New Zealand Trader Awarded Huge Compensation By Court For An Unfair Contract On Banana Exports

A New Zealand-based trading company has been awarded a hefty $450,000 compensation by the court, from a supplier of Philippines bananas, which were meant to be exported to Iraq. The deal went sour despite good samples and the quality was substandard and the exporting company suffered monetary loss and reputation.

Deal For Philippines Bananas

International New Zealand Trading owned by Ahmed Ali, last year, approached the High Court with a claim against Fresh Fruit Trading and its director Auckland based woman Leyda Wood. Wood is from the Philippines and her family owns a banana farm there. Wood and her husband set up Fresh Fruit Trading in 2012 as a business venture to obtain Philippine bananas for export.

In May 2012, International New Zealand Trading director Ahmed Ali entered into a contract with Fresh Fruit Trading for supplying bananas for exports to Iraq. The deal was signed after a sample shipment, with relevant specifications and quality standards outlined, reports NZ Herald.

However, some 30 containers later, International New Zealand Trading received feedback that the quality of "bananas supplied by the defendants were consistently poor". International New Zealand Trading sued Wood and Fresh Fruit alleging it to be responsible for failure to supply bananas on the agreed quality and in indulging deceptive conduct by faking representations about the quality of supplied bananas, and supplying products that were not of merchantable quality.

The defendants, fresh Fruit Trading, disowned the liability and filed counterclaims seeking the unpaid balance and insisted New Zealand Trading to persist with the order signed.

Claim of Defect Upheld

Justice Geoffrey Venning, after the hearing, said the defendants supplied "defective bananas" and observed that the evidence before the court has confirmed that the defendants supplied defective bananas to the plaintiff in breach of the defendants' obligations under the Sale of Goods Act 1908. The court identified a liability of $625,807 to International New Zealand Trading by Fresh Fruit from in which $174,913 must be offset from the sale of salvageable bananas.

Then Justice Venning gave his verdict against both Wood and her company and imposed $450,893 as penalty and endorsed the plea by International New Zealand Trading that it was entitled to costs.

Philippines bananas are globally famous. In November, the 2014 International Banana Symposium and 16th Davao Trade Expo (DATE) will be taking place at its Davao City from 19-22 November under the theme, 'Davao: from local agriculture to global agribusiness', reports Fruitnet.