HARDING V STEELE HC PMN CIV-2011-454-000857

HARDING V STEELE HC PMN CIV-2011-454-000857 [22 June 2012]IN THE HIGH COURT OF NEW ZEALANDPALMERSTON NORTH REGISTRYCIV-2011-454-000857[2012] NZHC 1435BETWEEN MARION HARDINGAppellantAND MONICA STEELE AND DENISESTEELERespondentsHearing: 20 June 2012Counsel: Appellant in personG J Mowbray for RespondentsJudgment: 22 June 2012In accordance with r 11.5 I direct the Registrar to endorse this judgment with the delivery time of 3.00pm on the 22nd day of June 2012.RESERVED JUDGMENT OF COLLINS JIntroduction[1] The appellant appeals a reserved judgment of the District Court dated 28 October 2011.[2] The gravamen of the dispute between the parties is their disagreement about the ownership and rights to show and breed from two dogs called "Porscha" and "Halo".[3] This appeal is being considered under the general appeal provisions contained in ss 72 and 75 of the District Courts Act 1947 and is therefore being heard by way of a rehearing.Background[4] The appellant has owned and bred Staffordshire Bull Terrier dogs for close to half a century. She has developed an enviable reputation in the Staffordshire Bull Terrier community.[5] The respondents are a mother and daughter. The first named respondent (Monica Steele) has known the appellant for close to 40 years. The second named respondent (Denise Steele) first met the appellant in 1996 when she acquired aStaffordshire Bull Terrier called "Frosty" from the appellant. Frosty died at 12 yearsof age.[6] During the course of October 2009 the respondents decided to acquire another dog.[7] Arrangements were made for the respondents to visit the appellant on 1 November 2009. They had lunch at the appellant's home. During the course ofthat visit the respondents saw Halo, who at this stage was a three and a half month old puppy, and her mother Porscha.[8] During the course of the respondents' visit to the appellant Denise Steeleasked if they could acquire both Halo and Porscha. On the appellant's explanation of events "it was agreed that [the respondents could] take Halo on condition that she remain in the appellant's name for the next 4 weeks" after which the appellant would determine if Halo was good enough to show. If it was thought that Halo was good enough to show then Halo would be registered in the names of the appellant and Denise Steele would show her. The appellant explained her understanding of the discussions of 1 November 2009 in the following way:The possibility of the appellant taking a litter from [Halo] was to be discussed later. If Halo wasn't considered good enough to be shown she would be spayed at 6 months and become [the respondents'] pet ...Appropriate agreements were to be signed when Halo was brought back in 4 weeks time.[9] The appellant maintains that Monica Steele then:... suggested [the respondents] take Porscha home for the 4 week period to help settle Halo into her new home so [the respondents] could get a feel for the two dog situation.[10] The appellant also maintains that six conditions were integral to this arrangement. Those six conditions were:(1) That the respondents had to make sure their property was properly fenced and gated.(2) That Porscha was not to use stairs or play ball or rough games because she had a weak ligament in her rear leg.(3) That the appellant was to be consulted before Porscha was taken to a veterinary clinic.(4) That if Porscha appeared to be fretting she was to be returned immediately.(5) That both dogs be immediately registered with the Kapiti Coast District Council (which is where the respondents live).(6) That Porscha was to be returned in four weeks or on day one of her season if she came into season prior to that time.[11] The respondents' understanding of these events is that when they met withthe appellant on 1 November 2009 Denise Steele told the appellant that she was looking for two dogs as they would be good company for each other and also for hermother. Denise Steele's evidence was that when she saw Halo and Porscha she liked the way they interacted and said that the respondents would like to have both dogs.Denise Steele's evidence was that the following day she told the appellant that she would like to buy both dogs. She said that at that stage the appellant required her to ensure her property was fully fenced and gated.[12] On 6 November 2009 Denise Steele sent the appellant the following email at 3.16pm:Hope you've had a great week.Mum and I are organised now for the pitter patter or (sic) little doggy feet.We're very excited about welcoming Porscha and Halo into our family.I've also got two new dog crates so we're all set to go.Can you please let me know your bank details and how much money I need to get you so I can deposit this directly to your account.Let me know when it's a good time to come back up and see you.Have a lovely weekend.[13] At 8.23pm on 6 November 2009 the appellant sent the following reply to Denise Steele:Is the gate all done?? Goodness you have been working hard.Now my puppies these days go for $1000. That's just said to give you onehell of a fright. How about we say $500 for Halo and keep her in my name until we can see whether she is good enough to show or not. If she is, you might like to show her from time to time in both our names or something agreeable and later may be I can take a litter. What do you think?Anyway nothing for Porscha. Just love her to bits for me and we can talkabout spaying her when we know that you love her and can't bear to partwith her.My account is ...[14] On 8 November 2009 the respondents went to the appellant's property to collect Halo and Porscha. Denise Steele's evidence was that the appellant said onthat occasion they would need to catch up at some stage to assess Halo's suitabilityfor showing or having a litter.