Claim against livestock export shipping company fails

Liquidators of a collapsed live export partnership have failed to take a claim against a shipping company that didn’t turn up for its voyage.

PwC’s Malcolm Hollis and Wendy Somerville had managed to secure litigation funding, but they ran out of time.

The non-completion of the voyage by MV Al Kuwait three years ago ultimately led to Genetic Development (NZ) Exports Limited Partnership’s insolvency.

It was put into liquidation by the High Court at Hamilton in October 2022 on the application of former Fonterra director Colin Armer’s Armer Farms.

Founded in 2020, the majority owner of the partnership's general partner is Hong Kong-based Haslic Limited. While live export by sea is currently banned — the last shipment left Napier for China in March last year — the new Government is working to reinstate it.

The voyage

In April 2021, during a time of wellpublicised shipyard congestion and supply chain disruptions, the Al Kuwait was on its way to New Zealand to pick up 12,000 head of cattle organised by Genetic Developments.

The 190-metre vessel, built in 2016, ended up at the centre of a legal battle in Australia over the export of 33,000 sheep from Australia to the Middle East.

The cattle were waiting on two preexport isolation farms; however, the ship broke down due to damage to its propeller on its way to New Zealand. It’s believed some stock was transported by sailing a few months later. However, it left farmers, transport companies and livestock companies out of pocket.

Ultimately, Armer Farms (NI) Limited, which was believed to be one of the farms waiting for money, applied to the High Court to liquidate the limited partnership.

At the time of Hollis and Somerville's appointment, 20 companies were listed as secured creditors in the report, including Gloriavale-owned Canaan Farming Dairy and large mid-Canterbury agricultural operator Quigley Dairy Farms.

However, about 117 unsecured creditors were owed about $11.3 million. Many of them appeared to be farmers, livestock agencies and transport companies.

Other creditors included Inland Revenue, which was owed about $725,000 for outstanding GST.

There was also $6500 in court award costs to Armer Farms.

Taking a claim

Not long after they were appointed, the liquidators signalled there was the potential to make a claim against Kuwait Livestock Transport & Trading Co (KLTT) for not showing up.

The partnership’s insurers declined to fund the action because of its collapse, and while initially saying they’d been unsuccessful in finding another source, Hollis and Somerville ended up securing funding.

In their latest report, the pair said legal representation was engaged and advice taken. They “attempted” to progress the claim through arbitration.

“Following detailed written submissions by all interested parties, it was ultimately established that the claim brought forward by the liquidators was unsuccessful due to being time-barred,” they said.

Transactions

Hollis and Somerville identified “several” payments after investments into insolvent transactions and began talking to two parties. They received a “full and final” settlement with one party.

“In respect of the other party, these matters remain ongoing. Limited information is available due to commercial sensitivity of these claims.”