Pumpkin Patch wins $20,000 from rival

Pumpkin Patch filed for damages after an injunction by Just Kids stopped them from trading for 61 days at one Auckland shopping centre. Photo / Supplied

Children's clothing company Just Kids has been ordered to pay competitor Pumpkin Patch $20,000 after a spat over a retail spot and alleged misuse of confidential information ended at the High Court at Auckland yesterday.

The dispute started over a confidentiality agreement the two companies signed in 2008 when Pumpkin Patch conducted due diligence on Just Kids.

In April, commercially sensitive information was released to Pumpkin Patch about Just Kids' retail premises, commercial offices and lease payment arrangements. This included details about the lease of a store in the Manukau Supa Centa.

Just Kids' lease expired in December and the company was in negotiations to extend the lease when it was informed the space had been given to Pumpkin Patch.

Just Kids filed an interim injunction against Pumpkin Patch in June to stop the company from moving into its old premises, although it later withdrew the injunction.

Pumpkin Patch later filed damages in relation to the injunction that prevented it trading for 61 days. It sought damages of $43,912.33 - $28,912.33 was based on a forecast net profit loss and $15000 is based on wasted management costs.

The loss of profit was worked out from a annual forecast of $172,000 per year for the single store.

Pumpkin Patch also sought $49,247.26 for indemnity costs on grounds the litigation was unnecessary and had no foundation.

Yesterday, Pumpkin Patch was awarded $20,000 in costs, the additional damages it was seeking for loss of profit during the injunction period. Management costs were not awarded.

But law firm Duncan Cotterill wrote to Pumpkin Patch on behalf of Just Kids a week before the injunction was filed, saying through the due diligence process it had access to "extensive confidential information relating to our client's business".

Law firm Simpson Grierson responded on Pumpkin Patch's behalf, stating the landlord had advised it on the retail space independent of the due diligence process.

"[Pumpkin Patch] utterly rejects any allegation it used information obtained [from Just Kids] during the course of due diligence in breach of any obligations of confidence.

"The point is the rental structure and payment information which your client has based its injunction on, is all information which AMP advised our client of independently of the due diligence process."

Pumpkin Patch's general manager Chris Cardwell said in an affidavit that the company was interested in the Manukau retail space because it was located in a bulk retail centre and it wanted to clear ageing stock.

"It also had low occupancy costs, low investments in terms of fit out and was central located to key transport networks."

THE CLAIM
* Pumpkin Patch sought damages from Just Kids in relation 61 days trading lost
* It sought damages of $43,912 from lost profit and management costs
* The profit figure was calculated from an estimated net surplus of $172,000 per year for the store
* Pumpkin Patch also sought $49,247.26 for indemnity costs
* A judge awarded the company $20,000 yesterday