The boys from Sydney sneaked into New Zealand under cover of darkness, incurring a $1.54 million Commerce Act fine, planning to seize control of local authorities’ use of online systems for processing building consents. A High Court injunction blocked poaching.
Wellington-based Nuwave Software Ltd alleges Australian-owned Objective Corporation Solutions is party to illegal commercial conduct attempting to dominate online building consents.
The High Court was told Nuwave joined with Master Business Systems in 2016 to develop an end-to-end online system for processing building consents. Their joint venture company GoCouncil provides bundled software to about twenty local authorities under the brand GoGet. Terms of the joint venture prohibit both Nuwave and Master Business from hiring each other’s employees or poaching clients; to protect each company’s goodwill and know-how, the agreement says.
In June 2022, Master Business along with three other companies was merged into Objective Corporation Solutions NZ Ltd, under ultimate control of Sydney-based investors. This merger fell foul of the Commerce Act. In the course of a Commerce Commission investigation, Objective Corporation acknowledged the merger was likely to substantially lessen competition. It was fined $1.54 million. Commerce Commission did not seek to reverse the merger. Divestment would likely disrupt building consents filed throughout the country.
This left Nuwave with the risk that Master Business staff operating their joint venture GoCouncil portal would be used to staff up Objectives’s operations, stealing clients and leaving GoCouncil to wither. Justice Palmer issued an injunction prohibiting Objective from approaching GoCouncil customers. Objective is free to offer its services to local authority consenting authorities that are not current GoCouncil customers.
Objective claims Nuwave’s non-poaching agreement is itself anti-competitive. This claim requires a further court hearing.
Nuwave Software Ltd v. Objective Corporation Solutions NZ Ltd – High Court (30.09.22)
22.171