Tim Gordon pushed the boundaries after agreeing to a restraint of trade when selling Trans-Space Industries for $1.92 million and then promptly negotiating for the purchase of AutexPSL which similarly manufactures aluminium products. Trans-Space’s new owners allege he is breaching agreed terms prohibiting both use of confidential Trans-Space information and setting up a rival business.
In December 2019, Mr Gordon sold Auckland aluminium fabricator Trans-Space to a consortium of family trusts: the Christensen Family Trust Number Two and the Purdom Family Trust. In a restraint of trade agreed as part of the deal, he promised not to be involved in a rival business for the next three years and further agreed not to poach customers.
The High Court was told Mr Gordon advised Trans-Space ten weeks later that he was negotiating for the purchase of AutexPSL, part of Autex International. Evidence was also given that during the covid-19 lockdown his spouse used remote access to Trans-Space’s computer system to provide Mr Gordon with two invitations to tender sent to Trans-Space: one from Genesis Energy, the other from Sir Howard Morrison performing Arts Centre in Rotorua. Mr Gordon’s administrator rights to Trans-Space’s computer system were not revoked after his sale. The court was told he twice accessed the system, seeking to delete emails.
Believing Mr Gordon had finalised the AutexPSL purchase, the two family trusts sued. Mr Gordon denies it is a done deal; he says the deal is conditional on a court ruling that he can go ahead.
Mr Gordon says AutexPSL product line differs from Trans-Space; AutexPSL manufactures and sells aluminium ‘partitioning systems,’ a product Trans-Space has never advertised, nor sold, he said. Justice Gault declined to issue a temporary injunction blocking Mr Gordon’s AutexPSL purchase. A full court hearing is needed to argue the finer points of their agreed restraint of trade. Mr Gordon was ordered to delete all electronic copies of the two Trans-Space invitations to tender he improperly received and to hand over any hard copies together with any other confidential Trans-Space information he may hold.
Christensen & Purdom Family Trusts v. Gordon – High Court (29.06.20)
20.112