CPI celebrates court case win over Stora Enzo

Appeal court judges overturn $3.9 million findings in the case of CPI assuming debt for Boomerang Paper in 2003.

 

In a decision that was termed a "complete vindication of our postion," by Bernard Cassells, CPI managing director, the long-running saga seems certain to reach a conclusion with the unanimous verdict. Speaking at the Sappi Awards ceremony in Boston, USA, Cassells said he was relieved the case was finally over and that he could never understand the original adverse finding against CPI.

He said CPI had been damaged by the ongoing court case, which had been costly in terms of both legal bills and management's time and attention. The verdict was the second piece of good news for the company in the same week that it acquired the Red Paper group.

The case, which has fascinated the industry, over the past few years, hinged on whether Stora Enzo had an obligation under the Trade Practices Act to inform CPI that Boomergang Papers was in serious debt and trading well outside its usual terms at the time it encouraged the paper merchant to accept  invoices for carbonless paper it was selling to the embattled Melbourne merchant. The original judge found that although Stora had a 20 year relationship with CPI and was a significant shareholder in the company, it was not required to come clean about the true state of its dealings with Ian Aiken's Boomerang Paper.

At the time CPI was looking at the possibility of buying the assetts of the embattled Boomergang and agreed to take responsibility for the Stora invoices. Cassells maintained he would never have done so if he had been aware of the true nature of the trading terms between Stora and Boomerang.

The findings for damages and costs will give a boost to the current CPI balance sheet, which last year was adversely affected by the court's decision.

David Bull, director of CPI Australia, said that the verdict was welcomed. "We're delighted at the outcome," he said. "We always thought our position was strong in the first place and thought there were elements of the initial judgement that were overlooked."