	Home \| Databases \| WorldLII \| Search \| Feedback Court of Appeal of New Zealand

Home | Databases | WorldLII | Search | Feedback

Court of Appeal of New Zealand

You are here: NZLII >> Databases >> Court of Appeal of New Zealand >> 2006 >> [2006] NZCA 104

Hunter Valley Station Limited at Timaru v Attorney General [2006] NZCA 104 (26 May 2006)

Last Updated: 1 June 2006

IN THE COURT OF APPEAL OF NEW ZEALAND

CA38/05

BETWEEN HUNTER VALLEY STATION LIMITED AT TIMARU
Appellant

AND THE ATTORNEY-GENERAL
Respondent

Hearing: 7 March 2006

Court: William Young P, Robertson and Allan JJ

Counsel: N R W Davidson QC for Appellant
M T Parker for Respondent

Judgment: 26 May 2006

JUDGMENT OF THE COURT

A The appeal is allowed. The order for specific performance made in the High Court is set aside and the claim for summary judgment by the Attorney-General is dismissed.

B Costs in the High Court are to be fixed in that Court.

C In this Court HVSL is awarded costs of $6,000 together with usual disbursements.

REASONS

(Given by William Young P)

Introduction

[1] This appeal arises out of the sale of a pastoral lease in 1975. The sale was approved by the Land Settlement Board on a conditional basis but the transaction was settled prior to the conditions being satisfied. Indeed, even now, at least one of the conditions remains unsatisfied. The dispute as to this led, in the end, to the Attorney-General (suing on behalf of the Commissioner of Crown Lands) issuing proceedings seeking orders requiring the purchaser to comply with an outstanding condition requiring surrender of some land from the pastoral lease. In the High Court it was held that the purchaser, the present appellant, was contractually committed to satisfying the consent conditions, a conclusion which was not challenged before us. An order for specific performance was made requiring compliance with the condition as to surrender of land.
[2] The purchaser now appeals.
[3] The conditions are expressed in vague and non specific language. This would probably not have been a problem if the Commissioner (as lessor) had insisted upon compliance with them before the transaction was finalised. One of the difficulties which the case now presents is that the conditions were not drafted with the precision which is customary for contractual terms dealing with interests in land and they are not easily susceptible to enforcement on a contractual basis. The other primary difficulty is the lapse of time which has occurred since the transaction was entered into.

Factual background

[4] This case concerns Hunter Valley Station, which is situated on the western shores of Lake Hawea and up the western bank of the Hunter River. It is approximately 96 kilometres in length and in parts up to 32 kilometres in width.
[5] The station is subject to pastoral lease 179 (under s 66 of the Land Act 1948) which was entered into in February 1958. The original lessee was Mr Murdoch Drake. He transferred the lease to Mr James Gillespie in May 1963 and in 1975 Mr Gillespie entered into an agreement to sell the property on to Messrs Donald and Hamish Cochrane. Hunter Valley Station Ltd (HVSL) was formed to complete the transaction.
[6] HVSL was owned by Donald and Hamish Cochrane and their father, Mr Clifford Cochrane. Donald and Hamish Cochrane were both in their 20s in 1975 and they were in effect being financed into the purchase by Clifford Cochrane. Clifford Cochrane died in 1986. Hamish Cochrane sold out of the company in 1983. HVSL is now owned and controlled by Donald Cochrane and his wife, Penny Cochrane.
[7] When the lease was owned by Mr Gillespie, he and the local catchment board put in place arrangements for the retirement of portions of the land subject to the pastoral lease. As we understand it, the areas earmarked for retirement consisted largely of land which was at high altitude and subject to erosion. At the time, it was thought that the erosion in question had been caused or contributed to by stock grazing. These arrangements were implemented at least in part by the erection of retirement fences.
[8] When the transaction with HVSL was under consideration, the Commissioner sought to formalise the existing land retirement arrangements by requiring the land in question to be transferred to the Mount Aspiring National Park.
[9] The land subject to the original pastoral lease amounted to some 54,172 acres. The agreement for sale and purchase provided for an area of approximately 29,000 acres to be retired for conservation purposes, "as per plan drawn up by the Lands and Survey Department". The area in question was defined on the ground by retirement fences and natural features. The agreement also purported to transfer an as yet ungranted lease over what was described as

part Run 430B known as the Camp Creek Block to be in area 2,774 acres more or less after the exclusion of certain areas to be set aside for Retirement and Reserves etc.

