Sargison v Vinpro Limited HC Dunedin CIV-2011-412-000453 [2011] NZHC 1451 (28 October 2011)

[1] On 31 July 2011 this Court made a Preservation Order in relation to wine stocks. The Preservation Order contained a paragraph which provided –

a. AWCL shall deliver to VinPro, promptly after it is bottled, the number of dozen bottles of 2008 vintage Discover Pinot Noir (CS) specified in Schedule 1 to this Order from the wine held by Maude Winery as at the date of this Order.

b. VinPro shall have no liability whatsoever to either the Applicants or the Respondents for any action, inaction or other conduct by VinPro:

i. to the date of this Order in respect of the wine referred to in Schedule 1 annexed to the Originating Application by the Receivers for Directions dated 16

	Home \| Databases \| WorldLII \| Search \| Feedback High Court of New Zealand Decisions

Schedule 1 to this Order (provided AWCL complies with paragraph 4(a) above), or in respect of the

ii. from the date of this Order in dealing with the wine that is the subject of this order in accordance with this Order and any further directions of the Court,

[2] In Bryan A. Garner A Dictionary of Modern Legal Usage (2nd ed, 2001), this

is said in relation to the words “provided that” and in relation to provisos generally –

Writers on drafting have long cautioned drafters not to use provisos. In fact, the words provided that are a reliable signal that the draft is not going well.

The problem – recognised five centuries ago by Coke – is that the phrase means too many different things: provided that may create an exception, a limitation, a condition, or a mere addition. Sometimes the phrase is the functional equivalent of an adjectival phrase – e.g. “Provided that an order under this section is approved, it shall be binding upon all persons concerned.”

[3] This case, and the difference between the parties, provides a fine illustration of the different constructions which may be suggested when a document employs a proviso.

[4] The receivers (the plaintiffs, as receivers of Anthem Holdings Limited (in receivership)) (“Anthem”) contend that the proviso in paragraph 4bi created a condition – meaning that VinPro’s non-liability was conditional upon AWCL’s complying with paragraph 4a. (Anthem is for present purposes unrelated to Anthem Wine Company Limited). Mr Sargison’s evidence included this explanation of paragraph 4b of the Preservation Order: -

A compromise was reluctantly reached whereby the defendant would have no such liability provided Anthem Wine Company Limited bottled 1,066.50 dozen bottles of the 2008 wine held at Maude Wines Limited and transferred that to the defendant [VinPro].

[5] VinPro contends that the proviso operates only in relation to the wine referred to in Schedule 1 to the Preservation Order and that it creates an assumption (in relation to the non-liability created) that AWCL will have managed to deliver to VinPro the wine referred to in paragraph 4a. Mr Kennedy of VinPro said this in his evidence –

The only 2008 wines included in Schedule 1 to the Preservation Order are a small quantity of 2008 Pinot Gris cleanskin, 232.33 cases of 2008 Riesling and, on the assumption it was delivered to VinPro ... 1,066.5 cases of 2008 “Discover” Pinot Noir then at Maude Winery.

[6] The diversity of possible meanings of “provided” is reflected in the simple

[7] The receivers sue VinPro for conversion of wine. VinPro says that it was released from any such liability by the terms of the Preservation Order.

[8] Each party asserts not only that its construction of the Preservation Order is open but that no other construction is reasonably arguable.

[9] Each party submits that the correct construction of the proviso emerges from the Preservation Order itself but goes on to say that, if the Court considers the pre- contractual materials as an aid to interpretation, then that background also makes its favoured construction clear.

[10] Before turning to deal with the central issues, I will first deal with two matters which arose in the course of the hearing and on which rulings were required.

[11] The receivers filed their statement of claim and at the same time their summary judgment application in June 2011. In July 2011 VinPro filed its opposition to the receivers’ summary judgment application, its own application for summary judgment, and a statement of defence. The statement of defence contained affirmative defences (estoppel by record; estoppel by conduct and accord and satisfaction).

[12] Where a statement of defence asserts an affirmative defence, r 5.62 High Court Rules requires the plaintiff within ten working days after service to file and serve a reply. Rule 5.63(2) provides that an affirmative defence which is not denied is treated as being admitted. Rule 1.19(1) permits the Court in its discretion to extend the time appointed for any step in a proceeding and r 1.19(2) provides that such extension may occur after the expiration of the time appointed.

[13] If one assumes that the statement of defence was served on the receivers’ solicitors on the same day as filed at Court (namely 26 July 2011) then under r 5.62 the receivers had until 9 August 2011 to file a reply.

[14] The receivers’ and Vinpro’s summary judgment applications had their first hearing date on 1 August 2010. Counsel, including Ms Kelly for VinPro, appeared and sought allocation of a hearing date for the summary judgment applications. No reference was made to the time running in relation to a reply. Had such mention been made, I would have suggested to counsel that the immediate issues for the summary judgment hearing were well identified and that directions for any further pleadings (including a reply) could most appropriately and economically be left to the time at which the outcome of the summary judgment applications was known. Had VinPro chosen to say that it was insisting on a reply in terms of the Rules, I would have exercised my discretion under r 1.19 to extend the time for the filing of a reply until further order of the Court.

[15] As it was, I simply made the necessary directions for the hearing of the summary judgment applications.

[16] When Ms Kelly filed her written submissions (on 23 August 2011) she attached a schedule of the positive allegations pleaded in the statement of defence, observing that they were, by r 5.63(2), to be treated as having been admitted. Without the need to go into the detail of those “admissions”, the effect of a number of them (such as that the receivers were estopped from raising any claim against the defendant by an estoppel by record (res judicata)) would have been determinative of the issues in the summary judgment applications.

[17] The receivers then promptly filed an interlocutory application for an extension of the time in which to file their reply. While reserving a point as to whether they had, in the circumstances, been strictly required to file a reply, they referred in their grounds to the fact that there was no room for any doubt that the affirmative defences pleaded by the defendant were squarely an issue in the proceedings. That was manifestly so. VinPro, however, filed a notice of opposition

– VinPro did not contend that the issues had not clearly been defined by the summary judgment proceedings. VinPro in its notice of opposition advanced various grounds of opposition. At the hearing Ms Kelly primarily focussed on the fact that the receivers had not provided evidence to explain their failure to file a reply in time. She submitted that the rules exist to stop a plaintiff leaving its reply in abeyance.

[18] For the proposition that an applicant for extension must provide an evidentiary basis for its failure and for the granting of extension Ms Kelly referred to Director-General of Social Welfare v K1 and to Spicers Paper (NZ) Ltd v BPK & GA Buckley Ltd.2

[19] The starting point for a shortening or extension of time is r 1.19, the jurisdiction invoked by the receivers. This Court has said in relation to the predecessor provision that the power is unlimited in scope and unfettered in the extent of the discretion: Caltex Oil (NZ) Ltd v Hughes.3 The authors of McGechan

This obviously gives rise to a tension with the notion that time limits are included in the High Court Rules in order to be obeyed. This tension can only be resolved by balancing a wide variety of factors in order to determine where the overall justice lies.

