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Intellihub Limited v Genesis Energy Limited [2020] NZCA 344 (13 August 2020)
Last Updated: 18 August 2020
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IN THE COURT OF APPEAL OF NEW
ZEALANDI
TE KŌTI PĪRA O AOTEAROA
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|
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BETWEEN
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INTELLIHUB LIMITED Appellant
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AND
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GENESIS ENERGY LIMITED First Respondent
ADVANCED METERING
SERVICES LIMITED TRADING AS VECTOR AMS Second Respondent
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Hearing:
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27 July 2020
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Court:
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Collins, Peters and Whata JJ
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Counsel:
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J D McBride and A W McDonald for Appellant S J P Ladd with B A Keown
and D M Scholes for First Respondent S M Hunter QC with I Rosic and S T
Coupe for Second Respondent
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Judgment:
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13 August 2020 at 9.00 am
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JUDGMENT OF THE COURT
- The
applications for leave to adduce further evidence are granted.
- The
appeal is dismissed.
- The
appellant must pay the first and second respondents costs for a standard
appeal on a band A basis and usual disbursements. We
certify for two
counsel.
____________________________________________________________________
REASONS OF THE COURT
(Given by Collins J)
Introduction
- [1] Intellihub
Ltd (Intellihub) and Advanced Metering Services Ltd (Vector) compete with each
other to supply electricity meters.
Genesis Energy Ltd (Genesis) is a retailer
of electricity and other energy products. Approximately 45,000 Genesis
customers use
meters that are owned and operated by Intellihub.
- [2] In October
2019, Genesis entered into a contract with Vector for the supply of new meters
and required Vector to decommission
the Intellihub meters used by Genesis
customers. Genesis agreed to defer the commencement of this project until
1 April 2020 because
of the potential impact its new business arrangements
will have on Intellihub.
- [3] On 18 March
2020, Intellihub commenced proceedings against Genesis and Vector. It also
sought an interim injunction to prevent
Genesis and Vector decommissioning
Intellihub’s meters, pleading that Genesis
is:
(a) intentionally causing harm to Intellihub by unlawful means
(unlawful means cause of action); and
(b) in breach of an implied term of its contract with Intellihub whereby,
according to Intellihub, Genesis is required to give three
to five years’
notice to displace Intellihub’s meters (breach of contract cause
of action).
No cause of action is pleaded against Vector.
- [4] In a
judgment delivered on 24 April 2020, Katz J dismissed Intellihub’s
application for an interim
injunction.[1] The High Court Judge
held:
(a) there was no serious question to be tried in relation to
the unlawful means cause of action;
(b) there was a serious question to be tried in relation to the breach of
contract cause of action;
(c) the balance of convenience weighed against issuing an interim injunction;
and
(d) the overall justice of the case also weighed against issuing an interim
injunction.
- [5] The issues
raised by Intellihub’s appeal are encapsulated in the following
questions:
(a) Did the High Court apply the correct legal test when
determining there was no serious question to be tried in relation to the
unlawful means cause of action?
(b) Did the High Court err when concluding there was no serious question to
be tried in relation to the unlawful means cause of action?
(c) Did the High Court err when concluding the balance of convenience weighed
against granting an interim injunction?
(d) Did the High Court err when concluding the overall justice also weighed
against the granting of an interim injunction?
Background
- [6] The
competitive nature of the New Zealand electricity retail market enables
consumers to switch between retailers with relative
ease. There is, however, an
expensive infrastructure associated with the supply of electricity from
retailers to consumers, which
investors wish to protect. Meters, which are
integral to determining what individual consumers are required to pay retailers
for
the electricity they consume, are an essential component of the
infrastructure that underpins the electricity retail market.
- [7] The
framework for the regulation of the New Zealand electricity industry is set out
in the Electricity Industry Act 2010 (the
Act). The Electricity Authority
(the Authority) is created by the Act. Its functions include the
promulgation of the Electricity
Industry Participation Code (the Code) and
the enforcement of certain parts of the Act and the Code.
- [8] The aims of
the Code
include:[2]
(a) ensuring
competition in the electricity industry;
(b) maintaining a reliable supply of electricity to consumers; and
(c) ensuring the efficient operation of the electricity industry in
New Zealand.
- [9] On 14
February 2000, Mercury NZ Ltd
(Mercury),[3] an electricity generator
and retailer entered into a contract with Genesis whereby Mercury would supply
metering services to Genesis.
The terms of the contract included a termination
clause which enabled Genesis to terminate its contract with Mercury by giving
six
months’ notice and for the displacement of no more than 50 per cent of
Mercury’s meters in any 45-day period.
- [10] In 2013,
the Code was amended so as to require electricity retailers, such as Genesis, to
have an “arrangement” with
providers of metering equipment
concerning the supply and maintenance of metering services. Pursuant to an
exchange of letters in
August and September 2013, Mercury continued to provide
metering services to Genesis. It is Genesis’ case that this constituted
an “arrangement” for the purposes of the Code, which was rolled over
on an annual basis, as evidenced by letters from
Genesis to Mercury in 2014,
2017 and 2018. Genesis accepts it cannot identify any termination provisions in
this “arrangement”.
- [11] Between
2009 and 2016, Mercury undertook a programme of replacing its meters with an
advanced metering infrastructure using MTRX
meters, which operate on an
intelligent “mesh” communication system, whereby individual meters
communicate with each
other and transmit metering information to a central
point. This mesh system is used by Intellihub. One of the characteristics
of
the mesh system is that some meters are key to the transmission of metering
information from other meters but, until meters are
decommissioned, it is very
difficult to determine which meters are essential to the overall efficacy of the
system.
- [12] In December
2018, Mercury incorporated Metrix Ltd (Metrix). Thereafter, Mercury
transferred ownership of the MTRX network of
meters to Metrix.
On 1 March 2019, Mercury sold its shares in Metrix to Intellihub
Australia Pty Ltd for $270 million and on 7 August
2019, Metrix changed its name
to Intellihub.
- [13] As a
consequence of the transactions we have summarised at [12],
Intellihub acquired approximately 460,000 MTRX meters and associated
infrastructure. As previously noted, approximately 45,000 of the MTRX
meters acquired by Intellihub are used by Genesis customers.
This number
changes on an almost daily basis however as consumers switch between electricity
retailers.
- [14] In August
2018, Genesis commenced a process to change the meters used by its gas consumers
and those of its electricity consumers
who use MTRX meters. Intellihub, which
had yet to acquire Mercury’s metering business, submitted a proposal
to supply new
meters to replace the MTRX meters used by Genesis customers.
Mercury and Vector also submitted proposals to Genesis.
- [15] By March
2019, Vector had emerged as the likely provider. Further negotiations
continued however. It was at this stage that
Genesis asked Vector to exclude
from its proposal the 45,000 meters, which by then were owned by Intellihub.
Vector agreed. Genesis
and Intellihub then endeavoured to reach a separate
agreement over Intellihub’s meters. No agreement was able to be
reached.
- [16] After
evaluating the competing proposals, Genesis finally awarded the contract to
Vector on 25 October 2019 and notified Intellihub
on 22 November 2019 that the
project to decommission the Intellihub meters used by Genesis customers would
take approximately 12
months to complete.
- [17] Intellihub
was concerned that the project would adversely affect:
(a) its share
of the metering market and therefore its revenue; and
(b) its mesh information system and therefore the efficacy of its other
meters.
- [18] In addition
to commencing its proceedings in the High Court, Intellihub lodged a complaint
with the Authority on 30 March 2020
alleging that Genesis was acting unlawfully
because, in the absence of an “arrangement” between Genesis and
Intellihub,
Genesis was breaching the Code by requiring Vector to displace
Intellihub’s meters. On 30 June 2020, the Authority notified
the parties
that Intellihub had not established a prima facie case of a breach of the Code
by Genesis because the Authority was satisfied
there was an arrangement
between Genesis and Intellihub. Intellihub is challenging the Authority’s
decision in the High Court.
Applications to adduce further
evidence
- [19] The parties
consented to their respective applications for leave to adduce further evidence
at the hearing. Accordingly, leave
was granted.
