Queen Elizabeth the Second National Trust v Netherland Holdings Limited

[2014] NZHC 291

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2013-409-001704 [2014] NZHC 291

BETWEEN  Queen Elizabeth the Second National

Trust

Plaintiff

AND  Netherland Holdings Limited

First Defendant

ANDR H WOBBEN AND D H WOBBEN Second Defendants

Hearing:                   11 February 2014

Appearances:           F B Collins and P Kirby for Plaintiff

C J Shannon and for Defendant

Judgment:                26 February 2014

JUDGMENT OF DUNNINGHAM J

[1]      This is an application by the Queen Elizabeth the Second National Trust (the Trust)  against  Netherland  Holdings  Limited  (NHL)  and  Mr  Roelof  Hendrik Wobben,1 seeking orders:

(a)       finding that the defendants are in contempt of the Court for breaching interim injunction orders made on 29 November 2013

(b)issuing  an  arrest  order  against  Mr  Wobben  and  detaining  him  in custody until a Court hearing is held to determine what can be done to

purge the contempt, and

1      It  was clarified at  the  hearing that the plaintiff was not pursuing Mrs  Diederika Hermina Wobben, the other director of Netherland Holdings Limited, in respect of this application, although she was originally named as a second defendant.

Queen Elizabeth the Second National Trust v Netherland Holdings Limited and Ors [2014] NZHC 291 [26 February 2014]

(c)       allocating  a  penalty  fixture  to  determine  the  consequences  of  the defendants’ contempt.

[2]      The   orders   were   originally   sought   without   notice.      However,   as   a consequence of directions made by Gendall J on 27 January 2014, the application proceeded on notice.  That procedural change prompted a modification to the orders which were sought by the plaintiff. At the hearing on 11 February 2014, the plaintiff proposed that any arrest order lie in Court for a period of one month to provide sufficient time for the defendant to take steps to purge the contempt.

Background

[3]      The proceedings which give rise to this application allege breaches by the defendants of statutory conservation covenants created under the provisions of the Queen Elizabeth the Second National Trust Act 1977.  Such covenants are designed to protect native flora and fauna, biodiversity and other open space values on the land owner’s land.  The covenants bind the land owner and all successors in title, as they are registered for perpetuity.

[4]      There are three such covenants registered on the two titles to the land owned and farmed by NHL near Eyrewell in the Waimakariri District (the NHL Land).  The covenant first relates to Block A, an area of some 1.07 hectares, the second to Block B, an area of 1.8 hectares and the third to Block C, an area of .5105 hectares. The three open space covenants together are known as the “Langstone Covenants” and were established to protect outcrops of remnant kanuka woodland on the covenanted land.

[5]      The pertinent terms of the Langstone covenants, applying to all three blocks, are as follows:

2.1No act or thing shall be done or placed or permitted to be done or remain upon the Land which in the opinion of Board materially alters the actual appearance or condition of the Land or is prejudicial to the Land as an area of open space as defined in the Act.

2.2In particular, on and in respect of the Land, except with the prior written  consent  of  the  Board,  or  as  outlined  in  Schedule  3,  the Owner agrees not to:

(a)       Fell, remove, burn or take any native trees, shrubs or plants of any kind.

(b)       Plant, sow or scatter any trees, shrubs or plants or the seed of any trees, shrubs or plants other than local native flora.

(c)       Introduce any substance injurious to plant life except in the control of pests.

(d)       Mark, paint, deface, blast, move or remove any rock or stone or disturb the ground.

....

(h)       Deposit any rubbish or other materials, except in the course of maintenance or approved construction, provided however, that after completion of any work all rubbish and materials not wanted for the time being are removed and the Land left in a clean and tidy condition.

(i)       Allow any livestock on the Land.

...

5.1The Owner shall keep all fences and gates on the boundary of the Land in good order and condition and will accept responsibility for all repairs and replacement except in the case of property boundary fences where the provisions of the Fencing Act 1978 shall apply.

[6]      Block A, and Block B2 both allowed an exception to the general terms of the covenant as a consequence of a provision in Schedule 3 which states:

3.        Servicing of water race

3.1The Owner, or such authority as has responsibility for maintaining the water-race on the Land, may continue to use the vehicle access track alongside the water race to facilitate servicing of the said water race.

