Nirvana Farms Ltd v Makakaho Land Company Ltd
[2020] NZHC 3268
•10 December 2020
IN THE HIGH COURT OF NEW ZEALAND WHANGANUI REGISTRY
I TE KŌTI MATUA O AOTEAROA WHANGANUI ROHE
CIV-2020-483-2
[2020] NZHC 3268
BETWEEN NIRVANA FARMS LTD
First Plaintiff
GERALD PEARCE and PHILIPPA WILLIAMS
Second PlaintiffsSETTLORS HONEY LTD
Third PlaintiffFREWIN & SON LTD
Fourth PlaintiffKAIMĀNUKA HONEY LTD
Fifth PlaintiffAND
MAKAKAHO LAND COMPANY LTD
First Defendant
RODGER KENNETH RODERICK PEARCE
Second Defendant
Hearing: 1 and 2 December 2020 Counsel:
K P Sullivan for the Plaintiffs
J K Mahuta-Coyle for the Defendants
Judgment:
10 December 2020
JUDGMENT OF CULL J
[Further interim injunction orders]
[1] This is a fresh application for an interim injunction by the plaintiffs (together, Nirvana), who comprise of manuka honey producers, beekeepers, landowners, and farmers, to prohibit the defendants (together, Makakaho), their neighbouring farmer
NIRVANA FARMS LTD v MAKAKAHO LAND COMPANY LTD [2020] NZHC 3268 [10 December 2020]
and beekeeper, from “boundary stacking” their property or “manuka poaching” from them.1 Orders are sought to restrict the number of hives and their location on the neighbouring Makakaho property until the determination of the substantive proceeding.
[2] Nirvana have filed a statement of claim pleading two causes of action, namely trespass and private nuisance against Makakaho for their overstocking of hives and placement of approximately 600 hives on the boundary between the two properties, enabling their bees to harvest nectar from Nirvana’s land. Nirvana claim this caused a loss in their production of manuka honey, because Makakaho’s bees have harvested the nectar in the manuka populations on their lands. Nirvana claim $612,000 plus interest. This substantive claim is set down for a seven day hearing for liability and quantum in mid-2021.
[3] On 12 February 2020, Nirvana sought an interlocutory application without notice for interim injunction, and the following relevant interim order was made:
Pending further order of the Court the first and second defendants/respondents and their appointed agents are prohibited from taking off the honey boxes and extracting the honey contained in the beehives that are now, or were, placed on their property … without providing a reasonable opportunity for the plaintiffs to have a suitably qualified assessor present during the removal of the honey boxes and providing a reasonable opportunity to that assessor to take samples during extraction and to ensure that the honey produced from each hive site is accurately recorded.
[4]The above order remains in place currently.
Current application
[5] These proceedings were case managed, with a direction that 1 and 2 December 2020 be allocated for a liability hearing to determine what has been described and
1 High Court Rules 2016, r 7.53.
accepted by all parties as novel causes of action, namely trespass and private nuisance in respect of bees harvesting nectar from another’s land. A week before the scheduled hearing, Counsel for the parties agreed that given the numbers of experts and the substantial evidence filed, two days was insufficient to complete cross-examination and submissions on liability. Accordingly, the liability hearing was vacated and the hearing time was used for the purposes of a further interim injunction application by Nirvana. There is an urgency to the application because the flowering season for manuka lasts approximately six to eight weeks from Christmas time until late February or early March, depending on the weather.
[6]In summary, Nirvana seek orders:
(a)prohibiting the defendants from placing more than 136 hives during the forthcoming manuka season;
(b)prohibiting the defendants from placing hives within 300m from the boundary;
(c)prohibiting the defendants from placing more than 20 hives on any one site;
(d)that the defendants abide by a stocking ratio of one hive per hectare of manuka resource;
(e)restricting the defendants to placing specific numbers of hives on specified sites;
(f)permitting a drone to fly over the defendants’ property; and
(g)that notice to be provided to the plaintiffs when honey is extracted from the defendants’ honey boxes.
