Jock Anderson

Well-known central Otago wine maker, orchardist and New Zealand wine distributor Hayden Johnston this week fell at the last hurdle in his court battle over a right of way to a subdivision in Blackman Gully, near Alexandra.

Mr Johnston thought there were enough questions of general or public importance surrounding a dispute with Papua New Guinea-connected Michael Wilson over the subdivision right of way to warrant the intervention of the Supreme Court.

But the Supreme Court, comprising Justices Andrew Tipping, John McGrath and Noel Anderson, thought differently.

This week the court refused Mr Johnston and his company Earnscleugh Vineyards Ltd leave to appeal from an earlier Court of Appeal decision granting a decree for specific performance of an agreement to transfer land to Michael and Joy Wilson’s company Schist Mountain Orchard Ltd.

The dispute began after Schist Mountain Orchard sold land in Blackman Gully to Mr Johnston in 2002 on the basis that a part of it would be transferred back, at no cost, once consent for a subdivision was obtained.

Consent was obtained but on terms Mr Johnston didn’t accept so he refused to transfer the relevant piece of land to the Wilson’s company.

The Blackman Gully land Schist sold to Mr Johnston was in one title but two lots – a front lot and a rear lot.

As associated company, Schist Mountain Forest and Viticulture Ltd, owned land adjoining the rear lot which was also sold to Mr Johnston.

In the normal course of events the Wilsons would have created separate titles for the front and rear lots and then sold the front lot and the adjoining lot to Mr Johnston.

But because of time constraints the parties decided to structure the deal so that all of the land would be transferred to Mr Johnston, subject to an obligation to transfer the rear lot back to Schist after the Central Otago District Council had approved a subdivision and issued a new title for that land.

The agreed sale price for the front lot was $225,000, which would increase to $275,000 if the rear lot was not transferred back to Schist.

However conditions involving easement access to the rear lot - including what width the easement should be - became complicated.

It also appeared likely Mr Johnston was under some misapprehension about the easement being ten metres wide.

There was continued wrangling between lawyers as to whether Mr Johnston intended disputing the eventual subdivision decision.

Mr Johnston’s position was that the subdivision approval did not conform to what was provided for by the agreement with the Wilsons because a ten metre easement was too wide.

Schist sued, seeking specific performance, damages and costs.

Mr Johnston counterclaimed arguing that there was an implied term of the agreement that subdivision consent “would not impact adversely” on his use of the land and would not impose restrictions that were not provided for in the agreement.

When the case hit the High Court Justice John Hansen took the view the problem was that the local council had decided on a ten metre wide right of way on the application of Schist itself, which Schist did not appeal, presumably accepting it.

In any event the Court of Appeal decided Mr Johnston’s argument was unfounded, partly because the contract was on the basis that the subdivision would be on terms which were to be fixed by the council and over which Mr Johnston had no right of veto.

What happened was well within what was contemplated by the contract.

In passing the Court of appeal noted that the rear lot was no worth far more than the $50,000 value in the 2002 agreement. “Mr Johnston has lost nothing of significance by his mistake,” Justice Willie Young said, awarding costs of $6,000 against Mr Johnston.

Mr Johnston didn’t fair any better in the Supreme Court which found no legal points of general or public importance, no miscarriage of justice and awarded $2,500 costs against him.

Colin Withnall QC appeared for the Wilson’s and Schist Mountain Orchard and Len Andersen for Mr Johnston and Earnscleugh Vineyards.

Feedback on this story to jockanderson@ihug.co.nz