Sharechat Logo

Clear grain 'reneging' on contract by opposing NZ hearing, NZX counsel says

Tuesday 15th November 2011

Text too small?

Clear Grain Exchange’s opposition to NZX’s legal action in the local courts amounts to “reneging” on its contract, the High Court in Wellington heard today.

Counsel for the stock exchange Brian Latimour said the sale and purchase agreement signed by Clear’s owners and the NZX stipulated it would be governed under New Zealand law, and in the event of a breakdown in the relationship, either party can elect to pursue a claim in New Zealand or the Australian state of Victoria.

“It should be conclusive, because what the defendants are now doing by resisting is reneging on contractual commitments,” Latimour said.

NZX has to prove there’s an answerable case, and that the arrangement is covered by New Zealand law if it wants to proceed with its application against Clear owners Grant Thomas and Dominic Pym and their companies Ralec Commodities and Ralec Interactive.

Latimour told the court Clear’s forecasts that it would trade 1.5 million tonnes of grain by June last year were inflated, and after two years of NZX ownership the platform has yet to meet half that target.

Clear’s owners misrepresented the likely volumes to be traded on the platform and talked down operating expenses, which misled the NZX when it purchased the exchange in 2009 for A$6.9 million, he said.

That also included overstating a relationship with GrainCorp, Australia’s biggest grain bulk handler, which failed to attract the expected trading volumes.

Today’s hearing in chambers before Judge Warwick Gendall will determine whether there’s an arguable case to answer and if the New Zealand courts are appropriate jurisdiction.

Judge Gendall had earlier turned down an application from NZX to have media excluded from today’s hearing, saying many hearings in chambers are open to media representatives and the interests of open justice wouldn’t be served if it was kept behind closed doors.

“I don’t think any parties should be too precious about responsible reporting that takes place,” the judge said.

Latimour said the stock exchange is seeking to claw back the cost of funding the exchange, lost profits from the platform and the fall in value, minus pay-outs to Thomas and Pym had they eventuated.

Australian counsel for Clear, Tim North, will give his address later this afternoon.

The case is set down for one day and is continuing.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Property for Industry Limited (NZX: PFI) Strong Valuation Outcome, Penrose Acquisition
3rd December 2021 Morning Report
Fonterra Shareholders Fund (NZX: FSF) Fonterra provides Milk Price, earnings and Q1 update
Kiwi Property Group Limited (NZX: KPG) Signs Sale and Purchase Agreement with IKEA
2nd December 2021 Morning Report
The New Zealand Refining Company Limited (NZX: NZR) Launches Share Purchase Plan
Seeka Limited (NZX: SEK) Confirms Market Guidance
Australia and New Zealand Banking Group Limited (NZX: ANZ) Acknowledges Class Action Proceedings
1st December 2021 Morning Report
Livestock Improvement Corporation Limited (NZX: LIC) Appoints New Chief Executive