[7] Counsel for Nirvana, Mr Sullivan, accepted that the proceedings involve novel issues of law relating to bees on the defendants’ property causing a nuisance and/or trespassing on the plaintiffs’ land. He submits that those issues are relevant to the
Court’s consideration of this injunction application, as the plaintiffs’ need to show that there is a serious question to be tried.
[8] Makakaho opposes some of the orders sought but consents to others. The orders that Makakaho consent to are:
(a)no beehives are to be placed within 300m of the neighbouring boundary by either the plaintiffs or the defendants, with the defendants saying it could be further than 300m;
(b)there are to be no more than 20 hives on any one site on the defendants’ land; and
(c)permitting a drone to fly over their property, provided that the defendants in turn are permitted to fly a drone over the plaintiffs’ property on the same terms.
[9] There are further conditions that Makakaho seek and/or agree to. Makakaho say that the plaintiffs must, prior to the commencement of the manuka flowering season, provide a verified list and map of sites and hive numbers per site to be located on their own lands (or those neighbouring lands they have contracted to extract from).
[10] In terms of the drone condition, the parties agree that there should be a joint instruction of an independent, but suitably qualified, drone pilot to survey during the manuka flowering season both the defendant and plaintiffs’ land. The exact time and date of the survey can be mutually agreed between the parties. The drone pilot would be further jointly instructed to fly up to three inspections/compliance checks across all properties during reasonable daylight hours during the manuka flowering season on 24 hours’ notice to be provided through the parties’ lawyers. The drone pilot’s costs are to be met in proportion by the parties on a time expended basis.
[11] The parties are also to agree, by 15 December 2020, on a process to be adopted that will enable independent confirmation of extraction and harvest results by all parties and the provision of that evidence to the Court. If the parties cannot agree to
such a process, either party has leave to file a memorandum (to which the other party must respond within five working days) seeking the Court’s determination of that issue of the papers.
[12] In summary, the points of contention among the respective parties, for present purposes, are:
(a)The order prohibiting the defendants placing more than 136 hives on their property.
(b)The order that the defendants abide by a stocking ratio of one hive per hectare of manuka resource.
(c)The order directing the numbers of hives to be placed on specific hive sites on the defendants’ property.
Relevant principles
[13] The relevant principles upon which an interim injunction should be decided have long been established in Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd.2 The relevant principles have more recently been confirmed by the Court of Appeal in New Zealand Tax Refunds v Brooks Homes Ltd.3
[14] There are in effect three stages to the consideration of an application for an interim injunction:
(a)the first threshold question is that the applicant must establish there is serious question to be tried;
(b)the second question is where the balance of convenience lies, which requires a consideration of the impact on the parties of the grant of injunctive relief and whether the balance favours the applicant or the respondent; and
2 Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 140.
3 New Zealand Tax Refunds v Brooks Homes Ltd [2013] NZCA 90, (2013) 13 TCLR 531 at [12].
(c)thirdly, an assessment of the overall justice of the position between the respective parties is required as a check.
[15]I turn then to consider all three limbs of the threshold tests.
A serious question to be tried
[16] Nirvana claim that the placing of the defendants’ 600 beehives on a section of manuka resource that cannot support such volume has caused those hives to compete with the plaintiffs’ hives on its land, resulting in the loss of $612,727 in value of manuka honey. In addition, they claim that the overstocking of hives by Makakaho caused significant loss of production to Nirvana because 520 of Makakaho’s overstocked hives sourced nectar from Nirvana’s land causing a loss of $802,256 over the four week season.
[17] Counsel for Makakaho, Mr Mahuta-Coyle, submits that there is no existing authority for the proposition that trespass or tortious nuisance are available as causes of action in cases of competing commercial manuka honey harvesting operations. However, for the purposes of the present application, Makakaho concedes that Nirvana’s claim is not amenable to strike out and is not unavailable at law. Both Counsel canvassed the elements of the principle causes of action, highlighting that this claim is novel. Mr Mahuta-Coyle submits that the key issue at trial will be whether Makakaho’s beehive management has given rise to an unreasonable interference with Nirvana’s right to use and enjoy the land.
[18] As was evident at the hearing, I am satisfied that there is a serious question to be tried. It is a novel claim, and the legal merits require consideration. There is a low threshold for a finding of a serious question to be tried,4 and I find that it is met in these circumstances.
