Supreme Court to hear Synlait's appeal on Pokeno case

Leon Clement, chief executive of Synlait Milk. Photo / File

Synlait Milk has won the right to appeal a decision restricting the land where its new $260 million Pokeno factory has been built to land grazing, lifestyle farming and forestry.

The company is now moving on with the next stage of the legal process and obtaining some certainty, it said in a statement.

"While we're pleased the legal case can move forward, we still remain committed to working constructively with all parties on a positive outcome," said chief executive Leon Clement.

Synlait's February 2018 land purchase was conditional on the seller, Stonehill Trustee, procuring the removal of covenants restricting the site's use. A High Court decision in November last year removed the covenants and then Synlait took the title of the land.

However, the owner of adjacent land, Ye Qing, had that decision overturned by the Court of Appeal in May.

Synlait then filed an application to appeal to the Supreme Court to have the decision overturned.

That appeal has been granted, according to the judgment published today.

"We're also committed to Pokeno. The site is now operational, and we are working to ensure an outcome which serves the best interests of our milk suppliers, shareholders and staff," said Clement.

Synlait will be substituted as the appellant, standing in the shoes of previous owner Stonehill Trustee Limited.

However, an application by Synlait to introduce new evidence will be determined at or after the hearing of the appeal, the judgment said.

The respondents, Ye Qing and his company New Zealand Industrial Park, have until November 15 to file affidavits regarding the evidence Synlait wants to adduce.

The court also recognised that the respondents may seek to present evidence in response to Synlait's new evidence. The court will hear arguments on both applications at the hearing and determine them at or after the hearing, according to the judgment.

Counsel should make submissions based on the possibility that leave is given to both parties to present new evidence or such leave is declined, it said.

In late September, Synlait announced it had processed its first milk at Pokeno and was recruiting as it increased manufacturing capacity.

Synlait Pokeno's nutritional spray dryer can produce 45,000 tonnes of product each year. The facility, like Synlait Dunsandel, can produced a full suite of nutritional, formulated powders, including infant-grade skim milk, whole milk and infant formula base powders.

The shares fell 2 per cent to $9.51 in afternoon trading.