NORTH-West dairy giant Van Dairy has won a court battle waged by the previous owner of the Wool- north property.
The Tasmanian Land Company had claimed it was entitled to receive $2.2 million dollars that had been paid as part of a $3 million payment by Fonterra to Van Dairy in relation to milk supplied in the 2017/18 season.
TLC argued that the money had been in compensation for the milk price step down that occurred in the 2015/16 season.
Chinese-owned VDL bought the Woolnorth dairy property from its New Zealand owners in 2016 for $275 million.
The sale included a milk supply agreement with Fonterra.
A month after the sale the price paid by Fonterra decreased significantly due to market conditions.
As a result the TLC agreed to pay Van Dairy $2.2 million as part of the post-closing adjustment.
TLC believed it was entitled to have its money returned once Fonterra had also paid out to Van Dairy.
Van Dairy successfully argued in court that the contract governed the parties’ respective rights, and that TLC had no contractual entitlement to the money paid in 2017/18.
Justice Michael Brett found TLC had failed to establish its claim against Van Dairy “on any basis” and its action was dismissed.
Van Dairy owner Xianfeng Lu welcomed the court decision as win.
Mr Lu said his goal was to build a high-quality international dairy company and he remained committed to this outcome.
“We want to make Van Dairy a well-known international brand,” he said.
Van Dairy currently employs about 140 local residents, making it one of the largest employers on the coast and a major contributor to the Circular Head economy.
Mr Lu is an Australian Permanent Resident and has been living in the homestead on the Woolnorth property for the past two years.
“We are committed to creating a world-leading, environmental best-practice and vertically integrated dairy operation which blends seamlessly with the Tasmanian brand,” Mr Lu said.
“We are looking forward to working with all interested stake- holders and parties to deliver upon the vision and progress our plans.”