Colville v Colville - [2023] NZHC 619

IN THE HIGH COURT OF NEW ZEALAND GREYMOUTH REGISTRY

I TE KŌTI MATUA O AOTEAROA MĀWHERA ROHE

CIV-2021-418-17

[2023] NZHC 619

BETWEEN
MATHEW ROBERT COLVILLE

Plaintiff

AND

ADAM KEITH COLVILLE

First Defendant

PETER JONATHON BLIGHT

Second Defendant

Hearing: 21 March 2023

Appearances:

A R B Barker KC for Plaintiff

A D Marsh for Second Defendant
First Defendant – appearance excused

Judgment:

24 March 2023

JUDGMENT OF ASSOCIATE JUDGE LESTER

COLVILLE v COLVILLE [2023] NZHC 619 [24 March 2023]

[1] This proceeding involves a dispute between two brothers, Mathew and Adam Colville and whether Adam breached a restraint of trade he gave when he sold his half shareholding in Housing West Coast Limited to his brother. Housing West Coast Ltd operates the G J Gardiner housing franchise for the West Coast.

[2] Mathew alleges Adam has acted in breach of the restraint of trade and that the second defendant, Peter Blight, is party to those breaches as director and shareholder of West Coast Residential Ltd, the company which owns the Stonewood Homes franchise for the West Coast.

[3] Adam and Peter, together with his wife, were equal shareholders in a company called Hammer Down Developments Ltd, incorporated on 20 May 2021. Peter’s company, West Coast Residential Ltd, acquired the Stonewood Homes franchise for the West Coast on 18 May 2021.

[4] In the week following West Coast Residential Ltd entering the franchise agreement, Adam paid $200,000 to West Coast Residential Ltd, albeit Adam and Peter say that sum was a personal advance between them.

[5] Mr Marsh, counsel for Peter, advised me during the hearing that West Coast Residential Ltd paid the franchise fee to Stonewood Homes on 3 June 2021.

[6] Hammer Down Developments Ltd purchased land in Hokitika. Peter gave an interview where he said: “We’ve bought this piece of land”, which in context referred to Hammer Down Developments Ltd as it was the owner of the land. Hammer Down Developments Ltd’s Hokitika land was the intended site of the Stonewood Homes franchise show home and office, suggesting a connection between West Coast Residential Ltd and Hammer Down Developments Ltd.

[7]An email from Stonewood Homes circulated on 3 June 2021 reads:

We are delighted to welcome Peter and Adam as our newest franchisee to the Stonewood Family.

[8] Some more detail of the events giving rise to Mathew’s belief that Adam had breached his restraint of trade and that was known to Peter, is contained in an earlier

judgment from 12 April 2022 when Mathew obtained orders for further and better discovery.1 In the 12 April 2022 Judgment, Adam and Peter were ordered to provide discovery of the documents relating to the $200,000 loan. While their evidence was that the loan was an oral agreement, given the money was paid directly into West Coast Residential Ltd, documents showing how that company treated the funds received, where the money was paid from and the narrations surrounding those transactions, were held to be relevant.

[9] Mathew has applied for further discovery…

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.

Keep reading for free

Create a free CaseChat account to read Colville v Colville and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2023] NZHC 619
Decision Date: 24 March 2023

CaseChat Overview and Summary

In the High Court of New Zealand, Mathew Robert Colville sued his brother, Adam Keith Colville, and Peter Jonathon Blight, the second defendant, over alleged breaches of a restraint of trade. The dispute revolves around Adam selling his half share in Housing West Coast Limited to Mathew, with an agreement that he would not engage in a similar business for five years. Mathew claims Adam violated this restraint by entering into the Stonewood Homes franchise business, which operates in the same area. Additionally, Mathew alleges that Peter, as director and shareholder of West Coast Residential Ltd, is complicit in these breaches.

The court had to decide whether the documents Mathew sought for discovery were relevant and proportionate, as well as whether Peter should be compelled to provide certain documents under the court's order. Specifically, the court examined the relevance of documents concerning Adam's sale of shares in Hammer Down Developments Ltd and details of the franchise fee paid by West Coast Residential Ltd to Stonewood Homes. Peter opposed these requests, arguing they were irrelevant and speculative.

The court found that the documents Mathew sought were indeed relevant to the case. The court concluded that understanding the nature of Adam's and Peter's relationship, their financial arrangements, and what Peter knew was crucial, especially since Mathew lacked direct knowledge of these matters. The court held that the documents related to the division of assets in Hammer Down Developments Ltd and the franchise fee were relevant to Mathew's claims. The court also noted that while the defendants argued the documents would only show an equal division of assets, they could still provide insight into the nature of the relationship and the activities of Hammer Down Developments Ltd.

Further, the court determined that Mathew was entitled to discover details of the franchise fee paid by West Coast Residential Ltd, as knowing the total amount and the contributors to the fee could support Mathew's claim of a joint arrangement to acquire the Stonewood Homes’ franchise. The court also addressed compliance with the previous order regarding electronic devices, concluding that the defendants had effectively complied by engaging a computer forensic expert who had waived privilege over his report. However, the court left costs to be determined later.

Orders