The High Court awarded exemplary damages against Anne Surridge for issuing trespass notices against her brother and sister-in-law in an attempt to seize part of her father’s cleaning products business, contrary to her prior agreement to work towards a joint venture operation. When her father left the business, she was not interested in a joint venture; she wanted to cripple any competition.
The family saga centred on Philip Moore and Co Ltd, a Wellington business run with an iron hand by father Lofty Surridge. Subsidiary trading operations were set up in the main centres. Cleaning products were manufactured from domestic and imported ingredients at a plant in Otaki under the name Kyle Chemicals Ltd. A separate legal entity was used for manufacturing because of potential liability surrounding volatile ingredients. The High Court was told daughter Anne was installed as sole director and nominal shareholder of Kyle Chemicals because when the company was set up she had minimal assets and would not be worth suing as director. It was a pretence that Anne owned Kyle Chemicals. Lofty was in charge. Thirty months prior to his death, Lofty stepped down. He entrusted daughter-in-law Marion Pearson with the task of running operations at Kyle Chemicals. Lofty’s progressive dementia left the next generation in charge. Relations between Anne on one side and her brother Paul and his wife Marion on the other became toxic.
The High Court was told of a two day mediation held in 2016 to overcome the family impasse. It was agreed Anne would take control of the Auckland trading subsidiary; brother Paul Wellington operations including the Otaki factory. Anne would have to source her own product; she was not to get any product from the Otaki factory. They agreed in writing to progress a joint venture to jointly take control of existing Philip Moore distributorships: primarily links with Italian manufacturer Ghibli & Wirbel and US chemical company Minuteman International.
Evidence was given that Anne immediately set out to undermine the agreement. A staff member met with Ghibli, obtaining for Anne an exclusive dealership. A similar deal was struck with Minuteman. Brother Paul did not find out until each refused to fill his orders, saying orders had to go through their newly appointed exclusive dealer. Anne also attempted to take control of the Otaki factory: issuing trespass notices against her brother and sister-in-law, instructing a local security firm to take control and changing the locks. She gained control of the factory bank account. Anne placed a large order for almost all stock held in the Otaki factory. In her position as titular director she raised an invoice for this purchase ready for payment. Justice Churchman said this large order was intended for a new business she was setting up in Wellington, in direct competition with her brother. Attempts to enforce the trespass orders failed when Otaki police refused to act on them. The Public Trust (by then acting as Family Court-appointed property manager for Lofty) did assist Anne in gaining control of the factory bank account but only after being misled; it was Marion Pearson who Lofty left in control of factory administration, not Anne.
Justice Churchman ruled Anne was liable for intentional interference with a business by unlawful means (when attempting to seize control of the Otaki factory) and also in breach of the Fair Trading Act (through use of misleading statements when attempting to gain intervention by the police and the Public Trust).
Anne was ordered to pay exemplary damages of $15,000. She was reminded she is still under a continuing contractual obligation set up a joint venture operation with her brother. She has to honour the agreement or renegotiate it. Otherwise she will be liable for damages.
Philip Moore & Co Ltd v. Surridge – High Court (28.03.18)
18.068