VIDEO EZY INTERNATIONAL PTY LIMITED & ANOR v RED BOND LIMITED & ORS [2015] NZHC 1636

VIDEO EZY INTERNATIONAL PTY LIMITED & ANOR v RED BOND LIMITED & ORS [2015] NZHC 1636

On the limited interlocutory inquiry the court found VEI raised serious issues that the restraint applied on expiry and that VENZ validly assigned rights to VEI; the balance of convenience and the status quo favoured VEI because the stores had been trading as Video Ezy and VEI's proprietary interests (goodwill) required protection pending trial; accordingly interim injunctive relief to require rebranding back to Video Ezy and trading under the franchise terms was justified.

Citation
[2015] NZHC 1636
Parties
First Plaintiff: Video Ezy International Pty Limited; Second Plaintiff: Video Ezy International (NZ) Limited (in liquidation); First Defendant: Red Bond Limited; Second Defendant: Christopher Paul Whelan; Third Defendant: Paula Lenore Whelan
Court
High Court
Jurisdiction
New Zealand
Judgment Date
14 July 2015
Procedural Posture
Franchise Dispute Interim Injunction Application / Interlocutory (hearing of Application for Interim Injunction)
Outcome
Interim injunction granted
Legal Topics
Assignment of Contractual Rights, Construction of Restraint Clauses, Interim Injunction, Status Quo and Balance of Convenience, Undertaking as to Damages
Contract Franchise Law Restraint of Trade Equity Injunctive Relief Assignment of Contractual Rights Construction of Restraint Clauses Interim Injunction Status Quo and Balance of Convenience +1 more

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Parties

Video Ezy International Pty Limited

First Plaintiff

Video Ezy International (NZ) Limited (in liquidation)

Second Plaintiff

Red Bond Limited

First Defendant

Christopher Paul Whelan

Second Defendant

Paula Lenore Whelan

Third Defendant

Procedural Posture

Franchise Dispute Interim Injunction Application / Interlocutory (hearing of Application for Interim Injunction)

Legal Issues

  1. 1 Whether two year restraint of trade in franchise agreement applies on expiry of the agreement
  2. 2 Whether VENZ had rights capable of assignment to VEI after termination of the master licence and expiry of franchise agreements
  3. 3 Whether VEI established a serious question to be tried and that the balance of convenience favoured injunctive relief

Ratio Decidendi

On the limited interlocutory inquiry the court found VEI raised serious issues that the restraint applied on expiry and that VENZ validly assigned rights to VEI; the balance of convenience and the status quo favoured VEI because the stores had been trading as Video Ezy and VEI's proprietary interests (goodwill) required protection pending trial; accordingly interim injunctive relief to require rebranding back to Video Ezy and trading under the franchise terms was justified.

Court Disposition

Interim injunction granted

Orders

  • Defendants Red Bond Limited, Christopher Paul Whelan and Paula Lenore Whelan are ordered, pending further order of the Court, to rebrand the stores at 164 Gordon Road Mosgiel; corner of Kaikorai Valley Road and Mellor Street Kaikorai Valley; and 381 Andersons Bay Road Dunedin to Video Ezy and to trade the stores...
  • VEI and VENZ granted leave to seek further orders or directions necessary to give effect to the injunctive relief