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Saunders Dairy Holdings Ltd v Avondale Pastoral Ltd Partnership [2019] NZDC 324

Published 10 May 2019

Oral lease contract — grazing lease — condition of animals— best endeavours — McDermot v Davis (1922) GLR 586 — Humphrey v Phipps [1974] 1 NZLR 650 — Newton v Andrews (CP 11/94). The plaintiff leased farmland to the defendant, who used the land for winter grazing. It was ultimately an oral agreement, with some prior discussion in writing. The plaintiff sent three invoices to the defendant, two of which the defendant paid, but the defendant refused to pay the final invoice because it believed the plaintiff failed to take reasonable care of the diary cows, on account of their poor condition at the end of the grazing contract. The plaintiff claimed the defendant owed the amount of the final invoice, and also for failing to provide the complete number dairy cows for grazing. The defendant cross-claimed that it suffered loss as a result of the cows returning in poor condition. The express oral terms of the contract were that the plaintiff would provide the defendant's cows the equivalent of 15kg of dry matter per cow per day on the property, for which the defendant would pay $32 per cow per week. The parties disputed whether the defendant had to provide 400 cows for grazing throughout the nine week lease, as well as the nature of the feed, whether the defendant had to provide NAIT numbers within 48 hours of delivery of the cows, and whether the defendants had to provide an animal status declaration. The Judge held that the plaintiff's claims and the defendant's cross-claim all failed. The Judge found that the defendants were to do their best to send 400 cows to the property at the start of the contract. However they were not obliged to send 400 exactly, as the exigencies of farming — particularly with "early calving" — must be taken into account. Further, neither party suffered loss. On the questions of the cows' condition at the end of the lease period, the Judge found there was an implied term to take all reasonable steps necessary to take reasonable care of the cows. However there was insufficient evidence at the start of the contract to establish the condition of the cows, and insufficient evidence to attribute that to any failure to provide sufficient feed. Judgment Date: 14 January 2019 .

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