Farm sale contract must proceed

Press, 28 November 1984, Page 4

Farm sale contract must proceed

A married couple who own a farm at Springs Junction have been ordered to complete the contract of sale to an Amberley farmer, in a reserved judgment given by Mr Justice Savage in the High Court His Honour also ruled that a contract for the removal of sphagnum moss from the farm by third parties was invalid. The case was heard over eight days in July and August. An Amberley farmer, Roger Gordon Palmer, sought the order for the specific performance of his contract to purchase the Springs Junction farm of Bernard Allin Hutton, a butcher, of Kumara, and Janice Helen Hutton, his wife, who were cited as second defendants in the action. Clifford Falconer Bellaney, a company director, of Christchurch, was cited as first defendant and Sphagnum Products (N.Z.), Ltd, as third defendant. Messrs D. H. Hicks and J. R. Turner appeared for Mr Palmer, Mr J. Cadenhead for Mr and Mrs Hutton, and Mr R. E. Wylie and Miss C. Risk for Mr Bellaney and Sphagnum Products. His Honour held that Mr Palmer did not know of the "Manifold agreement” for the removal of sphagnum moss when the contract to purchase was made. His Honour said that the action had its origin in a swamp on a farm at Springs Junction on the West Coast. The swamp contained sphagnum moss, a much sought-after product. The owners of the farm, which was a renewable lease from the Crown, were Mr and Mrs Hutton, who entered a contract on August 9, 1983, with Mr Palmer whereby he sold his farm at Amberley to the Huttons who sold their Springs Junction farm to

him. In addition, Mr Palmer was to pay the Huttons a sum by way of giving equality of exchange. Later the same month, on August 30, the Huttons, without advising Mr Palmer that they were doing so, entered into an agreement, “the moss contract,” with Mr Bellaney. In the contract the Huttons granted Mr Bellaney, an agent for a company to be formed known as Sphagnum Products (N.Z.), Ltd, now incorporated, an exclusive right to extract and process sphagnum pulp and moss from a specified area on the farm. Mr Palmer called upon the Huttons to transfer the Springs Junction farm to him but the Huttons refused unless Mr Palmer recognised the agreement with Mr Bellaney and would sign a memorandum of transfer creating a right for Sphagnum Products. Mr Palmer refused and the action followed, his Honour said. An order seeking specific performance by the Huttons was sought by Mr Palmer, who also asked for a declaration that the moss contract was void and not binding upon him. Damages of $50,000 were also sought by Mr Palmer. The Huttons had raised a variety of defences and sought relief by counterclaim, though some matters in that claim were not pursued. The Huttons had owned the farm at Springs Junction for some six years. It contained two swamps, one of about 10 acres and the other of about 100 acres, which contained the sphagnum moss. The moss was found in certain peat swamps. Three layers of material were involved. On the surface was the sphagnum moss, a growing substance; next there was a layer of dead or decaying moss, referred to as peat moss or pulp moss;

and below that was the third and bottom . layer which was settled decayed material, formed initially from the peat moss, which was peat. Under the Coal Mines Act coal was defined as including peat, his Honour said. For some years before 1982 a Mr Manifold had been taking sphagnum moss from the swamp on the Huttons’ farm and selling it Late in 1981 Mr Manifold formed an association with Mr Bellaney to deal commercially in sphagnum moss. On September 9, 1982, a handwritten single-page document was prepared, apparently written out in a B' ’ock, according to Mr fold, which was an agreement between Mr Manifold as agent for a company to be formed and Mr Hutton alone. It was agreed in general terms that the company was given access to the farm and “full rights to the extraction of all sphagnum pulp from the swamp sites on the farmer’s property.” A payment of 50c a full, compressed woolsack was to be made by the company which was also to be responsible for the royalties to be paid to the Lands and Survey Department After reviewing the evidence and legal argument, his Honour said that there would be an order for specific performance by the Huttons of the land contract and a declaration that the contract was not subject either to the Manifold agreement or the moss contract. Mr Palmer was clearly entitled to costs but the matter was reserved so that the amount and against whom and in what proportions could be argued. Mr Palmer’s claim for damages against all three defendants was still to be determined, his Honour said.