The lengthy legal battle around Synlait's north Waikato development appears to be over. Synlait Milk has reported that settlement has been reached between it, New Zealand Industrial Park and Karl Ye over its land at Pokeno.

The proceedings began shortly after Synlait bought a 28-hectare site in Pokeno in February 2018. The contract was conditional upon the removal of the land covenants which restricted the use of the land to grazing, lifestyle farming or forestry.

In November 2018 the High Court removed the covenants and transferred the title to Synlait.

Synlait had already started construction of its new factory prior to the judgment - its second nutritional milk powder manufacturing site.

Karl Ye, the neighbouring landowner, appealed to the Court of Appeal and, in May 2019, the court ordered for the historic land covenants to be reinstated. This effectively prevented the site being used as a factory.

Synlait then appealed to the Supreme Court claiming the covenants were irrelevant as the land had been rezoned industrial and this was supported by the presence of the Yashili New Zealand Dairy Company in the area.

The Supreme Court heard the appeal in June 2020; after that, the parties negotiated a settlement. The settlement agreement details are confidential, however Synlait did note the settlement price was reasonable and not material to them 

Land covenants have the ability to bind not only the current owners, but also successor owners of property. The covenants had only been agreed to in August 1998 but were to last for a period of 200 years. It is important to seek legal advice to check the title to any land you wish to purchase including reviewing any registered interests on it particularly for the purpose for which you would like to use the land.

If Synlait had not negotiated a settlement and the Supreme Court had found against the company, its $250 million factory would be unusable. Unsurprisingly, there was a jump in the Synlait share price following the announcement.