Enza action leaves growers facing large lawyers' bill

Independent growers have been left with hefty legal costs after action taken by apple and pear exporter Enza.

The revelation came as growers resist being made to pick up the tab for Enza's $50 million foreign exchange losses.

The Apple and Pear Export Permits Committee, responsible for giving growers permits to bypass Enza to export their fruit, won a long-running High Court case to be allowed to increase the number of permits it granted.

However, it has told Parliament's primary production select committee that, despite winning, it had to pay more than three-quarters of its legal costs and had to pass these on to growers.

It would not disclose the extent of these legal costs except to say they were "quite high" - but they are likely to be not far off the $500,000 paid by Enza.

Enza was ordered to pay its own costs and nearly a quarter of the committee's costs, but has not said whether its growers will have to bear that bill.

Committee chairman John Jenner asked MPs to ensure that members of the non-profit committee would not have to personally bear the cost of any future legal action, a request Enza also made.

The committee's legal bill in the Enza case was paid from fees paid by independent growers, he said, and so would reduce the total returned to the growers at the end of the year.

"The costs associated with that case were quite high. We were able to deal with those within the resources we had available to us and within arrangements we were able to make," he said.

"All of our revenue comes from the applicants, and any surplus is returned to the applicants. The higher the cost, the lower the surplus."

Mr Jenner said growers also had to bear the cost and inconvenience of a two-week injunction on issuing permits, sought by Enza but eventually lifted by the High Court.

Enza withdrew its threat of an appeal in April.



Mr Jenner was concerned that members might be left vulnerable to increasing levels of litigation, after the Apple and Pear Industry Restructuring Act Repeal Bill winds up the committee.

"We regard this as an unlikely event, but should it eventuate it would impose considerable and unjustifiable costs on the people concerned, in our view."

The committee approved permits for 4.8 million cartons of fruit to be exported independently this year, of which about three million cartons are being exported.

Nelson independent grower Danny Frielich, who is also facing legal action from Enza, criticised Enza's wasting money on taking the permits committee to court.

"I know at least three packhouses where they sent fruit to Enza without signing the contracts, and they wouldn't accept the fruit.

"At the same time Enza had the permits committee in court."

Mr Frielich also opposed his being forced to pay for Enza's foreign exchange dealings without being asked first whether he agreed to them.

"I didn't sign a contract to say that you can go and take money out for me, gamble my money away.

"I don't want them to gamble my money ... They're there to sell my fruit."

Mr Frielich said Enza was suing him for $1.4 million for describing producer boards as "lazy and inefficient" at a public meeting.

Hawke's Bay Apples director Grant Sinclair said "duress was a polite term" for the way Enza made growers sign contracts to bear the $3-a-carton cost of the foreign exchange losses.

- NZPA