[7]      In December 2012, NHL a company of which Mr and Mrs Wobben are the sole  directors  and  shareholders,  purchased  the  farm  on  which  the  Langstone covenants are registered.

[8]      There  is  no  dispute  that  NHL then,  through  the  actions  of  one  or  both directors, cleared the protected kanuka vegetation off all of Block B and at least half

2      The covenant relating to Block A was extended to cover Block B as a consequence of a variation to the Block A open space covenant which was registered on 10 April 2006.

of Block A in order to allow for a centre pivot irrigator and a lateral irrigator to have access over those parts of the NHL Land.

[9]      In  early  June  2013,  one  of  the  Trust’s  representatives,  Mr Miles Giller, discovered that this vegetation clearance had occurred, and, shortly after that, the Trust obtained written undertakings from NHL that it would not further harm, or allow harm, to the protected areas.  This avoided the need for the Trust to apply for interim injunctive relief at that time.

[10]     The undertakings were set out in a letter from the NHL’s solicitors dated

14 June 2013. They provide:

(1) It  undertakes  that  it  will  not  and  will  procure  that  no  director, shareholder, employee or agent will take any further steps to fell, remove, burn, damage, spray or take any trees, shrubs or plants of any kind, including ground covering, vegetation, or do any other works  whatsoever  that  may  breach,  or  further  breach  the  Open Space Covenants.

(2) It further undertakes that it will immediately reinstate the fences on the survey lines and that it will provide access to the Trust and it will not,  and  will  procure  that  no  director,  shareholder,  employee  or agent   permit  any  sowing  or   application   of  fertiliser   on  the covenanted areas and that no irrigation be operated in these areas pending agreement between the parties to release the undertakings.

[11]    On 28 November 2013, after further visits to the property to check for compliance with the undertakings, the Trust lodged an application for an interim injunction asserting that the undertakings had been breached by the defendants on at least three occasions.

[12]     The alleged breaches were that:

(a)      a pile of pulled up kanuka and other vegetation and fencing materials on  Block  A  was  burnt,  destroying  any  possibility  that  the  plant material may have had seeds or fungi that would allow or assist in natural regeneration of the area,

(b)      large amounts of manure were stockpiled next to, and uphill of, Block

C and had leached into Block C causing the death of approximately

80 kanuka trees, and other vegetation to sicken, and

(c)      a large lateral irrigator had been allowed to travel through Block B on at least one occasion and had sprayed Block B with water and/or effluent.

[13]     That application sought interim injunction orders restraining the defendants on terms which reflected the undertakings previously given.  The Court heard from counsel for the defendants on a Pickwick basis and the following orders were made without opposition from the defendants:

(a)       directing that no director, shareholder, employee or agent of the first defendant will take any further steps to remove, burn, damage, spray, or take any trees, shrubs or plants of any kind, including ground covering vegetation, or do any work whatsoever that may breach, or further breach the opening space covenants registered against Computer Free Hold Identifiers 592415 and 592414 (the “Langstone covenants”);

(b)       directing that no director, shareholder, employee or agent of the first defendant will permit any sowing or application of fertiliser on the Langstone covenants and that no irrigation will be operated in or placed on those areas pending agreement with the applicant;

(c)       granting the applicant the right to cross over the first defendant’s property for the purpose of access to the Langstone covenants to inspect the state and condition thereof and to carry out any necessary maintenance or restoration work; and

(d)       leave is reserved for either party to apply for variation of these orders, or for any further or other orders, on seven days notice.

[14]     That, one would have thought, would be the end of the matter until the substantive  proceedings  in  relation  to  the  alleged  breaches  of  the  Langstone covenants were heard and determined.   Instead, on 17 January 2014, the plaintiff lodged the present application alleging that the defendants were in contempt of Court for deliberately and wilfully breaching the sealed interim injunction orders dated 29

November 2013.

