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New Zealand court rules dairy factory illegal

Synlait remains committed to its $250 million Pokeno plant despite a court ruling it was built in breach of covenants restricting use of the land, chief executive Leon Clement says.

SYNLAIT remains committed to its $250  million Pokeno factory despite a court decision that means the plant was built in breach of covenants restricting use of the land.

The milk powder maker says it is confident it can find a solution to the ownership problem now afflicting most of the land on which the factory stands because of the Court of Appeal decision.

That ruling effectively means the factory was built in breach of covenants on the land.

When Synlait bought the 28 hectares of land in February 2018 it was conditional on the seller, Stonehill Trustee, obtaining removal of that restricted its use to grazing, lifestyle farming or forestry.

A High Court decision in November removed the covenants but the owner of adjacent land, Ye Qing and his company New Zealand Industrial Park, has won an appeal against that decision.

“Synlait will continue to engage with all parties involved and is confident the covenants issue should be able to be resolved by the parties, Synlait chief executive Leon Clement said.
“The company remains committed to the location.” 

Synlait shares fell as much as 6% to $9.90 in morning trading but recently recovered to $10.28.
The company says it has acted in accordance with legal advice at all times in respect to the land at Pokeno.

That land was rezoned from rural to industrial and other industrial developments including another dairy plant have been built on nearby land, it says.

The Yashili NZ Dairy Company has built a milk processing plant on land across the road from Synlait’s land but which isn’t subject to the same covenants affecting Synlait’s land.

Another dairy company, Winston Nutritional, is planning to build a milk products factory on the other side of the Yashili property on land that is also not subject to such covenants.

Synlait says it had been confident the land covenants were no longer relevant and that was confirmed by the High Court decision removing them.

“It made sense that, as a result of zoning and proper planning that allowed for industrial zoning, that the land covenants would be removed by the court, which they were,” Clement said.

Synlait took legal title to the land only after the High Court decision. 

“We intend to continue with our plans at Pokeno.”

However, the judgment said Synlait started earthworks in March last year and started building the factory in May after gaining resource consents.

The Pokeno plant is due to be commissioned for the 2019-20 dairy season. – BusinessDesk

Source: FarmersWeekly

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