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GARDINER V GORRINGE MLC 25 Waikato Maniapoto MB 83 22 July 2011
IN THE MAORI LAND COURT OF NEW ZEALAND
WAIKATO-MANIAPOTO DISTRICT
25 Waikato Maniapoto MB 83
(25 WMN 83)
A20070013172
UNDER Section 18(1)(c) and 18(1)(d) of Te Ture
Whenua Maori Act 1993
BETWEEN PHILLIP GARDINER, WILLIAM
GARDINER, DESMOND TATA,
GEOFFREY ROLLESTON, EASTON
TAIKATO, HINEWAI TAINGAHUE AND
BRENDON TAINGAHUE AS TRUSTEES
OF THE TAUWHAO TE NGARE TRUST
Applicants
AND PAUL GORRINGE AND ANDREW
GORRINGE
Defendants
AND JOHN GARDINER
First Third Party
AND JAG FARMS LIMITED
Second Third Party
Hearing: 8-11 June 2010 (7 Waikato Maniapoto MB 21-346)
(Heard at Tauranga)
Appearances: Mr J P Koning, Counsel for the Applicants
Mr A A Hopkinson, Counsel for the Defendants
Mr C M Bidois, Counsel for the First and Second Third Parties
Judgment: 22 July 2011
RESERVED JUDGMENT OF JUDGE S R CLARK
Copy to Counsel: Mr J P Koning, Koning Webster, P O Box 13309, Tauranga 3141, john@kwlaw.co.nz Mr A A Hopkinson, Cooney Lees Morgan, DX HP40001, Tauranga, ahopkinson@clmlaw.co.nz Mr C M Bidois, East Brewster, DX JP30017, Rotorua, bidois@eastbrewster.co.nz
25 Waikato Maniapoto 84
TABLE OF CONTENTS
Introduction [1]
The Lease [15]
The Proceedings
Applicants’ Pleadings [16]
Defendants’ Pleadings [20]
Third Parties’ Pleadings [21]
The Hearing [25]
First Cause of Action: Breach of Contract – Clause 10 of the Lease –
s 18(1)(d) of TTWMA [27]
Second Cause of Action: Breach of Contract – Clause 8 of the Lease –
s 18(1)(d) of TTWMA [50]
Informal v Formal Lease? [55]
Implied Term in the Formal Lease? [65]
Have the Defendants Breach Clause 8 of the Lease? [71]
Third Cause of Action: Injury to Māori Freehold Land –
s 18(1)(c) of TTWMA [85]
Claims by the Defendants Against the Third Parties for
Contribution or Indemnity – Law Reform Act 1936 [96]
Second Third Party’s Claims Against the Applicants [98]
Did the Applicants Deliver up Land in Pasture Fit for the Purpose
of Grazing Dairy Cattle and Producing Feed Supplements Between
1 September 2006 – 1 December 2006 [104]
Loss of Milk Production [106]
Feed Supplement [116]
Losses Arising from the Condition of the Soil [125]
Result [152]
Costs [156]
25 Waikato Maniapoto 85
Introduction
[1] Between 1981 and 31 May 2006 Peter and Andrew Gorringe (“the
defendants”) leased land on Rangiwaea Island, Tauranga from the trustees of the
Tauwhao Te Ngare Trust (“the applicants”).
[2] The land which was the subject of the lease is approximately 58.68 hectares
(“the land”). It is part of a larger block of Māori freehold land known as the
Tauwhao Te Ngare block (CFR 367875 – South Auckland).
[3] The defendants are in business as corn producers, agricultural contractors and
pastoral farmers. Between 1981 and May 2006 they grew maize on the land.
[4] On 16 May 2006 the applicants agreed to a separate lease with Mr John
Gardiner („the first third party”). The agreement to lease included the land leased by
the Gorringe brothers. It provided that the land would be available to Mr John
Gardiner by 1 September 2006.
[5] The agreement to lease was subsequently assigned or varied to JAG Farms
Limited (“the second third party”) a company in which Mr John Gardiner is a
director and shareholder.
[6] On 24 May 2006 one of the applicant trustees, Mr Brendon Taingahue had a
telephone conversation with one of the Gorringe brothers. At that stage it was made
clear that the lease between the applicants and the Gorringe brothers would be
terminated and the applicants wanted the land to be re-grassed.
[7] On or about 26 May 2006 Mr Paul Gorringe sent a letter to the chairman of
the applicant trust. Matters raised in that letter included surprise on behalf of the
Gorringe brothers at the short notice given of the decision to terminate the lease,
concern that sowing grass seed in winter would result in a poor result and an
invitation to meet with Mr Brendon Taingahue to discuss the proposed re-grassing.
25 Waikato Maniapoto 86
[8] Some preparatory work was carried out by the defendants in early August
2006 but little further appears to have happened until the parties met the following
month on 7 September. In attendance were Mr Brendon Taingahue on behalf of the
applicants, the Gorringe brothers and Mr John Gardiner. It was agreed that Mr John
Gardiner would carry out re-grassing on behalf of the Gorringe brothers. This
arrangement was reached in lieu of compensation being paid by JAG Farms Limited
for stock damage caused by their cattle in early 2006 to a maize crop on Matakana
Island owned by the Gorringe brothers.
[9] At the same meeting Mr Taingahue and Mr Gardiner agreed upon the type of
seed mix to be sowed. It was agreed that the Gorringes would pay $5.00 per
kilogram for the seed mix chosen by the applicants and Mr Gardiner.
[10] Mr Gardiner initially attempted to sow grass seed on 14 September 2006.
Difficulties were encountered and on 15 September 2006 Mr Andrew Gorringe
visited the land. It was further agreed that the Gorringe brothers would prepare the
land by using “rippers”. The Gorringe brothers arranged for the ripping of the land
on 15 and 16 September 2006.
[11] On 18 September 2006 Mr John Gardiner completed seeding the land.
Initially there was a good strike of ryegrass and clover and by 1 December 2006
there was sufficient pasture for grazing. On 6 December 2006 JAG Farms Limited
started grazing cattle on the land.
[12] By May 2007 the applicants had concerns about the quality of the new
pasture and they arranged for a farm consultant to inspect the land. Remedial work
was undertaken however by 2008 much of the annual and perennial ryegrass had
died leaving the paddocks covered in clover. JAG Farms Limited have suffered
stock losses which they attribute to the poor quality of the soil.
[13] The applicants have subsequently obtained recommendations from an expert
soil scientist concerning a remedial and restorative programme to restore the
condition of the soil and pasture of the land.
25 Waikato Maniapoto 87
[14] It is against that general background that these proceedings have been
brought.
The Lease
[15] A lease dated 23 August 2002 is central to the proceedings in this case.
Clauses important to this case are clauses 8 and 10 and they are highlighted in bold.
The lease in full reads:
LEASE AGREEMENT FOR CROPPING
BETWEEN The Owners of Tauwhao Te Ngare Block,
Rangiwaea Island, Tauranga (hereinafter called
the “Owner”)
AND Paul Gorringe and Andrew Gorringe, trading as
Gorringe Brothers (hereinafter called the
“Lessee”)
HEREBY AGREE THAT the Lessee shall rent approximately 58.6 hectares
from the Owner for the purpose of cropping,
from the 1st of June 2002 to the 31st of May
2003 or until harvesting is complete.
AND IT IS HEREBY
AGREED by the Owner and the Lessee as follows:
1. RENTAL
Base
The annual sum of $26,370 plus GST payable in 12 equal monthly
instalments by automatic payment bank authority commencing 20th June
2002.
2. ACCESS
That during the term of the lease the lessee will have rights of access to the
said land in order to cultivate, sow, manure, spray and harvest the crop and
for any other purpose associated with the management of such crops.
3. CONFIRMATION OF AREA
The planted are shall be confirmed by the Lessee if requested by the Owner.
4. CROP REVENUE
All crop revenue shall belong to the Lessee.
5. RIGHT OF RENEWAL
Both parties will meet within one month prior to the expiry of this lease to
consider a renewal of the agreement for a further term.
25 Waikato Maniapoto 88
6. PAYMENT OF RENT AND PENALTIES
The Lessee, during the said term will punctually pay lease money owing.
Rental arrears outstanding greater than ten days from the due date under
this agreement will be charged penalty interest at a rate of 15% per annum.
7. RATES
The portion of rates payable in respect of the 51.6ha of land is included in
the rental payments due in (1.) above.
8. MANAGEMENT
The Lessee shall manage the land in a good and husbandlike manner
for the purpose of cropping and shall apply adequate maintenance
fertilizer during the term of lease for the requirements of the crop.
9. FENCING
Provision and maintenance of stock proof fences are the responsibility of
the owner.
10. RE-ESTABLISHMENT OF PASTURE
At the direction of the Owner the area cropped shall be sown in normal
pasture grass seed mixture recommended for the district at the
termination of this Lease. All costs of cultivation sowing and grass seed
shall be borne by the Lessee.
The Proceedings
Applicants’ Pleadings
[16] The applicants bring three causes of action against the defendants. First they
allege a breach of clause 10 of the written lease. Specifically they say that the
defendants were required to re-establish the land in pasture on or before 1 June 2006.
[17] They go on to aruge that the ordinary and natural meaning of clause 10 was
to require the defendants to re-grass the land in a competent manner and that the
resulting pasture should have been of an acceptable standard for the district –
s 18(1)(d) of Te Ture Whenua Māori Act 1993 (“TTWMA”).
[18] Secondly they argue a further breach of contract. They submit that the
defendants breached clause 8 of the lease by failing to maintain the overall quality
and balance of the soil structure on the land. They also argue that the defendants
breached a statutory term implied in the lease namely s 106(b) of the Property Law
25 Waikato Maniapoto 89
Act 1952 (“PLA”). Alternatively they argue that even if the lease arrangements in
place were informal that the same statutory implied term is applicable and that the
defendants were under an obligation to yield up the demised premises in good and
tenantable repair having regard to the condition at the commencement of the lease –
s 18(1)(d) of TTWMA.
[19] As a third cause of action the applicants argue that there was a material
decline in the quality of the soil structure on the land during the time it was leased to
the defendants. They say that the decline in the quality and balance of the soil
structure on the land was caused by the defendants‟ continuous maize cropping and
that decline constitutes an injury to Māori freehold land – s 18(1)(c) of TTWMA.
Defendants’ Pleadings
[20] The defendants deny all claims. In the event of being found liable to the
applicants they seek a contribution or indemnity pursuant to the Law Reform Act
1936, from the third parties based on breaches of contract and negligence.
Third Parties’ Pleadings
[21] The third parties deny the claims brought against them by the defendants. In
turn they seek damages against the applicants for breach of contract, specifically a
breach of an implied term. They say that the applicants owed them a duty to deliver
up the land in pasture fit for the purpose of grazing dairy cattle and producing feed
supplements.
[22] The second third party alleges that as a result of not being able to take
possession of the land between 1 September 2006 – 1 December 2006 that they have
suffered various losses for that period.
[23] Secondly they argue that as a result of various deficiencies in the soil, the
land produces pasture containing clover in amounts toxic to cattle and not fit for
grazing. The second third party has suffered stock losses which it says are directly
attributable to the quality of the soil and in breach of the implied term to deliver up
25 Waikato Maniapoto 90
the land in pasture fit for the purpose of grazing dairy cattle and producing feed
supplements.
[24] The allegations by the second third party against the applicants are denied
and/or they say that the losses claimed by the second third party were not reasonable
or foreseeable.
The Hearing
[25] The hearing was held at Tauranga between 8 and 11 June 2010. In addition to
hearing evidence from the parties, the Court also received a significant amount of
expert evidence from: a farm consultant; two soil scientists; and a veterinarian.
Following the hearing further evidence in the form of affidavits and answers to
interrogatories was supplied to the Court by the soil scientists. The final evidence
was received on or about 11 August 2010.
[26] Closing submissions were then filed by the parties. The final set of
submissions were filed on or about 4 October 2010.
First Cause of Action: Breach of Contract – Clause 10 of the Lease – s 18(1)(d)
of TTWMA
[27] Clause 10 of the lease reads as follows:
10. RE-ESTABLISHMENT OF PASTURE
At the direction of the Owner the area cropped shall be sown in normal
pasture grass seed mixture recommended for the district at the termination
of this Lease. All costs of cultivation sowing and grass seed shall be borne
by the Lessee.
[28] At paragraph 23 of their amended statement of claim, the applicants allege
that the defendants breached clause 10 of the lease by failing to yield up the maize
block in normal pasture appropriate for the district by 1 June 2006.
[29] In his opening submissions, counsel for the applicants indicated that there
were two aspects to this claim. First a breach of the covenant to deliver up the maize
25 Waikato Maniapoto 91
block in pasture on 1 June 2006. Secondly that an implied term should be read into
clause 10 of the lease which required that the defendants were to re-grass the land in
a competent manner and that the resulting pasture would be of an acceptable
standard for the district. Counsel argued for the insertion of an implied term
notwithstanding the fact that an implied term was not pleaded in the amended
statement of claim.
[30] In the closing submissions dated 26 August 2010 there was a subtle variation
to the arguments made by the applicants in respect of the first cause of action.
Counsel argued that if clause 10 was given its natural and ordinary meaning then the
defendants have breached the following obligations:
a) An obligation to re-establish the land in pasture on or before 1 June
2006;
b) Re-grass the land in a competent manner;
c) Re-grass the land to a standard that would be acceptable for the
district.
[31] First I propose to discuss what is meant by clause 10 of the lease and then
discuss whether an implied term is necessary.
