Zuru lost a nappy lawsuit it had every reason to expect it would win

The result nobody expected

When a company with the commercial firepower of Zuru takes a nappy start-up to court, the smart money backs the giant. That is not how it played out. On 9 August 2026, Justice Dani Gardiner of the Auckland High Court released a 189-page ruling dismissing Zuru’s claim against nappy business JJK Group entirely.

This was not a marginal loss. The court heard that Zuru’s global nappy operation has nearly $1 billion in annual sales. Its co-founder Nick Mowbray runs a toy and consumer products empire that distributes to retailers in over 120 countries. And on the eve of trial, a key witness, Grant Taylor, settled by paying Zuru $1 million and handing over an affidavit that helped Zuru’s case. Zuru still lost its primary claim.

How the fight started

Zuru bought the Rascals nappy business from Taylor and his sister Louise Stainthorpe in 2020. The pair had founded the original company, Rascal and Friends Limited, in Hamilton in 2017, according to BusinessDesk’s 2024 reporting.

Just a year after the acquisition, in 2021, Zuru filed proceedings alleging JJK had used confidential information obtained through Taylor to acquire the rival Treasures brand, an opportunity Zuru said it was entitled to pursue. The litigation ran for four years and, The Post reported, included raising the matter with Woolworths, Treasures’ main retailer, and threatening an injunction to block JJK’s nappy sales. JJK counterclaimed, accusing Mowbray of running what it called “revenge litigation.”

The real lesson is about timing, not nappies

Here is the detail every business owner should sit with. The judge did not simply wave JJK through on the merits and stop there. She found that Mowbray had made claims “which objectively had the capacity to mislead or deceive”. That is a serious finding.

And yet Mowbray escaped a counterclaim judgment. Not because his conduct was cleared, but because JJK filed its counterclaim out of time. The procedural clock, not the commercial facts, decided that half of the case. A finding that might have stung landed with no damages order attached, purely because a deadline slipped.

That is process risk in its purest form. In commercial litigation, timing and procedure can override the underlying facts in both directions. Zuru lost a claim it spent four years and a fortune pursuing. JJK dodged a black mark it arguably earned, on a technicality. Neither outcome tracked the merits cleanly.

Delete the messages, lose the evidence

The trial ran for four weeks in August 2025, a proceeding Justice Gardiner later described as having “unusual twists and turns”. Billionaires, a former NBA player and nappy entrepreneurs gave evidence. Multiple witnesses reportedly wept on the stand.

The evidence management was a mess. Taylor admitted he had “impulsively deleted those because I was scared”, referring to communications from mid-2021. Kirk Penney deleted chat threads too. The court could not properly assess most of the relevant communications as a result. For any founder who thinks a quick clean-up of a phone makes a problem disappear, this case is a warning. Destroyed evidence does not vanish quietly. It becomes its own liability and colours how a court reads everything else.

Shelf space is the pressure point

Running underneath the whole dispute is New Zealand’s supermarket duopoly. Zuru’s alleged conduct included raising concerns directly with Woolworths and threatening to injunct JJK’s sales, moves that would have delivered leverage through retail access rather than product competition. For any consumer goods business, that is the live vulnerability. When two chains control the shelves, an incumbent with deep pockets does not need to beat you on quality. It can lean on the gatekeepers.

Zuru has a documented history of aggressive litigation, and questions about whether the extended nappy proceedings amounted to corporate bullying were raised throughout. The message for smaller operators is not that the courts will always protect them. It is that even a company this large can find its firepower neutralised when process turns against it. Litigation is a commercial tool, and like any tool it can misfire, sometimes on the party that swung it.

Sources

• Zuru nappy trial: Judge rules against billionaire Mowbray brothers’ company (2026-08-09)
• Zuru nappy trial closes as judge speaks of ‘unusual twists and turns’
• Zuru’s Nick Mowbray accused of ‘revenge litigation’ at Rascals vs Treasures High Court nappy scrap
• Nappies fight involving Zuru founder set down for 2025 trial (2024-10-01)
• High Court hears Zuru’s global nappy business has nearly $1b annual sales