CLAIM FOR DAMAGES

Manawatu Standard, Volume LVII, Issue 10, 10 December 1936, Page 11

CLAIM FOR DAMAGES

PICTURE THEATRE CASE. Per Press Association. AUCKLAND, Dec. 9. The hearing of a dispute over a motion picture and sound film agency and theatre advertising rights, involving a claim for £15,000 damages, was commenced before Mr Justice Callan in the Supreme Court to-day. The central issue was whether a covenant entered into was an unreasonable restraint of competition and therefore illegal and void. The claim was brought by Robert James Kerridge, of Gisborne, picture theatre proprietor, and lieathcote Beetham Williams, of Gisborne, sheepfarmer, against Archibald James McDermott, of Roiorua, theatre manager; Duncan William Steele, of Rotorua; William Henry Bailey, of Huntly; William Kay, of Auckland; George Calder, of Auckland, picture theatre proprietor; and Rotorua Theatres, Ltd., defendants being directors of the latter company. Under a deec. of November 14, 1933, between defendants, plaintiffs, and certain theatre and amusement companies, defendants covenanted to appoint plaintiffs as their sole agents for their motion picture and sound films, and also to give plaintiffs slide screen advertising rights at all theatres owned by defendant company. There were reciprocal covenants between the parlies not to engage in business in competition with each other in Rotorua, Gisborne, and other named centres.

Plaintiffs claimed that in August last defendants had wrongfully repudiated this deed and its obligations. They asked for a declaration that the deed was valid and enforceable; that accounts be taken and an injunction issued, or ill the alternative that plaintiffs be paid £15,000 damages for repudiation of the deed. The defence was that the deed was an unreasonable restraint of trade, contrary to public policy, and therefore void.

Air Johnstone, K.C., for Rotorua Theatres, Ltd., said the company owned three theatres at Rotorua. It was a .matter of considerable moment to it that there should be no opposition in a comparatively small town. In August, 1931, R. J. Kerridge, of Gisborne, | wrote and int mated to tlie Rotorua company that his picture company in[tended "to start operations in Rotorua. | Various negotiations between them culIminated in August, 1933, in the deed I which was the subject of the action. The result was that Rotorua Theatres paid Kerridge to stay out oi Rotorua. They gave him an agency to procure film's at the expense of the company and the sole right to dispose of slide screen advertising. Plaintiffs also acquired the riglit to a sum equal to 30 per cent, of the net profits made »>y Rotorua Theatres. In return for these benefits plaintiffs gave Rotorua I heat res a restrictive covenant restraining themselves from carrying on the picture theatre business not only in Rotorua but in other centres where G. Calder carried on a picture theatre business. The deed operated until last July, when Rotorua Theatres round their position so sharply affected that tliev negotiated for a readjustment. When this failed Rotorua Theatres repudiated the deed, hence these proceedings. The hearing was adjourned.