22 Feb 2010

Growers win High Court case against poultry company

5:53 am on 22 February 2010

A High Court judgement in favour of grain growers in a dispute with a poultry company has reinforced the legal standing of oral contracts.

A group of maize growers laid a complaint against Foxton-based egg and poultry company Turks, saying it had reneged on the price it would pay them to supply grain for the 2008-9 season.

The growers said they were offered $465 a tonne for their maize, which they accepted in November 2008.

The company argued that that had been an indicative price, not a firm price. After the maize price tumbled early last year, it told growers it would be paying only $290 a tonne.

Six of the growers began legal action, after which Turks agreed to take their maize at $300 a tonne and allow the court to decide which price should stand.

Following a hearing earlier this month, Justice Mallon ruled the higher rate has to apply, as that's what the growers accepted as a firm offer.

In his judgement he says an oral agreement is as binding as any written agreement.

For the growers, the difference between the two prices amounts to about $1 million in total.

In another part of the case, the judge also ruled in favour of two of the growers who said the poultry company had breached an agreement to take extra grain from them.