Page 6 - Food&Drink Jan-Feb 2022 magazine

NEWS
Noumi $35m settlement
A dispute between Freedom Foods Group (FFG) (now Noumi) and Blue Diamond Growers over a licensing agreement to manufacture and distribution Almond Breeze products has been resolved in US Arbitration, with FFG agreeing to pay Blue Diamond US$35 million.
The agreement stipulated FFG pay Blue Diamond US$17 million within 20 days of the agreement being signed and future payments totalling US$18 million paid in US$4.5 million instalments over four years, from 1 September 2022.
It also laid out a wind-down and termination of the licence agreement by 20 June 2022, with a 12-month packing by FFG option for Blue Diamond and payment of its Australian court costs. FFG would then be free to sell nut-based beverages including MilkLab without restriction.
Chair Genevieve Gregor said it limited by the terms of the settlement in what FFG could say, but it meant a major legacy issue was resolved.
“While the settlement amount maybe greater than we would have hoped, importantly it provides us with the certainty we need to pursue our ambitions in nut-based beverages in Australia and elsewhere through our key brands, such as Milklab and Australia’s own, and it saves us from a lengthy and costly arbitration process in the US,” Gregor said.
The Victorian Supreme Court has ordered the two class actions being brought against FFG be consolidated into a single proceeding.
The claims allege the company and its auditor Deloitte Touche
Tomatsu breached the Corporations Act, the Australian Securities and Investments Commission Act, and the Australian Consumer Law Act.
Slater & Gordon and Phi Finney McDonald will act as joint solicitors. ✷
SPC’s appeal tumbled in the Federal Full Court.
SPC loses appeal against $1.2m fine
THE Federal Full Court has dismissed an appeal by Shepparton Partners Collective Operations Pty Ltd (SPC) about an earlier ruling the business had infringed copyright through ongoing use of software by QAD Inc.
Prior to Coca-Cola Amatil’s (now Coca-Cola Europacific Partners) sale of SPC Ardmona to Shepparton Partners Collective, the company had a non-transferable licence and maintenance and support contract with software company QAD Inc. for its enterprise resource planning software (ERP).
QAD contended SPC had infringed its software copyright by continuing to use its ERP program after the company purchased the SPC Ardmona business from Coca-Cola Amatil for $40 million in June 2019.
On appeal, SPC contended that Federal Court Justice Thawley had erred in assessing compensatory damages on the basis that QAD’s maintenance fee of $177,816 should not have been included in the damages set or should have been set on a net profit basis only. And subsequently a reduction in the additional damages.
Justice Thawley had awarded QAD $662,428.80 in compensatory damages (the cost of the licence agreement transfer, and an annual
maintenance fee) and $500,000 in additional damages due to the “flagrancy” of the infringement and to set a deterrent.
Full Court Justices Andrew Greenwood, Jayne Jagot, and Helen Rofe agreed SPC’s appeal must be dismissed.
The full court judges said that after SPC submitted to Justice Thawley the “proper counter- factual” was not SPC accepting QAD’s list price of $984,000, but SPC accepting the offer of
21 June 2019 (a total of $662,428.80), it is not now open to SPC on appeal to contend that the primary judge erred in accepting SPC’s case.
“In a case involving an evaluative assessment such as an award of damages, a party cannot be permitted in an appeal to assert error on the part of a primary judge who has accepted that party’s case.
“The reality is that in answer to QAD’s claim for compensatory damages in the sum of $984,000, SPC contended to the primary judge that the damages should be $602,208 (excluding GST)
or $662,428.80 (including
GST). SPC having done so,
and the primary judge having accepted that submission, there is simply no error capable of being corrected on appeal,”
the full court judges said.
SPC did not accept an offer from QAD on 21 June 2019, but the hypothetical avoidance of
infringement would have involved SPC paying the total amount.
“In the hypothesised circumstances, where SPC did not accept the offer, it was not necessary for the primary judge to have inferred or, more accurately, speculated that QAD would have incurred a material hypothetical cost in providing the maintenance services and to have made an arbitrary deduction to reflect that cost. The primary judge did not err in not doing so,” they said.
Regarding the issue of reasonable foreseeability, SPC knew about the existing licence so therefore must have been able to reasonably foresee at least a real possibility that it too would be required to pay the fee for the maintenance service to be able to use the software. “That is sufficient to satisfy any requirement of reasonable foreseeability of the kind of loss in issue,” they said.
The full court judges said that even if SPC had succeeded in one or both of its compensatory damages’ challenges, it would have rejected its appeal in regards to additional damages because Justice Thawley had not suggested the connection between the two was quantifiable or proportional.
The Full Court judges dismissed the appeal. For more on the case visit the website. ✷
6 | Food&Drink business | January-February 2022 | www.foodanddrinkbusiness.com.au