The threshold
for an interim injunction
- [20] Mr McBride,
senior counsel for Intellihub, contends the High Court erred when applying the
serious question to be tried limb
of the test that governs applications for an
interim injunction. While acknowledging this ground of appeal was “not
the strongest”
available to Intellihub, Mr McBride nevertheless
argued:
(a) that all that was required of Intellihub was to
demonstrate that its claim was “not frivolous or vexatious”; and
(b) that the Judge erred when she said “it is a matter of common sense
that if there is no tenable resolution of the issues
of fact and law on which
the plaintiff may be able to succeed at trial (the Klissers test) there
cannot be a serious question to be
tried”.[4]
“Not frivolous or vexatious”
- [21] The phrase
“not frivolous or vexatious” can be traced to the speech of
Lord Diplock in American Cyanamid Co v Ethicon
Ltd.[5] When rejecting epithets
such as “a probability”, “a prima facie case” and
“a strong prima facie case”
as apt descriptors of the appropriate
threshold test for an interim injunction, Lord Diplock said such concepts led to
confusion
and that:[6]
The
court no doubt must be satisfied that the claim is not frivolous or vexatious;
in other words, that there is a serious question
to be tried.
- [22] The
threshold test for an interim injunction was first articulated in
New Zealand in Klissers Farmhouse Bakeries Ltd v Harvest Bakeries
Ltd, where Davison CJ
said:[7]
The threshold
question in each case must be whether the plaintiff has established that there
is a serious question to be tried. In
order to determine that question the
Court must consider – first, what each of the parties claims the
facts to be; second, what are the issues between the parties on these
facts; third, what is the law applicable to those issues, and,
fourth, is there a tenable resolution of the issues of fact and law on
which the plaintiff may be able to succeed at the trial: see Shotover Gorge
Jet Boats Ltd v Marine Enterprises Ltd [1984] 2 NZLR 154, 157. In
American Cyanamid Lord Diplock said at pp 406-407:
“... where the legal rights of the parties depend upon facts that are
in dispute between them, the evidence available to the
court at the hearing of
the application for an interlocutory injunction is incomplete. ...
“It is no part of the court’s function at this stage of the
litigation to try to resolve conflicts of evidence on affidavit
as to facts on
which the claims of either party may ultimately depend nor to decide difficult
questions of law which call for detailed
argument and mature
considerations.”
- [23] The
judgment of Davison CJ was upheld by this Court. Cooke J explained the general
three-step approach that should be followed
when considering applications for
interim injunctions, when he said such applications should be determined by
assessing:[8]
(a) whether
there was a serious question to be tried;
(b) the balance of convenience; and
(c) where the overall justice lies.
- [24] Thus, for
the past 35 years the general approach required of courts in New Zealand
when considering applications for an interim
injunction involves the application
of the three-step analysis articulated by this Court in Klissers. There
is no merit in engaging in microscopic dissections of any theoretical
differences between a claim being “not frivolous
or vexatious”
and there being “a serious question to be tried”. In New Zealand
the first limb of the test for
an interim injunction requires the applicant
to demonstrate that there is a serious question to be tried.
A
tenable resolution of the issues
- [25] Mr McBride
argued that the Judge erred by referring to the need to determine if Intellihub
had demonstrated that a tenable resolution
of the issues in its favour may lead
to it succeeding at trial. He submitted that the “tenable
resolution” test resulted
in the Judge trespassing beyond appropriate
boundaries when reaching definitive conclusions about the unlawful means cause
of action
in circumstances where it was inappropriate for her to do so.
- [26] The
“tenable resolution of issues of fact and law” phrase can be found
in the High Court judgment in Klissers and can be traced to the
judgment of the Supreme Court of Victoria in Henry Roach
(Petroleum) Pty Ltd v Credit House (Vic) Pty
Ltd.[9] It is a concept that can
also be found in some of the first New Zealand judgments that considered
American Cyanamid such as Sutton v The House of Running
Ltd[10] and Shotover Gorge
Jet Boats Ltd v Marine Enterprises
Ltd.[11]
- [27] We are
satisfied that all the High Court Judge was conveying when she referred to the
“tenable resolution of the issues”
concept was that, if Intellihub
could not show a tenable basis upon which it might be able to succeed at
trial, then it will have
failed to demonstrate there is a serious question to be
tried. The approach taken by the Judge therefore did not depart in any material
respect from the correct application of the serious question to be tried
test. Accordingly, there is no merit in the first ground
of appeal.
Was there a serious question to be tried in
relation to the first cause of action?
