After
losing its distributorship rights for Clarins beauty products in New Zealand,
BDM Grange has been hit with court orders to pay supplier Trimex $1.5 million and
to further pay $150,000 damages for injurious falsehood after bad-mouthing
Trimex’s French management.
The BDM Grange/Trimex distributorship was
established nearly thirty years ago at the time of import licencing. Foreign exchange was rationed. An importer’s most valuable asset was an
import licence allowing the importation of specifed goods up to a stated
value. It was a licence to print money, exploiting
a monopoly position.
The High Court was told the then managing
director of BDM Grange negotiated a deal in which fifty per cent of New Zealand
revenue would be remitted to Trimex after deduction of a percentage sum for New
Zealand adminstrative costs and promotion costs. The agreed level of deduction varied over
time but reduced steadily as Trimex products faced increased competition
following the removal of import licensing.
By 1985, deductions for administrative costs were down to 21.5 per
cent. Advertising and promotion
deductions were higher, subject to annual agreement between BDM Grange in New
Zealand and Trimex in France. Each side
had a mutual interest in keeping Trimex products firmly in the public eye as a
luxury product.
Evidence was given that BDM Grange was
feeling the pinch in the first decade of the century. Competition eroded margins and costs like
renting space in department stores and fitting out perfume counters were
expensive. In additon to Clarins, BDM
Grange was also marketing Hermes, Oscar de la Renta, Swarkovski and RoC.
Evidence was given that matters reached a
head in 2006 when Trimex made it clear it wanted the deduction for
administrative costs reduced to 17 per cent.
BDM Grange said it would not survive without the rate moving up to at
least 22.5 per cent. Managing director
Andrew Berryman told the High Court Trimex had agreed to this higher rate at a
September 2010 meeting. Differences of
opinion over the rate led to BDM Grange losing its sole distributorship rights
and being sued by Trimex, alleging its profit share was underpaid.
Justice Duffy ruled there had been no
agreement to raise the administrative deduction above 17 per cent. BDM Grange had underpaid Trimex $1.53 million
for the 2011 and 2012 financial years.
Justice Duffy said the manners of Trimex director Michel-Henri Carriol,
a former diplomat, may have caused confusion at the September 2010 meeting. Giving evidence, Mr Carriol said: When a diplomat
says Yes, he thinks, Maybe; when a diplomat says Maybe, he really says No; and
when a diplomat says No, he is not a diplomat.
After losing the distributorship, Mr
Berryman sent three emails to companies Trimex dealt with implying Trimex was
not to be trusted, was insolvent and that its management was dishonest. Two of the emails invited the recipient to
now do business with BDM Grange. Justice
Duffy ruled these emails were untrue and were sent with the malicious intent of
causing financial loss to Trimex. BDM
Grange was ordered to pay $150,000 damages.
BDM
Grange Ltd v. Trimex Pty – High Court (8.10.15)
15.111