[20] It is frequently observed that to justify the exercise of the discretion the Courts will require a proper foundation to be laid. Ms Kelly referred in that regard to Day v Ost (No 2)4 applying the decision of the Privy Council in Ratnam v Cumarasamy5 where Lord Guest said:

The rules of court must, prima facie, be obeyed, and, in order to justify a court in extending the time during which some step in procedure requires to be taken, there must be some material upon which the Court can exercise its discretion. If the law were otherwise, a party in breach would have an unqualified right to an extension of time which would defeat the purpose of the rules which is to provide a time table for the conduct of litigation.

[21] Master Williams QC in Spicers Paper, having cited the authorities, included reference to the dictum of Bowen LJ in Cusacks v London & Northwestern Railway Company6 in which his Lordship observed that there was no hard and fast rule governing the exercise of the discretion which can be laid down, but rather each case must be considered solely on its merits: Cusacks was approved in Wright v Anderson.7 In almost all cases an applicant for extension will have to provide an explanation for its failure to meet the time stipulated. That information is usually within the peculiar knowledge of the applicant. But as the authorities indicate, that is not a hard and fast rule. The discretion must ultimately be exercised in the light of the overall justice of the case.

[22] Here it is obvious that, at least from the hearing on 1 August 2011 when timetabling was addressed, the parties understandably focussed on the disposition of the summary judgment applications rather than on the pleadings and ultimate trial (if required). By 1 August 2011, the issues for determination in the summary judgment proceedings were clearly defined – the receivers’ case involved a rejection of the affirmative defences pleaded by VinPro. It made sense that the parties not address

_{the need for a reply until the outcome of the summary judgment
application. There}

could be no practical benefit to putting the receivers to the cost of a reply when such could be later rendered otiose. No principle of justice required the filing of a reply before judgment was given on the summary judgment applications.

[24] I reserved the costs associated with the plaintiffs’ application for an extension of time. Having regard to the fact that what the receivers sought was in the nature of an indulgence albeit justified, my present view is that costs should lie where they fall in relation to the application for an extension of time.

[25] At the hearing, Mr McAnally presented the submissions for the receivers and Ms Kelly presented the submissions for VinPro. When she had finished her submissions, Ms Kelly indicated that Mr Goldsmith, who had appeared with her, now wished to present further submissions, in relation to matters of background which may not have been fully covered.

[26] I initially indicated to Ms Kelly that I was not prepared to hear Mr Goldsmith. Central to this proceeding is the Preservation Order and, in particular, the meaning of paragraph 4. The precise terms of the paragraph were negotiated between the relevant parties after I had delivered an initial judgment as to the Preservation Order on 26 June 2009, following a hearing in which Mr McAnally appeared for the receivers and Ms Grieve appeared with Mr Goldsmith for VinPro. The finalised Preservation Order (with which this proceeding is concerned) was made on 31 July 2009. The evidence in this proceeding as to the negotiations which led to the final form of the Preservation Order shows negotiations conducted by Mr Goldsmith for VinPro, Ms Pye of Keegan Alexander for the receivers and Mr Smith of Cousins & Associates for AWCL. Included in the material before me was, for instance, an email from Mr Goldsmith to Ms Pye and others on 10 July 2009 in which Mr Goldsmith discusses a revised draft Preservation Order which he has prepared and discusses predecessor provisions to paragraphs 4a and 4b.

[27] Against this background, and in light of Ms Kelly’s indication that she wished to be followed by Mr Goldsmith, I indicated to Ms Kelly that I considered that request incompatible with the observations of all members of the Supreme Court in Vector Gas Ltd v Bay of Plenty Energy Ltd.8 Headnote 5, at 445, succinctly summarises what their Honours said –

It was undesirable for practitioners to appear as counsel in litigation when they had been personally involved in the matters being litigated. In such a situation, counsel were at risk of acting as witnesses and of losing objectivity.

[28] Tipping J at [51] identified the category of those who should not appear as counsel as being –

Those who practise as litigators in firms and who have been involved in correspondence between the parties.

[29] At the time of the Preservation Orders, Mr Goldsmith unsurprisingly (as he had been the solicitor instructing Ms Grieve who appeared for VinPro) had the conduct through correspondence of VinPro’s negotiation. The record indicates that in the case of Keegan Alexander (acting for the receivers) the correspondence was conducted by Ms Pye.

[31] I offered Ms Kelly a brief adjournment so that she could be briefed by Mr Goldsmith as to the additional points he had wished to advance. Following an adjournment, Ms Kelly returned with instructions to repeat her request to the Court to allow Mr Goldsmith to make submissions. Ms Kelly submitted that it was essential for VinPro’s perception of justice and even-handedness that it have the opportunity to have Mr Goldsmith present submissions as VinPro wished. Ms Kelly noted the involvement of Mr McAnally as counsel for the receivers in relation to the Preservation Order and she informed me from the Bar that Mr McAnally had been

_{very much involved in the negotiations over the final form of the
Preservation Order.}

[32] Upon an indication from Mr McAnally that he would abide my decision on a revisiting of the matter, I agreed to hear submissions from Mr Goldsmith.

[33] I regard that agreement as an indulgence granted to VinPro notwithstanding sound policy reasons against Mr Goldsmith’s presenting submissions. I understand the policy involved in the observations in cases such as Vector Gas to lie at least partly in the fact that it is unrealistic to expect counsel to make submissions as to what a document might objectively mean when counsel had a direct role in the negotiation of the contract and counsel therefore carries the subjective understanding which that involves. The point was subsequently illustrated when Mr Goldsmith in the course of his submissions invited me to accept that parentheses (by which he was referring to the bracketed section of paragraph 4bi) are used to signify a statement which is less important than those which surround it. Mr Goldsmith did not refer me to any authority on usage for that proposition. (I do not suggest that support cannot be found for such a use of parentheses. Rather, Mr Goldsmith was unable to refer me to authorities which discuss what may be a variety of uses).

[34] Accordingly, I heard for the purposes of the summary judgment applications Mr Goldsmith’s submissions but such indulgence is not to be regarded as a precedent for any later appearance to present submissions in this case.

[35] The starting point for a plaintiff’s summary judgment application is r 12.2(1) High Court Rules, which requires that the plaintiff satisfy the Court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.

[36] I summarise the general principles which I adopt in relation to this application:

(b) The onus is on the plaintiff seeking summary judgment to show that there is no arguable defence. The Court must be left without any real doubt or uncertainty on the matter.

(d) The Court will not attempt to resolve genuine conflicts of evidence or to assess the credibility of statements and affidavits.

(e) In determining whether there is a genuine and relevant conflict of facts, the Court is entitled to examine and reject spurious defences or plainly contrived factual conflicts. It is not required to accept uncritically every statement put before it, however equivocal, imprecise, inconsistent with undisputed contemporary documents or other statements, or inherently improbable.

