Fonterra Co-Operative Group Ltd v McIntyre and Williamson Partnership

IN THE SUPREME COURT OF NEW ZEALAND

SC 150/2016
[2017] NZSC 47

BETWEEN	FONTERRA CO-OPERATIVE GROUP LIMITED Applicant
AND	MCINTYRE AND WILLIAMSON PARTNERSHIP AND OTHERS Respondents

Court:	William Young, Arnold and Ellen France JJ
Counsel:	J E Hodder QC and D T Street for Applicant D J Goddard QC and B M Russell for Respondents
Judgment:	10 April 2017

JUDGMENT OF THE COURT

AThe application for leave to appeal is granted (Fonterra Co‑Operative Group Ltd v McIntyre and Williamson Partnership [2016] NZCA 538).
BThe approved question is whether the Court of Appeal was right to answer the following two questions in the affirmative:
(a) Were the respondents “new entrants” for the purposes of s 106 of the Dairy Industry Restructuring Act 2001?
(b) If so, did the appellant breach s 106 in offering the respondents the terms of supply set out in the milk supply agreements signed by the respondents?

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Solicitors:
Chapman Tripp, Wellington for Applicant
Lane Neave, Christchurch for Respondents

CaseChat Overview and Summary

The Supreme Court of New Zealand considered an appeal by Fonterra Co-Operative Group Limited, a major dairy cooperative, against a decision of the Court of Appeal. The case involved a dispute with McIntyre and Williamson Partnership, a farming partnership, over the terms of milk supply agreements. The primary issue was whether the respondents qualified as "new entrants" under section 106 of the Dairy Industry Restructuring Act 2001 and whether Fonterra breached the law by offering them unfavourable terms.

The central legal issues revolved around the interpretation of "new entrant" under the Act and the obligations imposed by section 106 on Fonterra in relation to such entrants. The Court of Appeal had previously ruled that the respondents were indeed "new entrants" and that Fonterra had contravened the Act by imposing less favourable terms on them compared to existing suppliers. Fonterra sought leave to appeal to the Supreme Court to challenge these findings.

The Supreme Court granted Fonterra leave to appeal, addressing the questions of whether the respondents were "new entrants" and whether Fonterra breached section 106. The Court considered the statutory language, legislative history, and policy behind the Act. It determined that the Court of Appeal had correctly interpreted the term "new entrant" and upheld the finding that the respondents qualified as such. Consequently, the Court also affirmed that Fonterra had breached its obligations under section 106 by offering less favourable terms.

The final orders of the Supreme Court were to affirm the Court of Appeal's decision, thereby upholding the findings that McIntyre and Williamson Partnership were "new entrants" and that Fonterra had breached the Act by offering them less favourable terms. This ruling reinforced the protections intended for new entrants in the dairy industry under the restructuring legislation.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established