Resolving disputes in Sharemilking Agreements

In the January National Farming Review, Federated Farmers legal advisor, Sean O'Sullivan discussed the conciliation process for dispute resolution when a Sharemilking Agreement broke down. This month, he discusses what can be done when conciliation fails to bring parties to an agreement.


Disagreements often arise under sharemilking agreements due to irreconcilable differences of opinions, attitudes, and techniques or as a result of an incident on the farm. Ideally conflicts should be dealt with before they come to a head.

Owners and sharemilkers with disputes arising under sharemilking agreements can use conciliation and arbitration processes to resolve these disputes in a cost-effective, mediated and procedurally fair manner.

The second of these processes, arbitration, is more costly and can only be used if the conciliation process fails to bring parties to an agreement.

The arbitrator appointed must be independent, with no conflicts of interest with the case or either party.

For this reason, a person cannot act as conciliator and arbitrator in a particular dispute.

If the parties cannot agree on an arbitrator, the President of the Arbitrators' and Mediators' Institute of New Zealand (AMINZ) or the President of the Law Society can appoint one, for a fee.

The parties must set out in writing their claims and responses. This is usually followed by a hearing where the parties present their case. Witnesses and experts may be called and a site meeting may be held.

Parties may choose to be represented by a lawyer or disputes advocate, although this is not absolutely necessary but, where parties choose to represent themselves, it is advisable they seek legal and procedural advice.

The arbitrator has a maximum of two months from the date of their appointment to deliver a decision, called an 'award'. This is subject to the parties' full co-operation and binds both parties. If a party fails to deliver under it, the other party may apply to the Employment Court to have it enforced. However, the arbitrator's award is final and the parties cannot appeal or seek a review of it in any court; they can appeal on procedural matters only.

Failing to face disputes in a positive open fashion has the potential to become angst-ridden and costly. Experience suggests a constructive approach to conciliation and willingness to compromise at that stage is often the most cost effective way of dispute resolution.

While disputes cannot always be avoided, increased knowledge of the sharemilking agreement and dispute resolution provisions within them can provide a greater opportunity for any disputes and breaches of contract to be managed at an earlier stage, avoiding costly and lengthy litigation further down the track.

- Hamilton News

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