HAOYU GAO v ZESPRI GROUP LIMITED [2022] NZSC 13

HAOYU GAO v ZESPRI GROUP LIMITED [2022] NZSC 13 [1 March 2022]IN THE SUPREME COURT OF NEW ZEALANDI TE KŌTI MANA NUISC 128/2021[2022] NZSC 13BETWEEN HAOYU GAOFirst ApplicantSMILING FACE LIMITEDSecond ApplicantXIA XUEThird ApplicantAND ZESPRI GROUP LIMITEDRespondentCourt: Glazebrook, O'Regan and Ellen France JJCounsel: E St John for ApplicantsL A O'Gorman QC, S A Barker and L C Sizer for RespondentJudgment: 1 March 2022JUDGMENT OF THE COURTA The application for leave to appeal is dismissed.B The applicants must pay the respondent costs of $2,500.____________________________________________________________________REASONSBackground[1] Zespri Group Ltd (Zespri) holds the exclusive plant variety rights (PVRs)under the Plant Variety Rights Act 1987 (PVR Act) to propagate for commercialproduction the G3 and G9 varieties of golden kiwifruit. Between 2013–2014, Zesprigranted licenses to grow G3 and sell the fruit produced (the G3 License Agreements)to the applicants, Mr Gao, Ms Xue and their company, Smiling Face Ltd (SmilingFace). Zespri later commenced proceedings against the applicants alleging that theyhad engaged in conduct breaching Zespri's exclusive PVRs in New Zealand as well asthe G3 License Agreements.Decisions below[2] In February 2020, the High Court made a number of factual findingsincluding:1(a) that Mr Gao supplied G3 and G9 plant material to two growers basedin the People's Republic of China (PRC), Mr Shu and Mr Yu;(b) in 2012, Mr Gao executed a license agreement purporting to authoriseMr Shu to exploit the G3 and G9 varieties throughout the whole of thePRC (the False License Agreement);(c) in or about 2014, Mr Gao entered into a joint venture with Mr Yu tocommercialise G3 and G9 in the PRC;(d) that as a result, G3 and G9 varieties have been established on fiveorchards in the PRC associated with Mr Shu and Mr Yu with a totalland area of 174.2 ha (although not all the land is planted with G3 andG9);2(e) Mr Gao offered to sell G3 to another PRC grower, Mr Li, although thedeal did not proceed; and(f) that Mr Gao's acts in relation to both Mr Shu and Mr Yu wereundertaken on behalf of his associated company, Smiling Face.31 Zespri Group Ltd v Gao [2020] NZHC 109 (Katz J) at [192]–[195].2 Four orchards were associated with Mr Shu (at [85](i)): Chibi, Xianning 1, Xianning 2 and Wuhan.One orchard was associated with the joint venture between Mr Gao and Mr Yu (at [99](a)):Liangshan Yi.3 At [197].[3] Consequently, the High Court awarded damages of $14,894,100 againstMr Gao and Smiling Face each for acts infringing Zespri's New Zealand PVRs,4 aswell as damages of $10,824,300 against Mr Gao and Ms Xue jointly for acts infringingZespri's contractual rights.5 The Court also granted Zespri a permanent injunctionagainst the applicants restraining them from further infringing Zespri's PVRs withrespect to the G3 and G9 varieties.6[4] The applicants' appeal to the Court of Appeal was largely unsuccessful, onlysucceeding on narrow liability and quantum points.7Grounds of appeal[5] The five proposed grounds of appeal raised by the applicants are:(a) the reliability of hearsay statements attributed to Mr Shu which wereadduced by Zespri's witnesses;(b) that the Court of Appeal finding that the False License Agreement wasirrelevant to liability or quantum should have meant that there was noevidence as to damages;(c) there was no 'sale' within the meaning of s 2 of the PVR Act;(d) since Zespri's PVRs did not have extraterritorial reach, the licensing ofprotected varieties in the PRC did not infringe upon those rights; and(e) the Court of Appeal's assessment of damages on the basis of a notionalpurchase price was procedurally unfair and a breach of natural justice.4 At [202](b) and [202](c).5 At [202](d). The High Court had found Ms Xue jointly liable for Mr Gao's breaches because theywere in a partnership together and had signed the licenses together: at [180].6 At [202](a).7 Gao v Zespri Group Ltd [2021] NZCA 442 (Kós P, Brown and Goddard JJ).Our assessment[6] The proposed appeal relates to the particular circumstances of the case. Nopoint of general or public importance arises.8 Nor do the submissions of the applicantspoint to any matters that would suggest that the largely concurrent findings of theCourts below may have been wrong.9Result[7] The application for leave to appeal is dismissed.[8] The applicants must pay the respondent costs of $2,500.Solicitors:Heritage Law, Auckland for ApplicantsBuddle Findlay, Auckland for Respondent8 Senior Courts Act 2016, s 74(2)(a).9 This means that there is no risk of miscarriage of justice: s 74(2)(b). For a risk of miscarriage ofjustice in the context of a civil appeal, see Junior Farms Ltd v Hampton Securities Ltd (in liq)[2006] NZSC 60, (2006) 18 PRNZ 369 at [5].