Melbourne-based logistics and warehousing company Deliver Group is taking legal action against Fonterra Australia after what director Nick Heath said was a “cold and callous” decision by the dairy co-op to pull out of a storage agreement shortly before Christmas last year.
Heath said his company began storing milk powder for Fonterra in September 2015, initially under a casual storage agreement with just a few thousand pallets of powder involved.
Over the next three years, the volume stored grew to as many as 37,000 pallets at one point and in May last year the company requested a new agreement to reflect the increased storage space required.
“Fonterra obliged and presented a standard contract, which offered a 12-month term,” Heath said.
The new agreement was to apply to “any engagement” and included a 90-day notice period for termination, he said.
“But months later, having engaged, Fonterra sent a letter indicating they were intending to vacate within 30 days.
“Deliver Group’s position is that Fonterra misled the directors into believing it had a one-year term and 20,000 minimum pallet storage holding agreement in place, only to terminate its services by referencing a much earlier agreement.”
Heath said Fonterra’s actions had resulted in A$3 million (NZ$3.3m) damages to Deliver Group.
“We were evicted from the warehouse by the landlord as we could not find a replacement for Fonterra in time so had to lay off six warehouse staff,” he said.
“As small business owners, we had to refinance the business, risking our homes as security to cover the damages.”
Fonterra Australia supply chain director Justin Ryan confirmed the co-op had a casual storage agreement with Deliver Group for its facility in the Melbourne suburb of Altona.
“Fonterra’s position is that Deliver Group is relying on a prior version of an agreement that was not signed by Fonterra,” he said.
“Fonterra gave Deliver Group 30 days’ notice under the executed casual storage agreement as required; accordingly, neither Fonterra nor its employees misled or deceived Deliver Group.”
As the matter was before the court, it would not be appropriate to comment on Deliver Group’s specific claims, Ryan said.
“However, we have instructed our lawyers to file a defence in due course, which will be in the public record and address each claim definitively, and we will vigorously defend these claims.”
