Interclean Industrial Limited v Camp [2015] NZHC 3177 (11 December 2015)

Last Updated: 27 January 2016

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2015-409-000725 [2015] NZHC 3177

BETWEEN	INTERCLEAN INDUSTRIAL LIMITED Plaintiff
AND	GRANT MORRIS CAMP First Defendant PAINTERS & PLASTICS (LYTTELTON) LIMITED Second Defendant

Hearing:	3 December 2015
Appearances:	B D Gustafson and K Kendrick for Plaintiff HDP van Schreven for First Defendant No Appearance for Second Defendant
Judgment:	11 December 2015

_{JUDGMENT OF GENDALL J}

[1] The plaintiff, Interclean Industrial Ltd (Interclean), seeks an interim injunction preventing the first defendant, Grant Morris Camp (Grant), from competing with it within a 20 kilometre radius from the port of Lyttelton. The genesis of this claim lies in the purchase of a business at a total price of $1.1 million by Interclean, from the vendor Painters & Plastics Limited (P&P) of which Grant was a director. The agreement for sale and purchase (the Agreement) outlining this purchase contained a restraint of trade clause. Interclean also seeks certain orders

_{under the Companies Act 1993. All orders sought are opposed by Grant.}

INTERCLEAN INDUSTRIAL LIMITED v CAMP [2015] NZHC 3177 [11 December 2015]

Background

[2] P&P operated the business in question providing abrasive blasting, water blasting, and spray painting to the marine industry (the business).¹ Grant was a director of P&P, together with his mother, Dorothy Camp (Dorothy).

[3] On 22 February 2013 P&P sold its business to Interclean under the Agreement. Clause 7.2 of the Agreement provided a restraint of trade in the following terms:

7.0 Restraint of trade

7.1 In consideration of the purchase price the vendor hereby agrees with the purchaser that the vendor will not during the vendor’s restraint of trade period stated on the front page of this agreement [5 years] either directly or indirectly carry on or be interested either alone or in partnership with or as manager, agent, director, shareholder, financier, or employee of any other person in any business similar to the business within the radius from the premises stated on the front page of this agreement [20 kilometres from Lyttelton Dry Dock, Lyttelton].

7.2 If the vendor is an incorporated company it will on or before the possession date procure its shareholders and its directors, other than any shareholders or directors specifically excluded from this provision in terms of Schedule 2 to this agreement, to enter into a deed of covenant with the purchaser binding themselves to like effect, such deed of covenant to be prepared by and at the expense of the purchaser and tendered to the vendor or the vendor’s lawyer for execution a reasonable time before settlement.

[4] The antecedent to the agreement was a “letter of offer” by which P&P offered to sell its business to Interclean. The offer was accepted and signed by Interclean. Clause 9 of the letter of offer provided:

Non-Compete

9. The Vendor agrees not to compete in the same market serviced by the Vendor within the greater Christchurch area for a period of five years. The purchaser will not request non-compete arrangements that extend beyond this.

¹ P&P was formerly called Tank Maintenance (1986) Ltd.

[5] As part of the pre-sale negotiations, Alan Hill (Alan), the sole director of Interclean, deposes that Grant represented that he would not compete with the business following the sale. In his affidavit, Alan relevantly states:

5. Prior to the execution of the Agreement [Grant] told me that he would not be involved in the marine and industrial blasting and painting market if he sold [P&P’s] business due to health reasons that were well known at the time. In addition [Grant] told me he may look at relocating to Australia. [Grant] told me these things prior to the Letter of Offer and prior to my decision to invest $1.1m in acquiring the Business.

6. At the time [Grant’s] son was operating his own business, entailing building maintenance work, which in no shape or form was involved in dry dock blast and painting and therefore was not in competition with the business. I expected that if [Grant] did not relocate to Australia he would instead assist his son in that business.

7. I took [Grant] at his word and it was essential to me that he not compete with the Business in light of the significant size of my investment. I understand [Grant’s] son’s business has suffered a downturn and I believe this underpins [Grant’s] decision to assist his son in vying for new business in the dry dock blast and painting area in competition with the Business.