[32] In reaching an understanding of what is meant by clause 10 of the lease, the
Court is entitled to read the words used, ascertain their natural and ordinary meaning
in the context of the document of the whole and then look at the background to the
surrounding circumstances to cross check whether some other or modified meaning
was intended.1
[33] Clause 10 clearly contemplates that at the termination of the lease, action can
be taken by the owners to re-establish pasture. However the opening words of clause
10 are important reading as they do, “At the discretion of the Owner…”.
1 Pyne Gould Guinness Ltd v Montgomery Watson (NZ) Ltd [2001] NZAR 789.
25 Waikato Maniapoto 92
[34] Those words should not in my opinion be read down. They give to the owner
of the land a discretion whether to re-pasture and when. There are no express words
which stipulate that by the date of termination of the lease the land has to be re-
pastured. The clause merely gives to the owner an option of requiring the land to be
re-pastured at the termination of the lease.
[35] Furthermore there are no positive obligations on the lessee in clause 10 other
than to be responsible for the costs of: cultivation; sowing; and grass seed. I do not
read the final sentence of clause 10 to impose an obligation on the lessee to actually
carry out the cultivation, sowing and re-grassing, merely that they would be
responsible for those costs. The owner has the option to carry out the cultivation,
sowing and re-grassing themselves, contract a third party to do so or request, as in
this case, the lessee to carry out that work.
[36] When one examines the lease as a whole it is clear that it is a relatively
limited agreement relating to cropping arrangements. When one looks to the
surrounding circumstances I am aware that for approximately 25 years the lessees
carried out cropping, in particular maize growing on the land. There is nothing in
the document as a whole or the surrounding circumstances which persuade me that
clause 10 can be read as imposing a positive obligation on the lessees to have re-
grassed the land in question by the date of termination of the lease.
[37] Nor am I persuaded that the actual words in clause 10 can be extended to
impose upon a lessee a requirement to re-grass the land in a competent manner and
that any resulting pasture should have been of an acceptable standard for the district.
If for example the owner decided to carry out re-pasturing themselves or contracted a
third party to do so, how in those circumstances could a lessee be responsible for the
manner in which the land was re-grassed and the resulting standard of pasture?
[38] By comparison clause 10 falls well short of the express obligation found in
Maori Trustee v Bjerring2. In that case there was a clause which reads as follows:
2 (1960) 1 NZCPR 565.
25 Waikato Maniapoto 93
6. THE Lessee shall not less than two years for the expiration of the said term lay
down the said land in good English grasses and shall leave the said land so laid
down so that the said land shall be and remain laid down in good English grasses
during the two years immediately preceding the termination of the said term.
[39] In the case of D & C H Cochrane v The Maori Trustee3 there was an express
term of the lease that the lessee:
… will “cultivate” within the meaning of this expression as said forth in the Fourth
Schedule to the Land Transfer Act 1952, and will at the end or sooner determination
of the said term leave all such parts of the said land as shall be broken up laid down
in good grass pasture of at least six months standing.
[40] In my opinion the opening words of clause 10 are fatal to the applicants‟
arguments. The discretion given to the owner was a discretion whether or not they
wish to re-pasture, when they might carry out that re-pasturing and whom they might
contract to carry out that re-pasturing. The natural and ordinary meaning of clause
10 does not impose any obligations upon the lessee other than to be responsible for
the costs of: cultivation; sowing; and grass seed.
[41] Nor am I persuaded that it is necessary to imply a term that the defendants
were required to re-grass the maize block in a competent manner and that the
resulting pasture should be of an acceptable standard for the district. The applicants
argue for an implied term using the approach set out in BP Refinery (Western Port)
Pty Ltd v Shire of Hastings4 and in Amaltal Corporation Ltd v Maruha Corporation
5.
[42] I note that the applicants did not plead the inclusion of an implied term at
clause 10 in their amended statement claim. The first time this was raised was
during counsel‟s opening submissions. I note that in the closing submissions on this
point counsel for the applicants does not further argue that there should be an
implied term and rather argues for an extended meaning of clause 10 based upon its
ordinary and natural meaning.
3 HC Whangarei A70/83, 14 July 1987.
4 (1977) 16 ALR 363 at 376.
5 [2007] 1 NZLR 608.
25 Waikato Maniapoto 94
[43] I am left in the uncertain position of not knowing whether the applicants
continue to argue that a term should be implied into the lease arrangements. Even if
they are I do not agree that this is a case in which the Court should imply a term.
Clause 10 is in my opinion easy to understand. It provides that at the termination of
the lease, the owner had the option of requiring the land to be re-grassed. The owner
was not compelled to do so, they had the option to choose to do so or not. They also
had the option to decide when to re-grass and whom to use to re-grass.
[44] As I have said earlier there are no positive obligations on the defendants to
actually re-grass by a certain date and to a certain standard. Imposing that sort of
implied term goes well beyond the express obligations which the parties had agreed
to. All the lessee was required to do, if the owner had chosen to re-grass, was to pay
for the cost of: cultivation; sowing; and grass seed.
[45] In my opinion the contract is effective without the implication of any such
term. It is not necessary and it would contradict what are the express terms of clause
10 of the lease. Therefore any argument based upon an implied term must also fail.
[46] I am aware that immediately following the termination of the lease the
defendants wrote to the applicants on 26 May 2006. The tenor of that letter is that
the defendants appear to have assumed that they would be involved in the re-
grassing of the land in due course. On 4 August 2006 the defendants carried out
some preliminary preparatory work for re-grassing.
[47] However nothing further appears to have happened until a meeting on
7 September 2006 when representatives of all parties met. At that meeting the type
of grass seed was chosen by the applicants and first third party. There was
agreement as to the amount the defendants would pay for grass seed. The
arrangement agreed upon that day was that the third parties would carry out the re-
grassing of the land, instead of paying the defendants financial compensation for
crop damage that had been caused by the third parties‟ stock to the defendants‟ maize
crop in early 2006.
25 Waikato Maniapoto 95
[48] The precise nature of the agreement reached on 7 September 2006 is
uncertain. However I note that the defendants sought an indemnity or contribution
based on allegation of negligence against the third parties for failing to take
reasonable care in the sowing of and selection of grass seed, controlling weeds and
managing the grass on the new pasture.
[49] I consider that the arrangement entered into between all parties on
7 September 2006 is entirely separate from the lease pleaded at paragraph 15.
Whatever the nature of the arrangement entered into on 7 September 2006 there is no
doubt that there was some form of agreement between all parties relating to when re-
pasturing would commence and who would carry out that work. I note that the
applicants have not sued the defendants based upon that separate contractual
arrangement, rather they have sought to imply and/or argue for an expanded reading
of clause 10 which is simply not available on my reading of the lease. Any
allegations relating to a breach of contract to re-grass the land in a competent manner
and/or re-grass the land to a standard acceptable for the district should have been
brought based upon the separate contractual arrangement entered into on
7 September 2006, rather than the lease.
Second Cause of Action: Breach of Contract – Clause 8 of the Lease – s 18(1)(d)
of TTWMA
[50] Clause 8 of the lease reads as follows:
8. MANAGEMENT
The Lessee shall manage the land in a good and husbandlike manner for the
purpose of cropping and shall apply adequate maintenance fertilizer during
the term of lease for the requirements of the crop.
