17 Feb 2018

Businessman fined $37k for false statements about cladding

7:37 am on 17 February 2018

An Auckland man has been fined $37,500 for claiming generic, Chinese-made cladding was a premium product made in Australia.

Signage outside the Auckland District Court

Photo: RNZ / Claire Eastham-Farrelly

The former director of Supercrete Auckland, Christopher Middleditch, was sentenced in the Auckland District Court on Friday.

He'd previously pleaded guilty to three charges for breaching the Fair Trading Act.

The Commerce Commission said he told two customers the cladding panels Supercrete were supplying were made by Hebel, but they had been imported from China.

Hebel is a concrete building product sold throughout New Zealand but manufactured in Australia.

"Mr Middleditch traded off Hebel's premium brand name while knowingly supplying generic substitutes. This gave him a financial advantage over his competitors. The Commission prioritises appropriate cases involving building materials because of the significant harm they can cause consumers," Commissioner Anna Rawlings said.

Supercrete was removed from the register of companies in August 2016.

However Mr Middleditch says he did not intentionally mislead any of his customers.

His supplier had told him he'd won the right to use the Hebel trademark, his and the product he sold two customers was superior.

"I did not intentionally mislead any clients over the use of the Hebel brand in 2013. My supplier had just successfully defended an IPONZ case over the ownership of the Hebel trademark and had advised me we could continue to use the Hebel brand," Mr Middleditch said in a statement.

"The two clients involved were not disadvantaged and one remains a loyal regular customer."

The case was part of the Commission's prosecution of four individuals associated with the former Cavan Forde Group (CFG) of companies.

The four are accused of selling AAC products as Hebel between July 2007 and June 2013.

Former owner and director of now-defunct Christchurch Lightweight Concrete Limited, Darryl Campbell, was fined $151,875 in October 2017 for his part.

Two others, Dunedin-based father and son Cavan Forde and Martin Forde have entered not guilty pleas, and a trial date is yet to be set.