Ward Equipment Limited v Preston

[2016] NZHC 2859

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2016-404-1966 [2016] NZHC 2859

BETWEEN

WARD EQUIPMENT LIMITED AND

ANOR Plaintiffs

AND

MARKUS JOHANNES PRESTON AND ORS

Defendants

Hearing:	29 November 2016 (by telephone)
Counsel:	J Cox for Plaintiffs J D McBride for Defendant
Judgment:	29 November 2016

JUDGMENT OF HEATH J

This judgment was delivered by me on 29 November 2016 at 2.00pm pursuant to

Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:

Rennie Cox, Auckland Simpson Western, Auckland Counsel:

J McBride, Auckland

WARD EQUIPMENT LIMITED AND ANOR v PRESTON AND ORS [2016] NZHC 2859 [29 November 2016]

The proceeding

[1]      This proceeding involves a licence agreement dated 29 June 1998 (amended in 2013) whereby Mevon Pty Ltd (an Australian company) granted Ward Equipment Ltd an exclusive licence to use and hire, “Preston SuperDecks” in New Zealand. They are loading platforms used for inserting and removing materials from high-rise buildings during construction.

[2]      An issue has arisen between the parties as a result of steps taken by Mevon to enter the New Zealand market.  Ward Equipment contended that was in breach of the licence agreement.  It applied for an injunction to restrain Mevon from carrying on business in this country.  Damages are also sought.

[3]      Mevon accepts it breached a licence agreement by entering the New Zealand market  when  it  did.    However,  it  has  pleaded  four counterclaims.    For present purposes, the relevant counterclaim asserts that the licence agreement was always subject to an implied term that it could be terminated by either party on reasonable notice to the other.

[4]      On 9 September 2016, the solicitors for Mevon wrote to the solicitors for Ward Equipment and gave notice that the licence agreement was being terminated on three months’ notice.  If that notice were valid, the licence agreement will terminate on 8 December 2016.  In one of its counterclaims, Mevon seeks a declaration that its purported termination is legally effective.

The application

[5]      Ward Equipment brought an application for an interim injunction.  That application came before Edwards J.   As a result of Mevon’s concession that it entered the New Zealand market contrary to the terms of the licence agreement, the interim injunction application did not proceed.  Instead, the Judge set the proceeding down for a hearing of one day, 13 February 2017.   At that time, counsel were

working on the premise that the hearing on that day would be limited to the counterclaim to which I have referred,1 in which a declaration is sought.

[6]      I heard from counsel at a telephone conference on 23 November 2016.   I expressed some concern about the absence of an order that this particular cause of action be tried separately.  I asked counsel and to provide further information to me as  to  the  reasons  why  an  order  was  needed.    Counsel  were  also  to  address outstanding applications in relation to discovery and interrogatories.

[7]      A further conference was allocated for today.   Counsel now seek an order under r 10.4 of the High Court Rules that the first cause of action brought by Mevon against Ward Equipment in its counterclaim should be tried first.  Other directions are also sought, with which I deal separately.

The separate trial issue

[8]      I am told that there is some urgency because Mevon is currently operating in New Zealand.  There are commercial reasons for needing a decision on the status of the licence agreement promptly.  Among other things, it is possible that Mevon will need to lay off employees if it were found to be trading in New Zealand unlawfully.

[9]      Rule 10.4 provides:

Court may order separate trials

When justice requires, the court may order separate trials of causes of action and it may also direct the sequence of the separate trials and make any supplementary order that is just.

[10]     The decision whether a cause of action should be tried separately is one of discretion.  It is informed by the overall interests of justice.  While the interests of the particular parties are relevant, wider questions involving potential prejudice to other litigants if the proceeding were to take more time to complete can be taken into

account.

1      See para [3] above.

[11]     I was concerned about the possibility of an appeal from a decision on a cause of action tried separately.   Both counsel agreed to a condition that would require each to  apply to the Court of Appeal to bring any appeal on the  “Fast Track” operated  by that  Court.    I  am  satisfied  that  ameliorates  concerns  I  have  about potential delay.

[12]     At this stage, one day is available for the hearing.  Counsel will need to tailor their cases to that.  While time is currently available for a Judge to prepare a prompt judgment after hearing evidence and argument on the counterclaim, that situation would not prevail if the case could not be heard within one day.

[13]     Counsel should be alive to the possibility that they will be asked to put time limits on cross-examination, if necessary, to ensure the hearing of the counterclaim issue is resolved in one day.

[14]     A direction will also be made that will enable the presiding Judge to have submissions from both parties in advance of the hearing.   That should expedite argument.  Obviously, the submissions may need to be adjusted depending upon the way in which the evidence unfolds at trial.

Orders

[15]     I make an order under r 10.4 of the High Court Rules that the first cause of action by way of counterclaim brought by Mevon against Ward Equipment shall be tried separately on 13 February 2017.   That order is conditional on a joint memorandum being filed by counsel for both parties by 4pm on 1 December 2016 confirming that each party agrees to apply to the Court of Appeal for entry on its “Fast Track” in the event that either wishes to appeal.  If that memorandum were not filed, the Registrar shall refer the proceeding back to me for an urgent telephone conference.

[16]   The outstanding applications by Mevon for particular discovery and interrogatories have been resolved.  Those applications are dismissed with no order as to costs.

[17]     I make the following trial directions, to ensure the proceeding is ready for hearing on 13 February 2017:

(a)       An amended statement of claim shall be filed and served on or before

1 December 2016.

(b)A statement of defence to any amended statement of claim together with any amended counterclaim shall be filed and served on or before

6 December 2016.

(c)       A statement of defence to Mevon’s counterclaim shall be filed and

served on or before 12 December 2016.

(d)On or before 23 December 2016, Mevon shall serve briefs of evidence and a proposed list of documents to be included in the agreed budle for the hearing on 13 February 2017.

(e)      Ward Equipment shall serve briefs of evidence and a proposed list of documents  to  be  included  in  the  agreed  bundle,  on  or  before  20

January 2017.

(f)       Mevon  shall  serve  any  reply  briefs  of  evidence  on  or  before  27

January 2017.

(g)Mevon shall file and serve submissions on the counterclaim issue, the agreed bundle of documents and a bundle of authorities on or before 3

February 2017.

(h)Ward Equipment shall file and serve submissions and its bundle of authorities on or before 9 February 2017.

[18]     While I have made directions in relation to the filing and service of amended pleadings, I have made my order for the trial of a separate cause of action on the basis that the counterclaim remains as pleaded in the existing statement of claim and counterclaim  of  3  October  2016.    If  that  were  not  the  case,  I  would  need  to

reconsider  the  order  I  have  made.    Counsel  shall  request  an  urgent  telephone conference should that occur.

[19]     All questions of costs are reserved.

P R Heath J

Delivered at 2.00pm on 29 November 2016