Gisborne Herald Friday, 28 December 2007Â by John Jones
THE multimillion-dollar Jody F Millennium case has been settled and Gisborne’s ratepayers are off the hook. Gisborne District Council chief executive Lindsay McKenzie advised councillors of the settlement but it was not made public until after the final papers were filed in the Supreme Court just before Christmas.
Mr McKenzie said the settlement was a confidential one and he did not know any details. But he had been told the council did not have to make any financial contribution.
One major effect of the settlement is that the council’s wholly-owned trading company, Gisborne Holdings, no longer has to operate as a port company.Â The company had kept this role after the port was sold to Eastland Infrastructure because Tauwhareparae farms, which it operates, had been part of the port company and the asset was available, if needed, to raise funds to meet a successful law suit.
The council has been told that there will be changes in the new year to finally dissolve the port company. Although it was widely believed that insurance would cover any possible claim, the announcement is still a relief and a Christmas present for the district. The settlement removes a risk that has hung over Gisborne District Council for four years.
In February 2003, a year after the Jody ran aground at Waikanae Beach, the ship’s owners Twin Bright Shipping Company and its parent company, filed a claim naming Port Gisborne as the first defendant and the council as the second. The claim was made in several currencies and was estimated to have a value at that time of (NZ) $23 million.
The port company was sold to Eastland Energy Trust and now is one of the Eastland Infrastructure group of companies, but the endowment farms at Tauwhareparae were retained by the council, which formed Tauwhareparae Farms Ltd. That company became the defendant.
The case has seen a number of developments. The council was discontinued from the action in 2005 but that decision was overturned by the Court of Appeal. The council had appealed to the Supreme Court. Presiding judge Justice Williams filed a minute setting a date for the trial in February next year, with four weeks set down.
The defendants were the farm company, the council pending its appeal, Svitzer Harbour Ltd (the parent company of Adsteam tug company which was the port’s pilot at the time of the stranding), and Eastland Moorings. The existence of the claim and fears that the council might be financially exposed has hung over the district since the claim was filed. Mayor Meng Foon said it was great news that the case had been settled and there were no liabilities for either the District Council or Tauwhareparae Farms Ltd.
The insurers for these two parties had reached a settlement with the plaintiffs. The council had only to pay a few thousand dollars in legal fees. “I am pleased it is behind us. It is past history now and we can get on with life,” said Mr Foon