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

 

Inequality: Top 10% Of Housholds Have Half Of Total Net Worth

The average New Zealand household was worth $289,000 in the year to June 2015, Statistics New Zealand said today. However wealth was not evenly distributed, with the top 10 percent accounting for around half of total wealth. In contrast, the bottom 40 percent held 3 percent of total wealth. More>>

ALSO:

What Winter? Temperature Records Set For June 20-22

The days around the winter soltice produced a number of notably warm tempertaures. More>>

Conservation Deal: New Kākāpō Recovery Partnership Welcomed

Conservation Minister Maggie Barry says the new kakapo recovery partnership between DOC and Meridian Energy is great news for efforts to save one of New Zealand’s most beloved birds. More>>

ALSO:

Tech Sector Report: Joyce Warns Asian Tech Investors View NZ As Hobbits And Food

Speaking in Wellington at the launch of a report showcasing the value of the technology sector to the New Zealand economy, Joyce said more had to be done to tell the country's technology stories overseas. More>>

ALSO:

Mediaglommeration: APN Gets OIO Approval For Demerger Plan

APN News & Media has received Overseas Investment Office approval for its plan to split out its NZME unit ahead of a potential merger with rival Fairfax Media's New Zealand operations. More>>

New Paper: Ninety-Day Trial Period Has No Impact On Firms' Hiring

The introduction of a 90-day trial period has had no impact on hiring by New Zealand companies although they are now in widespread use, according to researchers at Motu Economic and Public Policy Research. More>>

ALSO:

Corrections: Serco Exits Equity Stake, Remains As Operator

Serco has sold its equity stake in the company that holds the contract to design, build and run Wiri Prison in South Auckland but continues as sub-contractor to operate the facility. More>>

GDP: NZ Economy Grows Faster-Than-Forecast 0.7%

New Zealand's economy grew at a faster pace than expected in the first quarter of 2016 as construction expanded at the quickest rate in two years. The kiwi dollar jumped after the data was released. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news