The Court of Appeal has dismissed an appeal brought by Hawke's Bay agrifinance company Stock Co against a High Court ruling allowing the Crafar financiers to retain ownership of 4,000 disputed heifers.

It's the latest chapter in a long-running battle over ownership of both those cows and a further 750 that Allan Crafar claimed had been gifted to his son, Robert.

Last year Justice Douglas White ruled that the 4,000 cows which had been stationed on Crafar Farms land when the company went into receivership in 2009 should remain the property of the Crafar banking syndicate - Westpac, Rabobank and PGG Wrightson Finance.

In a convoluted deal, Allan Crafar sold the cattle to Stock Co in August 2008 for $3.6 million. Stock Co then leased the cattle back to Nugen Farms - a company owned by Crafar's son Robert outside of the Crafar Farms group.

This deal was done without the Crafar banking syndicate's knowledge or consent.

In the High Court case Crafar argued the sale and leaseback of the heifers was business as usual because it involved selling ''trading stock''.

Proceeds from the sale were used to part pay for one of two farms near Norsewood that Crafar was purchasing.

At the time of receivership, the Crafar Group was one of New Zealand's largest rural enterprises with around 20,000 head of livestock.

But it owed bankers $194 million when it went into receivership in October 2009 after Crafar had gone on a buying spree of what he considered was undervalued dairying land.

However the lawyer acting for receivers Korda Mentha argued the stock was originally meant to be leased back to the farm from which it had been bought - under a Crafar Farms company called Plateau.

The deal was restructured through Nugen at the last moment to avoid having to gain consent from the banks.

They had previously approved stock sales only if the proceeds were used to pay down bank debt, the receivers claimed.

The Court of Appeal found the one-off transaction was ''highly unusual''.

In its written judgement the court said if the stock sales had continued for much longer with the same frequency, the Crafar Farms group would have had no stock left.

Also under dispute in the High Court case was another 750 cows that had been involved in a sale and leaseback arrangement between Nugen Farms and Stock Co.
Receivers Korda Mentha argued in the Court of Appeal that in the absence of any proof of claims these cows had been gifted to Nugen, they remained the ownership of the overall Crafar group and thus subject to the banks' security rights.

This was disputed by Stock Co.

The Court of Appeal found that the purported gift was ineffective because the cows were never identified or delivered.

They had all remained on the Crafar Farms land with the rest of the herd. Therefore the banks were entitled to enforce their security interest over the entire herd.

- © Fairfax NZ News