- [28] Modern
manifestations of the unlawful means tort can be traced to
Mogul Steamship Co Ltd v McGregor, Gow &
Co[12] and Allen v
Flood.[13]
- [29] The core
elements of the unlawful means tort were summarised by Lord Hoffmann in
OBG Ltd v Allan.[14] This
Court has accepted the law of New Zealand reflects the elements of the tort
as described by Lord
Hoffmann.[15]
- [30] In
explaining the narrow ambit of the tort Lord Hoffmann
stressed:[16]
The common
law has traditionally been reluctant to become involved in devising rules of
fair competition ... It has largely left such
rules to be laid down by
Parliament. In my opinion, the courts should be similarly cautious in extending
a tort which was designed
only to enforce basic standards of civilised behaviour
in economic competition, between traders or between employers and labour.
...
- [31] The core
elements of the unlawful means tort were said by Lord Hoffmann to
be:[17]
(a) “wrongful
interference with the actions of a third party in which the claimant has an
economic interest”; and
(b) “an intention thereby to cause loss to the claimant”.
- [32] Baroness
Hale also provided a succinct summary of the tort when she said it involved
“the defendant ... deliberately striking
at his target through a third
party. But the means used to strike must be unlawful
...”.[18]
- [33] An
application of the currently recognised core elements of the tort will require
Intellihub to establish at trial that:
(a) Genesis intentionally
committed acts which interfered with the freedom of Vector to deal with
Intellihub.[19]
(b) Those acts were unlawful as against Vector and provide a cause of action
by Vector against Genesis, save for the qualification
that it is not necessary
for Vector to have actually suffered
loss.[20]
(c) Intellihub must have an “economic interest” in
Vector.[21]
(d) Genesis must have intended to cause loss to
Intellihub.[22]
(e) Intellihub must have suffered loss.
- [34] The case
advanced by Intellihub is that:
(a) Genesis has unlawfully
instructed Vector to decommission Intellihub’s meters. The unlawfulness
is said to arise from Genesis’
failure to act in accordance with an
arrangement under the Code.
(b) Genesis is intentionally harming Intellihub via Vector.
(c) If Intellihub meters are decommissioned it will lose any possibility of
entering into an arrangement with Vector to enable Vector
to use Intellihub
meters.
- [35] The High
Court was satisfied that, on the facts that were presented, Intellihub was
unable to seriously argue that:
(a) Genesis had attempted to
interfere with Vector and that Genesis’ alleged unlawful acts restrict the
ability of Vector to
deal with Intellihub if it wished to do so.
(b) Intellihub has an “economic interest” in Vector.
- [36] As a
consequence, the Judge concluded “Intellihub’s reliance on the
unlawful means tort is misconceived. The tort
is not apt for the current
circumstances”.[23]
- [37] Mr McBride
argues that the Judge erred when she determined there was not a serious
question to be tried in relation to the unlawful
means cause of action.
He submits:
(a) The law in relation to unlawful means is still
evolving. It was therefore wrong for the Judge to attempt to define the
untested
perimeters of the tort in the context of an application for an interim
injunction.
(b) Properly construed, the pleadings and evidence relied upon by Intellihub
demonstrate the existence of a serious question to be
tried in relation to the
unlawful means cause of action.
Did the High Court err in its approach to the unlawful means cause of
action?
- [38] Mr McBride
maintains Lord Hoffmann’s criteria are
“imprecise”[24] and the
exact requirements of the tort are still to be tested in New Zealand. Issues
identified by Mr McBride as requiring future
resolution
include:
(a) whether what constitutes an unlawful act has been cast
too narrowly in Lord Hoffmann’s
formulation;[25]
(b) whether it is necessary to show the defendant was “targeting”
the applicants;
(c) what an “economic interest in the third party” actually
means; and
(d) whether it is necessary to confine the tort to cases in which the
defendant has interfered with the freedom of the third party
to deal with the
plaintiff.[26]
- [39] We will
refrain from engaging in a detailed analysis of the perimeters of the tort.
We adopt this cautious approach because we
are focussing upon whether
the High Court erred when declining to issue an interim injunction.
Trite though it may appear, we emphasise
that courts considering applications
for an interim injunction are normally required to apply the law as it currently
stands and
are confined to the pleadings and facts presented at the time the
application is determined. Bearing in mind these fundamental qualifications,
we
shall briefly explain why we do not accept that Intellihub’s application
for an interim injunction is the appropriate forum
for testing and expanding
upon the existing perimeters of the unlawful means tort and why Katz J was right
when she ruled that Intellihub’s
claim does not fit within the current
criteria of the tort.