[15] On 10 November 2009 Monica Steele paid $500 into the appellant's bankaccount. On the same day the appellant sent an email to Denise Steele confirming receipt of the payment. She asked "How is Porscha?" and said "hope [Porscha] is settling in as she ... will feel a bit confused by the move. I'll talk to you soon".[16] On 16 November 2009 the respondents received a letter from the appellant.That letter enclosed Halo's registration tags. In her letter the appellant said therespondents could now register both dogs with the Kapiti Coast District Council(apparently the respondents already had Porscha's dog tag). Both dogs wereregistered in the name of Denise Steele with the Kapiti Coast District Council on 3 December 2009. However, both dogs continued to be registered with the New Zealand Kennel Club in the appellant's name.[17] The appellant's account of how matters then unfolded is set out in the following way in her statement of evidence dated 16 September 2011:I phoned the [respondents on] 10 December 2009 and discussed the return ofPorscha and assessment of Halo. The following weekend wasn't suitableand we organised for them to come up on 20 December 2009.On 20 December 2009 the [respondents] came up without the dogs. They explained that it was too hot in the car to bring them up. As the Christmasperiod was upon us I didn't call the [respondents] again until 30 December 2009. On 30 December the [respondents] agreed to return both dogs on 10 January 2010.On 10 January 2010 [Denise Steele] visited me. She again failed to bring either Porscha or Halo. She brought me a dog crate that I had bought off Trademe. I wasn't interested in the return of the crate at that time. I wanted to see Halo and have Porscha returned. At the end of Denise's visit I insisted that they bring the dogs up the next weekend. That didn't happen.On 18 January 2010 both [respondents] advised me (separately) that Porscha was in season. Both of them sounded strange on the phone. I had a newlitter born that day and couldn't get down to the [respondents'] home tocollect Porscha and said I would phone the following day to arrange a time to pick her up. I called them again on 19 and 23rd January 2010 to arrange for them to bring the dogs to me or for me to go to them and bring Porscha home. I was unsuccessful. The [respondents] were evasive about why theyweren't letting me go down to them or bringing the dogs to me.I called the [respondents] again on 30 January 2010, the day I had arranged for Porscha to be mated. It was then that the [respondents] told me that theydidn't want Porscha to have a litter at that time. I told them that was not their decision to make. It was a 13 minute phone call. At the end of it the [respondents] agreed to return Porscha on 7 February 2010.At 3.55pm on 7 February 2010 I phoned the [respondents] to ask them what time I could expect them. They told me that they were not returning Porscha because they loved her. Denise told me to stop calling her.On 8 February 2010 I called at the Levin Police Station and spoke with Constable Craig Gordon.On Constable Gordon's advice I drove to Paraparaumu Police station to askfor a Police escort to the [respondents'] home. Constable MacFarlane and Constable Keepuell went round to the [respondents'] house. ConstableMacFarlane will be giving his own evidence on this.[18] The appellant then explained in her evidence:Porscha was a valuable companion and valuable breeding dog. Her sire Ch Jamelkur High Octane (Imp Aust) cost me $4,000.00 to obtain from Australia. Her Dam Warsnop So This is Alma cost in excess of $1000 to lease back for one litter. Both her sire and dam were DNA tested for the known hereditary diseases in this breed at considerable cost. There were also a score of other costs above and beyond those needed to rear this special dog Porscha.My average litters are 6 puppies. I have no reason to think Porscha would not have more litters of 6 puppies. The usual price per puppy is $1,200.00. I expected to breed another 2 litters from her. I have also lost the opportunity to breed a litter from Halo.Proceedings[19] The appellant commenced this proceeding by lodging a claim with the Disputes Tribunal at Levin. A hearing was held on 20 May 2010. The Tribunal ordered that the application be dismissed. The appellant appealed that decision to the District Court. On 31 August 2010 the District Court quashed the DisputeTribunal's decision and transferred the proceeding to the District Court.[20] The District Court hearing took place on 12 October 2011. In delivering his reserved judgment the District Court Judge:(1) Said the appellant and both respondents "impressed as credible and honest persons telling their version of events as best remembered bythem".1(2) Held that on 8 November 2009 an agreement had been made for the sale and purchase of Halo for $500.(3) Held that on 8 November 2009 the appellant agreed that the respondents could acquire Porscha at no cost.The District Court Judge accordingly concluded that as a matter of contract the ownership of both dogs passed to the respondents.1 Harding v Steele DC Palmerston North CIV-2010-031-228, 28 October 2011 at [16].Grounds of appeal[21] In her very comprehensive submissions the appellant has raised three distinct issues, namely:(1) While she accepts that Halo was sold for $500 she maintains that sale was subject to conditions concerning future assessments over theshowing of Halo and breeding from her. The appellant's case is thatas those conditions have not been performed, the contract has been breached by the respondents and therefore the appellant is entitled to cancel the contract.(2) It is the appellant's case that Porscha was only lent to the respondents.(3) That her brief of evidence presented in the District Court was not taken into account by the District Court Judge.