Neptune Bio-Innovations Pty Limited v New Zealand EZ-Health Biotech Limited

[2021] NZHC 1280

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-000459

[2021] NZHC 1280

IN THE MATTER

of debt recovery

BETWEEN

NEPTUNE BIO-INNOVATIONS PTY LIMITED

Plaintiff

AND

NEW ZEALAND EZ-HEALTH BIOTECH LIMITED

Defendant

Hearing:

1 June 2021

Appearances:

O J Ward for the Plaintiff

No appearance by or on behalf of the Defendant

Judgment:

2 June 2021

JUDGMENT OF WOOLFORD J

This judgment was delivered by me on Wednesday, 2 June 2021 at 11:30 am pursuant to r 11.5 of the High Court Rules.

Solicitors:           Stace Hammond, Auckland, for the Plaintiff

NEPTUNE BIO-INNOVATIONS PTY LIMITED v NEW ZEALAND EZ-HEALTH BIOTECH LIMITED [2021] NZHC 1280 [2 June 2021]

[1]    The plaintiff, Neptune Bio-Innovations Pty Limited, seeks judgment for the recovery of a debt owed to it by the defendant, New Zealand EZ-Health Biotech Limited. The plaintiff commenced these proceedings and applied for summary judgment against the defendant on 24 March 2021. The proceeding was served on the defendant at its registered office on 21 April 2021. No steps have been taken by the defendant to defend the claim. No notice of opposition or statement of defence has been filed. There was no appearance by the defendant when the application for summary judgment was called on 1 June 2021.

Factual background

[2]    In April 2020, the defendant contracted with the plaintiff to procure raw materials to the value of AUD$1,228,500. The plaintiff agreed to the defendant’s payment proposal (40 per cent up front and 60 per cent balance within three days of the plaintiff’s delivery of the product). The plaintiff procured the raw materials.

[3]    On 6 May 2020, the plaintiff issued the defendant a tax invoice in the sum of AUD$1,228,500 for the raw materials. The defendant made a part payment of AUD$491,400 with AUD$737,100 remaining unpaid. On or about 28 May 2020, the plaintiff delivered the product. Despite the plaintiff delivering the product, payment of the balance of the tax invoice was not made within the agreed timeframe of three days.

[4]    On 24 September 2020, the plaintiff’s Australian lawyer issued a demand letter to the defendant seeking payment of the debt within seven days. On 9 October 2020, the plaintiff served a statutory demand on the defendant requiring payment of the outstanding debt.

[5]    On 19 October 2020, the lawyer acting for the defendant responded to the plaintiff’s statutory demand stating that it had been served in error as the defendant was acting as an agent in New Zealand only for Hong Kong EZ-Health Investments Holding Group Limited (HK EZ-Health) and was not a party to the contract between the plaintiff and HK EZ-Health. Accordingly, the defendant was not a debtor to the plaintiff.

[6]    In support of their claim, the defendant’s lawyer produced a copy of an “authorisation letter” dated 7 February 2020 and addressed to New Zealand EZ-Health Biotech Limited (EZ EZH). It states:

Due to the impact of roits [sic] in Hong Kong, Hong Kong EZ-Health Investment Holdings Group Limited (“HK EZH”) has difficulties in paying out to overseas suppliers. From now on, HK EZH authorises NZ EZH to conduct overseas purchasing business on its behalf.

Discussion

[7]    I am satisfied on the basis of the uncontested affidavit evidence that the alleged agency arrangement was never disclosed to the plaintiff. The following factors also establish that the defendant is appropriately a debtor to the plaintiff:

(a)On or around 22 April 2020, the defendant generated a purchase order addressed to the plaintiff for 630 kilograms of Lactoferrin 95 per cent at a price of AUD$1,228,500. It was in the name of New Zealand EZ- Health Biotech Limited with a New Zealand Business Number (NZBN): 9429047539983. The order also specified the registered office as 25 Hackett Street, Saint Marys Bay, Auckland 1011.

(b)On 27 April 2020, the defendant emailed the plaintiff:

Hi Ganthi,

Here’s      purchase      order      PO-EZ20200422-01      for AUD 1,228,500.00.

Delivery due date, address and instructions are included in the purchase order.

If you have any questions, please let us know. Thanks,

New Zealand EZ-Health Biotech Limited

(c)The tax invoice issued by the plaintiff to the defendant was part paid by the defendant, with a debt of AUD$737,100 remaining unpaid.

(d)All discussions the plaintiff had were with a representative of the defendant, namely, Dr Cissie Chen (Operations Manager), with  a New Zealand mobile telephone number of ….62.

(e)Dr Chen is also the wife of Jiaying Ni, one of the directors of the defendant.

Result

[8]    I am satisfied that there is no arguable defence to the plaintiff’s claim. The plaintiff is entitled to the judgment it seeks. There will be judgment for the plaintiff against the defendant in the sum of AUD$763,158.47, which includes the principal sum of AUD$737,100, interest of AUD$12,147.06 pursuant to the Interest on Money Claims Act 2016, and costs totalling AUD$13,911.41 on a 2B basis.

Woolford J