(f) In assessing a defence the Court will look for appropriate particulars and a reasonable level of detailed substantiation.

(g) In weighing these matters, the Court will take a robust approach and enter judgment even where there may be differences on certain factual matters if the lack of a tenable defence is plain on the material before the Court.

(h) Where a last-minute, unsubstantiated defence is raised and an adjournment would be required, a robust approach may be required for the protection of the integrity of the summary judgment process.

(i) Once the Court is satisfied that there is no defence, the Court retains a discretion to refuse summary judgment but does so in the context of the general purpose of the High Court Rules which provide for the just, speedy and inexpensive determination of proceedings.

12.2(2) High Court Rules, which requires that the defendant satisfy the Court that none of the causes of action in the statement of claim can succeed.

[38] I summarise the general principles which I adopt in relation to the application:

(a) The onus is on the defendant seeking summary judgment to show that none of the plaintiff’s causes of action can succeed. The Court must be left without any real doubt or uncertainty on the matter.

(c) The Court will not attempt to resolve genuine conflicts of evidence or to assess the credibility of statements and affidavits.

(d) In determining whether there is a genuine and relevant conflict of facts, the Court is entitled to examine and reject spurious defences or plainly contrived factual conflicts. It is not required to accept uncritically every statement put before it, however equivocal, imprecise, inconsistent with undisputed contemporary documents or other statements, or inherently improbable.

(e) In weighing these matters, the Court will take a robust approach and enter judgment even where there may be differences on certain factual matters if the lack of a tenable defence is plain on the material before the Court.

(f) Once the Court is satisfied that there is no defence, the Court retains a discretion to refuse summary judgment but does so in the context of

the general purpose of the High Court Rules which provide for the just, speedy and inexpensive determination of proceedings.

[39] The background to the issues now before the Court is traversed in two judgments of this Court, namely my judgment of 26 June 2009 in Sargison v Anthem Wine Company Ltd & ors9 and the judgment of French J dated 27 April 2010 in Sargison v Anthem Wine Company Ltd & ors.10 I adapt the summary which I gave in the 26 June 2009 judgment.

[40] The Anthem vineyard at Gibbston produces wine from grapes grown on land owned by a number of entities in the vicinity. Anthem is one of the landowners.

[41] The plaintiffs, as the receivers of Anthem, applied to this Court in October

2008 for directions as to their entitlement to possession and to sell quantities of wine held by VinPro which is a winemaker and bottling and storage company based at Cromwell.

[42] AWCL took issue with the receivers’ claim. AWCL claimed to have bought the existing Anthem wine stocks in December 2007 and to have itself undertaken the Anthem vintages from the 2008 season.

[43] AWCL and VinPro wished to achieve the continued sale of the Anthem wine. The wasting nature of at least some varieties led all parties to the view that continued sale of the wine was appropriate. The parties had different goals in the sales process,

VinPro as winemaker and bottler had a lien over the wine it held. It had unrecovered costs including in relation to continuing warehousing but

9 Sargison v Anthem Wine Company Ltd & ors HC Christchurch CIV 2008-409-2517, 26 June

10 Sargison v Anthem Wine Company Ltd & ors HC Christchurch CIV 2009-409-001876, 27 April

between the parties. VinPro wanted to be paid and did not wish to release its lien without payment. It had also before despatching any wine obtained from AWCL a written indemnity, guaranteed by David Henderson, and wished to retain wine stock to cover the value of the

AWCL (and a financier which claimed interest by way of a general security agreement from AWCL) wanted revenue continuing to come in from the sale of the wine, not least of all to support the continuing

The receivers, upon the basis of their view that they were entitled to possession of the wine, wanted to achieve the maximum cash recovery from the sale of the wine towards the payment of the Anthem debt to the receivers’ appointer (Perpetual Trust Limited). At the time of the hearing before me in June 2009, there was evidence that the Anthem debt to Perpetual stood at approximately $1,000,000. Interest alone (without costs associated with the receivership) was continuing to accrue at 23 per

[44] At the time of the June 2009 hearing, it was common ground that VinPro held less Anthem wine that it had at the time of the receivership.

[45] The receivers applied for an order that the Anthem wine stock be detained in the custody of VinPro until further order of the Court on terms which would permit the sale of the wine. VinPro filed a notice of opposition to the application for a Preservation Order. VinPro said it was inappropriate that it be involved in the sale of the wine as that would involve sale of the wine at bulk wine prices; VinPro was concerned that it not have an exposure to damages given the competing positions of the parties; and VinPro by virtue of its lien wanted to ensure payment of all costs it had incurred. (VinPro, when it entered into bottling agreements with customers such as Anthem, did so in written contracts which contained detailed lien provisions).

[46] AWCL and Perpetual also filed a notice of opposition which essentially took issue with the value of wine to be retained and the conditions to be attached to wine sales.

negotiations continued between the parties up to the morning of the hearing on 18

June 2009. Counsel for AWCL presented a re-cast proposal for a Preservation Order which had been reached following negotiations between AWCL and VinPro. The first proposed condition would have involved the receivers’ giving a release in favour of VinPro for any past or future claim in respect of the wine held by VinPro. (In this judgment I use the expression “release” to describe what was expressed in different ways at different times including as in paragraph 4bi that a party “shall have no liability”).

[48] During the hearing the concept of a retrospective release was discussed. I noted to counsel that the Court was being asked to consider a prospective Preservation Order. I suggested to counsel (and, in particular, to Ms Grieve for VinPro) that it might be unrealistic to expect the Court to impose a condition upon such a prospective Preservation Order that any claims held by the receivers for past actions should be waived. Ms Grieve emphasised at the hearing that at the very least VinPro wished to have protection for the future.

[49] It was common ground between all parties that, leaving aside the precise form or basis of VinPro’s lien claim, VinPro’s interest had to be recognised and protected.

[50] In my judgment of 26 June 2009 I concluded at [55] that there should be a Preservation Order but on a simpler basis than that emerging from the competing submissions I had heard. I then set out over three pages (at [56]) the draft orders which I was minded to make. The draft began with a Preservation Order, authorisation to VinPro to despatch identified wine stock, and authorisation to AWCL to enter into sale contracts for the identified wine.

[51] In relation to the proposed exclusion of VinPro’s liability, the draft provided

(a) The receivers and their appointor shall have no claim against VinPro Limited for any action or inaction by VinPro Limited or for any conduct by VinPro Limited from the date of this order in dealing with the wine held by VinPro Limited (save any necessary claim to enforce the terms of this order);

(b) AWCL’s indemnity and Mr Henderson’s guarantee in favour of VinPro Limited shall remain unaffected by this order and such indemnity and guarantee are to be left in place by AWCL and Mr Henderson (as offered by them).

(It will be seen from the draft that the protection envisaged for VinPro in relation to claims by the receivers or their appointor was prospective only.)

