canterbury. Le Roy was the sole director and shareholder of JIL, which TCSL contracted to collect used tyres on its behalf. TRSNZL was a company incorporated in November 2015, with Le Roy’s stepdaughter as its sole director and shareholder. TCSL claimed that Le Roy, JIL, and TRSNZL had breached contractual obligations and misused confidential information to set up TRSNZL in competition with TCSL. The court had to decide whether an interim injunction should be granted and, if so, on what terms. The court found that there was a serious question to be tried and that the balance of convenience favoured granting an interim injunction. The court decided to grant the injunction, restraining the first and second defendants from tyre recycling or collections in the South Island and the third defendant from aiding, abetting, counselling, or assisting the first and second defendants in that activity. The court also prohibited the first and second defendants from disclosing or using TCSL’s confidential information, including pricing and client database. The injunction would remain in place until further order of the court while the substantive litigation was being pursued. The court reserved leave to the defendants to apply to vary or rescind the orders if there was a material change of circumstances.

Orders