[10] The transfer of the pastoral lease was approved by the Land Settlement Board in February 1976 on terms which included the following conditions:

5. Surrender of 11,000 hectares approx and acceptance of a lease of 2500 hectares approx of this area, which is to be added to the Mount Aspiring National Park, from the Park Board.

...

7. Acceptance of the incorporation of the Camp Creek Block into the lease with the necessary adjustment being made to stock limitation and Annual Rent.

[11] It is common ground that the 11,000 hectares referred to in condition five corresponds to the 29,000 acres referred to in the agreement for sale and purchase as being destined to be retired for conservation purposes "as per plan drawn up by the Lands and Survey Department".
[12] On 6 April 1976, the solicitors for HVSL wrote to the Land Settlement Board saying:

We confirm on behalf of the purchaser Company that Conditions 1-8 in your minute dated 5^th February are acceptable.

[13] A transfer of the pastoral lease was registered in the Land Transfer Office on 28 May 1976. This was ahead of compliance with conditions five and seven. Compliance with those conditions required survey of the relevant areas of land, no easy task given the size of the station and the difficult nature of the terrain. With the benefit of hindsight, however, it was unwise of the Commissioner to agree to completion of the transaction ahead of compliance with the conditions, particularly given the loose way in which they were expressed.
[14] The evidence suggests that from an early stage, the Cochranes were reluctant to implement surrender in accordance with condition five. Their reluctance in this regard became more entrenched when it transpired (following a survey which was not completed until 1986) that the land defined by the "plan drawn up by the Lands and Survey Department" had an actual area of 16,000 hectares. HVSL has, throughout, been reluctant to surrender so much land. As well, a series of other issues associated with the pastoral lease have become tied up with the surrender of the land. In part this is because HVSL has taken the view that the non-completion of the surrender arrangements leaves it with some leverage in its dealings with the Commissioner over other disputes. The result has been a long and festering dispute between HVSL and the Commissioner.
[15] It is far from clear to us that HVSL’s position over area differential is as meritorious as might be thought given the apparently surprising difference between the area as estimated and as surveyed. We say this in part because the area differential may not be particularly material to the stock carrying capacity of the station Further, as an associated point, the Cochranes were well aware of the retirement fences and natural features which delimited, on the ground, what land was to be retired.
[16] This dispute was brought to a head by the current tenure review process and this in turn resulted in the Attorney-General commencing summary judgment proceedings in the High Court to enforce condition five.

The proceedings in the High Court

[17] In the High Court, Associate Judge Christiansen concluded that the acceptance by HVSL of the conditions of consent had contractual effect either as an implied variation of the lease or a collateral contract with the result that HVSL became contractually obliged to surrender the land identified in condition five. The Associate Judge also rejected a series of other defences which are no longer relied on by HVSL and to which, accordingly, it is not necessary to refer.
[18] In the result, the Associate Judge made an order requiring HVSL specifically to perform its obligation to surrender the land to be retired.
[19] To the limited extent to which it is necessary to refer in detail to the judgment of the Associate Judge, we will do so later in the judgment.

