Croser v Focus Genetics Ltd Partnership (2548500)
[2020] NZCA 367
•26 August 2020 at 12.30 pm
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA107/2020 [2020] NZCA 367 |
| BETWEEN | DAMIEN LEIGH CROSER and KIRSTEN LOUISE CROSER |
| AND | FOCUS GENETICS LIMITED PARTNERSHIP (2548500) |
| Hearing: | 20 May 2020 |
Court: | Brown, Simon France and Mallon JJ |
Counsel: | C M Stevens and T Mijatov for Appellants |
Judgment: | 26 August 2020 at 12.30 pm |
JUDGMENT OF THE COURT
AThe appeal is allowed.
BThe question of costs is reserved. Leave is granted for further submissions on costs, a timetable for which is set out at [103].
____________________________________________________________________
REASONS OF THE COURT
(Given by Mallon J)
Introduction
This appeal concerns whether the parties are bound by a settlement they reached in correspondence where the agreed terms were “subject to documenting the various agreed terms”. The settlement was reached in the lead up to a trial on a claim by the appellants (the Crosers) and a counterclaim by the respondent (Focus), arising out of a contractual arrangement over which they had fallen out. The trial was vacated when the settlement was reached.
The Crosers brought a claim in the High Court seeking to enforce the settlement. Focus applied for summary judgment against the Crosers, contending it was not seriously arguable that the parties were bound by the terms recorded in the correspondence. Justice Doogue in the High Court granted summary judgment, finding that the phrase “subject to documenting” indicated that the parties did not intend to be bound unless and until they executed a formal deed.[1]
[1]Croser v Focus Genetics Ltd Partnership (2548500) [2020] NZHC 320 [Summary judgment].
The Crosers appeal the summary judgment. They contend the Judge failed to apply an earlier High Court finding in an interim injunction application that they had an arguable case,[2] reversed the onus of proof, overlooked matters which precluded summary judgment, and erred in her objective assessment of the effect of the correspondence.
[2] Croser v Focus Genetics Ltd Partnership (2548500) [2019] NZHC 2995 [Injunction judgment].
We consider the appeal should be allowed. We set out our reasons below.
Background
The Crosers own and operate a sheep farm called Kiranda in South Australia. The farm has some 3,000 breeding ewes.
Focus is a limited partnership based in Napier, New Zealand, specialising in livestock genetics. It commercialises its genetics by entering into arrangements to supply genetic material (through sire livestock, semen or embryos) to breeders of livestock and by participating in the sale of the progeny to third parties.
Focus supplies the genetic material from its New Zealand nucleus flocks (NZ Flocks). The NZ Flocks are comprised of two composite breeds of sheep — Highlander and FocusPrime — developed by interbreeding with other sheep and careful genetic selection over many years. Sheep that are the product of Focus’ breeding programme can be either elite sheep or multiplier (flock) sheep (commercial breeding stock).
Focus and the Crosers entered into a “multiplier agreement” on 18 December 2013. Their initial plan had been for Focus to provide rams which would be put over the Crosers’ commercial flock to produce progeny in accordance with Focus’ breeding programme. Focus would then select the ram progeny for sale and the Crosers would have a share in the proceeds.[3]
[3]The Crosers were required to destroy any ram progeny not selected. The Crosers owned and retained the female breeding stock but Focus had rights of purchase when the agreement ended or if the Crosers wished to sell them. The Crosers were required to ensure that any multiplier females sold to anyone other than Focus were not used for commercial breeding.
However, Focus could not supply sire rams because an outbreak of Johne’s disease in Australia prevented the importation of sheep. Focus instead supplied embryos from the NZ Flocks. The embryos were transferred to Australia, where they were implanted into ewes in the Crosers’ flock. This meant the progeny contained 100 per cent genetic material provided by Focus. Later in the relationship Focus also supplied semen obtained from the NZ Flocks.[4]
[4]Under the multiplier agreement, Focus had the right to select sire rams, semen and embryos for supply to the Crosers.
Under the multiplier agreement, Focus owned and retained the intellectual property in the genetic material techniques, records and manuals involved in breeding. The Crosers collected data about the lambs born from these embryos and forwarded this data to Focus. Initially, Focus submitted the data to a database in New Zealand — the Sheep Improvement Ltd (SIL) database. SIL calculates estimated breeding values (eBVs) which are used for breeding selection and selling. Because the NZ Flocks are fully recorded on this database, the eBVs for the Kiranda progeny incorporated relevant genetic information from the NZ Flocks. The information on SIL is not publicly available.
The Crosers found the collection of data labour-intensive and expensive and not what they had envisaged. There were discussions in 2016 to 2017 between the parties to enter into a new agreement. From the Crosers’ perspective, but disputed by Focus, this was to regularise what in fact had been the arrangements in practice whereby they were breeders of elite progeny. A new agreement was never formalised.
In 2017 Focus put in place arrangements for the data of the progeny from the relationship (the Kiranda Flock) to be recorded on an Australian database called Lambplan which was managed by Sheep Genetics Australia (SGA). This database also calculates eBVs in the form of flock breeding values (FBVs) or Australian breeding values (ASBVs). Whether sheep have FBVs or ASBVs depends on whether there is sufficient genetic linkage on Lambplan to other flocks to provide the higher accuracy required for ASBVs. Australian breeders and purchasers rely on the FBVs or ASBVs when making breeding or purchasing decisions.
Owners of the data supplied to Lambplan can control the extent to which their data is publicly available. There is a dispute between the parties about the extent to which the information supplied by Focus was accessible to the Crosers on Lambplan, whether Focus had the right to control what the Crosers could access on Lambplan, and what information the Crosers needed access to if the Crosers were to carry on business as elite sheep breeders once the relationship came to an end.
It is not in dispute that the relationship between the parties soured. On 19 July 2018 Focus gave notice of termination of the multiplier agreement. Pursuant to that notice, the agreement terminated on the earlier of the date rams born in 2018 had been sold or 31 December 2019.
In March 2019 the Crosers brought a High Court proceeding against Focus in contract, tort and under the Fair Trading Act 1986 (the underlying proceeding). The claim alleged the multiplier agreement had been replaced with an agreement in which the Crosers became elite sheep breeders with the encouragement and support of Focus. It alleged various actions by Focus had caused them loss for which they claimed substantial damages.[5] They also alleged Focus had wrongly terminated their access to data on Lambplan and they sought an injunction requiring that access be provided.