[52] I invited counsel to confer with a view to filing a joint memorandum as to any matters covered by the draft order which would require better definition or amendment to assist in the implementation of the substance of the draft order. The proceeding was adjourned for the finalisation of the Court’s order.

[53] At the same time, I allocated a hearing date for an interpleader application which VinPro had made to the Court.

[54] Following the 26 June 2009 judgment the parties set about negotiating the final terms of the Preservation Order. Memoranda were filed in Court up to the eve of the hearing on 9 July 2009. While submissions were heard that day in relation to unresolved matters, the parties again thereafter continued to negotiate and to file memoranda as to progress and issues. By mid-July 2009, a single issue – as to whether AWCL’s indemnity in Mr Henderson’s guarantee in favour of VinPro should remain unaffected by the order – remained. The Court was invited to deal with that remaining issue in the context of a judgment which would otherwise grant a Preservation Order in the now agreed terms. On 31 July 2009 I issued a further

judgment in which I dealt with the indemnity issue and issued the Preservation Order in its final terms (para 4b of which is the focus of this judgment)11.

[55] Paragraph 4bi of the Preservation Order referred to and incorporated two schedules –

[56] The two schedules are related in this way. The Originating Application Schedule 1 was the wine stock which the receivers asserted was subject to their appointor’s general security agreement but held by VinPro. (There was a Schedule 2 to the originating application which was wine stock (comprising 32,340 litres of unbottled 2008 vintage Pinot Noir) held by another winemaker, Maude Wines Limited). By the time of the hearing in June 2009 it was common ground that although the Originating Application Schedule 1 wine stock had been with VinPro at the time of the Anthem receivership, VinPro by the time of the hearing, as a result of selling Anthem wine, held less than the wine identified in the Originating Application Schedule 1. The parties arrived at an agreed balance of Anthem Wine still held by VinPro which the Court (and therefore the parties) were to assume for the purposes of the Preservation Order. My 26 June 2009 judgment had the (balance) schedule attached as Schedule 1. By the time the parties reached agreement on the form of the Preservation Order finally made on 31 July 2009 there

_{had been further amendment agreed to accurately reflect the balance of
wine then}

11 Sargison v Anthem Wine Company Ltd HC Christchurch CIV 2008-409-002517, 31 July 2009.

[57] In summary, the differences between the Originating Application Schedule 1 and the Preservation Order Schedule 1 represented the reduction in wine stock through VinPro sales plus the addition (“to come”) of the 2008 Pinot Noir (which was held by Maude Wines Ltd).

[58] The receivers’ claims as to property rights in the wine stock held by VinPro focussed on the 2006 and 2007 vintages, with one exception relating to a quantity of

2008 Riesling. (The originating application also sought orders in relation to the

[59] The conversion proceeding now before the Court again focuses on the 2006 and 2007 vintages, and in particular focuses on those quantities of the VinPro wine which were disposed of by VinPro before the Preservation Order was made on 31

[60] At the 18 June 2009 hearing, Mr McAnally for the receivers was prepared to leave the status of the 2008 vintage wines to one side. I left the small quantity of

2008 Riesling in the draft Preservation Order because it had been included in the receivers’ schedule and had not been a specific subject of submission. Submissions received from counsel following the draft Preservation Order indicated a degree of confusion as to whether the 2008 Riesling should be included – that was ultimately resolved by the parties’ retaining the 2008 Riesling in Schedule 1 of the Preservation Order as consented to.

[61] The other 2008 vintage wine which had been discussed – the 2008 vintage Pinot Noir held at Maude Wines Limited – was not recognised in the Preservation Order proceeding as being the personal property of Anthem Wines. Rather, as seen

in paragraph 4a of the Preservation Order, it was ultimately (on 31 July 2009) left by the parties (and the Court) to be dealt with by AWCL (by delivering it to VinPro promptly after it was bottled).

[62] When, following the outcome of the originating application, the receivers proceeded with an ordinary claim against AWCL and its security holders (CIV-2009-

409-1876) the receivers sought a declaration as to the property interest of Anthem in not only the 2006 and 2007 vintages but also the 2008 Pinot Noir. In her Honour’s judgment in that proceeding dated 27 April 2010, French J found that the receivers were entitled to declarations that the 2006, 2007 and 2008 vintages as claimed by the receivers were the personal property of Anthem.

[63] VinPro was not a defendant in that proceeding and was not otherwise joined or served.

[64] By paragraph 4a of the Preservation Order AWCL was to deliver to VinPro, promptly after it was bottled, the 2008 (Maude Wines Ltd) Pinot Noir specified in Schedule 1 to the Order. Schedule 1 specified 1,066.50 dozen (cases). Memoranda filed by counsel before the Preservation Order was finalised indicate that the

1,066.50 dozen cases of 2008 Pinot Noir were being treated as the equivalent amount of wine that VinPro had previously despatched. During this period VinPro undertook calculations as to the wine despatched. Murray Kennedy, VinPro’s Chief Operating Officer, has produced a spreadsheet showing the stock position at 29 June 2009 in which the calculation of despatched wine was 1,086.50 dozen. The spreadsheet shows that the difference between that despatched wine and the 1,066.50 dozen (cases) of 2008 Pinot Noir was an item of 20 dozen (cases) of Anthem 2008 Pinot Gris. That Pinot Gris came to appear in the Preservation Order at Schedule 1 as the first item under the cleanskin wines. In his submissions for the receivers, Mr McAnally took me to the negotiations which occurred concerning the swap of Pinot Noir and some Pinot Gris for the wine previously despatched by VinPro. I will

return to those negotiations. At this point it is sufficient to note that the contemporary documents clearly indicate that the Pinot Noir and some Pinot Gris were in this period calculated as the direct equivalent of the wine which VinPro had earlier despatched.

[65] At the time of the litigation which led to the Preservation Order, VinPro was holding quantities of 2008 vintage Anthem Gewurztraminer, Pinot Gris and Sauvignon Blanc. The spreadsheet produced by Mr Kennedy indicates that the quantity held as at 29 June 2009 was 1,330.40 dozen (cases). The spreadsheet and contemporary documents indicated that VinPro regarded the 2008 white varietals as held by VinPro pursuant to its lien or as security for the indemnity/guarantee which AWCL/Mr Henderson had given it. When the final terms of the Preservation Order were being negotiated, the receivers were reserving their right to hold VinPro liable for the previous release of 2006 and 2007 wine. The possibility was recognised (for instance by a letter from the receivers’ solicitor dated 4 July 2009) that VinPro might retain some of the Anthem 2008 wines which it currently held and were not covered by the Originating Application Schedule 1 – this holding being to meet any such liability to the receivers. In a memorandum to the Court on 2 July 2009 counsel for AWCL/Mr Henderson referred to the need for AWCL to have the ability to sell the

2008 (white varietal wines) for cash flow purposes and referred to AWCL’s preparedness to VinPro having no further liability in respect of the Originating Application Schedule 1 wine (in order to lead VinPro to withdraw its lien claim over the 2008 white varietals). Counsel noted that this concept had been the subject of discussion between AWCL and VinPro (but did not suggest that it had been the subject of discussion with the receivers).

