OHL Ltd v Johns

[2021] NZHC 77

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-2377

[2021] NZHC 77

BETWEEN

OHL LIMITED

Plaintiff

AND

LLOYD DAVID JOHNS, TREVOR

RAKENA WI KAITAIA, ADRIAN DAVID LARKINS, NIGEL TERENCE INGHAM AND MARAINA JOSEPHINE JANE

LARKINS as responsible trustees of the PERIA CHARITABLE TRUST

Defendants

Hearing:

13-17 July 2020

Submissions on 27 October 2020

Appearances:

N S Gedye QC and L Edginton for the Plaintiff R Mark for the Defendants

Judgment:

4 February 2021

JUDGMENT OF MUIR J

This judgment was delivered by me on Thursday 4 February 2021 at 11.00 am pursuant to Rule 11.5 of the High Court Rules.

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

Counsel:

N S Gedye QC, Barrister, Auckland            [e-mail]

Solicitors:

Buddle Findlay, Auckland  [e-mail]

R C Mark, Kerikeri  [e-mail]

OHL LIMITED v JOHNS [2021] NZHC 77 [4 February 2021]

TABLE OF CONTENTS

Introduction  [1]

Background  [5]

The issues  [31]

The appropriate date for assessment of damages  [32]

Introduction  [32]

The law  [33]

Discussion  [36]

Conclusion - date of assessment  [52]

Are loss of chance principles applicable?  [53]

Quantification of OHL’s loss  [56]

Introduction  [56]
Application of onus of proof  [59]
Omnia praesumuntur contra spoliatorem  [64]
Noncompliance with the basis rule  [75]

Assessment of the expert evidence  [85]

Introduction  [85]

High level indicators that the Clarke valuation is the more reliable                 [101]
The Pango inventory – the respective positions  [106]

1.The Peria yields in comparison to Northland averages  [111]

2.Poor soils  [114]

3.Peria forest untended and lacking silviculture  [117]

4.Peria was a poor growing forest  [119]

5.High stocking variability  [123]

6.High PLE in Pango inventory  [127]

7.Inconsistency with PF Olsen mapping in 2003 – the missing five hectares of

trees  [136]

8.Partial harvest of two stands by Pango (1/04 and 3/01) indicates that they

were uneconomic and should not have been included in the valuation.     [140]

9.Raw data over-represents average diameter trees  [145]

Summary valuation issues  [148]

Roading and engineering costs  [154]

Required distance of roads  [156]
Metal costs and quantity  [164]

Result  [169]

Costs  [171]

Introduction

[1]    This is a case about the quantum of loss resulting from breach by the trustees of the Peria Charitable Trust (the Trust) of an agreement granting forestry rights.1 No issue as to liability arises.2 The plaintiff (OHL) seeks judgment in the amount of

$755,602. It does so on the basis:

(a)that its loss is appropriately assessed, not at the date of breach (February 2017), but at the date it says the forest would otherwise have been sold (December 2018);

(b)it has an agreed 62 per cent interest in the forest; and

(c)of its December 2018 valuation of $1,218,714.00.

[2]    The defendant says that damages are appropriately assessed as at the date of breach (when timber prices were significantly lower than in December 2018) but, that if the latter date is adopted the value of the forest was $715,394.00 only. On that basis it says at most the damages award should be $443,544.00.