Basis of the appeal

[20] HVSL accepts that its acceptance of the Land Settlement Board’s conditions had contractual effect as between it and the Commissioner. Further, the other defences specifically raised in the High Court are no longer pursued.
[21] For HVSL, Mr Davidson QC (who did not appear in the High Court) maintained that the contractual obligations of HVSL to conform to the terms of the Land Settlement Board’s consent (which are now conceded) are matched by obligations on the Commissioner inter alia to ensure that of the 11,000 hectares approximately to be surrendered to the Mount Aspiring National Park, 2,500 hectares are to be leased back and to incorporate the Camp Creek Block in the appellant’s lease. His complaint is that the Commissioner has not been prepared to honour his side of the bargain.
[22] These issues were to some extent touched on in the High Court and the Associate Judge discussed in his judgment the extent of the required lease back. But it is clear that counsel then acting for HVSL did not rely on these issues in the way in which Mr Davidson did in this Court.

The lease back of 2,500 hectares

[23] HVSL’s requirement to surrender the "11,000" hectares is subject to there being a lease back of 2,500 hectares. In argument before us, counsel did not explore, in any detail, the way in which the lease back should be viewed in legal terms. Mr Davidson proceeded on the basis that there was a contractual obligation on the part of the Commissioner to procure the required lease back and Mr Parker, for the Attorney-General, did not demur from this proposition. Another way of looking at the situation is to regard HVSL’s surrender obligations as being conditional upon the lease back being provided. The difference between these two approaches is not material to the present appeal because the outcome is the same irrespective of which is correct.
[24] As is obvious, condition five does not define the area concerned and likewise is not specific as to the lease terms.
[25] The contemporaneous documents suggest that the land which was to be the subject of the lease back arrangement was what has variously been referred to as "Cameron Valley", "Cameron’s Valley", "Cameron’s Creek", "Cameron Creek Valley" and "Cameron’s Creek Gully"). Cameron Valley (as we shall call it) is approximately 2,500 hectares in area.
[26] We note in passing that some of the discussion about Cameron Valley in the files maintained by the Commissioner is associated (at least temporally) with an issue as to some 880 hectares of land in the High Burn Valley. The Commissioner has been prepared to exclude the High Burn Valley from the land to be surrendered and the surrender of land the Commissioner is currently insisting on excludes the High Burn Valley. So this area of land is no longer in dispute albeit that it is mentioned in some of the documents to which we will later be referring. What is important to note at this point is that the willingness of the Commissioner to exclude the High Burn Valley from the surrender requirement is for reasons unrelated to the Cameron Valley lease back.
[27] Broadly speaking, the Commissioner’s position before us was that HVSL is entitled to take a lease back of only a portion of Cameron Valley, some 347 hectares. This is on the basis that HVSL has contractually surrendered its entitlement to a lease back of 2,500 hectares.
[28] In this regard it is necessary to refer briefly to the evidence.
[29] In the early 1980s there were negotiations between the Commissioner and HVSL as to the proposed lease-back over Cameron Valley. These are referred to in an internal file note of 7 May 1982 which was generated in the Commissioner’s office and a letter of 14 May 1982 from the Commissioner to Donald and Hamish Cochrane.
[30] Then on 25 May 1984, the Commissioner wrote to HVSL in these terms:

I refer to District Field Officer Sawyer’s discussions with you on 2 November 1983 at which time he requested that the attached agreement be executed.
I understand that this has been executed but could not be returned directly as the company’s seal was to be affixed to the document.
I would be pleased if you would return the agreement as soon as possible as I am unable to take any action with regard to the proposals set out therein.

[31] The enclosed agreement was in the form of a letter from HVSL to the Commissioner:

As discussed with DFO Sawyer last year this statement is to confirm that subject to the retention of the following areas in our Pastoral Lease P 179, and the issuing in due course of a Pastoral Occupation Licence over the High Burn Valley Flats and Cameron Creek Valley (the latter to eventually be converted to a National Park lease), Hunter Valley Station Ltd agrees to the surrender of lands behind the accepted lines when requested by the Lands and Survey Department.

(1) Mt Patriarch Faces - block limit 2000 adult wethers for 5 months between November/March

(2) McGregors Spur - 800 adult wethers for 5 months between November/March

(3) High Burn Spur Faces - Fence relocation only

(4) Sawyer Burn to Neck Creek - 500 2 tooth wethers for 5 months – November/March

We acknowledge also that the surrender will not be sought until completion of a survey which the Department has just commissioned.

