AFFCO NEW ZEALAND LIMITED v NZ PREMIUM TRADING COMPANY LIMITED [2018] NZHC 3149

AFFCO NEW ZEALAND LIMITED v NZ PREMIUM TRADING COMPANY LIMITED [2018] NZHC 3149[3 December 2018]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2015-004-000368[2018] NZHC 3149BETWEEN AFFCO NEW ZEALAND LIMITEDPlaintiffAND NZ PREMIUM TRADING COMPANYLIMITEDDefendantHearing: 16, 17, 18 and 19 July 2018Counsel R J Hollyman and G P Malone for PlaintiffA Parkinson and D Evans (McKenzie Friend) for DefendantJudgment: 3 December 2018JUDGMENT OF KATZ JThis judgment was delivered by me on 3 December 2018 at 11.00amPursuant to Rule 11.5 High Court RulesRegistrar/Deputy RegistrarSolicitors: Solutions Law Office, NelsonCounsel: J Hollyman, Shortland Chambers, AucklandCopy to: A Parkinson (on behalf of the Defendant)Table of ContentsPara No.Introduction ......................................................................................................... [1]The First Container............................................................................................. [9]Witness credibility and reliability [10]The First Container — factual background [13]Discussion [24]The Shandong Containers ................................................................................ [38]The Shandong Containers — factual background [39]Discussion [46]The Shandong loss of profits claim .................................................................. [51]The Shandong loss of profits claim — factual background [55]Discussion [74]The Shanghai Container ................................................................................... [79]The Shanghai Container — factual background [79]Discussion [93]Summary and conclusion ............................................................................... [100]Result ................................................................................................................ [106]Introduction[1] AFFCO New Zealand Limited ("AFFCO") operates meat processing plants atvarious locations throughout the North Island and, through a subsidiary, in the SouthIsland. Most of its meat products are exported overseas, including to China.[2] NZ Premium Trading Company Limited ("NZ Premium") is a private companythat was operated principally by Andrew Parkinson, one of its owners and directors.1It was a registered exporter of meat products under the supervision of the Ministry ofPrimary Industries ("MPI") in New Zealand, and a registered exporter to China under1 Mr Parkinson represented NZ Premium in this proceeding, with leave of the Court.the control of AQSIS China (the Chinese authority regulating such imports).NZ Premium is no longer trading.[3] In 2013 and 2014, AFFCO sold various meat products to NZ Premium forexport to China. Difficulties arose with some of the shipments. First, the format ofNew Zealand health certificates required for importing meat products into Chinachanged. Chinese authorities ceased accepting New Zealand meat exports for a timewhile their concerns with the health certificates were addressed. Second, one ofAFFCO's meat processing plants was "delisted" by Chinese authorities for a period,which meant that meat from that plant could not exported to China. Certain exportsof AFFCO's meat products by NZ Premium were affected by these events.[4] The difficulties arising from these events were further compounded by themanner in which NZ Premium operated its business. In particular, NZ Premium madevarious payments to AFFCO that did not match AFFCO's invoices, and did not givereferences for those payments. Further, although AFFCO's terms and conditions ofinternational trade ("terms and conditions") prohibited set-offs, NZ Premium wouldregularly set off amounts it claimed were owing to it, without requesting or waitingfor AFFCO to approve the claimed sum and issue a credit note. This made it difficultto reconcile the true state of NZ Premium's account. AFFCO was at times willing toprovide product to NZ Premium without prior payment in full, as staff acceptedMr Parkinson's assurances that NZ Premium had a credit. The situation becameincreasingly problematic, however, in the second quarter of 2014. Both partiesclaimed that the other owed them money. By the end of 2014 their relationship hadbroken down completely.[5] In March 2015, AFFCO issued proceedings against NZ Premium in the DistrictCourt, seeking payment of $152,729.64. AFFCO prepared a helpful spreadsheet fortrial that set out all the sums claimed by both AFFCO and NZ Premium, and includedcredits for all sums paid by either party. Mr Parkinson accepted that the spreadsheetis comprehensive. Taking into account the various NZ Premium claims in respect ofwhich it has given credit, AFFCO now claims that the balance owing to it is$118,064.71.[6] In May 2015, NZ Premium filed a statement of defence denying any liabilityto AFFCO, and counterclaiming for more than $8 million. Most of NZ Premium'scounterclaim comprises "lost profits" said to arise from various contractual breachesby AFFCO. NZ Premium's counterclaims necessitated the removal of the proceedinginto this Court, on 4 June 2015.[7] The issues between the parties became more focussed during the course of thehearing, as is often the case. The key issues still requiring determination relate to threedifferent shipments:(a) The First Container (11602738) — this was a container that had to bereturned from China as it contained product that had been produced atAFFCO's Moerewa plant during the period when that plant wasdelisted by Chinese authorities.(b) The Shandong Containers (11669665 and 11672759) — thesecontainers were also denied entry to China due to the Moerewadelisting issue, although they contained product that had been producedprior to the delisting period.(c) The Shanghai Container (11705415) — this was a container thatAFFCO re-routed to Shanghai (from its original destination of Ningbo)and attempted to sell to another customer, as a result of NZ Premium'sfailure to pay AFFCO's invoice for the container.[8] NZ Premium alleges, in relation to each of these containers (or theirreplacements) that AFFCO has acted in breach of contract. Its loss of profits claimsrelate to the Shandong Containers and the Shanghai Container.The First Container`[9] The first issue requiring determination is whether AFFCO owes money toNZ Premium in respect of the First Container. In particular, NZ Premium claims thatAFFCO is required to reimburse it for certain shipping and storage costs incurred inrelation to this container.Witness credibility and reliability[10] It is necessary to make some observations at the outset as to witness credibilityand reliability. I set out below (and in subsequent sections) the facts as I have foundthem to be reliably proved. Many of my factual findings are based largely on thecontemporaneous documents. Other facts were not in dispute. To the extent, however,that factual matters were in dispute, I generally preferred the evidence of the AFFCOwitnesses, including in particular Mr Bailey, AFFCO's China Sales Manager, to thatof Mr Parkinson.