The courtroom dramas swirling around Australia's biggest longlife milk processor, Noumi, have taken a new $25 million European surfing twist.
A coffee supplies outfit claims the dairy and plant protein processor should pay about $25m in damages because a potential distribution deal involving Noumi's specialist cafe product, MilkLab, never eventuated.
Noumi, which has processing operations in Sydney and Shepparton in northern Victoria, already faces a class action from its shareholders alleging multiple breaches of corporate responsibilities after it suddenly wrote off almost $600 million in outdated or lost stock in 2020, then revealed several years of inadequate accounting records.
The discovery coincided with a nine month trading halt to the company's shares on the Australian Securities Exchange, and a balance sheet collapse which led to a fire sale of half the business, including its old name, Freedom Foods.
A legal fight with its former auditor, Deloitte Touche Tohmatsu, has also ensued.
Sydney-based Noumi fully intends to defend the court claims brought by the international coffee products and equipment business, Sunday Collab.
This legal stoush will play out in the Supreme Court of Queensland.
Sunday Collab has close connections to the Gold Coast and overseas surfing scene, including world champion Australian surfer, Joel Parkinson.
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Its 17m euro damages claim apparently originates from a supply deal partly finalised in 2019-20 when Freedom Foods wanted to establish an exclusive European distribution network for MilkLab, a premium milk and plant-based milk substitute brand for baristas.
The deal was never executed, although Sunday Collab has alleged talks with Freedom gave every indication an agreement was reached and the processor had therefore breached a contract, regardless of the fact nothing was signed.
Surfing foundations
The coffee business, established by two professional surfers and former long-time Billabong surf wear marketing bosses in Europe, operates in Queensland and France, where it has strong surf culture origins in the southern French surfing city of Hossegor.
Sunday originally sought about $660,000 in damages, or alternatively wanted Noumi to honour the initial European distribution plan.
Now it has now served Noumi with the multi-million dollar damages claim which covers its estimated lost profits, plus costs and expenses.
Noumi told the ASX the claim was unsubstantiated, the demands were without merit and the proposition of lost profits is wholly unsupportable.
"Noumi also considers the quantum of Sunday Collab's alleged losses are misconceived and will not succeed," the company said in a statement.
Deal abandoned
It claimed the distribution agreement did not proceed because Sunday Collab provided little or no demonstrable relevant past distribution experience in connection with dairy or plant based beverages, particularly in the highly competitive European market.
It said significant disruption caused by COVID-19 and the broader economic challenges which hit in 2020 and continued to affect supply chains were also cause to challenge Sunday's claims.
Given the competitive and disrupted market conditions for plant-based beverages in the past two years, industry observers have been surprised by Sunday Collab's upgraded claim for lost profits, viewing the move as opportunistic and seemingly unsupportable.
Both parties had already accepted that no distribution contract was signed.
Meanwhile, both Noumi and accounting giant, Deloitte are mired in court action relating to combined shareholder class actions filed by law firms Slater and Gordon and Phi, Finney, McDonald, with Deloitte also accusing the former Freedom Foods of failing to provide a true and fair view of the manufacturer's performance.
Deloitte has argued it should not be liable to pay compensation demanded by the shareholder class action, despite being Freedom's long standing accounts auditor.
Misleading information
It claimed the true state of information presented by the manufacturer was misleading or deceptive and denied it had made accounting errors.
The firm has made a defensive crossclaim against the company, arguing Freedom Foods had already acknowledged the accounting group could not be liable for any losses it suffered because it had relied on information provided by the company.
Noumi is currently in the process of paying a court settlement with US almond processor, Blue Diamond Growers, which has already cost about $23m and will involve about $26m more over four years.
The company is selling its 10pc stake in Australian Fresh Milk Holdings to help pay for that commitment.
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