Funny things make headlines in Australia - for instance, speculation about the monetary value of the Woolmark (the familiar wool skein arranged in the shape of a Merinos head) and the Woolblendmark, (the same logo with the letter "B" in a triangle superimposed).
The media interest in the value of the international quality symbols appearing on garments approved and licensed by the Woolmark Company, arose because of a court case soon to begin involving the South African wool industry.
The case follows numerous unsuccessful attempts by the South African Wool Board (SAWB) Liquidation Committee, which is managing the South African withdrawal from the Woolmark Company, previously the International Wool Secretariat (IWS), to settle the dispute.
It all began when South Africa was forced to terminate its membership of IWS following promulgation of the new Agricultural Products Marketing Act in 1997, in which all agricultural levies were abolished.
This meant the South African industry could no longer raise the considerable statutory levy required to maintain membership of the IWS.
The wrangling about the value of the these robust symbols has led the South Africans down some interesting corporate byways in Australia.
Eugene Brock, the Committee chairman, said the first two phases in the withdrawal process, realising South Africa's share of the moveable assets and cash reserves, went smoothly. The third phase, realising the industry's share of the immovable assets, is currently in progress.
The most difficult part is determining South Africa's share of IWS intellectual property, most importantly the Woolmark and Woolblendmark.
Brock said the realisation process for intellectual property was governed by the Members Agreement between the Australian Wool Research and Promotion Organisation (AWRAP) and the SAWB signed in June 1997.
The two organisations duly appointed a trademark valuer, KPMG in Melbourne, which found in its report on October 30 1998 that the Woolmark had nil commercial value. This was unacceptable to the SAWB, so consultations followed with international trademark valuations firm, Arthur Andersen, for a second valuation.
Brock said a dispute was declared, but extensive efforts on part of the Liquidation Committee to reach a negotiated settlement with the Australians proved fruitless. Eventually the two opposing parties agreed to approve a second, and final, valuer.
Deloitte & Touche was appointed to assist the Liquidation Committee in formulating a strategy for the valuation process. A firm of forensic auditors in Australia, Horwath Services, was appointed followed by submissions and interviews with various role players.
The process was to be finalised at a conference to be held in Melbourne on October 16, but the process was stalled and finally aborted on October 10.
During this time negotiations also took place at chairman level. At this meeting, where AWRAP was represented by Tony Sherlock, its chairman, and Rodney Price, the Interim Advisory Board's chairman, it was proposed that South Africa take equity in the future structure of the Australian wool industry instead of a cash settlement.
Brock said South Africa rejected this proposal for two reasons. Firstly, it called for South African growers to agree to a 2 percent to 3 percent levy in order to join the new structure.
Secondly, no indication was given as to the future plans or financial structure of this body and it was impossible to make an assessment of its financial viability or of the value of the equity. The South African request for a business plan was refused.
The Liquidation Committee then reconfirmed its earlier decision that it was imperative that the value of the intellectual property be established with a view to an eventual settlement.
Brock said it had become apparent that the entire valuation process set out in the Members Agreement, which provided for an independent valuer, had been compromised.
It was discovered that KPMG had, without telling the South Africans, carried out a valuation of the Woolmark with AWRAP as its client some months before. Brock said had the Liquidation Committee known this, it would never have agreed to the appointment of KPMG as the first valuer.
Brock said the cancellation of the conference and the revelations surrounding KPMG effectively derailed the second valuation process and left the Liquidation Committee with no alternative but to take legal action to protect its rights and to obtain a determination of the value of the marks.
The Wool Forum, the South African wool industry policy-making body, has unanimously approved the actions taken by the Liquidation Committee.
A preliminary hearing will take place in Melbourne on December 15 with trial proceedings expected to start next February.