Consequences of Chorus putting on the charm, using grossly misleading flattery to garner support from potential business partners in rolling out a national fibre network, featured in unsuccessful litigation by Marlborough-based Creative Development Solutions when alleging Chorus stole its intellectual property.
Creative Solutions, part-owned by former journalist and member of parliament Brendon Burns, joined forces with Marlborough District Council on plans to get fast broadband in place across Marlborough. Learning that Chorus had withdrawn from Crown Fibre’s initial bidding round for rural Marlborough’s network coverage, Creative Solutions met with Chorus in early 2018. It was intended the two would jointly progress a bid for the Marlborough network. Creative required Chorus sign a non-disclosure agreement to protect what it perceived to be confidential and commercially sensitive information. Creative sued when Chorus later turned around and bid separately for the rural Marlborough franchise; Chorus had stolen Creative’s confidential information and used it to formulate a bid, Creative alleged. Neither Creative nor Chorus were successful in their bids.
The High Court ruled that the supposedly confidential information provided to Chorus by Creative added little to Chorus’ existing accumulated knowledge and experience, and that information which was new was of little commercial value. Creative failed in attempts to overturn this ruling on appeal.
In the High Court, the trial judge referred to ‘substantial posturing’ by both sides during negotiations. Chorus talked up the benefits Creative Solutions could bring to the project, such that Creative came to over-value its own expertise and the information it held. Behind the scenes, Chorus was dismissive. Chorus also turned on the charm with Marlborough District Council in the then belief that Council would provide significant financial funding for the project.
Creative Solutions was forced into liquidation by Chorus in December 2020 for unpaid court costs following the High Court trial. Prior to the High Court trial, Creative Solutions turned down an offer intended to avert litigation: $750,000 in full and final settlement.
Creative Development Solutions Ltd v. Chorus New Zealand Ltd – Court of Appeal (13.05.21)
21.080