- [40] The
ingredients of the unlawful means tort were cast narrowly in OBG Ltd v
Allan because the House of Lords was satisfied that regulation of economic
competition is best left to Parliament. The Authority, which
is a statutory
entity, provides mechanisms for resolving disputes between participants in the
electricity market. The Supreme Court
of Canada has also emphasised the
narrow limits of the unlawful means
tort.[27] We can find no authority
to support the notion that unlawful means is a broad and evolving
tort.
- [41] The
suggestion the tort may not necessarily require a plaintiff to show
the defendant was “targeting” the plaintiff
is difficult to
accept. One of the essential elements of the tort requires a plaintiff to
demonstrate the defendant is intentionally
causing harm to the plaintiff via an
intermediary and is doing so by employing unlawful means. Baroness Hale’s
succinct description
of the tort in OBG Ltd v Allan encapsulates these
basic requirements.
- [42] We accept
the scope of the “economic interest in a third party” element of
the tort may evolve on a case by case
basis. Any modification to this
aspect of the common law can only occur, however, after all material facts
in each case are established.
We are far from that point in this instance.
- [43] Mr McBride
submitted that it is seriously arguable New Zealand’s approach to the tort
may ultimately align with the decision
of the Supreme Court of Canada in which
it decided not to adopt the “freedom to deal with the third party”
control mechanism
found in Lord Hoffmann’s formulation of the
tort.[28]
- [44] We think it
is premature to say New Zealand law might evolve in the manner advocated by Mr
McBride. Any change to the law as
articulated by the House of Lords can only
occur once all facts have been determined.
- [45] The High
Court Judge applied the ingredients of the tort as articulated by the
House of Lords in OBG Ltd v Allan to the pleaded facts when
determining that the unlawful means cause of action was not seriously arguable.
The methodology adopted
by the Judge cannot be criticised.
Do the
facts support Intellihub’s unlawful means cause of action?
- [46] In an
effort to address some of the flaws in the case that were exposed in the High
Court judgment, Intellihub now submits that:
(a) Genesis and
Intellihub can be classified as competitors; and
(b) Genesis’ alleged unlawful conduct has the effect of preventing
Vector from dealing with Intellihub.
- [47] The
assertions that we have summarised at [46] are, however, not pleaded by
Intellihub in its second amended statement of claim.
Nor are those assertions
supported by the evidence. To the contrary, the second amended statement of
claim specifically alleges
that Intellihub and Vector are competitors.
Furthermore, Intellihub does not plead that Genesis has prevented Intellihub and
Vector
from entering into commercial arrangements. When pressed on this lacuna
in his client’s case, Mr McBride suggested that at
some stage in the
future Vector may wish to enter into a commercial arrangement with Intellihub,
which would involve Vector making
use of Intellihub’s meters. There is,
however, no evidence to support this theoretical possibility.
- [48] The High
Court Judge correctly focused upon what Intellihub had pleaded and the
supporting evidence. The Judge would have erred
had she entertained
Intellihub’s speculative idea that at some point in the future Vector may
wish to enter into a commercial
relationship with Intellihub over the use
of Intellihub’s meters.
- [49] Nothing
placed before us causes us to depart from the High Court Judge’s
conclusions that Intellihub cannot seriously argue
that:
(a) Genesis
has attempted to interfere with Vector so as to restrict the ability of Vector
to deal with Intellihub; and
(b) Intellihub has some form of economic interest in Vector.
- [50] The Judge
did not find it necessary to comment upon another weakness in Intellihub’s
case, namely that Intellihub faces
considerable difficulty in showing that
Genesis was trying to harm Intellihub. We will also refrain from making
definitive findings
on this element of the tort. Suffice to
say:
(a) there is nothing to suggest that Genesis and Intellihub
compete in the same market; and
(b) it is difficult to understand why Genesis would wish to harm Intellihub
when it is in Genesis’ interests to have competition
between Intellihub
and Vector in relation to the supply of meters.
- [51] We
accordingly conclude that there can be no criticism of the High Court
Judge’s decision that these essential elements
of the wrongful means tort
are incapable of being seriously argued. The second ground of appeal also lacks
merit.
Balance of convenience
- [52] The High
Court found there was a serious question to be tried in relation to the breach
of contract cause of action. Genesis
and Vector have not challenged that aspect
of the High Court’s decision.