[5]Damages of at least AUD 1,724,479 were claimed as well as a further sum for general damages.
Focus counterclaimed for unpaid invoices.[6] It also alleged the Crosers had breached duties owed to Focus which had caused them loss.[7] It alleged the multiplier agreement continued to govern their relationship throughout its term. It sought to enforce the restraint of trade to which the Crosers were subject under that agreement and it sought orders requiring the Crosers to withdraw trade mark applications (for trade marks associated with Focus’ trade marks) and not to use those trade marks.
[6]The claim was for invoices totalling AUD 56,078.97.
[7]Damages of approximately $570,000 were claimed as well as a further sum for general damages.
Close to trial, the parties engaged in settlement negotiations. In an exchange of correspondence, they reached agreement on a sum of money to be paid and a description of the data to which the Crosers would have access, with the correspondence recording it was “subject to documenting the various agreed terms”. They also agreed the Crosers would withdraw trade mark applications they had made. The Crosers’ lawyers sent an email to the court, copied to Focus’ lawyers, advising that the trial fixture was to be vacated.
When the parties came to document the agreement reached, Focus sought to add a qualification to the data definition. The Crosers rejected this qualification. Focus claimed it was not bound by the agreement reached in the correspondence because “subject to documenting” meant the parties did not intend to be bound unless and until a formal contract was negotiated.
The Crosers brought a fresh proceeding to require Focus to perform the agreement they say was reached in the exchange of correspondence (the enforcement proceeding). They also sought an interim injunction to obtain access to the data.
On 18 November 2019 Churchman J in the High Court granted an interim injunction in favour of the Crosers, requiring Focus to (amongst other things) cause SGA to make publicly available certain data relating to rams to be sold by the Crosers.[8] This Court has since partially stayed the judgment and granted leave to appeal against part of the judgment.[9]
[8]Injunction judgment, above n 2.
[9]Focus Genetics Ltd Partnership (2548500) v Croser [2019] NZCA 639.
Focus applied to strike out the Crosers’ proceeding and sought summary judgment in its favour. On 28 February 2020 Doogue J in the High Court granted summary judgment in favour of Focus, finding that the parties did not intend to be bound unless and until they executed a formal deed finalising all outstanding matters between them.[10] The Crosers appeal the judgment of Doogue J.
The data and other context
[10]Summary judgment, above n 1.
Before turning to the negotiated terms recorded in the correspondence it is helpful to have an understanding of the information about the Kiranda Flock that was on Lambplan and what access the Crosers had to it. Detailed affidavit evidence about this was filed in the High Court by Marius Van Niekerk, Focus’ genetic database administrator and the person who was responsible for uploading all the data to SIL and Lambplan.
Mr Van Niekerk explained that the data or information on Lambplan comprised:
(a)Breeding and index values: these are the FBVs or ASBVs that are calculated for a range of traits including birth weight, weaning weight, fat depth, eye muscle depth, wool weight, fibre diameter, reproductive performance and worm egg count. Traits can be combined to give a single value.
(b)Raw data: this is measurements taken on the farm (for example, weights at various ages, body condition scores and fleece weights), test results and other information (for example, gender, birth date and breed).
(c)Pedigree information: this is the sheep’s forebearers recorded as an identification number. This information is displayed as a family tree. If the forebearers of a sheep are recorded in Lambplan with their own FBVs or ASBVs, the identification number is displayed on the family tree as a link that users can click on. That takes the user to that sheep’s FBVs or ASBVs and family tree. If the forebearer of a sheep is not separately registered and recorded on Lambplan, then the identification number is recorded but there is no link to the forebearer.
(d)Linkage: this describes the link between related sheep, when the raw data of one sheep is relevant to the calculation of eBVs for the other sheep. Linkage improves the accuracy of the eBVs and is necessary for the generation of ASBVs.
Mr Van Niekerk explained that Focus registered the Kiranda Flocks on Lambplan on 20 June 2016 for the Highland and FocusPrime breeds. This involved turning the raw data as reported by the Crosers into data capable of input into Lambplan and uploading it. Focus also uploaded the pedigree information in the form of the identification number for the sheep’s parents. Where the parent was from the NZ Flocks, there was no clickable link on the identification number because Mr Van Niekerk did not transfer the dataset to Lambplan to enable this to occur until September 2018 (that is, after Focus terminated its relationship with the Crosers). Up until 2019, the eBVs for the Kiranda Flock were FBVs only.
Mr Van Niekerk also explained that Lambplan has three default settings:
(a)Full public access: all sheep in a flock are publicly listed, searchable and viewable.
(b)Current drop only: the eBVs for the current drop of lambs on the farm and for their parents (one generation).
(c)Private: access is for the breeder only by log in.
The Crosers say there was full public access on Lambplan to the Kiranda Flock until Focus changed it to private access. Their evidence about this is somewhat limited in detail although affidavit evidence in support was filed by Gerald Martin, a retired South Australian sheep producer and consultant with significant involvement in Lambplan over the years. He said that to be on Lambplan the sheep must have pedigree data identified at least to the extent of their parents, and this can be identified for as many generations as there is data.
From Mr Van Niekerk’s evidence, it seems that there may have been a period where there was public access to the Kiranda Flock information on Lambplan and this was changed to “current drop” in July 2017. Regardless, according to Mr Van Niekerk’s evidence, at no time before September 2018 was it possible to click on the parentage identification number where the parent was from the NZ Flocks to obtain the eBV for the parent, and nor was the raw data for the NZ Flocks available on which the eBVs were calculated, because the data from the NZ Flocks had not yet been transferred. Between September and November 2018, the eBVs for the current drop of the Kiranda sheep was publicly accessible and those values were calculated with reference to linkages to the New Zealand dataset. In November 2018 it was changed to “private” so that only Focus could access the information.
The evidence in the High Court discussed whether the Crosers needed access to the eBVs of the forebears of the Kiranda progeny. Focus’ evidence was that with the raw data on the Kiranda sheep and the identification numbers for their parentage, the Crosers could build up their own dataset going forward. Its evidence also made the point that linkage information improved the accuracy of the eBVs but did not necessarily result in higher values. Mr Martin’s evidence, in contrast, was that without the linkage information, the Crosers’ elite sheep operation would be a fraction of its current size.
The evidence before the Court also discussed the motivations for why Focus did not provide (Focus’ evidence) or stopped providing (the Crosers’ evidence) access to the pedigree information. Focus’ view was that it was intellectual property it had developed over many years and its business depended on being able to control its commercialisation. The Crosers saw it as unfairly enabling Focus to advantage the other Australian breeders to which Focus supplied rams, embryos or semen over the Crosers when they had become elite breeders.
The negotiation
A two-week trial on the underlying proceeding was scheduled to commence on 14 October 2019. In August and early September 2019 a settlement offer and a counter‑offer were made. In late September 2019 the Crosers and their lawyer, Ms Anagnostou, met with Mr McMechan (general counsel for Landcorp, the owner of Focus) and Mr Creswell (general manager of Focus) to discuss settlement. No settlement was reached but the parties continued their discussions in correspondence.
On 30 September 2019 Ms Anagnostou wrote to Buddle Findlay, the solicitors representing Focus in the underlying proceeding. The letter proposed an agreement that:
(a)The Crosers owned all the sheep at Kiranda, including the progeny of the Kiranda sheep, and Focus had no options to purchase them.
(b)The Crosers would not use, and would keep confidential, Focus’ “breeding programmes, genetic material techniques, records, manuals, procedures, techniques, methods, brands, tradenames, trade marks, logos and devices”.
(c)Focus would provide “all of the data in relation to all of their sheep” (meaning “the sheep born between 2014 and 2018 that were not born into the Crosers’ commercial operation, including the sheep which the Crosers no longer own”). This applied to the “data collected on the sheep, including the data in relation to third party tests of such collection”.
(d)The Crosers owned this data and Focus would inform Lambplan that the Crosers owned all data in relation to the “Kiranda Highlander” and “Kiranda Focus Prime” sheep.
(e)Focus waived any right to pursue the Crosers for the outstanding invoices, which totalled AUD 56,078.97.
(f)Neither party would be subject to a restraint of trade.
(g)Focus waived its rights to a percentage of the profits from the October sales of Kiranda sheep and had no claim on profits from future sales.
(h)Focus would pay the Crosers AUD 500,000.
(i)The usual terms of confidentiality applied and there was no admission of liability. Each party released the other from existing or future claims relating to the subject matter of the underlying proceeding.
(j)Within two days of Focus providing the data to the Crosers, advising Lambplan of the Crosers’ ownership and paying the compensation, “provided that a Deed of Settlement and Release” had been executed in accordance with the above terms, the parties would file a notice of discontinuance in the Court with no issue as to costs.
Mr McMechan made a counter-offer of $405,000 for compensation the same day, stating “[o]ther terms would be as per your letter and our discussions, subject to me clarifying and us agreeing on the appropriate definition of ‘data’”. Ms Anagnostou replied the same day, saying “[i]f we agree on the cash amount, we can work out the most elegant way of framing the definition of data – I think that we are both on the same page there”. She said that $500,000 was the appellants’ final offer, otherwise they would go to court.
On 1 October 2019 there was a further exchange of emails. Mr McMechan said Focus might be able to offer more money if the appellants could accept less. Ms Anagnostou replied that $500,000 was the final offer.
Mr McMechan then replied, saying he had “had a chance to discuss internally and [was] authorised to make the following offer”. This was a payment of $437,500 and the following in relation to data:
Focus agrees to provide all data in relation to any sheep (born between 2014‑18 inclusive) belonging to the Crosers that is held by Focus Genetics LP and its subsidiaries, including pedigree information and all raw data (measurements, test results etc) held in respect of those sheep. Focus will warrant that the information provided will be all information held by Focus in relation to the Crosers’ sheep but will provide no other warranty in relation to the data.
Focus agrees to transfer any ownership interest in that data to the Crosers.
Focus will procure the transfer of all unique sheep identification numbers relating to the Crosers’ sheep in Lambplan. Focus will not provide access to any data/records within Lambplan.
Mr McMechan referred to a discussion with Ms Anagnostou about why the last part of this data offer was different to the Crosers’ proposal. He said this was because:
… transferring access from Focus to the Crosers within Lambplan will provide the Crosers with access to a wider set of data than that agreed above. Transfer of the unique identifiers is necessary so that the Crosers can continue to use Lambplan for those particular sheep and it would be up to the Crosers to develop their own records within Lambplan with their data.
Mr McMechan concluded by saying:
Other terms are as set out in correspondence between us.
Please let us know if this offer is acceptable to the Crosers and we can then move to document the terms in a settlement agreement.
The email correspondence indicates there was then a further telephone discussion between Mr McMechan and Ms Anagnostou. Mr McMechan then sent an email referring to this discussion and confirming that Focus was prepared to round up its payment to $450,000 in the interests of reaching a full and final settlement. He asked that Ms Anagnostou “confirm by return that we have agreement, subject to documenting the various agreed terms”.
Ms Anagnostou replied the same day saying:
We accept your offer to settle on the terms of the below emails read together with our letter to you of yesterday’s date (for the avoidance of doubt, using your definition of data).
On the basis of this agreement, we’ll draft a deed of settlement and release, and [we] will notify the Court in the morning that the fixture can be vacated.
Thank you for working with us towards settlement over the past few days.
The next morning, 2 October 2019, Mr McMechan replied:
Great to have agreement, thank you ...
One point to clarify/add please – as we’ve discussed, just ensuring that the Focus TM point (not covered in your letter but agreed in earlier exchanges) is also covered off in the settlement deed please.
We look forward to receiving the draft deed of settlement.
Ms Anagnostou replied that “[w]e are fine to give up the trademarks. It was implied I think in our 30/9 letter but granted not explicit”. She said she would have a draft deed ready for the next day. Mr McMechan’s response was that this was “[a]ll good, thank you” and asked her to send the draft deed to Buddle Findlay.
In the morning of 2 October 2019, counsel for the Crosers informed the Court that the matter “was settled last night” and the fixture could accordingly be vacated. Counsel’s email also advised that a notice of discontinuance would be filed in due course. This email was copied to Buddle Findlay.
On 4 October 2019 Ms Anagnostou sent a draft deed of settlement to Buddle Findlay. The draft provided:
(a)The deed was in full and final settlement.
(b)The Crosers own all the Kiranda sheep (defined as sheep born on the property of Kiranda) and Focus had no options or other rights in respect of them or any future progeny of the Kiranda sheep.
