Facing the legal problem of suing a customer in China for $1.7 million allegedly unpaid, Nelson Honey & Marketing turned its guns on Grace Gu in New Zealand claiming she had guaranteed payment. The claim was thrown out. She acted merely as consultant to Nelson Honey and incurred no personal liability for customer’s unpaid accounts.
In 2013, Nelson Honey & Marketing (NZ) Ltd met with Ms Gu for advice on marketing its product in China. She provided contact with a Mr Jack Wang. Through Mr Wang’s company Horizon, Nelson Honey’s product was sold online through a trading company called VIPShop. Over a five year period some $8.7 million of product was supplied to Horizon. In early 2018, Nelson Honey claimed about $1.7 million remained unpaid. Threats to sue Mr Wang and Horizon in China were put on hold; Ms Gu was sued.
The High Court was told a formal consultancy agreement between Nelson Honey and Ms Gu had been drafted, but never signed. For a period, a company controlled by Ms Gu was used as a conduit for the export transactions.
Associate judge Johnston ruled there was no evidence that Ms Gu had guaranteed payment of Horizon invoices. In fact, part of the unsigned draft consultancy agreement indicated Ms Gu would never be liable for Horizon accounts.
Nelson Honey & Marketing (NZ) Ltd v. Pureality Trading Company Ltd & Gu – High Court (16.11.22)
23.005