[15]     The specific allegations of breach are as follows:

(i)the   first   defendant’s   centre   pivot   irrigation   system   has continued to operate in Block A and its lateral irrigator has continued to operate in Block B of the Langstone covenant areas,

(ii)      fertiliser has been allowed to leach and/or flow through into

Block C by way of surface puddling caused by rainfall,

(iii)the  farm  track  on  Block  B,  which  the  Trust  said  was wrongfully created by the defendant, continued to be used by the defendants for their vehicular access, and

(iv)     fertiliser has been spread onto Block B.

Preliminary Matter

[16]     Following receipt of the notice of opposition to this application which was supported by affidavits, the Trust filed an application for leave to cross-examine Mr Wobben. The Trust sought to cross-examine him on:

(a)      further evidence filed by the Trust that there had been subsequent irrigation of Block A which Mr Wobben had not referred to,

(b)his explanation for continued use of the farm track in Block B when he had been advised that it was considered a breach of the interim junction,

(c)       what steps, if any, he took to prevent fertiliser being spread on Block

B,

(d)his understanding of whether the interim injunction also covered the presence of irrigators in the covenanted area, as opposed to their use.

[17]     The application was not opposed by the defendants.   Instead, they filed a memorandum abiding the decision of the Court.

[18]     High Court rule 7.28 provides that:

A Judge may in special circumstances, on the application of a party, order the attendance for a cross-examination of a person who has made an affidavit in support of, or in opposition to, an interlocutory application.

It is  well accepted that  the  phrase  “in special circumstances”  is flexible, but it requires circumstances which are uncommon, or out of the ordinary, although not necessarily extraordinary or unique.3

[19]     Here the issues on which the applicant sought to cross-examine the deponent went to the question of whether his actions were deliberate or wilful, or merely accidental, which was a pivotal issue in this hearing.  Furthermore, it appeared both sides saw advantages in allowing the witness to be cross-examined on the identified points as the application was not opposed.   In my view, those constituted special circumstances which justified granting the application to cross-examine Mr Wobben on the issues identified in the application, and I granted it accordingly.

Legal test for contempt

[20]   The applicable legal principles on a contempt application were neatly summarised in Solicitor-General for New Zealand v Krieger,4  a recent decision of Panckhurst J, where he stated:5

[24]      ... . I consider there are three elements to be proved.  The first is the existence of an order unambiguous in its terms and binding upon the respondent.   An aligned requirement is that the respondent had knowledge of the terms of the order, typically as a result of personal service of the order upon him or her.

[25]      Second, it must be proved that the respondent acted in breach of the order. ...

[26]     Third, there is a mental element.   It must be established that the respondent’s conduct was deliberate in the sense that he or she knew the obligation cast by the order of the Court, but nonetheless intentionally breached that obligation. ...

3      Kidd v Van Heeren (1997) 11 PRNZ 422 (CA).

4      Solicitor-General for New Zealand v Krieger [2014] NZHC 172.

5      At [24]-[26].

[21]     Proof to the criminal standard of beyond reasonable doubt is required before punitive sanctions will be imposed, whereas if the applicant can only prove contempt on the balance of probability, costs and damages, where proven, may be awarded.6

[22]     In the present case, the issues are:

(a)      Were the orders clear and unambiguous (there being no real debate that   the   defendants   were   made   aware   of   the   orders,   having participated in the process of making the interim injunction orders)?

(b)      Has a breach of the orders been proved beyond reasonable doubt?

(c)      If so, has it been proven beyond reasonable doubt that the breach was deliberate or wilful?

I now consider these questions in relation to each alleged breach.

Allegations relating to irrigators/irrigation of Blocks A and B

[23]     Order 3.2 of the injunction states:

... that no director, shareholder, employee or agent of the first defendant will permit any sowing or application of fertiliser on the Langstone covenants and that no irrigation will be operated in or placed on those areas pending agreement with the applicant.

[24]     The   Trust   provided    affidavit    evidence   from   the   Trust’s    regional representative, Mr Giller, that Block A was irrigated on 11 January 2014 and, in an affidavit in reply, that it was also irrigated on 18 January 2014.   He also gave evidence that on subsequent site visits on 23 January 2014 and 3 February 2014 objects that he had placed and photographed in wheel ruts on Block A had been “disturbed by irrigator wheels indicating that the irrigator had again passed (at least once prior to each visit) through the block”.  On both 23 January and 3 February, he also observed that the ground in Block A was “noticeably wet” despite no recent

rainfall.