[66] By memorandum on 3 July 2009 counsel for VinPro provided draft clauses including in relation to “no further liability in relation to Originating Application Schedule 1 wines”, at that point without reference to the 2008 (Maude Wines Ltd) Pinot Noir. Counsel noted that such an order would remove any difficulty over VinPro having to exercise its rights as lien or against either the 2006 and 2007 wine or the 2008 (white varietal) wines which were not the subject of the Preservation Order.

[67] Counsel for the receivers in response rejected the comprehensive “no further liability” clause proposed by VinPro and AWCL.

[68] In the event the Court convened a further hearing on 9 July 2009 for further submissions as to the final form of the Preservation Order and as to the VinPro interpleader application. The parties, following that hearing, entered into a period of negotiation which resulted in an agreed position on all issues bar one. That remaining issue was whether the deed of indemnity/guarantee between AWCL/Mr Henderson and VinPro dated 18 December 2008 should survive. I gave my judgment on that single issue on 31 July 2009 (determining by cl 4(c) of the Preservation Order that the rights and obligations of the parties to the deed of indemnity would remain unaffected by the Order) and at the same time making the Preservation Order otherwise in the finalised terms consented to by all parties.

[69] I now briefly summarise the background to this point before considering the construction of paragraph 4 of the Preservation Order. I will then return to the impact which consideration of the negotiations between the parties might have.

[70] On 26 June 2009 the Court gave judgment on the receivers’ application for a Preservation Order, providing at the same time a draft of the Order the Court was minded to make. Draft cl 4 provided for the AWCL/Henderson indemnity/guarantee in favour of VinPro to remain in place and for the receivers and their appointor to have no claim against VinPro in relation to VinPro’s conduct from the date of the Preservation Order (save any necessary claim to enforce the terms of the Order). The draft Order left VinPro with an exposure to claims by the receivers (or their appointor) in relation to 2006 and 2007 wine previously disposed of. Because most of the 2008 vintage was not the subject of the claim in the Originating Application Schedule 1 VinPro had, through its possession of the 2008 white varietals, a potential lien claim and fund from which to reimburse itself in the event the receivers successfully sued VinPro. On the other hand, AWCL/Henderson needed to be able to deal with the 2008 white varietals for usual business and cashflow purposes. Although the initial focus of the requested Preservation Order was upon the wine

stock held by VinPro, the receivers’ originating application encompassed amongst

the claimed collateral the 2008 Pinot Noir held by Maude Wines Limited (Schedule

2 to the originating application). It was 1,066.50 dozen cases of that 2008 Pinot Noir that came to be identified in paragraph 4a and Schedule 1 of the Preservation Order as finalised on 31 July 2009. That defined quantity of Pinot Noir was the direct equivalent of the 2006/2007 wine disposed of by VinPro. With the exception of some 2008 Riesling (which had been included from the start) and a minor amount of

[72] Paragraph 4a imposes an obligation on AWCL. All other parties, including the receivers and VinPro, would have been entitled to enforce that obligation. It was an obligation to deliver the 1,066.5 dozen (cases) of 2008 Pinot Noir from the wine held by Maude Wines.

[73] The obligation was to arise “promptly after it is bottled”. Two interpretations of that provision have been suggested. The alternatives have some parallel with the alternative meanings suggested for the proviso in paragraph 4bi. Ms Kelly, for VinPro, submitted that AWCL’s obligation of delivery would not arise unless the Pinot Noir was first put into bottles. An alternative interpretation, given that of the parties to the Preservation Order it was only AWCL which could control the bottling of the 2008 Pinot Noir held at Maude Wines, is that AWCL was implicitly accepting an obligation to cause the Pinot Noir to be bottled (and thereupon a prompt obligation of delivery).

[74] There is evidence at least as at 10 July 2009 (through an email that day from VinPro’s solicitor sent to or copied to all other legal representatives (including VinPro)) that there was a common understanding that, in the event Pinot Noir was to come to VinPro, AWCL would be first having it bottled elsewhere.

[75] The evidence is that none of the 2008 Pinot Noir at Maude Wines was bottled in the period after the Preservation Order. Following the release of the judgment of French J on 27 April 2010 (declaring Anthem’s property in the 2008 vintage) the receivers sold the 2008 Pinot Noir in bulk. These subsequent events and conduct cannot influence the meaning of the Preservation Order of 31 July 2009. Ms Kelly did not suggest that they did. VinPro’s case in relation to this conduct was that the Court in the present proceeding must in its discretion have regard to the fact that when the receivers, rather than AWCL, came to control the fate of the Pinot Noir at Maude Wines they chose to sell it (unimproved) and have since received 100 per cent of the gross benefit rather than the 50 per cent of the net benefit which would have accrued had bottled Pinot Noir been sold by VinPro in terms of the Preservation Order.

[76] AWCL’s delivery of the bottled 2008 Pinot Noir is an aspect of both paras 4a and 4bi.

b. VinPro shall have no liability whatsoever to either the Applicants or the Respondents for any action, inaction or other conduct by VinPro:

i. to the date of this Order in respect of the wine referred to in Schedule 1 annexed to the Originating Application by the Receivers for Directions dated 16

Schedule 1 to this Order (provided AWCL complies with paragraph 4(a) above), or in respect of the

[78] Clause 4bi has as either a requirement or an assumption of the non-release of

[79] The context in which the Court comes to construe cl 4bi is that the parties have agreed that AWCL will be obliged to deliver to VinPro the quantity of 2008

Pinot Noir which is equivalent to the 2006 and 2007 wine which VinPro had disposed of. The interests of either the receivers (and their appointor) or of VinPro or both are clearly intended to be protected by this mechanism.

[80] What was to happen to the 2008 Anthem white varietals is not expressly dealt with either in paragraph 4bi or elsewhere in the Preservation Order. The background as discussed indicates that the 2008 white varietals, which VinPro was treating as subject to a lien, was important to VinPro as a fund it could resort to if faced with an adverse claim of the receivers (or their appointor). The final clause of paragraph 4bi (“no liability ... in respect of the 2008 Anthem white varietals”) was clearly intended to leave VinPro free to exercise its lien in relation to those white varietals should the need arise.

[81] Against the background in which the Preservation Order arose, is the Court able in this interlocutory context to determine indisputably the correct construction of the balance of paragraph 4bi?

[82] Mr McAnally submitted that the proper interpretation of cl 4bi is that the defendant would be released from liability if and when AWCL transferred the stipulated volume of 2008 Pinot Noir from Maude Wines to VinPro’s premises. This construction requires the proviso – “provided AWCL complies with paragraph 4a above” - as applying both to the wine in the Originating Application Schedule 1 and to the wine in the Preservation Order Schedule 1. It was only wine in the Originating Application Schedule 1 which VinPro had disposed of – the Preservation Order Schedule 1 dealt with the balance of the wine stock as it existed at 31 July

2009. From the receivers’ viewpoint, the linking of the delivery of the bottled 2008

Pinot Noir to VinPro’s release from liability in relation to wine referred to in the Preservation Order Schedule 1 would serve no apparent purpose – VinPro had not yet disposed of any of the wine in the Preservation Order Schedule 1. The logical relationship given the background appeared to be between the bottled Pinot Noir to be delivered under paragraph 4a and all of the wine covered by the Originating Application Schedule 1 (which included the equivalent volume which VinPro had disposed of).

