Meat Board wins appeal against $7.5 million judgment

11am

The New Zealand Meat Board has narrowly won a Privy Council appeal over a $7.5 million judgment made against it regarding European Union export quotas.

In a 3-2 majority decision released today, the Council allowed an appeal by the Meat Board and the Meat Industry Association (MIA) against an earlier Appeal Court decision in favour of Ronnick Commodities and Paramount Export Limited.

Paramount, a horse and sheepmeat company, and its second debenture holder, Ronnick Commodities, in the Appeal Court successfully fought a complaint that the meat industry "establishment" breached contracts with the small companies when it allocated lucrative quotas.

Both companies claimed they went into receivership and liquidation because they were not given a high enough export quota after the allocation system changed.

But the Privy Council in London overturned the Appeal Court ruling in a rare legal move that allowed the Meat Board to withdraw a "concession" that had formed the basis of the earlier court proceedings and judgment.

That concession related to whether the Meat Board had breached contracts under a particular clause relating to quota allocation based on a company's share of the national kill for the season.

Most of the legal argument centred on a supposedly amended clause but it was later found the clause had not been properly amended.

Despite this, legal arguments were not made about whether the Meat Board had breached contracts under the original clause.

However, the Appeal Court ruling said the Meat Board had conceded that, if the clause hadn't been amended, allocations would have been made in breach of contract. The Board was consequently found liable.

Counsel for the Meat Board, Colin Carruthers QC, told the Privy Council he had never made such a concession and wanted to withdraw it.

Counsel for Ronnick Commodities and Paramount Export, Nigel Cooke, said a withdrawal would be "unjust" now because the case was fought on the assumption that if the clause was breached, the Meat Board would be liable.

Lords Hoffman, Hutton and Scott decided to allow the withdrawal but found that the Meat Board was not legally liable under the contract and so allowed the appeal.

"It is no doubt very disappointing for the plaintiffs, having succeeded in the courts below, to lose on a new point in the final court," they said.

"On the other hand, it would be a miscarriage of justice if the Meat Board were required to pay some $7m out of public funds when it had no legal liability to do so, merely on account of the way its advisers had conducted the litigation."

Lords Nicholls and Walker disagreed with this decision, saying they were surprised the Meat Board had not disputed its concession of liability when the case had gone back to the Court of Appeal three times before reaching the Council.

They said the Meat Board had given no satisfactory explanation for not raising the issue earlier. "We believe that to permit the Meat Board to take this point for the first time on appeal to the Privy Council would inevitably mean the plaintiffs will feel, in our view justifiably, that they have not been treated fairly in this litigation."

The Council said Ronnick and Paramount would have to be compensated by the Meat Board for the late withdrawal of concession and invited submissions from both parties on appropriate costs.

The MIA was also found not to be legally liable and had its appeal allowed.

The MIA and the Meat Board are effectively combined to form industry board Meat New Zealand.

- NZPA