in the maori land court of new zealand … · waikato-maniapoto district 25 waikato maniapoto ......

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, [email protected] Mr A A Hopkinson, Cooney Lees Morgan, DX HP40001, Tauranga, [email protected] Mr C M Bidois, East Brewster, DX JP30017, Rotorua, [email protected]

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]


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.


[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.


[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.


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


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


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


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.


[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.


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.


[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.


[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.


[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).


[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.




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.


[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.


[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).


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.


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].


[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.


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.


[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.


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


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


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.




[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



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


[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.


[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).




24 7 Waikato Maniapoto MB 196 and 330 (7 WMN 196 and 330).


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







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.


[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?


[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


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

in the maori land court of new zealand … · waikato-maniapoto district 25 waikato maniapoto ......

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