Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Gisborne Milk Co-op survival bid turned down by High Court

Gisborne Milk Co-op survival bid washed away by Fonterra 'perfect storm'

By Paul McBeth

Jan. 10 (BusinessDesk) - Gisborne Milk Co-op, the 66-year-old Bay of Plenty dairy supplier in liquidation, has lost a last-ditch bid to get back shares and supply arrangements with Fonterra Cooperative Group.

In the High Court in Auckland, Justice Rebecca Ellis turned down Gisborne Milk's claim that Fonterra breached its empowering legislation, saying the Bay of Plenty firm made its own commercial decisions to surrender shares in the cooperative. The Dec. 17 judgment was published on the Justice Ministry's website this week.

"It is difficult not to think of the shareholders Gisborne Milk as sailors caught in a perfect storm," Justice Ellis said. "It is impossible not to have considerable sympathy for them. But none of their claims can succeed."

Gisborne Milk was seeking reinstatement of its Fonterra shares and an inquiry into damages, saying Fonterra's hardball negotiations and stance on whether the company could be a shareholder fell afoul of the Dairy Industry Restructuring Act and constituted misleading conduct.

Fonterra inherited Gisborne Milk as a supplier from the company's relationship with Bay Milk when Parliament legislated to create a national dairy group.

What made Gisborne Milk unusual for Fonterra was that the company processed milk for its local community, shipping excess supply to the Bay Milk operation without producing its own product.

The distance and nature of Gisborne Milk's shareholding was seen as a problem for Fonterra, though the dairy group didn't devise a way to deal with the issue for several years, even with prodding by its supplier.

Justice Ellis said Fonterra's interpretation of the act that Gisborne Milk couldn't be a shareholder was incorrect, but the dairy group was entitled to put it forward as an honestly held and reasonable opinion.

Gisborne Milk wasn't obligated to sell its shares, and in doing so ignored legal advice it had received that Fonterra's position was wrong, the judgment said.

"The evidence from Gisborne Milk's own witnesses leads to the conclusion that a decision was taken by Gisborne Milk to voluntarily surrender its shares, for a number of perfectly sound reasons," the judgment said.

The judgment doesn't determine a separate action by Gisborne Milk shareholder Opoiti, which claims a letter from Fonterra manager Mark Leslie caused it to enter into an individual contract with the dairy group.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Future Brighter Money: RBNZ Releases New Bank Note Designs

New Zealand’s banknotes are getting brighter and better, with the Reserve Bank today unveiling more vibrant and secure banknote designs which will progressively enter circulation later next year. More>>

ALSO:

Commerce: Supermarket Inquiry Finds No Breaches By Countdown

The Commerce Commission inquiry into anti-competitive behaviour by Countdown supermarkets, alleged by former Labour Party MP Shane Jones, has found nothing to warrant prosecution, although it warns supermarkets to take care in the way they communicate... More>>

ALSO:

Crown Accounts: English Flags ‘Challenge’ To Budget Surplus

Finance Minister Bill English is warning next month’s half yearly fiscal and economic update from the Treasury may not forecast a budget surplus, saying that returning the government’s accounts to surplus in 2015 will be “a challenge”, given the decline in commodity prices and weak global inflation. More>>

ALSO:

March 2015: Netflix To Launch In Australia And New Zealand

World’s Leading Internet Television Network to Offer Original Series, Movies, Documentaries, Stand-Up Comedy Specials and TV Shows for Low Monthly Price More>>

ALSO:

Price Of Cheese (Is Up): Dairy Product Prices Fall To Five-Year Low

Dairy product prices fell in the latest GlobalDairyTrade auction to the lowest level in more than five years, led by declines in rennet casein and skim milk powder. More>>

ALSO:

Gordon Campbell: On The Australians Scoring Trade Points Against Us With The Chinese

It hasn’t been a great year for Trade Minister Tim Groser... To top it off, Australia has just signed a FTA with China that has far better provisions on dairy exports than what New Zealand currently enjoys in our own FTA with China. More>>

ALSO:

Iwi & Local Consultation: Oil And Gas Block Offer 2015 Begins

Energy and Resources Minister Simon Bridges today announced the start of the Block Offer 2015 process for awarding oil and gas exploration permits. More>>

Industrial Action: Stats NZ Throwing Public Money Away Duplicating Data

The Public Service Association (PSA) says Statistics NZ are throwing money away by collecting the same data twice for official statistics such as the Consumer Price Index... As part of the ongoing industrial action, field interviewers who are PSA members are continuing to collect data, but are not sending it through to Statistics NZ. More>>

ALSO:

Other Stats:

Space: Rosetta's 'Philae' Makes Historic First Landing On A Comet

After more than a decade traveling through space, a robotic lander built by the European Space Agency has made the first-ever soft landing of a spacecraft on a comet. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news