Competitor ordered to pay Bunnings $60,000 for trying to stop store

Wednesday, 3 April 2019

Bunnings was not so welcome in Queenstown, after a competitor associated with Mitre 10 Mega tried to block a new store.(File photo)

A company associated with two Mitre 10 Mega stores must pay Bunnings $59,953 after the Environment Court ruled it was a trade competitor when it objected to a new Bunnings store 500 metres away.

H&J Smith objected to Bunnings setting up a trade supplies store at Frankton-Ladies Mile Highway in Queenstown.

Bunnings is still hoping to obtain consent for a new store near on the Frankton-Ladies Mile Highway at the top left of the photo which shows Queenstown Airport.

But Environment Court judge Jon Jackson ruled that H&J Smith's objections were an abuse of court process because its associated companies own the Mitre 10 Mega Queenstown and Invercargill outlets.

The $59,953 cost award was the highest that could be given.

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Judge Jackson said H&J Smith had tried to delay and prevent Bunnings entering the Queenstown market as a competitor, which was not permitted under the Resource Management Act.

The new Bunnings store would be in the area near the top of the map close to the Ladies Mile subdivision.

The Bunnings resource consent application lodged with Queenstown Lakes in March 2018 to build the store was turned down, and the company decided to appeal the decision.

H&J Smith then tried to join the Bunnings appeal with the purpose of objecting as a section 274 party under the RMA.

H&J Smith refused two 'Calderbank' offers during May 2018 - where an offer is made to settle a dispute.

After another court hearing in August 2018, the Environment Court ruled H&J Smith was a trade competitor and struck out its 274 notice - the latest judgment set the costs of the legal proceedings in favour of Bunnings.

The $59,930 was the total cost of court fees incurred by Bunnings, 'awarded rarely and in exceptional circumstances', the judgment said.

Standard costs were usually between 25 per cent and 33 per cent of reasonable costs sought.

'Since the RMA attempts to control anti-competitive behaviour or rent seeking behaviour - which imposes costs on persons trying to join the relevant market - the court should…keep extra costs to legitimate applicants to a minimum,' Judge Jackson said.

Bunnings is still going ahead with its appeal for setting up its store as a non-complying activity in an industrial zone at Frankton.

According to the Bunnings web site it has a store in Dunedin but none others in the lower South Island.

H&J Smith is one of the biggest chains in the lower South Island with shops in Invercargill, Gore, Queenstown, Te Anau and Balclutha and owned by Smith family interests headed by Acton Smith. In 2015 it acquired Dunedin-based Arthur Barnett.

Meanwhile, another Queenstown developer, Remarkables Park, was also recently awarded costs but on the basis of more standard costs. The amount is yet to be finalised.