Sharing space on a south Auckland light industrial site, a co-operation agreement between two Chinese businesses manufacturing and selling dairy and health food products turned sour requiring High Court intervention to allow access.
NBL (New Zealand) Ltd leases an industrial site on Harbour Ridge Drive in Wiri. It works closely with Supermega Market Ltd, which deals in similar products. Both companies have connections to mainland China.
The High Court was told the two signed a business co-operation agreement in early 2022. Supermega was given access to a specified part of NBL’s site, setting up a processing facility. Supermega agreed to pay $78,000 a month for access, plus meeting utility costs and wage costs for staff seconded to its production line. Supermega also agreed to stump up extra cash when requested, making short-term loans enabling NBL to pay its trade creditors. In turn, NBL agreed to buy all Supermega’s production.
With NBL’s borrowings from Supermega reaching nearly $800,000, Supermega stopped paying monthly rent and demanded NBL repay the money lent. NBL responded by posting security guards, restricting access for Supermega staff.
In the High Court, Justice Johnstone ruled the co-operation agreement had all the appearances of a lease, with Supermega sub-leasing space from NBL. As a short-term fix, NBL was ordered to allow Supermega continued access, subject to Supermega resuming payment of the $78,000 monthly rent.
The two are due back in court at a later date to sort out liability on their mutual debts and the status of Supermega’s continued access.
Supermega Market Ltd v. NBL (New Zealand) Ltd – High Court (28.03.24)
24.081