6      Country Colours Limited v Resene Paints Limited (1992) 6 PRNZ 506 (HC).

[25]     Mr Wobben’s affidavit evidence acknowledged that an irrigator sprayed water on Block A on 11 January 2014.   His explanation was that Waimakariri Irrigation Limited, the water supply company, failed to turn off the water supply due to a “miscommunication with the raceman”.   This meant that water continued to flow into the small storage pond on NHL land.  Because water continued to flow into the pond, the pump did not cut off and the irrigator continued to pass over Block A and watered it.  It also watered another crop that Mr Wobben did not intend to irrigate as he wanted to harvest it.  Mr Wobben claimed he did not know that this had occurred until afterwards and that the 11 January 2014 event was unintentional.

[26]     He also acknowledged that an irrigator passed over Block A on about three or four occasions between 12 December 2013 and 3 February 2014, but said that “the water was turned off and the irrigator was not operating”.  When cross-examined on whether irrigation water was spread on Block A or other occasions he accepted it was possible that when the irrigator passed through Block A on 18 January 2014 that the irrigation was turned on, but said “it should not have been”.   He also acknowledged that there was no barrier to stop the irrigator from travelling through Block A at that time and that he had provided no evidence to the Court confirming that his employees were told not to allow irrigation to go through Block A.   He accepted that when he irrigated land alongside Block A on 3 February 2014 water could have been sprayed over the covenant boundary into Block A.  When it was put to him that he took the “risk that water would go from the irrigator onto Block A”, his answer was “It’s water, not manure or fertiliser.  It’s just water”.

[27]     The first matter raised in the defendant’s submissions was that the order did not prohibit the irrigators tracking through the covenanted blocks, only the discharge of water onto those blocks.  In other words, if the defendants moved the irrigators over Blocks A or B without turning the irrigators on, they did not breach the terms of the order, as the literal meaning of “irrigation” is the action of applying water to the land.

[28]     However, as the Trust submitted,  the terms of the order must be read in the context in which they were made, and given their ordinary meaning.  As was said in Malavez v Knox:7

... the words ... must be read against the background mentioned and with the ordinary meaning which I think they would be understood by commercial men such as Knox and Russell.

[29]     In the present case I have no doubt that the word “irrigation” as used in the order, encompassed both the act of wetting the land, and the movement of the irrigator over the land.   In reaching that view, I have had regard to the relevant background in which the orders were made.  The starting point is the covenant itself. In order for a centre pivot irrigator, or a lateral irrigator, to pass over the covenanted land, tracks must be cleared through the native vegetation and that vegetation will not be able to regenerate in the irrigator’s path.  That breaches cl 2.1 of the covenant because it is an activity which “alters the actual appearance or condition of the Land or is prejudicial to the Land as an area of open space as defined in the Act”.

[30]    It is because the Trust considered the passage of irrigators through the covenanted land breached the covenant, that the undertakings sought from NHL in June 2013 included that “no irrigation be operated in these areas pending agreement between the parties to release the undertakings”.   The Trust claimed subsequently that, in contravention of that undertaking, a large lateral irrigator had been allowed to travel through Block B and had sprayed Block B with water on at least one occasion.

[31]     The ability to permit the irrigator to pass through the blocks continued to be a matter  of  contention  between  the  Trust  and  the  defendants.    By  letter  dated  5

November 2013, the Trust wrote to the defendants insisting that, to resolve matters, “no irrigation system must travel through or over the covenant areas”.   The defendants’ solicitor, in a letter dated 11 November 2013, acknowledged “one matter, and we accept that it is significant which our client needs to carefully consider, is the irrigation system travelling through the covenant areas”.  The letter acknowledged that this issue was a “show stopper” for the Trust, but said the defendant needed to

“consult  with  its  irrigation  advisers  as  to  what  else  may  work  to  satisfy  your

7      Malavez v Knox [1977] 1 NZLR 463 (SC) at 467.

concerns”.  However, that issue was not resolved before the interim injunction was applied for.