[32] This agreement was executed by HVSL and sent back under cover of a letter of 14 June 1984 from Donald Cochrane in these terms:

Enclosed policy [sic] with Common Seal and signed.
There’s two points we wish to attach to the four points with the Common Seal. These were discussed with D.F.O. Sawyer.
The Boundary at Scrubby Creek moving to Long Flat Creek – being valley floor grazing for cattle.
The same grazing license over the Big Hopwood Valley floor as the High Burn Valley floor and Cameron Creek Valley floors.

[33] The agreement to retain within the pastoral lease the four areas of land referred to in the agreement was entirely unrelated to any reduction in the lease back area in Cameron Valley (as Mr Parker conceded). On the other hand, the reference in the letter of 10 June 1984 to the "Cameron Creek Valley floors" could conceivably be a reference to a reduction in the proposed area of the lease back land. If so, it is far from specific. Further, given the "two points" set out in the letter, the acceptance of the agreement is arguably equivocal.
[34] In an affidavit filed on behalf of the Attorney-General, Margaret Kennedy sought to fill in the gaps in the written material:

32. The surrender document did not need to mention the Cameron’s Valley or the New Zealand Electricity Department unders and overs as those were already part of the prior agreements. While Mr Cochrane continues to refer to the Cameron’s Valley lease as 2,500 hectares (6,000 acres) this area changed in general discussions and negotiation that took place prior to the 1984 agreement which was signed under seal.

33. The 1984 agreement provided for the following to be added to or retained in the lease:

(a) The Mount Patriarch faces – 700 hectares approximately

(b) High Burn spur – 200 hectares approximately

(d) Sawyer Burn to Neck Creek – 200 hectares approximately

(e) High Burn Valley – 880 hectares

Total 2380 hectares approximately.

34. In addition there was to be a lease over Cameron’s Valley, comprising 347 hectares, so that the total additional grazing was 2727 hectares approximately.

...

36. Mr Cochrane’s comments again overlook the fact that subsequent discussions and negotiations resulted in additional land being added to the lease. Part of the land now to be retained in the lease includes the High Burn Valley land that at one time was to be surrendered out of the lease and held in pastoral occupation licence or special lease. Those subsequent discussions also resulted in the area of the Cameron’s Valley lease being reduced to the area available for grazing (i.e. some 347 hectares).

[35] This affidavit, however, is not an answer to Mr Davidson’s argument, at least in a summary judgment context. In the first place, Ms Kennedy was not involved in the negotiations in the early to mid 1980s and her evidence is hearsay. Secondly, as a matter of practice we would expect an agreement relating to interests in land to be in writing. Thirdly the absence of writing necessarily raises issues as to the Contracts Enforcement Act 1956. Fourthly, the suggestion that the four areas of land identified were a quid pro quo for a reduction in the Cameron Valley lease back is simply wrong, as Mr Parker for the Attorney-General accepted. Fifthly, so too is her linking of the High Burn Valley and Cameron Valley issues. Finally, her assertions as to there having been an agreement reducing the area of the Cameron Valley lease back are not entirely consistent with a file note of 31 January 1986, in which Mr D J Sawyer, the District Field Officer already referred to, recorded:

Another matter here is that of the area in the Cameron Creek and High Burn Valleys over which a lease/licence is to be issued. Originally areas of approximately 2500-3000 ha and 580 ha respectively have been quoted. More recently areas of 347 hac and 627 hac respectively have been mentioned. I think the important thing here is that the areas are clearly identified on the a map.

[36] On 17 July 1986, the Commissioner wrote to HVSL in these terms:

I refer to recent discussions with District Field Officer Sawyer regarding the surrender of an area of 15829.9 hectares from your Pastoral Lease.
I am pleased to advise that approval has been given to the issue of the following leases to you from the surrendered area.
1. SPECIAL LEASE – HYBURN (sic) VALLEY
(a) Authority – Section 67 Land Act 1948.