(c)The Crosers would not use, and would keep confidential, Focus’ breeding programmes, genetic material techniques, records, trade marks among other information, but this did not prevent the Crosers from breeding, marketing and selling Kiranda sheep.
(d)The Crosers were to withdraw their trade marks for “Kiranda Highlander” and “Kiranda Focus Prime” and to direct Lambplan to change these names to a name that did not breach its undertaking in (c).
(e)On the transfer and ownership of data, Focus agreed:
(a) No later than 10 October 2019, to provide [the Crosers] all data in relation to all Kiranda Sheep (and therefore including any and all Kiranda Sheep born after 2014) that is held by [Focus], its subsidiaries and/or any of their contractors, including pedigree information and all raw data (including but not limited to measurements and test results including TSU sample results) (“the Data”). [Focus] will warrant that the information provided will be all information held by [it] or its subsidiaries in relation to the Kiranda Sheep but provides no other warranty in relation to the Data;
(b) No later than 10 October 2019, to procure the transfer to [the Crosers] of all unique sheep identification numbers relating to all the Kiranda Sheep which have such Lambplan unique sheep identification numbers;
(c) That it transfer to [the Crosers] any interest it may have in the Data; and
(d) No later than 10 October 2019, to procure the transfer of all unique sheep identification numbers relating to the Kiranda Sheep in Lambplan.
(f)Focus waived its right to invoiced sums totalling $56,078.97 and to its percentage share of the sale receipts from the October 2019 sales of Kiranda Stud Rams and agreed it had no claim on future sales.
(g)Neither party was subject to a restraint of trade.
(h)Focus was to pay $450,000 to the Crosers by 10 October [2019] without an admission of liability.
(i)Within two days of completion of (d), (e) and (h), a notice of discontinuance with no issue as to costs would be filed.
The draft also contained standard clauses, including release, governing law and entire agreement clauses.
On 8 October 2019 Mr McMechan sent back an edited version of the draft deed and noted that there was “an outstanding point under the data clause that I need to come back to you on”. Mr McMechan explained that he was waiting to hear back from Focus on this point and he would revert once he had done so. The edits were mainly in the nature of tidying up some of the drafting. The edit to the data definition included the words “[t]o avoid doubt, Data does not include [ ]” and Mr McMechan noted that Focus “would like to be clear about what is and is not in scope. Proposed wording TBC”.
On 9 October 2019 Ms Anagnostou replied with a further version of the deed, largely adopting Mr McMechan’s drafting changes and adding a minor change. Further she noted in her covering email that “[a]s we’ve not heard from you on the data we’ve removed your change, but if you propose to clarify what ‘all the data’ means, we’ll consider that”.
Mr McMechan sent back an edited version of the deed. It changed the date by which the appellants needed to direct Lambplan to change the name of their sheep to avoid using the respondent’s intellectual property. More significantly, it added to the data clause, for Ms Anagnostou’s consideration, “[t]o avoid doubt Data does not include pedigree or parentage information relating to any New Zealand sheep used in the breeding programme under the Sheep Agreements”.
On 11 October 2019 Ms Anagnostou replied by email, forwarding the “email correspondence articulating the terms of the settlement, which terms include that [Focus] is to provide our clients with all data, including pedigree information”. She said:
On this basis, we can’t accept your carve out at clause 2.4(a) of the draft settlement deed, which is contrary to what was agreed. …
Our next draft of the settlement agreement will reflect what was agreed. …
Later on in the day, Ms Anagnostou forwarded the draft with minor changes and removing “the carve out you inserted on the data so that the definition of Data is consistent with what was agreed via email”. Mr McMechan replied, disagreeing that the qualification was inconsistent with what had been discussed or agreed.
He explained:
As per our correspondence on settlement our agreement is subject to documenting the various terms. What we are trying to do is clarify what is in and out of scope to avoid a later dispute about what constitutes “data”.
… you’ve latched on to the wording “all data … including pedigree information” without taking into account the prior words or the following paragraphs which provides context as to what that means. We are offering to provide all data in relation to the Crosers sheep (being those born on Kiranda 2014-2018). We are not providing NZ pedigree or parentage data. As noted in the email, the very reason we do not agree to provide the Crosers with access to Lambplan is because that would provide them with access to a “wider set of data than that agreed above”. As has been the case from day 1 of this dispute, Focus is not prepared to hand over all data (its core IP). We discussed – and I thought agreed – this when we met in Adelaide.
From that point, negotiations broke down, with the parties disagreeing on whether an agreement had been reached earlier. The Crosers commenced the proceeding that has led to this appeal.
The law
Contract formation
Electricity Corporation of New Zealand Ltd v Fletcher Challenge Energy Ltd identified the prerequisites to formation of a contract as:[11]
(a)an intention to be immediately bound at the point when the bargain is said to have been agreed; and
(b)an agreement, express or found by implication, or the means of achieving an agreement, on every term which was legally essential to the formation of the agreement or which was regarded by the parties as essential to their agreement.
[11]Electricity Corporation of New Zealand Ltd v Fletcher Challenge Energy Ltd [2002] 2 NZLR 433 (CA) at [53].
Whether the parties intended to enter into a contract and had succeeded in doing so are to be determined objectively.[12]
[12]At [54].
Electricity Corporation of New Zealand Ltd v Fletcher Challenge Energy Ltd also discussed the evidence that was relevant when considering whether a contract has been formed. In contrast with when the court is interpreting a formed contract, when deciding whether a contract has been formed the matrix of facts includes the statements the parties made in their negotiations and the drafts of the intended contractual document.[13] It is also permissible to consider that “one party told the other that the otherwise apparently binding contract was not in fact to be binding” and “to look at subsequent conduct of the parties towards one another, including what they have said to each other after the date of the alleged contract”.[14] The Court expressed reservations about whether direct expressions of subjective intent were relevant, but did not reach a firm view about that.[15]
[13]At [54]–[55].
[14]At [55]–[56].
[15]At [56].
Subsequently, in Tower Insurance Ltd v Nicon Ltd, this Court said:[16]
[33] It is settled law that the determination of whether parties have intended to enter into a contract requires an objective assessment. It is not a question of deciding the credibility of their competing claims as to their actual intentions. It is also settled law that in undertaking that objective assessment, the Court may have regard to the context or purpose of the document, its wording and the subsequent conduct of the parties as well as what they said both before and after the document was signed.
(Footnotes omitted.)
The context and type of transaction
[16]Tower Insurance Ltd v Nicon Ltd [2019] NZCA 332.