[83] Ms Kelly’s submissions relied heavily upon the grammatical construction of paragraph 4bi. Ms Kelly noted that commas separated what are three sub-clauses of paragraph 4bi so that VinPro is relieved from liability in relation to three categories or groups of wine –

[84] Reading the paragraph broken down into these three sub-clauses, Ms Kelly submitted that the proviso applies only to the second clause. In other words, because the wine which VinPro had disposed of was covered by the Originating Application Schedule 1 and not by the Preservation Order Schedule 1, the proviso (whether it was a condition of non-liability or simply an underlying assumption) could not apply to the disposal of wine. In Ms Kelly’s submission this would still leave the proviso as having meaning because, in her words –

[86] Ms Kelly’s submission as to the correct construction of the second clause of

Assuming the 2008 Pinot Noir is delivered to VinPro, the exclusion of VinPro’s liability in relation to the Preservation Order Schedule 1 wine will extend to that 2008 Pinot Noir wine.

[87] Such a construction invites the question as to whether the parties can be taken to have covered the future dealing with the 2008 Pinot Noir in paragraph 4bi. Paragraph 4bi deals only with VinPro’s conduct to the date of the Preservation Order. It is paragraph 4bii which expressly deals with VinPro’s conduct from the date of the Preservation Order. If the intended construction of paragraph 4bi was to provide protection to VinPro assuming the 2008 Pinot Noir was delivered to VinPro then

more logically one would have expected that to be dealt with in the prospective part of paragraph 4b rather than in the retrospective part.

[88] Mr McAnally responded to the VinPro construction by observing that it would effectively render the proviso pointless or meaningless, which in itself suggests that the proviso has appeared in the wrong place in paragraph 4bi. His submission was that logically the proviso must be taken to relate to the entire wine stock which had been covered by the Originating Application Schedule 1 from which VinPro had disposed of the wine which was now to be “replaced” by the 2008 Pinot Noir from Maude Wines.

[89] At this point the opposing submissions reached a common note, albeit for entirely opposite reasons. Ms Kelly submitted that VinPro’s construction involved no ambiguity, commercial unreality or absurdity and that the receivers’ construction resulted in absurdity. Mr McAnally contended that the VinPro interpretation would render paragraph 4bi otiose and somewhat absurd when looked at in its context and submitted that the paragraph 4bi, when read with the proviso applying to all the wine VinPro had held (as covered by Preservation Order Schedule 1) gave paragraph 4bi the very important effect which the words were clearly intended to have.

[90] I recognise that there may be arguable absurdities in the event of either construction. Ms Kelly suggested there would be an absurdity in reaching the conclusion that VinPro was effectively to be stripped of its release in circumstances where AWCL did not have an obligation to bottle the 2008 Pinot Noir (but merely an obligation to deliver the wine once bottled) and VinPro could not control the time within which AWCL would bottle and deliver. It is true that Ms Kelly’s submissions on this point made assumptions as to the correct construction of paragraph 4a (such as there being no obligation upon AWCL to bottle the 2008 Pinot Noir). That said, the very possibility that the Court might find an implied term as to AWCL’s bottling suggests that this is a case where careful scrutiny of all surrounding circumstances, including aspects of the negotiations, may be pivotal to the correct outcome.

[91] Counsel recognised that the starting point for construction of a document is that which it would convey to a reasonable person having all the background knowledge reasonably available to the parties in the situation in which they were at the time of the contract.

[92] The judgments of the Supreme Court in Vector Gas Ltd v Bay of Plenty Energy Limited12 are authoritative on the question of when and what pre-contractual materials may be used as an aid in construction. The effect of those judgments, summarised, is that it is unnecessary for there to be any ambiguity in the wording of a contract before the Court resorts to reading pre-contractual materials as an aid to interpretation. Negotiations are relevant to establish the commercial context and the subject matter of the contract if such an exercise shows objectively what the parties

contended their words to convey. Tipping J, having referred to the objective approach to interpretation, made the further observations that –

Evidence is not relevant if it does no more than tend to prove what individual parties subjectively intended or understood their words to mean, or what their negotiating stance was at any particular time (at [19]); and

A party cannot be heard to say – never mind what I signed, this is what I really meant (at [20]).

[93] The document to be construed in this case is the Preservation Order, the relevant terms of which were negotiated by the parties and effectively became a consent order. The principles of construction applicable in such a situation are those applying to a contract. Counsel made their submissions on that basis. Such was the approach adopted by Plowman J in Chancery Division in General Accident Fire &

_{Life Assurance Corporation Ltd v Inland Revenue
Commissioners}13_{. In the
Supreme}

13 General Accident Fire & Life Assurance Corporation Ltd v Inland Revenue Commissioners

Court of New South Wales, Campbell J in Kirkpatrick v Kotis14 undertook a review of the law in this area and similarly concluded, at 575, that the authorities in principle favour the view that surrounding circumstances can be used to construe a consent order in the same way as they are used to construe a contract, in accordance with the principles laid down by Mason J in Codelfa Construction Pty Ltd v State Rail Authority of NSW15. In New Zealand, in construing a consent order in Kain v

Hutton16 at [33] Panckhurst J similarly adopted principles of contract construction

[94] Counsel for the plaintiffs and for the defendant respectively made submissions as to the way in which negotiations, as part of the context, reinforced their preferred construction of cl 4bi.

[95] Mr McAnally for the receivers referred to a number of negotiating stances or developments –

(a) The receivers considered that VinPro would have a liability to the receivers if it were established that wine identified in the Originating Application Schedule 1 was found to be the personal property of Anthem (which eventuated).

(b) The receivers did not agree that VinPro should have any form of retrospective release from that contingent liability (relying on emails sent by the receivers’ solicitor to VinPro’s solicitor on 29 June 2009

15 _{Codelfa Construction Pty Ltd v State Rail
Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 at 352.}

July 2009 jointly by the receivers and VinPro dealt with a prospective release only, in line with the draft included in my judgment dated 26

(d) On 2 July 2009 counsel for AWCL in his memorandum to the Court indicated that AWCL would agree to a retrospective release.

(e) In a letter between their solicitors on the same day, 2 July 2009, VinPro effectively threatened not to release any wine unless it was holding sufficient to cover any potential claim in relation to the 2006 and 2007 wines which had been released.

(f) On 3 July 2009 counsel for VinPro by memorandum to the Court provided a redrafted release clause which included a retrospective release.

