VALID DEED.

Auckland Star, Volume LXVIII, Issue 54, 5 March 1937, Page 15

VALID DEED.

ROTORUA PICTURE CASE. INJUNCTION* GRANTED.

In a typed judgment running to 52 pages, Mr. Justice Callan has decided in favour of the plaintiff* in an action which occupied three days in the Supreme Court in December last. The action arose out of the repudiation by picture interests in Rotorua of a deed entered into with picture interests with headquarters at (Jisborne, and the (Jisborne interests sought to have the deed enforced, or asked, in the alternative, for £1,>.000 damages. The defendants claimed that the deed was an unreasonable restraint of trade and contrary to public policy.

The "plaintiffs were R. J. Kerridge and H. B. Williams, of Gisborne (Mr. C. H. Weston, K.C., and Mr. F. (J. Spratt, of Wellington), and the defendants, A. J. McDermott and D. W. Steele, of Rotorua. W. H. Bailey, of Huutly, W. Kay and G. Calder, of Auckifind (Mr. H. I'. Richmond), and Kotorua Theatres, Limitetk (Mr. A. H. .Johnstone, K.C., and Mr. Weir), the defendants named being the directors of the latter company.

Under a deed of November 14, 1933, the defendants covenanted to appoint plaintiffs as their sole agents for buying their motion pictures and sound films and also to give plaintiffs their slide screen advertising rights and 30 per cent of profits from Rotorua Theatres. Limited. The parties also covenanted not to engage in the picture business in competition with each other.

In repudiating the deed the defendants said they had entered into it only because of the plaintiff's threat to entei into competition with them in Rotorua.

In his judgment hLs Honor said:—"l conclude that no restraint of trade which the deed contains is of a kind which the law will refuse to enforce, and that every restraint contained in the deed was, at the date of the deed, reasonable as between the jmrties. "It is declared, as prayed, that the deed is valid, subsisting and enforceable by the plaintiffs against the defendants. The plaintiffs are also entitled to accounts and inquiries as prayed, if they so desire, and leave to apply therefor is reserved. It was conceded for defendants that if the deed be valid the plaintiffs are entitled to an injunction. 1 adopt and confirm that view.

"The exact form of the injunction and all other questions not, hereby specifically disposed of, including costs, ore reserved for further consideration. It was agreed, and I think properly, that as plaintiffs, if successful, were to have an injunction, the claim for £15.000 damages, which was alternative to an injunction, lapses."