SML - Synlait Milk Ltd

[Filthy]

I don't really want to argue with the Beagle's dogged insistence on his expertise on all matters legal and LGBTQ re SML, but for those interested in an alternative viewpoint I happened to be in the Supreme Court this morning and had the privilege of hearing both parties oral submissions.

I don't intend to summarise the cases here but suffice it to say each party's written submission equaled several phone books (remember them?) of legal argument and evidence.

I came away with the distinct impression from the verbal submissions and questioning, that SML have a good chance of a reasonable and possibly favourable outcome.

From the words of the judges came words such as 'abuse of process' and 'opportunistic appeal' and 'other industrial plants in the area ignored by this appeal' and 'a possibility that the lower courts may have got it wrong'.

After hearing arguments this morning the judges adjourned to make a ruling, so we await a ruling with interest.

JMHO.... I don't hold SML, but do hold ATM.

thanks mate

[RupertBear]

I don't really want to argue with the Beagle's dogged insistence on his expertise on all matters legal and LGBTQ re SML, but for those interested in an alternative viewpoint I happened to be in the Supreme Court this morning and had the privilege of hearing both parties oral submissions.

I don't intend to summarise the cases here but suffice it to say each party's written submission equaled several phone books (remember them?) of legal argument and evidence.

I came away with the distinct impression from the verbal submissions and questioning, that SML have a good chance of a reasonable and possibly favourable outcome.

From the words of the judges came words such as 'abuse of process' and 'opportunistic appeal' and 'other industrial plants in the area ignored by this appeal' and 'a possibility that the lower courts may have got it wrong'.

After hearing arguments this morning the judges adjourned to make a ruling, so we await a ruling with interest.

JMHO.... I don't hold SML, but do hold ATM.

thanks for posting Left field much appreciated

[BlackPeter]

I don't really want to argue with the Beagle's dogged insistence on his expertise on all matters legal and LGBTQ re SML, but for those interested in an alternative viewpoint I happened to be in the Supreme Court this morning and had the privilege of hearing both parties oral submissions.

I don't intend to summarise the cases here but suffice it to say each party's written submission equaled several phone books (remember them?) of legal argument and evidence.

I came away with the distinct impression from the verbal submissions and questioning, that SML have a good chance of a reasonable and possibly favourable outcome.

From the words of the judges came words such as 'abuse of process' and 'opportunistic appeal' and 'other industrial plants in the area ignored by this appeal' and 'a possibility that the lower courts may have got it wrong'.

After hearing arguments this morning the judges adjourned to make a ruling, so we await a ruling with interest.

JMHO.... I don't hold SML, but do hold ATM.

Interesting summary - thanks for sharing.

Quite surprised, though that according to your report the audience could be let to believe that the judges seem to take already clear sides in the oral hearing and making judgement calls - obviously before they heard and read through all the arguments ...

I always thought that this sort of stuff it is only happening in banana republics and totalitarian regimes that judges judge before they have all the facts. Naive me assuming a court in New Zealand has to be impartial.

May I ask why you joined the hearing? Curiosity, professional interest or similar?

As well - do you want to give us an idea whether you have legal experience which would help you to read the judges (potentially preconceived) views?

[Leftfield]

BP,

I have already stated my comments were JMHO (after listening for several hours of legal arguments - hopefully with an open mind.)

I attended the hearing because I have experience with planning and zoning decisions. I wont justify my comments any further, you are free to ignore them.

You make some assumptions about “banana republics and totalitarian regimes", which are incorrect.

I stress that the judges did not make any rulings, or decisions, or display any bias.

The words I noted were merely used in questions and discussions with and by the submitters regarding their various legal arguments. You should not assume the judges have preconceived views.

I already have stated that the judges adjourned without making a ruling and that we await this.

[Beagle]

SC 50/2019 is the case number.
These are the facts as the Court Of Appeal saw them
https://forms.justice.govt.nz/search...6c9fa9d2b3.pdf

As a non holder and I also don't have a short position, I do not suffer from confirmation bias.
I have merely observed Synlait's approach which I have found at times to be quite interesting and surpising.

[BlackPeter]

You make some assumptions about “banana republics and totalitarian regimes", which are incorrect.

No assumptions at all. Just an observation that these sort of things (as they came across) would happen in “banana republics and totalitarian regimes", which is absolutely correct.

By the way - I do have currently no interest in Synlait (well, but a small A2M holding) and observe the unfolding story only as interested citizen.

While it is clear to me that the other side of this agreement might well just opportunistically exploit their legal position (but don't most people do that, if they can?) do I find it mind boggling that Synlait's board and management allowed the company to get into such a precarious position clearly by nobody's fault but their own. If a big company wants to build a factory in rural New Zealand there is basically infinite supply of land without any prohibitive covenents around - and I understand that they even could have built without problems on their Pokeno site avoiding the convenants (which effect only parts of their site).

If they would drive a car with this attitude the courts would call it reckless driving ... but hey, it is just about risks and money :

[Beagle]

[12] In March 2018, Synlait obtained (on a non-notified basis) resource consent to undertake earthworks on the land it was buying from STL and, in May 2018, it obtained a further consent permitting it to construct and operate a dairy factory on the land.5 It then commenced construction of the dairy factory.
[13] NZIPL’s solicitors wrote to STL’s solicitors on 19 June 2018 demanding that STL require that all works in breach of the covenants cease and advising that NZIPL would be opposing STL’s originating application. STL did not respond.

This extract from the court of Appeal ruling is very interesting BP. Important to note that Synlait obtained consent to build on a non notified basis so the neighbour's would have no idea and then as soon as consent is obtained they commence building and don't even respond to what amounts to a cease and desist demand that works are in breech of covenant rights.
Just go ahead and continue to gamble quarter of a billion dollars of shareholders money knowing full well at the time their right to build the factory would be rigorously challenged. To me this is gross arrogance and recklessness on such a grand scale I'm not sure as a former shareholder I could ever trust management or the board again.
$262m is the total profit of the company for the six years leading up to this decision. Puts the size of this fiasco into its true perspective.
Even worse, this gamble was made using borrowed funds putting the company into a very highly leveraged and vulnerable position. It beggars belief.

How about this for a show of complete arrogance, note the timeframe here and that they had just been issued with a legal challenge on 19 June 2018.
The very next day what do they do ?...announce to the market confirmation of the commissioning date of the plant https://www.nzx.com/announcements/319620
No mention to shareholders that the plant's build is going to be subject to a legal challenge. Not only is this an extremely arrogant response to the legal cease and desist but is also gross recklessness and non disclosure to shareholders is effectively concealment of a very relevant fact. Shortly after this the CEO steps down and most recently the CFO has announced his resignation. If the custard completely hits the fan will we see board changes ?

[Ggcc]

This extract from the court of Appeal ruling is very interesting BP. Important to note that Synlait obtained consent to build on a non notified basis so the neighbour's would have no idea and then as soon as consent is obtained they commence building and don't even respond to what amounts to a cease and desist demand that works are in breech of covenant rights.
Just go ahead and continue to gamble quarter of a billion dollars of shareholders money knowing full well at the time their right to build the factory would be rigorously challenged. To me this is gross arrogance and recklessness on such a grand scale I'm not sure as a former shareholder I could ever trust management or the board again.
$262m is the total profit of the company for the six years leading up to this decision. Puts the size of this fiasco into its true perspective.
Even worse, this gamble was made using borrowed funds putting the company into a very highly leveraged and vulnerable position. It beggars belief.

How about this for a show of complete arrogance, note the timeframe here and that they had just been issued with a legal challenge on 19 June 2018.
The very next day what do they do ?...announce to the market confirmation of the commissioning date of the plant https://www.nzx.com/announcements/319620
No mention to shareholders that the plant's build is going to be subject to a legal challenge. Not only is this an extremely arrogant response to the legal cease and desist but is also gross recklessness and non disclosure to shareholders is effectively concealment of a very relevant fact. Shortly after this the CEO steps down and most recently the CFO has announced his resignation. If the custard completely hits the fan will we see board changes ?

It could be that A2 will bail them out and buy company for a song if this heads south. It is in the interest of A2 to keep this machine going.

[BlackPeter]

It could be that A2 will bail them out and buy company for a song if this heads south. It is in the interest of A2 to keep this machine going.

Possible - but how would this help Synlait shareholders?

[Ggcc]

Possible - but how would this help Synlait shareholders?

Maybe no exchange of cash and rather that SML shareholders get shares in A2 for a set price that the majority agrees upon. I know that sounds simple, but many shareholders would be fuming as they bought on Hype and have to sell at a loss. Either that or they all sell at a loss... Like a mortgagee sale.