[11] Mr Parkinson is in the unfortunate position of having lost his business.NZ Premium is no longer trading. Not surprisingly, this has caused Mr Parkinsonconsiderable distress. He lays the blame for the loss of his business squarely at thedoor of AFFCO. This belief has strongly coloured how he now views the relevantevents. Key aspects of his evidence were not supported by the contemporaneousrecord, and were often contradicted by it. Mr Parkinson was frequently unwilling tomake concessions in cross-examination, even when such concessions were clearlycalled for. At other times his evidence was discursive or evasive. He is clearly a manof firm views. Due to his deep emotional involvement in the subject matter of thisproceeding, it is my view that he struggled to bring the required degree of objectivityto aspects of his evidence.[12] The evidence of Mr Bailey (who was AFFCO's primary witness), on the otherhand, was measured and generally objective. His account of the key events was largelyconsistent with (and supported by) the contemporaneous documents. He was willingto make concessions when appropriate. I found him to be a credible and generallyreliable witness.The First Container — factual background[13] AFFCO made two sales to NZ Premium in May 2013, for a total sum of$206,544.50. One of those orders, order 11602738 (the First Container), is the subjectof the present dispute. NZ Premium paid $102,068.11 to AFFCO for the FirstContainer, which comprised beef quarters that had been produced at AFFCO'sMoerewa plant between 19 and 22 April 2013. It was shipped from New Zealand onor about 16 May 2013 and arrived in China on 20 June 2013.[14] On 11 May 2013, shortly before the product was shipped, China gave noticethat it was placing a halt on New Zealand meat imports, as a result of MPI changes tothe accompanying health certificates. MPI advised exporters, however, that the issuewould likely only affect product certified after 11 May (which would exclude the FirstContainer). Further, officials appeared confident that the issue would be resolvedquickly. Ultimately, however, that assessment proved to be somewhat optimistic. Atotal of 1,323 containers, including the First Container, were held up in Chinese portsuntil the problem was resolved in early July 2013.[15] Once that issue was resolved, a second issue arose that prevented the FirstContainer from being cleared for entry into China. MPI advised AFFCO on 4 June2013 that it had been notified by AQSIQ that AFFCO's Moerewa processing plant hadbeen delisted from being authorised to produce product for export to China, with effectfrom 20 April 2013. As a result, product produced at the Moerewa plant from 20 April2013 onwards could not be imported into China. Neither AFFCO nor NZ Premiumwere aware of this issue at the time the First Container was shipped. Although theMoerewa plant was subsequently re-listed for export to China, this did not assist, asproduct produced during the delisting period was still prohibited.[16] On about 5 August 2013, NZ Premium notified AFFCO that the First Containerhad been refused entry into China on 23 July 2013. The reason given by Chineseauthorities was that the product had been produced during the period in which theMoerewa plant had been delisted. To resolve the situation, Mr Bailey informedMr Parkinson, also on 5 August 2013, that AFFCO would pay the costs of returningthe First Container to New Zealand and would ship replacement product. Mr Bailey'semail stated that:As you booked Vessel for ME47 Quarter Beef we will need you to arrange toBring Home. Of course we will reimburse you but as FOB sale2 unfortunatelywe need you to arrange the return.2 AFFCO's Terms and Conditions of International Trade applied the definition of FOB set out inthe Incoterms Rules, namely:[17] Unfortunately, by this stage NZ Premium no longer had possession or controlof the original MPI health certificate for the shipment. Mr Parkinson's evidence as tohow NZ Premium lost possession and control of the certificate was somewhat vague.When cross-examined on the issue he denied that NZP or its agents were responsiblefor the loss, stating that:No, I'm sorry, no one, no one can prove who lost the health certificate. Itcould be the agent, could be AQSIQ, could be Customs, could be the NewZealand Embassy, 'cos they all had them. One of five or six people may havelost it, all out of the control of NZP or their agent.[18] It appears that the administrative delays and difficulties associated with 1,323New Zealand containers being held up in Chinese ports may well have been acontributing factor. Whatever the reasons for the health certificate being mis-placed,however, it is clear that it was lost on NZ Premium's watch. AFFCO had noinvolvement in clearing the shipment through Chinese customs and bore noresponsibility for the certificate going missing.[19] The loss of the certificate made it substantially more difficult for NZ Premiumto arrange to return the First Container to New Zealand, and this resulted in significantdelays. Additional costs that arose as a result of the delay included storage costs ofthe First Container in China from June 2013 to October 2013, and storage of thecontainer in Auckland from November 2013 to May 2014, and ancillary costs such aspower charges incurred while the container was in storage in New Zealand. The FirstContainer was not ultimately returned to AFFCO until June 2014.[20] On 17 January 2014, Mr Parkinson sent AFFCO an invoice for costs of$66,856.04 associated with the return of the First Container (NZ Premium #002). Heproposed, in his covering email, that NZ Premium and AFFCO share the costs, whichhe anticipated at that stage would be about $76,000 in total. Mr Parkinson proposedthat NZ Premium bear $50,000 of that sum, leaving AFFCO to contribute the balance"Free on Board" means that the seller delivers the goods on board the vessel nominated by thebuyer at the named port of shipment or procures the goods already so delivered. Risk of lossof or damage to the goods passes when the goods are on board the vessel, and the buyer bearsall costs from that moment onwards.of $26,000. There was no further dialogue between the parties regarding this proposal,and no agreement was reached regarding it.[21] The breakdown of the costs claimed in NZ Premium #002 is as follows:Shipping costs to China $7,646.18 PaidStorage in China from 20 June 2013 to 21 October2013$40,921.24 Not paidCargo handling fees on reshipment $17,422.12 PaidNZ port logistics $866.50 PaidTOTAL $66,856.04 $25,934.80[22] As set out in the above table, AFFCO paid for those portions of the invoice thatrelated to shipping costs to China, cargo handling fees on reshipment and NZ portlogistics. It disputes liability, however, for the storage costs that were incurred inChina for the period from 20 June to 21 October 2013. It submitted that the delays inChina (resulting in significant storage costs being incurred) were attributable toNZ Premium's loss of the health certificate, and should therefore be borne byNZ Premium.[23] NZ Premium issued a second invoice to AFFCO, dated 28 May 2014,(NZ Premium #003) for $77,257. This comprises storage costs in New Zealandbetween 10 November 2013 and 5 May 2014 (the First Container was returned toAFFCO in early June 2014). A third invoice (NZ Premium #005), dated 3 June 2014,was for $11,155. This was for power charges while the container was stored inNew Zealand, prior to its return to AFFCO. AFFCO disputes its liability to pay eitherNZ Premium #003 or NZ Premium #005.Discussion[24] NZ Premium claims that it is entitled to reimbursement of a total sum of$155,277.04 (said to be the sum of invoices NZ Premium #02, NZ Premium #03 andNZ Premium #05),3 plus interest and costs, in relation to the First Container. It acceptsthat AFFCO has already credited it with $25,934.80 of that sum.