A farmer with a string of environmental offences has won the right to sue Fonterra for more than $2 million for refusing to take his milk.
Philip John Woolley plans to sue Fonterra to recover losses from dumping his milk and paying out his sharemilker, after a court order stopped him from milking the cows at his Glenmae farm in Tuamarina, north of Blenheim, in 2014.
The Marlborough District Council got an order from the Environment Court to stop Woolley from using the milking shed from June 7, 2014, unless he got an engineer’s certificate approving the effluent pond as fit-for-purpose.
Woolley started milking the cows in breach of the order, which he was convicted for in 2015, despite telling the court he was concerned about the welfare of the calving cows.
Fonterra’s sustainable dairying adviser sent Woolley a letter on June 18, 2014, saying the company could not collect milk that season unless the milking ban was lifted.
Woolley sent the council an engineer’s certificate on September 5, saying it was now fit-for-purpose, but Fonterra still refused to take the milk.
As a result Woolley was forced to dump milk into his effluent systems, and his contract milker terminated their agreement.
A High Court decision issued in December 2018 said without Fonterra buying the milk, Woolley suffered “serious financial consequences” which resulted in the appointment of receivers.
Woolley wanted $1.8m from Fonterra to cover the loss of milk, another $629,486 for the cost of paying out his contract milker, and an enquiry to find out how much Fonterra should pay towards the $3.4m cost of receivership and other expenses.
Fonterra sought a summary judgment from Associate Judge John Matthews in the High Court to stop Woolley from suing.
The company had to prove that on the balance of probabilities, Woolley’s suit would fail.
At a hearing in November, Fonterra’s lawyer Murray Branch said the company was under pressure from the council not to collect milk from Glenmae.
Despite receiving the requested certificate, the council’s lawyer Miriam Radich, of Radich Law, said Woolley had not yet met the enforcement order.
Woolley’s lawyer David Clark said the case should be referred to the company’s milk commissioner, appointed as an independent solicitor to resolve disputes between Fonterra and shareholders.
But the milk commissioner was Peter Radich – the council’s lawyer’s father, and partner at the same practice.
“Obviously that cannot happen as he is not independent as far as this matter is concerned,” Clark wrote to Fonterra’s lawyer, Alison Brewer-Shearer.
She replied that as long as council disputed Woolley’s entitlement to start milking again, Fonterra would also refuse to take the milk.
Clark accused Fonterra of treating Woolley’s livelihood with disdain and in a flippant manner.
Brewer-Shearer said the company was giving “careful consideration” to the issues and would “continue to provide as much assistance as possible”.
She told the court Fonterra did not want to collect milk in breach of Environment Court orders.
The council’s chief executive at the time, Andrew Besley, had issued a warning to Fonterra, saying if the milk was collected, it would breach Environment Court orders.
Judge Matthews said Fonterra’s suspension notice was not the same as a termination of contract, and implied that when the problem causing the suspension was fixed, the suspension would end.
Fonterra knew Woolley had a certificate that “at least arguably complied” with the enforcement order, Judge Matthews said.
Fonterra must also have known that to refuse the milk meant it would have to be dumped, causing “significant adverse environmental consequences”, and at “huge financial cost” to Woolley.
However, Fonterra also knew Woolley had a poor background of compliance with environmental regulations, and had no clearance from the Environment Court until after the end of the milking season, Judge Matthews said.
Fonterra’s application fell “well short” of proving Woolley’s suit would fail, Judge Matthews said.
A trial date for Woolley’s suit has not yet been set.