[32]     The interim injunction orders made reflected the wording of the previous undertakings.   However, in respect of the prohibition on irrigation, the additional words “or placed on” were added to the order so that it prohibited irrigation being “operated in or placed on those areas”.  Had the only concern been with spraying the land with water, the wording could have been left as it appeared in the undertaking. Instead, by expanding the terms of the order to include the words “placed on”, I am satisfied that both the intention and the natural meaning of the words, was to prohibit both  the  spraying  of  water  and  the  presence  of  irrigation  equipment  on  the covenanted land.  Indeed the fact Mr Wobben acknowledges he should have sought the Trust’s permission to move the lateral irrigator over Block B, but did not because it was over the Christmas holiday period, supports this understanding.

[33]     In  short,  reading  the  words  of  the  injunction  against  the  background mentioned, and in light of the ordinary meaning which they would have conveyed to the parties, I have no doubt that the injunction prohibited the irrigation equipment from tracking over the covenanted land, whether spraying water or not.

[34]     The next issue is whether there was a breach of the order.  The defendants accept the order was breached by actual spraying of water, on 11 January 2014.  I am also satisfied on the evidence that there was a further breach involving spraying of water on 18 January 2014.  However, given the high standard of proof required, I am not  prepared  to  find  that  water  was  sprayed  in  the  covenant  blocks  on  other occasions except by over-spraying the boundary on Block A on 3 February 2014. The evidence also demonstrates, and the defendant acknowledges, that the irrigators have  passed  through  Block A on  four  occasions  and  Block  B  on  at  least  one occasion. These are all breaches of the order.

[35]     The next plank of the defendants’ submissions was it has not been proven beyond reasonable doubt that the breaches of the irrigation prohibition in the order were deliberate or wilful.

[36]     This  requirement  was  clearly  explained  in  Morris  v  Douglas,8    where

Paterson J observed:9

As the writ is very drastic in form, the Courts have generally been reluctant to allow the writ to issue except in the clearest cases and will not normally issue the writ unless the conduct has been intentional or reckless.   The conduct must be shown to have been contumacious or wilful and it is necessary  to  establish  that  conduct  to  the  standard  of  proof  beyond reasonable doubt.  Casual, or accidental, or unintentional disobedience to an order of the Court is not enough to justify either sequestration or committal. If the disregard is wilful, then it is contumacious.

[37]     Those  comments  were  cited  with  approval  by  Randerson  J  in  Douglas

Pharmaceuticals Limited v Nutripharm NZ Limited,10 and he added:11

I am also of the view that where a Court has asked to exercise its power to levy  a  fine  for  contempt  of  Court,  it  is  again  necessary  to  establish something more than accidental or unintentional behaviour:  ... Although the imposition of a fine does not carry the same drastic consequences as the issue of a writ of sequestration, it is nevertheless my judgment that it is necessary for the parties seeking the levying of a fine to establish some degree of wilful or reckless disobedience of the Court order.

[38]     Mr Wobben and NHL seek to extricate themselves from responsibility for the occasions when watering did occur by saying that it should not have happened and by putting  the  blame  on  unnamed  staff  members  or  on  the  irrigation  company raceman.   I do not think that, of itself, excuses the defendants.   As was said in

Douglas Pharmaceuticals:12

In my view, it is no defence that the defendants relied on others to carry out the labelling required.  The defendants gave the undertakings and it is for the defendants to ensure that they are complied with.

However, in Douglas Pharmaceuticals, because the defendants had also taken “steps to satisfy themselves that the terms of the undertaking were carried out” by the people undertaking the labelling, their conduct in breaching the orders was not held

to be wilful, reckless or contumacious.13

8      Morris v Douglas (1996) 10 PRNZ 363 (HC).

9      At 366.

10     Douglas Pharmaceuticals Limited v Nutripharm NZ Limited (No. 2) (1998) 12 PRNZ 176 (HC).

11     At 182.

12     At 181.

13     At 183.

[39]     In this case I am deeply sceptical that the defendants took reasonable steps to ensure the terms of the injunction were complied with.  Mr Wobben was vague as to how the 11 January event occurred, simply saying it was a “miscommunication with the raceman”.