[25] NZ Premium relied in particular on Mr Bailey's email of 5 August 2013[set out at [17] above) in which he stated:As you booked Vessel for ME47 Quarter Beef we will need you to arrange toBring Home. Of course we will reimburse you but as FOB sale unfortunatelywe need you to arrange the return.[26] Mr Parkinson submitted that the phrase "of course we will reimburse you", incontext, refers to all costs (not just shipping costs) incurred by NZ Premium in relationto the First Container from that date (5 August 2013) until it was returned to AFFCOin June 2014.[27] AFFCO submitted that the additional costs, over and above the $25,934.80 ithas agreed to pay in relation to the First Container, were not incurred in shipping theFirst Container back to New Zealand. Rather, they were additional costs incurred byNZ Premium, initially because of the dispute between the Chinese and New Zealandauthorities, and then because NZ Premium delayed returning the First Container and,when it did, it sent the container back without the correct documentation so that itcould not be released into New Zealand for many months.[28] Clause 11 of AFFCO's terms and conditions provide that:11 Regulatory complianceGoods shall as at the date of shipment have been manufactured,processed and packed to the standard required by the health andagriculture authorities in the country at which the Goods are to bedischarged from the vessel shipping the same.[29] AFFCO breached clause 11, because the product contained in the FirstContainer had not been manufactured, processed and packed to the standard requiredby the health and agriculture authorities of China.3 The actual sum of the three invoices is $155,268.04.[30] Clause 14 is also relevant. It provides:14 Limits of Seller's liabilityThe Seller shall not be liable for any act or omissions whether byreason of negligence of otherwise in breach of the Terms andConditions of Contract unless such breach is notified by the Buyer tothe Seller in accordance with the Seller's claims procedure and theSeller's liability including but not limited to consequential, special oraggravated loss shall not in any event whatsoever exceed the invoicedprice for the Goods in respect of which the breach is notified.[31] The invoiced price for the First Container was $102,068.11.[32] The delisting of the Moerewa plant first came to AFFCO's attention on 4 June2013, after the First Container had already been shipped. It is not entirely clear whenAFFCO learned that the delisting had occurred with effect from 20 April 2013,and that the First Container was therefore affected. There is no evidence, however,that it informed NZ Premium of the issue prior to the First Container being rejectedby Chinese customs on 5 August 2013.[33] AFFCO was contractually required to provide NZ Premium with product thathad been processed to the standards required by AQSIQ. It failed to do so. In theevent that NZ Premium has suffered loss as a result, it is entitled to damages that willput it in the same situation, so far as money can do it, as if the contract had beenperformed.4 NZ Premium is only entitled to recover, however, that part of its loss aswas at the time of the contract reasonably foreseeable to result from the breach.5Further, the quantum of damages is limited by the cap in clause 14 of AFFCO's termsand conditions.[34] In my view, it was reasonably foreseeable at the time the contract for the saleof the First Container was entered into that there could be delays in clearing thecontainer through Chinese customs. Both parties were aware that China had givennotice that it was placing a halt on New Zealand meat imports, as a result of MPIchanges to the accompanying health certificates. The parties were hopeful that that4 Robinson v Harman (1848) 1 Ex 850, 154 ER 363 (Exch) at 855.5 Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528 (CA) at 539.issue would be resolved promptly, but there was no guarantee of that. AFFCO shouldtherefore bear the costs of any delays arising out of this issue.[35] It was not reasonably foreseeable, however, that NZ Premium or its agentswould lose (or lose control of) the health certificate. As this was an FOB sale,NZ Premium was responsible for the import and export process and had control of thekey documents, including the bill of lading and the MPI health certificate.NZ Premium must bear responsibility for the loss of the health certificate on its watch,and the additional costs that flowed from that.[36] Applying this approach to the present facts, it is my view that AFFCO shouldbear responsibility for half of the storage costs incurred in China. The claimed costsrelate to the four-month period from 20 June 2013 to 21 October 2013. The FirstContainer was rejected by Chinese customs authorities on 5 August 2013, due to thedelisting of the Moerewa plant. AFFCO advised, on the same date, that the containershould be returned to it in New Zealand. It is reasonable to allow a period of up totwo weeks for NZ Premium to arrange for that. The delays from that point on,however, were due to the loss of the health certificate by NZ Premium or its agents.NZ Premium must bear those losses. As the total costs of storing the First Containerin China are $40,921.24, AFFCO is liable to reimburse NZ Premium for $20,460.62for those costs.[37] The balance of NZ Premium's claim under this head relates to storage costsfor the First Container in New Zealand for the period from 10 November 2013 to5 May 2014, and power charges incurred during that period. I have found, however,that the very lengthy delay in returning the First Container to AFFCO is attributableto the lost health certificate. NZ Premium rather than AFFCO must bear responsibilityfor the losses associated with that. The New Zealand storage costs (and associatedpower charges) are accordingly not recoverable by NZ Premium. There is nothing inMr Bailey's email of 5 August 2013 that requires a different outcome, or suggests thatAFFCO had agreed to meet costs that it was not otherwise contractually obliged to.The Shandong Containers[38] The second key issue in dispute between the parties relates to two containersthat NZ Premium purchased for its client Shandong Taihua Food Co Ltd("Shandong").The Shandong Containers — factual background[39] NZ Premium ordered the Shandong Containers (orders 11669665 and11672759) on 28 January 2014 and 3 February 2014 respectively. They were shippedas part of 11 sales made by AFFCO to NZ Premium between September 2013 andApril 2014. The orders were placed pursuant to AFFCO's terms and conditions.[40] The Shandong Containers each included 260 bags of frozen beef quartersmanufactured at the Moerewa plant between 5 April 2013 and 11 April 2013.Mr Bailey informed Mr Parkinson that there was a risk that the containers might notbe accepted into China due to the issues that had arisen relating to the Moerewa plant,even though the product was produced outside the period of delisting. Mr Parkinsonwas willing to proceed nevertheless. The orders were shipped on 24 January 2014 and14 February 2014.