Zespri wins first round in court battle with T&G

FRUIT TO GO: Zespri's kiwifruit is loaded on to a ship for export. The kiwifruit distributor won its first legal battle with Turners and Growers, which is challenging Zespri's export dominance over marketing offshore.

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Heavyweight kiwifruit exporter Zespri has won the first round of a legal stoush with a challenger to its dominance, Guinness Peat Group (GPG) subsidiary Turners & Growers (T&G), with the High Court allowing Zespri's bid to split big court proceedings.

Justice White, at the High Court at Auckland, has ruled he is satisfied the practical advantages to the parties and the court of having two of T&G's claims determined ahead of a substantive trial significantly outweighed disadvantages to T&G from the time taken to do so. However, he has imposed a tight new timetable for the case, which had been set down for a five week hearing from November 1.

A spokeswoman for the $1 billion annual export earner Zespri said the firm was pleased with the decision.

Tony Gibbs, the chairman of T&G and the New Zealand director of GPG, could not be contacted.

Listed T&G is challenging Zespri's export dominance, arguing that some of the regulations governing it compel the granting of export authorisation to the Mt Maunganui-based marketing company and prevent others exporting kiwifruit. It alleges Zespri has engaged in unjustifiable discrimination among suppliers and engaged in non-core activities in breach of the Kiwifruit Export Regulations.

Justice White was asked by Zespri to determine whether all aspects of the challenge should be heard together at one time at the five week trial, or whether two legal issues relating to the validity of two regulations and the jurisdiction of the court in respect of alleged breaches of other regulations should be heard separately and in advance of the trial.

T&G argued against the proposal, saying a big risk existed of a substantial delay to the November proceedings if the trial was split.

Arguing for the split, Zespri earlier told the High Court that two of T&G's claims should be determined by the New Zealand Kiwifruit Board, instead of by the court.

The board was set up 10 years ago to monitor and enforce Zespri's compliance with the regulations.

Justice White ordered the November fixture to be cancelled and six weeks to be allocated for a trial early next year.

He ordered issues relating to the validity of the regulations and the validity of the High Court jurisdiction issue to be heard from July 20-23.

T&G, New Zealand's biggest fresh produce company, alleges Zespri's support of a single point of entry for growers' export produce, purchase of varietal rights, and selling and growing kiwifruit overseas are "non-core" activities.

It also alleges that through entering into exclusive supply agreements with some growers and paying them a loyalty premium, Zespri unjustifiably discriminates among growers.

T&G, owner of the Enza brand, wants to grow in New Zealand a red kiwifruit it has harvested in China, but cannot legally export the fruit outside of Australia without a collaborative agreement with Zespri, which it has failed to achieve.

T&G says it also holds the global intellectual property rights to trademarked EnzaGold and the regional rights to Summerkiwi.

- © Fairfax NZ News