Wairarapa beekeeper First Honey NZ Ltd has been ordered to hand over $492,800 to Whanganui honey producer Settlers Honey Ltd, proceeds of an export order. First Honey’s claim to a set off was dismissed; money it claimed to be owed was not owed by Settlers Honey but by a related company.
The High Court was told of a symbiotic relationship between the two honey producers. They placed hives on each other’s land, stored honey belonging to each other and either processed sale orders on behalf of the other or purchased their end of season stocks. This led to a mass of contra accounting entries as debts each owed the other were periodically set off.
It was against this background that Settlers Honey alleged First Honey had unlawfully intercepted payment on a US export contract, keeping the money as part of a claimed set off. Evidence was given that a container load of medical grade manuka honey was shipped from Settlers Honey to United States-based First Honey US in late 2020. There is a family link between First Honey NZ and First Honey US. First Honey NZ staff helped prepare the consignment for export, but it was Settlers Honey product that was exported. Settlers billed First Honey US, later discovering payment had instead been made to First Honey NZ. It held on to the money, claiming a set off against money it alleges Settlers owes.
In the High Court, Associate judge Lester ordered First Honey NZ hand over $492,800. It knew the export receipt was Settlers’ money. It could not claim a set off.
Evidence was given that a company related to Settlers called Land and Bee’s Ltd at one point owed First Honey NZ some $800,000. This is being paid at the rate of $6500 per week. If it wants to accelerate payment, First Honey has to take legal action directly against Land and Bee’s, Judge Lester said. It cannot set off this claim by wrongly holding on to Settlers money.
The $492,800 First Honey NZ owes Settlers was calculated as recovery of the original $648,200 export price less $155,400 ‘profit margin’ on the product exported. This profit margin recognises that First Honey NZ disputes whether Settlers took ownership of First Honey’s stocks it held at close of the previous season and at what price. It was left open for Settlers to dispute in a further court hearing whether First Honey was entitled to this ‘profit margin.’
Settlers Honey Ltd v. First Honey NZ Ltd – High Court (6.10.21)
21.162