(b) Term – 5 years from 1 July 1986. (Term to coincide with expire of Pastoral Lease 179) at a nil annual rent.

(d) That upon renewal in 1991 rental to be assessed on a carrying capacity basis and to be reviewable (currently 11 yearly).

(e) The numbers of stock carried on the land being determined from time to time by the Land Settlement Board. At this stage a stock limitation as follows has been set – not more than 250 cattle per annum.

(f) The general conditions and covenants to Pastoral Leases to apply.

(g) No right of freeholding.

(h) Rights of foot access to be granted to members of the public at all times.

(i) That in event of adjoining land being transferred (currently P179) this lease to be transferred to the new lease.

2 CO-OPERATIVE MANAGEMENT LEASE – CAMERON CREEK VALLEY

Conditions (a) to (i) above with exception of (e) in respect of the current stock carried. This is to read "not more than 160 cattle for three months".
The following conditions also to apply:

(j) It is recognised in terms of policy by the Land Settlement Board that Co-operative Management Leases contain provision for integration of their uses. In the case of the land in question the land has been identified for possible addition to the Mount Aspiring National Park. Should certain values be identified during the term of the lease that requires some form of protection it is intended that under this Co-operative Management Lease agreement between Lessor/Lessee be negotiated and incorporated into the lease.

Would you please consider the Department’s offer as outlined above and advise of your decision by completing the attached duplicate of this letter and returning it to this office no later than one month of the date of this letter.

This produced a response from HVSL in these terms:

I acknowledge your above letter and accept the offer of the leases on the terms set out therein.

[37] We cannot see in this correspondence an agreement as to the area of the lease back and thus do not see in it a variation (at least as to area) of the contractual relationship between HVSL and the Commissioner (incorporating the original terms of the Land Settlement Board consent).
[38] In the High Court, HVSL raised arguments associated with the lease back which the Associate Judge dealt with as follows:

The reference in the conditions to the "surrender of 11,000 hectares approx. and acceptance of a lease of 2,5000 hectares approx., of this area ..." is a reference to an area of land the boundaries of which were clearly understood by all. It was a reference to an area of land to be surrendered from a pastoral lease within which stock limitations were imposed for grazing purposes.
In that context the word "approx." was not meant to delineate the area of land to be surrendered, for there is no information about how the area of 11,000 hectares was calculated. The history of correspondence endorsed the view that there was no misunderstanding in 1976 about what land was to be surrendered. The variation agreement achieved in 1984 identified additional land to be included in the pastoral lease. Likewise the 1976 agreement contemplated the inclusion of an area of approximately 2,500 hectares in the pastoral lease. Originally that area of land was identified as likely to come from the Cameron’s Valley lease, but in the end, and following negotiations and the agreement achieved in 1984, the Cameron’s Valley land eventually comprised a lesser proportion of the lease back land eventually settled upon.

[39] As is apparent from what we have said, we disagree with this approach. We see no clear evidence of contractual variation of HVSL’s lease back entitlement.

The Camp Creek block

[40] The evidence as to this is exiguous.
[41] A portion of the Camp Creek block was included in the lease in 1982. The lease was renewed in 1991 with no issue being raised as to the balance on the block. This suggests that the portion of the Camp Creek block which was made subject to the lease is the portion which HVSL desired to lease.
[42] In the affidavits filed in the High Court on behalf of HVSL the only complaint about the Camp Creek Block was made in a reply affidavit by Donald Cochrane. Given the belated nature of this complaint and the apparent failure to rely on it in the course of the hearing before the Associate Judge, we would not be inclined to allow the issue to be raised in effect for the first time in this Court.
[43] For the sake of completeness we note that the Camp Creek block issue does not necessarily have the same contractual relevance as the condition five lease back. The surrender obligation in condition five is closely linked to the lease back. Such linkage is not so obvious in the case of condition seven.

Our conclusions

[44] We accept that there may not be much difference, in economic terms, between what the Commissioner has been prepared to provide and what HVSL is insisting on. In economic terms, the key issue is presumably the stock capacity of the land rather than its area. But, on the evidence before us, it is not possible for us to say that the dispute is de minimis.
[45] Further, while it may well be that the July 1986 agreement is sufficient to make certain what was otherwise left uncertain in condition five of the consent as to the lease back, this too is not completely obvious.
[46] In those circumstances we consider that we have no alternative but to allow the appeal on the basis that the Commissioner has not excluded arguable defences that:

(a) He is not ready willing and able to comply with the contractual obligations which are the quid pro quo of the surrender obligation of HVSL which he wishes to enforce (which is the way Mr Davidson put it), or, alternatively
(b) The surrender obligation in condition five is conditional upon the lease back contemplated by that condition being provided and such lease back is not currently available.

Disposition

[47] The appeal is allowed. The order for specific performance made in the High Court is set aside and the claim for summary judgment by the Attorney-General is dismissed. Costs in the High Court are to be fixed in that Court. In this Court HVSL is awarded costs of $6,000 together with usual disbursements.

Solicitors:
Checketts McKay, Alexandra for Appellant
Crown Law Office, Wellington

NZLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.nzlii.org/nz/cases/NZCA/2006/104.html

[1]	This appeal arises out of the sale of a pastoral lease in 1975. The sale was approved by the Land Settlement Board on a conditional basis but the transaction was settled prior to the conditions being satisfied. Indeed, even now, at least one of the conditions remains unsatisfied. The dispute as to this led, in the end, to the Attorney-General (suing on behalf of the Commissioner of Crown Lands) issuing proceedings seeking orders requiring the purchaser to comply with an outstanding condition requiring surrender of some land from the pastoral lease. In the High Court it was held that the purchaser, the present appellant, was contractually committed to satisfying the consent conditions, a conclusion which was not challenged before us. An order for specific performance was made requiring compliance with the condition as to surrender of land.
[2]	The purchaser now appeals.
[3]	The conditions are expressed in vague and non specific language. This would probably not have been a problem if the Commissioner (as lessor) had insisted upon compliance with them before the transaction was finalised. One of the difficulties which the case now presents is that the conditions were not drafted with the precision which is customary for contractual terms dealing with interests in land and they are not easily susceptible to enforcement on a contractual basis. The other primary difficulty is the lapse of time which has occurred since the transaction was entered into.

[4]	This case concerns Hunter Valley Station, which is situated on the western shores of Lake Hawea and up the western bank of the Hunter River. It is approximately 96 kilometres in length and in parts up to 32 kilometres in width.
[5]	The station is subject to pastoral lease 179 (under s 66 of the Land Act 1948) which was entered into in February 1958. The original lessee was Mr Murdoch Drake. He transferred the lease to Mr James Gillespie in May 1963 and in 1975 Mr Gillespie entered into an agreement to sell the property on to Messrs Donald and Hamish Cochrane. Hunter Valley Station Ltd (HVSL) was formed to complete the transaction.
[6]	HVSL was owned by Donald and Hamish Cochrane and their father, Mr Clifford Cochrane. Donald and Hamish Cochrane were both in their 20s in 1975 and they were in effect being financed into the purchase by Clifford Cochrane. Clifford Cochrane died in 1986. Hamish Cochrane sold out of the company in 1983. HVSL is now owned and controlled by Donald Cochrane and his wife, Penny Cochrane.
[7]	When the lease was owned by Mr Gillespie, he and the local catchment board put in place arrangements for the retirement of portions of the land subject to the pastoral lease. As we understand it, the areas earmarked for retirement consisted largely of land which was at high altitude and subject to erosion. At the time, it was thought that the erosion in question had been caused or contributed to by stock grazing. These arrangements were implemented at least in part by the erection of retirement fences.
[8]	When the transaction with HVSL was under consideration, the Commissioner sought to formalise the existing land retirement arrangements by requiring the land in question to be transferred to the Mount Aspiring National Park.
[9]	The land subject to the original pastoral lease amounted to some 54,172 acres. The agreement for sale and purchase provided for an area of approximately 29,000 acres to be retired for conservation purposes, "as per plan drawn up by the Lands and Survey Department". The area in question was defined on the ground by retirement fences and natural features. The agreement also purported to transfer an as yet ungranted lease over what was described as