[6] Following its purchase by Interclean, the business was operated by Grout Seal Limited (GSL), a company associated with Interclean.² Since the purchase, Interclean says it has become aware that Grant has approached former clients of P&P and offered to introduce them to another business entity operated by his son, Kelvin Camp (Kelvin), Marine Blast and Paint Limited (Marine Blast), which is in competition with GSL.³ Interclean became aware of the activities of Grant through the manager of GSL, Mr Nick Percovic (Nick). In the course of approaching certain clients for business, Nick it seems became aware that Grant had been doing the same.

[7] By letter dated 12 August 2015, Interclean’s solicitors wrote to Grant alleging that he was in breach of the restraint of trade by approaching clients on behalf of Marine Blast. Grant was asked to cease such activities. By letter dated 21 August,

_{Grant’s solicitors replied alleging that Grant was not bound by any restraint of trade}

² Following P&P being struck off the companies register, GSL changed its name to Tank

_{Maintenance (1986) Ltd (the predecessor name of P&P).}

³ Marine Blast applied on 7 August 2015 for a resource consent to undertake abrasive blasting, water blasting and spray painting at the Lyttelton Port. These are activities in direct competition with GSL.

and further, that he had not been approaching businesses on behalf of Marine Blast. Grant states that he has no personal interest in Marine Blast, but acknowledges that he has personally introduced Kelvin to certain business contacts. In his affidavit, Grant relevantly states:

4. In addition to my being a director (the other director being my mother, Dorothy Camp) and employed by [P&P] as its manager, my wife and I also owned the shares in a company now called Tissiman House Repairs Limited (“Tissiman”), but which was purchased by us in 2010 when it was called Tissiman Marine Maintenance Limited. We incorporated a new company called Tissiman Marine Maintenance Limited in about October 2010 and then changed the name of that company to Tissiman House Repairs Limited on 13

April 2012.

...

6. Tissiman, in 2010, was a company which carried on the business of marine maintenance, general building work, yacht repairs, waterblasting, spray-painting, vessel fitouts, and so on. Our son, Kelvin Camp, was employed as Tissiman’s manager, and Tissiman had four other employees.

[8] Grant then goes on to describe pre-sale meetings with Alan, in which the sale of P&P was discussed, together with other matters. Grant deposes:

14. At those meetings, Alan Hill and myself spoke about a number of matters. These discussions included my advising with Alan Hill of the involvement I had with Tissiman and which, at that stage, was, of course, still working in the marine industry and operating from our own premises in Lyttelton at 93 London Street, Lyttelton. I wanted to be upfront with Alan Hill in relation to my involvement with Tissiman because clearly it was operating in the same general marine industry.

15. Tissiman’s and [P&P’s] clients were the same general target market.

But Tissiman was a much smaller scale business than [P&P]. Tissiman undertook waterblasting and spray-painting work on slipways but also did carpentry and fitout work which PPL did not do. Tissiman was at that time, and has continued to be, involved in dry-dock work associated particularly with carpentry and fitout, but its work has not been limited to that, and it has undertaken waterblasting and spray-painting work both then and subsequently.

16. All of this was known to Alan Hill, and he has been fully aware of my involvement with Tissiman from the time of the agreement to purchase to the present day.

17. When Alan Hill and I discussed this, I remember Alan Hill saying to

me in general terms, “what you’re doing won’t affect our business”.

[9] It is convenient here to interpolate the evidence provided by Mr Nicholas Jessop (Mr Jessop), the Marine Manager of an unrelated company, Lyttelton Engineering Ltd:

3. I knew the Tank Maintenance (1986) Limited business was sold to Interclean Industrial Limited, the company associated with Alan Hill.

4. After the sale of the business to Interclean Industrial Limited, Lyttelton Engineering Limited continued to deal with the new company, and it still does.

5. In addition, Lyttelton Engineering Limited has a long association with Tissiman, and has provided various contracts over the years to that company for work similar to that undertaken by Interclean Industrial Limited, though on a much smaller scale.

[10] Grant then seeks to bolster his position by referring to the fact that Interclean has referred work to Tissiman. This related to work in 2014 on a vessel called “Amaltal Enterprise” and in May 2015 on a vessel called “Shemara”. Tissiman also received an approach from Lyttelton Engineering Ltd as a result of a referral from Nick, the manager of Interclean. Importantly, Grant states that all work was undertaken with the knowledge of Interclean.

[11] While the antecedent discussion may appear to paint a clear picture of the representations made by the parties, the evidence of Adam Baines (Adam), national business manager for Interclean, muddies the waters. The crux of his evidence emerges from a single paragraph:

4. One fundamental problem I have with [Grant’s] and [Kelvin’s] affidavits is that they seem to be saying that [Grant] always made it clear that Tissiman was offering services in the Lyttelton Port area to marine clients before acquisition in competition with [the business] in the Lyttelton Port area pre acquisition and continued to be in competition with [Interclean] immediately post acquisition of the business.

[12] Adam claims this is simply incorrect. His firm understanding was that the business of Tissiman was confined to building work. The specific representations Adam says were made to him by Kelvin were in relation to the Christchurch rebuild. A reply affidavit of Alan further obfuscates the position regarding what was communicated by the parties. In sum, Alan states that he did not consider Tissiman

to be in direct competition with the business. He says that if this were the case, Interclean would not have purchased the business.

[13] Grant in his evidence continues by denying that he ever represented to Alan that he was moving to Australia. He states “neither my wife nor I ever had any intention of moving to Australia, and I simply do not know where that suggestion came from”. By way of further explanation, Grant states that a previous operation, an intended operation, and the Canterbury earthquakes meant “[n]othing was further from [their] minds” than moving. Indeed, such an intention to move, Grant says, would have been inconsistent with the requirement under the agreement that he and his wife continue to be employed by the business post-sale.

[14] Grant does make the frank concession that he has continued to be involved in the business of Tissiman post-settlement. But he says that he thought this arrangement was accepted by Interclean as a result of his discussions with Alan. Indeed, Grant refers to two occasions when Interclean approached Tissiman for assistance with work it was unable itself to complete. And Grant goes further and does not deny introducing his son, Kelvin, to some of his business contacts.

[15] Perhaps unsurprisingly, Kelvin supports Grant’s recount of these introductions. As to the allegations by Nick that Grant has been approaching clients, Kelvin deposes:

22. In his affidavit, [Nick] deposes that my father had been approaching marine industry clients on behalf of my business. Other than as I have deposed, and as has my father in relation to his introduction to Mr Odey and Mr Kim, all other approaches to my business have come either from my own efforts or from unsolicited approaches to me by word of mouth around the port of Lyttelton. This is particularly the case with Lyttelton Engineering. [Marine Blast] has no involvement with Black Cat Group. That company has dealings with Tissiman and has been a long-standing customer and client of Tissiman for many years. Indeed, they were a client of Tissiman prior to 2010 when my parents bought that company.

[16] Mr Jessop supports this version of events. In his affidavit he states that recently, Lyttelton Engineering Ltd have become frustrated with Interclean. This led him to make an approach to Kelvin and his business, Marine Blasting, asking if they

would be interested in undertaking work on a larger scale than Tissiman had previously been involved with.

[17] Importantly, P&P was struck off the companies register on 21 May 2015. Arguably therefore, there is presently no entity bound by the restraint in the Agreement. Further, at no time before settlement under the Agreement did Interclean comply with cl 7.2 by preparing the deed of covenant mentioned there and presenting it to P&P for execution by its shareholders and directors to bind themselves to the restraint of trade provision.

Overview of the evidence on this application

[18] From the foregoing it is clear that under the Agreement P&P (as vendor) was the subject of the restraint of trade clause. It is also apparent that P&P is no longer on the Companies Register. The fundamental issue is whether Grant can be held to be any way bound by the restraint that is, prima facie, confined to P&P as vendor.

[19] Related to the above question is the knowledge of Interclean as to Grant’s post-sale activities in the marine industry. It appears accepted by the parties that all were aware of the existence of Tissiman and that Grant may continue to be involved with it post-sale. The real contention between the parties is the knowledge of the scope of Tissiman’s business. While, as a matter of fact, it appears that Tissiman did have involvement in the marine industry, it is Interclean’s position that they were not aware of this.

[20] A further factual issue requiring resolution is whether Grant ever represented to Alan that he intended to move to Australia. The positions of the parties on this issue are diametrically opposed. Both positions have some merit which will need to be fully ventilated and tested at trial.

[21] If the restraint of trade is found to bind Grant, a further issue will be whether he is in fact breach of that restraint. The evidence between the parties differs on this aspect. It is the evidence of Interclean (through Nick) that Grant has been approaching clients and/or potential clients of Interclean on behalf of Kelvin’s business, Marine Blast.

[22] It is the evidence of Grant that he has introduced Kelvin to commercial contacts. Beyond that Grant says he has little to do with Marine Blast other than arms’ length commercial transactions. Mr Jessop deposes that he approached Kelvin to compete with Interclean.

[23] Additionally, it seems there are issues concerning the referral of work by Interclean to Tissiman. This could bear on the knowledge of Interclean of Tissiman’s scope of work or its acceptance that Tissiman was in competition with it.

The interlocutory applications

[24] In its statements of claim, Interclean alleges three causes of action against

Grant. They can be summarised as follows:

(a) Breach of the Fair Trading Act 1986: prior to the execution of the agreement, Grant stated to Alan, a director of Interclean, that he would not be involved in the tank cleaning market if he sold the business, and that he would be relocating to Australia. It is said that these representations were not based on reasonably held beliefs by Grant when made and they were therefore misleading and deceptive in all the circumstances. As a result of these representations, Interclean decided not to enforce cl 7.2 of the Agreement and as a direct result this is causing it loss.

Grant denies that he stated that he would not in any way compete with the business. He states that in a conversation with Alan, he communicated that he and his wife owned a business that would be involved in work similar to that carried on by the plaintiff, but on a smaller and different scale. Grant states this was accepted by Alan.

(b) Estoppel: Grant represented to Interclean that he would not in any way be assisting any party to compete with the business following the sale and that Interclean relied on this representation, which was reasonable in all the circumstances. As a result, Interclean has acted to its detriment in not enforcing cl 7.2 of the Agreement. Further, that

it would inequitable and unconscionable for Grant to claim he is not bound by the restraint after making the representations and applying to have P&P struck off.

Grant resists this cause of action on the same grounds as outlined in relation to the first cause of action.

(c) Breach of contract: Interclean seeks specific performance of cl 7.2 of the Agreement by P&P after an order is made restoring it to the Companies Register.

Grant does not respond to this cause of action as it is against a second intended defendant, not him.

[25] Grant also pleads an affirmative defence attacking the validity of the restraint of trade clause, if it is found to be binding on him.

[26] For the purposes of the interlocutory applications before me, Interclean seeks the following orders:

1. Until the Court orders otherwise the first defendant is enjoined from competing with the plaintiff or aiding, abetting, counselling or assisting any other party competing with the plaintiff, within a 20 kilometre radius of the Lyttelton Port;

2. Leave to bring an application to appeal the Registrar of Companies’ decision to strike the proposed second defendant from the company register;

3. An order that the Registrar of Companies’ decision to strike the proposed second defendant from the company register be reversed and the proposed second defendant be restored to the company register.

[27] Shortly, I will turn to address the three heads of claim. But first I will briefly outline the principles involved in issuing the interim injunction sought by Interclean here.