Balance of convenience
[19] The second assessment is the balance of convenience. In this case, the balance is Nirvana’s need for protection of its manuka resource and the prevention of its
4 E R Squibb & Sons (NZ) Ltd v ICI New Zealand Ltd [1988] 3 TCLR 296.
economic loss weighed against Makakaho’s need to be protected against loss or injury from exercising their legal right to operate a commercial business on their privately owned land.
[20] Both the plaintiffs and defendants have filed substantial affidavit evidence, including evidence from six experts. Of relevance to the application for interim injunction is the contest between the respective parties’ experts’ assessment of the manuka resource on Makakaho’s land. Nirvana’s initial evidence, provided by Mr Campbell of Manuka Health, calculated 80 hectares of manuka on the defendants’ land. It is accepted industry practice, and at the hearing I understood there was no real contest about the standard, that there should be one beehive per complete hectare of manuka. On Mr Campbell’s calculations, therefore, Makakaho should place 80 hives only on the estimated calculation of the manuka resource.
[21] Subsequently, Mr Orme, another expert in field measurement for forestry purposes, was asked to provide an affidavit in reply, including a supplementary affidavit just prior to the hearing, in which he identified 136 hectares of manuka on the defendants’ property. However, when a density percentage was applied and the manuka was identified down to areas of at least one hectare in size, Mr Orme’s calculation was 106 hectares of manuka. Accordingly, Mr Sullivan for Nirvana seeks an order that the defendants be prohibited from placing more than 136 hives on their land, taking the more favourable figure to Makakaho on Nirvana’s evidence.
[22] Makakaho challenge the plaintiffs’ calculations, pointing to their expert who has estimated the resource to be up to 641 hectares, justifying 641 hives. I was referred to the report from Mr Grant, who completed a land-use mapping of the defendants’ lands by taking samples and extrapolating the calculation of manuka resource from the sampling plots.
[23] On the basis of Mr Grant’s report, Mr Mahuta-Coyle submits that the Court cannot resolve the differences between the experts when their evidence has not been tested or heard. The Court, he submits, should not grant what is in effect a mandatory injunction sought by Nirvana that Makakaho should be restricted to 136 hives with specific locations. He says that is an unwarranted intrusion into their legal and
commercial rights to conduct their business on their land. He submits that the restrictions on the placement of hives near the boundaries and the orders for the independent obtaining and preservation of evidence meet the purpose of Nirvana’s application. Both the intrusive nature of the orders into Makakaho’s business and the resulting removal of 300 hives off their lands tells against Nirvana and means that the balance of convenience strongly favours the defendants.
[24] The issue facing the Court is whether Makakaho should be restricted in the placement of hive numbers on their property to, judged against the industry standard, one hive per hectare of manuka. As the Courts have reinforced, the Court is not justified in embarking on anything resembling a trial of the action on conflicting affidavits in order to evaluate the strength of either parties case.5 The strengths and/or weaknesses of the contest between the principal experts of both parties in this case can only be resolved on an interim basis by the concessions made by the relevant experts.
[25] Mr Grant was candid in his report by saying that the number of plots that were chosen for sampling was restricted by time constraints and he gave two calculations for the areas of manuka resource on Makakaho’s land. Makakaho have recently planted manuka and a number of the blocks of manuka have an average height of less than two metres. If those blocks are excluded from the weighted average calculations, the total area estimated is 431.2 hectares of manuka. Plainly, young manuka cannot be equated to a hectare with solid coverage of manuka and the consequences of overstocking of hives will occur if there is less nectar for the bees to collect. Nirvana point to the two detriments of overstocking of hives with inadequate manuka resource: the health of the hives and the resulting disease that occurs. Further, the bees resort to eating the nectar for their sustenance, with no consequent honey production.
[26] In weighing the needs of Nirvana against Makakaho, there are two further factors that are relevant. The first is whether damages will be an adequate remedy in the substantive trial. Mr Sullivan submits that damages is not an adequate remedy, because of the difficulty to accurately estimate the loss to Nirvana if Makakaho overstock their “narrow property with hives”. From the 2020 season, Nirvana
5 American Cyanamid Co v Ethicon Ltd [1975] AC 396; and Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129 (CA) at [142].
estimated its loss on an assessment of each of the hive sites and properties, including that of Makakaho. Mr Sullivan says that the calculations show first that the damages are substantial, being $612,727 for the 2020 season. But secondly, estimating damages is difficult because once the honey is consumed by the excess beehives, everyone loses, and that production cannot be recovered.