(g) On the same day, 3 July 2009, AWCL put to the receivers the prospect of moving to the defendant’s premises a volume of the 2008 Pinot Noir equivalent to that of the 2006 and 2007 released wine. Mr McAnally submitted that this was a proposal essentially for the benefit of VinPro and not for the benefit of the plaintiff which would be prejudicially affected by the use of the 2008 Pinot Noir (over which the receivers had a claim).

(h) Against this background, the receivers on 4 July 2009 rejected the amended Preservation Order, suggesting that VinPro should rely on its indemnity from AWCL. (On 6 July 2009 the receivers’ solicitors sent a similar refusal to AWCL’s solicitors, with the varied suggestion that the full amount of 2008 Maude Wine Pinot Noir held should become covered by the Preservation Order (rather than available as security to VinPro).

(i) By counsel’s memorandum dated 6 July 2009 the receivers indicated to the Court that they would not accept a retrospective release of VinPro. They attached a draft form of release which was prospective only.

(j) By counsel’s memorandum dated 8 July 2009 the receivers agreed that VinPro could hold the equivalent amount of wine it had already despatched (some 1,063.83 dozen cases of bottled wine) from the

2008 Pinot Noir wine currently held at Maude Wines subject to the terms of the Preservation Order. Counsel indicated that they believed that this approach should dispose of VinPro’s pending interpleader application (to be heard the next day). They suggested a new paragraph 4a (as it was then numbered) which would read –

Vinpro Limited shall have no further liability whatsoever to either the Applicants or the Respondents in respect of the subject matter of this proceeding, being the wine referred to in Schedule 1 annexed to the originating application ... and by agreement of the parties the 1,063.83 dozen cases of bottled 2008 Pinot Noir wine referred to in clause xx above, save for any claim relating to the enforcement against Vinpro of the terms of any Order made in these proceedings.

Mr McAnally submitted to me that clearly what was proposed by the receivers was a mechanism (as advocated by VinPro and AWCL) which would provide VinPro with the release it wanted. The transfer could not be seen as compensation to the receivers - in all likelihood (and as it transpired in actuality) it was no compensation at all – the replacement was coming from a wine stock in which the receivers’ appointor had property.

(k) On 10 July 2009 Mr Goldsmith for VinPro emailed to the representatives of the receivers and of AWCL/Henderson a marked-up draft of the Preservation Order with some further amendments. Mr Goldsmith noted in relation to proposed cl 4a that he understood that AWCL would now have the 2008 Pinot Noir bottled elsewhere and there therefore had to be an obligation to deliver 1,066.50 dozen to

9 July 2010 and discussions with Mr Smith, the solicitor for AWCL/Henderson. The draft “clause (a) and (b)” now appeared in the marked-up version as –

a. AWCL shall deliver to VinPro, promptly after it is bottled, the number of dozen bottles of 2008 vintage Anthem Pinot Noir specified in Schedule 1 to this Order from the wine held by Maude Winery as at the date of this Order.

~~b. VinPro Limited~~VinPro shall have no liability whatsoever to either the Applicants or the Respondents for any action, inaction or other conduct by VinPro:

i. to the date of this Order in respect of the ~~subject~~ ~~matter of this proceeding, being the~~ wine referred to in ~~the s~~Schedules 1 annexed to the originating application by the ~~Receivers~~Receivers for Directions dated 16

October 2008, or in respect of the wine referred to in Schedule 1 to this Order (provided AWCL

ii. from the date of this Order in dealing with the wine that is the subject of this Order in accordance with this Order and any further directions of the Court,

save for any claim relating to the enforcement against VinPro of the terms of any Order made in these proceedings.

(l) No-one else had required the insertion of the words “(provided AWCL complies with paragraph 4a above)” but they were clearly intended to add some meaning.

(m) The receivers’ solicitors then drafted a clear version of the proposed Preservation Order which was submitted to the Court by memorandum on 16 July 2009 – it identified that VinPro had resisted attempts by AWCL to have the AWCL/Henderson indemnity discharged, a situation which Mr McAnally submitted would not have applied had VinPro not believed that the indemnity might be still

necessary. The implication in Mr McAnally’s submission was that by finalised wording of cl 4bi the parties must be taken to have recognised a possibility that the retrospective release would not apply by reason of a failure by AWCL to deliver the 2008 Pinot Noir to VinPro.

[96] Against that background, Mr McAnally submitted that cl 4bi meant that if VinPro did not come to hold the 2008 Pinot Noir “replacement” wine the “trigger” of release would not be activated.

[97] For her part, Ms Kelly for VinPro did not suggest that the Court should explore the same detail of the process of negotiation as Mr McAnally had suggested. Indeed she referred to aspects of the receivers’ evidence in relation to the process of negotiation which involved evidence of subjective intention or understanding. She referred for instance to evidence from Mr Leonard who deposed in relation to the suggestion that there should be a retrospective release in respect of the 2006 and

[98] Ms Kelly submitted that it was plain from the evidence that during the course of negotiations the receivers changed their position as to a retrospective release. Her submission was a change from an outright rejection to an acceptance of a retrospective release (in which the proviso to paragraph 4bii did not make the release conditional upon AWCL’s delivery of the 2008 Pinot Noir wine).

[99] While suggesting that the Court would not be assisted by an examination of the context and of negotiations, Ms Kelly considered that should the Court go down that path then cross-examination would be most definitely required.

[100] When Ms Kelly elaborated upon her written submissions, she identified as the most significant development in the course of negotiations the new paragraph “4a” (above [95](j)) which the receivers had volunteered on 8 July 2009 through counsel’s memorandum of that date. In response to the proposal for delivery to

VinPro of an equivalent volume of 2008 Pinot Noir wine, the receivers came up with a retrospective (as well as prospective) form of release (that is one covering not only VinPro’s conduct in relation to the wine now held but also in relation to the full amount of wine originally held as recorded in the Originating Application Schedule

2009 contained no condition as to whether or not AWCL delivered that wine to VinPro. From that date the receivers were no longer objecting to a retrospective release.

[101] The thrust of Ms Kelly’s submission in this regard was that when one then went forward to find Mr Goldsmith’s introduction of the proviso to what became paragraph 4bi (introduced by his email of 10 July 2009) the objective implication is that the proviso was being inserted as some form of clarification. It served to state an assumption that the 2008 Pinot Noir would be delivered. It did not serve to create a condition which would leave the receivers free to proceed against VinPro in conversion in relation to the 2006 and 2007 wine which had been disposed of.

[102] To my mind, this case and the submissions I have heard in relation to the negotiations illustrate some of the reasons for the earlier judicial antipathy that existed towards evidence of negotiations. It may be that upon careful examination some aspects of the negotiations (and I think particularly of statements of negotiating position which were made to the Court by memorandum), may assist the Court in construing objectively the parties’ intentions as expressed in paragraph 4bi of the Preservation Order. On the other hand, the detailed examination of negotiations invited by Mr McAnally has a real potential to confuse or blur what is subjective with that which is truly objective.

