By PAUL PANCKHURST
A High Court judge has ordered one of New Zealand's biggest fishing companies, Amaltal, to pay $6.1 million to the Japanese joint venture partner it deceived.
Listed food company Maruha is expected to also seek $6 million to $8 million in interest - plus costs.
Amaltal is owned by Talley's Fisheries and Amalgamated Marketing, and calls itself the country's third largest fishing company.
After a 23-day trial in Auckland, Justice John Priestley on Tuesday ruled Maruha had proven a civil case of "deceit" - Maruha had acted on Amaltal's false representations and suffered a loss. He also found a breach of fiduciary duty.
The joint venture, Amaltal Taiyo, set up in 1985 to catch hoki for use in surimi, a fish product sold in Japan.
The events at issue occurred between 1986 and 1991 but Maruha said it only learned of key facts in 2000, nine years after the joint venture was dissolved.
Maruha owned 24.99 per cent of the company and Amaltal the rest.
Amaltal handled the tax affairs of the joint venture.
The judge found the joint venture company successfully claimed tax deductions that were a "try on" - or "aggressive taxation accounting" - by depreciating the cost of a five-year lease of 40,000 tonnes of hoki quota.
The judge said there was "a deliberate failure" by Amaltal to disclose the tax benefits to Maruha.
This led Maruha to pay an unnecessary $5.38 million under a profit guarantee deal and to miss out on a $732,000 share of the company's profits - $6.1 million in total.
Justice Priestly said Michael Talley, who is a director and owner of Talley's Fisheries, and Amaltal accountant Clive Holyoake "were well aware that the taxation figures used to calculate the profit guarantee payments were not the figures which Amaltal Taiyo was actually paying".
He described a pattern of behaviour that was "brazen and deceptive".
The judge said Maruha's lawyer, Julian Miles, QC, had correctly described some of Michael Talley's lengthy answers in court as "obstructive" and "argumentative".
He rejected Talley and Holyoake's suggestions of an agreement between Maruha and Amaltal for money from the profit guarantee payments to be put aside in case the Inland Revenue Department disallowed the joint venture's tax deductions.
The judge rejected Maruha's claim Amaltal hid a MAF mix-up over hoki quota issued separately to the joint venture and to Amaltal.
Amaltal spokesman Andrew Talley, said the company would appeal the adverse findings.
The case
The parties: New Zealand's third largest fishing company, Amaltal, and Japan's listed Maruha.
The dispute: Maruha claimed it was ripped off in a joint fishing venture with Amaltal that was dissolved in 1991.
The judge says: Amaltal deceived Maruha over the joint venture's financial affairs and must pay $6.1 million plus a sum of interest yet to be calculated.
Why it took so long: Maruha said it only learned of key facts in 2000.
Fishing giant to cough up $6.1m
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