Christchurch businessman Evan Stewart transferred $3.1 million to Australia over a twelve month period; cash generated from sale of legal highs. He is challenging attempts to recover this money.
Bionutrient Customs Ltd manufactured legal highs. Government permission for retail sales proved a commercial bonanza. Mr Stewart’s business model collapsed overnight in May 2014, after an abrupt reversal in government policy. A related company, Eversons International Ltd, is now in liquidation. Liquidators allege the $3.1 million sent to Australia by Bionutrient more properly belongs to Eversons and they want it back. Mr Stewart controlled both companies. Inland Revenue claims Eversons owes $3.7 in unpaid taxes and penalties.
In the High Court, Bionutrient failed to file in time a statement of defence to Eversons’ demand for $3.1 million. Normally, liquidation follows promptly after a failure to file. Associate judge Paulsen granted Bionutrient an extension for filing. Defence was filed only a few days late.
Bionutrient says the money remitted to Australia was an investment in Mr Stewart’s father’s Australian health food business. Eversons’ liquidators say there is no evidence of Bionutrient holding an equity stake in any Australian business.
Even if there were no legal basis for sending the money to Australia, the liquidators are too late, Mr Stewart says. The last payment was sent to Australia in April 2014. Liquidators did not take legal action before April 2020, after which the Limitation Act six year rule blocked any claim. The six year clock was reset in October 2018, the date when Mr Stewart signed a letter acknowledging $3.1 million had been transferred to Australia, the liquidators say.
The High Court is yet to rule on either the liquidators’ claim or Bionutrient’s claimed defences.
re Bionutrient Customs Ltd – High Court (12.11.20)
20.177