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York Timber Organisation Limited - Minister And Director General In Contempt Of

Release Date: 27/02/2003 17:41
Code(s): YRK
Wrap Text

York Timber Organisation Limited - Minister And Director General In Contempt Of Court In Yorkcor Case York Timber Organisation Limited (Registration number 1916/004890/06) ISIN : ZAE000008108 Share code : YRK 27 February 2003 In a judgment handed down 26 February 2003, the High Court in Pretoria ordered the Department of Water Affairs and Forestry to make Yorkcor operating subsidiary York Timbers Limited an unconditional offer of sawlogs, that were to be supplied over a five-year period ended 31December 2004, from three supplying plantations near Buchbuckridge. This is in terms of an "evergreen" contract and involves the entire volume of timber which will be available from silvicultural operations in those plantations. The High Court furthermore declared the Minister of Water Affairs and Forestry and his Director-General to be in contempt of court and awarded costs on the punitive scale as between attorney and own client, to mark the court`s disapproval "of the way in which the State has attempted to avoid its responsibilities in terms of the agreement." The judge stated, "The Department should have given notice of cancellation to [York Timbers] as it was entitled to and then dealt with the question of compensation: i.e. honestly and fairly as [York Timbers] frequently suggested. Instead, it seems to have been content to wage this pointless war of attrition in the courts. This is not how the State should conduct business." Yorkcor chairman Solly Tucker said that this is one of several cases involving the government, as well as parastatal Safcol, in which JSE-listed Yorkcor has sought to vindicate the group`s log supply entitlements in the teeth of attempts to strike down or diminish its "evergreen contracts". The court observed that this was another battle in the war of attrition which the parties have waged in the courts since at least 1994. In a previous action that was taken on appeal to the Supreme Court of Appeal, Yorkcor was awarded damages, interest and costs amounting to over R6 million for breach of contract. Arbitration proceedings are underway to determine the amount of compensation the government is obliged to pay Yorkcor for terminating its York Lumber evergreen contract with effect from 2007 on the basis of "a going concern . . . enjoying the benefits of the contract without interruption. The intention is to place [York Lumber] in at least the same financial position as if the contract had not been terminated" [from clause 4.5.2]. Ends ISSUED FOR : Yorkcor Limited CONTACT : Solly Tucker (012) 804 9730/083 456 9900 FAX NO : (012) 804 8611 E-MAIL : sol@yorkcor.co.za WEBSITE : www.yorkcor.co.za ISSUED BY : TISH STEWART PR ASSOCIATES CONTACT : Tish Stewart (011) 325 4195 Cell: 082 443 6399 FAX NO : (011) 325 4199 E-MAIL : tish@tspr.co.za DATE : 27 February, 2003 Date: 27/02/2003 05:41:00 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department

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