Advance Apiaries Limited v Waipunga Station Limited

[2016] NZHC 3175

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

CIV-2016-454-120 [2016] NZHC 3175

BETWEEN

ADVANCE APIARIES LIMITED

Applicant

AND

WAIPUNGA STATION LIMITED Respondent

Hearing:	On the papers
Counse:	N Gray for Applicant M V Smith for Respondent
Judgment:	20 December 2016

JUDGMENT OF CLARK J

[1]      This judgment determines an application for an interim mandatory injunction requiring the respondent to allow the applicant to have access to the respondent’s property in Central Hawke’s Bay in order to place apiaries there in accordance with the terms of an agreement between them.

[2]      I have received memoranda from the parties’ solicitors and an affidavit on

behalf of the applicant sworn by Mr Janson, a director of the applicant.

Background

[3]      On 2 September 2015 the applicant and respondent entered into an agreement whereby the respondent would provide to the applicant access to its land for the purpose  of  harvesting  manuka  honey.    The  contract  term  was  for  a  period  of five years and the agreement was not to be terminated except by mutual agreement.

[4]      The  respondent  purported  to  cancel  the  agreement  by  an  email  to  the applicant on 10 November 2016 which concluded:

ADVANCE APIARIES LIMITED v WAIPUNGA STATION LIMITED [2016] NZHC 3175 [20 December 2016]

We’re terminating the contract on behalf of the [respondent] immediately; [we] are not prepared to continue. I’ll forward you a check as I said in my last letter. It’s generous in any case. The arrangement is hardly profitable for either of us but we wish to act honourably seeing we have terminated.

[5]      The applicant  filed a statement  of claim  on  15  December 2016  alleging breach of contract by the respondent.  By way of relief it seeks specific performance of the agreement.  On the same date the applicant sought an interim injunction on a Pickwick basis.

[6]      The respondent accepts that it is in breach of the agreement.  It has offered

$10,000 by way of compensation.

Applicable principles

[7]      There was no dispute as to the law applicable to the application.  There must be a serious issue to be tried; and the balance of convenience must support the grant of an injunction, as must the overall justice of the case.

[8]      Further, and as Mr Gray submitted for the applicant, special circumstances must exist to justify an injunction which would have the substantive effect of a final order.1   Mr Gray accepts that would be the effect of the proposed injunction.

[9]      The threshold for grant of a mandatory injunction is higher than a prohibitive injunction,2 and grant is unusual:3

Mandatory injunctions are relatively uncommon, interim mandatory injunctions are rare indeed, and interim mandatory injunctions having the effect of a final order and involving the payment of a sum of money which normally would be described as a debt, in my experience are completely novel.

The application

[10]     Mr Gray for the applicant filed detailed submissions.  I mean no disservice to their detail and comprehensive nature by summarising them in this way:

1      Citing Mead v Kragten (1990) 5 PRNZ 113 (HC).

2      McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR7.53.23] citing Locabail

International Finance Ltd v Agroexport [1986] 1 All ER 901 (CA).

3      Soft-Tech International Ptd Ltd v Ball (1990) 3 PRNZ 683 (HC) at 684.

(a)      There is a serious issue to be tried as to whether the respondent was entitled  to  cancel  the  agreement  particularly  in  the  circumstances which Mr Gray elaborated.

(b)The  balance  of  convenience  favours  the  applicant  because  the flowering season is already underway.  Real prejudice arises for the applicant. The respondent will suffer no financial prejudice.

(c)      Damages  will  not  be  an  adequate  remedy  because  the  value  of manuka honey varies significantly according to factors which cannot be determined ahead of a particular harvest.   Damages would be difficult to quantify.

(d)The loss to the applicant if the injunction were not granted would be disproportionate to any loss to the respondent if the injunction were granted.   Mr Janson suggested the applicant’s expected return could be between $100,000 and $400,000.

Analysis

[11]     Even accepting for the purpose of argument that there is a serious question to be tried, I am not persuaded that the applicant has met the high threshold for the grant of an interim mandatory injunction.

[12]     First, damages will be an adequate remedy for breach of contract, which breach is not disputed by the respondent.  It is difficult to see why the factors cited by the applicant make quantification so difficult as to render damages an inadequate remedy for breach of contract.

[13]     Secondly, by now the sites for apiaries are occupied by a third party apiarist. Mr Janson speculates the third party apiarist may have procured the respondent’s breach of contract.  Howsoever the third party apiarist came to be on the land, the proposed injunction would require its departure.   In view of Mr Janson’s evidence that it would not be possible to find another site suitable for the production of

manuka honey in Hawke’s Bay at this time, it may be assumed that an injunction would cause the third party apiarist significant prejudice.

[14]     The third party apiarist is not a party to this proceeding.  The complete lack of evidence bearing on prejudice to the third party makes it difficult to assess where the balance of convenience lies. The Court will not:4

except in cases of real emergency, issue orders which are going to have an obvious effect on other people without hearing them.

[15]     Thirdly, the applicant has delayed in seeking interim relief.  Cancellation was notified on 10 November 2016.   Since that time the respondent has consistently resisted the applicant’s entreaties.   The emails appended to Mr Janson’s affidavit indicate that termination was raised on 2 November 2016.  The exchanges show that the respondent had no interest in re-establishing the agreement with the applicant and was possibly considering granting a different apiarist access to its land.

[16]     By the applicant’s own account in the affidavit of Mr Janson, the manuka flowering season is a brief eight week period beginning mid-December.  Placement of hives is urgent.   But the applicant has delayed by over one month in seeking interim relief.   The delay has affected the balance of convenience in this matter because in the time since the cancellation the third party apiarist has placed apiaries on the property.

[17]     Special  circumstances  are  required  to  justify  the  grant  of  a  mandatory injunction,  and  one  which  would  have  the  effect  of  a  final  order,  as  Mr  Gray accepted this injunction would.  Special circumstances have not been made out and delay and the interests of the third party apiarist point away from the grant of an injunction.

Result

[18]     The application for an interim injunction is declined.

4      Dunedin Taxis 1965 Ltd v Dunedin Airport Ltd (1990) 3 PRNZ 391 (HC) at 394.

[19]     The  respondent  is  entitled  to  costs.     If  costs  cannot  be  agreed  brief

memoranda should be filed.

Karen Clark J

Solicitors:

Sainsbury Logan & Williams, Solicitors for Appellant

M Smith, Solicitor for Respondent