Disgruntled kiwifruit growers have taken the Overseas Investment Office (OIO) to court over the performance of a German company that owns Turners & Growers.
But a High Court judge has rejected their challenge to the OIO's view that German company BayWa, which now owns 73 per cent of listed fruit and vegetable marketer Turners & Growers, had fulfilled its consent conditions.
The OIO, which is an arm of Land Information New Zealand, approved BayWa's takeover of Turners & Growers in 2012.
As part of its consent requirements, BayWa had to report on plans identified in its application, including "improved relationships with growers".
In particular it was required to identify "any measures taken to improve relationships with growers and other third parties".
BayWa submitted its first report in March last year and the OIO was apparently satisfied with it, but a group of Bay of Plenty kiwifruit growers was not.
The growers, operating as TFG Society Incorporated in the court proceedings, were unhappy with how Turners & Growers had dealt with them since the takeover by BayWa.
Their complaint was that their discontent was not mentioned in the section of BayWa's report dealing with improving relations with growers.
In the High Court at Wellington, they argued that BayWa was obliged to mention this, and as a result the regulator was wrong to accept the report as fulfilling BayWa's obligations.
In his judgment, Justice Simon France rejected the claim, saying there was no evidence a decision to "accept" the report was ever made.
"Certainly it was received and the evidence makes it clear that its contents have been considered by the OIO," Justice France said.
"The applicant seeks to infer from this a formal decision to accept the reporting condition has been fulfilled but that is not necessarily so."
There are no statutory criteria that the report must comply with and no process "dependent solely on it or initiated by it," Justice France said.
"It is just a prescribed step in the information gathering and monitoring role."
It was also unclear that the group's grievance fell within the terms of BayWa's reporting requirements, the judge said.
"It is a stretch to suggest the existence of a dispute with one small group of growers is a topic encompassed by that reporting obligation," he said.
In February Turners & Growers announced a net profit of $16.2 million in the year to December 31, 2013, a turnaround from the $15.3m loss the previous year.
The 2012 result was affected by writedowns associated with the outbreak of the kiwifruit virus PSA.
- Fairfax Media