[41] When the Shandong Containers arrived in China, difficulties arose in clearingcustoms. AFFCO was keen to rally support from MPI to get the containers throughAQSIQ, given that they were not processed during the delisting period. Based on theadvice of his contacts in China, however, Mr Parkinson persuaded AFFCO to let theissue go, and instead simply send replacement product. Indeed, Mr Parkinsoninformed AFFCO by email that he had already confirmed that the product would bereturned and replaced "as consequences too great to push the issue". He said that"I hope this is ok with AFFCO, I'm sure it will be".[42] AFFCO agreed to proceed in accordance with NZ Premium's wishes. In earlyMarch 2014, it agreed to cancel the Shandong order and send two replacementcontainers (orders 11689013 and 11689015). The value of the two cancelled orderswas $210,581.29. AFFCO agreed to bear the cost of that order. The parties also agreedthat AFFCO would credit NZ Premium $14,616.61 in respect of the shipping costsincurred by NZ Premium in shipping the Shandong Containers to China. Those costshad been incurred by NZ Premium, because those were FOB sales. NZ Premiuminvoiced AFFCO (NZ Premium #004) for the shipping costs on or about 28 May 2014,and AFFCO has credited that sum to NZ Premium in its calculation of claim.[43] In an email exchange on 12 March 2014, Mr Bailey advised Mr Parkinson thatthe prices for the replacement shipment would be USD 4.85 per kilogram for beef, andUSD 4.95 per kilogram for mutton. This pricing was quoted on a CIF (Cost, Insuranceand Freight) basis,6 rather than FOB. As a result, the price was calculated in USDrather than NZD (FOB shipments are priced in NZD).[44] NZ Premium requested, and AFFCO agreed, to ship the replacement ordersdirect to NZ Premium's client, Shandong. AFFCO also agreed to pay NZ Premium acommission on the sale of the two replacement containers, which amounted to$18,788.27 (45 cents per kilogram). That sum has been credited in AFFCO'scalculation of claim. The replacement orders were shipped on 21 March 2014 andarrived in April 2014.[45] NZ Premium has invoiced AFFCO a further $26,517.31 (NZ Premium #012)in respect of foreign exchange losses and price differentials between the ShandongContainers and the replacement containers. In essence, NZ Premium says that the tworeplacement containers ended up costing it more than the two original containers, andAFFCO should meet the difference. AFFCO denies liability for this sum.6 The Incoterms Rules (which apply to AFFCO's terms and conditions) define CIF as follows:"Cost, Insurance and Freight" means that the seller delivers the good on board thevessel or procures the goods already so delivered. The risk of loss of or damage to thegoods passes when the goods are on board the vessel. The seller must contract forand pay the costs and freight necessary to bring the goods to the named port ofdestination.The seller also contracts for insurance cover against the buyer's risk of loss of ordamage to the goods during the carriage. The buyer should note that under CIF theseller is required to obtain insurance only on minimum cover. Should the buyer wishto have more insurance protection, it will need either to agree as much expressly withthe seller or to make its own extra insurance arrangements.Discussion[46] Mr Parkinson submitted that AFFCO is required to meet the cost differentialbetween the Shandong Containers and the two replacement containers because it hasbreached clause 11 of AFFCO's terms and conditions. As I have noted above, thatclause provides, inter alia, that goods shall at the date of shipment have met thestandard required by the health and agriculture authorities in the country at which thegoods are to be discharged from the vessel shipping the same.[47] It appears from the evidence before the Court, however, that the Shandongcontainers did comply with Chinese import requirements, as they were processedoutside the period of delisting. For that reason AFFCO was keen to get MPI involvedin resolving the issue with its Chinese counterpart, and had already taken steps in thatdirection. AFFCO was requested by NZ Premium, however, not to press the issue.NZ Premium's preference was to return the Shandong containers and obtainreplacement product. AFFCO agreed to this course.[48] It is clear from the evidence (including the contemporaneous correspondence)that the original contracts were effectively rescinded by agreement. AFFCO agreed totake back the Shandong containers at NZ Premium's request, and the price of thosecontainers was fully refunded, as were the associated shipping costs.[49] A new contract was then entered into for the two replacement containers. Theprice of the new containers was expressly agreed in an email exchange betweenMr Parkinson and Mr Bailey on 12 March 2014. The new containers were moreexpensive than the original containers. This was in part because they were shippedCIF rather than FOB and, as a result, AFFCO was covering the shipping costs.Because shipping CIF includes more cost and risk for the seller, it is inevitably moreexpensive. It was also agreed that the price of the new containers would be in USDrather than in NZD, and there was no agreed protection from exchange rate risk.Further, the new price included a commission to NZ Premium of over $18,000, whichAFFCO has given credit for in its claim.[50] AFFCO has met its contractual obligations to NZ Premium in respect of theShandong containers and the two replacement containers. NZ Premium's claim thatit is owed $26,517.31 in relation to this issue fails.The Shandong loss of profits claim[51] NZ Premium advanced several counterclaims. Some of these were more in thenature of defences than true counterclaims, in that they explained why NZ Premiumsays the balance claimed by AFFCO is not payable.[52] One of the counterclaims which is, however, a true counterclaim isNZ Premium's loss of profits claim relating to its business relationship with Shandong.NZ Premium alleges that AFFCO failed to supply NZ Premium with 40 containers ofproduct that it had ordered on behalf of Shandong, from which NZ Premium wouldhave made net profits of $505,344.32.[53] NZ Premium further claims that as a result of AFFCO's failure to supply it withthe required 40 containers, Shandong cancelled 75 other orders for 2014 (with a valueof $14,723,551.28), thereby causing NZ Premium to lose profits of $1,148,437.Shandong is said to have also cancelled "orders" for the next two years, 2015 and 2016(with a value of $78,822,091.66), thereby causing NZ Premium to lose further profitsof $7,374,964.05.[54] There was no evidence at trial of any orders being placed on behalf ofShandong for 2015 or 2016. Although this aspect of the loss of profits claim lackedclarity, I understood Mr Parkinson to be alleging, in essence, that if AFFCO hadsupplied Shandong with 40 containers in 2014 it is likely that firm orders would havebeen forthcoming for increasing volumes of product in subsequent years. The lossesassociated with these potential sales are therefore claimed as consequential losses.The Shandong loss of profits claim — factual background[55] NZ Premium was keen to develop its business relationship with Shandong, andenvisaged that the initial two Shandong Containers discussed in the preceding sectionwould be followed by many more sales.