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Privy Council Denies GPG Appeal

Privy Council Denies GPG Appeal

One of the final Privy Council decisions on a New Zealand court ruling was handed down in London early this morning (NZ time) when it denied Guiness Peat Group's petition to appeal against a Court of Appeal judgement regarding Perry Corp's interests in Rubicon.

The decision puts an end to a dispute that began in July 2002 when GPG bought shares in Rubicon, the largest shareholder in Fletcher Challenge Forests Ltd. GPG claimed that Perry Corp had breached disclosure laws by not disclosing its economic interest in Rubicon through the use of equity swap transactions. Perry Corp is a New York based investment company.

However, late last year five Court of Appeal judges unanimously overturned and set aside an earlier High Court ruling that Perry Corp had breached its disclosure obligations under the Securities Markets Act when it entered into equity swaps, allowing it to buy shares in Rubicon at short notice. The Court of Appeal found no such breach. GPG sought leave from the Court of Appeal to appeal to the Privy Council but this was declined.

Rachel Taylor, a partner in the trans-Tasman law firm, Phillips Fox, which acts for Perry Corp, said the argument against GPG's petition was that the claim didn't involve $5000 or more (as it concerned regulatory compliance); that it was not of great general or public importance, and that it was a weak case, the matter having been carefully analysed by a five-member Court of Appeal.

"GPG did not have a money claim," said Ms Taylor. "Its claim for damages of $4.5m had failed at the High Court where Justice Potter had held 'GPG was not a victim of market price distortion'. GPG never appealed that finding against it."

Ms Taylor said the Privy Council's denial of GPG's petition completely endorses the Court of Appeal findings. "The decision reflects the fact that the Court of Appeal's decision was entirely consistent with international practice. Any other decision would have put New Zealand out of line with other important jurisdictions, she said.

NB: The Privy Council also declined an appeal by the Bell Group concerning a Court of Appeal decision in PPCS's battle for control of Richmond.

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