[11]	It is common ground that the 11,000 hectares referred to in condition five corresponds to the 29,000 acres referred to in the agreement for sale and purchase as being destined to be retired for conservation purposes "as per plan drawn up by the Lands and Survey Department".
[12]	On 6 April 1976, the solicitors for HVSL wrote to the Land Settlement Board saying:

[13]	A transfer of the pastoral lease was registered in the Land Transfer Office on 28 May 1976. This was ahead of compliance with conditions five and seven. Compliance with those conditions required survey of the relevant areas of land, no easy task given the size of the station and the difficult nature of the terrain. With the benefit of hindsight, however, it was unwise of the Commissioner to agree to completion of the transaction ahead of compliance with the conditions, particularly given the loose way in which they were expressed.
[14]	The evidence suggests that from an early stage, the Cochranes were reluctant to implement surrender in accordance with condition five. Their reluctance in this regard became more entrenched when it transpired (following a survey which was not completed until 1986) that the land defined by the "plan drawn up by the Lands and Survey Department" had an actual area of 16,000 hectares. HVSL has, throughout, been reluctant to surrender so much land. As well, a series of other issues associated with the pastoral lease have become tied up with the surrender of the land. In part this is because HVSL has taken the view that the non-completion of the surrender arrangements leaves it with some leverage in its dealings with the Commissioner over other disputes. The result has been a long and festering dispute between HVSL and the Commissioner.
[15]	It is far from clear to us that HVSL’s position over area differential is as meritorious as might be thought given the apparently surprising difference between the area as estimated and as surveyed. We say this in part because the area differential may not be particularly material to the stock carrying capacity of the station Further, as an associated point, the Cochranes were well aware of the retirement fences and natural features which delimited, on the ground, what land was to be retired.
[16]	This dispute was brought to a head by the current tenure review process and this in turn resulted in the Attorney-General commencing summary judgment proceedings in the High Court to enforce condition five.

[17]	In the High Court, Associate Judge Christiansen concluded that the acceptance by HVSL of the conditions of consent had contractual effect either as an implied variation of the lease or a collateral contract with the result that HVSL became contractually obliged to surrender the land identified in condition five. The Associate Judge also rejected a series of other defences which are no longer relied on by HVSL and to which, accordingly, it is not necessary to refer.
[18]	In the result, the Associate Judge made an order requiring HVSL specifically to perform its obligation to surrender the land to be retired.
[19]	To the limited extent to which it is necessary to refer in detail to the judgment of the Associate Judge, we will do so later in the judgment.

[20]	HVSL accepts that its acceptance of the Land Settlement Board’s conditions had contractual effect as between it and the Commissioner. Further, the other defences specifically raised in the High Court are no longer pursued.
[21]	For HVSL, Mr Davidson QC (who did not appear in the High Court) maintained that the contractual obligations of HVSL to conform to the terms of the Land Settlement Board’s consent (which are now conceded) are matched by obligations on the Commissioner inter alia to ensure that of the 11,000 hectares approximately to be surrendered to the Mount Aspiring National Park, 2,500 hectares are to be leased back and to incorporate the Camp Creek Block in the appellant’s lease. His complaint is that the Commissioner has not been prepared to honour his side of the bargain.
[22]	These issues were to some extent touched on in the High Court and the Associate Judge discussed in his judgment the extent of the required lease back. But it is clear that counsel then acting for HVSL did not rely on these issues in the way in which Mr Davidson did in this Court.

[23]	HVSL’s requirement to surrender the "11,000" hectares is subject to there being a lease back of 2,500 hectares. In argument before us, counsel did not explore, in any detail, the way in which the lease back should be viewed in legal terms. Mr Davidson proceeded on the basis that there was a contractual obligation on the part of the Commissioner to procure the required lease back and Mr Parker, for the Attorney-General, did not demur from this proposition. Another way of looking at the situation is to regard HVSL’s surrender obligations as being conditional upon the lease back being provided. The difference between these two approaches is not material to the present appeal because the outcome is the same irrespective of which is correct.
[24]	As is obvious, condition five does not define the area concerned and likewise is not specific as to the lease terms.
[25]	The contemporaneous documents suggest that the land which was to be the subject of the lease back arrangement was what has variously been referred to as "Cameron Valley", "Cameron’s Valley", "Cameron’s Creek", "Cameron Creek Valley" and "Cameron’s Creek Gully"). Cameron Valley (as we shall call it) is approximately 2,500 hectares in area.
[26]	We note in passing that some of the discussion about Cameron Valley in the files maintained by the Commissioner is associated (at least temporally) with an issue as to some 880 hectares of land in the High Burn Valley. The Commissioner has been prepared to exclude the High Burn Valley from the land to be surrendered and the surrender of land the Commissioner is currently insisting on excludes the High Burn Valley. So this area of land is no longer in dispute albeit that it is mentioned in some of the documents to which we will later be referring. What is important to note at this point is that the willingness of the Commissioner to exclude the High Burn Valley from the surrender requirement is for reasons unrelated to the Cameron Valley lease back.
[27]	Broadly speaking, the Commissioner’s position before us was that HVSL is entitled to take a lease back of only a portion of Cameron Valley, some 347 hectares. This is on the basis that HVSL has contractually surrendered its entitlement to a lease back of 2,500 hectares.
[28]	In this regard it is necessary to refer briefly to the evidence.
[29]	In the early 1980s there were negotiations between the Commissioner and HVSL as to the proposed lease-back over Cameron Valley. These are referred to in an internal file note of 7 May 1982 which was generated in the Commissioner’s office and a letter of 14 May 1982 from the Commissioner to Donald and Hamish Cochrane.
[30]	Then on 25 May 1984, the Commissioner wrote to HVSL in these terms:

[37]	We cannot see in this correspondence an agreement as to the area of the lease back and thus do not see in it a variation (at least as to area) of the contractual relationship between HVSL and the Commissioner (incorporating the original terms of the Land Settlement Board consent).
[38]	In the High Court, HVSL raised arguments associated with the lease back which the Associate Judge dealt with as follows:

[40]	The evidence as to this is exiguous.
[41]	A portion of the Camp Creek block was included in the lease in 1982. The lease was renewed in 1991 with no issue being raised as to the balance on the block. This suggests that the portion of the Camp Creek block which was made subject to the lease is the portion which HVSL desired to lease.
[42]	In the affidavits filed in the High Court on behalf of HVSL the only complaint about the Camp Creek Block was made in a reply affidavit by Donald Cochrane. Given the belated nature of this complaint and the apparent failure to rely on it in the course of the hearing before the Associate Judge, we would not be inclined to allow the issue to be raised in effect for the first time in this Court.
[43]	For the sake of completeness we note that the Camp Creek block issue does not necessarily have the same contractual relevance as the condition five lease back. The surrender obligation in condition five is closely linked to the lease back. Such linkage is not so obvious in the case of condition seven.

[44]	We accept that there may not be much difference, in economic terms, between what the Commissioner has been prepared to provide and what HVSL is insisting on. In economic terms, the key issue is presumably the stock capacity of the land rather than its area. But, on the evidence before us, it is not possible for us to say that the dispute is de minimis.
[45]	Further, while it may well be that the July 1986 agreement is sufficient to make certain what was otherwise left uncertain in condition five of the consent as to the lease back, this too is not completely obvious.
[46]	In those circumstances we consider that we have no alternative but to allow the appeal on the basis that the Commissioner has not excluded arguable defences that: