Kicked
off a native forest logging concession ten years into a fifty year contract,
Forest Holdings is claiming $10.7 million damages from Gisborne-based Mangatu
Incorporation.
The High Court was told
Forest Holdings Ltd was ordered off the Mangatu block in July 2013. Logging in the area is contentious with
detailed resource management conditions imposed by Gisborne District Council
after intervention by Royal Forest & Bird.
Mangatu said it was justified in removing Forest Holdings without notice
for failing to properly comply with these conditions. Forest Holdings paid Mangatu $1.5 million as
an advance on logging royalties when taking up the concession.
Retired High Court
judge Barry Paterson acting as arbitrator decided Mangatu should have allowed
Forestry Holdings 120 days to remedy its problems before terminating the
concession. Despite the lack of notice,
any damages would be minimal, he said.
Forest Holdings could not have fixed the issues within 120 days.
The High Court ruled
damages be re-assessed. Justice Heath said
the concession had a value at the time Forestry Holdings was wrongly ordered
off, though the appropriate value depended on possible subsequent events. Terms of the concession could be renegotiated
or Forestry Holdings could have found a new buyer by exercising its rights to
transfer the logging concession.
Forest
Holdings v. Mangatu – High Court (15.03.17)
17.026