JK TRADING LTD v RIMPRO-TEC LTD (IN LIQ) [2019] NZHC 1989

JK TRADING LTD v RIMPRO-TEC LTD (IN LIQ) [2019] NZHC 1989

The court held that, on the matrix of fact and the parties' subsequent conduct, RimPro-Tec in practice controlled design and manufacture and thus bore responsibility and risk for product quality; an implied term existed that the licensed design/product would be fit for its intended purpose and of merchantable quality; RimPro-Tec breached those implied terms and therefore was not entitled to lawfully cancel the licence; judgment awarded to JK Trading for NZD 223,165.70 plus interest and costs.

Citation
[2019] NZHC 1989
Parties
Plaintiff and First Counterclaim Defendant: JK Trading Ltd; Defendant and Counterclaim Plaintiff: RimPro-Tec Ltd (in liquidation); Second Counterclaim Defendant: K J Quigley
Court
High Court
Jurisdiction
New Zealand
Judgment Date
15 August 2019
Procedural Posture
Commercial Contract and Intellectual Property Dispute (licence of Product) / Judgment (formal Proof Hearing)
Outcome
Judgment for plaintiff JK Trading Ltd; RimPro-Tec Ltd (in liq) found to have breached implied terms and wrongfully terminated the licence
Legal Topics
Implied Terms, Fitness for Purpose, Merchantable Quality, Licence Agreement, Repudiation and Termination, Damages, Liquidation, Allocation of Manufacturing Risk
Contract Law Intellectual Property Patents Trade Marks Consumer Protection Company Law Fair Trading Act Claims Implied Terms +7 more

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Parties

JK Trading Ltd

Plaintiff and First Counterclaim Defendant

RimPro-Tec Ltd (in liquidation)

Defendant and Counterclaim Plaintiff

K J Quigley

Second Counterclaim Defendant

Procedural Posture

Commercial Contract and Intellectual Property Dispute (licence of Product) / Judgment (formal Proof Hearing)

Legal Issues

  1. 1 Whether an implied term existed that the licensed design/product would be fit for purpose and of merchantable quality
  2. 2 Whether JK Trading or RimPro-Tec bore responsibility and risk for manufacture and product quality under the licence
  3. 3 Whether RimPro-Tec lawfully terminated the licence or repudiated the agreement

Ratio Decidendi

The court held that, on the matrix of fact and the parties' subsequent conduct, RimPro-Tec in practice controlled design and manufacture and thus bore responsibility and risk for product quality; an implied term existed that the licensed design/product would be fit for its intended purpose and of merchantable quality; RimPro-Tec breached those implied terms and therefore was not entitled to lawfully cancel the licence; judgment awarded to JK Trading for NZD 223,165.70 plus interest and costs.

Court Disposition

Judgment for plaintiff JK Trading Ltd; RimPro-Tec Ltd (in liq) found to have breached implied terms and wrongfully terminated the licence

Orders

  • Judgment for JK Trading Ltd against RimPro-Tec Ltd (in liquidation) in the sum of NZD 223,165.70
  • Interest on that sum at 7.5 per cent per annum from 27 October 2015 to judgment