[27] When pressed during the hearing on the issue of adequacy of damages, Mr Sullivan pointed to Nirvana’s affidavit evidence that canvassed the health of the hives if affected by overstocking, the death rate of bees, and the causation of disease, all of which are hard to quantify and/or replace in terms of damages. It is that quantification that is difficult to estimate. The estimation in lost honey, because of the overstocking of hives, amounts to $802,000 according to Nirvana’s calculations. For this reason, Mr Sullivan submits that the only way to adequately protect the plaintiffs position is to put an interim stop to the overstocking of the manuka resource by restricting Makakaho’s number of hives and limiting the numbers per site.
[28] Makakaho reject that estimation. Mr Mahuta-Coyle submits that Nirvana’s claim that quantifying damages is difficult is undermined by its own evidence, in which they have “at length endeavoured to set out the amount that they consider the defendants’ hives over consumed on the 2020 season”. That said, the defendants concede that the estimate of lost production might equally apply to the defendants. He submits that the expected harm to the defendants is more certain if Makakaho is required to reduce their hive number from 437 to 136 in the forthcoming season.
[29] The second factor relates to the conduct of Makakaho. Mr Rodger Pearce, the second defendant, would not agree to a drone flying over his property to map the manuka and objected when Nirvana flew in a helicopter to photograph his hives from 500 feet away. He refused to allow an independent expert to assess his property and identify an appropriate number of hives and hive sites for his manuka resource, despite Nirvana offering for an independent assessment of their properties as well. Despite agreeing to remove 250 hives through his solicitor’s correspondence, Mr Pearce removed 100 from near the boundary of his property but sacked his lawyers and did not remove the remaining 150 hives. He has locked the second plaintiffs, the Trustees of the Totaranui Trust, from accessing their own property, and he has failed to comply
with the interim injunction order issued in February by taking off the honey boxes and extracting the honey without providing an opportunity to the plaintiffs to have a suitably qualified assessor present during that removal. In addition, there is some doubt about the defendants’ ability to meet a damages award, given his solicitor’s advice that Mr Peace does not have the resources or appetite to finance proceedings such as these.
[30] In weighing up these considerations, I have reached the following conclusions. First, the Court is not in a position to resolve the factual contest among the parties’ experts and cannot do so on an interim injunction hearing. One of the key issues for trial is the identification of the manuka resource on each of the respective parties’ lands and on the evidence before me, I cannot conclusively determine the extent of that resource on the defendants’ land. What is ascertainable, on the basis of Mr Grant’s report, is that the newly planted manuka if excluded from a calculation leaves an estimated 431 hectares. This is an estimation only. The criticism by the plaintiffs’ experts may well be validated at trial. On an interim basis, therefore, the figure conceded by the defendants’ experts in excluding immature and low density manuka is a compromised position that I can use as a guide only.
[31] Second, there is no real contest that the industry standard for manuka honey beekeeping is one hive per hectare of manuka coverage.
[32] Third, it is unclear whether damages will be an adequate remedy if the plaintiffs are successful at trial, given the potential for loss of honey production, poor hive health, and disease in the hives as a result of Makakaho’s overstocking the manuka resource and trespass and/or nuisance, if upheld.
[33]I find that for these reasons, the balance of convenience favours the plaintiffs.
Overall justice
[34] I consider that granting the mandatory orders sought by Nirvana, namely the restriction on Makakaho of the number of hives to 136 and the location of the hive sites, would effectively determine the substantive litigation when the evidential contests have not been able to be heard and tested. Nevertheless, it is plain from the
evidence before the Court that boundary poaching is an identifiable risk to manuka honey commercial interests, with fiscal consequences from overstocking a manuka resource. The question for the substantive trial is whether those issues can found an action in tort.