The context and type of the transaction can be important elements of the factual matrix in determining whether an agreement was intended to be binding.[17] As this Court discussed in Smada Group Ltd v Miro Farms Ltd, there are a series of cases in this Court holding that “the usual inference in the case of the sale and purchase of land is that the parties intend to be bound only by a formal document signed by both parties”.[18] This inference may arise expressly (by the use of a phrase such as “subject to contract”) or impliedly. This inference has also been applied when parties are negotiating a complex business transaction involving substantial sums that would normally be embodied in a formal contract.[19]
[17]See Jeremy Finn, Stephen Todd and Matthew Barber Burrows, Finn and Todd on the Law of Contract in New Zealand (6th ed, LexisNexis, Wellington, 2018) [Burrows] at 278–280.
[18]Smada Group Ltd v Miro Farms Ltd [2007] NZCA 568 at [15]–[27].
[19]Burrows, above n 17, at 279, citing Concorde Enterprises Ltd v Anthony Motors (Hutt) Ltd [1981] 2 NZLR 385 (CA), which involved negotiations over an agreement for manufacturing and distribution of supplies of emulsion-producing guns where the negotiations ended with an approval of a draft agreement conditional on some additional matters and a request for “the final draft for execution”.
As it was put in Smada Group Ltd v Miro Farms Ltd:
[27] In order for the inference to be engaged, there needs to be some evidence that the parties were contemplating being bound by the ordinary and customary method of obtaining agreement – which is the signing of a document. Both the words used in the agreement and the factual matrix are relevant in making this determination.
Even when this inference arises, other evidence may show that there was a different intention. Burrows summarises this point:[20]
As we may expect, there will be cases where the courts will not draw the inference that the parties intended to so delay their contractual liabilities. This may be because the way in which the agreement was concluded indicates that the agreement was intended and expected to have effect immediately, or because the form of words actually used indicates that some contractual effect was to be given to the preliminary agreement, or both.
(Footnote omitted.)
[20]Burrows, above n 17, at 279.
For example, it may be that, although the parties initially intended to be bound only once a formal contract was executed, matters changed during the negotiations. As it was put by Somervell LJ:[21]
If in a complicated commercial transaction of this kind parties do finally become ad idem, their intentions on this point might well take a new turn. One can imagine, for example, a case in which parties had contemplated signature of a document up to the time when they were ad idem, but, when all points were finally agreed, an exchange of telegrams might make it clear that they were at that stage agreeing to be bound in advance of signature of the formal document. …
[21]Sociedade Portuguesa de Navios Tanques Ltda v Hvalfangerselskapet Polaris A/S [1952] 1 Lloyd’s Rep 407 (CA) at 417. Cited with approval in Concorde Enterprises Ltd v Anthony Motors (Hutt) Ltd, above n 19, at 389.
Further, after a consensus intended to be binding is reached, adding the words “subject to contract” does not alter the fact that a contract has already been formed. As it is put in Burrows:[22]
If an informal or preliminary agreement was intended to be binding from the time it was made, it will not be rendered ineffective because one party’s legal advisers propose the execution of a more formal document to remove legal impediments left unaddressed in the informal agreement.
(Footnote omitted.)
[22]Burrows, above n 17, at 280.
In the Court below, the parties referred to, and the Court relied on, a decision of the High Court of Australia from the 1950s, Masters v Cameron, which discussed how “subject to contract” cases may belong to one of three classes:[23]
(a)The parties have reached finality on the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect.
(b)The parties have agreed upon the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but have made performance of one or more of the terms conditional upon the execution of a formal document.
(c)The intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.
[23]Masters v Cameron (1954) 91 CLR 353 at 360. These categories have been considered helpful in RPNZ Ltd v Real Estate Institute of New Zealand Inc HC Auckland CIV-2003-404-527, 15 September 2005 at [29]; and Northern Dairylands Ltd v Maxted HC Whangarei CIV‑2004‑488‑402, 20 December 2007 at [62].
The High Court of Australia discussed that, in the third of these, the parties may have made their negotiated agreement subject to contract either because they have dealt only with the major matters and contemplate that others will or may be regulated by provisions to be introduced into the formal document, or simply because they wish to reserve to themselves a right to withdraw at any time until the formal document is signed.[24] If that is the true construction of the evidence, then the parties are not bound. If that is the position, then a party is free to retire from the contract if “on looking at the formal contract, he finds that though it may represent what he said, it does not represent what he meant to say”.[25]
[24]At 361.
[25]At 362, quoting Rossiter v Miller (1878) 3 App Cas 1124 at 1152.
The case before the Court was an example of this third category. It involved a land transaction expressed to be “subject to the preparation of a formal contract of sale which shall be acceptable to my solicitors on the above terms and conditions”.[26] The Court considered the natural meaning of “subject to contract” in this context prima facie meant that what had been agreed did not constitute a contract, but was the intended basis for a future contract.[27] This decision aligns with the approach that has been taken in New Zealand to negotiations over the purchase of land.
[26]At 359.
[27]At 362–363.
Focus’ submissions also referred to the decision of this Court in Dryden v Hemingway.[28] In that case, there were negotiations between Ms Dryden and her former employer to buy the employer’s shares in a company in financial difficulty. As the negotiations progressed there were phrases such as “details which we can out”, “arranging contract with lawyers” and “subject to formal documentation”. This Court considered that the parties indicated by these phrases that they did not intend to be bound up to that point until formal documents were executed. The final version of an agreement being negotiated was never signed and there was a conflict in the evidence about why that was. The onus was on the appellant to show some later change of intention than that indicated by the negotiations and she had not done so.[29]
The High Court decision
[28]Dryden v Hemingway CA70/95, 15 November 1995.
[29]At 6–7.
The statement of claim alleged a settlement agreement was reached between the parties on 1 October 2019.[30] It alleged the common intention of the parties was that the agreement was binding on them immediately and its terms would be recorded in a formal document afterward. It alleged the agreement was reconfirmed in correspondence between the parties on 2 and 3 October 2019. It alleged that Focus repudiated the agreement by failing to provide the data and execute the deed. It sought an order requiring Focus to perform the agreement.
[30]The pleaded particulars of that agreement were the settlement offer from Mr McMechan to the Crosers’ lawyers by emails dated 1 October 2019 at 9.15 pm and 6.26 pm (the emails discussed at [34]–[37]), and acceptance of the offer by the Crosers’ lawyers in an email dated 1 October 2019 at 10.21 pm (the email at [38] above).
