Richmond to pay Bell's court-ordered costs

By LIAM DANN AND NZPA

Hawkes Bay meat company Richmond will pay any court-ordered costs incurred by the Bell Group of shareholders in its Privy Council dispute with PPCS - Richmond's majority owner.

The close relationship between Richmond and the Bell Group is revealed in PPCS' annual report and listed under contingencies.

The indemnity agreement covers "any costs that may be ordered against the Bell Group in favour of PPCS Ltd in relation to the Court of Appeal judgment delivered on October 1 2003, and any appeals from the judgment".

Costs have not yet been awarded in the Court of Appeal case but are likely to be sought by PPCS.

As majority owner of Richmond, this means it would be effectively suing itself for the costs.

PPCS has had a controlling 63 per cent stake in Richmond since October when the Appeal Court overturned earlier penalties imposed by the High Court.

The Bell Group accounts for about 1.5 per cent of shares on issue but claims to have the support of 35 per cent. It is seeking leave from the Court of Appeal to have the case of PPCS' shareholding in Richmond heard by the Privy Council.

Richmond and the Bell Group both had cases against PPCS through the High Court and Appeal Court process but Richmond has decided not to go to the Privy Council.

Bell Group spokesman Robin Bell said the group was still paying its own legal costs and the indemnity related only to court-ordered costs. So far the only costs awarded by the court were against PPCS.

"The group has always maintained independence from Richmond. We undertook legal proceedings knowing we would be meeting our own expenses all the way through, unless the court stated otherwise."

He said the group could have sought the status of a derivative action, which would have seen Richmond meeting all costs, including Bell Group's.

A derivative action arises when a group of shareholders takes an action on behalf of a company under its name and at its cost. The indemnity against adverse costs was given by Richmond's board in recognition of the fact that the Bell Group did not seek derivative status, he said.

Richmond chairman Sam Robinson said the indemnification for "adverse costs" was granted after legal advice to the Bell Group prior to High Court action over the disputed ownership.