[40]     He gives no evidence of when or how he gave instructions to his employees about compliance with the terms of the injunction, and seems to have abdicated his responsibilities on 11 January, by relying on a pump turning off in his absence, or on

18 January, to staff who appear, on the facts, unable to follow his instructions.

[41]     However,  even  if  accepted,  those  “excuses”  only  relate  to  the  breaches involving spraying water on those two dates.  The breaches relating to passage of the irrigators over Blocks A and B or of incidental spraying of Block A when irrigating adjacent land, are clearly deliberate and wilful actions by Mr Wobben and NHL.  He chose to do what was convenient and efficient for him rather than to accept the burden of strict compliance with the Court’s orders.

[42]     I hold there has been a contempt by repeated and deliberate breaches of order

3.2 between 12 December 2013 and 3 February 2014, by allowing irrigators to track over Blocks A and B and to overspray water onto Block A on 3 February 2014.

Allegation that fertilizer has been allowed on Block C through surface puddling caused by rainfall

[43]     This  allegation  was  not  pursued  by  the  Trust  at  the  hearing  accepting (correctly in my view) that as Mr Wobben had cleared the pile of manure adjacent to Block C, any subsequent leaching of nutrients from residual manure into Block C was not wilful or deliberate.

Allegation of using the farm track on Block B

[44]     When  NHL  bought  the  farm  there  was  an  existing  grass  track  running through the western side of Block B.  The track was once adjacent to a water-race and Schedule 3 to the covenants relating to Blocks A and B expressly authorised use of the vehicle access track alongside the water-race for the purpose of servicing of

the water-race.  However, it was common ground that when NHL acquired the farm the water-race had been closed.

[45]     After NHL bought the farm Mr Wobben had shingle spread on the existing track and has continued to use it as an access way on the farm.  He explained that, as it was an existing access way, he “did not think that vehicles on it breached the wording of the injunction”.

[46]     It is clear that the Trust regards continued use of the farm track as being in breach of the covenant.   It has raised that with Mr Wobben in correspondence.14

However, in the context of this application, I am not required to determine whether the action is in breach of the covenant, but whether it is in breach of the wording of the interim injunction.  The interim injunction prohibits the defendant from taking “any further steps” to damage or remove vegetation or “do any work whatsoever” that may breach, or further breach, the open space covenants.  The question is simply whether the terms of the interim injunction order prevented the defendants from continuing to drive across the gravelled track.

[47]     On balance, I do not consider that this activity breached the terms of the order.  The order is designed to “hold the fort” and prevent any further damage while the Trust progresses its substantive claim alleging breaches of the Langstone covenants.  There is no suggestion that by using the access track any further damage to vegetation would occur, because no vegetation existed on the access track. Furthermore, I do not think that driving along the track is obviously encompassed by the prohibition on doing “any work ... that may breach ... the open space covenants”. The term “work” describes an activity undertaken to achieve a result.   Use of a vehicle track, without more, is not obviously covered by that definition.   For this reason, I do not consider this activity was a breach of the order, although it may, of

course, breach the terms of the covenant.

14     See for example, letter dated 10 June 2013, 5 November 2013 and 12 December 2013.

Allegation that fertiliser has been spread onto Block B

[48]     Mr  Giller’s  evidence  for  the Trust  provides  clear  evidence  that  fertiliser pellets were distributed on part of Block B.  Order 3.2 of the injunction included an order directing that the defendants were not to “permit any sowing or application of fertiliser on the Langstone covenants”.

[49]     Mr  Wobben  gives  evidence  that  NHL  and  he  did  not  knowingly  allow fertiliser to be spread on part of Block B, but that when  a fertiliser truck was fertilising surrounding paddocks, some accidentally got on part of Block B.