In the High Court Focus contended that it was entitled to an order striking out the claim or for summary judgment because:
(a)objectively assessed, there was no intention to be bound unless a formal contract was executed; and
(b)the terms of its offer were insufficiently certain to constitute an agreement because there was uncertainty as to the meaning of “data”, which was an essential issue for both parties, and there was also uncertainty as to the “other terms” in the correspondence that were to be included.
The Crosers contended Churchman J’s earlier finding on the injunction application, that there was an arguable case of a binding agreement, was fatal to Focus’ applications. They also contended that summary determination was not appropriate because the pleading disclosed a tenable case for breach of contract and because there were factual disputes on important questions. The factual disputes were said to include the meaning of Mr McMechan’s “[g]reat to have agreement” email and what constituted “all data”. The Crosers submitted Mr McMechan should be cross‑examined on his later attempt to recast what these meant.
The Judge rejected the submission that Churchman J’s earlier finding was binding. She considered the decision was not final because it was always open for Focus “to argue later that there was no such finding available to the Court on closer examination”.[31]
[31]Summary judgment, above n 1, at [43].
The Judge rejected the submission that there was conflicting evidence that made summary determination inappropriate. She noted that the Crosers asserted there was a binding agreement on the face of the written correspondence.[32] She said this must be determined on an objective assessment of the correspondence and their ex post facto assertions as to what their correspondence or conduct was intended to mean were not relevant.[33] This meant it was not necessary for there to be a credibility finding on Mr McMechan’s “[g]reat to have agreement” email (as the Crosers had submitted) and what was meant by “all the data” was able to be determined summarily on the basis of the correspondence.[34]
[32]At [45].
[33]At [46], citing Electricity Corporation of New Zealand Ltd v Fletcher Challenge Energy Ltd, above n 11, at [31].
[34]At [47]–[49].
The Judge then considered whether, objectively, the parties intended to be bound at the conclusion of their exchange of correspondence. She referred to both Electricity Corporation of New Zealand Ltd v Fletcher Challenge Energy Ltd and Masters v Cameron.
The Judge reasoned that the correspondence did not clearly set out all the terms of the offer to settle:[35]
(a)The email from Ms Anagnostou of 30 September 2019 was evidence of the parties still needing to confirm the definition of data. This reflected that “the relevant terms would be fully negotiated and set out in a formal agreement at a later date”.
(b)Mr McMechan’s email of 1 October 2019 explained that Focus would not simply provide the Crosers with access to the existing Lambplan data because this would provide them with “access to a wider set of data than that agreed above”. The email did not explain what the wider set of data was. “The uncertainty” in this email on an important issue showed it was not objectively intended to be “a carefully drafted term with immediate binding effect” and reinforced that it was to be more fully articulated in a formal agreement. The Crosers “provide[d] no explanation” as to what the wider set of data was to which they were being denied access.
(c)The exchange of correspondence was not comprehensive. For example, Mr McMechan asked Ms Anagnostou to clarify that the trade mark issue would be covered off in the settlement agreement. Further, Mr McMechan’s offer had been accepted on the basis of his “uncertain reference to terms as set out in earlier correspondence”.
[35]At [70]–[75].
The Judge considered the fact that the settlement was of complex intellectual property litigation, with significant issues about the definition and ownership of data and third-party interests, crucial elements only partially discussed and uncertainty as to the terms agreed to, indicated that the parties did not intend to be legally bound.[36] She considered the trial was vacated because both parties expected matters would be concluded satisfactorily in an agreement.[37] The Judge made an order dismissing the Crosers’ claim.[38]
Analysis
Earlier High Court finding
[36]At [76].
[37]At [78].
[38]At [81]. Although she did not say so, it is implicit in her approach that she granted Focus’ summary judgment application. She did not make an order striking out the claim.
In his decision on the injunction application, Churchman J said, “I find that the [Crosers] have an arguable case that they reached a binding settlement agreement with [Focus]”.[39] In the summary judgment decision, Doogue J distinguished that finding because it was made “in the context of applying the balance of convenience test” and was “far different to the test to be applied in the summary judgment context”.[40]
[39] Injunction judgment, above n 2, at [35].
[40] Summary judgment, above n 1, at [42].
The Crosers take issue with the formulation of words the Judge used to distinguish Churchman J’s finding. As we read those words in their context, we consider the Judge meant that an arguable case for the purposes of then deciding where the balance of convenience lay was different to deciding whether there was an arguable case in the context of a summary judgment application. We agree with the Judge about this.
The more important point is that the Judge was correct to reject the Crosers’ submission that this finding created an issue estoppel preventing Focus from effectively relitigating the issue.[41] We agree with Focus that, as an interim injunction is subject to review, rescission and variation and the injunction was given “pending further order of the Court”,[42] it lacks the necessary finality to be a final judicial determination which is required for issue estoppel.[43]
Onus of proof
[41]Shiels v Blakeley [1986] 2 NZLR 262 (CA) at 266 and 268.
[42]Injunction judgment, above n 2, at [70].
[43] Weta Estate Ltd v Savvy Vineyards 4334 Ltd [2019] NZCA 437 at [24]; and Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853 (HL) at 927.
When discussing the jurisdiction to grant summary judgment, the Judge said that, “unless [the] Crosers can show a clear incontrovertible binding contract on the face of the settlement correspondence, the application for strike out or summary judgment application will succeed”.[44] The Crosers submit that, in this statement, the Judge incorrectly imposed the onus of proof on them and imposed a higher standard than the balance of probabilities. The Crosers submit this error permeated the judgment, evidenced by the Judge’s later comment that:
[73] Crosers say that the alleged agreement includes “all data” and yet provide no explanation as to what they say constitutes the wider set of data to which access was not being provided. Nor do they explain what data in the LambPlan dataset was excluded from the offer.
[44]Summary judgment, above n 1, at [39]
We agree that the Judge appears to have erroneously put the burden on the Crosers. Her statement requiring the Crosers “to show a clear incontrovertible binding contract” may have been a slip, given that she had earlier correctly set out the test for summary judgment.[45] However, the Judge’s reasoning at [73] suggests the reversal of the onus may have permeated the judgment. On appeal this Court is required to reach its own view on whether Focus is entitled to summary judgment. In doing so, any reversal of the onus in the Court below is remedied.
Relevance of the factual matrix
[45]At [37]. We disagree with Focus’ submission that the Judge was referring to an evidential burden arising because Focus had provided a complete answer to the Crosers’ claim and that the Crosers had not put forward any fact that might contradict Focus’ answer. In fact, the Crosers had filed evidence about what “all the data” would be and why that was important to them in the context.
The Crosers submit that, in confining her assessment to “on the face of the settlement correspondence”, the Judge erred in her approach.[46] We agree. As set out earlier, it is well established that the matrix of facts is relevant (including the context or purpose of the document) as is the subsequent conduct of the parties and what they said both before and after the document was signed.
[46]At [39].
Extensive evidence was filed by both parties about the data available on Lambplan, the extent to which the Crosers had access to this, and what information was needed by breeders and was important to purchasers. The Judge did not discuss this evidence because she confined herself to the face of the written correspondence. As with the reversal of the onus, this error is remedied by this Court reaching its own view on whether Focus is entitled to summary judgment.
Subjective intentions
The Crosers submit the Judge was wrong to dismiss their submission that there were conflicting evidence and credibility issues that made summary determination inappropriate. We consider the Judge was correct to dismiss the submission in so far as it suggests that the credibility of one party’s claim as to their actual intentions is relevant. It is not. For example, the credibility of Mr McMechan’s affidavit evidence about what he meant by his “Great to have agreement” email did not need to be tested at trial.
On appeal, the Crosers submit that Focus adduced so much ex post facto evidence intended to qualify the meaning of the contract that the Judge may have been influenced by it. They submit they should have had the benefit of testing the case at trial. We do not accept this submission. The Judge expressly noted this evidence was not relevant and her analysis shows that she did not rely on it.[47]
Objective assessment
[47]At [46].
We agree with the Judge that the fact there were complexities in what the parties were endeavouring to settle is a factor on its own that might suggest the parties envisaged they would only be bound once the terms of a formal document recording that settlement were finalised and signed.
However, this factor needed to be viewed in the context of the upcoming trial and the desire of both parties to achieve a settlement before that trial and thereby avoid the costs and risks associated with the trial. This context provided a strong incentive for both parties to compromise their positions. That incentive would dissipate if the parties were free to walk away from their agreed compromise after the fixture was vacated if the terms of a formal document were not agreed upon. This is quite different from a negotiation over a land purchase or a commercial arrangement which does not have that litigation context.
We disagree with the Judge that there is any significance in the indication in Ms Anagnostou’s 30 September 2019 email that some drafting was still required on the data definition. That email was part way through the exchange that led to the agreement between the parties. The next day Mr McMechan had obtained instructions about what Focus was offering on the data and Ms Anagnostou had responded accepting “your definition of data”. Ms Anagnostou’s words suggest she considered there was now clarity on the data to which the Crosers would have access.
We agree with the Judge that Mr McMechan’s 1 October 2019 email did not define what was meant by the “wider set of data” to which the Crosers were not to have access. We disagree that this indicates the parties did not intend to be bound. What was meant by the “wider set of data” needed to be considered in the context of Mr McMechan’s data proposal as a whole, and the evidence before the Court about what information was held by Focus, what information was recorded on Lambplan, what information was or was not accessible by the Crosers before the relationship terminated, what data the Crosers would need access to if they were to operate as elite breeders, and Focus’ intellectual property interests in the data it held on the NZ Flocks.
In other words, the data proposal made by Mr McMechan may seem unclear and non-comprehensive on the face of the correspondence to someone without the relevant context, but the parties were negotiating a settlement against the backdrop of their relationship and their respective interests now that the relationship was at an end and litigation was pending.
On the face of the correspondence Mr McMechan’s data definition was:
(a)to provide “all data” in relation to the Crosers’ sheep including “pedigree information and all raw data”;
(b)to provide the Crosers with the unique sheep identification numbers; and
(c)not to provide the Crosers with access to the data and records on Lambplan because that would provide the Crosers with a “wider set of data”.
In making this offer, Mr McMechan explained it would enable the Crosers to develop their own records within Lambplan with the data on their sheep. He also explained that he was not providing the Crosers with access to the data and records on Lambplan.
The evidence from Mr Van Niekerk discussed above provides relevant context for understanding this offer. To recap: Focus held raw data (such as measurements and tests results) collected on the Kiranda Flock by the Crosers; Focus submitted this data to SIL to calculate eBVs; Focus also provided the raw data on the Kiranda Flock to Lambplan to enable FBVs to be calculated; pedigree information was displayed on Lambplan only as an identification number because Focus did not provide Lambplan with data on the NZ Flocks until after the agreement with the Crosers was terminated; and only after the NZ Flocks data was provided were ASBVs calculated.
If that evidence is correct, then Mr McMechan’s offer covered the three sets of information it and Lambplan held: the raw data on the Kiranda Flock; the pedigree information (comprising only the identification number before termination); and the wider data (the data relating to the parents of the Kiranda Flock).
The Crosers’ evidence contests Focus’ evidence about what was accessible on Lambplan. The Crosers also contest that Focus had the right to control that access — the Crosers say that they were the breeders of the sheep and as such it should have been them controlling the Lambplan access. They also contest Focus’ evidence that they could continue as elite breeders if they only had the raw data on the Kiranda Flock and the identification numbers for the parents. The correct view on this may be relevant when interpreting what the settlement agreement meant if the Court were to find there was an intention to be bound. For present purposes, the point is that the apparent lack of clarity or incompleteness on the face of the correspondence did not in itself indicate that the parties intended they would be bound only if a formal contract was signed. There was relevant context against which the data definition agreed to in the correspondence was to be understood.
We also disagree with the Judge that the exchange of correspondence was not comprehensive because the trade mark issue needed to be covered off in the settlement agreement. Mr McMechan’s offer on 1 October 2019 included “other terms as set out in the correspondence between us” and Ms Anagnostou’s email on the same day accepted this offer “on the terms of the below emails read together with our letter to you of yesterday’s date”.
Through this exchange, Ms Anagnostou’s 30 September 2019 letter was incorporated in the settlement the parties reached subject to the compromise later reached on the money and the agreement reached on the data definition. This letter had proposed that the Crosers would not use Focus’ “brand, tradenames [and] trade marks” amongst other things. This was against the backdrop of Focus’ counterclaim for orders that the Crosers not use Focus’ trade marks (FocusPrime and Highlander) and that they withdraw their applications to register trade marks (Kiranda Focus Prime and Kiranda Highlander).