[22] I will address each of these specific concerns when determining the outcome of this appeal by way of a rehearing of the entire case.What were the terms of the parties' contract?Halo[23] The only clear and discernible term of the parties' contract for the sale and purchase of Halo are set out in the appellant's email of 6 November 2009 (refer[13]). That term was that Denise Steele would purchase Halo for $500.[24] In both the District and this Court the appellant maintained that ownership of Halo was dependent on a decision being made in the future about whether or not Halo would be good enough to be showed and on the condition that the appellant would receive any litter produced from Halo.[25] In my judgement, the propositions contained in the appellant's email of6 November 2009 that:(1) Halo would be registered in the names of both the appellant and Denise Steele until they could decide if she was good enough to show or not; and(2) If Halo was good to show then Denise Steele might like to show Halofrom time to time in both her name and the appellant's namefollowed by the words "What do you think?" were clearly nothing more thansuggestions by the appellant. Absent acceptance of those suggestions by the respondents those suggestions never graduated to the status of contractual terms.[26] This conclusion is further reinforced when regard is had to the appellant'sevidence in the District Court and her submissions in the High Court where sheacknowledged that "the proposal of the appellant taking a litter from [Halo] was tobe discussed later".2[27] Part of the appellant's case is based on the fact that some time after8 November 2009 she prepared two written agreements. Those agreements were never shown to the respondents and never signed by them. Those agreements may reflect the terms which the appellant wanted to achieve after the 8 November 2009 agreement but they can have no influence on the terms of the contract created that day. In any event, neither draft agreement refers to the appellant receiving a litter from Halo.Porscha[28] The appellant's email of 6 November 2009 clearly establishes that Porscha was not being lent to the respondents. The appellant's words:2 Appellant's submissions 5 April 2011 at [11].Anyway nothing for Porscha. Just love her to bits for me and we can talk about spaying her when we know that you love her and can't bear to partwith hercannot be objectively construed as suggesting that Porscha was being lent to the respondents for just four weeks.[29] One of the cornerstones of the law of contract is that communications which form the basis of a contract between parties are to be construed objectively and not on the basis of what one party later says they hoped they meant to say, particularly when their post-contractual recollection is totally inconsistent with the clear terms of the agreement. This point was made in the following way by Tipping J in Vector Gas Ltd v Bay of Plenty Energy Ltd:3Although subjective evidence would be relevant if a subjective approach were taken to interpretation issues, the common law has consistently eschewed that approach. The common law focuses strongly on the agreement in its final form as representing the ultimate consensus of the parties. Hence it is regarded as irrelevant how the parties reached that consensus. To inquire into that process would not be consistent with an objective inquiry into the meaning of a document which is generally designed to be the sole record of the final agreement. A party cannot be heard to say – never mind what I signed, this is what I really meant.(emphasis added)I acknowledge that in his judgment Tipping J was referring to pre-contractual conduct. The point his Honour was making applies with even greater force to post- contractual conduct.[30] In my judgement the agreement of 8 November 2009 clearly included ownership of Porscha being transferred to the respondents. No other conditions were agreed to at that time.[31] In these circumstances I find myself in complete agreement with the DistrictCourt Judge's interpretation of the terms of the agreement reached by the parties on6 November 2009.3 Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] NZSC 5, [2010] 2 NZLR 444 at [20].Procedural issues[32] The appellant is concerned the District Court Judge failed to read her witness statement presented to the District Court.[33] An examination of the Court record reveals that the appellant's witnessstatement was produced and marked as an exhibit. The notes of evidence do not record the production of that exhibit but it was produced as demonstrated by theCourt's exhibit stamp on the cover page.[34] Furthermore, the District Court Judge's decision quotes sections of the appellant's witness statement4 and therefore, I cannot accept the proposition that theDistrict Court Judge failed to take into account the appellant's witness statement.[35] In this Court the appellant explained that the District Court Judge did not have regard to a written submission which she read from in the District Court and which she took home with her after the hearing. That submission was not a brief of evidence. I have now had the benefit of reading the appellant's submissions in theDistrict Court and this Court before reaching my conclusions. The appellant may be assured that I have carefully considered everything she has urged upon the Court.Conclusion[36] The appeal is dismissed.[37] The judgment entered in the District Court in favour of the respondents is upheld.[38] The respondents are entitled to costs in this Court on a category 1A basis.4 Harding v Steele DC Palmerston North CIV-2010-031-228, 28 October 2011 at [8].____________________D B Collins JSolicitors:Breaden McCardle Chubb, Paraparaumu for Respondents