- [53] The High
Court held that the balance of convenience weighed against issuing an interim
injunction. All parties accept this conclusion
involved the exercise of
judicial discretion and that to succeed in its third ground of appeal Intellihub
must show the High Court
erred in law, took account of an irrelevant matter,
failed to take account of a relevant matter or was plainly
wrong.[29]
- [54] Mr McBride
submitted the High Court erred in the following ways when concluding the balance
of convenience weighed against issuing
an interim injunction
by:
(a) not giving precedence to preserving the status quo;
(b) misunderstanding the basis upon which Intellihub was arguing that damages
would fail to provide an adequate remedy;
(c) overestimating the impact of an interim injunction upon Genesis and
Vector;
(d) failing to give proper consideration to the intangible and reputational
harm that Intellihub would suffer if its meters are decommissioned;
and
(e) effectively endorsing Genesis’ breach of contract.
Status quo
- [55] The Judge
accepted that preservation of the status quo was a factor that favoured the
granting of an interim injunction.
- [56] The High
Court did not err however, when determining that preserving the status quo was
one of the factors that was required
to be balanced with other considerations
when deciding not to issue an interim injunction. The approach taken by the
High Court
was in accordance with this Court’s judgment in NZ Tax
Refunds Ltd v Brooks Homes
Ltd.[30]
- [57] Preservation
of the status quo was not a requirement that needed to prevail over other
considerations when assessing the balance
of
convenience.
Assessment of damages as an adequate remedy
- [58] Mr McBride
submitted the High Court erred when it
said:[31]
Intellihub
does not allege that Genesis cannot displace the MTRX metering installations.
Rather, it says it is entitled to more time
before that occurs, or compensation
in the absence of reasonable notice.
- [59] In this
Court, Mr McBride submitted that Intellihub is alleging that Genesis cannot
lawfully arrange for Vector to decommission
Intellihub’s meters.
That submission is a correct statement of Intellihub’s pleaded
position in relation to the unlawful
means cause of action.
- [60] In relation
to the breach of contract cause of action, however, Intellihub pleads that
Genesis is acting contrary to an implied
term “that Genesis will not
displace the MTRX Metering Installation, absent either reasonable notice or
compensation”.
- [61] Thus,
Intellihub’s position in relation to the breach of contract cause of
action envisages that damages is an available
remedy.
Impact of
an injunction on Genesis and Vector
- [62] Intellihub
takes issue with the weight that the Judge placed upon the impact of an interim
injunction upon Genesis and Vector.
- [63] In fact,
the High Court agreed with Intellihub that Genesis’ losses were capable of
being compensated by an award of damages.
It was the impact of an injunction
upon Vector, an innocent third party, that the High Court said weighed against
the issuing of
an interim injunction.
- [64] We agree
with the approach taken by the High Court. The evidence shows that Vector has
incurred significant time and expense
in preparing for the deployment of its
meters and the corresponding decommissioning of Intellihub’s meters.
Mr Hunter QC,
senior counsel for Vector, properly emphasised that an
injunction would seriously harm Vector’s relationship with its providers,
its reputation in the marketplace and its ability to retain the staff it has
employed for the project. While some of these potential
losses may be
addressed through an award of damages, the fact that Vector is an innocent third
party, against whom no cause of action
is alleged, is a factor that weighs
against the granting of an interim injunction.
Potential impact
on Intellihub’s business
- [65] The Judge
found that the evidence for Intellihub about potential damage to
the efficacy of its mesh network was “somewhat
speculative” and
“equivocal”.[32]
- [66] Mr McBride
criticised the High Court’s assessment of Intellihub’s evidence.
The reality is, however, that it is
not possible to predict the degree to which
Intellihub’s mesh network will be compromised through the decommissioning
of the
Intellihub meters used by Genesis customers. In addition, Genesis filed
evidence from an independent expert that confirmed the decommissioning
of
Intellihub meters may result in localised problems but should not adversely
affect the overall efficacy of its mesh network.
We do not need to resolve the
factual conflict raised by this aspect of the appeal. Suffice to record that
the Judge evaluated the
competing evidence and reached a conclusion that was
reasonably available.
Endorsing a breach of contract
- [67] This is not
a relevant consideration in the circumstances of this case because it
presupposes Genesis has breached its contract
with Intellihub. That is
precisely the issue that needs to be determined when the High Court decides
the second cause of action.