Interim injunctions

[28] The invariable starting point for an analysis of the principles applicable to interim injunctions is the seminal decision of the House of Lords in American Cyanamid Co v Ethicon Ltd.⁴ There, it was confirmed that the cause of action gateway to be passed requires an applicant to establish that there is a serious question to be tried.⁵ There is no need to establish a prima facie case, or a strong prima facie case.

[29] The leading New Zealand authority remains Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd, in which the Court of Appeal laid out a three stage test for considering interim injunctions:⁶

Whether there is a serious question to be tried and the balance of convenience are two broad questions providing an accepted framework for approaching these applications. As the NWL speeches bring out, the balance of convenience can have a very wide ambit. In any event the two heads are not exhaustive. Marshalling considerations under them is an aid to determining, as regards the grant or refusal of an interim injunction, where overall justice lies. In every case the Judge has finally to stand back and ask himself that question. At this final stage, if he has found the balance of convenience overwhelmingly or very clearly one way - as the Chief Justice did here - it will usually be right to be guided accordingly. But if the other rival considerations are still fairly evenly poised, regard to the relative strengths of the cases of the parties will usually be appropriate. We use the word "usually" deliberately and do not attempt any more precise formula: an interlocutory decision of this kind is essentially discretionary and its solution cannot be governed and is not much simplified by generalities.

[30] The Klissers test can therefore be reduced to three considerations. First, is there a serious question to be tried? Secondly, where does the balance of convenience lie? And, finally, what does the overall justice of the case require? These considerations should be addressed sequentially. Only if there is a serious question to be tried, need a Court move on. And only after considering where the balance of convenience lies is it necessary to move to consider the exercise of the

_discretion.

⁴ _{American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] AC 396 (HL).}

⁵ _{At 406G–407G.}

⁶ Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] NZCA 70; [1985] 2 NZLR 129 (CA) at 142.

A serious question to be tried

[31] The approach to determining whether there is a serious question to be tried is that articulated by Lush J in Henry Roach (Petroleum) Pty Ltd v Credit House (Vic) Pty Ltd:⁷

In order to determine whether there is a serious question to be tried it is necessary to consider what is the applicable law and whether there are arguable differences concerning it, what the facts are said to be on the opposing sides, and where the issues lie, and whether there is a tenable combination of resolutions of the issues of law and fact on which the plaintiffs could succeed.

[32] As Eichelbaum CJ stated in Ansell v NZI Finance Ltd, “it is not sufficient for a plaintiff to indicate there is a tenable cause of action from a legal point of view and a conflict of evidence on the facts”.⁸ His Honour continued that this was not a step to be brushed over lightly.

The balance of convenience

[33] The words “the balance of convenience” are no more and no less than a catch all phrase used to describe the requirement that the Court considers the various factors tending towards the grant or refusal of an interim injunction. It is an inquiry that is not amenable to unyielding prescription. Somers J has explained the premise in these terms:⁹

[It] involves a decision as to whether the granting of an injunction or its refusal is the course which, after the action itself has been tried and the issues between the parties determined, would best allow the adjustment of the rights of the parties in a way that accords with fairness and justice.

[34] While there is no exhaustive set of factors which must be brought to bear, the following are often considered relevant to the assessment:

(a) Whether damages are an adequate remedy.

_{(b) Strength of the parties’ case.}

⁷ _{Roach (Henry) (Petroleum) Pty Ltd v Credit House (Vic) Pty Ltd [1976] VicRp 26; [1976] VR 309 (Vic SC) at 311.}

⁸ _{Ansell v New Zealand Insurance Finance Ltd HC Wellington A434/83, 30 November 1983.}

⁹ Congoleum Corp v Poly-Flor Products (NZ) Ltd [1979] NZCA 25; [1979] 2 NZLR 560 (CA) at 571.

(c) Conduct of the plaintiff. (d) Conduct of the defendant.

(e) Impact of the order on the defendant. (f) Impact of the order on third parties. (g) Public interest.

(h) Status quo.

(i) Undertakings as to damages. (j) Defendant’s undertakings.

Exercise of the discretion – the overall justice

[35] No test is prescriptive, however. Nothing should usurp the discretion conferred upon the presiding Judge to hear the matter and consider whether an interim injunction should issue so as to do justice as between the parties after careful consideration of all the facts of the case.¹⁰

[36] When considering applications for interim injunctions it is important to bear in mind the founding rationale of the jurisdiction – preservation of the status quo.¹¹

It is a holding pattern which is set in place to ensure the Court is able to properly give effect to the rights of the parties upon ultimate resolution of the substantive dispute.¹² The potential artificiality of the status quo criterion was articulated by Lord Hoffmann in National Commercial Bank Jamaica Ltd v Olint Corp Ltd:¹³

It is often said that the purpose of an interlocutory injunction is to preserve the status quo, but it is of course impossible to stop the world pending trial.

¹⁰ Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] NZCA 70; [1985] 2 NZLR 129 (CA) at 142;

_{Series 5 Software v Clarke [1996] 1 All ER 853 (Ch) at 865.}

¹¹ _{Finnigan v NZ Rugby Football Union Inc (No 2) [1985] 2 NZLR 181 (HC) at 183.}

¹² _{Resene Paints Ltd v Orica New Zealand Ltd [2003] 3 NZLR 709 (HC) at [22].}

13. National Commercial Bank Jamaica Ltd v Olint Corp Ltd [2009] UKPC 16, [2009] 1 WLR 1405 at [16].

The court may order a defendant to do something or not to do something else, but such restrictions on the defendant's freedom of action will have consequences, for him and for others, which a court has to take into account. The purpose of such an injunction is to improve the chances of the court being able to do justice after a determination of the merits at the trial. At the interlocutory stage, the court must therefore assess whether granting or withholding an injunction is more likely to produce a just result.

[37] Finally, there is a need for injunctions to be couched in terms of absolute clarity. In The School Board of the Parish of Kelso v Hunter, it was stated that “if an injunction is to be granted at all, it must be in terms so plain that he who runs may read”.¹⁴ This is the corollary of the potential ramifications of breaching an injunction; namely, a finding of contempt.

Fair Trading Act 1986 claim

The principles applicable to the cause of action

[38] Section 9 of the Fair Trading Act 1986 provides that “[n]o person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive”. The first requirement evident from the section is that the person must be in trade. This term is defined by s 2 in the following terms:

trade means any trade, business, industry, profession, occupation, activity of commerce, or undertaking relating to the supply or acquisition of goods or services or to the disposition or acquisition of any interest in land.

[39] Once it is established that a defendant is in trade, the approach is that set out by the Supreme Court in Red Eagle Corp Ltd v Ellis:¹⁵

(a) First, whether the claimant has proved s breach of s 9 (or other relevant section) by the defendant.

(b) Second, whether the claimant has suffered loss or damage “by” the contravening conduct as is required by s 43. In so determining, the Court asks:

_{(i) was the particular claimant misled or deceived?}

¹⁴ _{The School Board of the Parish of Kelso v Hunter (1874) 2 R 228 (IH (1 Div)).}

¹⁵ Red Eagle Corp Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492.

(ii) If so, was the defendant’s conduct the effective cause, or an effective cause, of the claimant’s loss or damage?

[40] The Supreme Court further articulated the test at the first stage. It stated:¹⁶

The question to be answered in relation to s 9 in a case of this kind is accordingly whether a reasonable person in the claimant’s situation – that is, with the characteristics known to the defendant or of which the defendant ought to have been aware – would likely have been misled or deceived. If so, a breach of s 9 has been established. It is not necessary under s 9 to prove that the defendant’s conduct actually misled or deceived the particular plaintiff or anyone else. If the conduct objectively had the capacity to mislead or deceive the hypothetical reasonable person, there has been a breach of s 9. If it is likely to do so, it has the capacity to do so. Of course the fact that someone was actually misled or deceived may well be enough to show that the requisite capacity existed.

Resolution

[41] I have summarised the facts and issues above at [18]–[23]. I do not repeat them here. From these facts and issues I am required to consider first whether there is a serious question to be tried in relation to the Fair Trading Act claim in light of the applicable principles outlined above. On this aspect, I consider the claim advanced by Interclean to be at least tenable. I need not go further than that at this stage of the proceeding.

[42] I must now consider where the balance of convenience lies. In my view it clearly favours the grant of an interim injunction. A prime reason for this is that Interclean has provided an undertaking as to damages and there is no question as to its ability to satisfy an adverse damages award against it. Related to this is the fact that there is no indication before the Court that damages would not be able to adequately compensate Grant were he to succeed at trial.

[43] On the other hand, it is unlikely that an award of damages would be sufficient to compensate Interclean. The purpose of the restraint (if proved) was to protect the goodwill in the business purchased (a business purchased at a total price of

$1.1 million which it seems did include a substantial payment component for

_{goodwill) and to enable Interclean to solidify its position in the Lyttelton marine}

¹⁶ At [28] (footnotes omitted).

industry. Calculating the damage Grant has done to this (if proved) would be a difficult task and indeed it is also questionable in my view whether an award of damages would be sufficient to undo any damage that is ultimately shown to have been done.

[44] In this context I need not engage in an assessment of whether the restraint was or was not reasonable. That issue only becomes live if the restraint is proved to bind Grant. I am solely concerned here with whether there is an arguable cause of action and determining where the balance of convenience lies. I am of the view that whether or not the restraint may be reasonable bears in no way on the first issue noted above and little on the second.

[45] Similarly, I am not able, in this context, to resolve contested issues of fact and law. Thus, on the material currently before the Court, I cannot determine whether cl 7.2 would now have application, nor whether it might be enforceable. Neither is it possible to form a view of the prospects of success of the Companies Act claim, either in terms of leave or substantive success.

[46] Stepping back and considering the overall justice of the case as I see it must confirm that issuing an interim injunction here is warranted. The factors fall decisively in favour of Interclean on this application. For these reasons, the interim injunction sought will be granted.

Estoppel

[47] Because I have concluded an interim injunction is warranted on the above basis, I need not consider the application in relation to the head of estoppel by representation.

Companies Act 1993 claim

[48] Additionally, Interclean has sought leave here to appeal the decision of the Registrar of Companies allowing P&P to be removed from the register in accordance with s 318 of the Companies Act 1993. The claim is advanced in reliance on s 370 of the Companies Act 1993. Grant accepts that s 370 has potential application, but

states it is circumscribed by s 329 which addresses the power of the Court to restore a company to the register.

[49] The short point for present purposes is that this is not an issue which is able to be resolved on an interlocutory basis. At trial there will need to be argument on the appropriate provision to be applied and whether Interclean can establish a claim under that section. In so doing, evidence will need to be heard regarding the reasons for removal from the register.

[50] I therefore decline Interclean’s application for leave and restoration on an

interlocutory basis.

Orders

[51] I order:

(a) Grant Camp is enjoined from competing with Interclean Industrial Ltd or aiding, abetting, counselling or assisting any other party competing with Interclean Industrial Ltd within a 20 kilometre radius of the Lyttelton Port.

(b) I decline Interclean Industrial Ltd’s application for leave to appeal the Registrar of Companies’ decision to remove Painters & Plastics Limited from the register of companies on an interlocutory basis.

(c) I decline Interclean Industrial Ltd’s application to restore Painters & Plastics Limited to the register of companies on an interlocutory basis.

[52] Given that each party has achieved some level of success, I am somewhat minded to order that costs lie where they fall. In the absence of submissions, however, I reserve the issue of costs. If the parties are unable to reach agreement (if any) on costs, they are to sequentially file memoranda (not exceeding five pages), and I will decide the issue based on the material then before the Court.

...................................................

Gendall J

Solicitors:

Speakman Law, Auckland

Clark Boyce, Christchurch