[56] On 13 February 2014, NZ Premium placed 40 orders with AFFCO. They wereplaced pursuant to AFFCO's terms and conditions and were recorded under sales orderconfirmations issued by AFFCO. The 40 orders were to be shipped to Shandongprogressively from March to May 2014.[57] In February 2014, Shandong representatives visited New Zealand. They metwith AFFCO and NZ Premium representatives, at AFFCO's head office, on25 February 2014. There was a dispute at trial as to precisely what happened at thatmeeting, and at a further meeting the following day. Mr Bailey and Henry Fu(AFFCO's sales co-ordinator) gave evidence on behalf of AFFCO. Mr Parkinson gaveevidence on behalf of NZ Premium. Overall, I preferred the evidence of the AFFCOwitnesses on this issue, in large part because their account is significantly moreconsistent with the contemporaneous documentation than the account given byMr Parkinson.[58] The first contemporaneous document of note is a document prepared byShandong headed "New Zealand Beef and Lamb business outline of negotiations –February 2014". Mr Parkinson produced this document at trial. He said that theShandong representatives gave it to him at the conclusion of the 25 February 2014meeting. On its face, the document appears to be an outline of the speaking notesor negotiation points that the Shandong representatives wished to make at the meeting.The document outlines Shandong's market strategy and lists "the main issuescurrently". The first point on Shandong's list of issues is:1. Price. The cost is always the most important part of any business.China is the market with lots of competitor. We all know we get whatwe paid, we wish your company may supply the value products to us.The price will decide the volume of our import.Another issue identified was that as the arrival of the first two containers had beendelayed, Shandong now had permit issues.[59] The 25 February meeting was attended by Mr Parkinson, Mr Bailey, Mr Fu,Mark Smith (AFFCO's then manager) and the Shandong representatives. I accept theevidence of the AFFCO witnesses that during the course of the meeting, the Shandongrepresentatives expressed an unwillingness to proceed with any orders, purportedlybecause they did not believe that the quality of AFFCO's beef was good enough forthem. AFFCO's view was that Shandong's real issue was price and had nothing to dowith quality. The Shandong representatives denied this when it was put to them, at themeeting, albeit I note that "price" was the first issue listed in their "negotiation outline"document. The meeting became quite heated, as Mr Smith appears to have takenumbrage at what he saw as false criticisms of the quality of AFFCO's product. TheShandong representatives said they were not going to proceed and Mr Smith calledthe meeting to an end.[60] Mr Parkinson spoke to Mr Bailey after the meeting and told him that he wouldtry and sort something out overnight and let Mr Bailey know the outcome in themorning.[61] At 7.43 am the next morning, Mr Parkinson emailed Mr Bailey, confirmingthat after Shandong's visit the previous day he had a "major problem" with the quarterbeef order "partly due to what they saw and price". Mr Parkinson informed Mr Baileythat he had delayed his trip home so he could meet with Mr Bailey to "work out asolution and keep our good relationship with you/AFFCO."[62] Mr Parkinson met with Mr Bailey later that morning and informed him that hehad not been able to persuade the Shandong representatives to change their minds, andso would not be able to proceed with the order for 40 containers. He said that he wouldkeep trying to sort out a deal and would keep AFFCO informed.[63] That day, AFFCO cancelled the remaining 30 Shandong orders in its system.Ten of the 40 orders had previously been cancelled in the system, on 24 February, theday prior to AFFCO's meeting with Shandong representatives. Mr Bailey explainedat trial that AFFCO was, in essence, simply trying to keep product moving through itsshipping system during its peak production period. There was ample product availableat that time, so that if Shandong had confirmed on 25 February 2014 that it did indeedwant the full 40 containers within the next couple of months, and arranged paymentfor those containers, there would be no difficulty in fulfilling such orders.[64] On 28 February, Mr Parkinson emailed Mr Bailey to advise that he had a newagreement with Shandong "to keep the 20 quarter beef and 20 mutton deal". He saidthat Shandong's chairman would be signing the deal that day, but that he(Mr Parkinson) had made the contract subject to approval by AFFCO. Mr Parkinsonsaid that he would advise once the deal was completed, and would come and seeAFFCO the following Monday (3 March 2014). Mr Parkinson claimed at trial that the"new agreement" he was referring to did not relate to the original 40-container order,but was an entirely new order, in addition to the previous 40-container order. Hisevidence on this issue lacked credibility and I reject it.[65] The proposed meeting between Mr Bailey and Mr Parkinson on 3 March 2014was superseded by events, as on that date Chinese customs officials rejected the twoinitial Shandong containers (as discussed in the preceding section) due to the Moerewadelisting issue. As a result, Mr Parkinson sent Mr Bailey an email advising him of theproblem with the Shandong containers and that "in the meantime Shandong has puton hold the beef quarters order until they get the two containers paid for and problemwith AQSIQ sorted".[66] Also on 3 March 2014, after receiving advice from Mr Parkinson that the twoShandong containers had been rejected by Chinese customs, Mr Bailey emailedRowan Ogg, AFFCO's operations manager, and requested that he put pressure on MPIto talk to AQSIQ to get the product into China. His email concluded that this was"critical as we will have another 20 [containers] to ship to this client which are nowbeing produced". In cross-examination, Mr Bailey said that this was a "white lie" toput pressure on Mr Ogg "to get going with MPI." Mr Parkinson's role was in sales,whereas Mr Ogg was in operations. Mr Ogg therefore had the relationship with MPI.Mr Bailey wanted him to prioritise getting MPI to sort this issue out. AlthoughAFFCO did not have a confirmed order from Shandong at that stage for a further20 (or 40) containers, Mr Bailey appears to have remained hopeful that such an orderwould be forthcoming, if the issues with the initial two Shandong containers could beresolved.[67] On 6 March 2014, Mr Parkinson, in a further email to Mr Fu at AFFCO, statedthat "my client has put on hold all other shipments until this [receipt of the two ordersreplacing the Shandong Containers] is sorted and he gets the two containers he hasalready paid for".