[51] In its amended statement of claim the applicants argued that the defendants
had obligations to manage the land in a good and husbandlike manner pursuant to
clause 8. They also argued that if the status of the lease was informal then a
statutory implied term, s 106(b) of the PLA, applies.
25 Waikato Maniapoto 96
[52] I attempted to clarify the applicants‟ position with counsel during opening
submissions. The indication was that the applicants were not relying upon any
implied terms into an informal lease.6
[53] However in the applicants‟ closing submissions they appear to argue a
number of different scenarios for the second cause of action. First the applicants
argue that there has been a breach of an express term of the lease being clause 8.
Secondly that a statutory implied term applies namely s 106(b) of the PLA. Thirdly
that if the lease is informal the defendants have breached the same statutory implied
term.
[54] The situation is further confused by the fact that at no stage did the applicants
specifically refer to s 106(b) of the PLA in their pleadings.
Informal v Formal Lease?
[55] The first issue that needs to be decided under this heading is what was the
status of the lease in 2006? This question arises because although the defendants
leased the land for some 25 years, there was during that period of time a variety of
lease arrangements in place.
[56] As at 23 August 2002 the applicants and defendants entered into the lease
arrangements which are set out at paragraph 15 of this decision. That agreement was
to last from 1 June 2002 to 31 May 2003.
[57] The 2002/2003 lease agreement contained a right of renewal – clause 5. That
clause provided that both parties would meet within one month prior to the expiry of
the lease to consider a renewal of the agreement for a further term.
[58] However the evidence is that later in 2003, 2004 and 2005 the parties met to
discuss whether or not to continue the lease arrangements.
6 7 Waikato Maniapoto MB 31 (7 WMN 31).
25 Waikato Maniapoto 97
[59] In 2003 and 2004 it is clear that the parties decided to continue with the
cropping arrangements and were content that the terms of the formal lease of
2002/2003 were to continue to apply to the arrangements.
[60] The situation becomes a little more murky in 2005. The parties certainly met
on 20 October 2005 and the possibility that the applicants might want to re-grass the
land in question appears to have been discussed. At that stage however it cannot be
said that the lease was terminated.
[61] In April 2006 there were some further discussions between Mr Brendon
Taingahue and Andrew Gorringe about the possibility that the lease would be
terminated. Mr Taingahue accepted under cross-examination however that at that
stage no decision had been made to terminate the lease.7 He also conceded that the
first time he indicated to the defendants that the lease was going to be terminated
was during a telephone discussion on 24 May 2006.8
[62] At all times it appears that the parties accepted that the formal 2002/2003
written lease continued to govern their arrangements except for the fact that the
renewal condition was varied by the parties having discussions in the
September/October period each year to decide whether or not to continue the lease.
[63] That is the practice that the parties adopted. Thus I find as a fact that the
formal conditions set out in the 2002/2003 lease continued to apply up until the time
it was terminated on 24 May 2006.
[64] Therefore any argument that the lease was informal and s 106(b) of the PLA,
needs to be implied into the lease arrangements necessarily fails.
7 7 Waikato Maniapoto MB 128 (7 WMN 128).
8 7 Waikato Maniapoto MB 129 (7 WMN 129).
25 Waikato Maniapoto 98
Implied Term in the Formal Lease?
[65] The applicants go on to argue that the provisions of s 106(b) of the PLA are
as a matter of law implied into the formal lease arrangements. The relevant words of
s 106(b) of the PLA read as follows:
106 Covenants implied in leases
In every lease of land there shall be implied the following covenants by the lessee… :
…
(b) That he… will, at all times during the continuance of the said lease, keep,
and at the termination thereof yield up, the demised premises in good and
tenantable repair, having regard to their condition at the commencement of
the said lease, accidents and damage from fire, flood, lightning, storm,
tempest, earthquake, and fair wear and tear (all without neglect or default of
the lessee) excepted:
[Provided that this covenant shall not be implied in any lease of a dwellinghouse.]
[66] Counsel for the applicants submits that the effect of both s 106(b) of the PLA
and the express clause is that there is an obligation on the defendants to keep the
land in good order and repair throughout the lease.
[67] If the applicants are placing reliance upon the provisions of s 106(b) of the
PLA, that should have been expressly pleaded in the amended statement of claim. It
was not and appears to have been raised for the first time in counsel for the
applicants‟ closing submissions. The Court, and more importantly the applicants‟
opponents, were entitled to clearly know the case which it had to answer.9
[68] Of greater relevance is the fact that there is a good husbandry clause in the
lease, clause 8, which imposes an obligation upon the defendants to manage the land
in a good and husbandlike manner for the purposes of cropping. Secondly an
obligation is imposed upon the defendants to apply adequate maintenance during the
term of the lease for the requirement of the crop.
9 See Thomson v Westpac Banking Corporation (No 2) (1986) 2 PRNZ 505.
25 Waikato Maniapoto 99
[69] Section 68 of the PLA provides that any implied covenant may be negatived,
varied or extended by the parties. It is reasonably clear to me that the parties
accepted for themselves a good husbandry clause but expressly limited or confined it
to cropping. Thus they negatived or varied the implied provisions of s 106(b) of the
PLA.
[70] Where there is an express covenant or power in a deed or memorandum of
lease dealing with the same obligation or the same right, no implication of any other
covenant on the same subject matter is permitted.10
Have the Defendants Breached Clause 8 of the Lease?
[71] The applicants‟ case is that clause 8 of the lease imposed upon the defendants
an obligation to maintain the overall quality and balance of the soil structure when
measured against other productive soils on the land.
[72] The applicants go on to say that continuous cropping and harvesting of maize
by the defendants between 1981-2006 was the direct cause of a material decline in
the quality and balance of soil structure on the land when measured against other
productive soils on the land.
[73] Thus the applicants argue that the defendants breached clause 8 of the written
lease by failing to maintain the overall quality and balance of the soil structure on the
maize block.
[74] Under this particular heading the applicants say that as at the termination of
the lease the soil on the block was in poor condition. They place heavy reliance
upon the expert evidence of Mr Shepherd whose opinion was that the most likely
cause of the decline in soil structure was the defendants‟ cultivation, tillage and
harvesting of maize crops between 1981 and 2006.
10 Herlihy v Hinurewa Kawe [1952] NZLR 709 at 723 (CA) and BP Oil New Zealand Ltd v Ports of
Auckland Ltd [2004] 2 NZLR 208 at 52.
