The bill $14,000 bill was based on one farmer’s assessment of how much weight each cattle had gained in the time they had grazed on his land, but the cattle owner felt it “far outstripped” the value of the use of his digger. Photo / 123rf
The unnamed pair ran neighbouring farms in Southland, but the problem arose over a barter-style arrangement, which began with them swapping digger use for tractor hours.
The farmer named “HC” in the decision owned the cattle plus a digger he lent to KD, who initially returned the favour with “tractor hours” to help his neighbour shift heavy items on his farm.
The pair then agreed to swap digger use for cattle grazing, but things turned sour when HC got the “$14,000 bill for grazing 20 of his animals on KD’s farm, from August to December 2023″.
Eleven of them stayed on until April 2024.
Bill calculated on cattle weight gain
Robertshawe said KD was in the business of grazing cattle and went into the arrangement expecting he would be paid for the grazing at market rates, based on weight gain using an industry standard formula, but pegged slightly lower to take account of the relationship.
However, this was never discussed at the start, nor in December, when nine of the cattle went home.
HC disputed the grazing fee and defended the claim on the basis that he was never advised there would be a fee.
He also argued if he did have to pay anything, the commercial value of the digger use over that period equated to the commercial value of the grazing.
He felt the value of the grazing “far outstripped” the value of the use of his digger.
Tribunal orders payment on per head fee
Robertshawe has now ordered the cattle owner to pay his neighbour $5554, based on a per-head fee for the cattle of $14 per week.
She reached her conclusion by calculating the value of the grazing and the value of the digger use during the period of grazing.
However, there was no entitlement to impose the market rate based on a per kilo weight gain because KD had failed to make his intentions clear with the nature of the deal, particularly in light of the mutually supportive arrangement they had in place.
“Nonetheless, when some of the cattle went home in December, and others stayed, it seems less likely that it could be viewed objectively as a free deal paid for by digger exchange only,” she said.
Robertshawe said there was no dispute that the grazing occurred in the context of a relationship of exchange.
“However, not all mutual understandings amount to contractual obligations that can be sued upon.”
She said to create a legally binding obligation, parties needed to demonstrate a number of things, including an intention to enforce any offers and acceptances through legal means.
Evidence ‘lacking’
Applying this test to the grazing arrangement, KD lacked sufficient evidence to show that he had a contractual right to the fee sought, Robertshawe said.
She said in cases where there was a genuine misunderstanding, each party acted rationally for how they understood the situation to be.
“However, looking at this objectively, there was no meeting of minds,” Robertshawe said.
She resolved that while there was no right to claim for the grazing on a weight gain basis under principles of contract, but HC received a substantial benefit from it, it was appropriate to make an award of $5554 which represented the overall fairness of the situation, applying equitable principles of quasi-contract.
“I am satisfied that [HC’s] surprise at receiving an account was genuine, and that he had honestly interpreted the arrangement as one of goodwill,” she said.
Tracy Neal is a Nelson-based Open Justice reporter at NZME. She was previously RNZ’s regional reporter in Nelson-Marlborough and has covered general news, including court and local government for the Nelson Mail.