Landowners, whose land is affected by leases to failed timber companies Great Southern and Gunns Plantations Ltd (GPL), should be careful before entering into any agreement with the liquidators of GPL, according to a warning by Richard Anderson, a director of law firm Harwood Andrews.

Some landowners who have been caught up in the collapse of Great Southern and GPL may recently have received a letter from the liquidators of GPL offering various options concerning dealing with trees still growing on their land, even though landowners have not received rental payments for some time.

In a letter seen by Harwood Andrews, options offered to landowners require them to limit any claims for arrears of rental, and require landowners to share the proceeds of sale of timber growing on their land when it is harvested. In some cases, this may involve landowners giving up significant arrears of rental which would otherwise be due to them.

Mr Anderson said it was by no means clear that either the liquidators of GPL or growers who had invested in the timber growing schemes offered by the failed timber companies had any interest in the trees growing on a farmer’s land.

“Particularly where leases had been terminated, there was a strong argument that neither the liquidators nor the growers had any remaining interest in the trees, and that the trees were now owned by the landowners”, he said.

By agreeing to share the proceeds of sale of the trees with the liquidators or the growers, landowners might be giving up significant rights, including foregoing the ability to recover all the arrears of rental which were owed to them.

Mr Anderson also went on to say that affected landowners had a considerable community of interest with each other and that Harwood Andrews was putting together a list of those landowners, with the intention that by acting together affected landowners would achieve a better result and minimise any legal costs.

Any landowner contemplating entering into any agreement with the liquidators by which the proceeds of sale of the trees will be shared with the liquidators or recovery of arrears of rental would be capped should obtain legal advice before signing any agreement and be fully aware of the rights that are being given away.

For further information or comment:

Richard Anderson
Harwood Andrews
03 5226 8524