[68] On 10 March 2014, Mr Parkinson advised Mr Bailey by email that Shandongcould not get their full import permit for the 40-container order until their first permit,relating to the initial Shandong Containers' importation, was complete. Shandongapparently needed to import the quantity allowed in the first permit before it couldapply for the larger permit, and therefore shipping dates could only be determinedwhen the initial orders were released or replacements sent and received. (I note thatthis issue was also noted in Shandong's "outline of negotiations" paper that wasprovided to Mr Parkinson by the Shandong representatives immediately following the25 February meeting.)[69] On 29 April 2014, Mr Bailey emailed Mr Parkinson asking whether stock thatAFFCO was holding was required by NZ Premium. If not, Mr Bailey said he washeading to China on 11 May and would sell it. Mr Parkinson said in reply that:The product [the two replacement containers sent to Shandong] was clearedfrom wharf last Friday. We can follow that up now. Meeting with Ken andothers this weekend, so will get full update now.Can you give me update of product that ready for sale, I'm working6 containers qrter beef, I assume all mutton gone by now.[70] Mr Bailey replied later that day, and said that AFFCO had been sitting onmutton until NZ Premium advised it did not want it—"[a]nyhow just as long as youaware we will have to take sales when I'm in China as we can't sit on such a volumeof product as has cost a fortune in slow stock turn."[71] On 7 May 2014, Mr Parkinson emailed Mr Bailey advising that the tworeplacement containers sent to Shandong (to replace the two Shandong Containersrejected in March) had not yet cleared Chinese customs. He confirmed that Shandong"are fully aware of your deadline to confirm orders and shipping dates as being thisFriday". However, an extension was requested to the middle of the following week"so they can see the product in there (sic) factory after it is released". Mr Parkinsonconcluded that he hoped that AFFCO would agree to extend the deadline "as I'm sureit will all be positive".[72] Mr Bailey responded by email on the same date, advising that AFFCO had soldall quarter beef, and any new product would be at 4.70USD/kg CIF—"[a]s you couldappreciate if we held product this long we would be broke". In terms of a possiblemutton sale, he advised that AFFCO "could try to come up with Mutton 6 way butMarket Levels now $5.00USD/kg CIF and we would need quick shipment".[73] Mr Parkinson responded that he would advise Shandong accordingly andobserved that "the rejection of [the] first two containers as not eligible for entry toChina has cost us both a lot in lost sales and revenues". He added that:Unfortunately the delays were way out of our control and I believe that thesepeople will become good customers for both of us in the future. Theyunfortunately have had to wait almost 6 months to get there (sic) first order.I totally understand not being able to hold stock, especially quick movingproducts and appreciate what you have and are doing for us to develop ourmarket for full range of cuts.Discussion[74] NZ Premium claims for lost profits of $505,344.32 in respect of the40 containers ordered on behalf of Shandong for delivery in 2014, which it saysAFFCO failed to supply, in breach of contract. In addition, it claims just over$8.5 million in lost profits for orders that it claims Shandong would have placed insubsequent years, but for AFFCO's breach of contract.[75] NZ Premium has failed to prove, however, that at any time after 25 February2014 it had an unconditional contract with AFFCO for the provision of 40 containersof product to Shandong. The contemporaneous documents tell an entirely differentstory. Although 40 orders were initially placed, those orders were cancelled on25 February 2014. Mr Parkinson clearly worked hard, for several months, to try andget the Shandong deal back on the table, or to secure an alternative deal. AFFCO wasfairly patient throughout this process. By early May 2014, however, time had run out.The season was nearing an end and AFFCO could no longer hold back product for apossible sale to Shandong that might never eventuate. Mr Parkinson confirmed thatShandong "are fully aware of your deadline to confirm orders and shipping dates asbeing this Friday". Mr Parkinson was unable to obtain an extension to that deadline,and did not confirm an order prior to it (or indeed subsequent to it).[76] Shandong wanted to wait and assess the first two containers it received fromAFFCO before confirming any further orders. Indeed, Shandong's position was thatit could not obtain an import permit for a further 40 containers until it had received thetwo initial containers. Unfortunately, for reasons beyond the control of eitherNZ Premium or AFFCO, delivery of the two initial orders was delayed by severalmonths (as discussed in more detail at [40]–[41] above).[77] As the original 40 orders had been cancelled, there was no contractualobligation for AFFCO to supply the product. Even if the orders had only beensuspended or put "on hold", as Mr Parkinson suggested at trial, at no time did NZPremium lift the suspension and request that the orders now be shipped. No dates forshipment were ever agreed and no payments were tendered by NZ Premium.[78] AFFCO has not breached any contractual obligation that it owed toNZ Premium in relation to the Shandong orders. AFFCO is accordingly not liable toNZ Premium for its alleged loss of profits on the 40-container order that was cancelledin February 2014. Nor is AFFCO liable for any loss of profits that may have resultedfrom sales to Shandong by NZ Premium in subsequent years.The Shanghai ContainerThe Shanghai Container — factual background[79] On 29 April 2014, NZ Premium purchased a shipment of beef(order 11705415) from AFFCO for delivery to Ningbo, China ("the ShanghaiContainer"). The sale was pursuant to AFFCO's terms and conditions. NZ Premiumpurchased the Shanghai Container for on-sale to Zheijiang Cereals, Oils andFoodstuffs Import & Export Co Ltd ("Zheijiang").[80] The container was shipped on 4 July 2014, prior to AFFCO receiving paymentfor it. The reason for this, in large part, was that AFFCO found NZ Premium's accountdifficult to reconcile, for the reasons I have set out at [4] above. Mr Parkinsonrepeatedly asserted that AFFCO owed him money (rather than the reverse) and thisappears to have caused some confusion.[81] AFFCO's terms of conditions (clause 9.2) required that AFFCO's invoices tobe paid without setoff. Credit notes therefore needed to be issued by AFFCO beforedeductions could be made from any amounts owing. Mr Parkinson, however,unilaterally applied significant setoffs without first receiving approval from AFFCO,and did not hold AFFCO credit notes in relation to those deductions.[82] AFFCO's then Marketing Manager, Dale Kwok, met with Mr Parkinson todiscuss the issues with the NZ Premium's account on or about 9 July 2014. Mr Kwokfollowed up with an email later that day, emphasising the importance of followingproper processes. He stated that making deductions:without prior approval or advice is completely unacceptable and contraryto AFFCO protocolAFFCO requires all invoices to be paid in full with anypossible claim situations arising, settled afterwards as a separate situation. Westand irrevocably by this principle and as advised are prepared to test thislegally.