Farmer-owned wool promotional company Wools of New Zealand (WONZ) has dismissed legal action filed against it as being without foundation.
Wellington product development company The Formary has filed a claim in the High Court in Wellington against UK weaving company Camira Fabrics, with Wools of New Zealand as second defendant.
It relates to a new upholstery fabric The Formary developed two years ago, combining wool with jute from recycled Starbucks coffee sacks.
Camira Fabrics and Wools of New Zealand were involved through a memorandum of understanding with The Formary and Starbucks.
WONZ chair Mark Shadbolt says despite their best efforts, the project never went any further.
He says WONZ worked hard to try to ensure all four parties and growers would benefit from the arrangement, but it's been 12 months since they decided that they could take it no further.
"Our view as directors of Wools of New Zealand and based on the legal advise we've had is that the legal proceedings issued are frivolous and vexatious, it's an abuse of the court process and really it's wasting everybody's time."
Mr Shadbolt has also questioned whether the legal action has been timed to coincide with the Wools of New Zealand campaign to raise up to $10 million from farmers to market and sell strong wool.
But The Formary managing director, Bernadette Casey denies the legal action was timed to disrupt WONZ's capital raising.
She says concerns were raised with Wools of New Zealand last year and is not something that has come out of the blue.
Ms Casey says the company had hoped to avoid court action but was completely stonewalled so feel it was left with very little choice.
She says The Formary has now re-established its supply chain through weavers in Germany and the WoJo fabric will be going to market early next year.
