(1) Authorisations under section 67(3)(b) of the Commerce Act 1986 are granted for—

• (a) the new co-op amalgamation; and

• (b) the acquisition by new co-op of all the shares in the Board; and

• (c) the amalgamation of new co-op (or a wholly-owned subsidiary of new co-op) and The Tatua Co-operative Dairy Company Limited under Part 13 of the Companies Act 1993; and

• (d) the amalgamation of new co-op (or a wholly-owned subsidiary of new co-op) and Westland Co-operative Dairy Co Limited under Part 13 of the Companies Act 1993.

(2) The authorisations under subsection (1) are granted on the date of commencement of this subpart.

(3) The authorisation under subsection (1)(a) expires 20 working days after it is granted.

(4) The authorisation under subsection (1)(c) expires on the date that The Tatua Co-operative Dairy Company Limited transfers or surrenders all its shares in the Board under this Act.

(5) The authorisation under subsection (1)(d) expires on the date that Westland Co-operative Dairy Co Limited transfers or surrenders all its shares in the Board under this Act.

(6) Sections 91 to 97 of the Commerce Act 1986 do not apply to the authorisations granted under this section.

(1) Despite section 7, section 47 of the Commerce Act 1986 applies to an acquisition of assets of a business or shares by any of the persons specified in subsection (2) (or any interconnected body corporate of any of those persons), as if the assets or shares were acquired by new co-op immediately after the new co-op amalgamation, if—

• (a) the acquisition took place during the period commencing on 15 August 2001 and ending on the amalgamation date; and

• (b) the assets or shares are held by new co-op (or any interconnected body corporate of new co-op) immediately after the amalgamation date.

(2) The persons referred to in subsection (1) are—

• (a) The New Zealand Co-operative Dairy Company Limited:

• (b) Kiwi Co-operative Dairies Limited:

• (c) Fonterra Co-operative Group Limited:

• (d) the Board.

(3) Despite section 7, if the amalgamation referred to in section 7(1)(c) takes place, section 47 of the Commerce Act 1986 applies to an acquisition of assets of a business or shares by The Tatua Co-operative Dairy Company Limited (or any interconnected body corporate of that company), as if the assets or shares were acquired by new co-op immediately after the amalgamation referred to in section 7(1)(c), if—

• (a) the acquisition took place during the period commencing on 15 August 2001 and ending on the date of the amalgamation referred to in section 7(1)(c); and

• (b) the assets or shares are held by new co-op (or any interconnected body corporate of new co-op) immediately after that date.

(4) Despite section 7, if the amalgamation referred to in section 7(1)(d) takes place, section 47 of the Commerce Act 1986 applies to an acquisition of assets of a business or shares by Westland Co-operative Dairy Co Limited (or any interconnected body corporate of that company), as if the assets or shares were acquired by new co-op immediately after the amalgamation referred to in section 7(1)(d), if—

• (a) the acquisition took place during the period commencing on 15 August 2001 and ending on the date of the amalgamation referred to in section 7(1)(d); and

• (b) the assets or shares are held by new co-op (or any interconnected body corporate of new co-op) immediately after that date.

(1) New co-op must unconditionally dispose of all its shares in New Zealand Dairy Foods Limited within 12 months after the date of commencement of this subpart.

(2) The disposal required by subsection (1) must have the effect of passing control of the assets of New Zealand Dairy Foods Limited described in subsection (3) and must not be to an associated person of new co-op.

(3) The assets referred to in subsection (2) are all the assets of New Zealand Dairy Foods Limited as at 1 June 2001, and the assets acquired by that company between 1 June 2001 and the date of an unconditional disposal under subsection (1), excluding assets sold by that company in the ordinary course of its business.

The obligation in section 9—

• (a) constitutes an undertaking that forms part of the authorisation granted by section 7(1)(a); and

• (b) must be treated and enforced as if it were an undertaking given under section 69A of the Commerce Act 1986.

(1) New co-op and its shareholders are authorised to adopt and give effect to clauses that are identical to the clauses set out in Schedule 1 in the constitution of new co-op.

(2) The authorisation under subsection (1) ceases to apply to a clause set out in Schedule 1 if new co-op—

• (a) changes that clause; or

• (b) changes the effect of that clause (for example, by changing any other part of the constitution in a way that alters the meaning or operation of that clause).

(3) The authorisation under subsection (1) must be treated as if it were an authorisation granted by the Commerce Commission under section 58(1), (2), (5), and (6) of the Commerce Act 1986.

(4) Sections 65 and 91 to 97 of the Commerce Act 1986 do not apply to the authorisation under subsection (1).

(5) The effect of the authorisation under subsection (1) is the same as that stated in section 58A(1) and (2) of the Commerce Act 1986.

(6) For the purposes of section 58B(2) of the Commerce Act 1986, the authorisation under subsection (1) applies to a person who becomes a shareholder in new co-op.

The purpose of this subpart is, in the event that the new co-op amalgamation takes effect,—

• (a) to facilitate the Board's operation as a subsidiary of new co-op for the period from the amalgamation date to the conversion date; and

• (b) to provide for the conversion of the Board into a company 12 months after the commencement of this subpart; and

• (c) to remove restrictions on exporting New Zealand dairy products; and

• (d) to enable the Board and 1 or more of The Tatua Co-operative Dairy Company Limited or Westland Co-operative Dairy Co Limited or New Zealands Premier Dairy Cooperative Limited to reach agreement for the buy-out of the exiting company's shares in the Board; and

• (e) to provide a default procedure for the compulsory buy-out of an exiting company's shares in the Board if the exiting company does not reach agreement with the Board and, in the case of The Tatua Co-operative Dairy Company Limited or Westland Co-operative Dairy Co Limited, if the exiting company does not choose to amalgamate with new co-op; and

• (f) to provide for miscellaneous provisions relating to a buy-out of an exiting company's shares in the Board.

The Dairy Board Act 1961 is amended in the manner shown in Schedule 2 on the amalgamation date.

(1) The Board is converted into, and continued as, a company under the Companies Act 1993 12 months after the commencement of this subpart.

(2) This section applies only if the new co-op amalgamation takes effect.

(3) The provisions contained in Schedule 3 apply to the conversion of the Board.

(1) After the amalgamation date, an exiting company may—

• (a) transfer the shares it holds in the Board to any qualifying company by agreement with the qualifying company; or

• (b) surrender those shares by agreement with the Board.

(2) This section does not apply after an exiting company has given a binding notice under clause 12.15 of the Board's constitution.

Schedule 4 applies from the commencement of this subpart.

(1) The Board and an exiting company may give the Minister a notice in writing requesting that the default procedure under Schedule 4 should stop.

(2) The Minister must stop the default procedure under Schedule 4 if he or she receives notices from the Board and every exiting company.

The Minister must stop the default procedure under Schedule 4 if, at the expiry of the 20-working-day period granted under section 7(3) for the new co-op amalgamation, the new co-op amalgamation has not taken effect.

(1) This section applies if shares are transferred under this subpart.

(2) Section 15V of the Dairy Board Act 1961 applies as if the transfer were an amalgamation described in subsection (1)(a) of that section, as if the exiting company were the predecessor and the qualifying company were the successor, and with other necessary modifications.

(3) This section applies despite section 15Q of the Dairy Board Act 1961.

Sections 15M and 15N of the Dairy Board Act 1961 apply to shares that are surrendered under this subpart as if they had been surrendered under section 15I of the Dairy Board Act 1961.

(1) The purpose of this subpart is to—

• (a) maximise the economic benefits to New Zealand arising from tariff quotas maintained by foreign governments controlling access to their domestic markets:

• (b) provide that the New Zealand dairy industry is the recipient of these benefits:

• (c) safeguard New Zealand's interests in respect of those tariff quotas:

• (d) ensure that the administrative and other arrangements made are consistent with New Zealand's international obligations.

(2) The Crown owns the rights to secure the economic benefits deriving from the tariff quotas referred to in subsection (1).

(3) Those rights in respect of designated markets described in Schedules 5 and 5A are or will be allocated as provided by this subpart.

(4) This subpart does not prevent the Crown from engaging in international trade negotiations for the purpose of establishing, amending, or terminating tariff quotas.

(1) Section 23 restricts exports to designated markets.

(2) Sections 24 and 25 confer initial export licences on the Board.

(3) Sections 26 to 42 contain provisions relating to further export licences, restrictions on dealing with export licences, transferring export licences, enforcement, cost recovery, Ministerial directions on international obligations, and other miscellaneous provisions.

(1) A person must not export directly or indirectly to a designated market any dairy product that is described in Schedules 5 and 5A for that market unless he or she—

• (a) is the holder of a current export licence; and

• (b) exports product in accordance with that licence in respect to the product and market.

(2) No export restrictions apply to a designated market listed in Schedule 5 after the expiry of the applicable initial and interim periods unless that designated market is listed in Schedule 5A.

(1) The Board has the licences to export to each designated market until the end of the initial period.

(2) The initial period is,—

• (a) in respect of exports to designated markets in Canada, the period ending on 31 July 2007:

• (b) in respect of exports to designated markets in the European Communities, the period ending on 31 December 2007:

• (c) in respect of exports of cheddar cheese and low-fat cheese to designated markets in the United States of America, the period ending on 31 December 2008:

• (d) in respect of exports of NSPF cheese and other American-type cheeses to designated markets in the United States of America, the period ending on 31 December 2009:

• (e) in respect of exports to designated markets in Japan, the period ending on 31 March 2010:

• (f) in respect of exports to designated markets in the Dominican Republic, the period ending on 30 June 2007.

(1) The Board holds the interim licences to export to designated markets in the European Communities for the periods and the reduced amounts specified in subsection (2).

(2) The reductions applying to the interim licences for designated markets in the European Communities must result in each licence being,—

• (a) in the 12 months to 31 December 2008,—

  • (i) in the case of butter, for the lesser of 75% of the total available quantity and 57 500 tonnes of that butter:

  • (ii) in the case of cheese for processing, for the lesser of 75% of the total available quantity and 3 000 tonnes of that cheese:

  • (iii) in the case of cheddar cheese, for the lesser of 75% of the total available quantity and 5 250 tonnes of that cheese:

• (b) in the 12 months to 31 December 2009,—

  • (i) in the case of butter, for the lesser of 50% of the total available quantity and 38 333 tonnes of that butter:

  • (ii) in the case of cheese for processing, for the lesser of 50% of the total available quantity and 2 000 tonnes of that cheese:

  • (iii) in the case of cheddar cheese, for the lesser of 50% of the total available quantity and 3 500 tonnes of that cheese:

• (c) in the 12 months to 31 December 2010,—

  • (i) in the case of butter, for the lesser of 25% of the total available quantity and 19 166 tonnes of that butter:

  • (ii) in the case of cheese for processing, for the lesser of 25% of the total available quantity and 1 000 tonnes of that cheese:

  • (iii) in the case of cheddar cheese, for the lesser of 25% of the total available quantity and 1 750 tonnes of that cheese.

(1) The chief executive must record an export licence conferred on the Board by section 24 or 25 in the register of export licence holders in accordance with section 29B as soon as reasonably practicable after the commencement of the Dairy Industry Restructuring Amendment Act 2007.

(2) The Board must supply all necessary information to the chief executive for the purpose of subsection (1).

(1) The following are vested in or revert to the Crown:

• (a) any rights in respect of designated markets that become available as a result of the expiry of the initial period under section 24:

• (b) any rights in respect of designated markets in the European Communities listed in Schedule 5A that become available as a result of reductions under section 25:

• (c) any quantities that become available as a result of increases in rights in respect of designated markets listed in Schedule 5A after the initial periods, except where the quantities are reallocated in accordance with section 27A(2):

• (d) any rights in respect of designated markets listed in Schedule 5A that become available at the expiry of any other allocations.

(2) Following the expiry of the initial and interim licences, export licences for the designated markets listed in Schedule 5A must be allocated or reallocated by, or on behalf of, the Crown.

(3) The Minister must, in accordance with the rules set out in Schedule 5B, allocate export licences to multiple participants for the designated markets listed in Schedule 5A unless subsection (4) applies.

(4) If the Minister is satisfied that an allocation under subsection (3) is not appropriate, having regard to the purpose in section 21(1), the Minister may recommend to the Governor-General that an Order in Council is made to allocate or reallocate export licences under subsection (7).

(5) The Minister may allocate a general export licence for trade at the normal tariff (outside the terms of the quota), in respect of a designated market listed in Schedule 5A, that may be used by any person eligible to hold an export licence for any quantity of the product for which the licence applies.

(6) Subsection (5) applies subject to section 29A.

(7) The Governor-General may, by Order in Council made on the recommendation of the Minister, allocate or reallocate export licences in respect of designated markets listed in Schedule 5A.

