With legal costs in excess of $2.5 million after facing down now abandoned legal action over unpaid Chinese import duties, Zespri International is playing pin the tail on the donkey trying to find someone, anyone, liable to pay compensation.
After allegations by Chinese authorities that Shanghai Neuhof Trade Company Ltd had underpaid duty payable on kiwifruit imports, Shanghai Neuhof said Zespri was to blame. Allegations and counter-allegations flew. Shanghai Neuhof sued Zespri claiming it acted simply as agent for Zespri and China’s import duties were Zespri’s responsibility.
The High Court was told Xiongjie Liu, then managing director of Shanghai Neuhof, has since been sentenced to 13 years imprisonment by Shanghai Peoples’ Court for underpaying import duty. Shanghai Neuhof was also convicted; fined about $8.7 million.
Shanghai Neuhof’s abandoned its New Zealand litigation against Zespri. Now, Zespri is casting around to find who should be contributing to its costs. Shanghai Neuhof appears to be worthless: it has not paid the fine imposed in China; its business licence has been revoked by Chinese authorities.
Zespri demanded to know who funded Shanghai Neuhof’s litigation; members of Liu’s family using an inheritance received on the death of Liu’s father was the response. Zespri demanded details of this inheritance plus metadata from email correspondence with Shanghai Neuhof’s New Zealand lawyers. Metadata would identify who contacted the lawyers, without disclosing the content of any discussions, much of which would be protected by solicitor/client legal privilege. Zespri suspects Liu’s nephew Lijun Si, living in New Zealand, was in control of the litigation. If so, it would be looking to recover its costs from him.
Justice Wylie ordered disclosure of the names and source of funds of any person, trust or company which funded Shanghai Neuhof’s New Zealand litigation. He refused forced disclosure of email metadata and the named inheritance.
Shanghai Neuhof Trade Co Ltd v. Zespri International Ltd – High Court (13.05.20)
20.079