[50]   In cross-examination Mr Wobben acknowledged that he authorised the contractor to come onto the NHL land to spread fertiliser and that he did not give any express instructions to avoid or stay away from the covenanted blocks.  When asked whether it would have been prudent to warn his contractor that he should operate within a safe buffer zone from the covenanted areas, given the existence of the injunction orders, he replied that he “probably should have but I didn’t.   I didn’t think it was necessary to do this”.  He acknowledged he did not provide a map of exactly where the covenanted areas were, nor did he advise the contractor of the terms of the interim injunction.   This seems particularly irresponsible when the covenanted areas would not have been readily distinguished from the surrounding farmland because of the clearance of the kanuka from parts of them and because some of the fencing was no longer on the precise boundary of the blocks.

[51]     While the defendants’ submissions sought to characterise this as an accidental breach of the covenant, I do not take the same view.  The fertiliser truck was on the property at Mr Wobben’s request.  He failed to take even the most basic precautions to ensure that the contractor was aware of the terms of the injunction and had sufficient information (such as map or precise boundary indicators) to be able to avoid the spread of fertiliser on the blocks.

[52]   I have no doubt that this was conduct which was wilful, reckless or contumacious on the part of the defendants.  Mr Wobben created the risk of fertiliser going on Block B and was entirely indifferent as to whether that risk occurred or not. I therefore hold there has been contempt by a breach of Order 3.2 by allowing

fertiliser  to  be  spread  on  Block  B  sometime  between  27  December  2013  and

11 January 2014.

Consequences

[53]     The Trust’s position is, and always has been, that its primary aim in these proceedings is to reinstate the vegetation which has been damaged or destroyed by the defendants’ actions.  It appears from the affidavit evidence provided in support of the substantive proceedings that this will be a costly and time consuming exercise for the defendants.   However, that is a matter which sits outside my consideration of what penalty should be imposed for contempt of Court orders.

[54]     The Trust has asked that the issue of penalty be deferred to a subsequent hearing and be considered in light of what steps the defendants have taken to purge their  contempt.    That  strikes  me  as  being  a  reasoned  and  sensible  approach. However, despite some discussion on the matter, there was not unanimity on what should be done to purge the contempt. The Trust proposed that the applicant:

(a)      erect rabbit proof fencing on the two boundaries of the covenanted areas,

(b)cease using the gravel track to allow it to revert back to a vegetated state,

(c)      take  reasonable  steps  (for  example,  by  erecting  effective  barriers which comprise more than just a waratah stake in the ground) to ensure the irrigation systems do not track through either of the blocks, and that the adjacent irrigator cannot spread water into this land (for example  by  modifying,  or  removing,  the  end  sections  of  the irrigators).

[55]     The defendants agreed that the first and third steps could be taken but they did not agree that they should have to cease using the roadway at this point in time.

[56]     Given that I have found the use of the access did not meet the high threshold for a finding there had been contempt of a Court order, I am not prepared to require anything to be done in respect of this in order to purge the contempt.  However, I accept and agree that the other steps proposed by the Trust are appropriate.

Outcome

[57]     I have found the defendants in contempt of Court by allowing irrigators to pass through and/or water the covenanted land, and by allowing fertiliser to be spread while taking no precautions to ensure that it would not be spread on the covenanted  areas.    The  issues  of  penalty,  and  of  costs  on  this  application,  are deferred to a further hearing on a date to be set by the Registrar at least one month from the date of this judgment.

[58]     I have considered the request to issue an arrest warrant but that it lie in Court until the penalty hearing.   That strikes me as superfluous at this stage.   However, Mr Wobben should be in no doubt that imprisonment is an available option to punish a wilful or reckless disobedience of a Court order.  It is an aggravating feature of this case that the Trust has had to escalate its response to the alleged breaches of the Langstone covenants,  from informal advice, to  formal undertakings  and then to seeking interim orders from the Court.

[59]     The penalty to be imposed will be considered in light of the steps taken by the defendants in the interim to purge their contempt.  The Court expects there to be strict compliance with the interim injunction and comprehensive steps taken to purge the contempt in the interim.

[60]     The Trust has also sought costs on an indemnity basis.  That strikes me as appropriate.  However, if the defendants wish to make any alternative submissions on costs, that should be done at the penalty hearing.

Solicitors:

Duncan Cotterill, Christchurch

Gibson Sheat, Wellington