Third-strike win for winemaker
A four-year court dispute between high-profile veterans of Central Otago’s wine industry has ended after a ruling from the Court of Appeal over the value of a payout by one shareholder to another.
Greg Hay, who won the argument, said he was relieved it was over and he had moved onto another wine venture.
Peregrine Wines co-owner Fraser McLachlan said he was comfortable with the ruling and wouldn’t take it further.
Peregrine Wines was founded in the late 1990s by Hay and other shareholders, who were joined in
2003 by Fraser and Lindsay McLachlan.
The McLachlans bought out the other shareholders by 2013 but the
$2.6 million paid to Hay became the focus of the dispute.
The courts heard evidence from valuer John Hagen acting for the McLachlans that Hay’s 25 per cent of the company was worth $1.72m.
But Hagen’s valuation assumed the value of the company if it was liquidated, which required a discount of 20 per cent, plus a further discount because it would be difficult to sell the quarter stake.
Hagen’s evidence also claimed Hay’s valuer, Julie Millar of BDO in Christchurch, had overstated the value of company assets.
The Court of Appeal judges took their lead from the company’s constitution, which set out a prescription for the sale of shares and seeking ‘‘fair value’’ valuation.
Millar had sought legal advice about whether she was required to make a discount in her assessment and was assured it was not a legal requirement.
The Court of Appeal found in favour of Hay and ruled the Peregrine owners must pay costs.
Fraser McLachlan said Peregrine had moved on and was expanding with the purchase of grape-growing land at Bendigo.
Peregrine Wines is based on the Gibbston Highway overlooking the Kawarau River, about 12 kilometres from Queenstown.
‘‘We want to be 100 per cent reliant on our own grape source rather than buying it year to year,’’ McLachlan said.
Meanwhile, Hay has his own new cellar door business, Wet Jacket Wines, producing wine made from grapes sourced from the Cromwell area.
‘‘It’s been a good week. In addition to the Court of Appeal’s ruling, I’m chuffed that two of Wet Jacket’s wines have just won gold medals at the Air New Zealand Wine Awards,’’ Hay said.