Anzco will appeal Waitara plant decision

4.00pm

Anzco Foods Ltd says it will appeal a High Court decision which has kneecapped a $22 million revival of a meatworks in the centre of an area of high unemployment.

Justice Ronald Young yesterday decided a 20-year legal encumbrance meat giant Affco tagged to the 1999 sale of its Waitara meatworks property stopped the site from being used to make smallgoods: hamburger patties, beef jerky, salamis, or weiner sausages for the Japanese market.

Anzco had hoped to start using the factory next month and has spent $22 million on the works, in a district battling unemployment rates of 17 per cent.

The Affco encumbrance -- a condition imposed at the sale of the property -- prevented the site being used for slaughter, processing, cooling or freezing of lamb, sheep, bobby calves, cattle or goats. Such restrictions have become common as the meat industry continues to have excess killing capacity and meat works are closed and sold.

"Justice Young's decision has surprised us," Anzco chairman, Graeme Harrison, said today in a statement. "We have instructed our lawyers to lodge an appeal today and will be seeking the earliest possible date in the Court of Appeal."

"We do not believe the judgement to be correct in fact and law and this will form the basis of our appeal."

Mr Harrison said that with one of the two new manufactured meat plants almost completed, his company had been about to start recruiting new employees -- about 60 were needed for the new processing plant.

"Clearly that cannot proceed at this time."

Mr Harrison said he was "acutely aware" of the expectations that had been raised in Waitara, and both Anzco and its partners in the Waitara development, Itoham Foods of Japan, appreciated the support they had received from the New Plymouth District Council and community leaders in Waitara.

"We are sorry we cannot follow through our intentions at this time but we remain optimistic that the High Court decision is a temporary setback," he said.

Justice Young said Anzco had bought the site in full knowledge of the risk it took and continued to build having been warned its investment would not influence the court.

Much of the six-day court hearing last month was taken up debating what the words "further processing" meant in the encumbrance.

Justice Young said the plain meaning covered what Anzco intended for the Waitara factory, and he saw no reason to restrict that meaning in the context of the encumbrance.

He also rejected an Anzco argument that the encumbrance breached the Commerce Act because its aim or effect was to substantially reduce competition.

Affco chairman Sam Lewis said the decision justified the stance his company took: "I've never been in any doubt about the outcome."

Affco could understand the disappointment of local residents "but we did have some rights around the sale of our plant and the court has chosen to uphold them".

Community leaders have said they will help fight the High Court decision. New Plymouth Mayor Peter Tennent said he had already spoken to Anzco's lawyers and was not ready to concede defeat just yet.

"I am furious that the opportunity could be lost. I am still confident common sense will prevail. I went to the court case and argued the community good and there was no cross-examination," Mr Tennent said.

- NZPA