Carr v Gallaway Cook Allan

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

CIV-2013-412-332

[2016] NZHC 2065

BETWEEN

EWAN ROBERT CARR

First Plaintiff

BROOKSIDE FARM TRUST LIMITED
Second Plaintiff

AND

GALLAWAY COOK ALLAN

Defendant

Hearing:

9 May - 1 June, 3 June, 10 June, 13-14 June 2016

Appearances:

F M R Cooke QC, P J Dale and S Cottrell for the Plaintiffs

M Ring QC, A Foote, C Shannon and D Hills for the Defendant

Judgment:

1 September 2016

JUDGMENT OF THOMAS J

This judgment was delivered by me on 1 September 2016 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:………………………….

Solicitors:

GCA Lawyers, Christchurch. Duncan Cotterill, Christchurch.

CARR v GALLAWAY COOK ALLAN [2016] NZHC 2065 [1 September 2016]

Table of Contents

Introduction.......................................................................................................... [1]

Factual Background......................................................................................... [3]
The BSF Claim............................................................................................... [19]
Other claims.................................................................................................... [27]
This judgment................................................................................................ [33]

Part I – Water on BSF........................................................................................... [37]

Water Sources..................................................................................................... [39]

The Sowburn....................................................................................................... [40]

The Carr/Beattie water right............................................................................... [44]
Findings.......................................................................................................... [52]

The Maniototo.................................................................................................... [54]
The Community Water Agreement..................................................................... [59]

A Effect of the CWA....................................................................................... [68]
B Findings on status of the CWA................................................................... [71]

McSkimming land.............................................................................................. [74]
Findings.......................................................................................................... [80]

Expert evidence on water availability................................................................. [84]

Dr Davoren......................................................................................................... [85]

A Water requirements for BSF....................................................................... [89]
B The Sowburn............................................................................................... [91]
C The Taeiri................................................................................................... [96]
D Maniototo.................................................................................................... [97]

E Assessment.................................................................................................. [99]
F Maximum hectares.................................................................................... [105]

G Irrigation equipment................................................................................. [112]
Dr Heiler........................................................................................................... [114]

A SoilWorks/Greenwood report and parameters.......................................... [118]

B AusFarm modelling................................................................................... [120]
C Relationship of dry matter production to milk solids production             [127]
D Conclusion................................................................................................ [130]

Observations..................................................................................................... [132]
Mr Hamilton...................................................................................................... [138]
Dr Eger.............................................................................................................. [140]
Carr and others on water availability................................................................ [144]

A Mr Carr’s background evidence............................................................... [144]
B The Sowburn............................................................................................. [149]
C Water from the McSkimming land............................................................. [157]
D Milking Platform...................................................................................... [160]
E Production................................................................................................ [170]

Conclusion as to size of milking platform........................................................ [179]
Plaintiffs' submissions....................................................................................... [179]
Defence submissions......................................................................................... [185]

Analysis............................................................................................................. [189]

Part II Market value of BSF as at 31 May 2007........................................... [206]

What was the state of BSF in 2002 - 2008?...................................................... [207]
Findings........................................................................................................ [228]

Production levels 2002 onwards....................................................................... [230]
Mr Mills............................................................................................................. [235]

A Average Efficient Production.................................................................... [246]
B Productive valuation assessment.............................................................. [257]

Mr Crighton’s peer review of Mr Mills............................................................. [261]
Mr Larmer......................................................................................................... [268]
Mr Armstrong................................................................................................... [283]

Average efficient production of BSF in 2007................................................... [301]

Submissions.................................................................................................. [302]
Analysis........................................................................................................ [309]

The Fonterra forecast announcement................................................................ [318]

Tenders 2007..................................................................................................... [325]
Findings........................................................................................................ [343]

Stationview....................................................................................................... [347]
Findings........................................................................................................ [352]

Tenders 2008..................................................................................................... [356]

Findings........................................................................................................ [365]

Conclusion as to market value as at 31 May 2007........................................... [368]
Submissions.................................................................................................. [368]
Analysis and findings................................................................................... [371]

Value of BSF in late 2007/2008........................................................................ [396]
Fonterra announcements post 31 May 2007................................................ [397]
Submissions.................................................................................................. [405]
The law......................................................................................................... [415]
Analysis........................................................................................................ [422]

Value of BSF to Mr Carr................................................................................... [440]
Did Mr Carr have a preferential position in relation to water?  [441]
Findings........................................................................................................ [447]
Willowview.................................................................................................. [452]
Equity investors............................................................................................ [455]
Observations................................................................................................. [462]
Would Mr Carr have performed at least as well as his budget?                  [465]
Costs of production...................................................................................... [484]

Conclusion as to Mr Carr’s abilities.................................................................. [487]

Submissions.................................................................................................. [487]

Findings........................................................................................................ [492]

Mr Crighton on investment value..................................................................... [502]

Is investment value appropriate?....................................................................... [512]
Defence…