[83] AFFCO required NZ Premium to forthwith pay various amounts it hadpurported to set off (totalling $148,472.65) and to provide a full explanation of anysums claimed, which AFFCO would then consider.[84] On 24 July 2014, Mr Kwok sent a further email to Mr Parkinson, expressingconcern that there was still no commitment to pay the deductions that NZ Premiumhad made. AFFCO's concerns increased further when Mr Kwok learned thatNZ Premium had not yet paid for the Shanghai Container, which by then had almostarrived in China. NZ Premium had requested that AFFCO hand over the bill of lading,but Mr Kwok advised him that AFFCO was not willing to do that without firstreceiving payment. Mr Kwok told Mr Parkinson that AFFCO had lost confidence inNZ Premium. He said that unless the previous deductions/set offs were paid, alongwith the invoice for the Shanghai container, AFFCO would instruct the shippingcompany to return the Shanghai Container to New Zealand.[85] NZ Premium did not make the required payments. Accordingly, on 26 July2014, when the Shanghai Container arrived in Ningbo, it was not unloaded. Instead,AFFCO arranged for the container to be sent on to Shanghai, where it arrived on28 July 2014. AFFCO cancelled its contract with NZ Premium in relation to theShanghai Container, pursuant to its terms and conditions. AFFCO then madearrangements to sell the container to another buyer. An impasse arose, however, asNZ Premium had possession of the MPI health certificate required to import thecontainer into China and refused to provide this to AFFCO. AFFCO, on the otherhand, had the bill of lading, and would not provide this to NZ Premium. Neither partycould import the container into China without the co-operation of the other. Thecontainer was therefore sent to a holding area in Shanghai for containers that did nothave correct documentation.[86] Lawyers became involved. A resolution was reached on 18 August 2014, asrecorded in an email to NZ Premium from AFFCO's in-house counsel on that date:1. Andy Parkinson and Clint Bailey will work together on putting NZP'sclaim together so that it is in a fully detailed form that it can be put to theAFFCO Board for consideration;2. It is no longer a pre-requisite to the claim being considered by the AFFCOBoard that the $148,472.65 be repaid by NZP. (Once the claim isconsidered and decided on by the AFFCO Board, we will work out whoowes who, how much and how it will be paid); and3. The contract for the current product sitting in Shanghai (ordered by NZPon 29 April 2014) will be performed as originally intended. NZP will paythe invoiced amount of USD$78,465.07 to AFFCO immediately. Once thatsum is received by AFFCO, it will release the bill of lading to NZP. NZPwill not be liable for any extra costs incurred by AFFCO due solely to thedelay in performance of the contract. AFFCO will not be liable for any lossor costs incurred by NZP due to the delay in performance of the contract.[87] In their email in reply, NZ Premium's lawyers recorded their understandingthat upon AFFCO receiving confirmation of payment from NZ Premium, it would(amongst other things) immediately provide NZ Premium with a copy of the bill oflading to allow NZ Premium to initiate the customs clearance process. Further, oncepayment for the container had cleared, AFFCO was to release the original bill of ladingto NZ Premium in order for NZ Premium to collect the product in Ningbo.[88] On 20 August 2014, NZ Premium paid for the Shanghai Container. A problemarose, however, as it was discovered that delivery to Ningbo would not bestraightforward. NZ Premium therefore decided to clear customs in Shanghai, ratherthan Ningbo. NZ Premium subsequently informed AFFCO, on 24 September 2014,that:The cost to get the container removed from the official system at Ningbo andmake it a container "awaiting documents for clearance in Shanghai" is NZD24,150.00 (gst incl).We will invoice AFFCO showing "consultation and negotiation fee" for theabove amount.For obvious reasons a detail invoice from China will not be sent to cover theaccount. All other clearance costs will be as per normal commercialtransactions and covered by invoices.[89] On the same date, NZ Premium invoiced AFFCO for that amount(invoice NZ Premium #011). AFFCO paid that invoice.[90] The Shanghai Container was eventually released by Chinese customs on16 November 2014. On 28 November 2014, NZ Premium issued two further invoicesfor further costs incurred in clearing customs—NZ Premium #0117 ($1,484.04) andNZ Premium #015 ($28,537.38).8 Invoice #015 was for "customs sluggish","container detention", "demurrage" and "agency handling charge". Invoice #011 wasfor documentation fees.[91] NZ Premium submitted that AFFCO was required to reimburse it for all of itscosts in arranging the clearance of the Shanghai Container through Chinese customs.It relied on the 18 August 2014 agreement (set out at [86] above) and further noted thatin Mr Parkinson's subsequent email of 24 September 2014 (seeking reimbursement of$24,150), he had stated that "all other clearance costs will be as per normal commercialtransactions and covered by invoices".[92] NZ Premium also claims that the diversion of the goods to Shanghai and delaysencountered in Chinese customs' clearance of the order "by 112 days" caused its buyer,Zheijiang, to cancel other orders valued at $746,940. NZ Premium alleges that it7 There are two invoices numbered NZ Premium #011. The costs for this invoice are detailed as"documentation fees".8 The sum was originally invoiced as USD $22,377. Once the exchange rate as at the date of Invoice#15 is applied, the sum in NZD is $28,537.38.would have derived profits of $56,020.50 from such orders, and seeks judgment forthat sum.Discussion[93] The sale of the Shanghai container was made on a CIF basis. AFFCO wastherefore responsible for paying the costs and freight charges necessary to transportthe goods to the port of destination specified by the purchaser, together with insurancefor the goods. Under the CIF model, AFFCO's responsibility ended once the goodsreached NZ Premium's port of choice. NZ Premium was then responsible for all othercharges (including port storage fees and customs clearance fees) incurred to enable thegoods to be cleared from the port. The key issue is whether that position changed asa result of the 18 August 2014 settlement agreement. That agreement must beinterpreted in its factual context, which I have set out above.[94] Pursuant to clause 9 of AFFCO's terms and conditions, NZ Premium wasrequired to pay for the Shanghai Container prior to its dispatch from New Zealand.Clause 9.2 specified that "the Buyer shall not, for any reason, withhold payment normake any deduction or set off". NZ Premium did not pay for the goods as required.When pressed for payment (after the goods were already en route to Ningbo),NZ Premium asserted a set-off. NZ Premium had no contractual entitlement to do so.Further, its belief that it had a set-off available that was sufficient to cover the costs ofthe Shanghai Container was erroneous.