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

 

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Women's Affairs: Government Accepts Recommendations On Pay Equity

The Government will update the Equal Pay Act and amend the Employment Relations Act to implement recommendations of the Joint Working Group on Pay Equity. More>>

ALSO:

Immigration: Increase In Seasonal Workers For RSE

The current cap will be increased by 1,000 from 9,500 to 10,500 RSE workers for the 2016-17 season. Mr Woodhouse says the horticulture and viticulture industry is New Zealand’s fourth largest export industry, producing almost $5 billion in exports. More>>

ALSO:

Hurunui: Crown Irrigation Invests Up To $3.4m In North Canterbury

Crown Irrigation Investments will invest up to $3.4m in the Hurunui Water Project, an irrigation scheme that will be capable of irrigating up to 21,000 hectares on the south side of the Hurunui River in North Canterbury. More>>

ALSO:

Not So Great:Butterfly Eradication Success

The invasive pest great white butterfly has been eradicated from New Zealand in a world-first achievement, Primary Industries Minister Nathan Guy and Conservation Minister Maggie Barry say. More>>

Gordon Campbell: On The Government’s Tax Cuts Fixation

Long before the earthquake hit, the dodginess of the government tax cuts programnme was evident in the language of its packaging. It is being touted as a “tax cuts and family care” package... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news