April 8, 2021
In mid-February this year, Wylie J ordered two China-based fruit importers to pay Zespri $894,537.92 towards costs it incurred in responding to proceedings filed in the High Court by the Chinese importers in 2014. Zespri had sought up to $1,832,262.
The Chinese importers distributed Zespri’s kiwifruit in China. In their 2014 proceedings they sought NZ$25 million (approx) in damages from Zespri alleging breaches of contract. The proceedings were commenced after one of the importers, its General Manager, ‘Big Liu’, and a Zespri subsidiary along with one of its employees were convicted of smuggling in China in 2012. The Chinese authorities alleged that duty had been underpaid on kiwifruit coming into China. Big Liu was sentenced to 13 years’ imprisonment and the import company was fined $NZ8.6 million (approx). In their 2014 proceedings, the Chinese importers alleged (among other matters) that Zespri had failed to reimburse them for duty paid to the Chinese customs authorities. Big Liu gave an interview to TVNZ before proceedings were filed and asserted Zespri had made him a ‘scapegoat’ for what had occurred in China. Zespri denied the claims and brought a substantial counterclaim.
However, the Chinese importers discontinued their proceedings in February 2020 after their application for an adjournment was denied. The adjournment was sought on the basis that Big Liu remained in prison in China and therefore could not give evidence in the proceeding.
Zespri application for indemnity or uplifted costs was refused, but it was awarded ordinary “scale” costs and reimbursement for its disbursements. Bruce Gray QC, of Shortland Chambers, acted for the Chinese importers.
Zespri also sought a non-party costs order against one of Big Liu’s New Zealand-based family members. Zespri’s application against the family member was unsuccessful. The family member was represented by members Greg Blanchard QC and James Little.
Links to news reporting of this case: