Hedley v Kiwi Co-Operative Dairies Limited HC Palmerston North CP24/99

The plaintiffs were shareholders in Tui Milk Products Limited, a Palmerston North based dairy co-operative, which merged with Kiwi Co-operative Dairies Limited in 1996. The plaintiffs brought an action against Kiwi, the former Tui board of directors, and others, alleging deceit in relation to the terms of the merger, and professional negligence in the preparation of an independent review of the merger proposal. The court dismissed all causes of action. The court found that the plaintiffs’ claims were based on suspicion, rather than proof, of deceit on the part of the defendants. The court found that there was no evidence of deceit, and no negligent misstatement by the independent reviewers. The court found that the Tui directors had acted responsibly and in the best interests of the shareholders in agreeing to the merger terms. The defendants were awarded their costs of the proceeding.