(8) Before making an allocation under subsection (5), the Minister must—

• (a) be satisfied that an allocation is appropriate in the circumstances; and

• (b) have regard to the purpose in section 21(1).

(9) Subsection (1) does not limit the Minister's power under subsection (3) or (5), or the Governor-General's power under subsection (7), to allocate new licences in respect of those rights or quantities to the Board or new co-op.

(1) This section applies if, during the initial period, there is an increase in the Crown's rights to secure the economic benefits that are obtained from designated markets that are not allocated in an existing export licence.

(2) Any such increase vests automatically in the Board as part of the initial licences conferred on the Board under this subpart.

(1) This section applies if, after the initial period, there is an increase or reduction in rights to secure economic benefits from designated markets that are not allocated in an existing export licence.

(2) An increase in a right to export to a designated market during the course of an allocation period accrues on a pro rata basis to the registered holders of export licences at the time the increase first becomes available for use.

(3) A reduction in a right to export to a designated market during the course of an allocation period applies on a pro rata basis to the registered holders of export licences for that designated market at the time the volumes reduce.

(4) In the case of interim licences held by the Board, the allocation period for any licence for a specified quantity is the period for which the licence is valid for that quantity.

(5) An accrual under subsection (2) and a reduction under subsection (3) applies only for the remainder of the allocation period.

(6) An accrual or reduction referred to in subsection (5) must be recorded in the register of export licence holders that is kept in accordance with section 29B.

(1) The Board may not transfer, sub-license, or otherwise dispose of an initial licence in respect of a designated market to any other person.

(2) In order to comply with the restriction on transfer in subsection (1) and for the purposes of the Customs and Excise Act 1996, the Board must own any dairy products which it exports to designated markets.

(1) The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations for the purpose of governing the transfer of export licences or parts of export licences.

(2) Export licences may be transferred only in accordance with regulations made in accordance with subsection (1).

(3) The chief executive is responsible for administering the transfer of export licences.

(4) Subsection (1) applies subject to section 28.

(1) All of the initial licences of the Board are revoked in the case of—

• (a) the Board's insolvency:

• (b) new co-op ceasing to control the Board.

(2) An initial licence of the Board is revoked if the Board transfers, sub-licenses, or otherwise disposes of any rights conferred by it to another person.

(3) The rights conferred by a licence that is revoked revert to the Crown.

(4) The Governor-General may, by Order in Council made on the recommendation of the Minister, allocate new licences in respect of the rights that revert to the Crown under this section.

(5) Before making a recommendation under subsection (4), the Minister must have regard to the purpose in section 21(1).

(6) Subsection (1) does not limit the Governor-General's power under subsection (4) to allocate new licences in respect of those rights to the Board or new co-op.

(1) This section applies to trade at the normal tariff (outside the terms of the quota) for the following markets:

• (a) prepared edible fat to Japan:

• (b) milk powder to the Dominican Republic.

(2) For the markets listed in subsection (1), in any quota year, holders of export licences for trade at the normal tariff may not use those export licences until the quota for the market is filled in that quota year.

(3) A quota is to be treated as filled when the competent authority has issued export certificates to all licence holders for at least 95% of each export licence holder's quantity of export licences.

(4) The competent authority must publicly notify the industry when a quota is filled in accordance with subsection (3).

(5) When a quota is filled, the competent authority must, as soon as is reasonably practicable,—

• (a) publish a notice in the Gazette ; and

• (b) notify the eligible participants in any manner that the competent authority considers effective and appropriate, including electronically.

(6) An export licence holder may use the export licence for trade at the normal tariff only for the remainder of the quota year in which publication and notification are made in accordance with subsection (5).

(1) The chief executive must—

• (a) keep and maintain a register of export licence holders; and

• (b) make the register available to the competent authority; and

• (c) on receipt of a written request, allow a holder of an export licence to inspect information on the register that relates to his or her licence.

(2) The register must contain the following information:

• (a) the full name and address of the export licence holder:

• (b) each designated market for which the holder holds an export licence:

• (c) the volume of quota rights held in respect of each export licence for each quota year:

• (d) the following dates for each export licence:

  • (i) date of registration:

  • (ii) date of commencement:

  • (iii) date of expiry:

• (e) the date of transfer, if any, of the export licence or part of the export licence:

• (f) the full name and address of the previous holder of the export licence.

(3) If a person holds more than 1 export licence for a designated market for the same quota year, each export licence must be registered separately.

(4) This section does not apply to general export licences allocated under section 26(5).

The chief executive may only authorise a person to exercise a power under sections 29E to 29L if that person has appropriate training, experience, or qualifications in the exercise of that power.

The chief executive, or a person authorised by the chief executive, may call on any person for assistance in the exercise of any or all of the powers under sections 29E to 29L.

(1) For the purpose of determining and monitoring compliance with the rules set out in Schedule 5B, the chief executive, or a person authorised by the chief executive, may during business hours enter any place (other than a dwellinghouse or marae) without a search warrant.

(2) Before entering any place under subsection (1), the chief executive or person authorised by the chief executive must—

• (a) give the owner or occupier reasonable notice of his or her intention to enter the place, unless to do so would defeat the purpose of the entry; and

• (b) if notice under paragraph (a) is not or cannot be given, leave in a prominent location at the place a written statement of—

  • (i) the time and date of the entry; and

  • (ii) the purpose of the entry; and

  • (iii) the name of the person; and

  • (iv) the address of the office to which inquiries should be made.

(3) A person who exercises any power under this section must produce his or her evidence of authorisation—

• (a) on first entering the place; and

• (b) subsequently whenever reasonably required to do so by a person appearing to have charge of the place or any part of the place.

For the purpose of determining and monitoring compliance with the rules set out in Schedule 5B, the chief executive, or a person authorised by the chief executive, may, at any place entered in accordance with section 29E,—

• (a) examine all things, and open containers, packages, and other things to inspect their contents:

• (b) examine, inquire about, and copy any documents or other records (including records held in electronic or other form) and may—

  • (i) remove documents or records to another place for a reasonable time for the purpose of copying them, or require the person having control of the documents or other records to forward them or a copy of them to the officer by way of post, courier post, fax, or other means acceptable to the chief executive or authorised person; and

  • (ii) require a person who has control of or knowledge of the documents or records to reproduce or assist in reproducing in usable form information recorded or stored in a computer or other device or system; and

  • (iii) direct the occupier to identify and hold any equipment, package, container, or document until any lawful direction of the chief executive, or a person authorised by the chief executive, has been complied with; and

  • (iv) take photographs of any container, package, equipment, or thing.

(1) For the purpose of determining and monitoring compliance with the rules set out in Schedule 5B, the chief executive, or a person authorised by the chief executive, may require an eligible participant or an employee or agent of an eligible participant to provide any relevant information or documents or answer any relevant questions.

(2) Any information, documents, or answers required under subsection (1) must be provided within a reasonable time to a person or place as directed by the chief executive, or a person authorised by the chief executive.

(3) An eligible participant or an employee or agent of an eligible participant may not refuse to answer a question under subsection (1) on the ground that the answer would be likely to incriminate the eligible participant.

(4) An incriminating answer under this section—

• (a) may be used in civil or criminal proceedings against the eligible participant if it is a body corporate; but

• (b) may not be used in civil or criminal proceedings against the employee or agent of the eligible participant who gave the incriminating answer.

(1) For the purpose of determining and monitoring compliance with the rules set out in Schedule 5B, the chief executive, or a person authorised by the chief executive, may audit the milk collection data received from an eligible participant.

(2) Participants must be notified of the possibility of an audit on a cost-recovery basis at the time of an application for an export licence.

(3) Participants may be charged a fee for an audit carried out under subsection (1).

(1) A District Court Judge, Community Magistrate, Justice of the Peace, or Registrar may issue a search warrant in the form set out in Schedule 5D in respect of any place if satisfied, on application in writing made on oath, that there are reasonable grounds for believing that there is at that place any thing—

• (a) in respect of which an offence under section 31(3) has been or is being committed; or

• (b) that has been, is being, or is intended to be used by any person for the commission of an offence under section 31(3); or

• (c) that is evidence of the commission of an offence under section 31(3) by any person.

(2) The District Court Judge, Community Magistrate, Justice of the Peace, or Registrar may impose any reasonable conditions on the warrant that he or she thinks fit.

(3) A search warrant must be directed to a member of the police by name or to every member of the police or to the chief executive or to a person authorised by the chief executive by name, but, in any of these cases, the warrant may be executed by any member of the police.

(1) The chief executive or authorised person who executes the warrant may use any force that is reasonable to—

• (a) enter an area that is to be searched; or

• (b) break open or access an item that is to be seized.

(2) The chief executive, or person authorised by the chief executive, who executes a search warrant may seize any item that—

• (a) he or she has reasonable grounds to believe is evidence of an offence under this Act; or

• (b) is found while he or she is lawfully—

  • (i) exercising a search power; or

  • (ii) in the place in which the item is found.

(3) Subsection (2)(b) applies even if the seizure of the item is not authorised by the search warrant.

(4) If it is not reasonably practicable to determine whether an item may be seized in accordance with a search warrant, the chief executive or authorised person may remove the item for the purpose of examination or processing to determine whether it may be seized.

(1) The chief executive, or a person authorised by the chief executive, who executes a search warrant must carry the warrant with him or her, and produce it for inspection, along with evidence of his or her identity,—

• (a) on first entering the place specified in the warrant, to the person appearing to be in charge of the place; and

• (b) whenever subsequently required to do so, at the place specified in the warrant, by any other person appearing to be in charge of the place or any part of the place.

(2) If the occupier of the place is not present at the time the search warrant is executed, the chief executive or authorised person must leave in a prominent location at the place a written statement of the time and date of the search, a copy of the search warrant, the name of the chief executive or authorised person, and the address to which inquiries may be made.

(3) If anything is seized in the execution of a search warrant, the chief executive or authorised person executing the search warrant must leave in a prominent location at the place, or deliver or send by registered mail to the occupier within 10 working days after the search, or a later date if an extension is approved by a District Court Judge, a written inventory of all things seized.

(4) The chief executive or authorised person may make an application, at the time of making an application for a search warrant, for a waiver from subsections (2) and (3) if he or she believes that there are reasonable grounds for believing that compliance with those subsections would unduly prejudice any ongoing or subsequent investigations or endanger the safety of any person.

(5) A waiver under subsection (4) may only be issued for a specified period up to 12 months.

(6) The chief executive or authorised person who executed the search warrant must provide information to persons from whom items have been seized regarding—

• (a) access to and the disposition of the seized items; and

• (b) the right, under the Official Information Act 1982, to access documentation relating to the application for a search warrant and the exercise of a search power.

(7) The chief executive or authorised person who is exercising a power of entry in relation to a marae, or a building associated with a marae, must have regard to the kawa of the marae so far as is practicable in the circumstances.

Section 199 of the Summary Proceedings Act 1957 applies to any property seized by a member of the police under a search warrant and, with any necessary modifications, to property seized under a search warrant by the chief executive, or a person authorised by the chief executive, subject to the following provisions:

• (a) where a member of the police seized the item in question, it may be retained by the Commissioner of Police pending the trial of the person for the offence in respect of which the item was seized:

• (b) where the chief executive, or a person authorised by the chief executive, seized the item in question, it may be retained by the chief executive pending the trial of the person for the offence in respect of which the item was seized:

• (c) the item in question must be returned to the person from whom it was seized—

  • (i) if no proceedings are taken in respect of an offence to which the item relates within 6 months after its seizure; or

  • (ii) if proceedings are completed in respect of such an offence and no order of forfeiture is made in respect of the item:

• (d) if any person is convicted of an offence to which the item relates, the Court may, if it thinks fit, order that the item be forfeited to the Crown or disposed of as the Court directs at the expense of the convicted person, and may order that the person pay any reasonable costs incurred by the Commissioner of Police or the chief executive in retaining the item.

(1) All the provisions of the Customs and Excise Act 1996, and any regulations made under that Act, that apply to prohibited exports apply to the export of any dairy products in contravention of this Act in all respects as if the export of those dairy products were prohibited under Part 5 of the Customs and Excise Act 1996.

(2) The penalty for an offence against section 209(1)(b) of the Customs and Excise Act 1996 is a fine not exceeding $200,000 if the offence is in respect of the export of any dairy products in contravention of this Act.

(1) Every person commits an offence against this Act and is liable on summary conviction to a fine not exceeding $200,000 who exports a dairy product contrary to section 23.

(2) Every person commits an offence against this Act, and is liable on summary conviction to the following fines, who does not provide the information or document required under section 29G:

• (a) a fine not exceeding $200,000; and

• (b) a further fine not exceeding $10,000 for every day or part of a day during which the offence is continued.

