The Supreme Court of Victoria judge, presiding over TasFoods' failed bid for an injunction against the sale of (VDL), has said he was "by no means persuaded" the company had a strong case.
But, in a statement issued to the Australian Securities Exchange (ASX), TasFoods said it would appeal the decision to refuse the extension of the injunction.
TasFoods chairman Rob Woolley said, earlier this week, it was unlikely the company would be able to buy VDL – but he said there were remedies open to the company, as it felt it had been “seriously misled” in the process.
“We have looked at our options, our legal advice is very strongly in favour of our position, we have got this dichotomy, if you like, of what the judge has delivered and what we believe is our position,” Mr Woolley said.
“We are not in the business of throwing money around, with lawyers, so have had to think it through and we believe we will back our legal advice.”
The statement to the ASX also said the appeal would cover the court’s orders, directing the remove of caveats and priority notices, lodged by TasFoods and its subsidiary.
The company also flagged it would be seeking damages, with a trial expected to begin on February 22.
Justice James Judd found in favour of the defendants, current owners of VDL - Tasmanian Land Company – in his ruling on Monday.
TasFoods alleged the Tasmanian Land Company - owned by Taranaki Investment Management Limited, the superannuation arm of the New Plymouth District Council (NPDC), breached its best endeavours and obligation to cooperate.
TasFoods contended that had these obligations not been breached, NPDC, which held the final right to approval, would have approved the sale.
The plaintiffs also relied upon misleading or deceptive conduct in contravention of a section of the Australian Consumer Law, Justice Judd said.
Justice Judd said he was prepared to accept there was a "serious question to be tried" over whether the defendants breached their best endeavours obligation, however was not convinced TasFoods had a strong case.
"Suffice to say the the plaintiffs' case is not without complexity and difficulty," Justice Judd wrote.
"On the evidence presently before the court, it is not a strong case. "That observation applies equally to the claims for a relief based on alleged misleading or deceptive conduct."
Justice Judd said if TasFoods were successful in trial to establish a breach of the TasFoods agreement, the remedy would lie in damages.
TasFoods chairman Rob Woolley said the TasFoods board still believed it had been seriously misled by the decision, by NPDC to sell to private Chinese investor Moon Lake Investment Limited.
Mr Woolley said while TasFoods was disappointed not to get VDL, plans to build a premium Tasmanian dairy brand would go ahead.
“From a business point of view, there was a great opportunity coming from a property, which gave us huge opportunities for branding ,” he said.“Whilst we don’t have the provenance of VDL, we have the provenance of Tasmania and we have some nice ideas around that.”
Earlier this week, the Victorian Supreme Court dismissed an injunction, sought by Tasfoods, to stop the sale of VDL to Moon Lake.
TasFoods made a deposit with Taranaki Investment Management Limited, the investment arm of NPDC to exclusively negotiate the sale.
Mr Woolley said he believed TasFoods' offer to TIML was superior. It had agreed to pay $250 million for VDL.
But TIML chairman Keith Sutton said Moon Lake made a "commercially superior" bid.
The sale of VDL to Moon Lake, an Australian company set up for Chinese businessman Lu Xianfeng, is now subject to the Foreign Investment Review Board (FIRB).
Mr Woolley said the proposed purchase had a groundswell of interest from Australian, and particularly, Tasmanian investors. TasFoods would go ahead with issuing a prospectus to potential investors in mid-December.
Mr Woolley said he had not seen so much Australian investment in an agricultural enterprise in 15 years involved in listed farming entities.
NPDC mayor Councillor Andrew Judd said he was pleased the court had ruled in its favour, by ending the injunction.
"In accepting the rival offer from Moonlake Investments, which is A$30 million higher than the offer from TasFoods, the Council is fulfilling its obligation to make decisions that are in the best interests of the New Plymouth District community,” Cr Judd said.
TasFoods would have been the first Australian owner of VDL in the company's 190-year history.
A TIML spokesman said it rejected any suggestion of unfair treatment or lack of fair play in its dealings with TasFoods.
Meanwhile, the purchase of the VDL by TasFoods was an "opportunistic acquisition" and not initially part of the company's original plan, according to chairman Rob Woolley.
Mr Woolley told Fairfax Media TasFoods' initial plan had been to "grow things steadily" and build premium product.
"Whilst we don’t have the provenance of VDL, we always have the provenance of Tasmania," Mr Woolley said.
"I can understand how, people, looking from the outside, would think all was lost because it [the purchase of VDL] was such a big purchase.
"It’s not as if everything stopped, it’s just the big deal didn’t happen.
"The rest is on the go and we think we can do some things with product, because we can source capital, others can’t do."