Talley’s claim MacLab is not properly paying royalties for supply of mussels resulted in a counterclaim by MacLab for $3.4 million alleging overcharging for stock supplied.
A 2014 supply agreement saw Talley’s Group Ltd and MacLab (NZ) Ltd joined at the hip in a long-term arrangement. MacLab processes raw mussels, producing powder for health products having claimed anti-inflammatory properties. The deal sees Talley’s receiving five per cent of MacLab’s gross revenue as royalties. Talley’s disputes the amount paid in royalties and the manner in which it is paid. It was envisaged payment would be made in kind, through issue of shares in a company holding MacLab assets, Talley’s claims. It has been refused access to MacLab’s internal records to allow verification of royalty payments, it says.
When sued by Talley’s, MacLab kicked back, alleging Talley’s overcharged for mussels supplied. MacLab has to prove what was the market price. The New Zealand market is dominated by Talley’s, MacLab and Sanford. MacLab dragged Sanford into its litigation seeking a court order for release of Sanford pricing information.
Sanford agreed to release pricing schedules and invoices covering mussel sales to its customers for the six year period ending December 2018. It refused to release aggregated data. That could identify pricing strategies developed over time and could be extrapolated to determine current pricing strategies, it said. In the High Court, Associate judge Sussock agreed, refusing to order disclosure of aggregated information. Judge Sussock also ruled Sanford was not obliged to disclose any information it held regarding pricing by other suppliers. If MacLab wants this information, it should be approaching these other suppliers, Sanford said.
MacLab has to pay Sanford’s costs in assembling pricing information being released.
Talley’s Group Ltd v. MacLab (NZ) Ltd – High Court (20.03.20, 29.10.21 & 28.04.22)
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