After opposing a $4.5 million sale of Ashburton-based Hastings McLeod Real Estate to franchisor Property Brokers, Clark McLeod was blocked from setting up a rival business with wife Susie using the name Hastings McLeod.
Hastings McLeod has a long history in Canterbury real estate circles. The business was founded in 1974 by Clark McLeod’s father, Colin. Company staff later took over, with a management buyout nearly three decades later after Colin died. In 2007, son Clark bought into the business, coming to hold a twenty per cent stake.
The High Court was told Hastings McLeod become a franchisee of Palmerston North-based Property Brokers Ltd in 2010. Their franchise agreement required Hastings McLeod to use Property Broker’s name, logo and trademarks in day-to-day business. In fact, Hastings McLeod branding was used co-extensively with Property Brokers. Clark McLeod consistently opposed Property Brokers offers made through 2018-19 to buy out the business. He was one of four directors. A sale was forced through in August 2019, after Hasting McLeod’s company constitution was changed to override his objections.
Evidence was given that Clark McLeod then set about establishing his own business under the Hastings McLeod brand: advertising in the local press; setting up a facebook page; and registering a new domain name. Property Brokers sent a ‘cease and desist’ letter, then sued. Justice Wylie granted an injunction ordering Clark McLeod to stop use of the Hastings McLeod brand. There is an arguable case that continued use of the name is misleading and deceptive, he said. Property Brokers claims it owns the name, following its $4.5 million purchase of the business. It is for Clark McLeod to go back to court and to prove rights to the name Hastings McLeod were not sold.
Property Brokers Ltd v. Hastings McLeod Real Estate Ltd – High Court (26.02.20)
20.035