Penney said Grant Taylor, who founded the Rascals nappy brand before his family was bought out by Zuru in 2020, was initially used as a sounding board for their plans, and there was some consideration given to bringing him on board formally as a consultant.<\/p>\n
\u201cIf he can get involved, it\u2019s a no-brainer, right? Like, this guy\u2019s just built this company that\u2019s worth $30 million. If he can help us do that, and we can do it together … Jared and James and I would have been keen,\u201d Penney said.<\/p>\n
Sam Lowery, acting for JJK, asked him why this plan didn\u2019t come to fruition.<\/p>\n
\u201cHe had a restraint of trade with Zuru, and he wasn\u2019t able to be a part of our company.\u201d<\/p>\n
JJK contends it relied only on \u201chigh-level\u201d advice and information from Taylor, while Zuru alleges this information was confidential and improperly obtained.<\/p>\n
Zuru\u2019s initial lawsuit also targeted Grant Taylor and his father, Keith. <\/p>\n
Those proceedings were settled on the eve of trial, with Grant Taylor admitting breaches of confidence and restraint and paying $1m.<\/p>\n
The soured friendship, and partnership in the Rascals nappy business, between Grant Taylor (left) and Nick Mowbray is at the heart of the case being heard at the High Court.<\/p>\n
Zuru\u2019s remaining claims seek more than $75m in compensation and damages from JJK.<\/p>\n
Penney said tensions with the Mowbrays over JJK\u2019s purchase of Treasures and the alleged extent of their reliance on Taylor began to have business consequences.<\/p>\n
Nick Mowbray informed Woolworths of his lawsuit in 2021 and raised the possibility of an injunction that would prevent the sale of Treasures, leading to Woolworths cancelling initial orders for Treasures.<\/p>\n
Penney said the subsequent caution exercised by Woolworths required JJK to assume warehousing and distribution costs and expenses instead of shipping directly from factories in China to supermarkets as originally planned. It was a crippling development for his business.<\/p>\n
\u201cIt [an injunction] never did happen. It was just a threat in the end. But [Woolworths-owned] Countdown felt like they had to prepare for it. They folded,\u201d he said.<\/p>\n
Earlier in the week, Angela Deehan, Woolworths\u2019 general manager of grocery non-foods, told the court the move was intended to insulate the supermarket from the risk of holding goods it was restrained from selling.<\/p>\n
\u201cOur main concern was being left with stock that we couldn\u2019t sell, a million dollars\u2019 worth of stock at our distribution centres that we couldn\u2019t sell.\u201d<\/p>\n
Penney said the suddenly tense relationship with his biggest retailer was devastating: \u201cIt was a dark day for me and for the team.\u201d<\/p>\n
He delivered a backhanded salute to Zuru\u2019s tactics: \u201cIt\u2019s a great ploy, you know, it really is … First of all, you know, legal proceedings, completely drains your company. Secondly, you can\u2019t sell your shares to anyone else because you\u2019re in litigation, no one else wants to jump into a fight.<\/p>\n
\u201cAnd thirdly, and probably the most powerfully, is it completely changed your relationship with your customer. For us, it was Woolworths.\u201d<\/p>\n