One of the brothers completed his building apprenticeship before setting up his own company. Photo / File
One of the brothers completed his building apprenticeship before setting up his own company. Photo / File
A West Coast builder who owns a franchise of New Zealand’s busiest housing construction business sued his brother and a rival builder.
The case went to the High Court at Greymouth for a breach of restraint of trade hearing.
Up until three years ago, brothers Mathew and Adam Colville hadtogether operated the G.J. Gardner Homes franchise in that South Island area.
But their relationship broke down, Justice Cameron Mander said in a newly-released judgment. And by mutual agreement, Mathew bought Adam’s share and the two separated.
Adam Colville had a restraint of trade agreement in place but then went to work for rival West Coast builder Peter Blight who two years ago bought a Stonewood Homes franchise for the West Coast.
Mathew Colville claimed his brother was closely involved in establishing the new Stonewood franchise and said his G.J. Gardner franchise was subsequently being damaged.
So Mathew sued his brother for the alleged breach of restraint of trade, claiming it caused him loss, and he also sued his brother’s associate Blight for having induced the breach of trade.
Both Adam Colville and Peter Blight denied the claims.
Adam was self-represented but the other two men had legal representation.
But the judge ruled in Mathew’s favour, awarding him $252,000, saying that was the loss he estimated Adam Colville and Peter Blight had caused to the G.J. Gardner franchisee for the West Coast.
“That being the loss incurred by Mathew, he is required to be compensated by both Adam and Peter.”
Each of the other two men must pay $126,000 as well as interest on that sum.
Before the brothers fell out, they had worked together using G.J. Gardner Homes proprietary designs, systems and supply relationships, developing a successful franchise business.
Mathew purchased Adam’s shares in the brothers’ company for $1,062,000.
Mathew paid his brother $1.7m to buy him out of the G.J. Gardner franchise. Prior to the execution of the restraint, Adam asked Mathew if he could be permitted to be employed as a builder’s labourer.
This was agreed and provided for in the terms of the brothers’ agreement.
Adam told his brother that Peter Blight had signed a restraint of trade but that he was allowed to work as a building labourer. It was Peter’s position in court that he engaged Adam in that capacity, in accordance with the terms of the restraint.
The restraint was two years and four months, applied to the West Coast region comprising Buller, Westland and Grey Districts.
Justice Cameron Mander presided over the hearing. Photo / Joseph Johnson
“This was a large geographical area, but one marked by a small population with a relatively small pool of contractors and tradesmen,” the High Court judge said.
Adam and Peter claimed that G.J. Gardner did so well that between early 2021 and early 2022, the number of homes it built rocketed from 28 to 54. But Mathew Colville said his share of the market only rose by 2.3 per cent during that time.
The pair claimed Mathew was simply unable to show lost sales to Stonewood Homes.
But Mathew Colville disagreed and said he had suffered loss.
“Mathew emphasised that despite the total number of builds on the West Coast for the period ended January 2021 doubling over the course of the same period for the following year, [his] market share increased by only 2.3 per cent, from 24.7 per cent to 27 per cent,” the decision noted.
The court heard Adam took and sent a Snapchat message that included a photograph of Stonewood Homes’ offices with the narration “my new family” in May 2021.
Justice Mander said Adam maintained he was lying about his involvement in the Stonewood Homes franchise in order to cause “hurt” to Mathew and was effectively “stirring things up” to get back at his brother because of the bad blood and ill-will that arose from personal difficulties causing him to be bought out of the G.J. Gardner franchise.
But the judge said despite the boom in new houses on the West Coast, Mathew Colville had indeed suffered a loss.
He agreed that there had been a negative impact on the G.J. Gardner business that coincided with the actions of Adam and Peter. That should not be allowed to be obscured by the overall increase in building activity over their period.
So he allowed Mathew Colville’s claims.
Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas.