[103] There are also aspects of the course of negotiations which, as suggested in Ms Kelly’s submissions, mean that an examination of only the documentary record may be insufficient and unreliable. In the process towards a retrospective release, there were two developments in the negotiations which a Court might consider to be highly significant. First there was the receivers’ 8 July 2009 decision to put forward

a draft paragraph 4a which would create a retrospective release. Secondly, there was the VinPro response through its solicitor’s 10 July 2009 email which, through the attached draft Preservation Order, introduced the proviso to the retrospective release. Mr Goldsmith’s covering comment specifically in relation to what he called cl 4b included this –

This reflects discussions with Nicola [Pye] after the Hearing yesterday and with Grant [Smith] this morning. Nicola is happy with the Judge’s original wording (action, inaction or other conduct) and the Receivers do not require any limitation to “despatch of” wine.

[104] I am far from convinced that a trial Judge would find a detailed examination of this process of negotiation particularly helpful to construing the Preservation Order as it was finalised (it being finalised as between the parties some three days later when counsel for the receivers submitted a memorandum to the Court, identifying the only remaining unagreed issue being as to whether the AWCL/Henderson indemnity/guarantee should remain unaffected by the Preservation Order).

[105] There is no evidence as to the oral exchanges which took place between the solicitors for the three parties, as referred to in Mr Goldsmith’s email. I accept Ms Kelly’s submission that if there is to be consideration of negotiation material then in relation to this case the parties are entitled to have the full negotiation information before the Court, including that which comprised the oral discussion or negotiation.

[106] On balance, and notwithstanding my suspicion that much of the negotiation material may not ultimately assist a trial Judge, I must recognise that the comparatively recent developments (and importantly the judgment in Vector Gas) by which evidence of negotiations is recognised as admissible, it may be that in this case at least some of the negotiations may be of assistance to establish the commercial context.

[107] In the context of the competing summary judgment applications, neither the plaintiffs nor the defendant is able to establish its case to the high standard required of a summary judgment application. On the plaintiffs’ application, I am not satisfied that the defendant has no defence to the plaintiffs’ claim and on the defendant’s application I am not satisfied that the plaintiffs’ cause of action in conversion cannot succeed.

[108] By reason of this finding it is unnecessary that I consider the defendant’s alternative grounds of opposition and I do not do so, save to say this. Grounds relating to estoppel and to accord and satisfaction were tied up with the correct construction of paragraph 4bii. They would be unlikely to have prevailed if the construction of paragraph 4bii was found to be clear beyond argument. The defendant's remaining ground of opposition suggested that the plaintiffs should be denied their remedy because of unreasonable delay – a delay of three years of itself is unlikely to have affected the outcome of the plaintiffs’ application although I recognise that submissions Ms Kelly developed in relation to what the receivers have been able to do and have done with the unbottled 2008 Pinot Noir in the meantime may yet have some arguable relevance to the construction of the Preservation Order.

[109] In the circumstances of competing, unsuccessful applications, and having regard to the Court of Appeal’s approach in NZI Bank Ltd v Philpott18 (in relation to plaintiff’s summary judgment applications), I do not view an order for costs as

(a) The plaintiffs’ summary judgment application is refused. (b) The defendant’s summary judgment application is refused. (c) The costs in relation to both applications are reserved.

[111] I adjourn the proceeding to a case management conference at 2.30pm 6

December 2011 by telephone (Associate Judge Osborne). Counsel are required to file at least three working days before that conference preferably a joint memorandum dealing with the readiness of this proceeding for hearing. The

the suitability of the case for Judicial Settlement Conference or alternative dispute resolution;

confirmation that a back-up fixture will be accepted (or if not, why not), subject to prior notification.

Anthem 2007 Gewurztraminer 6 pack	6pk	117.83
Anthem 2007 Pinot Gris	6pk	685.83
Discover 06 Pinot Noir 6 pack	6pk	1,000
Discover 2006 Pinot Noir 12 pack	doz	342
Anthem 2007 Sav Blanc	6pk	670
Anthem 2006 Pinot Noir	6pk	889.66
Anthem 2008 Riesling (AW) Cleanskin	doz	235
Anthem 07 Pinot Gris L2 Cleanskin	doz	123.33
Anthem 07 Pinot Gris L1 Cleanskin	doz	1
Anthem Pinot Noir 06 B3 Cleanskin	doz	1,420.33
Anthem Pinot Noir 06 Batch 4 Cleanskin	doz	4.16
Anthem 2007 Pinot Noir Cleanskin B2	doz	1,267.41
Discover 2007 Pinot Noir Cleanskin	doz	2,786.92
Anthem 2007 Sav Blanc Cleanskin	doz	134

Code	Description	Prod. Type	Stock Unit	Units	Doz
Labelled
ANGW07_6P	Anthem 2007 Gewurztraminer 6 pack	WINE	6pk	87.83	43.92
ANPG07	Anthem 2007 Pinot Gris	WINE	6pk	485.83	242.92
ANPN06D_6P	Discover 06 Pinot Noir 6 pack	WINE	6pk	608.00	304.00
ANPN06D_12P	Discover 2006 Pinot Noir 12 pack	WINE	doz	38.00	38.00
ANSB07	Anthem 2007 Sav Blanc	WINE	6pk	591.00	295.50
ANPN06	Anthem 2006 Pinot Noir	WINE	6pk	96.00	48.00
				1,906.66	972.33
Clean skin
ANPG08CS_AH	Anthem Holdings 2008 Pinot Gris C/skin**	WINECL	doz	20.00	20.00
ANR108_CS	Anthem 2008 Riesling (AW) Cleanskin	WINECL	doz	232.33	232.33
ANPG07_CS	Anthem 07 Pinot Gris L2 Cleanskin	WINECL	doz	104.33	104.33
ANPG07L1_CS	Anthem 07 Pinot Gris L1 Cleanskin	WINECL	doz	1.00	1.00
ANPN06_CS	Anthem Pinot Noir 06 B3 Cleanskin	WINECL	doz	1,419.66	1,419.66
ANPN06B4_CS	Anthem Pinot Noir 06 Batch 4	WINECL	doz	4.16	4.16
	Cleanskin
ANPN07B2_CS	Anthem 2007 Pinot Noir Cleanskin B2	WINECL	doz	1,261.08	1,261.08
ANPN07D_CS	Discover 2007 Pinot Noir Cleanskin	WINECL	doz	2,780.59	2,780.59
ANSB07CS	Anthem 2007 Sav Blanc Cleanskin	WINECL	doz	133.83	133.83
TO COME	Discover 2008 vintage Pinot Noir	WINECL	doz	1,066.50	1,066.50
	(CS) (ex Maude Winery)
				6,771,15	6,771,15
Total				8,930.14	7,995.81

High Court of New Zealand Decisions

Sargison v Vinpro Limited HC Dunedin CIV-2011-412-000453 [2011] NZHC 1451 (28 October 2011)