Based on next season's average opening forecast of $9 a kilo, it would mean a $9 million loss of income annually for the Gloriavale Christian Community.
Canaan filed for an injunction in the High Court at Greymouth, asking the court to compel the company to honour the terms of its milk collection contracts with Canaan, specifically to require it to continue to collect milk from its three farms.
An interim injunction was granted and both parties agreed that Westland would continue to collect Canaan's milk until the court made a final ruling on the injunction.
Today, the case is being argued at the High Court in Christchurch.
The court heard details of the 10-year contract including the terms of supply arrangements, which states that Canaan must supply all milk produced on its dairy farms to Westland – and that Westland must accept and collect it.
However, contractual fine print says that Westland may refuse any milk if it is not produced in compliance with any legal requirements; or not in their "best interests" to accept it.
Canaan's lawyer Richard Raymond QC said Westland's decision to stop milk collection came after the Employment Court ruling – but said Canaan had nothing to do with the proceeding and was not a party.
No children had worked on the farms since at least 2017, Raymond said, with all 15 or so Canaan workers being over the age of 18.
He said there is no evidence that Canaan was acting other than in "complete accordance with its legal obligations", with no ongoing investigation or concerns from any government agency including the Labour Inspectorate or WorkSafe.
Canaan has been an "exemplar" dairy farm company, which has been highly valued by Westland over a 30-year relationship, Raymond said.
The loss of a $9m a year contract would be a "devastating if not fatal blow" for the community, the lawyer said.
And in addition to the multiple government reviews in recent times, and "relentless attacks" by media and leavers, Raymond said that Gloriavale has spent more than $800,000 on reviews and reports on how the community and its businesses are run.
Raymond says if Westland needs more proof that there are no children working on Canaan's farms, they can "come and have a look".
"It's an open book," Raymond said, despite what people think about the place, calling it "the most investigated place in New Zealand".
Anyone can go there, the lawyer said, and Westland can "inspect until their heart's content" but they won't find any children working there.
"It's not a submission, it's not a position, it's a fact," Raymond said.
The hearing before Justice Jan-Marie Doogue is ongoing.
