Seven former Mike Pero Mortgages' franchisees have had their day in court to try and overturn a restraint of trade against them.
As first reported by TMM Online a group of mortgage advisers wanted to leave the group, however they have a two-year restraint of trade in their franchise agreements.
They presented their case in the High Court at Auckland recently.
Currently the franchisor, Mike Pero (New Zealand), has interim court orders against the seven franchisees preventing them competing with the firm as mortgage brokers.
The case ended up in court as the company had applied for those orders to continue against one of the former franchisees, Christchurch's James Heath.
Queen's Counsel for the franchisor firm, Bruce Stewart, argued the company would be harmed if the interim orders weren't continued and said that eight of its other franchisees in Canterbury deserved protection.
Heath's lawyer, Paul Sills, told Justice Simon Moore yesterday that his 46-year-old client wanted to start from scratch as an independent broker and wasn't intending to use his former customer database, which was the biggest in the region.
Sills said there was no justification for the two-year non-compete period. If any term was required, he proposed a period of no longer than three months. Sills told the court his client, who has five children, would have about four to five months of financial headroom if he was unable to continue acting as a mortgage broker.
Justice Moore reserved his decision.
