Crafar Farms Purchase Group: Legal Action for OIO Report

24 January 2012

Crafar Farms Purchase Group Commences Legal Action to Obtain Crucial OIO Report

Lawyers for the Crafar Farms Purchase Group have today filed proceedings in the High Court in Wellington with the initial aim of obtaining a copy of the crucial Overseas Investment Office (OIO) recommendation on whether or not the 16 North Island properties should be sold offshore.

“Our concern is that there has been no transparency around the OIO’s involvement in this matter so far and that appears unlikely to change, forcing us to launch litigation this morning,” Alan McDonald, a spokesman for the purchase group, said today.

“There is a very real risk that a final decision could be made without anyone receiving the information needed to launch an effective judicial review, and there is therefore a very strong public interest in the OIO recommendation being made available.”

Mr McDonald said there was also a risk that ministers could make a decision this week – prior to the 31 January deadline set by receivers KordaMentha – without announcing it publicly until after a sale of the properties was completed, potentially making ineffective subsequent judicial oversight.

The Crafar Farms have a total area of approximately 10,000 hectares, the same size as 167 18-hole golf courses, 20 Millbrook Resorts or all of Hamilton.

The OIO recommendation is believed to be that the land be sold to Shanghai Pengxin, a company backed by the Government of China and with no background in dairy farming, but reported to be offering an amount that no dairy farmer believes would make farming on the land economic. Shanghai Pengxin’s lack of expertise in dairy farming is why the purchase group argues any OIO recommendation in favour of the offshore sale would be wrong in law.

The alternative purchase group includes Tiroa E and Te Hape B Trusts, Tauhara Hapu Trusts, Aitchison Farms Limited, WD Holmes 2000 Trust, Sir Michael Fay, Donovan Group Limited and Brent Cook.

If successful in obtaining the properties, they will be split amongst the group, so that each of the farms will be owner-operated by an entity with experience in dairy farming in the Central North Island.

No-one in the group will own more than two of the farms and the Government has been advised that all members of the group are happy to be made legally unable to on-sell the properties to foreign owners.

Mr McDonald said the group’s Statement of Claim to the High Court in Wellington sought the court’s agreement that any judicial review of the OIO’s recommendation or ministerial decisions should be completed before KordaMentha’s 31 January deadline.

For this to be possible, the group is seeking that discovery be allowed to begin immediately and that the OIO’s recommendation become available before any ministerial decision is finalised.

The group has also asked ministers to make any decision they make provisional on a judicial review. It is being represented by leading QC Alan Galbraith and legal heavyweights Bell Gully.

ENDS

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