(3) Every person commits an offence against this Act, and is liable for the following, who provides a false declaration in relation to milk collection data contrary to Schedule 5B:

• (a) a declaration by a court of competent jurisdiction that the person is not eligible for further allocations of export licences for a period determined by the court; and

• (b) a fine not exceeding $200,000 or a term of imprisonment not exceeding 3 months, or both.

(1) In any proceedings for an offence under section 31, it is not necessary for the prosecution to prove that the defendant intended to commit the offence.

(2) This section does not limit section 239(4) of the Customs and Excise Act 1996 if proceedings are taken for an offence under that Act.

(1) It is a defence in any proceedings for an offence under section 31 if the defendant proves that—

• (a) the contravention was due to an event or cause beyond the control of the defendant, including natural disaster, mechanical failure, or sabotage; and

• (b) the defendant took reasonable precautions and exercised due diligence to avoid the contravention.

(2) A defendant is not, without leave of the Court, entitled as part of a defence provided by this section to rely on any of the matters specified in subsection (1)(a) unless the defendant has, not later than 7 working days before the date on which the hearing of the proceedings commences, served on the informant a notice in writing identifying the event or cause relied on by the defendant.

(1) Any act or omission on behalf of a person other than a body corporate by—

• (a) an agent or employee of that person; or

• (b) any person at the direction or with the consent or agreement, whether express or implied, of any person referred to in paragraph (a),—

is treated, for the purpose of this subpart, also as the act or omission of the first-mentioned person.

(2) Any act or omission on behalf of a body corporate by—

• (a) a director, agent, or employee of that body corporate; or

• (b) any other person at the direction or with the consent or agreement, whether express or implied, of any person referred to in paragraph (a)—

is treated, for the purpose of this subpart, also as the act or omission of the body corporate.

(3) However, if proceedings are brought under section 31 in respect of an act or omission under subsection (1) or subsection (2), it is a good defence if the defendant proves,—

• (a) in the case of a natural person (including a partner in a firm), that—

  • (i) he or she did not know nor could reasonably be expected to have known that the offence was to be or was being committed; or

  • (ii) he or she took all reasonable steps to prevent the commission of the offence; and

• (b) in the case of a body corporate, that—

  • (i) neither the directors nor any person involved in the management of the body corporate knew or could reasonably be expected to have known that the offence was to be or was being committed; or

  • (ii) the body corporate took all reasonable steps to prevent the commission of the offence; and

• (c) in all cases, that the defendant took all reasonable steps to remedy any effects of the act or omission giving rise to the offence.

(4) For the purposes of this section,—

• (a) a person may act as an agent of another person or body corporate whether or not the first-mentioned person is employed by the other person or body corporate and whether or not he or she is acting for reward:

• (b) any agent or employee of a person acting as an agent is treated as also acting as an agent for the other person or body corporate referred to in paragraph (a).

(1) If a body corporate commits an offence under section 31, every director, and every person concerned in the management of the body corporate, also commits an offence under that section if it is proved that—

• (a) the act or omission that constituted the offence took place with the director's or person's authority, permission, or consent; or

• (b) the director or person knew or should have known that the offence was to be or was being committed and failed to take all reasonable steps to prevent or stop it.

(2) Every person to whom subsection (1) applies is liable on summary conviction to the fine specified in section 31.

(3) A person may be convicted of the offence even though the body corporate has not been charged with that offence or a similar offence.

A return, record, transaction, form, application, or other information purporting to be completed, kept, or provided by, or on behalf of, any person is, for the purpose of this subpart, treated as having been completed, kept, or provided by that person unless the contrary is proved.

The Crown is not liable to any person for—

• (a) any termination or amendment of tariff quotas, however caused; or

• (b) any reduction, expiry, revocation, or reversion of export licences under this subpart; or

• (c) any reduction in the value of export licences, however caused.

(1) The export of dairy product to a designated market in breach of section 23 is actionable by the holder of an export licence in respect of the export of that product to that market.

(2) No proceedings may be brought under subsection (1) in respect of the export of any dairy product unless the customs administration or other authority responsible for the administration of the tariff quota in the market to which the specific product has been exported has treated, or has determined (whether provisionally or finally) to treat, that specific product as falling within the relevant designated market.

(3) In proceedings under subsection (1), the court may award any relief by way of damages, injunctions, accounts, or otherwise that the court considers appropriate in the circumstances.

(4) In proceedings under subsection (1), the court may give any directions it thinks just in respect of the joinder of any person having concurrent rights of action under subsection (1) in respect of the alleged breach.

(1) If a person brings proceedings under section 38, a court may, on the application of any person against whom the proceedings are brought,—

• (a) make a declaration that the bringing of proceedings was unjustified:

• (b) on making a declaration, make an order for the payment of damages for any loss suffered by the person against whom the proceedings are brought.

(2) A court must not grant relief under this section if the person who brought the proceedings proves that the acts in respect of which proceedings were brought constituted a breach of section 23.

(3) Nothing in this section makes a barrister or solicitor of the High Court of New Zealand liable to any proceedings under this section in respect of any act done in his or her professional capacity on behalf of a client.

(1) The Minister of the Crown who (under the authority of any warrant or with the authority of the Prime Minister) is in charge of international trade may at any time give to any exporter to a designated market a written notice specifying—

• (a) a particular international obligation of New Zealand; and

• (b) an element of the performance of the exporter's functions or the exercise of the exporter's powers to which, in the Minister's opinion, the obligation is relevant.

(2) The exporter to whom the notice is given is under a legal duty to ensure that its performance or the exercise of the element is consistent with the obligation until the notice is revoked.

(1) Any holder of an export licence must supply to the Minister any information relating to designated markets that the Minister considers is relevant to the purpose in section 21(1) and that the Minister from time to time requests in writing.

(2) Subsection (1) applies only to information that is in the person's possession or that the person can obtain without unreasonable difficulty or expense.

(3) Every person commits an offence who fails, without reasonable excuse, to comply with a request under subsection (1) and is liable on summary conviction to a fine not exceeding $200,000 and, if the offence is a continuing one, to further fines not exceeding $10,000 for every day or part of a day during which the offence is continued.

(1) The chief executive (or any officer of his or her Ministry authorised in that behalf) and the Comptroller of Customs (or any officer of Customs authorised in that behalf) may, for the purpose of the administration of this Act or the Dairy Industry Act 1952 or the Customs and Excise Act 1996, disclose to each other, on request, information on exporters of dairy products and dairy products exported or proposed to be exported.

(2) Information obtained under subsection (1) must not be disclosed except—

• (a) to the persons authorised under that subsection; or

• (b) for the purpose of any proceedings that have been commenced or that are reasonably in contemplation and that are connected with a matter in relation to which those persons perform their duties.

(3) No obligation as to secrecy or other restriction on the disclosure of information imposed by any enactment or otherwise prevents a disclosure under this section.

(1) Sections 44 to 61 describe the procedure by which LIC will be restructured into a co-operative company owned by purchasers of LIC products and services.

(2) Sections 62 to 65A contain regulation-making powers relating to herd testing, the provision of information to the core database, access to the core database, disclosure of information by LIC, and regulations relating to a dairy industry entity other than LIC.

(3) Sections 66 to 69 provide for information to be supplied to the chief executive, offences, and deeming herd testing regulations to be made under this Act.

(1) The LIC board must prepare a restructuring plan for LIC.

(2) Before sending the restructuring plan to the Minister, LIC must consult with the Board.

The restructuring plan must—

• (a) contain a share allocation plan for LIC; and

• (b) contain a constitution for LIC that complies with the requirements of this Act; and

• (c) be accompanied by the proposed application for registration of LIC under Part 2 of the Co-operative Companies Act 1996; and

• (d) specify a restructuring day.

(1) The LIC board must ensure that the share allocation plan in the restructuring plan—

• (a) provides for the allocation of the shares in LIC, on the approved restructuring day, to persons—

  • (i) who derive an income from farming dairy cows in New Zealand whose milk is supplied for processing in New Zealand (including sharemilkers); and

  • (ii) who have purchased qualifying products or services from LIC to the value of $500 or more (exclusive of GST) during the year ending 31 May 2001; and

• (b) provides that shares in the company are to be allocated on a proportionate basis (as determined by the LIC board), calculated by reference to the higher of—

  • (i) the amount paid by the purchaser for qualifying products or services purchased from LIC during the year ending 31 May 2001; and

  • (ii) the amount paid by the purchaser for qualifying products or services purchased from LIC during the year ending 31 May 2000; and

• (c) specifies clearly the proposed basis of allocation.

(2) LIC must, in the share allocation plan, treat participants in LIC's Sire Proving Scheme and contract mating scheme who acquired qualifying products or services at no cost, or less than full cost, as if they were purchasers who had paid the amount that would have been payable if they were not participants in those schemes.

The LIC board must ensure that the constitution in the restructuring plan requires LIC to retain the core database.

(1) The LIC board must ensure that the constitution in the restructuring plan requires that shares in LIC must be held only by persons who—

• (a) derive an income from farming dairy cows in New Zealand whose milk is supplied for processing in New Zealand (including sharemilkers); and

• (b) purchase products or services from LIC, as determined by LIC.

(2) The LIC board must ensure that the constitution in the restructuring plan requires a shareholder who is not, or has ceased to be, a transacting shareholder of LIC to surrender all or any of the shareholder's shares in LIC.

(3) The provision in the constitution required by subsection (1) does not prevent—

• (a) shareholders continuing to hold shares until surrender, in accordance with the provision in the constitution required by subsection (2); or

• (b) LIC holding its own shares under section 24 of the Co-operative Companies Act 1996 or section 67A of the Companies Act 1993.

(1) The LIC board must ensure that the constitution in the restructuring plan provides that no person may exercise, or control the exercise of, more than 1% of the maximum number of votes that may be exercised at a meeting of LIC.

(2) The LIC board must ensure that the constitution in the restructuring plan provides that the following are included in the calculation of a person's number of votes:

• (a) the number of votes that an associated person of the person may exercise or control the exercise of; and

• (b) the number of votes that a person may exercise or control the exercise of by reason of being appointed as a proxy.

The LIC board must ensure that the constitution in the restructuring plan provides for postal voting in accordance with clause 7 of Schedule 1 of the Companies Act 1993.

The provisions of the constitution of LIC referred to in sections 47 to 50 may not be amended or revoked without the written consent of the Minister.

(1) The LIC board must ensure that, under the restructuring plan, LIC becomes a company registered under Part 2 of the Co-operative Companies Act 1996.

(2) No application may be made under section 12 of the Co-operative Companies Act 1996 in relation to LIC without the written consent of the Minister.

(3) Subsection (2) is additional to the requirements in section 12 of the Co-operative Companies Act 1996.

The LIC board must ensure that the application for registration of LIC as a co-operative company under the Co-operative Companies Act 1996 that is part of the restructuring plan complies with section 6 of that Act.

(1) The LIC board must give the restructuring plan to the Minister no later than 30 November 2001.

(2) The LIC board must also give the Minister a certificate signed by not less than 2 directors of the LIC board certifying that sections 44 to 53 have been complied with.

(1) The Minister must, as soon as practicable after receiving a restructuring plan, by notice in writing to the LIC board,—

• (a) approve it; or

• (b) decline to approve it.

(2) The Minister may decline to approve the plan only if the Minister is not satisfied that it complies with the requirements of this Act.

(1) If the Minister declines to approve the restructuring plan,—

• (a) the Minister must indicate the grounds on which he or she declines to approve the plan; and

• (b) the Minister must direct the LIC board to prepare and submit a revised plan; and

• (c) the LIC board must submit a revised restructuring plan to the Minister not later than 15 working days after the date on which approval was declined or any later date that the Minister in any particular case may allow.

(2) Section 54(2) applies in respect of a revised restructuring plan that is required to be submitted to the Minister under this section.

(1) As soon as practicable after receiving a revised restructuring plan, the Minister must—

• (a) approve the plan by notice in writing to the LIC board; or

• (b) if the Minister considers that the revised plan requires further amendment,—

  • (i) make any amendments to the plan that the Minister considers necessary; and

  • (ii) approve the plan (as amended) by notice in writing to the LIC board, which notice must be accompanied by a copy of the plan as approved.

(2) Before making any amendments to a restructuring plan under this section, the Minister must advise the LIC board of the Minister's intention to do so, and must give the LIC board a reasonable opportunity to make submissions on the matter.

(1) If the LIC board has not given a restructuring plan to the Minister by 30 November 2001, or has not given the Minister a revised restructuring plan by the date required by section 56(1)(c), the Minister must arrange for a restructuring plan to be prepared and the Minister has all the powers necessary for that purpose.

(2) Sections 44 to 53 and 57(1) apply to a restructuring plan prepared under subsection (1) as if the restructuring plan were a revised restructuring plan given to the Minister by the LIC board.

(3) If, as a result of the default of the LIC board, the Minister acts under subsection (1), the Minister is entitled to be reimbursed by LIC for all costs and expenses that the Minister incurs in taking the action.

As soon as practicable after the Minister approves the restructuring plan, the LIC board must notify each prospective shareholder in writing of the number and type of shares for which LIC considers the prospective shareholder will be eligible on the approved restructuring day.

(1) On the approved restructuring day,—

• (a) the constitution in the approved restructuring plan becomes the constitution of LIC:

• (b) any shares in LIC in force immediately before the approved restructuring day are cancelled and the rights and privileges attached to those shares expire:

• (c) shares are issued in accordance with the share allocation plan in the approved restructuring plan:

• (d) the LIC board must cause the application under section 6 of the Co-operative Companies Act 1996 in the approved restructuring plan to be presented to the Registrar of Companies:

• (e) on receiving the application, the Registrar of Companies must issue a certificate of registration under section 6(3)(b) of the Co-operative Companies Act 1996.

(2) Clauses 3 and 7 of Schedule 3 apply as if references to the Board were references to LIC, references to the company were references to LIC as registered as a co-operative company, and with all necessary modifications.

(3) The shares are cancelled and issued under subsection (1)(b) and (c) without payment or other consideration.

For the avoidance of doubt,—

• (a) the restructuring of LIC under this subpart does not affect any employment agreement that is applicable to LIC; and

• (b) each employee of LIC continues to be an employee of LIC and, for the purposes of every enactment, law, award, determination, contract, and agreement relating to the employment of the employee, his or her employment agreement is unbroken and the period of his or her service with LIC, and every other period of service that is recognised by LIC as his or her continuous service, continues to be recognised; and

• (c) the terms and conditions of the employment of each employee with LIC are (until varied) identical to the terms and conditions of his or her employment before the restructuring and are capable of variation in the same manner; and

• (d) an employee is not entitled to receive any payment or other benefit by reason only of the restructuring.

The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations for all or any of the following purposes:

• (a) prohibiting herd testing except by persons or classes of persons, and in circumstances, specified in the regulations:

• (b) providing for the certification of herd testers or herd testing equipment, including—

  • (i) providing for the approval of persons to issue certifications:

  • (ii) providing for the criteria for, and terms and conditions of, certification:

  • (iii) providing for other matters related to certifications, including applications, procedures, auditing of herd testers against herd testing practice standards, and the keeping of registers:

• (c) requiring LIC to offer a nationwide herd testing service:

• (d) requiring LIC to charge uniform prices for its herd testing service within regions specified in the regulations:

• (e) specifying information that must be provided to LIC for entering into the core database, the persons who are required to provide it, the form in which it must be provided, and the time limits for its provision:

• (f) requiring LIC to retain information specified in the regulations in the manner prescribed in the regulations:

• (g) restricting the liability of the Crown for acts or omissions of persons approved to issue certifications.

(1) The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations for all or any of the following purposes:

• (a) prohibiting LIC from entering into exclusive arrangements for access to data in the core database:

• (b) providing for the establishment of a panel (comprising 2 or more persons) to—

  • (i) decide applications for access to data in the core database; and

  • (ii) determine other circumstances in which LIC must make data in the core database available (including, for example, at the request of persons who have supplied the information from which that data results):

• (c) restricting LIC from making available data in the core database except—

  • (i) in accordance with a decision or determination of the panel; or

  • (ii) to the owner of the dairy herd to which the data relates:

• (d) requiring the panel to grant an application for access, or to make a determination regarding access, to data in the core database only if it is satisfied that to do so is likely to be beneficial to the New Zealand dairy industry:

• (e) if the panel is not satisfied that to do so is likely to be beneficial to the New Zealand dairy industry, enabling the panel to grant an application for access, or to make a determination regarding access, to data in the core database only if the panel is satisfied that to do so would not be harmful to the New Zealand dairy industry:

• (f) providing for matters concerning the panel's functions, powers, members (including their appointment, removal, duties, and protection from liability), procedures, employees, administration, operation, and reporting requirements:

• (g) allowing the panel to set terms and conditions (excluding LIC's charges) on which data in the core database may be made available including the form in which it must be made available and time limits for access:

• (h) requiring LIC to comply with decisions of the panel (subject to payment of any charge for access set by LIC):

• (i) prescribing fees that may be charged by the panel for applications for access, or the basis on which fees may be calculated:

• (j) requiring LIC to pay a levy to the Minister in each financial year.

(2) A levy order under subsection (1)(j) must specify the amount of the levy or the way the levy must be calculated.

(3) The Minister must calculate the amount of the levy so as to ensure that the costs of the panel (net of any application fees) are met fully from the levy.

(4) LIC must pay any levy required by regulations made under this section.

(5) The Minister must consult with LIC before making a recommendation under subsection (1)(j).

(6) The Minister may—

• (a) deduct over-recoveries in respect of a financial year from the levy payable in subsequent financial years; or

• (b) add under-recoveries in respect of a financial year to the levy payable in subsequent financial years.

(7) The amount of unpaid levy is recoverable in a court of competent jurisdiction as a debt due to the Crown.

The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations for all or any of the following purposes:

• (a) providing for the confidentiality of—

  • (i) information supplied to LIC for entry in the core database; and

  • (ii) data in the core database; and

  • (iii) information about applications for access:

• (b) providing for audits of LIC's compliance with any regulations made under section 62 or section 63 or this section and for matters related to the audit, including the auditor's powers:

• (c) prescribing offences for the breach of, or non-compliance with, any of those regulations:

• (d) prescribing penalties not exceeding $20,000 for any offences prescribed under any of those regulations:

• (e) providing that a person is liable for damages for any loss or damage caused by that person's contravention of any of those regulations.

The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations for all or any of the following purposes:

• (a) requiring LIC to publish, in the prescribed manner, information about the supply of data in the core database, that may include—

  • (i) LIC's pricing methodology and other terms and conditions:

  • (ii) LIC's procedures, including for complying with decisions of the panel, and for ensuring confidentiality:

• (b) prescribing the form of statutory declaration and who must provide it under section 66(4):

• (c) setting rules about when and for how long information must be disclosed.

(1) The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations for all or any of the purposes set out in sections 62 to 65 in respect of any dairy industry entity, other than LIC, nominated by the Crown to manage the core database.

(2) Regulations may be made under subsection (1) only—

• (a) if the core database reverts to the Crown under section 68(2); or

• (b) if provisions of the constitution of LIC are amended or revoked in accordance with section 51; or

• (c) if LIC makes an application under section 52(2).

(1) LIC or any other dairy industry entity nominated by the Crown to manage the core database must send a copy of the information that it is required to make publicly available by regulations under section 65 to the chief executive within 20 working days of making it publicly available.

(2) The chief executive may request (in writing) information, statements, or reports from LIC or any other dairy industry entity nominated by the Crown to manage the core database to monitor LIC' s or that other dairy industry entity's compliance with regulations made under section 65.

(3) LIC or any other dairy industry entity nominated by the Crown to manage the core database must comply with a request made under subsection (2) within 20 working days of receiving the request or within any longer period allowed by the chief executive.

(4) Information, statements, or reports supplied to the chief executive under this section must be verified by statutory declaration in the form and by the persons prescribed by regulations made under section 65(b).

(1) Every person commits an offence against this section who—

• (a) fails, without reasonable excuse, to comply with any information disclosure requirements prescribed in regulations made under section 65; or

• (b) fails, without reasonable excuse, to comply with the requirements of section 66(1) or (3).

(2) Every person commits an offence against this section who makes a false declaration under section 66(4) in relation to any statement, forecast, report, agreement, particulars, or information supplied under section 66(1) or (3).

(3) Every person who commits an offence against subsection (1) is liable on summary conviction to a fine not exceeding $200,000 and, if the offence is a continuing one, to a further fine not exceeding $10,000 for every day or part of a day during which the offence is continued.

(4) Every person who commits an offence against subsection (2) is liable on summary conviction to a fine not exceeding $20,000.

(1) This section applies if—

• (a) a liquidator or interim liquidator is appointed in respect of LIC under Part 16 of the Companies Act 1993; or

• (b) LIC is removed from the register of companies kept pursuant to section 360(1)(a) of the Companies Act 1993.

(2) In that case, any interest of LIC in the core database reverts to the Crown until ongoing arrangements can be made for it to be taken over by a dairy industry body.

The Herd Testing Regulations 1958 (SR 1958/44) are deemed to have been made under this Act, and may be amended and revoked accordingly.

The purpose of this subpart is to promote the efficient operation of dairy markets in New Zealand.

The intention of this subpart is to promote the following principles:

• (a) independent processors must be able to obtain raw milk, and other dairy goods and services, necessary for them to compete in dairy markets:

• (b) new co-op must accept applications by new entrants and shareholding farmers to supply it with milk, as shareholding farmers:

• (c) new co-op must not discriminate between new entrants and shareholding farmers whose circumstances are the same:

• (d) shareholding farmers who withdraw from new co-op, and cease or reduce supply, must receive their capital in new co-op without unreasonable delay:

• (e) the amount per unit of milk production paid, at a time, to new co-op to become a shareholding farmer must be the same as the amount per unit of milk production received, at the same time, from new co-op by a shareholding farmer who withdraws from new co-op:

• (f) The Tatua Co-operative Dairy Company Limited or Westland Co-operative Dairy Co Limited must have a reasonable opportunity to establish its own marketing arrangements, if the company does not amalgamate with new co-op (or a wholly-owned subsidiary of new co-op).

(1) Sections 73 to 85 describe the obligation of new co-op to accept applications from new entrants and shareholding farmers to supply milk, as shareholding farmers.

(2) Sections 86 to 93 describe circumstances when the commencement of supply of milk to new co-op may be deferred.

(3) Sections 94 to 96 are exceptions to the obligation to accept applications.

(4) Sections 97 to 105 describe the right of shareholding farmers to cease or reduce the supply of milk to new co-op as shareholding farmers.

(5) Sections 106 to 109 regulate the supply of milk to new co-op.

(6) Sections 110 to 114 provide transitional arrangements for certain exiting companies in relation to the marketing of their export produce.

(7) Sections 115 to 119 are regulatory powers concerning the supply of dairy goods or services, and the publication and supply of information.

(8) Sections 120 to 133 empower the Commission to determine disputes arising under this subpart.

(9) Section 134 provides for the imposition of a levy on new co-op to pay the costs of the Commission.

(10) Sections 135 to 146—

• (a) allocate responsibility for enforcing this subpart; and

• (b) contain general provisions.

(11) Sections 147 to 149 describe the circumstances that must exist before the subpart expires, and how the subpart expires.

(12) Section 150 is a transitional provision.

(1) New co-op must accept an application to become a shareholding farmer that is made by a new entrant in an application period.

(2) New co-op must accept an application to increase the volume of milk supplied as a shareholding farmer to new co-op that is made by a shareholding farmer in an application period.

(3) New co-op must notify acceptance to the applicant within 15 working days of receipt of the application.

(4) Sections 136 to 139 specify—

• (a) how an application may be given; and

• (b) when an application is made.

(1) If an application referred to in section 73 is made to new co-op in an application period, new co-op must accept the milk to which the application relates from the beginning of the season following that application period.

(2) Despite subsection (1), new co-op is not required to accept milk if the shareholding farmer fails to satisfy the applicable terms of supply.

(3) New co-op may, in its discretion, accept an application made outside an application period from a dairy farmer, including a shareholding farmer, to supply milk as a shareholding farmer.

(1) New co-op must set an application period that is before the commencement of each season in which new entrants may apply to supply milk, and shareholding farmers may apply to increase the volume of milk supplied, as shareholding farmers.

(2) As a minimum, an application period must span the dates 15 December in a year to 28 February in the next year.

(1) New co-op must publish details of each application period set by it under section 75,—

• (a) in each of the daily newspapers published in Whangarei, Auckland, Hamilton, Rotorua, Hawke's Bay, New Plymouth, Palmerston North, Wellington, Nelson, Christchurch, Dunedin, and Invercargill; and

• (b) on new co-op's website in an electronic form that is publicly accessible.

(2) New co-op must publish details of an application period before the application period begins.

(3) New co-op must publish the details under subsection (1)(a) as soon as practicable after those details are determined by new co-op.

(4) Publication under subsection (1)(b) must be continuous throughout the application period.

(1) New co-op must set a price of a co-operative share to apply from the beginning of each application period.

(2) New co-op may amend the price set under subsection (1) throughout an application period.

(3) An amendment to the price set under subsection (1) takes effect on the day after the day it is published under section 80.

(4) New co-op must set a June price for a co-operative share to apply as at 1 June in each season.

(1) New co-op must set the price of a peak note to apply from the amalgamation date.

(2) New co-op must not amend the peak note price.

(3) New co-op must—

• (a) charge the peak note price for all peak notes issued to new entrants and shareholding farmers who apply under section 73, or whose application is accepted under section 74(3); and

• (b) redeem all peak notes at the peak note price to shareholding farmers who give notice of withdrawal under section 98(1) or whose notice of withdrawal is accepted under section 99.

(1) New co-op must set a co-operative share standard and a peak note standard at the beginning of each application period to apply from the beginning of the next season.

(2) New co-op may not amend the co-operative share standard or the peak note standard set under subsection (1) until the beginning of the next application period.

(1) New co-op must ensure that the following prices and standards are published on or before the first day of each application period: (a) the price of a co-operative share set at the beginning of the application period:

• (b) the peak note price:

• (c) the co-operative share standard set at the beginning of the application period:

• (d) the peak note standard set at the beginning of the application period.

(2) New co-op must ensure that the price of a co-operative share is published each time it is amended.

(3) New co-op must ensure that the June price is published as soon as practicable after it is set under section 77(4).

(4) New co-op must comply with subsections (1) to (3) by publishing the information—

• (a) once in each of the daily newspapers published in Whangarei, Auckland, Hamilton, Rotorua, Hawke's Bay, New Plymouth, Palmerston North, Wellington, Nelson, Christchurch, Dunedin, and Invercargill; and

• (b) on new co-op's website in an electronic form that is publicly accessible in the following manner:

  • (i) for information required to be published by subsections (1) and (2), continuously throughout the application period:

  • (ii) for information required to be published by subsection (3), continuously throughout the season to which it applies.

(1) The price of a co-operative share issued to a new entrant or a shareholding farmer in response to an application that new co-op is required by section 73 to accept is—

• (a) the June price in the first season for the supply of milk to which the application relates if the new entrant or shareholding farmer elects to pay that price; or

• (b) the default price if that election is not made.

(2) An election under subsection (1)(a) must be made with the application from the new entrant or shareholding farmer.

(3) The co-operative share standard and the peak note standard that apply to a new entrant or a shareholding farmer who makes an application under section 73 that new co-op is required to accept are the co-operative share standard and the peak note standard published at the beginning of the application period in which the application is made.

(1) The price of a co-operative share issued to a new entrant or a shareholding farmer in response to an application to which section 74(3) applies is the June price in the first season for the supply of milk to which the application relates.

(2) The co-operative share standard and the peak note standard that apply to a new entrant or a shareholding farmer who makes an application to which section 74(3) applies are the co-operative share standard and the peak note standard published at the beginning of the application period in the season immediately before the first season for the supply of milk to which the application relates.

(3) The co-operative share standard and the peak note standard that apply to a new entrant or shareholding farmer who is allocated shares and peak notes in respect of supply in the 2001/2002 season are the co-operative share standard and the peak note standard set in accordance with the first constitution of new co-op.

New co-op must not require payment from a new entrant or a shareholding farmer for accepting milk supply as a shareholding farmer other than payment to purchase co-operative shares and peak notes.

(1) This section regulates deposits payable by new entrants or shareholding farmers who apply under section 73.

(2) New co-op must not require a new entrant or a shareholding farmer to pay a deposit for the purchase of co-operative shares and peak notes—

• (a) that exceeds 20% of the total amount payable for the co-operative shares and peak notes; and

• (b) before the earlier of—

  • (i) 15 working days from the notification of acceptance of an application; or

  • (ii) the last day of the application period in which the application is made.

(3) The total amount payable for the co-operative shares and peak notes referred to in subsection (2)(a) is calculated based on—

• (a) the published price on the date that the application under section 73 is made; and

• (b) the co-operative share standard and the peak note standard published at the beginning of the application period in which the application is made.

(1) This section regulates the timing of payment of the balance of the purchase price payable by a new entrant or a shareholding farmer who applies under section 73.

(2) New co-op must not require a new entrant or a shareholding farmer to pay the following amounts, or part of those amounts, before 1 June in the first season for the supply of milk to which the application relates:

• (a) the balance of the purchase price for the co-operative shares:

• (b) the balance of the purchase price of any peak notes that new co-op requires the new entrant or shareholding farmer to purchase.

(1) New co-op may publish a capacity constraint notice for a geographical area specified in the notice if, in new co-op's reasonable opinion, processing the expected increase in the volume of milk supplied to new co-op from that area in the next season cannot be reasonably managed.

(2) A capacity constraint notice—

• (a) must define clearly the geographical area to which it applies; and

• (b) must specify the period in a season to which it applies; and

• (c) must be published not later than the first day of the application period for the season to which the notice applies; and

• (d) may not apply to more than 1 season.

(3) Sections 87 to 93 apply while a capacity constraint notice applies to a geographical area.

(1) New co-op must defer, until the end of the period specified in the capacity constraint notice, the commencement of the supply of milk that is the subject of applications that new co-op is required to accept under section 73 in the area to which the capacity constraint notice applies.

(2) However, a subsequent capacity constraint notice is of no effect in relation to a supply of milk that has previously been deferred under subsection (1).

(3) Despite subsection (1), new co-op may accept a supply of milk that is the subject of an application that new co-op is required to accept under section 73 earlier than the end of a period of deferral specified by new co-op under section 86(2).

(4) Offers to accept supply of milk under subsection (3) must be made in the same order that applications to supply the milk were received by new co-op.

(1) This section applies to a new entrant or a shareholding farmer who—

• (a) is in a geographical area to which a capacity constraint notice applies; and

• (b) applies in an application period.

(2) The price of a co-operative share issued to a new entrant or a shareholding farmer to whom this section applies is—

• (a) the June price in the first season for the supply of milk to which the application relates if the new entrant or shareholding farmer elects to pay that price; or

• (b) the default price if that election is not made.

(3) An election under subsection (2)(a) must be made with the application to which the supply relates.

(4) The co-operative share standard and the peak note standard that apply to a new entrant or a shareholding farmer to whom this section applies are,—

• (a) if the new entrant or shareholding farmer makes an election under subsection (2)(a), the co-operative share standard and the peak note standard published at the beginning of the application period immediately before the first season for the supply of milk to which the application relates; or

• (b) if that election is not made, the co-operative share standard and the peak note standard published at the beginning of the application period in which the application is made.

(1) This section applies if—

• (a) a new entrant or shareholding farmer to whom section 88 applies commences supply of milk in a season later than the season immediately following the season in which the application was made; and

• (b) the new entrant or shareholding farmer does not make an election under section 88(2)(a); and

• (c) the co-operative share standard or the peak note standard published by new co-op at the beginning of the application period immediately before the first season for the supply of milk to which the application relates is different from the co-operative share standard or the peak note standard published by new co-op at the beginning of the application period in which the application was made.

(2) If this section applies, the number of co-operative shares and peak notes to be issued to the new entrant or shareholding farmer, and the amount payable for those co-operative shares and peak notes, must be calculated as if—

• (a) the supply of milk to which the application relates commenced in the season immediately following the application period in which the application was made; and

• (b) co-operative shares and peak notes were issued to the new entrant or shareholding farmer in relation to that supply; and

• (c) all changes to the co-operative share standard or the peak note standard since the application was made were applied as if it were existing supply by a shareholding farmer.

(1) This section applies to a new entrant or a shareholding farmer who is committed under section 88(2)(b) to pay the default price.

(2) New co-op must not require a new entrant or a shareholding farmer to pay more than 2 deposits for the purchase of co-operative shares and peak notes.

(3) A first deposit—

• (a) must not exceed 10% of the total amount payable for the co-operative shares and peak notes; and

• (b) must not be payable before the earlier of—

  • (i) 15 working days from notification of acceptance of an application; or

  • (ii) the last day of the application period in which the application is made.

(4) A second deposit—

• (a) must not exceed 10% of the total amount payable for the co-operative shares and peak notes; and

• (b) must not be payable earlier than the last day of the application period immediately before the first season for the supply of milk to which the application relates.

(5) The total amount payable for the co-operative shares and peak notes referred to in subsections (3)(a) and (4)(a) is calculated based on—

• (a) the published price on the date that the application is made; and

• (b) the co-operative share standard and the peak note standard published at the beginning of the application period in which the application is made.

(1) This section regulates the timing of payment of the balance of the purchase price by a new entrant or a shareholding farmer who is committed under section 88(2)(b) to pay the default price.

(2) New co-op must not require a new entrant or a shareholding farmer to pay the following amounts, or part of those amounts, before 1 June in the first season for the supply of milk to which the application relates:

• (a) the balance of the purchase price for the co-operative shares:

• (b) the balance of the purchase price of any peak notes that new co-op requires the new entrant or shareholding farmer to purchase.

(1) This section applies to a new entrant or a shareholding farmer who elects under section 88(2)(a) to pay the June price.

(2) New co-op must not require a new entrant or a shareholding farmer to pay a deposit for the purchase of co-operative shares and peak notes—

• (a) that exceeds 20% of the total amount payable for the co-operative shares and peak notes; and

• (b) earlier than the last day of the application period immediately before the first season for the supply of milk to which the application relates.

(3) The total amount payable for the co-operative shares and peak notes referred to in subsection (2)(a) is calculated based on the most recent published price, co-operative share standard, and peak note standard on the date that the deposit is payable, and the peak note price.

(1) This section regulates the timing of payment of the balance of the purchase price by a new entrant or a shareholding farmer who elects under section 88(2)(a) to pay the June price.

(2) New co-op must not require a new entrant or a shareholding farmer to pay the following amounts, or part of those amounts, before 1 June in the first season for the supply of milk to which the application relates:

• (a) the balance of the purchase price for the co-operative shares:

• (b) the balance of the purchase price of any peak notes that new co-op requires the new entrant or shareholding farmer to purchase.

New co-op may reject an application by a new entrant or a shareholding farmer if the supply of milksolids obtainable from milk to be supplied by the applicant in a season is less than 10 000 kilograms.

(1) New co-op may reject an application by a new entrant if the cost of transporting the milk of the new entrant exceeds the highest cost of transporting another shareholding farmer's milk.

(2) In subsection (1) and this subsection,—

(3) In subsection (2), factory means a facility operated by new co-op that—

• (a) has a capacity to store at least 50 000 litres of milk; and

• (b) has operated for more than 120 days in the season before the season in which the application is made.

(4) New co-op must disclose the evidence on which it relies to reject an application, on demand, to—

• (a) the new entrant whose application is rejected; and

• (b) the Commission.

(1) The Governor-General may, by Order in Council made on the recommendation of the Minister, declare that section 95 does not apply to a geographical area specified in the order from a date specified in the order.

(2) The Minister must not make a recommendation under subsection (1) unless the Minister is satisfied that new co-op pays shareholding farmers in the geographical area different amounts for milk based on the different costs of transporting that milk.

(1) A shareholding farmer who wants to cease or reduce the supply of milk as a shareholding farmer to new co-op may give a notice of withdrawal.

(2) The right of a shareholding farmer to cease or reduce the supply of milk as a shareholding farmer is subject to the terms governing the relationship between new co-op and the shareholding farmer.

(1) If a shareholding farmer gives a notice of withdrawal to new co-op in an application period, the shareholding farmer must receive—

• (a) a surrender value for the relevant co-operative shares which is either—

  • (i) the June price immediately following the application period in which the notice of withdrawal is given if the shareholding farmer elects to receive that price, multiplied by the number of shares; or

  • (ii) the default price if that election is not made, multiplied by the number of shares; and

• (b) a surrender value for the relevant peak notes which is the peak note price multiplied by the number of peak notes.

(2) An election under subsection (1)(a)(i) must be made with the notice of withdrawal.

If new co-op accepts a notice of withdrawal from a shareholding farmer outside an application period, new co-op must pay the shareholding farmer—

• (a) a surrender value for the relevant co-operative shares which is the June price immediately following the date that the notice of withdrawal is given multiplied by the number of shares; and

• (b) a surrender value for the relevant peak notes which is the peak note price multiplied by the number of peak notes.

(1) This section applies if the co-operative share standard or the peak note standard published by new co-op at the beginning of an application period in a season in which a shareholding farmer gives a notice of withdrawal is different from the co-operative share standard or peak note standard published by new co-op at the beginning of the preceding application period.

(2) If this section applies, the amount that a shareholding farmer must receive under section 98(1) or section 99, as the case may be, must be calculated after applying all changes to the co-operative share standard and to the peak note standard as if the shareholding farmer had not given the notice of withdrawal.

(1) New co-op must ensure that a shareholding farmer who ceases or reduces supply as a shareholding farmer under section 97 receives the surrender value of the relevant co-operative shares and the surrender value of the relevant peak notes within 30 working days after the end of the season in which the notice of withdrawal is given.

(2) New co-op must pay or satisfy the surrender amount payable to a withdrawing shareholding farmer by—

• (a) payment in cash; or

• (b) issuing capital notes; or

• (c) a combination of both cash and capital notes.

(3) However, new co-op may satisfy all or part of the surrender amount referred to in subsection (1) by issuing supply redemption rights, if the withdrawing shareholding farmer referred to in subsection (1) requests new co-op to do so.

(4) New co-op may satisfy the surrender amount under subsection (2)(b) or (c) by issuing capital notes itself or by procuring a wholly-owned subsidiary to issue them.

(1) New co-op must ensure that the total market value of the capital notes issued to satisfy or partly satisfy a surrender amount is not less than the surrender amount to be satisfied by their issue.

(2) The total market value of capital notes in subsection (1) is calculated using their market price which is the volume-weighted average sale price for all trades of the capital notes, through the electronic matching markets of all stock exchanges on which the capital notes are quoted, adjusted to remove the impact of any interest accrued on the capital notes, for the 1-month period immediately before the capital notes are issued.

(3) New co-op may not issue capital notes under section 101 if,—

• (a) during the month immediately before the capital notes are to be issued, capital notes that are the same as the capital notes to be issued were not traded through a registered exchange's market (within the meaning of section 2(1) of the Securities Markets Act 1988); or

• (b) capital notes that are the same as the capital notes to be issued have not been listed continuously on that registered exchange's market for 6 months or more.

(1) This section applies if any of the following persons acquires or enters into an arrangement to acquire capital notes during the month immediately before new co-op issues capital notes under section 101 and the capital notes are the same as the capital notes issued:

• (a) new co-op:

• (b) an associated person of new co-op:

• (c) a person with whom new co-op or an associated person of new co-op has an arrangement for an acquisition of those capital notes in that period.

(2) The person to whom the capital notes are issued may require new co-op, by written notice to new co-op, to acquire some or all of those capital notes at any time within 6 weeks after their date of issue.

(3) New co-op must repurchase capital notes under sub- section (2)—

• (a) by payment in cash; and

• (b) at a price that is not less than 97.5% of the market price at which they were issued to the person; and

• (c) within 10 working days after receiving the written notice.

(4) New co-op must, by notice in writing, no later than the day on which the capital notes are issued under section 101, advise every person to whom the capital notes are issued, of the following matters:

• (a) that a person specified in paragraph (a) or paragraph (b) or paragraph (c) of subsection (1) acquired or entered into an arrangement to acquire the capital notes:

• (b) that the recipient of the notice may require new co-op to acquire some or all of the capital notes issued to the person, in cash:

• (c) the price at which the person may require new co-op to acquire the capital notes:

• (d) the date by which the person must make the requirement under this section.

(1) This section applies if—

• (a) the value of equities surrendered in a season minus the value of equities issued in that season exceeds 5% of the value of equities on issue on 31 May in the previous season; and

• (b) new co-op's board considers and certifies that paying cash and issuing capital notes that exceed the 5% threshold described in paragraph (a) would materially and adversely affect new co-op's ability to implement its business plan.

(2) If this section applies, new co-op may satisfy that part of the total value of equities surrendered that exceeds the 5% threshold referred to in subsection (1)(a) by—

• (a) payment in cash; or

• (b) issuing capital notes, subject to section 102 and section 103; or

• (c) issuing redeemable preference shares; or

• (d) a combination of cash, capital notes, and redeemable preference shares.

(3) However, new co-op may satisfy all or part of any surrender amount that falls within the total value of equities covered by subsection (2) by issuing supply redemption rights if the withdrawing shareholding farmer requests new co-op to do so.

(4) In subsection (1)(a), equities means co-operative shares and supply redemption rights in new co-op.

New co-op must ensure that redeemable preference shares issued by it under section 104—

• (a) are tradeable; and

• (b) have total face values that at least equal the surrender amount for which they are issued; and

• (c) bear a dividend at a rate that is 50% or more of the interest rate on capital notes issued at the same time as, or most recently before, the redeemable preference shares; and

• (d) entitle the holder to accumulate unpaid dividends; and

• (e) are convertible, at the holder's election, at not less than their face values, into co-operative shares that the holder is entitled to hold under new co-op's constitution at a time specified by new co-op, but not later than 3 years after their issue; and

• (f) are redeemable, at the holder's election, for cash or capital notes (as determined by new co-op) at a time specified by new co-op, but not later than 3 years after their issue.

(1) New co-op must ensure that the terms of supply that apply to a new entrant—

• (a) are the same as the terms that apply to a shareholding farmer in the same circumstances; or

• (b) differ from the terms that apply to a shareholding farmer in different circumstances only to reflect the different circumstances.

(2) New co-op must ensure that the terms and effect of securities offered or issued in new co-op are the same for new entrants as for shareholding farmers.

(3) In this section, securities has the same meaning as in section 2D of the Securities Act 1978.

(4) New co-op must not treat a shareholding farmer who exercises an entitlement under this subpart any less favourably than a shareholding farmer who does not do so.

(1) New co-op must offer new entrants contracts for milk supply as shareholding farmers for 1 season.

(2) New co-op may offer new entrants and shareholding farmers longer-term contracts for milk supply if new co-op complies with subsection (3).

(3) New co-op must ensure that, at all times, 33% or a greater percentage of the milksolids produced within a 160 kilometre radius of any point in New Zealand—

• (a) is supplied under contracts with independent processors; or

• (b) is supplied under contracts with new co-op that—

  • (i) expire or may be terminated by the supplier at the end of the current season without penalty to the supplier; and

  • (ii) on expiry or termination, end all the supplier's obligations to supply milk to new co-op.

(4) A requirement in a supply contract that the supplier give new co-op up to 3 months' notice to terminate the contract is not a penalty under subsection (3)(b)(i).

(1) Shareholding farmers are entitled to allocate to independent processors up to 20% of their weekly production throughout the season.

(2) Subsection (1) does not entitle shareholding farmers to allocate to independent processors in any month other than October a higher percentage of their weekly production than their average weekly allocation to independent processors in October.

(3) A shareholding farmer who exercises the entitlement in subsection (1) must give new co-op 20 working days' notice of the arrangements for the collection of milk allocated to independent processors.

(4) If new co-op requires separate storage, milk supplied to independent processors must be stored in milk vats that are separate from milk vats that store milk for supply to new co-op.

(5) This section does not apply to milk with a unique feature that is the subject of a right, privilege, or entitlement that is conferred, or acknowledged as valid, by or under the Patents Act 1953.

(1) A shareholding farmer who withdraws totally from new co-op may require new co-op to sell, and new co-op must sell, a milk vat situated on the withdrawing shareholding farmer's farm to—

• (a) the shareholding farmer; or

• (b) an independent processor, if the independent processor has agreed with the shareholding farmer to buy the milk vat.

(2) A shareholding farmer must notify new co-op of a requirement to sell a milk vat under subsection (1) with the relevant notice of withdrawal.

(3) A sale of a milk vat by new co-op under this section must be at market value.

(4) If new co-op and the buyer of the milk vat do not agree on the market value of the milk vat within 10 working days of receipt by new co-op of the notification under subsection (2), the following provisions apply:

• (a) new co-op and the buyer will attempt to agree on a valuer within a further 10 working days:

• (b) if new co-op and the buyer do not agree on a valuer within that time, the New Zealand Property Institute Incorporated must appoint a valuer:

• (c) a valuer appointed under paragraph (a) or paragraph (b) acts as an expert:

• (d) the valuer's decision is binding on new co-op and the buyer, and is not appealable:

• (e) the costs of valuing a milk vat and appointing a valuer must be shared equally by new co-op and the buyer.

(5) New co-op must not require payment for a milk vat sold under this section before the end of the season in which the shareholding farmer gives notice of withdrawal to new co-op.

The purpose of the transitional provisions in sections 111 to 114 is to ensure that, if either or both of The Tatua Co-operative Dairy Company Limited (Tatua) or Westland Co-operative Dairy Co Limited (Westland) do not amalgamate with new co-op (or a wholly-owned subsidiary of new co-op), that exiting company has a reasonable opportunity to establish its own export marketing arrangements, by ensuring that—

• (a) new co-op provides it with information about the export marketing of its produce; and

• (b) new co-op provides it with access to export marketing services for a transitional period.

The transitional provisions in sections 110 to 114 apply subject to any agreement that Tatua and Westland may reach with new co-op.

(1) Tatua or Westland may from time to time, by notice in writing to new co-op, require new co-op to supply it with the information specified in subsection (2) for produce—

• (a) supplied by the exiting company and exported by the Board (or its subsidiaries) in the 1999/2000 or 2000/2001 season or during the period beginning on 1 June 2001 and ending with the amalgamation date; or

• (b) purchased from the exiting company by new co-op (or its subsidiaries) as required under section 113.

(2) The information that may be required is as follows:

• (a) the contact details of the customers to whom the Board, new co-op, or any of their subsidiaries supplied that produce; and

• (b) details of the supply contracts with those customers; and

• (c) prices paid by those customers for that produce; and

• (d) information held by the Board, new co-op, or any of their subsidiaries as to the payment history and creditworthiness of those customers; and

• (e) information held by the Board, new co-op, or any of their subsidiaries as to customer satisfaction with, or complaints about, that produce.

(3) If a supply contract referred to in subsection (2) relates to produce from more than 1 supplier or produce of more than 1 type, the information supplied to Tatua or Westland must cover all the matters relevant to the produce of the type supplied by that company under the contract, but need not cover matters relevant only to produce from other suppliers or other types of produce.

(4) New co-op must supply any information required by Tatua or Westland in accordance with this section to the exiting company as soon as reasonably practicable and in any event not later than 20 working days after the requirement is sent.

(1) Tatua or Westland may from time to time, by notice in writing to new co-op, require new co-op to purchase some of the dairy produce produced by Tatua or Westland, as the case may be.

(2) New co-op must then purchase that produce from Tatua or Westland, as the case may be, subject to the restrictions in subsections (3) to (6).

(3) The quantity of produce that Tatua and Westland may require new co-op to purchase must not exceed—

• (a) for any particular type of produce, the amount of produce of that type that was supplied by Tatua or Westland, as the case may be, to the Board in the 1999/2000 or the 2000/2001 season or during the period beginning on 1 June 2001 and ending with the amalgamation date, whichever is the higher; and

• (b) for all produce in aggregate for that company, the maximum amounts in subsections (4) and (5).

(4) The maximum amount of produce that Tatua may require new co-op to purchase is—

• (a) in the 2001/2002 season, 7,650 tonnes:

• (b) in the 2002/2003 season, 5,950 tonnes:

• (c) in the 2003/2004 season, 4,250 tonnes.

(5) The maximum amount of produce that Westland may require new co-op to purchase is—

• (a) in the 2001/2002 season, 47,700 tonnes:

• (b) in the 2002/2003 season, 37,100 tonnes:

• (c) in the 2003/2004 season, 26,500 tonnes.

(6) Produce supplied to the Board during the period beginning on 1 June 2001 and ending with the amalgamation date counts towards the maximum amounts specified under subsections (3)(a) and (4)(a) and (5)(a).

(7) Tatua and Westland must give new co-op no less than 60 working days notice of a requirement that new co-op purchase produce under this section.

(8) However, in the case of produce that Tatua or Westland requires new co-op to purchase in the 60-working-day period beginning on the amalgamation date, Tatua and Westland must give new co-op the requirement within 5 working days of the amalgamation date.

(1) New co-op must, in respect of the produce purchased under section 113,—

• (a) offer to Tatua and Westland terms and conditions of supply that are reasonable, having regard to the terms and conditions of supply that Tatua and Westland received from the Board during the period beginning on 1 June 1999 and ending with the amalgamation date; and

• (b) pay Tatua or Westland, for each type of produce purchased under that section, no less than the net sales revenue minus an agency fee.

(2) In subsection (1)(b),—

(1) The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations that—

• (a) require new co-op to supply in New Zealand 1 or more of the following goods or services:

  • (i) raw milk:

  • (ii) components of milk:

  • (iii) products derived from milk:

  • (iv) transportation, processing, and packaging of milk, components of milk, and products derived from milk; and

• (b) prescribe the terms of supply for goods or services regulated under paragraph (a), and specify a price, or a methodology for determining a price, for those goods or services; and

• (c) subject to subsection (2), limit the amount of goods or services that new co-op is required to supply, including different limitations for—

  • (i) different independent processors; and

  • (ii) different geographical areas; and

• (d) allow new co-op to require independent processors to give new co-op advance notice of their requirements for the goods or services to which regulations under paragraph (a) apply, prescribe the maximum period of advance notice that it may require, and authorise new co-op to require buyers to buy the amount of goods or services specified in an advance notice; and

• (e) empower the Commerce Commission to fix a discount rate in calculating the price of goods or services regulated under this section; and

• (f) require new co-op and independent processors to provide periodic returns of milksolids collected from dairy farmers; and

• (g) authorise new co-op to perform obligations imposed by the regulations through an associated person.

(2) Regulations made under subsection (1) must not require new co-op to supply a total amount of goods or services that exceeds, in the Minister's opinion, 5% of the amount of those goods or services produced by, or supplied to, new co-op, as the case may be.

(3) A regulation under this section is not invalid because it leaves a matter or thing to be decided by a person.

(1) The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations that—

• (a) impose obligations on new co-op to publish information about its business, including the following information:

  • (i) the price of a co-operative share:

  • (ii) the price of a peak note:

  • (iii) the peak note standard:

  • (iv) the pay-outs to shareholding farmers for the supply of milk to new co-op:

  • (v) forecasts of the price of dairy goods and services, including components of those prices and information used to calculate those prices:

  • (vi) prices for dairy goods or services, including components of those prices and information and methodologies used to calculate those prices:

  • (vii) the total volume of dairy goods or services that new co-op has contracted to supply to independent processors under regulations made under section 115, for current or future seasons:

  • (viii) the market price of capital notes:

  • (ix) average premiums payable for winter milk in particular areas; and

• (b) prescribe when and how the information must be published; and

• (c) prescribe the form of statutory declaration and who must provide it under section 117(4).

(2) Disclosure of information required by regulations made under subsection (1) is not an offer nor an advertisement under the Securities Act 1978.

(1) New co-op must send a copy of the information that it is required to publish by regulations under section 116 to the Commission within 3 working days of publication.

(2) The Commission may request (in writing) information, statements, or reports from new co-op to monitor new co-op's compliance with regulations made under section 116.

(3) New co-op must comply with a request under subsection (2) within 20 working days of receiving the request or within a longer period allowed by the Commission.

(4) Information, statements, or reports supplied to the Commission under this section must be verified by statutory declaration in the form, and by the persons, prescribed by regulations made under section 116(1)(c).

(1) Every person commits an offence against this section who—

• (a) fails, without reasonable excuse, to comply with any information disclosure requirements prescribed in regulations made under section 116; or

• (b) fails, without reasonable excuse, to comply with the requirements of section 117(1) and (3).

(2) Every person commits an offence against this section who makes a false declaration under section 117(4) in relation to any information, statement, or report supplied under section 117(1) or (3).

(3) Every person who commits an offence against subsection (1) is liable on summary conviction to a fine not exceeding $200,000 and, if the offence is a continuing one, to a further fine not exceeding $10,000 for every day or part of a day during which the offence is continued.

(4) Every person who commits an offence against subsection (2) is liable on summary conviction to a fine not exceeding $20,000.

The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations prescribing fees for applications to the Commission under section 120.

(1) A person may apply to the Commission for a determination if the person has a dispute with new co-op about the application of this subpart or regulations made under section 115.

(2) Despite subsection (1), the Commission may reject an application, and return it to the applicant (and do no more in relation to the application), if, in the Commission's opinion,—

• (a) the dispute is not genuine or is vexatious or frivolous; or

• (b) the applicant does not have a direct financial interest in the matter to which the application relates; or

• (c) the applicant has not made a reasonable attempt to settle the matter with new co-op; or

• (d) the Commission has made a determination, or is currently considering an application, on the same matter.

(3) The Commission may consider related applications together.

(4) An application under subsection (1) must be made within 3 years after the matter giving rise to the dispute arose.

An application made under section 120(1) must—

• (a) be in writing; and

• (b) be given in the prescribed manner, if any; and

• (c) contain the prescribed information, if any; and

• (d) be accompanied by the prescribed fee, if any.

On receiving an application made correctly under section 121, the Commission—

• (a) must notify new co-op in writing that the application has been made; and

• (b) must provide a copy of the application to new co-op; and

• (c) must request new co-op to comment on the matter in writing to the Commission by a date specified by the Commission, which must be not later than 10 working days after receipt of the notice from the Commission; and

• (d) may require new co-op to provide information about the matter to the Commission.

The Commission must, within 10 working days after the date by which new co-op may comment on the application,—

• (a) decide whether or not to determine the matter:

• (b) give written notice of its decision to the applicant and new co-op.

The Commission must complete a determination as soon as practicable after it has decided to make a determination.

In deciding whether to make a determination under section 123(a) and in making a determination under section 124, the Commission must—

• (a) consider the purpose in section 70; and

• (b) consider whether the decision or determination promotes the principles specified in section 71

(1) A determination by the Commission must—

• (a) state the Commission's decision on the matters in dispute; and

• (b) state clearly whether a breach of this subpart or any regulations has occurred; and

• (c) include the reasons for the determination; and

• (d) include the terms and conditions on which the determination is made; and

• (e) specify the actions that a party to the determination must do or refrain from doing, which may include (without limitation) payment of compensation by one party to the other.

(2) The Commission may specify an expiry date for the determination.

For a determination made under this subpart, the Commission—

• (a) is not bound by technicalities, legal forms, or rules of evidence:

• (b) may inform itself of any matter relevant to the determination in any way that it thinks appropriate.

(1) An applicant for a determination may, at any time, withdraw the application by written notice to the Commission.

(2) If the Commission receives a notice of withdrawal under subsection (1),—

• (a) it must notify the parties to the determination, or to an application for a determination, of the withdrawal and do no more in relation to the application; and

• (b) it may apportion costs under section 129.

(1) The parties to a determination or application for a determination bear their own costs.

(2) However, the Commission may, by written direction to a party to a determination or to an application for a determination, require that party to meet some or all of the other party's costs in respect of the determination or application if, in the opinion of the Commission, the party has contributed unreasonably to costs or delays.

(3) A party in whose favour a direction under subsection (2) is given may enforce that direction by filing it in the prescribed form (if any) in the Wellington Registry of the High Court.

(4) A direction that is filed in the High Court under subsection (3) is enforceable as a judgment of the High Court in its civil jurisdiction.

The Commission may amend a determination to clarify it if—

• (a) the Commission, on its own initiative or on the application of a party to the determination, considers that a determination requires clarification; and

• (b) the clarification is either not material to any person affected by the determination or is agreed to by the parties to the determination; and

• (c) No appeal of the determination is pending.

(1) The Commission may, on the application of a party to a determination, revoke or amend the determination or revoke the determination and make another determination in substitution for it if the Commission considers that—

• (a) there has been a material change of circumstances since the date on which the determination was made or last reconsidered; or

• (b) the determination requires clarification in a material respect and is not agreed to by all persons affected by the determination; or

• (c) the determination was made on the basis of information that was materially false or misleading.

(2) Despite subsection (1), a determination may not be reconsidered if an appeal of the determination is pending.

(3) In reconsidering a determination, the Commission must follow the same process that was followed for the initial determination.

(4) To avoid doubt, a determination continues to have effect and is enforceable until its reconsideration under this section is complete.

(1) A party to a determination made under this subpart may appeal to the High Court against—

• (a) the determination, including an amended or reconsidered determination, on a question of law:

• (b) a decision of the Commission not to clarify a determination under section 130 on a question of law:

• (c) a decision of the Commission not to reconsider a determination under section 131 on a question of law.

(2) Despite subsection (1), no party may appeal against a determination made under this subpart—

• (a) while a clarification of the determination under section 130 is pending; or

• (b) while a reconsideration of the determination under section 131 is pending.

(3) If appeal or judicial review proceedings are commenced about a determination, the determination continues to have effect and is enforceable as if the proceedings had not been commenced until the proceedings are finally disposed of.

(4) The decision of the High Court on appeal from a determination is final unless leave to appeal to the Court of Appeal is given by the High Court or, if leave is refused by the High Court, by the Court of Appeal.

(5) [Repealed]

(1) A party to a determination made under this subpart, or the Commission, may enforce the determination by filing it in the prescribed form (if any) in the Wellington Registry of the High Court.

(2) A determination filed in the High Court under subsection (1) is enforceable as a judgment of the High Court in its civil jurisdiction.

(3) A party who has filed a determination in the High Court under subsection (1) must file in the High Court in the prescribed form (if any) any clarification or reconsideration of the determination.

(1) The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations requiring new co-op to pay a levy to the Minister in each financial year.

(2) The order must specify the amount of the levy or the way the levy must be calculated.

(3) The Minister must calculate the amount of the levy so as to ensure that the costs to the Commission estimated under subsection (4) are met fully from the levy.

(4) In calculating estimated costs under subsection (3), the Commission—

• (a) may include—

  • (i) the cost of making determinations; and

  • (ii) the cost of enforcing this subpart; and

  • (iii) the cost of enforcing determinations in the High Court; and

  • (iv) over-recoveries or under-recoveries referred to in subsection (9); and

• (b) must exclude—

  • (i) the cost of taking other proceedings in the High Court, or defending proceedings against the Commission in the High Court; and

  • (ii) the cost of investigations that are not related to complaints or determinations made under this subpart; and

• (c) must calculate and deduct the total amount of application fees likely to be received.

(5) A levy may be calculated to include costs to the Commission from 1 July 2001, even though regulations imposing the levy may be made after that date.

(6) A levy may be calculated to recover estimated costs to the Commission in respect of a period after the expiry of this subpart.

(7) New co-op must pay any levy required by regulations made under this section.

(8) The Minister must consult with new co-op before making a recommendation under subsection (1).

(9) The Minister may—

• (a) deduct over-recoveries in respect of a financial year from the levy payable in subsequent financial years; or

• (b) add under-recoveries in respect of a financial year to the levy payable in subsequent financial years.

(10) The amount of unpaid levy is recoverable in a court of competent jurisdiction as a debt due to the Crown.

This subpart applies despite anything in the constitution of new co-op or the Companies Act 1993.

(1) Applications or notices made or given under sections 73 to 109 may be delivered, posted, or sent by facsimile or electronically.

(2) Sections 137 to 139 apply to applications or notices under this section.

(1) Applications or notices sent by post are made or given at the time when the letter is posted.

(2) It is sufficient to prove that the letter was properly addressed and posted.

(1) Applications or notices sent by facsimile are made or given if the facsimile machine of the sender generated a record of the successful transmission to the facsimile machine of the recipient.

(2) The date and time of that record is the date and time that the application or notice is made or given.

An application or notice sent electronically is made or given at the time that the electronic communication enters the information system of the addressee.

The High Court may hear and determine the following matters:

• (a) proceedings for recovering pecuniary penalties under section 141:

• (b) applications for injunctions under section 142:

• (c) actions for damages under section 143.

(1) If the Court is satisfied, on the application of the Commission, that a person has contravened this subpart or regulations made under section 115, the Court may order the person to pay to the Crown a pecuniary penalty that the Court determines to be appropriate.

(2) The maximum amount of a pecuniary penalty under subsection (1) is the same as the amount that applies under section 80 of the Commerce Act 1986.

(3) Despite section 145, section 79 of the Commerce Act 1986 does not apply to proceedings under this section.

If the Court is satisfied, on the application of the Commission or any other person, that a person has contravened this subpart or regulations made under section 115, the Court may grant an injunction restraining a person from continuing the contravention.

(1) Every person is liable for damages for loss or damage caused by that person engaging in conduct that constitutes a contravention of this subpart or regulations made under section 115.

(2) Sections 82 and 82A of the Commerce Act 1986 apply to actions for damages under this section.

(1) In determining an appropriate penalty under section 141, the Court must have regard to all relevant matters, including the following:

• (a) the purpose and principles of this subpart, as expressed in sections 70 and 71:

• (b) the nature and extent of the act or omission:

• (c) the nature and extent of any loss or damage suffered by any person as a result of the act or omission:

• (d) in the case of a body corporate, the nature and extent of any commercial gain resulting from the contravention:

• (e) the circumstances in which the act or omission took place:

• (f) whether or not the person has previously been found by the Court in proceedings under this subpart to have engaged in similar conduct.

(2) The standard of proof in proceedings under this subpart is the standard of proof that applies in civil proceedings.

(3) In any proceedings under this subpart, the Commission, on the order of the Court, may obtain discovery and administer interrogatories.

(4) Proceedings under this subpart may be commenced within 3 years after the matter giving rise to the contravention arose.

(5) If conduct by a person constitutes a contravention of 2 or more provisions of this subpart, proceedings may be instituted under this subpart against that person in relation to the contravention of 1 or more of the provisions, but no person is liable to more than 1 pecuniary penalty under this subpart for the same conduct.

The following provisions of the Commerce Act 1986 apply with all necessary modifications:

• (a) sections 15 to 17 (proceedings of the Commission):

• (b) sections 77 and 78 (lay members):

• (c) section 79 (evidence not otherwise admissible):

• (d) section 88 (general provisions relating to granting of injunctions):

• (e) section 88A (when undertakings as to damages not required):

• (f) section 89 (other orders):

• (g) section 90 (conduct by servants or agents):

• (h) section 98 (Commission may require person to supply information or documents or give evidence):

• (i) section 98A (power to search):

• (j) sections 98B to 98G (relating to warrants, etc):

• (k) section 99 (powers of Commission to take evidence):

• (l) section 100 (powers of Commission to prohibit disclosure of information, documents, and evidence):

• (m) sections 101 and 102 (notices):

• (n) section 103 (offences):

• (o) section 104 (determinations of Commission):

• (p) section 106 (proceedings privileged):

• (q) section 106A (judicial notice):

• (r) section 109 (Commission may prescribe forms).

