Zuru's Nick Mowbray accused of ‘revenge litigation’ at Rascals vs Treasures High Court nappy scrap

Tuesday, 5 August 2025

Nick Mowbray of Little Rascals and Zuru, outside the High Court at Auckland.

Zuru’s Nick Mowbray has given evidence at the second day of the Rascals versus Treasures nappy dispute at the High Court in Auckland, but was accused of taking “revenge litigation” by the company it is suing.

Rascals International and its owner Zuru are suing Auckland-based nappy-making rival JJK, and related company Taonga IP, for millions in damages.

Zuru and Rascals claim JJK conspired with a Rascals’ director, and used confidential information from Rascals supplied by that director, to buy and develop the Treasures brand in 2020 from under Zuru’s nose, setting back Rascals’ expansion into Woolworths’ supermarkets.

JJK is defending the action, and has counter-claimed for damages, saying a call Mowbray made to Woolworths in February 2021 cost them more than $1m.

Counsel Sam Lowry, acting for JJK, told the court the directors of JJK had a deep conviction they had done nothing wrong, and believed they had been targeted by “revenge litigation by a wealthy businessman”.

Mowbray’s 2021 intervention with Woolworths “almost pushed JJK under from the start”, Lowry said.

“It takes courage and fortitude to resist that kind of pressure from one of New Zealand's most wealthy families. JJK's directors have resisted that pressure,” he told the court.

JJK’s directors had taken on debt to get the company to trial, Lowry said.

Lowry told the court on Monday that Rascals had never made an offer for the Treasures brand, and only made tyre-kicking, speculative approaches.

But in the witness box, Mowbray said Rascals had intended to buy Treasures, which in 2019 was struggling.

Mowbray said there were efficiencies in Zuru buying an existing brand that had deals with retailers and bases of customers that had “affection” for them, before using Zuru’s business model to rapidly scale it up profitably.

Mowbray said as Rascals’ nappies could only be sold through Foodstuffs’ supermarkets (Pak ‘n Save, New World, FourSquare) under an exclusivity deal, buying Treasures would have allowed it to start selling through Woolworths supermarkets (Woolworths, Countdown, SuperValue and FreshChoice).

However, one Rascals’ director, Grant Bruce Byron Taylor, had passed confidential information to the directors of JJK to help them buy and develop Treasures, Mowbray claimed.

Woolworths stocks Millie Moon nappies. Its rival Foodstuffs does not.

After missing out on Treasures, it wasn’t until February 2025 that Zuru had launched its new Millie Moon nappy range into Woolworths supermarkets.

The JJK directors were Jarrod Armitage, James Collie and Kirk Penney, though Penney, a former New Zealand representative basketballers, left JJK last year.

Taylor was being sued by Zurubut had settled the claim against him before the High Court civil trial began.

Pak 'n Save supermarkets are part of the North and South Island Foodstuffs cooperatives.

Mowbray said he had known Grant Taylor for more than a quarter of a century as they had gone to school together at St Peter’s College in Cambridge.

The pair became business partners after a holiday they took together in Bali in 2016, when Taylor asked for help in developing the Rascals nappy company Taylor’s family owned.

That led Zuru to invest in Rascals in 2017 through a specially-established company Rascal and Friends NZ. By 2019, it was doing $10 million a year in nappy sales. And in 2020, Zuru bought complete ownership from Taylor and his family, for $30m.

Part of Zuru’s claim is that JJK mimicked the profitable Rascals business model based on confidential information and contacts passed to it by Taylor. The detailed specifics of the Rascals’ model were suppressed by Justice Dani Lee Gardiner.

Walmart stocks Rascals nappies. (AP Photo/David Zalubowski), File)

However, it involved a very “lean” business model, manufacturing in a high-tech factory in China, targeting style-conscious parents, pumping the brand through intensive data-driven, targeted digital marketing, and offering supermarkets a bigger margin than other nappy makers could.

Rascals used this model in overseas territories into which Rascals launched, including the UK, where it sold through Tescos, and in the US, where it sold through Walmart.

Mowbray told the court Taylor had learned much confidential information about how Rascals operated during his time at Rascals.

“Only those at Rascals knew all the components of the model, and how it fitted together,” he said.

Mowbray said Taylor's efforts to buy the Treasures brand and develop it with JJK was done without his knowledge, all while Taylor was a Rascals employee, and later, when he was under a non-compete contract.

In court, Mowbray read out electronic communications between JJK directors talking about keeping Taylor’s contacts with them secret to avoid Zuru finding out and launching “all out war against us”.

On Monday, the High Court heard there was “bad blood” after Taylor had been let go from Rascals.

By early 2020, Mowbray said he had lost confidence in Taylor as a leader for the Rascals business in New Zealand.

Taylor had “limited capability” as a leader”, Mowbray said, and was not adding any value to the business.

“Strong leadership is incredibly important to a business,” Mowbray said. “Grant seemed to be having the opposite effect.”

But Mowbray said he and Taylor had agreed to remain friends, despite Taylor failing to meet “our crazy, high ambitions”.