Australia: Federal Court restrains Murray Goulburn Cooperative from making damaging statements about United Dairy Power
Last Updated: 8 July 2011

The Federal Court of Australia has ruled this afternoon that certain employees of Murray Goulburn Cooperative Co Ltd (Murray Goulburn) should be restrained from making statements regarding the financial position of United Dairy Power Pty Ltd (UDP) pending a full trial of the matter.

UDP issued these proceedings on 29 June 2011 by filing an application seeking urgent interlocutory injunctions against Murray Goulburn after it learned that Murray Goulburn employees had been making negative statements about UDP's financial position to dairy farmers. UDP was gravely concerned by the impact that Murray Goulburn's conduct would have on UDP's business particularly as UDP had recently announced its plans to expand its operations into South Australia. Murray Goulburn conceded that there was no basis to make negative assertions about the financial position of UDP, but rather denied making the representations.

The Court found that UDP had established that it had an arguable case and that there was a sufficient risk that the statements alleged to have been made by Murray Goulburn employees would cause damage to UDP and that the making of an injunction was appropriate. The Court ordered that that Murray Goulburn's field officers be restrained from making the statements alleged to have been made.

Tony Esposito, Managing Director of UDP said that the Court's decision was a welcome victory for UDP given the potential negative impact on UDP if Murray Goulburn had been permitted to continue to make the statements about UDP. Mr Esposito noted that the business of each and every supplier was valued by UDP and that UDP would continue to take any action necessary to uphold its reputation in the market place.

Tony Watson, partner at Middletons who acted for UDP, said that this decision had once again shown that businesses can effectively use the Court system to act swiftly and decisively to ensure that commercial issues such as this are addressed and relief ordered quickly in an effective manner. He said this was a serious issue for UDP and that UDP had to move swiftly to protect the excellent reputation that it has spent 11 years developing.

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