Building company seizes files from rival

Sopers MacIndoe is a supplier of building hardware such as door handles, cabinetry and bathroom products. Photo / Getty

A building supply company has seized electronic files from a former business partner and now rival, which is accused of making unlawful use of confidential information to set up in competition with it.

The search and seizure, ordered by a judge, took place at five different premises last month after Auckland-headquartered Sopers MacIndoe went to the New Plymouth High Court requesting them.

Sopers MacIndoe, which employs over 100 staff around the country, is a supplier of building hardware such as bathroom products, cabinetry, door handles, and door and window seals.

The limited partnership behind the business was formed by two companies - Wilson & MacIndoe and Hardware Connections - after the collapse of their common customer, Mainzeal, in early 2013.

Those responsible for Wilson & MacIndoe were Tony Banks, Janet Banks and Scott MacIndoe - the Banks interest. Hardware Connections is run by Rex Soper, Nick Soper and Watene Galvin - the Soper interests.

However, by June last year the relationship between these two interests had become strained.

The two sides of the company formally parted ways in September 2014 and the Banks' interests bought out their partners.

But Justice Paul Heath, who granted the search orders last month, said the evidence before him strongly suggested Rex Soper was beginning to take steps to set up a business in competition with the partnership as early as June last year - two months before a separation agreement was signed.

The new rival was a company called NZ Hardware.

Before NZ Hardware was set up, meetings were held in New Plymouth in August 2014 and February this year where the Sopers and Galvin were present.

"I am satisfied from the evidence that there is a strong case that those meetings were designed to attract staff of the limited partnership to work in a new venture allied with the Soper interests, in an endeavour to use commercially sensitive information held by the limited partnership for the purpose of competition," Justice Heath said.

The judge was satisfied there was a strong prima facie case raised by the evidence to demonstrate actionable claims.

"The claim against Hardware Connections Ltd is based on breach of various terms of the limited partnership agreement, the shareholders agreement and the separation agreement which relate to confidentiality of information, non-competition and other protective covenants," the judge said.

"A second claim is made for unlawful use or disclosure of confidential information, for the purpose of establishing and operating a business in competition with the limited partnership. There are also claims of breaches of confidential duties and good faith owed by various persons, including Mr Rex Soper and Mr Nick Soper, to the limited partnership," he said.

Justice Heath said he was satisfied the loss or damage potentially suffered will be serious if a search order was not made.

On the question of whether there was a real possibility relevant information might be destroyed, Justice Heath said the degree of preparation and deliberate conduct got the plaintiffs over the relevant threshold.

Sopers MacIndoe's lawyer, Anthony Harper partner Dan Hughes, said his clients had also secured an interim injunction from Justice Heath that prevented NZ Hardware from soliciting the partnership's clients.

Read the decision here: