Heartland Bank Limited v Hillend Station Limited (in liq)
[2020] NZHC 1658
•10 July 2020
IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE
CIV-2018-412-000041
[2020] NZHC 1658
BETWEEN HEARTLAND BANK LIMITED
Plaintiff
AND
HILLEND STATION LIMITED
(in liq)
First DefendantAND
TONY PETER HAINES
Second Defendant
Hearing: 15–17 June 2020, updating evidence filed 2 July 2020,
supplementary submissions filed 2 July 2020
Appearances:
K M Wakelin and T P Kelly for Plaintiff T P Haines (Second Defendant) in person
Judgment:
10 July 2020
JUDGMENT OF OSBORNE J
This judgment was delivered by me on 10 July 2020 at 12.00 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
HEARTLAND BANK LTD v HILLEND STATION LTD [2020] NZHC 1658 [10 July 2020]
[1] The second defendant, Tony Peter Haines, had a stock trading and finishing business. He guaranteed the debt owed by his company, Hillend Station Ltd (Hillend) under a facility agreement with Heartland Bank Ltd (Heartland). Hillend’s farming operations were conducted on two properties (at Coe Road and at Table Hill) situated near Milton, Otago. In this judgment I will refer to Tony Haines as “Mr Haines”. When I come to refer to his father, Peter Haines, I will refer to “Peter Haines”.
[2] Heartland sues Mr Haines on his guarantee. Its underlying claim against Hillend is stayed, as Hillend was put into liquidation after this proceeding was issued.
[3] In coming to try this case, I had the advantage of having heard in 2018 Heartland’s (unsuccessful) summary judgment application, delivering a judgment which traversed many of the matters on which oral evidence has now been given at this trial.1
[4] In relation to matters of background, I have extensively borrowed from my previous judgment as the background then was accurately stated.
The claim, defence and counterclaim
[5] Heartland relies on the contractual relationship between itself and Hillend, and Mr Haines’ guarantee of Hillend’s obligations. Heartland pleads that Hillend committed a default under its facility agreement in December 2017 when it sold secured stock and failed to pay some $85,740.37 into Hillend’s bank account with Heartland. Mr Haines accepts that sum (under the contract) should have been paid to Heartland’s account. Heartland pleads that Hillend failed, upon notice, to remedy its default and that Heartland then called up Hillend’s entire indebtedness.
[6] Heartland pleads that it took possession of and sold stock belonging to Hillend, following which Hillend and Mr Haines (as guarantor) remained indebted to Heartland in the sum of $570,840.86 as at 30 July 2019. Heartland’s Sales Support Manager, Abbey Newman, has in her evidence stated that Hillend’s debt as at 30 April 2020 stood at $615,150.90. She produced an account reconciliation identifying that debt
1 Heartland Bank Ltd v Hillend Station Ltd (in liq) [2018] NZHC 2919.
balance (“the 30 April 2020 reconciliation”). The 30 April 2020 reconciliation figure took into account a number of legal fees and disbursements which Heartland had debited to Hillend’s account pursuant to contractual provisions in relation to such costs. Following Court direction, Ms Newman provided supplementary evidence as to the account reconciliation with such legal expenses excluded for the time being. That reconciliation (the 19 June 2020 reconciliation) identified the debit balance owing at 19 June 2020 as $590,948.41.
[7] Heartland seeks judgment for that sum together with interest at the contractual penalty interest rate and costs on an indemnity basis.2
[8] Mr Haines filed a statement of defence and counterclaim. His defence contains denials of most of Heartland’s material allegations (although, as noted at [5] above, he concedes his breach in December 2017). Mr Haines pleads, as an affirmative defence, that Heartland failed to mitigate its damages by failing to properly care for and control repossessed stock and by failing to obtain the best possible price for stock sold.
[9] As a counterclaim, Mr Haines asserts that Heartland was in breach of the facility agreement when it wrongfully uplifted, entered into possession of and sold Hillend’s stock. He pleads further that Heartland did not take reasonable care of the wrongfully seized stock and realise what it should have realised from the sales. He says that as a result of the plaintiff’s breaches, Hillend lost profit of $256,893 on its Hillend land and lost profit of $777,835 on its Table Hill land. He pleads that he, as a 60 per cent shareholder in Hillend, suffered damages of $620,836, representing a 60 per cent share of Hillend’s expected profits.
[10] Heartland filed a reply and a statement of defence to the counterclaim. Heartland denies the allegations of breach of the facility agreement and the allegations of a lack of care.
[11] Heartland pleads that any claim for loss of profit (which is denied) belongs to Hillend, not to Mr Haines. It also pleads a number of other matters in defence of the
2 The 30 April 2020 reconciliation identified a number of payments debited to the Hillend account to meet legal expenses payable by Heartland to Grove Darlow & Partners, its solicitors in this proceeding.
counterclaim. It invokes provisions of the contractual documents as excluding any liability of Heartland and/or providing Heartland with an indemnity. Mr Haines did not file a reply to these affirmative defences to the counterclaim but, as he is a litigant in person, counsel for Heartland responsibly responded by reference to the evidence to the issues raised by the affirmative defences rather than invite the Court to treat them as admitted.3
[12] Ms Wakelin also appropriately conceded that the close relationship of Mr Haines’ counterclaim allegations to the contractual debt claimed by Heartland is such that the counterclaim should equally be regarded as a defence in the nature of equitable set-off.4
Contractual arrangements between Heartland and Hillend
[13] From October 2016, Hillend, through Mr Haines as its director, became a customer of Heartland. Hillend needed livestock financing to allow it to borrow money to purchase stock, to be repaid when that stock was later sold.
[14] Then and thereafter a series of agreements was entered into. The contractual arrangements incorporated standard conditions of Heartland. Relevant documents and provisions which applied between the parties are now summarised.
[15]The Livestock Finance Application contained the following relevant terms:
This application is subject to approval by Heartland Bank Limited (Lender). Important terms and conditions apply, including lending criteria and other restrictions. If this application is approved by the Lender, it will immediately constitute a binding facility agreement on the terms set out in this application and the Lender’s Livestock Finance Standard Conditions. Subject to approval of this application by the Lender, the Lender makes the following facility available to you:
•The Borrower may request multiple Advances to purchase Livestock by providing to the Lender invoices and/or other documents or information describing the Livestock to be acquired
3 As would occur through a strict application of r 5.63(2) High Court Rules 2016.
4 As a set-off (rather than a counterclaim) the defence is available to a guarantor as it is to the principal debtor: Mutual Loan Fund Association v Sudlow (1858) 5 CBNS 449; Laws of New Zealand Guarantees and Indemnities (online ed) at [239].
•Interest is calculated in accordance with a variable interest rate notified to the Borrower by the Lender and capitalises monthly in arrears
•The Amount Outstanding must not exceed the Facility Limit, which will be notified to the Borrower by the Lender
•Each Advance (and capitalised interest and fees relating to it) is repayable on the Repayment Date, which will be notified to the Borrower by the Lender
•The Borrower grants security to the Lender over all Livestock financed using the Facility
•If the Borrower sells or otherwise disposes of any Secured Property, the proceeds of disposal must be paid directly to the Lender
•Each Guarantor is personally liable to pay to the Lender all amounts due by the Borrower under this Agreement and each other Relevant Document.
(emphasis added)
[16] Heartland’s Livestock Finance Standard Conditions contained the following materially relevant clauses:
PART B - TERMS OF SECURITY
…
1.2You may, at any time prior to the occurrence of an Event of Default, in the ordinary course of your ordinary business:
(a)sell the Secured Properly on arm's length commercial terms; and
(b)collect accounts receivable which are proceeds of the Secured Property, provided that:
(i)you notify the sales agent, if any, acting on your behalf that any proceeds of disposal are to be paid directly to us in satisfaction of your obligation under clause 3.11 of Part A; and
(ii)if any proceeds of disposal are paid to you, you will, immediately upon receipt hold such proceeds and apply them in accordance with clause 3.11 of Part A.
You shall not otherwise dispose of any Secured Property, or grant a security interest in any Secured Properly, without our prior written consent.
(emphasis added)
[17] By cl 3.11 of Part A of the Livestock Finance Standard Conditions, Hillend agreed to hold on trust, in a separate identifiable account, any proceeds of disposal of any secured property pending application in accordance with that clause.
[18] Part B (Terms of Security) of the Livestock Finance Standard Conditions also contained a clause (cl 9.2) – under a heading “Other rights, powers and protections” – providing legal protection to Heartland and any receiver in these terms (the protection clause 9.2):
To the maximum extent permitted by law, neither we nor a Receiver shall be accountable for any losses which may occur in, or as a result of, the exercise, purported exercise or non-exercise of any of their rights, and any such losses which are borne by us or a Receiver shall form part of the Secured Money.
[19] Clause 11 in each of the General Security Deed and Specific Security Deed, headed “Protection Provisions”, contained materially similar protections for Heartland in the context of its exercise of rights under those deeds.
[20] Clause 7 of Part A of the Livestock Finance Standard Conditions defined “events of default”. The events of default included where Hillend failed:
(a)to pay on the due date any amount payable under any “Relevant Document”; or
(b)to comply with any other obligation in any “Relevant Document”.
The “Relevant Documents” were defined so as to include the Livestock Finance Application, the Livestock Finance Standard Conditions, and the securities (including guarantees) required by Heartland.
[21] The Livestock Finance Application and Heartland’s Livestock Finance Standard Conditions together formed the terms that were applicable to the initial facility (Livestock Finance Facility Terms).
[22] The Instructions, which were provided to Mr Haines in the “welcome pack” sent on 30 November 2016, contained the following direction:
When selling stock, please arrange for the proceeds to be paid directly to your Livestock Finance Facility account …
Please advise Heartland of repayment amount and forward the sale notification or kill sheet to enable stock on hand to be reconciled.
For other sales (i.e. meat processors), enclosed is a Payment of Proceeds Authorisation for you to sign and send to the purchaser of your stock. This letter instructs and gives your authority to the purchaser to pay the stock proceeds directly into your Heartland account.
(emphasis added)
[23] The Authorisation, signed by Mr Haines, and also included in the ‘welcome pack’, stated:
I/We have entered into a Livestock Finance Facility with Heartland Bank Limited (“Heartland”). Under the terms of the Facility Heartland have security over the livestock purchased. I/We agree that any proceeds from the sale of livestock will be paid directly to Heartland. As a result of this, I/we instruct you to pay all proceeds into the bank account provided below.
…
(emphasis added)
[24] I add at this point that the Livestock Finance Facility Terms, the Instructions and the Authorisation, when read together, clearly required Hillend to account to Heartland for the proceeds of livestock funded by and secured to Heartland. The requirement continued to apply after Hillend signed a Current Account Facility Agreement with Heartland on 26 July 2017. Mr Haines was once again a guarantor of that agreement.
[25] Schedule 4 of the Current Account Facility Agreement contained the following special condition:
The Borrower and each Guarantor acknowledges and accepts that this Loan and any other [facility] provided by the Lender or any other related company, subsidiary, society or member (in each case, whether present or future) of [Heartland Group] to the Borrower and/or any of the Guarantors is secured by the Securities and all other securities entered into by the Borrower and/or the Guarantors in favour of the Lender and/or an entity of the [Heartland Group], whether before or after the date of this Facility. A default under any facility provided by the Lender of the [Heartland Group] to the Borrower or any of the Guarantors shall be a default under this facility and vice versa.
(emphasis added)
[26]Clause 10 of the Current Account Facility Agreement provided:
10.Events of Default
10.1 If, at any time and for any reason, whether or not within the control of a party:
10.1.1the Borrower fails to make a payment upon its due date of:
(a)any amount payable under any Relevant Document;
(b)any amount payable by the Borrower to the Lender or to any company in the HNZ Group on any account whatsoever:
(c)any other indebtedness when due: or
10.1.2the Borrower fails to perform or comply with any of its other obligations under any Relevant Document in any respect which the Lender considers material and, in the case of a failure that is capable of remedy, that failure is not remedied to the satisfaction of the Lender within 14 days of the date that the Borrower (or the Guarantor) first became aware of it; or
…
10.1.6the Borrower ceases or threatens to cease to conduct all or a substantial part of its business, or disposes of, or threatens or agrees to dispose of (either by a single transaction or series of transactions, whether related or not and whether voluntary or involuntary) all or a substantial part of its assets;
10.1.7an event occurs or information becomes known to the Lender, which in the Lender’s opinion, may materially affect the creditworthiness of the Borrower, or the Borrower’s ability or willingness to comply with its obligations under any Relevant Document; or
…
then this Agreement, the Securities and the other Relevant Documents shall become immediately due and enforceable and the Lender may at any time, by notice in writing to the Borrower:”
(a)cancel the Facility; and
(b)declare all or any part of the Facility and any other indebtedness of the Borrower under the Relevant Documents to be, and the indebtedness will be, due and payable either immediately or Upon Demand or at a later date as the Lender may specify.