Mr McMechan’s email on 2 October 2019 sought clarification about the “Focus TM point”. Ms Anagnostou confirmed that the Crosers would “give up the trademarks”. Given the Crosers’ applications incorporated “Focus Prime” and “Highlander” trade marks, she understandably regarded this as implicit in the proposal set out in her 30 September 2019 letter. The confirmation this would be covered in the draft deed, in our view, is equally consistent with an intention to be bound only when a deed was finalised and executed, as it is with an intention to be bound immediately and the terms of the agreement to be restated in a form which will be fuller or more precise but not different in effect.
We also disagree that important elements were left unresolved. The key issues in the litigation were money, access to data, the trade marks and whether the Crosers were bound by the restraint of trade. Of those issues, the trade marks and restraint of trade were not difficult to resolve — they were part of Ms Anagnostou’s proposal on 30 September 2019 and required no further discussion. The toing and froing in the negotiation was over the money and the data. By the time of Mr McMechan’s “[g]reat to have agreement” email, the money and what was called the “data definition” were agreed.
Other relevant context not considered by the Judge includes that the negotiations were between lawyers and that Mr McMechan’s proposal for the data was made only after he had obtained internal instructions about that. That suggests a thought out offer that was made with authority.
Further, when Mr McMechan sought to amend the draft deed he purported to do so “to avoid doubt” and so as “to be clear about what is and is not in scope”. This suggests that Mr McMechan was not purporting to renegotiate what had been agreed but was looking to tidy up the wording of what had been agreed for improved clarity.
Focus submits that the draft deed demonstrates that the parties only intended to be bound when the deed came into force. Focus refers to: cl 2, which provided that the claims would be settled by entry into the deed; cl 3, which recorded that the deed was a complete defence to any actions, suits or proceedings without reference to any earlier settlement; and cl 7, which is an entire agreement clause. In our view these provisions are all neutral as to whether there was an intention to be bound to the settlement reached in the correspondence. If there was such an intention, but also an agreement that the settlement would be more formally documented without altering the terms already agreed, the clauses Focus has referred to are consistent with the parties intending the formal document to govern their settlement once it was executed.
Focus submits the data definition included in the draft deed was different from the data definition that Ms Anagnostou had agreed to in the email correspondence and this shows the parties did not intend to be bound in that correspondence. Focus says these were material changes but that does not appear to be so:
(a)Focus refers to an amendment from data for the sheep “belonging to the Crosers” to sheep “born on the property of Kiranda”. Focus submits this change meant the Crosers would be entitled to the data for all sheep sold from 2014. However, that may have been what was envisaged with the “belonging to the Crosers” wording, remembering that the Crosers considered the multiplier agreement had been replaced, and that they had become breeders of elite sheep.
(b)Focus refers to an amendment from “sheep born between 2014‑2018 inclusive” to “sheep born after 2014”. Focus submits this change meant that if a sheep was born after 2018, the Crosers would obtain data for it. However, the Crosers say there were no sheep born after 2018 from the NZ Flocks as the relationship had been terminated by then.
(c)Focus refers to an amendment from “all raw data (measurements, test results etc)” to include “measurements and test results including TSU sample results”. Focus submits this change meant that “raw data” would include “TSU sample results”. However, the “etc” indicated that raw data did include more than “measurements” and “test results” and Focus does not suggest that “TSU sample results” are not properly described as, or encompassed by the term, “raw data”.
(d)Focus refers to an amendment from transferring “any ownership interest” it had in the data to requiring Focus to transfer “any interest that it may have in the Data”. Focus submits that this change meant that if Focus had any interest short of ownership in the data, it would be obliged to transfer that interest to the Crosers. However, this change may simply reflect that the Crosers considered Focus to have wrongly claimed ownership in the data because the multiplier agreement had been replaced.
(e)Lastly, Focus refers to the change in the warranty from “all information held by Focus” to “all information held by the Defendant or its subsidiaries”. Focus submits this extended the warranty but it is not clear that it did so in any material way.
These changes, as with other changes made to clauses in the deed which Focus referred to, appear to be consistent with an intention to tidy up the wording of what had been agreed without changing its substance. Some of them were said to be “for clarification”. Certainly, we are not satisfied Focus has shown they were material changes. This is supported by the fact that they caused neither party any concern in that they were not changes that were resisted when proposed.
The Judge granted summary judgment in favour of Focus on the first of the two prerequisites to formation of a contract (intention to be bound). Part of her reasons for that concerned her view as to the lack of clarity of what was agreed and that not all crucial elements had been agreed. These reasons overlap with the second prerequisite (agreement on every essential term). We consider that Focus has failed to establish that it was not seriously arguable that this prerequisite was met. The exchange of emails on 1 October 2019 expressly incorporated the earlier correspondence. This included Ms Anagnostou’s letter of 30 September 2019 which set out a comprehensive set of terms for an agreement. There could be no confusion about what was and was not incorporated from that. The terms proposed in Ms Anagnostou’s letter were all incorporated except as varied by the later communications on the money and the data. They were ultimately all included in the draft deed and Focus has not pointed to anything new and material in that draft.
In summary, we consider Focus has failed to establish that the Crosers’ claim for enforcement of a settlement agreement reached in the correspondence was not seriously arguable. For completeness, we also consider the Crosers’ pleading set out a tenable claim so that a strike out would not have been appropriate either. The result is that it will be a matter for trial whether a settlement agreement was reached in the correspondence. We note that the Crosers’ pleading does not currently plead what it contends is the objective meaning of the data definition recorded in the correspondence. As matters stand, therefore, there is the prospect that the enforcement proceeding will not resolve the dispute between the parties whatever its outcome.
Result
The appeal is allowed.
The respondent sought to be heard further on costs following our decision. Although not this Court’s usual approach, we agreed that the parties would have this opportunity. We can indicate that our preliminary view is that costs should follow the event with costs in this Court for a standard appeal on a Band A basis plus any disbursements and with costs in the High Court to be determined in that Court. However, we reserve our decision on costs.
The parties have leave to file submissions of no more than four pages on the matter of costs. The respondent is to file submissions within ten working days of the judgment. The appellant will then have five working days to reply.
Solicitors:
Succeed Legal, Wellington for Appellants
Buddle Findlay, Wellington for Respondent
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