[95] Clause 13 of the terms and conditions provided that "no property in the Goodsshall pass to the Buyer until payment is made in full to the Seller." Accordingly, at alltimes prior to NZ Premium paying for the goods on 24 September 2014, the Shanghaicontainer was owned by AFFCO. As I have noted above, however, NZ Premium hadthe health certificate required to clear the container through customs and refused toreturn this to AFFCO. This put AFFCO in an untenable position. Although it ownedthe goods, and had another customer willing to purchase them, it could not clear themthrough customs. Nor could the goods leave China. One option was for AFFCO toabandon the goods, leaving them to be destroyed by Chinese authorities, and then sueNZ Premium for its losses. Alternatively, AFFCO could try and work withNZ Premium to try and resolve the situation. It elected to follow the latter course.[96] NZ Premium's position, on the other hand, was that it did not feel it shouldhave to pay for the container, due to set-offs that Mr Parkinson (wrongly) believedwere available to it. But it could not clear the container through customs as it did nothave the bill of lading. NZ Premium was keen to resolve the situation, as it had acustomer awaiting the shipment. Further, the customer was an important one toNZ Premium, as evidenced by NZ Premium's significant claim for consequential lossof profits in respect of potential future orders from Zheijiang.[97] Absent the 18 August agreement, it is clear that NZ Premium (rather thanAFFCO) would have been contractually required to pay the costs included in invoicesNZ Premium #011 ($1,484.04) and NZ Premium #015 ($28,537.38) as they related tothe costs of clearing the Shanghai Container through Chinese customs, which was abuyer cost. The issue is whether there is anything in the 18 August agreement thatalters that position. In my view, there is not. In relation to the Shanghai Container,that agreement provided that:3. The contract for the current product sitting in Shanghai (ordered by NZPon 29 April 2014) will be performed as originally intended. NZP will paythe invoiced amount of USD$78,465.07 to AFFCO immediately. Once thatsum is received by AFFCO, it will release the bill of lading to NZP. NZP willnot be liable for any extra costs incurred by AFFCO due solely to the delay inperformance of the contract. AFFCO will not be liable for any loss or costsincurred by NZP due to the delay in performance of the contract.(Emphasis added)[98] The parties expressly agreed that the contract would be "performed asoriginally intended". As a result, the costs associated with clearing Chinese customswere required to be met by NZ Premium. The agreement further makes it clear thatAFFCO "will not be liable for any loss or costs incurred by NZ Premium due to thedelay in performance of the contract." Hence, even though some or all of the increasedcosts associated with clearing customs were likely attributable to the delay inperformance of the original contract, NZ Premium was contractually required to bearthese.[99] It necessarily follows that NZ Premium's loss of profits claim in relation to theclaimed 2015 orders from Zheijang is also untenable. Even if Zheijang had placed"confirmed 2015" orders as NZ Premium claimed, any subsequent cancellation ofthose orders was not caused by any breach of a contractual obligation by AFFCO.Accordingly, there is no basis for NZ Premium's claim for consequential losses.Summary and conclusion[100] AFFCO (unintentionally) breached clause 11 of its terms and conditions inrelation to the First Container, because the meat products in that container were notprocessed and packed to the standard required by China's health and agricultureauthorities. AFFCO was accordingly required to meet NZ Premium's losses inrelation to the First Container (including costs associated with returning it toNew Zealand), to the extent that such losses were a reasonably foreseeableconsequence of its breach. This is subject to the contractual cap (the price of thegoods) in clause 14.[101] The delay in clearing the First Container through Chinese customs, due tochanges made by MPI to the New Zealand health certificates, was reasonablyforeseeable. The parties were aware of this issue prior to shipment. The delayassociated with NZ Premium or its agents losing possession and control of the MPIhealth certificate for the container was not, however, reasonably foreseeable.[102] NZ Premium is accordingly entitled to an additional credit of $20,460.62 inrespect of the First Container, covering storage costs in China up until 20 August2013. The further delays after that time were due to the loss of the health certificate.This additional credit reduces the balance of NZ Premium's account from $118,064.71to $97,919.09.[103] NZ Premium's claim for price differences and exchange rate losses in respectof the Shandong Containers and their replacements is misconceived. The goodscontained in the Shandong containers did not breach clause 11 of AFFCO's terms andconditions. Nevertheless, at NZ Premium's request, AFFCO agreed to take themback and ship replacement product. The price of the Shandong Containers, and theassociated shipping costs, was fully refunded to NZ Premium. A new contract wasentered into for the two replacement containers, at a different price. AFFCO has notbreached its contractual obligations to NZ Premium in relation to either the Shandongcontainers or their replacements.[104] NZ Premium did not have an unconditional agreement with AFFCO for thesupply of 40 containers of product to Shandong at any time after 25 February 2014. Itis apparent from the contemporaneous documents that the Shandong order wascancelled on that date and never reinstated. No dates for shipment were ever agreedor provided and no payments were tendered. AFFCO has not breached any contractualobligations it owes to NZ Premium in relation to the Shandong orders. It follows thatAFFCO is not liable to NZ Premium for NZ Premium's alleged loss of profits onprospective sales to Shandong.[105] AFFCO has met all of its contractual obligations in relation to the ShanghaiContainer. The parties agreed on 18 August 2014 that the contract in relation to thatshipment would be performed as originally intended, and that AFFCO would not beliable for any loss or costs incurred by NZ Premium due to the delay in performancethe contract. The costs of clearing customs in China (and associated costs) were costsfor the buyer (NZ Premium) to bear.Result[106] AFFCO is entitled to judgment in the sum of $97,919.09, together with interestfrom and including 22 April 2014 until the date of judgment, at the rate of 5 per centper annum.9 I order accordingly.[107] NZ Premium's counterclaims are dismissed.[108] It is my preliminary view that AFFCO, as the successful party, is entitled to anaward of costs on a 2B scale basis. I encourage the parties to endeavour to agree costsbetween themselves, based on this indication. As I have not heard submissions oncosts, however, leave is reserved to file memoranda if costs cannot be agreed. Any9 Judicature Act 1908, s 87 and Judicature (Prescribed Rate of Interest) Order 2011, cl 4. TheInterest on Money Claims Act 2016 does not govern the awarding of interest as the proceedingcommenced prior to cl 1 of sch 1 coming into force, see sch 1, cl 1 of that Act.memorandum on behalf of AFFCO is to be filed and served by 18 December 2018.Any memorandum in response from NZ Premium is to be filed and served by25 January 2019.__________________________Katz J