(emphasis added)
[27] Clause 14 of the Current Account Facility Agreement, dealing with Heartland’s recovery of its expenses, provided:
14.Expenses
14.1The Borrower will pay each cost and expense (including all legal expenses on a solicitor and own client basis and taxes) sustained or incurred by the Lender in connection with:
14.1.1the preparation, negotiation and entry into of each Relevant Document and each other transaction required or contemplated thereby; and
14.1.2each amendment to, or waiver in respect of, a Relevant Document or another transaction required or contemplated by a Relevant Document,
in each case on demand and on a full indemnity basis.
14.2The Borrower will pay each cost and expense (including all legal expenses on a solicitor and own client basis and taxes) sustained or incurred by the Lender as a result of the exercise of, or in protecting or enforcing or otherwise in connection with, its rights under any Relevant Document or another transaction required or contemplated by any Relevant Document, in each case on demand and on a full indemnity basis.
…
[28] The Livestock Finance Facility Terms, the Instructions and the Authorisation are “Relevant Documents”. “Relevant Document” is defined in the Current Account Facility Agreement as follows:
Relevant Document means this Agreement, the Securities and each other agreement, present or future, required or contemplated by or relating to this Agreement or the Securities
[29]Heartland’s rights under the Relevant Documents are cumulative.5
[30] Consistently with this, the Specific Security Deed secures all “Secured Indebtedness”,6 which relevantly includes “all indebtedness of the Debtor to the Secured Party”.7
[31] The Livestock Finance Application and the Livestock Finance Standard Conditions, as executed for Hillend by Mr Haines on 28 October 2016 contained provision also for execution by a guarantor. Both Mr Haines and his father, Peter
5 Current Account Facility Agreement, cl 17.3.
6 Clause 3.1.
7 Clause 1.1.
Haines, executed the document that day in their capacities as guarantors. By their guarantee, Mr Haines and Peter Haines each guaranteed to Heartland due payment of all “Guaranteed Indebtedness”, which relevantly included “all indebtedness of the Borrower to the Lender”.8
[32] The Heartland documents do not detail how a borrower should go about claiming for itself the profit it makes as a result of buying, carrying and selling stock. In terms of the contractual documents, the borrower must pay to Heartland all proceeds of disposal. Heartland’s practice was explained by Ms Newman in her evidence. She explained that, in the event that a profit is made, the borrower needs to make a request of Heartland for release of the profit element. Heartland then establishes from information supplied by the borrower whether its current figures for stock on hand and market values show that the held stock covers any amount currently owing on the facility agreement. Until that point is reached and Heartland agrees to the release of some profit, the contractual provisions mean that Heartland is to receive all the proceeds of sale (whether or not involving a profit) and it is Heartland’s practice to maintain that right.
The SINV agreement
[33] Late in the period of dealings between Heartland and Hillend, those parties entered into one transaction in which Heartland ended up being the purchaser of the stock. Around late-November 2017, Hillend had arranged to purchase 1,966 lambs under the usual facility arrangement with Heartland. The lambs were in fact purchased from ANZCO in December 2017 and invoiced in three separate invoices. With events taking place on the Hillend farm, a decision was made that Heartland would become the purchaser under a “SINV” grazier agreement, that Peter Haines would graze the lambs on the Table Hill property until they were sold, and that any profit would be split between Heartland and Hillend.
[34] Ms Newman provided an accounting of the lambs sold. 1,457 store lambs were sold on 18 February 2018. Ms Newman identified a further 502 lambs sold, leaving seven lambs ultimately unaccounted for (identified by Ms Newman as likely having
8 Deed of Guarantee and Indemnity, cl 2.1, 1.1.
either died or failed to muster). Heartland accounted for Hillend’s share of the modest profit which accrued, crediting it to Hillend’s account.
Hillend’s 2017 PGW purchase and breach
[35] Paul Macfie, Heartland’s Rural Lending Manager at the time, gave uncontradicted evidence of the way stock was generally carried on Hillend. Ms Newman’s evidence supplemented that. She explained that cattle born in, say, the spring of 2016 (September to November) may still be referred to as “calves” by the following June 2017. But by November/December 2017, those same calves came to be referred to as “yearlings” or “steers” (as the case may be).
[36] John O’Neill, the Senior Regional Manager employed by PGW, gave evidence of transactions of Hillend in 2017. In late June 2017, Hillend purchased 108 mixed- sex calves through PGW. Under the arrangements between the parties, Ms Newman obtained Mr Haines’ approval for Heartland to pay PGW’s invoiced sum of
$94,820.03 which Heartland did on 13 July 2017. Ms Newman, in line with usual practice, also obtained from Mr Haines and made a note of his anticipated “sell date” for the 108 calves. Mr Haines told her that it was the end of November 2017.
[37] In late-November 2017, Hillend in fact sold 73 steers through PGW pursuant to two sale notes. Hillend received two credits ($43,479.71 and $42,260.66) totalling
$85,740.37. On 8 December 2017, PGW on Mr Haines’ instructions transferred the credits not to Hillend’s Heartland–linked account, but to another Hillend account linked to Bank of New Zealand (BNZ). This arrangement by Mr Haines (as he now concedes) was in breach of Heartland’s entitlements, and in particular Part B, cl 1.2(b)(i) B of the Livestock Finance Standard Conditions (set out above at [16]).
[38] Christopher Taylor, at the time Heartland’s Senior Rural Manager, learned of the Hillend breach in December 2017 through Mr Haines’ father, Peter Haines. Peter Haines was a 40 per cent shareholder in Hillend, Mr Haines having the remaining 60 per cent shareholding. Mr Taylor conveyed the information to Mr Macfie who travelled on or around 14 December 2017 to Milton to interview Peter Haines and PGW’s livestock agent to confirm details of the breach. The three then travelled to
Coe Road. Mr Macfie confronted Mr Haines. Mr Macfie has stated in evidence that Mr Haines:
(a)denied having signed any agreements with Heartland;
(b)denied having any knowledge of the requirement to direct proceeds of stock sales to Heartland; and
(c)confirmed that he had sold stock and directed PGW to pay the proceeds to Hillend’s BNZ account.
[39] Heartland by letter to Mr Haines dated 20 December 2017 identified the breach and instructed Hillend immediately to arrange for all proceeds from the sale of stock secured to Heartland to be credited to Hillend’s Heartland account. Heartland identified that the failure to account was an event of default under the facility agreements.
[40] Mr Haines did not immediately make payment of the $85,740.37 or any part of it.
Heartland takes possession of Hillend’s stock
[41] On 23 December 2017, a Saturday, Heartland mustered and took possession of the property of the stock on Hillend’s Coe Road farm, transporting them to Hillend’s Table Hill farm. Stock not mustered that day were later mustered in two instalments in late-December 2017 and January 2018. They were also transported to the Table Hill farm. The total of Hillend’s stock then held, Mr Macfie says, was 4,117 head of stock.
[42] Mr Macfie and Ms Newman of Heartland gave evidence of their reconciliation of stock purchases and accounting as at that point, stating that:
(a)Heartland held 4,117 relocated Hillend stock on the Table Hill farm; and
(b)Heartland had funded Hillend’s purchase of 4,929 head of stock together with an additional 1966 head of stock through a “SINV” arrangement; and
(c)243 lambs had been sold and transported prior to 22 December 2017; so that
(d)Hillend had not accounted for 2,535 head of stock.
[43] Mr Haines’ father, Peter Haines, was retained by Heartland to care for the Hillend stock on the Table Hill farm. Peter Haines was at that point looking to take over the Table Hill lease, and was looking (through Heartland financing) to farm independently of Hillend.
[44] On 27 December 2017, a deposit of $31,000 was received from Hillend into Hillend’s Heartland facility account. The documentary evidence establishes 27 December as the date of the deposit. In his evidence Mr Haines stated that he “transferred” that amount to Heartland’s account on 23 December 2017 (the same day as Heartland took possession of stock). The bank records produced indicate that the
$31,000 did not leave the Hillend account until 27 December 2017, being the same day as it was credited to Heartland’s account. I am not satisfied on the evidence that Mr Haines took any such step on 23 December 2017.
[45] During the summer in early-2018, it became no longer feasible for Heartland to continue to have the stock cared for on Table Hill. Mr Macfie has stated in evidence that that situation came about because:
(a)Peter Haines was unable to secure the Table Hill lease;
(b)Peter Haines lost interest in caring for the stock on Table Hill;
(c)throughout early-2018 drought conditions prevailed;
(d)the stock were not adequately rotated among such pasture as stated; and, consequently
(e)the condition of the stock deteriorated without access to adequate feed sources.
[46] Heartland issued a second notice of default and demand to Mr Haines as guarantor on 20 February 2018. The notice identified the amount owing by Hillend to Heartland as $734,995.72. At the same time Heartland issued to Hillend a notice of entry into possession (with effect from 23 December 2017) of mortgaged goods, being the livestock.
Heartland’s sale of Hillend’s stock
[47] Mr Macfie has given evidence that until January 2018 managers at Heartland had been hoping that they would be able to sell stock to Peter Haines (who would continue farming on Table Hill). When that did not eventuate Heartland gradually sold the stock, with proceeds credited to Hillend’s Heartland facility between January and March 2018. The details of stock sales (not in dispute) are:
(a)Much of the stock was sold to meat processors (such as ANZCO), with the purchase price set at the published schedule based on carcass weight.
(b)Other stock was sold through PGW – such sales were in all but one case by public auction. The remaining private sale was undertaken by PGW’s livestock agents, one acting for the vendor and one for the purchaser. Peter Haines, through his company, was the purchaser of some of the stock, through such arrangements.
(c)A limited number of stock, which had developed pink-eye and was therefore unable to be transported by truck, was sold to a neighbouring farmer, Lionel Bugden. On the termination of the Table Hill lease and Mr Bugden’s becoming lessee, Mr Bugden purchased some cattle, calves, ewes and lambs which were in poor condition.
[48] Through these sales, Heartland accounted for the sale of 3,732 stock following repossession, with Heartland unable to account for the remaining 385 head of stock.
Heartland has been unable to provide any reliable explanation of precisely how those stock came to be unaccounted for.
[49]Heartland issued further demands during this period.
Contractual terms
[50] The contractual arrangements between the parties (and in particular the Livestock Finance Application as set out at [15] above) required Hillend to pay directly to Heartland the proceeds of disposal of stock which were subject to Heartland’s security, as all stock the subject of this litigation were.
[51] The arrangements (and in particular Part B, cl 1.2(b)(i) of the Livestock Finance Standard Condition as set out at [16] above) required Hillend to notify the sales agent (PGW in relation to the key transaction) that proceeds on disposal were to be paid directly to Heartland.
[52] By his pleadings, Mr Haines admitted Heartland’s identification of these material terms.
Breach – Mr Haines’ instructions to PGW
[53] There was, as Ms Wakelin has submitted, a breach (amongst others) of Hillend’s obligation to notify any sales agent that proceeds of sale were to be paid directly to Heartland. As Ms Wakelin submitted, Hillend had done exactly the opposite of what was required by instructing PGW to divert the proceeds of sale received in December into its BNZ account. Hillend also failed to hold those funds, once received into that bank account, on trust for Heartland.
The identification of Mr Haines’ defaults
[54] Notwithstanding the occurrence of such defaults, Mr Haines submitted that he ought to have been given 14 days in which to remedy his defaults. He invoked cl
10.1.2 of the Current Account Facility Agreement (as set out at [26] above), which provides for 14 days’ notice where defaults are capable of remedy.
[55] Ms Wakelin noted that cl 10.1.2, as invoked by Mr Haines, relates only to an obligation (other than payment) which is capable of being remedied. She submitted the clause does not assist Mr Haines because the material default in question (Mr Haines’ instruction to PGW to pay the money into a different account) was not capable of being remedied, the payment having been made.
[56] I accept Ms Wakelin’s submission. Once Mr Haines had been successful in his deliberate diversion of the funds, the failure to instruct PGW correctly in accordance with the contract became incapable of remedy.
Breach – non-payment of the $85,740.37
[57] The other aspect of breach relied upon by Heartland lay in Hillend’s failure to pay the $85,740.37 December 2017 proceeds to Heartland. By his pleading, Mr Haines had made a bare denial to Heartland’s particularised details of that breach. However, in his opening synopsis before trial, Mr Haines conceded that there had been a default through non-payment.
[58] Mr Haines asserted through his synopsis that the total he ought to have paid to Heartland was not $85,740.37 but $64,091. To reach that figure, he explained that the initial purchase price of 108 heifers and steers was $94,820 (including GST) ($877.96 including GST per head). As 73 steers were sold, Mr Haines assessed the payment he ought to have made (73 x $877.96) to be $64,091.
[59]Such accounting is not in relation to all proceeds from the sale of the livestock
– instead Mr Haines produced a figure calculated by reference to his purchase price only.
Addressing repayment of the $85,740.37
[60] Heartland did not move immediately to cancel the facility and to call up the entire debt. Through the 20 December 2007 letter, it instead demanded immediate payment of the $85,740.37.
[61] Contrary to Mr Haines’ assertion that he transferred a sum of $31,000 to Heartland’s account on 23 December 2017, the documentary records establish that such payment was made by Hillend and received by Heartland on 27 December 2017.
[62] Upon the $31,000 being paid, there remained a shortfall in Hillend’s payment of $54,740.37. Mr Haines did not identify in his pleadings any particulars as to how he may have met that shortfall. However, in the brief of evidence which he provided and read, he referred to the facility being in surplus and having made a number of payments. In particular, he stated:
… I looked in the finance agreement and could not find any clauses stating that I could not pay off stock before they were actually sold or killed.
I made a payment of $10,000 on the 12th June and $10,500 on the 26th June and $19,600 on the 10th October. I also [k]new that all the profit margins were still in the plaintiff account from the previous stock sales as the company had never had any payment from the plaintiff.
[63] Self-evidently, the three payments identified by Mr Haines, totalling $40,100, would have been insufficient (if truly credits) to combine with the later $31,000 payment in order to make the $85,740.37 payment.
[64] As it was, payments made by Mr Haines to the credit of his finance facility from June 2017 were not payments which placed the facility in credit. The finance facility statement produced by Ms Newman shows that at the beginning of June 2017, the account had an opening debit balance of $202,809.93 which was to increase further.
[65] Accordingly, Heartland has established that Hillend did not remedy the breach of which it was given notice on 20 December 2017.
Total head of stock
[66] It is common ground between Heartland and Mr Haines that Heartland should have had security over 6,895 head of stock (representing 4,929 head of stock financed by Heartland against invoices produced by Hillend and an additional 1,966 head of stock paid for by Heartland under the SINV facility).
[67] It is Heartland’s pleaded case that after the shifting of stock from Coe Road to Table Hill on 22 December 2017, there were 4,117 head of stock, a figure which included Hillend’s stock already held at Table Hill. On Heartland’s theory of the case, the discrepancy between the purchased 6,895 head of stock and the 4,117 head of stock on Table Hill from late-December 2017 must lie in intervening stock sales not accounted for by Hillend. Alternatively, some stock may have been left behind at Coe Road (a property difficult to muster on account of its contour and the number of tree plantations).
[68] Matters relating to stock numbers gave rise to Mr Haines’ affirmative defence (failure to mitigate) and his counterclaim (lost profits from sale of stock not properly cared for).
[69] Those matters pleaded by Mr Haines do not directly impact on the correct accounting calculation of the state of Hillend’s borrowings. That is, Heartland had provided the finance for the stock purchased by Hillend and Hillend was indebted to Heartland. At this point I focus on the correct accounting under the facility.
Amount owing on the facility
[70] Heartland has through Ms Newman presented comprehensive reconciliations of credits and debits received and made against Hillend’s facility. These were both the original 30 April 2020 reconciliation (incorporating legal fees debited) and the updating 19 June 2020 reconciliation (excluding legal fees).9
[71] The reconciliations bring into account the payments financed for Hillend by Heartland and monies subsequently received through sales and other deposits.
[72] The evidence establishes that the balance shown as at 19 June 2020 accurately brings together the credits and debits providing the figure of $590,948.41 DR.
[73] In his cross-examination of Ms Newman (but not pleaded) Mr Haines raised a matter relating to the accounting for GST. Referring to the fact that stock purchases
9 Above at [7].
and sales were subject to GST, Mr Haines suggested to Ms Newman that there was no recognition of GST elements in the Heartland accounting. That is correct, because the Heartland accounting is in relation to gross sums financed and gross sums received. The accounting for GST would be as between vendor and purchaser. There were no GST implications as between Heartland and Hillend. Questions relating to GST are irrelevant to the state of Hillend’s facility account and Hillend’s breach.
[74] In his evidence relating to the state of Hillend’s account, Mr Haines had also referred to the three payments made into the account from June to October 2017 ($10,000, $10,500 and $19,600) as referred to at [62] above. The suggestion in his evidence in chief was that he was paying off stock before they were actually sold or killed. But in cross-examination he accepted that the three payments in question had come in at a time when the account was significantly in debit. He accepted that in making the payments, he had not identified to Heartland that they were to cover specific portions of lending. Instead, they had been appropriated by Heartland, within its entitlement, to meet existing debt. Accordingly, there was no error in Heartland’s accounting in this regard.
[75] Mr Haines cross-examined Mr Macfie as to an entry in Heartland’s facility statement on 13 July 2017, being a debit for $95,719.71. The entry represents a payment made to Hazlett Rural Ltd (Hazlett) and bears the notation “198 lambs”. In cross-examination, Mr Haines had Mr Macfie accept that, having regard to the price of lambs, the $95,719.71 debit could not have represented such a limited transaction. In fact, it did not. Heartland had produced the settlement statement of Hazlett Rural Finance and Procurement Ltd dated 5 July 2017. One single item on the statement related to the 198 lambs. The total covered by the statement ($95,719.71) represented borrowings which Hillend had until that point had from Hazlett but which were, from that date, covered by equivalent lending from Heartland. There was accordingly no error in the Heartland statement in relation to the “Hazlett” debit.
[76] Heartland has established that as at 19 June 2020 the debt which Hillend owed under the finance facility stood at $590,948.41 (exclusive of legal fees and disbursements).
Contractual provisions relating to loss, damage and/or costs
Mr Haines’ affirmative defence and counterclaim (or set-off)
[77] As an affirmative defence, Mr Haines pleaded that Heartland failed to mitigate its damages by failing to properly care for and control repossessed stock and by failing to obtain the best possible price for stock sold.
[78] By way of counterclaim, Mr Haines asserted that Heartland was in breach of the facility agreement when it wrongfully uplifted, entered into possession of and sold Hillend’s stock. He then made parallel pleadings as to breach of a duty to take reasonable care of the stock and to realise what Heartland should have realised from the sales of stock.
Heartland’s reply
[79]In its reply, Heartland pleaded:
(a)Any claim for “loss of profits” (denied) belongs to the first defendant, and the second defendant does not have standing to bring any claim on behalf of the first defendant, as the first defendant is in liquidation;
(b)Any budgets supplied to the plaintiff were [sic] simply future forecasts of income and expenses, which were not “accepted” by the plaintiff, but rather were supplied as a condition of obtaining and maintaining the finance facilities provided by the plaintiff;
(c)Any loss of expected profit (not admitted) has arisen directly as a result of the defendants’ actions in causing the default pleaded at paragraph 22 of the ASoC, and not through any actions of the plaintiff;
(d)Pursuant to cl 11.1 of the General Security Deed executed on 26 July 2017 (“GSD”) and cl 11.1 of the Specific Security Deed executed on 26 July 2017 (“SSD”) (each of which are relied upon as if pleaded in full), the plaintiff is not liable for any loss or damage (not admitted) that results from the exercise, or attempted exercise or non-exercise of its rights under the GSD and/or SSD;
(e)Pursuant to Part B, cl 9.2 of the Livestock Finance Standard Terms, which are incorporated by the Facility Conditions contained in the Livestock Finance Application executed by the defendants on 28 October 2016 (together, the “Livestock Finance Facility Terms”) (each of which are relied upon as if pleaded in full), the plaintiff is not liable for any losses (not admitted) that may occur in, or as a result of, the exercise, or attempted exercise or non-exercise of its rights, and any such losses which are borne by the plaintiff shall form part of the first defendant’s indebtedness to the plaintiff;
(f)The defendants indemnified the plaintiffs against each cost, loss (including loss of profit or margin), expense (including all legal expenses on a solicitor and own client basis and taxes) and liability sustained or incurred by the plaintiff as a result of any event of default or breach of obligation pursuant to Part A, cl 8.1 of the livestock Finance Facility Terms and cl 11.1 of the Current Account Facility Agreement dated 26 July 2017 (each of which are relied upon as if pleaded in full);
(g)The defendants indemnified the plaintiffs against each cost and loss (including loss of profit or margin) incurred by the plaintiff pursuant to and [sic] cl 11.3 of the SSD, and cl 11.3 of the GSD (each of which are relied upon as if pleaded in full).
[80] As identified in its reply, Heartland also invokes the protection clause 9.2 in Part B of Heartland’s Livestock Finance Standard Conditions (set out above at [18]). It also relies on the protection provisions in cl 11.1 of each of the Security Deeds, although Ms Wakelin acknowledges that Mr Haines as guarantor signed the Livestock Finance Standard Conditions but not the Security Deed.
Submissions
[81] Ms Wakelin identified Heartland’s various “protection” provisions as being in the nature of exclusion clauses, that is clauses excluding a liability which might as a matter of law otherwise accrue.
[82] Ms Wakelin noted that the matters which Mr Haines pleaded by way of counterclaim expressly involve the identification of loss or damage suffered by Hillend and/or Mr Haines himself. Ms Wakelin noted that Heartland’s allegedly wrongful conduct – uplifting, possessing and selling stock – involved in each case the exercise or attempted exercise of Heartland’s rights under the facility arrangements. As such, in Ms Wakelin’s submission, the subject-matter of Mr Haines’ counterclaim is alleged loss or damage falling within the provisions of the protection cl 9.2 (as well as those in cl 11.1 of each of the Security Deeds).
[83] Ms Wakelin submitted that these provisions are appropriately to be treated as applicable exclusion clauses, in accordance with principles identified authoritatively in Grant v New Zealand Motor Corporation Ltd.10
10 Grant v New Zealand Motor Corporation Ltd [1989] NZLR 8 (CA).
[84] Mr Haines was not in a position to make legal submissions as to the interpretation or enforceability of Heartland’s protection provisions.
[85] He addressed the protection provisions only through his submissions on the facts.
[86] The protection clause 9.2 is on its plain terms intended to exclude (to the extent permissible by law) any liability of Heartland which would arise through a careless or otherwise neglectful exercise of its contractual rights in relation to the security.
[87] As such, the protection clauses serve to exclude any liability for a negligent possession or realisation of the security. That such an equitable duty would be imposed on Heartland on settled equitable principles was not challenged by Ms Wakelin for Heartland.11 Here, Mr Haines agreed in terms of his guarantee to be liable as a sole and principal debtor and not as a surety. In the circumstances of these arrangements, the Court will enforce the guarantee and hold that any defence (of the guarantor) based on the creditor’s negligent realisation of securities is not sufficiently arguable to resist the creditor’s claim for judgment.12
Outcome
[88] In these circumstances, the matters relied upon by Mr Haines as giving rise to his affirmative defence and counterclaim (or set-off), even if established, have not given rise to a liability on the part of Heartland. That is because both Hillend (through Mr Haines) and Mr Haines personally as guarantor agreed to contractual terms which excluded such liability.
[89] Accordingly, as I have found that Heartland has established the amount owing by Hillend on the facility (as guaranteed by Mr Haines), there will be judgment for Heartland as sought.
11 Apple Fields Ltd v Damesh Holdings [2001] 2 NZLR 586 (CA) at [40]-[52], citing Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971] Ch D 949 (CA).
12 Continental Illinois National Bank v Papanicolaou [1986] 2 Lloyd’s Rep 441. See also Geraldine Andrews and Richard Millett QC Law of Guarantees (7th ed, Sweet & Maxwell, London, 2015) at [9-041].
The basis of Mr Haines’ affirmative defence and counterclaim
Negligent possession and care?
[90] At the heart of Mr Haines’ pleaded defence is his allegation that Heartland failed to take reasonable care in uplifting the stock, having the stock cared for and selling the stock.
[91] In case it is subsequently found that I have incorrectly applied the exclusion clause, I will consider as trial Judge the evidence in relation to Mr Haines’ allegations as to a failure to take reasonable care.
The evidence – the taking of possession
[92] The first aspect of Mr Haines’ complaint may be expressed as the likelihood that Heartland took possession of a significantly greater number of stock than the 4,117 head of stock which Heartland asserts to have been taken into its possession.
[93] The evidence at trial established that Heartland did not cause a tally of the seized stock (that is, both stock already on Table Hill and stock transferred from Coe Road to Table Hill) to be taken either on 23 December 2017 or subsequently. Mr Macfie, Heartland’s Rural Lending Manager in charge of the situation, frankly conceded in cross-examination that he had no idea as to who Heartland was relying on for a tally. He stated that he was “not necessarily” relying on truck drivers to take a tally in the course of loading the stock. He recognised that in relation to ewes with lambs at foot it would be hard to tally the stock accurately while they were going onto a truck. Later in his cross-examination, Mr Macfie indicated that his understanding was that Heartland was relying on the stock agents (which could only have been for Coe Road stock). But he did not know whether there had been any document or email from stock agents to provide tallies. It appeared from other answers that Heartland to some extent relied on figures provided by Peter Haines, who was the person Heartland placed in charge of looking after stock immediately upon the relocation of the Coe Road to Table Hill. In an email to Peter Haines dated 11 January 2018, Mr Macfie was exploring the possibility of a deal between Heartland and Peter Haines. Having referred to values which might be used in relation to the stock, Mr Macfie continued:
Obviously they need to line up with the numbers that actually were repossessed recently and we can do that once we have all the dockets (you were going to take a photo of the dockets of those already shifted and send to me?)
[94] An important context of that discussion is that Peter Haines was already by that time a person to whom Heartland believed it might be able to sell the stock.
[95] Furthermore, there is no evidence that any employee of Heartland ever assessed the number of stock held on Table Hill before the transfer of Coe Road stock. Nor was evidence produced of any stock-take carried out by Peter Haines. Ms Wakelin pointed to a spreadsheet produced by Ms Newman, which culminated in a figure of 4,117 head of stock. But that calculation was unsupported by any document or other evidence relating to a stock-take of the original Table Hill numbers.
[96] In defence of the state of Heartland’s records, Ms Wakelin emphasised the urgency and difficulty of the situation which confronted Heartland on learning that Mr Haines had been diverting sale proceeds. Heartland clearly had to move quickly. It had to deal with the difficulty of finding a secure alternative to the Coe Road farm. Hillend’s other, larger farm at Table Hill, already under the control of Peter Haines, was an obvious solution. I recognise the impact of all those matters. But, those matters notwithstanding, it was open to Heartland when seizing Hillend’s stock to put in place that day or immediately thereafter an arrangement which ensured that an accurate stock-take occurred.
[97] The concern raised by Mr Haines in his pleadings and pursued through cross- examination was justified. The evidence establishes that Heartland, at the time it took possession of the stock, did not put in place a reliable system for accurately taking and recording a tally. To the extent it relied on Peter Haines to accumulate information and provide a tally, that was an inherently unreliable procedure in circumstances where Peter Haines appeared to be a likely buyer and there is, in any event, no evidence that he conducted a stock-take of the Table Hill numbers around 23 December 2017.
[98] The predominant theory of Heartland’s case in relation to stock numbers is that Mr Haines had during the course of the facility been disposing of stock without reporting such transactions to Heartland, with the consequence that the number of
stock on hand in December 2017 was substantially below that purchased under the facility. In answer to questions from the Court, Mr Haines confirmed that all his stock sales were either through PGW or to the works. In a case where discovery was given by the parties and there has not been any suggestion of incomplete discovery, there is no direct evidence to support the proposition that Mr Haines may have been secretly selling stock. Ms Wakelin referred, however, to the fact that Mr Haines had through 2017 been operating his own transport company, with the ability to move his own stock. I take that possibility into account.
[99] In all the circumstances, I find it probable that the stock tally figures (and in particular the total figure of 4,117) as provided by Heartland do not reliably represent the total number of stock assembled on Table Hill following the relocation of the Coe Road stock. The approach adopted by Heartland lent itself to a material understatement of the correct figure. In the absence of expert evidence from a stock agent (or similar person) as to likely levels of miscounting, an accurate assessment of the probable miscounting of stock is fraught. But, having particular regard to the issue relating to the counting of ewes with lambs at foot, a realistic approximation may suggest that the error would be in the order of 10 to 15 per cent of the lambs. Heartland, in its tally of 4,117 stock, included 444 ewes. Given that the onus was upon Mr Haines to establish breach and damage, I would have concluded that the Heartland tally figure of 4,117 may have been understated to the extent of 44 lambs. Apart from that which I consider to be a realistic assessment based on the evidence, any other estimate of a shortfall in the tally would be speculation.
Heartland’s care of stock while in its possession
[100] Heartland led no evidence as to any contractual arrangement with Peter Haines for the care of the Hillend stock. In answer to a question from the Court, Mr Macfie stated that he doubted that any arrangement with Peter Haines would have been documented by Heartland.
[101] I am satisfied on the evidence that Heartland did not enter into a formal contractual arrangement with Peter Haines either as to any remuneration for services rendered or requirements as to levels of care for the stock. At most there was an
understanding that he would look after the stock while he pursued the leasing of Table Hill and the purchase of Hillend stock.
[102] I am further satisfied that Heartland, having Peter Haines effectively as its agent to care for the stock, did not have in place arrangements which could reasonably give it assurance that the stock would be properly cared for. That conclusion flows substantially from the evidence which Heartland itself led. Mr Macfie described the circumstances in which Peter Haines was negotiating to take over the lease from Hillend but was ultimately unable to do so. Mr Macfie stated:
During this period of uncertainty over the Table Hill lease arrangements, it appeared that Peter lost interest in managing the stock that was then located on Table Hill. There were drought conditions throughout early 2018 and the stock were not rotated among the pastures regularly, and as a consequence, their condition began to deteriorate as they did not have access to adequate feed sources.
[103] Mr Macfie stated that at a point in March 2018 the condition of the stock on the Table Hill farm was poor.
[104] Mr Macfie spoke of an unspecified time when “negotiations with Peter broke down” and Heartland looked to sell the stock to someone other than Peter Haines.
[105] Mr Macfie produced an email from a PGW agent, dated 6 March 2018, in which the state of calves bought by the neighbour (Lionel Bugden) was expressed to be “nothing short of appalling”. Mr Bugden, the purchaser in question, produced photographs of stock he had bought. They were affected by the painful and highly infectious eye disease “pink eye” and Mr Bugden regarded the cattle as essentially starved. He viewed the paddock on which they had been grazing and noted that it had insufficient feed to support the cattle.
[106] Ms Wakelin, for Heartland, pointed to the record of sales of stock achieved by Heartland through December-February. This was not a situation where Heartland, without a selling regime, oversaw a deterioration in stock quality before a later sale. I recognise that there was a steady pattern of sales organised by Heartland, with most stock sold or committed for sale before March, but that cannot be permitted to obscure
the extent to which Mr Macfie observed, during the drought conditions of early-2018, the failures of stock management as I have recorded at [102] above.
[107] Mr Bugden bought 102 cattle in total. He explained that he paid $200 plus GST per head for 60 calves, whereas a good calf would have been “about $360”.
[108] In other words, if the state of the calves purchased by Mr Bugden was reasonably representative of the state of remaining Hillend stock in March 2018, their poor condition had resulted in their obtaining approximately 55 per cent of their sale value if in good condition.
[109] In the way Mr Haines presented his case, he focused on the general evidence of poor care of the stock and some specific instances where there had been a financial consequence flowing from the poor care.
[110] That said, Mr Haines did not lead through expert evidence or otherwise an analysis of all the stock sold and a comparison with what would have been achieved from sales of stock maintained in good condition.
[111]The Court has no basis for itself undertaking that analysis.
[112] I accordingly conclude in relation to the pleadings as to a lack of reasonable care that Mr Haines has established the allegation. He has established that it had some material impact on the prices realised by Heartland through sale of the stock. In the case of the sales to Mr Bugden, a figure of gross loss could be calculated. But that would not take into account the offsetting of additional costs which Heartland would have incurred through a different management regime which was likely to have included the purchase and feeding out of supplements and costs of supervision. There is no evidence in that regard.
[113] Mr Haines accordingly failed to establish any particular quantum of damage flowing from the established neglect.
[114] In these circumstances, it is unnecessary that I consider in detail Ms Wakelin’s submission as to the very limited scope of duties which the law imposed on Heartland
to take care of mortgaged property. Ms Wakelin referred to another case involving security over livestock – Leech v National Bank of New Zealand.13 In that case, the High Court applied Cuckmere Brick Co Ltd v Mutual Finance Ltd.14 Ms Wakelin submitted that the relevant duty – to act in good faith – is merely a duty to act honestly and without reckless disregard for the guarantor’s interest. On the other hand, Paterson J in Leech expressly found that an aspect of the duty was to keep the stock in good condition within the net income received by the mortgagee (or that which it might have received but for its wilful default or neglect). Ms Wakelin submitted that, in accordance with Leech, Heartland was not obliged to expend its own money caring for the animals, beyond any surplus income received from the stock. The implication of that submission is that none of the significant sums received by Heartland on the sale of stock constituted “surplus income” because Heartland required all the proceeds in order to reduce the indebtedness on Hillend’s account. The soundness of that position may be arguable. In the event, I am not required to determine whether Mr Haines has established a breach of the equitable duty of care as he has in any event failed to establish any particular quantum of damage flowing from Heartland’s conduct.15
Legal expenses
[115] Clause 14.2 of the Current Account Facility Agreement (set out above at [27]) requires Hillend to pay to Heartland its costs and expenses incurred as a result of protecting or enforcing its rights under the “Relevant Documents”. That expressly includes all legal expenses on a solicitor and own client basis.
[116] Through Ms Newman and Mariska Nieuwkoop, a legal secretary employed by Grove Darlow & Partners, Heartland has provided to the Court affidavit evidence as to its legal expenses as charged by Grove Darlow & Partners. That has included narrative explanations of the work invoiced and details of the personnel involved together with their charge-out rates.
13 Leech v National Bank of New Zealand [1996] 3 NZLR 707, (HC).
14 Cuckmere Brick Co Ltd v Mutual Finance Ltd, above n 11.
15 This discussion of Mr Haines’ counterclaim as identified at [91] above, addresses a situation in which another Court finds (contrary to my primary conclusion) that the exclusion clause did not exclude such a counterclaim.
[117] By reason of the contractual provision, Heartland is entitled to claim indemnity costs under r 14.6(4)(e) High Court Rules 2016. By reason of r 14.6(1)(b), the Court must be satisfied that the expenses claimed were “reasonably incurred” by Heartland. That involves an assessment of whether the tasks undertaken were reasonably necessary and covered by the contract, whether the charge-out rates were reasonable, and whether any other general contract law principles deny Heartland its prima facie right to judgment.16 I am satisfied on the evidence provided by Heartland that its legal costs as claimed were reasonably incurred. Over the period from 31 March 2018 to 23 June 2020, the total fees and disbursements charged (exclusive of GST) were respectively $147,583 and $15,735.43, covering commercial advice and steps at the time of Hillend’s default and the subsequent conduct of litigation. That includes Heartland’s unsuccessful summary judgment application in relation to which costs and disbursements were initially reserved. Now that through this judgment, Heartland’s claim has been vindicated, and having regard to Heartland’s rights of recovery under the contractual arrangements, it is appropriate and just that Heartland’s costs recovery include the costs associated with the summary judgment application. In the terms expressed by the Court of Appeal in NZI Bank v Philpott, this is among the general run of cases where the defendant should pay for “both proceedings”.17 Mr Haines’ defences raised in opposition to summary judgment, and not capable of resolution in that context, were not ultimately vindicated.
[118] I find Heartland’s costs and disbursements to have been reasonably incurred. There is no reason to justify an order of a figure less than the (GST exclusive) costs and disbursements actually incurred.
Interest
[119] Interest on the total judgment sum will accrue from today in accordance with the provisions of the Interest on Money Claims Act 2016.
16 Watson & Son Ltd v Active Manuka Honey Association [2009] NZCA 595 at [20].
17 NZI Bank v Philpott [1990] 2 NZLR 403 (CA) at 405.
Outcome
[120] There is judgment for the plaintiff in the sum of $754,266.84, comprising indebtedness of $590,948.41 and legal costs and disbursements of $163,318.43.
Osborne J
Solicitors:
Grove Darlow & Partners, Auckland Mr T Haines (self-represented)
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