Legal Research
Cases
Colville v Colville

Colville v Colville

Case [2023] NZHC 2659 22 September 2023

Contract Formation

Breach of Contract

Restraint of Trade

Unconscionable Conduct

Compensatory Damages

Contract Law

Commercial Law

No judgment structure available for this case.

Type to search within this case.

IN THE HIGH COURT OF NEW ZEALAND GREYMOUTH REGISTRY

I TE KŌTI MATUA O AOTEAROA MĀWHERA ROHE

CIV-2021-418-17

[2023] NZHC 2659

BETWEEN
MATHEW ROBERT COLVILLE

Plaintiff

AND

ADAM KEITH COLVILLE

First Defendant

PETER JONATHON BLIGHT

Second Defendant

Hearing: 17–19 and 21 April 2023

Appearances:

A R B Barker KC and H P Short for Plaintiff First Defendant in Person

A D Marsh for Second Defendant

Date:

22 September 2023

JUDGMENT OF MANDER J

This judgment was delivered by me on 22 September 2023 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules 2016

Registrar/Deputy Registrar Date: .

COLVILLE v COLVILLE [2023] NZHC 2659 [22 September 2023]

[1] The plaintiff, Mathew Colville (Mathew), and the first defendant, Adam Colville (Adam), are brothers who for a number of years owned and operated a G J Gardiner Homes franchise on the West Coast. After a breakdown in their relationship, Mathew, by mutual agreement with his brother, purchased Adam’s share of this business in October 2020. In accordance with the terms of that agreement, Adam executed a deed in restraint of trade (the restraint) that prevented him from competing with Mathew’s business. The second defendant, Peter Blight (Peter), is also a builder based on the West Coast. Adam, after selling his share in the G J Gardiner franchise, went to work for Peter as a builder’s labourer.

[2] In May 2021, Peter acquired a Stonewood Homes franchise for the West Coast area. Mathew claims that, in breach of the restraint, Adam was closely involved in the establishment and development of this new franchise and that Peter, who was aware of the restraint, knowingly induced and encouraged Adam to do so. Mathew sues Adam for the alleged breach of the restraint, claiming it has caused him loss, and Peter for having induced this breach of contract. Adam and Peter deny Mathew’s claims.

Factual background

[3] While this case requires the determination of various important factual issues, much of the preliminary background to the dispute is not in issue.

G J Gardiner Homes franchise

[4] In around 2003, Mathew went into business for himself as a builder. He and his stepfather incorporated a company for the purpose of engaging in property development and the construction of spec houses. Adam came to work for Mathew and completed his building apprenticeship while in his employ.

[5] Because of increasing competition from larger national home building franchises, the two brothers approached G J Gardiner Homes, one of the largest residential building companies in the country, wanting to secure a franchise for the West Coast. Mathew and Adam successfully purchased a franchise for this region in January 2013. They formed Housing West Coast Ltd (HWC) to own the franchise. The two brothers were equal shareholders in the company, and Adam the sole director.

[6] By using G J Gardiner Homes proprietary designs, systems and supply relationships, Mathew and Adam were able to develop a successful franchise business that over the years continued to grow.1 After some five…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Colville v Colville

Details

AGLC: Colville v Colville [2023] NZHC 2659
Case: [2023] NZHC 2659
Decision Date: 22 September 2023

CaseChat Overview and Summary

Mathew Colville commenced proceedings against his brother, Adam Colville, and Peter Blight, alleging breach of contract and inducement to breach. The dispute arose after Adam sold his shares in a residential building franchise to Mathew and executed a deed in restraint of trade. The restraint prevented Adam from engaging in a competing building business on the West Coast for two years and four months from October 2020. Despite this, Adam went to work for Peter and was closely involved in the establishment of a rival building franchise. Mathew alleged Adam's involvement amounted to a breach of the restraint and that Peter knowingly induced and encouraged this breach. Adam and Peter denied the claims. The court found Adam breached the restraint by his involvement in the establishment and development of the rival building franchise. Peter was found to have encouraged and induced Adam to breach the restraint. The court found that Mathew had suffered a loss as a result of Adam's breach and Peter's encouragement and inducement of that breach. The loss was quantified as 60 per cent of the value of the restraint that Adam had agreed to abide by when selling his shares to Mathew, amounting to $252,000. The court ordered Adam and Peter to each pay $126,000 to Mathew, together with interest, and ordered Adam and Peter to pay Mathew's costs.

Orders