Proceedings brought under this Part are in addition to any proceedings brought under any other Act.

(1) If an order has not been made under section 148, the Governor-General may, by Order in Council made on the recommendation of the Minister, declare that this subpart, except sections 104, 105, and 110 to 146, ceases to apply in the North Island of New Zealand and specify a date on which the declaration takes effect.

(2) If an order has been made under section 148, the Governor-General may, by Order in Council made on the recommendation of the Minister, declare that this subpart ceases to apply and specify a date on which the declaration takes effect.

(3) The Minister must, as soon as practicable, make a recommendation under subsection (1) or subsection (2) if the Minister is satisfied that independent processors collected 12.5% or more of milksolids collected from dairy farmers in the North Island in a season.

(4) The Minister may not make a recommendation under subsection (1) or subsection (2) if the Minister is not satisfied that independent processors collected 12.5% or more of milksolids collected from dairy farmers in the North Island in a season.

(1) If an order has not been made under section 147, the Governor-General may, by Order in Council made on the recommendation of the Minister, declare that this subpart, except sections 104, 105, and 110 to 146, ceases to apply in the South Island of New Zealand and specify a date on which the declaration takes effect.

(2) If an order has been made under section 147, the Governor-General may, by Order in Council made on the recommendation of the Minister, declare that this subpart ceases to apply and specify a date on which the declaration takes effect.

(3) The Minister must, as soon as practicable, make a recommendation under subsection (1) or subsection (2) if the Minister is satisfied that—

• (a) independent processors collected at least 65 million kilograms of milksolids from dairy farmers in the South Island in a season; and

• (b) 1 independent processor collected at least 25 million kilograms of milksolids from dairy farmers in the South Island outside the boundaries of the Westland Regional Council.

(4) The Minister may not make a recommendation under subsection (1) or subsection (2) if the Minister is not satisfied that—

• (a) independent processors collected at least 65 million kilograms of milksolids from dairy farmers in the South Island in a season; and

• (b) 1 independent processor collected at least 25 million kilograms of milksolids from dairy farmers in the South Island outside the boundaries of the Westland Regional Council.

(1) This subpart (except sections 110, 111, 113, 114, and 134) expires on the last of the dates declared in the Orders in Council made under sections 147 and 148.

(2) Section 134 expires 2 years after the last of the dates declared in the Orders in Council made under sections 147 and 148.

(3) Regulations made under section 115 or 116 are revoked on the expiry of this subpart.

(1) The expiry of this subpart and the revocation of regulations made under it does not affect the ability of the Commission to receive and determine applications in respect of conduct before the expiry or revocation, or the ability of a party to a determination or the Commission to enforce a determination, and sections 120 to 133 remain in force for that purpose.

(2) An application under section 120 may not be made later than 1 year after the expiry of this subpart.

(3) The expiry of this subpart and the revocation of regulations made under it does not affect the liability of a person for a contravention of this subpart or of those regulations committed before the expiry or revocation and sections 140 to 146 remain in force for that purpose.

(4) Proceedings for a contravention described in subsection (3) may be taken as if this subpart had not expired and those regulations were not revoked.

(1) The receipt by a person of shares issued by new co-op on the new co-op amalgamation in respect of shares held by the person in an amalgamating co-operative dairy company is neither a dutiable gift for the purposes of the Estate and Gift Duties Act 1968 nor a dividend for the purposes of the Income Tax Act 2007.

(2) Neither regulation 7 of the Co-operative Dairy Companies Income Tax Regulations 1955 nor regulation 7 of the Cooperative Milk Marketing Companies Income Tax Regulations 1960 applies to permit the Commissioner of Inland Revenue to deem any of the receipts referred to in subsection (1) to be gross income other than a dividend.

For the purposes of the definition of the term available subscribed capital in section YA 1 of the Income Tax Act 2007, and despite anything in that definition,—

• (a) new co-op is deemed to receive, on the amalgamation date, an aggregate amount of consideration in respect of the issue of its shares equal to the total available subscribed capital of the Board at that date (before the application of paragraph (e)); and

• (b) new co-op is deemed to receive on each 1 June after the amalgamation date, up to and including 1 June 2006, an additional aggregate amount of consideration of $140,000,000 in respect of the issue of its shares; and

• (c) the amounts of consideration new co-op is deemed to receive under paragraphs (a) and (b) are in addition to any other amount of consideration taken into account before the application of this section under the definition of available subscribed capital in the Income Tax Act 2007; and

• (d) the total available subscribed capital of the Board referred to in paragraph (a) includes any amount of consideration that the Board is deemed to have received by virtue of section 15ZE(2) of the Dairy Board Act 1961; and

• (e) the Board is deemed to have no available subscribed capital for the purposes of the Income Tax Act 2007 on the amalgamation date, but is from that time onwards to have the available subscribed capital that it has according to the definition of available subscribed capital in section YA 1 of the Income Tax Act 2007 as if it had never received any consideration in respect of the issue of its shares before that time.

(1) The consideration deemed to be received by new co-op—

• (a) under section 152(a) is deemed to be received in respect of the classes of shares of new co-op issued on or before the amalgamation date in the proportions nominated by new co-op; and

• (b) under section 152(b) is further deemed to be received in respect of the classes of shares of new co-op issued on or before the relevant 1 June in the proportions nominated by new co-op.

(2) A class of shares referred to in subsection (1)(a) or (b) may, for the purposes of that subsection, be substituted if necessary by any class of shares that may reasonably be regarded as the successor to all or part of the original class.

(3) Subsections (1) and (2) apply if new co-op nominates the proportions by notice in writing to the Commissioner of Inland Revenue within 30 days after the date on which the consideration is deemed to be received.

(4) If no valid nomination is made under subsection (3) in respect of an amount of consideration, the amount is deemed to have been received in respect of the class of shares in new co-op that is required to be held by transacting shareholders.

(1) For the purpose of subsection (2), the holders of shares or options over shares in each company amalgamating in the new co-op amalgamation are deemed, at all times before the new co-op amalgamation, to be the same persons, holding in the same proportions, as the actual holders of shares or options over shares in new co-op immediately after the new co-op amalgamation.

(2) Subsection (1) applies for the purpose of determining the voting interest or market value interest of any person in the companies amalgamating in the new co-op amalgamation (other than Fonterra Co-operative Group Limited), in the Board, and in all companies in which new co-op has a voting interest or market value interest (determined as if sections YC 4 and YC 5 of the Income Tax Act 2007 did not deem voting interests and market value interests held by new co-op not to be so held by new co-op).

(3) For the purposes of subpart IE of the Income Tax Act 2007 and the provisions relevant to section IA 6 of that Act, new co-op and all the companies that amalgamate to form new co-op, and all the companies in the same group of companies as any company that amalgamates to form new co-op, including, for the avoidance of doubt, consolidated groups of companies (determined immediately before the new co-op amalgamation), are deemed to be in existence and in the same group of companies at all times before the new co-op amalgamation.

(4) In this section, consolidated group, group of companies, market value interest, and voting interest have the same meanings as in the Income Tax Act 2007.

(1) This section applies, for the purposes of the Inland Revenue Acts (within the meaning of section 3(1) of the Tax Administration Act 1994), if the Board becomes, under this Act, a company registered under the Companies Act 1993.

(2) The company is not a statutory producer board for the purposes of the Income Tax Act 2007.

(3) For the avoidance of doubt, and for the purposes of the Income Tax Act 2007, the unexpired portion of any amount of accrual expenditure of the Board for the tax year of the conversion is deemed to be the unexpired portion of an amount of accrual expenditure of the company for the tax year of the conversion.

(4) Subject to section 154 and for the purposes of the Income Tax Act 2007 the voting interests and market value interests in the Board for the period up until the conversion of the Board into a company must be calculated as if section 15ZE(3) to (5) of the Dairy Board Act 1961 had not been repealed.

(5) Subsections (1) to (3) apply on and after the conversion date.

(6) Subsection (4) applies on and after the amalgamation date.

(1) The issue of shares by LIC under section 60 is not a dutiable gift for the purposes of the Estate and Gift Duties Act 1968 or a dividend for the purposes of the Income Tax Act 2007.

(2) For the purposes of the Income Tax Act 2007, the available subscribed capital of the shares issued under section 60 is equal to the available subscribed capital of the shares which are cancelled under section 60.

(3) For the purposes of the Income Tax Act 2007, if the constitution of LIC is altered on or after the day on which shares in LIC are issued under section 60 (or with effect as at or after that date) to allow any part of the funds of LIC to be used or be available to be used for the private pecuniary profit of any shareholder (referred to in section CW 42(5)(b) of that Act),—

• (a) the income of LIC that is exempt income only by virtue of section CB 5(1)(g) of that Act immediately before the alteration that is derived in the tax year in which the alteration comes into effect is income of LIC and is not exempt income under section CB 5(1)(g) of that Act; and

• (b) the assets and rights of LIC are deemed to be disposed of to a person, not being an associated person of LIC, immediately before the beginning of the tax year in which the alteration is made, and to be re-acquired by LIC from that person for a consideration equal to their market value at the beginning of that tax year; and

• (c) the alteration of the constitution may not be treated as altering or affecting in any way the status, as exempt income, of any income of LIC that is exempt income under section CW 51 of that Act, derived before the beginning of the tax year in which the alteration comes into effect.

(4) Subsection (3)(c) does not apply if the Board retains any interest in LIC at the time that the constitution comes into effect so that any part of the funds of LIC is used or is available for use for the private pecuniary profit of the Board.

(5) Subsection (4) does not apply to an interest that the Board retains in LIC by reason of the issue of shares under section 60 to a person.

(6) The interpretation of the Income Tax Act 2007 is not affected by subsection (3)(a), except to the extent of the effect of the application of that subsection to LIC in the circumstances indicated in that subsection.

(1) For the purposes of the Income Tax Act 2007, the company referred to in section 158(2)(a)—

• (a) is deemed to acquire the assets, rights, and liabilities of the charitable trust known as The New Zealand Dairy Research Institute on the amalgamation date for their market values on that date; and

• (b) despite paragraph (a), is deemed to be the same person as that charitable trust.

(2) For the purposes of the Income Tax Act 2007, nothing effected by section 158 may be treated as in any way altering or affecting the status, as exempt income under subpart CW of that Act, of any income of that charitable trust before the amalgamation date.

(3) Subsection (1)(b) also applies for the purposes of the other Inland Revenue Acts (within the meaning of section 3(1) of the Tax Administration Act 1994).

(4) For the avoidance of doubt, the vesting that takes place under section 158(2)(a) is not a dutiable gift for the purposes of the Estate and Gift Duties Act 1968.

(1) The charitable trust known as The New Zealand Dairy Research Institute (the trust)is terminated on the amalgamation date, and the property of the trust ceases on that date to be trust property.

(2) Despite the Charitable Trusts Act 1957 or any other Act or rule of law,—

• (a) on the amalgamation date, the assets, rights, interests, obligations, and liabilities of the trust vest beneficially in the company that is on that date the trustee of the trust (the Institute company); and

• (b) the Institute company may, on or after the amalgamation date and without further authority than this section, alter or revoke its constitution in accordance with the Companies Act 1993, including for the purpose of removing the company's charitable purposes and the restrictions on its capacity, rights, powers, and privileges; and

• (c) proceedings that could have been commenced or continued by or against the trust before its termination may be commenced or continued by or against the Institute company; and

• (d) all transactions entered into by, and acts of, the trust before the termination of the trust must be treated as having been entered into by, or as being those of, the Institute company and as having been entered into, or performed by, the Institute company at the time when they were entered into, or performed by, the trust; and

• (e) the Institute company is deemed to be the same person as the trust.

(3) The New Zealand Dairy Research Institute, a trust board registered under the Charitable Trusts Act 1957, is dissolved on the amalgamation date and the Registrar of Incorporated Societies is directed to remove it from the register under section 26 of that Act.

For the avoidance of doubt,—

• (a) section 158 does not affect any employment agreement that is applicable to the trust; and

• (b) each employee of the trust is an employee of the Institute company and, for the purposes of every enactment, law, award, determination, contract, and agreement that relates to the employment of the employee, his or her employment agreement is unbroken and the period of his or her service with the trust, and every other period of service that is recognised by the trust as his or her continuous service, is a period of service with the Institute company; and

• (c) the terms and conditions of the employment of each employee with the trust company are (until varied) identical to the terms and conditions of his or her employment with the trust and are capable of variation in the same manner; and

• (d) an employee is not entitled to receive any payment or other benefit by reason only of section 158.