Colville v Colville - [2022] NZHC 766

IN THE HIGH COURT OF NEW ZEALAND GREYMOUTH REGISTRY

I TE KŌTI MATUA O AOTEAROA MĀWHERA ROHE

CIV-2021-418-17

[2022] NZHC 766

BETWEEN
MATHEW ROBERT COLVILLE

Plaintiff

AND

ADAM KEITH COLVILLE

First Defendant

PETER JONATHAN BLIGHT
Second Defendant

STONEWOOD HOMES

Non-Party

Hearing: 5 April 2022

Appearances:

A R B Barker QC and J E Palairet for Plaintiff

D M Hughes and L H Scott for First and Second Defendants No appearance for Non-Party

Judgment:

12 April 2022

JUDGMENT OF ASSOCIATE JUDGE LESTER

COLVILLE v COLVILLE [2022] NZHC 766 [12 April 2022]

[1] Mathew Colville (Mathew) , the plaintiff, and Adam Colville (Adam), the first defendant, are brothers. They were, up until October 2020, equal shareholders in a company called Housing West Coast Limited, which operates the G J Gardner franchise for the West Coast. Mathew and Adam have fallen out and their relationship is acrimonious.

[2] Mathew bought out Adam’s 50 per cent interest in Housing West Coast Ltd for a substantial sum. The agreement included a restraint of trade in the following terms:

1.THE Vendor covenants with the PURCHASER that he will not directly or indirectly be engage, participate in or have any direct or indirect interest whether as an owner, partner, director, shareholder, officer, employee, agent, consultant, representative, contractor or subcontractor or in any other capacity in the business detailed in the schedule in competition with Housing West Coast Limited.

… SCHEDULE
Business the design, sales, marketing, management, accounting, estimating and construction of any houses, commercial or industrial buildings, units or duplexes.

[3] Mathew alleges that Adam has acted in breach of the restraint and that the second defendant, Peter Blight (Mr Blight), is party to those breaches in his role as a director and shareholder of West Coast Residential Limited (WCRL) which owns the Stonewood Homes West Coast franchise.

[4] As will be developed below, Mr Blight previously owned the Stonewood Homes franchise for the West Coast and re-acquired that franchise in May 2021.

[5] Adam and Mr Blight dispute that the restraint has been breached, and Adam says the restraint is unreasonable both as to its breadth and duration.

[6] While the parties have exchanged discovery, cross-applications for further and better discovery were for hearing on 5 April 2022. By the time of the hearing, those cross-applications were largely resolved. Mr Barker QC, counsel for Mathew, tabled a draft proposed order covering the areas of agreement and noting the issues that

remained for hearing. Those orders, which reflect my findings on the disputed areas, appear at the end of this Judgment.

Discovery principles

[7] The principles that apply to an application under r 8.19 High Court Rules 2016 (the Rules) are well settled. They were summarised by Asher J in Assa Abloy New Zealand Ltd v Ellegion (New Zealand) Ltd as follows:1

(a)Are the documents sought relevant, and if so, how important will they be?

(b)Are there grounds for belief that the documents sought exist?…

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.

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Details

Case: [2022] NZHC 766
Decision Date: 12 April 2022

CaseChat Overview and Summary

Mathew Colville and his brother Adam Colville, who were previously equal shareholders in a building company, dispute whether Adam has breached a restraint of trade agreement by working with the Stonewood Homes franchise for the West Coast. The dispute has reached the High Court in New Zealand. The Court heard applications for discovery and further and better discovery. The Court found that there were reasonable grounds for the plaintiff to believe that certain categories of documents existed and would be relevant to the proceeding. These included documents relating to the relationship between the defendants and Hammer Down Developments Ltd, Peter Blight Builder Ltd and West Coast Residential Ltd. The Court also found that there were reasonable grounds to believe that documents relating to a $200,000 loan made by Adam to West Coast Residential Ltd existed and would be relevant. The Court ordered the defendants to provide the plaintiff with certain documents and allow an inspection of their electronic devices by an independent expert. The Court reserved certain costs and adjourned other applications for further mention.

Orders