Wallbank v Coxhead

[2014] NZHC 880

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV-2013-470-521 [2014] NZHC 880

BETWEEN

RODGER WALLBANK

Applicant

AND

ELAINE EVELYN COXHEAD Respondent

Hearing:	1 May 2014
Appearances:	C Muston for applicant M Beech and K Serjeant for respondent
Judgment:	1 May 2014

JUDGMENT OF LANG J

[on application for leave to appeal to the Court of Appeal]

This judgment was delivered by me on 1 May 2014 at 2 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

WALLBANK v COXHEAD [2014] NZHC 880 [1 May 2014]

[1]      On 5 December 2013, I delivered a judgment in which I dismissed an appeal by Ms Coxhead on a question of law.1   The question of law related to whether or not an arbitrator had correctly determined that Mr Wallbank had validly commenced his claim.  I take the reader to be familiar with that judgment, and do not propose to set out the underlying facts in greater detail.

[2]      Although Mr Wallbank was the successful party in relation to the appeal, he nevertheless  seeks  leave  to  appeal  to  the  Court  of Appeal  against  one  of  the conclusions I reached in my judgment.  He does so because of the downstream affect it is likely to have on his certain aspects of his claim against Ms Coxhead.

Relevant principles

[3]      The present application is governed by Clause 5(5) of Schedule 2 to the

Arbitration Act 1996, which provides:

5       Appeals on questions of law

…

(5)     With the leave of the High Court, any party may appeal to the Court of Appeal from any refusal of the High Court to grant leave or from any determination of the High Court under this clause.

…

[4]      As the Court of Appeal confirmed in Downer Construction (New Zealand) Ltd v Silverfield Developments Ltd,2  the criterion for leave to appeal under Clause

5.5 is whether the appeal raises some question of law capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal.

[5]      In this context the Court of Appeal is not engaged in the general correction of error.  Its primary function will be to clarify the law and to determine whether it has

been properly construed and applied by the Court below.   Importantly, not every

1      Coxhead v Wallbank [2013] NZHC 3249.

alleged error of law is of such importance, either generally or to the parties, as to justify further pursuit of litigation.3

The proposed question

[6]      As finally formulated, the proposed question of law is as follows:

Was the High Court correct to determine that Clause 138 of the Sharemilking Agreements Order 2001 prevents a claimant from proceeding with a claim unless the claimant serves the other party with full details of the claim in writing within 21 clear business working days of the claimant becoming aware of the facts giving rise to the claim?

Decision

Is the proposed question of law capable of bona fide and serious argument?

[7]      Clause 138 of the Sharemilking Agreements Order 2001 provides as follows:

Clause 138      No claims by the farm owner against the sharemilker or the sharemilker against the farm owner in any way arising out of this agreement in relation to operations during any one milking season (whether the agreement is renewed or not) is recognised or sustainable, and no action in respect of any claim is enforceable, unless full details thereof in writing are served by the claimant on the respondent within 21 clear business working days of the claimant becoming aware of the alleged breach of the agreement but in any event no later than 21 clear business working days from the end of the season to which the breach relates, time being strictly of the essence of the contract.  If a claim is made by either party, a period of 10 clear business working days after the claim has been lodged is permitted within which to make a counterclaim, but in no cause is a counterclaim valid if made more than 30 clear business working days from the end of the season.

(Emphasis added)

[8]      In my judgment I interpreted the clause, and gave my reasons for doing so, as follows:4

[11]      There was some dispute between counsel regarding the meaning to be  given  to  Clause  138.   As  will be evident,  the clause  prescribes  two separate time periods within which a claimant must provide the other party with full details of his or her claim.  First, the clause requires the claimant to provide full details “within 21 clear business days of the claimant becoming aware of the alleged breach of the agreement”.  Secondly, it requires that, in any event, the claimant shall provide details of the claim “no later than 21

3 Ibid, at [33].

clear business working days from the end of the season to which the breach

relates.” The sharemilking season ends each year on 31 May.

[12]     Counsel for Mr Wallbank submits that the effect of the clause is to enable a claimant to provide full details of a claim at any stage up to and including 21 clear business working days from the end of the season to which the breach relates.  I do not agree with this interpretation.  In my view, the meaning of the clause is clear.  If a claimant becomes aware of a breach during the course of a season, he or she must provide full details of the claim to the other party within 21 clear business working days of becoming aware of the breach.  If a claimant becomes aware of a breach after the end of the season, he or she must give full details of the claim within 21 clear business working days of the end of the season.  If a claimant becomes aware of a breach after the expiration of 21 days from the end of the season, no claim may be brought.

[13]     The object of the clause is clearly to ensure that the parties to a sharemilking agreement provide each other with full details of claims as soon as they become aware of them.   If the argument for Mr Wallbank is correct, this objective would be significantly undermined.   It would also largely rob the requirement to provide full details of a claim within 21 days of  any  utility.    The  prohibition  on  giving  notice  of  a  claim  after  the expiration of 21 days after each season permits sharemilkers and farmers to begin each season free of the prospect that they may be subject to claims arising during previous seasons.

[9]      Counsel for Mr Wallbank contends that this interpretation was incorrect.  He contends that it is sufficient for a claimant to provide the other party with written details of a claim within 21 days after the end of each sharemilking season regardless of when the claimant becomes aware of the facts giving rise to the claim.

[10]     I do not consider this interpretation to be capable of bona fide or serious argument for the reasons given at [13] of my judgment.   Nor do I accept that my interpretation means that the words “and in any event not later than 21 business working days from the end of the season to which the breach relates” are robbed of utility.   As I explained in the penultimate sentence of [12], those words apply in circumstances where the claimant becomes aware of a potential claim after the end of the sharemilking season.  The application for leave to appeal therefore fails at the first hurdle.

Is the proposed question of such importance to warrant a second appeal?

[11]     Counsel for Mr Wallbank submits that my interpretation of Clause 138 is contrary to that which has been applied by parties to sharemilking agreements in the

past.   He advised me from the bar that he had obtained this information from the person who instructed him, who had in turn spoken to somebody in the Federated Farmers organisation about the interpretation of Clause 138 contained in my judgment.   Obviously information of this type ought to have been provided in an affidavit filed in support of the application.   I cannot give any weight to an unsubstantiated assertion from the bar.   Moreover, to the extent that parties to sharemilking agreements may previously have applied the interpretation for which Mr  Wallbank  contends,  the  interpretation  contained  in  my  judgment  will  give

certainty to the issue in respect of future claims.5

Result

[12]     The application for leave to appeal is accordingly dismissed.

Costs

[13]     Ms Coxhead would ordinarily be entitled to costs on a Category 2B basis, together with disbursements as fixed by the Registrar.  During the hearing, however, counsel for Mr Wallbank advised me that his client has been granted legal aid in respect of this matter.   For that reason, I make no order for costs at this stage. Instead,  I  reserve  leave  to  counsel  to  file  submissions  in  relation  to  costs  in

accordance with ss 45 and 46 of the Legal Services Act 2001.

Lang J

Solicitors:

Holland Beckett, Tauranga
Counsel:

C Muston, Whangarei

5      The  Sharemilking Agreements Order  2001  has  now  been  repealed  and  replaced  with  the Sharemilking Agreements Order 2011.   Clause 139 of the 2011 Order requires a claimant to provide the other party with full details in writing of any claim within 20 working days of the claimant becoming aware of the alleged breach, but in any event no later than 20 working days of the end of the season to which the alleged breach relates.