£15,000 Damages Claimed

Manawatu Times, Volume 61, Issue 292, 10 December 1936, Page 6

£15,000 Damages Claimed

INTERESTING DISPUTE IN PICTURE THEATRE WORLD. Por Press Association. AUCKLAND, Last Night. 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 Supremo. Court. The central issue was whether the covenant entered into was aa unreasonable restraint of competition and therefore illegal and void. The claim was brought by Robert James Kerridge, of Gisborne, picture theatre proprietor and Heatheote Beetham Williams, of Gisborne, sheepfarmer, against Archibald James MeDermott, of Rotorua, theatre manager, Duncan William Steele, of Rotorua, William Henry Bailey, of Huntly. William Kay, of Auckland, George Caluer, of Auckland, picture theatre proprietor and Rotorua Theatres Limited, defendants being the directors of the latter company. Under a deed of November 14, 1933, between defendants, plaintiffs and certain amusement companies, tho defendants covenanted to appoint plaintiffs as their sole agents for their motion picture and sound films and also to give plaintiffs the slide screen ■ advertising rights at all theatres owned by the defendant company. There were reciprocal covenants between the parties not to engage in business in competition with each other in Rotorua Gisborne and other named centres. Plaintiff's 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 bo taken and an injunction issued or in the alternative that plaintiffs be paid £15,000 damages for repudiation of tho deed.

The defence was that the deed was an unreasonable restraint of trade, con trary to public policy and therefore void.

Air. Johnstone K.C., for Rotorua Theatres Limited, said tho company owned three theatres at Rotorua. It was a matter of considerable moment to it that there should bo ho opposition in a comparatively small town. in August, 1931, E. J. Kerridge, of Gisborne, wrote and intimated to the Rotorua company that his picture company intended to start operations in Rotorua. Various negotiations between them culminated in August, 1933, in the deed which was the subject of the action. Tho result was that Rotorua Theatres paid Kerridge to stay out of Rotorua. They gave him the agency to procure films at the expense of. the company and tho sole right to dispose of the glide screen advertising. Plaintiffs also acquired the right to a sum equal to 30 per cent, of the net profits made by Rotorua Theatres. In return for these benefits plaintiffs gave Rotorua Theatres a restrictive covenant restraining themselves from carrying oil a 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 found their position so sharply affected that they negotiated for a readjustment. When this failed Rotorua Theatres repudiated the deed and hence these proceedings. The hearing was adjourned.