It is not a factor that should be weighed when
considering the balance of convenience at this interim stage.
- [68] We can see
no basis upon which it can be properly asserted that the High Court erred in
law, took account of an irrelevant matter,
failed to take account of a relevant
matter or was plainly wrong. There is, accordingly, also no merit in the third
ground of appeal.
Overall justice
- [69] Before
concluding that an interim injunction should not be issued, the Judge
“stood back” and considered whether
the overall interests of justice
dictated a different result. She concluded they did not.
- [70] That
assessment was a quintessential exercise of judicial discretion. The Judge
exercised her overall assessment of the justice
of the case after considering
the matters that had been urged upon her concerning the balance of
convenience. We are satisfied the
Judge cannot be criticised for
concluding the overall interests of justice weighed against an interim
injunction being issued.
- [71] More than
nine months have now passed since Intellihub was notified of Genesis’
intention to displace Intellihub’s
meters. Intellihub has had a
significant period of time in which to adjust to the new commercial relationship
between Genesis and
Vector. We also consider it significant that if Genesis has
erred in a way that renders it liable to Intellihub it will be required
to pay
damages. There is no suggestion Genesis will be unable to meet any award made
against it.
Result
- [72] The
applications for leave to adduce further evidence are granted.
- [73] The appeal
is dismissed.
- [74] The
appellant must pay the first and second respondents costs for a standard appeal
on a band A basis and usual disbursements.
We certify for two
counsel.
Solicitors:
Lee Salmon Long, Auckland for Appellant
Bell Gully,
Auckland for First Respondent
Gilbert Walker, Auckland for Second
Respondent
[1] Intellihub Ltd v Genesis
Energy Ltd [2020] NZHC 807 [High Court judgment].
[2] Electricity Industry Act 2010,
s 32.
[3] Then named Mighty River Power
Ltd.
[4] High Court judgment, above n
1, at [15].
[5] American Cyanamid Co v
Ethicon Ltd [1975] UKHL 1; [1975] AC 396 (HL).
[6] At 407.
[7] Klissers Farmhouse Bakeries
Ltd v Harvest Bakeries Ltd [1985] NZCA 70; [1985] 2 NZLR 129 (HC)
[Klissers HC judgment] at 133.
[8] Klissers Farmhouse Bakeries
Ltd v Harvest Bakeries Ltd [1985] NZCA 70; [1985] 2 NZLR 129 (CA) at 142.
[9] Klissers HC judgment,
above n 7, at 133; and Henry Roach (Petroleum) Pty Ltd v Credit House (Vic)
Pty Ltd [1976] VicRp 26; [1976] VR 309.
[10] Sutton v The House of
Running Ltd [1979] 2 NZLR 750 (SC).
[11] Shotover Gorge Jet Boats
Ltd v Marine Enterprises Ltd [1984] 2 NZLR 154 (HC).
[12] Mogul Steamship Co Ltd v
McGregor, Gow & Co [1891] UKLawRpAC 50; [1892] AC 25 (HL).
[13] Allen v Flood [1897] UKLawRpAC 56; [1898]
AC 1 (HL).
[14] OBG Ltd v Allan
[2007] UKHL 21, [2008] AC 1.
[15] Diver v Loktronic
Industries Ltd [2012] NZCA 131, [2012] 2 NZLR 388 at [100]–[103]; and
Greenbaum v Southern Cross Hospitals Ltd [2019] NZCA 438 at [21].
[16] OBG Ltd v Allan,
above n 14, at [56].
[17] At [47].
[18] At [306].
[19] At [51].
[20] At [49] and [51].
[21] At [47].
[22] At [62].
[23] High Court judgment, above
n 1, at [50].
[24] Citing Hazel Carty
“The Economic Torts in the 21st Century” (2008) 124 LQR 641 at
641.
[25] Referring to Lord Nicholls
in OBG Ltd v Allan, above n 14, at [150].
[26] Citing AI Enterprises
Ltd v Bram Enterprises Ltd 2014 SCC 12, [2014] 1 SCR 177 at [87].
[27] At [29]–[35].
[28] At [87].
[29] NZ Tax Refunds Ltd v
Brooks Homes Ltd [2013] NZCA 90 at [13].
[30] At [12].
[31] High Court judgment, above
n 1, at [88].
[32] High Court judgment, above
n 1, at [76] and [88].
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