25 Waikato Maniapoto 100
[75] In my opinion this cause of action also fails. The express wording of clause 8
of the lease simply provides that the lessee has to manage the land in a good and
husbandlike manner for the purpose of cropping. There is an obligation to supply
adequate maintenance fertiliser during the term of the lease for the requirements of
the crop.
[76] There is no express obligation that the lessee had to maintain the soil
structure to a certain standard or improve it.
[77] Secondly there is no direct evidence to suggest that the defendants failed to
manage the land in a good and husbandlike manner for the purpose of cropping.
There is evidence that the defendants followed standard cropping practices and
followed the advice of specialists concerning fertiliser, crop and soil husbandry. The
defendants applied maintenance fertiliser annually and were able to give specific
examples of fertiliser application for the 2003-2005 period. There is no evidence
that the defendants applied fertiliser containing potassium and any suggestions to
that effect must necessarily be speculation. The defendants also carried out regular
soil tests.11
[78] Thirdly the applicants‟ case under this particular heading is based upon two
factors they being:
a) The evidence of its soil scientist expert Mr Shepherd that the land
suffers from poor soil structure;
b) That the most likely cause of the poor soil structure was continuous
cultivation of maize, the over cultivation of the soil using
conventional tillage practices, the timing of the maize harvest and the
heavy wheel compaction during harvesting.
[79] It is important to note that Mr Shepherd indicated in his evidence in chief that
the scientific research now available as to the potential impact on soil structure was
11 7 Waikato Maniapoto MB 60-61, 193, 198, 233 (7 WMN 60-61, 193, 198 and 233).
25 Waikato Maniapoto 101
not generally available to maize contractors until the 1990s. It is also important to
note that he has no knowledge of the particular practices adopted by the defendants
during the time they were in possession of the land.
[80] The defendants also called a soil scientist expert, Mr Rijkse. He too agreed
with Mr Shepherd regarding the current condition of the soil. He disagreed with Mr
Shepherd regarding the probable cause of any such depletion but agreed with Mr
Shepherd that remedial work was necessary to address any depletion.
[81] Even if one accepts the evidence of Mr Shepherd, the difficulty in this
particular case is that he has very little in the way of baseline evidence to compare
the state of the soil as at the commencement of the lease in 1981 and at the
termination of the lease in 2006.
[82] The stark fact is that Mr Shepherd simply does not know what the state of the
soil was like in 1981. Whilst it is his opinion based upon his study and other
international literature that you will get significant degradation taking place using
continuous maize cultivation over a number of years, the difficulty that I have in
assessing this matter is comparing the state of the soil at the termination of the lease
and the commencement of the lease.
[83] The defendants‟ expert, Mr Rijkse, did carry out an inspection and soil
sampling together with a Mr Cotching on Rangiwaea Island in 1982. He is certainly
familiar with the various soil types on Rangiwaea Island. He gave evidence that the
soil on Rangiwaea Island on 17 December 2009 indicates low levels of organic
matter which is a similar conclusion he reached in 1982.
[84] Whilst the soil scientists both agree that the soil structure was of poor quality,
neither of them are able to give the Court a definitive opinion as to the soil quality at
the commencement of the lease.12
Absent such a finding and definitive evidence that
12 Although as I discuss shortly Mr Rijkse tends to suggest that there was little change in the soil
quality.
25 Waikato Maniapoto 102
commencing from a 1981 baseline that the soil quality has deteriorated throughout
the lease, the applicants cannot succeed in this cause of action.
Third Cause of Action: Injury to Māori Freehold Land – s 18(1)(c) of TTWMA
[85] In this cause of action the applicants allege that there was a material decline
in the quality and balance of the soil structure on the land which was caused directly
by the defendants‟ continuous maize cropping between 1981 and May 2006.
[86] The applicants point to the Privy Council decision of McGuire v Hastings
District Council13
to remind the Court of the obiter comments made in that case that
activities other than physical interference could constitute injury to Māori freehold
land.
[87] In this case it is not necessary to decide that point, however I accept as a
matter of general principle that deterioration in soil quality by a lessee or occupier
done intentionally, negligently or in breach of contract might constitute injury to
Māori freehold land within the scope of s 18(1)(d) of TTWMA.
[88] In this case the cause of action is premised on the basis that there has been a
material decline in the quality and balance of the soil structure which was caused by
the defendants‟ continuous maize cropping and harvesting between 1981 and May
2006.
[89] In support of that allegation the applicants rely heavily upon the evidence of
their expert soil scientist Mr Shepherd whose opinion, as we have discussed earlier,
is that continuous maize cropping will cause degradation of soil quality.
[90] In this case both soil scientists agree that when they carried out their
respective inspections of the land in December 2008 and December 2009 that the
current condition of the soil was poor. They disagree however as to the probable
causes of any such depletion.
13 [2002] 2 NZLR 577 at [10].
25 Waikato Maniapoto 103
[91] Crucially as far as I am concerned there is very little baseline evidence which
tells the Court what the condition of the soil was in 1981 and whether there has been
any proven decline in that soil quality as at the time the lease was terminated.
[92] Under cross-examination Mr Shepherd opined that the defendants‟ activity
under a long term maize regime would have been the reason for the degree of
structural degradation and degradation in the biology and fertility that we see now.
However when asked what the land was like to begin with, he had to accept that he
did not know what the condition of the soil was like in 1981 or 1982. Rather he
relies upon his own research and published papers which indicate that you get
significant degradation in soil structure under a long term maize regime.14
[93] Mr Rijkse the other soil scientist had carried out an inspection of soils on
Rangiwaea Island in 1982, 1995 and more recently in December of 2009. His
evidence tends to suggest that the quality of the soil was the same in December 2009
as when he carried out a soil survey in 1982.15
[94] Thus I find as follows:
a) Both soil scientists agree based on their inspections in 2008 and 2009
the quality of the soil on the land in question was poor;
b) In the absence of any definitive expert evidence confirming a decline
in soil quality from 1981 through until the termination of the lease,
there is no factual basis upon which it can be said that the quality and
structure of the soil has definitively declined.
[95] Based on that finding, the third cause of action must also fail.
14 7 Waikato Maniapoto MB 59-60 (7 WMN 59-60).
15 Evidence in chief Mr Rijkse, para 17.1 and affidavit of Mr Rijkse 30 June 2010, para 32.
25 Waikato Maniapoto 104
Claims by the Defendants Against the Third Parties for Contribution or
Indemnity – Law Reform Act 1936
[96] Given that none of the applicants‟ claims have succeeded there is no need for
me to make any decision on the claims by the defendants against the third parties
seeking a contribution or indemnity pursuant to the Law Reform Act 1936.
[97] Nor is it necessary to decide any of the defences raised by the third parties in
relation to the claims brought against them by the defendants.
Second Third Party’s Claims Against the Applicants
[98] The second third party entered into a separate lease arrangement with the
applicants to graze dairy cattle on the land from 1 September 2006.
[99] Due to the fact that the land was not in pasture until early December 2006,
the second third party was unable to graze the land between 1 September 2006 and
1 December 2006.
[100] The pasture initially sown, being a mixture of perennial ryegrasses and clover
failed in that the ryegrass died away. By late 2007 the pasture was virtually all
clover.
[101] From late December 2007 through until approximately 7 September 2008 the
second third party suffered stock losses. They allege that the stock losses were
caused by nutrient and structural deficiencies in the soil which produced pasture
containing clover in amounts so great that the pasture was toxic to dairy cattle and
not fit for grazing.
[102] They allege that a term should be implied into their lease arrangements with
the applicants that the applicants owed them a duty to deliver up the land in pasture
fit for the purpose of grazing dairy cattle and producing feed supplements. The
applicants for their part have admitted that they were under that duty but deny the
losses claimed.
25 Waikato Maniapoto 105
[103] The second third party alleges that the applicants breached the implied term
in two ways:
a) Failing to deliver up the land in pasture fit for the purpose of grazing
dairy cattle and producing feed supplements between 1 September
2006 – 1 December 2006;
b) Failure to deliver up the land in a condition fit for the purpose of
grazing dairy cattle and producing feed supplements. Specifically
they say that as a result of structural deficiencies in the soil, the land
produced pasture containing clover in amounts so great that the
pasture was toxic to dairy cattle and not fit for grazing. They suffered
stock losses which they argue were directly attributable to the
condition of the soil and quality of the pasture.
Did the Applicants Deliver up Land in Pasture Fit for the Purpose of Grazing
Dairy Cattle and Producing Feed Supplements Between 1 September 2006 –
1 December 2006?
[104] The nature of the losses claimed by the second third party under this heading
are:
a) A decrease in milk production between
1 September 2006 – 1 December 2006 $42, 304.97
b) A loss in feed supplements not obtained from the land $18,000.00
c) Less rental payments withheld $7,214.00
Total claimed $53,090.97
[105] The applicants deny that they are liable for the losses on the basis they were
not reasonably foreseeable and too remote.
25 Waikato Maniapoto 106
Loss of Milk Production
[106] The basis of this claim is that the second third party had planned to graze on
the land between 1 September – 1 December 2006. As they were unable to do so
heifers, steers and weaner calves which would have grazed on that land had to be
grazed on a different property owned by the second third party at Matakana Island.
[107] In support of this claim evidence was given by Mr John Gardiner. In 2004 –
2005 the second third party had increased its cattle numbers through a special
breeding programme in order to be ready when land became available to lease. The
claim is premised on the basis that the 370 cattle which the second third party
intended to graze on the land was a “new herd” as contrasted with its main “milking
herd”.
[108] The second third party goes on to say that the “new herd” consumed dry
matter in the form of grass and hay at Matakana Island. They have provided a
schedule of information indicating on average the amount of dry matter consumed
by the heifers, steers and weaner calves grazed at Matakana. That figure is 141,050
kilograms of dry matter.
[109] They argue that the dry matter would otherwise have been available to be
consumed by the “milking herd”. They have provided calculations converting the
amount of dry matter consumed by the “new herd” into milk solids which they say
would have been produced from the dry matter, that figure being 9,403 kilograms of
milk solids. At the time the relevant pay out was $4.13 per kilogram of milk solids.
Therefore the total milk solids loss claimed is $42,304.97.
[110] In answer to a question from me, Mr Gardiner‟s recollection was that
between 1 September 2006 through until 1 December 2006 the second third party
was milking about 400 cows on their main farm at Matakana Island.
[111] Whilst I accept that the applicants have breached the implied term which has
caused the third parties‟ damage namely the loss of the dry matter consumed, I am
25 Waikato Maniapoto 107
not convinced that the nature of the losses claimed, the value of the milk solids, was
foreseeable and reasonable.
[112] The difficulty I have with this claimed loss is the assumption made by Mr
Gardiner and Mr Mark Dodd, the farm consultant, that the dry matter consumed by
the “new herd” would have converted into 9,403 kilograms of milk solids as
claimed. I do not know for example what milk solids the “milking herd” actually
produced during the period 1 September 2006 – 1 December 2006 and whether there
had been an increase or reduction in production as compared to the same period in
say 2003, 2004 and 2005.
[113] If for example the “milking herd” had produced milk solids during
1 September 2006 – 1 December 2006 which were equivalent to or greater than the
milk solids produced for the same period in 2003 – 2005 that would indicate that the
presence of the “new herd” made no real difference to the actual production of milk
solids. The difficulty is I do not have that evidence and cannot make those
comparisons.
[114] Put another way there is no evidence before me that if the “new herd” had not
grazed on Matakana during 1 September 2006 – 1 December 2006 that the “milking
herd” would have been able to produce additional milk solids from the dry matter,
over and above that which they actually produced.
[115] Undoubtedly the second third party has suffered loss, that being the
consumption of the additional dry matter by the “new herd”. However I have
considerable difficulty in accepting that that dry matter would necessarily have been
converted into the amount of milk solids as claimed. I would have thought a more
foreseeable and reasonable claim for damage would have been to quantify the value
of the dry matter by converting it into the equivalent amount of silage or hay bales
that could have been produced rather than link it to milk solids. As a further
alternative a claim for grazing based on a per head of cattle basis would have been
25 Waikato Maniapoto 108
more reasonable and foreseeable. However neither of those types of special damage
were expressly pleaded so are not recoverable.16
Feed Supplement
[116] The second third party‟s claim under this heading is that in addition to it
being able to graze the land between 1 September 2006 – 1 December 2006 it would
also have been able to take additional supplements from the land in the form of hay
and silage.
[117] The evidence in support of that contention came from Mr Gardiner and Mr
Dodd. Mr Gardiner gave evidence that the second third party should have been able
to harvest 200 wrapped silage bales and 200 (15 equivalent) hay bales from the land
in the three month period between 1 September – 1 December 2006. Mr Dodd gave
evidence in chief that those estimates are conservative. In a schedule attached to his
evidence he provided calculations of a net value of the silage bales and hay bales
arriving at a figure of $18,000.00.
[118] Mr Dodd was challenged on both occasions when he was cross-examined as
to how many cuts of baleage should be taken during the first twelve months once
grass had been sown. Under cross-examination he responded to counsel for the
applicants that on new pasture there should be only one cut of baleage in the first
three months as a maximum.17
[119] Mr Dodd later conceded that the taking of supplements should be avoided
during the first 12 months following establishment of the pasture. He went on to say
that the taking of the supplements could be taken, however it should not be a heavy
crop and approximately half of what might have been taken historically 15 to 20
years ago.18
16 Bank of New Zealand v Fleming (1898) 18 NZLR 1.
17 7 Waikato Maniapoto MB 177 (7 WMN 177).
18 7 Waikato Maniapoto MB 289 (7 WMN 289).
25 Waikato Maniapoto 109
[120] In his evidence in chief on this topic and under cross-examination Mr Dodd
indicated that the calculations he had been provided with and upon which he based
his evidence represented not even one cut of the whole area of land. He indicated
that the amount of supplements claimed was just over 1,000 kilograms per hectare
and when you normally cut supplements you would expect somewhere between
2,500 kilograms per hectare. Thus in his opinion the amount of supplements claimed
represented one light cut over the whole area.19
[121] I find based upon the evidence of Mr Dodd that:
a) Supplements could have been harvested from the land between
1 September 2006 and 1 December 2006, if the grass had been
properly established by 1 September 2006;
b) Although you might avoid taking supplements during the first three
months following establishment, as a maximum that should be limited
to one cut in the first three months;
c) The amount of supplements claimed by the second third party
represented one light cut and less than half what would normally be
taken on a per hectare basis.
[122] In this case the applicants have accepted that there was a duty on them to
provide the land in pasture fit for the purpose of dairy grazing and producing feed
supplements from 1 September – 1 December 2006. Clearly the applicants breached
that duty and the second third party is entitled to be compensated for the loss of that
bargain and should be restored to the position which they would have occupied had
the contract been performed.
[123] Quite clearly the applicants caused the damage under this heading to the
second third party by not providing the land at the relevant time in pasture. I
19 7 Waikato Maniapoto MB 287 (7 WMN 287).
25 Waikato Maniapoto 110
consider the loss of the additional supplements to have been a loss fairly and
reasonably foreseeable as arising naturally from the breach of the contract.
[124] The second third party is entitled to the figure claimed of $18,000.00 being
200 wrapped silage bales and 200 hay bales (15 equivalent) on the basis as
calculated in the schedule attached to the evidence of Mr Dodd given for the second
third party. From that figure I deduct the rental payments of $7,214.00 which were
withheld. Under this heading the second third party is entitled to $10,786.00.
Losses Arising from the Condition of the Soil
[125] Between October 2007 and September 2008 the second third party suffered a
number of stock losses in particular 95 cattle. They say that the reason for those
losses was caused by the nutrient and structural deficiencies of the soil which
produced pasture containing clover in amounts so great that the pasture was toxic to
cattle and not fit for grazing.
[126] In addition to the actual stock deaths claimed, the second third party claims
associated costs concerned with animal care and welfare including bloat control,
veterinary costs, farm consultant‟s costs, additional labour and travel costs. In total
the second third party claims $138,168.73 against the applicants which is broken
down as follows:
a) Bloat control (Bloateze) 9,402.03
b) Additional labour and travel costs 9,600.00
c) Stock deaths 115,800.00
d) Veterinarians‟ costs 2,266.70
e) Farm consultants‟ costs 1,100.00
Total claimed $138,168.73
25 Waikato Maniapoto 111
[127] It is Mr Gardiner‟s evidence that the pasture established on the land was
initially very good with a good mixture of perennial ryegrasses and clover. However
the ryegrass gradually started dying away until by late 2007 the pasture was virtually
all clover.
[128] Mr Dodd in his evidence given on behalf of the applicants visited the land on
2 May 2007 to assess the quality of the re-grassing. He noted that the re-grassing
varied largely in all aspects including quality of cultivation, grass strike and weed
infestation. In conclusion he opined that the pastures on the block were very rough
and the only remedy was to re-cultivate. However that would be expensive and as
an alternative he recommended that nine paddocks in poor condition due to poor
pasture establishment be direct drilled with perennial ryegrass.
[129] The remedial work was undertaken by the applicants, however even after the
direct drilling of ryegrass, there remained ongoing problems with the pasture to the
point where the annual and perennial ryegrass had largely died leaving most of the
paddocks covered in clover.
[130] The second third party relies heavily upon the evidence of Mr David
McDonnell a registered veterinary surgeon. Mr McDonnell visited Rangiwaea
Island on two occasions on 7 January 2008 and 15 May 2008 following the death of
some of the second third party‟s cattle.
[131] On 7 January 2008, 19 cattle died suddenly over a 24 hour period. On
15 May 2008, 6 cattle died. There is no expert evidence as to what caused the deaths
of the remaining 70 cattle.
[132] In his evidence in chief Mr McDonnell opines that combining the history of
events, the clinical and post-mortem findings and laboratory samples to conclude
that the cattle died of cyanide poisoning. He goes on further to opine it is likely that
white clover contributed to the cyanide poisoning based upon the material that he has
researched.
25 Waikato Maniapoto 112
[133] The third party‟s claim under this particular heading is premised on the basis
that the poor soil condition combined with a failure to cultivate the land in
accordance with accepted practice resulted in pasture containing clover in amounts
so great that they were toxic to the cattle which resulted in stock losses.
[134] Undoubtedly the condition of the soil contributed to the ryegrass dying out
and the pasture reverting almost completely to clover.20
Mr Shepherd‟s expert
evidence was also to the effect that there was an extraordinarily high risk of cattle
bloating on eating pasture from the land.21
[135] Whilst the condition of the soil contributed to the failure of the ryegrass there
were also a number of other factors which contributed to the failure of the ryegrass
those being:
a) The applicants and the first third party chose the grass seed that was
sown. There was evidence to suggest that grass seed was susceptible
to black beetle strike and is no longer on the market;22
b) Both the applicants and the third parties insisted that re-grassing was
commenced in early to mid-September 2006 despite concerns being
raised by the defendants as to the appropriateness of the soil and
weather conditions at that time;23
c) It appears neither the defendants nor the third parties adequately
cultivated the land prior to the seed bed being sown. Each say that it
was the other‟s responsibility24
and I am unable to make a definitive
finding on this point. However the fact remains that it would have
20 See for example evidence from Graham Shepherd 7 Waikato Maniapoto MB 97 (7 WMN 97).
21 7 Waikato Maniapoto MB 95 (7 WMN 95).
22 7 Waikato Maniapoto MB 139 (7 WMN 139).
23 7 Waikato Maniapoto MB 138 (7 WMN 138).
24 7 Waikato Maniapoto MB 196 and 330 (7 WMN 196 and 330).
25 Waikato Maniapoto 113
been preferable to cultivate the land by plough or plough harrow prior
to the grass seed being sown;25
d) Notwithstanding his concerns about the lack of cultivation, the first
third party proceeded to sow grass in mid-September 2006;26
e) Despite being responsible for weed control from 1 September 2006
onwards, at no stage did either of the first or second third parties spray
weeds between September 2006 and July 2007. Indeed Mr Dodd
found on inspection on 2 May 2007 that a large proportion of the land
was infested with weed;27
f) The third parties did not apply any nitrogen or phosphate to the new
pasture between September 2006 until 2008.28
[136] It is highly likely that a combination of the matters set out above contributed
to the failure of the ryegrass and the pasture reverting almost completely to clover.
Mr Shepherd‟s evidence was that if cattle grazed on pasture, in particular clover
when immature that it would promote bloat and potentially promote cyanide
toxicity.29
[137] As can be seen from the above list some of those factors such as the choice of
grass seed, the timing of sowing, the lack of cultivation, the failure to fertilise and
the failure to control weeds were matters for which the third parties were totally or
partially responsible for. Notwithstanding the fact that the first and second third
parties took some steps to avoid bloat such as the application of salt and Bloateze,
undoubtedly the failure of the ryegrass leading to the predominance of clover
25 7 Waikato Maniapoto MB 160 and 329 (7 WMN 160 and 329).
26 7 Waikato Maniapoto MB 329 (7 WMN 329).
27 7 Waikato Maniapoto MB 143 and 321 (7 WMN 143 and 321).
28 7 Waikato Maniapoto MB 321 (7 WMN 321).
29 7 Waikato Maniapoto MB 95 (7 WMN 95).
25 Waikato Maniapoto 114
resulting in high toxicity levels, was partially contributed to by the first and second
third parties.
[138] Whilst I am left with the overall impression that the poor quality of the soil
was a contributing factor to the failure of the pasture, I note that none of the parties
were aware of the soil condition until sometime after the termination of the lease. I
am also left with the general impression that the failure of the pasture was
contributed to in part by the factors that I have set out in paragraph 135 some of
which were caused by the third parties. Having said that it is difficult to be exact and
precise about those matters.
[139] Added to that is the lack of definitive evidence in and around the causes of
the stock deaths. Mr Taingahue gave evidence that up until 23 December 2007 a
total of 12 cattle had died. He attributed those deaths to bloat but nothing was done
further to confirm the actual cause of death.
[140] There was an unexpected death of 19 cattle in early January 2008. The
evidence from Mr McDonnell is inconclusive as to the cause of those deaths. In a
report dated 7 January 2008 Mr McDonnell indicated that a definitive diagnosis
remained open for discussion. He also indicated there was limited laboratory
pathological tests to help support a diagnosis other than to rule out nitrate poisoning,
infectious causes or toxins that cause clinical or pathological changes in the serum
and blood. He went on to opine that it is very likely that water deprivation and heat
stress then shifting onto pasture and sudden access to water may have precipitated a
salt poisoning episode. A likely secondary cause of death identified was water
deprivation aggravated by plant toxicity from woolly nightshade but that could not
be confirmed.
[141] In his penultimate paragraph under the heading “Recommendations” Mr
McDonnell said:
The animals have grazed these paddocks in the last 12 months with no similar
problems reported in the largely clean grass sward. It is likely that a combination of
management factors together with potential opportunities to poison – it is prudent to
maintain regular daily checks for adequate water and daily feed intake.
25 Waikato Maniapoto 115
[142] After the death of 6 cattle on 15 May 2008 Mr McDonnell provided a second
report for the Society of Dairy Cattle Veterinarians. Notwithstanding the fact that
clover pasture sampled was negative for cyanide toxicity, Mr McDonnell indicated
that a definitive diagnosis as to the source of cyanide still remains open. In
hindsight, he thought the first episode in January 2008 may also have been caused by
cyanide poisoning but they had not tested to confirm this.
[143] In his evidence in chief, Mr McDonnell was far more conclusive. As a
clinician he opined that the cattle died of cyanide poisoning.
[144] Mr McDonnell‟s evidence is internally inconsistent. For example in his
report following the first episode in January 2008 he identifies a number of possible
causes for the cattle death, none of which involves cyanide poisoning. In a second
report into the deaths following the May 2008 deaths he raised as a possibility only
that the cattle died of cyanide poisoning. It was not until much later that Mr
McDonnell positively asserted that the cattle died of cyanide poisoning.
[145] Mr McDonnell also conceded under cross-examination that cyanide
poisoning was not something which he had a great deal of experience with and he
had drawn his conclusions in part based upon an article he had read about which was
attached to his evidence.
[146] Viewed in total, the evidence of Mr McDonnell as to the cattle death is
inconclusive. Whilst it is suggestive that 25 cattle died of cyanide poisoning it does
not persuade me on the balance of probabilities that that in fact was the case.
[147] Furthermore there is no direct expert evidence as to how the balance of the 70
cattle died.
[148] In summary I accept that the pasture established on the land ultimately failed
in that ryegrass died away leaving the land virtually all clover. I accept the evidence
of Mr Shepherd that there was a high risk of cattle bloating on eating pasture in
clover. There is no doubt that 95 cattle belonging to the second third party also died,
the question is however was that caused by the applicants?
25 Waikato Maniapoto 116
[149] The evidence of the stock deaths is, as I have accounted earlier, inconclusive.
There is a suggestion from the second third party that 25 of their cattle died from
cyanide poisoning however the evidence for that is internally inconsistent and
inconclusive. There is no expert evidence relating to the remainder of the cattle
deaths.
[150] Even if we accept for the moment that the cattle died from bloat and/or
cyanide poisoning it is difficult to conclude that the applicants were necessarily
responsible for that state of affairs. As I have said earlier the condition of the soil did
contribute to the failure of the ryegrass, however that was not a matter known to the
applicants nor the third parties until well after the lease had commenced.
[151] Furthermore the failure of the ryegrass was contributed to by a range of other
factors some of which were under the direct control of the third parties. Thus I am
not able to say on a balance of probabilities that the second third party‟s stock losses
were caused by the applicants and that the losses claimed were necessarily
reasonable and foreseeable.
Result
[152] The claims of the applicants against the defendants are dismissed.
[153] Given that the applicants‟ claims against the defendants have failed, it is not
necessary to decide the defendants‟ claims against the third parties for an indemnity
or contribution.
[154] The second third party is partially successful in one claim against the
applicants, that being for failure on the part of the applicants to deliver up the land in
pasture fit for the purpose of grazing dairy cattle and producing feed supplements
between 1 September 2006 – 1 December 2006.
[155] The second third party is entitled to the sum of $10,786.00 pursuant to
s 18(1)(d) of TTWMA, being the net cost of the probable feed supplements they
would have obtained from the land if they had been in possession from 1 September
25 Waikato Maniapoto 117
2006 – 1 December 2006 after the withheld rental payments of $7,214.00 are
deducted from the figure proven, of $18,000.00. All other claims by the second third
party against the applicants are dismissed.
Costs
[156] The defendants are entitled to costs against the applicants. The second third
party is also entitled to costs on the basis of their partial success against the
applicants. Counsel for the defendants and second third party should, if they wish to
pursue costs, file memoranda within 14 working days upon receipt of this judgment.
Thereafter the applicants have 14 working days within which to file any memoranda
in response.
Pronounced in open Court at 4.15 pm in Hamilton on this 22nd
day of July 2011.
S R Clark
JUDGE
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