His mother gave evidence against him. His former wife gave evidence against him. West Coast builder Adam Colville was ordered to pay $126,000 for setting up in competition against his former family company in breach of a restraint of trade. His new business partner Peter Bright was similarly ordered to pay $126,000 for intentionally assisting in his breach of contract.
The High Court was told Adam with his brother had for a number of years owned and operated a GJ Gardiner Homes franchise on the West Coast. Domestic violence within his marriage caused a bust-up with extended family; Adam was paid $1.06 million to give up his share of the families’ GJ Gardiner franchise. In addition, Adam was paid $1.7 million by his brother buying out his half share in a separate landholding company.
As part of the deal in 2020, Adam agreed not to directly or indirectly compete against GJ Gardiner’s West Coast building operations for a period ending February 2023. The fine print did allow him during this period to work as a builder’s labourer.
Evidence was given that from early 2021 Adam became involved with Peter Bright in establishing a Stonewood Homes franchise on the Coast. Involvement went beyond being a ‘hammer hand.’
He transferred $200,000 to Mr Bright around the time this new West Coast Stonewood franchise was set up. Adam said this was a personal loan. There was no written detail; it was a ‘handshake’ deal.
While not named in franchise documentation, there was evidence of Adam becoming deeply involved in management. He attended at Stonewood’s Auckland head office and was included in its management training scheme. He helped manage a new build in Hokitika. He negotiated terms of trade with suppliers. He was to later say that in his public activities he was just ‘big-noting’ to annoy his brother. These public activities were unwise but of no commercial significance, he said.
When his mother pointed at that he was still bound by an agreement not to compete with GJ Gardiner, he told her ‘he didn’t give a fuck about [his brother].’ His former wife gave evidence of seeing him wearing Stonewood branded clothing.
Adam’s denial that he had ever been at Stonewood’s head office was tempered by evidence of a Snapchat message he had sent including a photo of head office with his narration ‘my new family.’
With legal proceedings against him underway, Adam said he was unable to produce a number of potentially relevant business emails because his phone was lost on a fishing trip. His personal gmail account was deleted around this time.
Justice Mander ruled the cumulative evidence was that of a scheme concocted by Adam and Peter Bright to set up and develop a new building franchise in breach of Adam’s restraint of trade. Adam was liable for breach of contract; Peter Bright liable in tort for wilfully inducing Adam’s breach of contract.
Each was ordered to pay $126,000.
Evidence was given that GJ Gardiner’s market share of West Coast new builds dropped by some fifteen per cent following Stonewood’s entry.
Total damages of $325,000 represented partial recovery of goodwill included in the $1.06 million buyout paid Adam on his departure from GJ Gardiner. Payment for goodwill represented anticipated future profits expected to be generated by GJ Gardiner’s ongoing business operations; profits now reduced at his brother’s cost, following Adam’s involvement with Stonewood during the restraint period.
Colville v. Colville – High Court (22.09.23)
23.166