[35] To do justice between the parties in the interim, however, I consider that interim orders are necessary to protect Nirvana’s position and prevent further loss without causing detriment or loss to Makakaho by restraining them in an intrusive way in the conduct of their business on their own land. I consider it is in the interests of justice that relevant interim orders be made to preserve the respective positions of each party.
Conclusion
[36] On the basis of the above conclusions, I am not persuaded that the Court is in a position to restrict the number of hives on the defendants’ property as sought by Nirvana. To do so would be accepting the evidence of one expert over another, when the Court has not had the benefit of hearing from the respective experts and it is inappropriate to do so in this case, until the substantive hearing.
[37] I am satisfied, however, that the stocking ratio standard of one hive per hectare of manuka resource is an industry standard and that in this case, the defendants should be restrained from placing more hives on their property than the stocking ratio permits. I therefore make the following orders by way of interim injunction to preserve the parties’ respective positions, but with conditions to ensure that the parties’ properties are adequately mapped and surveyed during the manuka flowering season, that there are inspections and compliance checks across all properties during the manuka flowering season, and that the defendants’ and their agents are prohibited from taking off the honey boxes to extract honey in their beehives without providing a reasonable opportunity for the plaintiffs to have a suitably qualified assessor present during the removal and to take samples during extraction. Accordingly, I make the orders that follow.
Orders
[38]A further interim injunction is granted and the following orders are made:
(a)The defendants and their employees and agents are prohibited from placing more hives on the defendants’ property in Waitotara Valley, Whanganui during the forthcoming manuka honey season than is consistent with a stocking ratio of one hive per hectare of manuka resource on the defendants’ property, excluding blocks with an average height of less than two metres. For interim purposes, 431 hectares or less of manuka resource on the defendants’ property is a guide but non- compliance by the defendants with the stocking ratio will be a matter for determination and ultimate remedy at trial.
(b)Neither the plaintiffs nor the defendants are permitted to place their beehives within 300m of their respective boundaries on their lands.
(c)For the purposes of identifying manuka when in flower and checking compliance with the terms of this injunction, the plaintiffs duly appointed employee of their agent, Forest 360, is permitted to fly a drone over the defendants’ property during daylight hours and following all appropriate rules for the flying of drones during the manuka season on 24 hours’ notice to the defendants’ or their lawyer, provided that the use of a drone is not used every day.
(d)The defendants and their appointed agents are prohibited from taking off the honey boxes and extracting the honey contained in the beehives that are placed on the defendants’ property without providing a reasonable opportunity for the plaintiffs to have a suitably qualified assessor present during the removal of the honey boxes and providing a reasonable opportunity to that assessor to take samples during extraction to ensure that the honey produced from each hive site is accurately recorded.
(e)The plaintiffs must, prior to the commencement of the manuka flowering season, provide a verified list and map of sites and hive numbers per site to be located on their own lands (or those neighbouring lands they have contracted to extract from).
(f)The plaintiffs and the defendants are to jointly instruct an independent, but suitably qualified, drone pilot to survey both the defendants’ and the plaintiffs’ lands during the manuka flowering season.
(g)The drone pilot is to be further jointly instructed to fly up to three inspections/compliance checks across all properties during reasonable daylight hours during the manuka flowering season on 24 hours’ notice to be provided through the parties’ lawyers. The drone pilot’s costs are to be met in proportion by the parties on a time expended basis.
(h)The parties are to agree, by 15 December 2020, on a process to be adopted that will enable independent confirmation of extraction and harvest results by all parties and the provision of that evidence to the Court. If the parties cannot agree to such a process, either party has leave to file a memorandum (to which the other party must respond within five working days) seeking the Court’s determination of that issue on the papers.
(i)The plaintiffs and defendants are to jointly instruct a suitably independent drone photography specialist for the photographic surveying of all lands relevant to the plaintiffs claim, being the defendants’ land and the plaintiffs’ land over which they have contracted the right to occupy and control in respect of bee manuka honey harvesting.
(j)Leave is granted to the parties to seek further clarification of the above orders, if necessary.
Cull J
Solicitors:
Cooper Rapley Lawyers, Palmerston North for the plaintiffs Dewhirst Law, Whanganui for the defendants
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