SAVVY VINEYARDS 4334 LTD v WETA ESTATE LTD [2018] NZHC 989

SAVVY VINEYARDS 4334 LTD v WETA ESTATE LTD [2018] NZHC 989

On the contractual text and context the option clause (cl 2.2 read with cl 2.4) entitled the buyer to give notice in two consecutive three-year periods (i.e. up to six years from the Commencement Date); defendants' 2010 repudiation did not prevent plaintiffs giving timely notice and the Court of Appeal judgment did...

Source-derived case information.

Citation
[2018] NZHC 989
Parties
First Plaintiff: Savvy Vineyards 4334 Limited; Second Plaintiff: Savvy Vineyards 3552 Limited; First Defendant: Weta Estate Limited; Second Defendant: Tirosh Estate Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
9 May 2018
Procedural Posture
Breach of Contract (grape Supply and Vineyard Management Agreements) / Liability Hearing (damages Inquiry Ordered)
Outcome
Plaintiffs succeed on second cause of action (declaration options exercisable for 2016 and subsequent harvests); plaintiffs fail on first and third causes; defendants' counterclaims for declaration and rectification dismissed; inquiry as to damages ordered.
Legal Topics
Repudiation, Option to Purchase, Contract Interpretation, Rectification, Estoppel, Injunctions, Damages
Contract Law Equitable Remedies Property Law Commercial Law Repudiation Option to Purchase Contract Interpretation Rectification +3 more

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Parties

Savvy Vineyards 4334 Limited

First Plaintiff

Savvy Vineyards 3552 Limited

Second Plaintiff

Weta Estate Limited

First Defendant

Tirosh Estate Limited

Second Defendant

Procedural Posture

Breach of Contract (grape Supply and Vineyard Management Agreements) / Liability Hearing (damages Inquiry Ordered)

Legal Issues

  1. 1 Whether repudiation by defendants in December 2010 caused plaintiffs to forfeit option exercise rights
  2. 2 Whether plaintiffs' purchase options lapsed on the 3rd anniversary or remained exercisable up to the 6th anniversary of the Commencement Date
  3. 3 Whether the defendants are entitled to rectification of the grape supply agreements

Ratio Decidendi

On the contractual text and context the option clause (cl 2.2 read with cl 2.4) entitled the buyer to give notice in two consecutive three-year periods (i.e. up to six years from the Commencement Date); defendants' 2010 repudiation did not prevent plaintiffs giving timely notice and the Court of Appeal judgment did not, as a matter of law, suspend the contracts; rectification was not established on the required evidence and no estoppel prevented defendants asserting their rights, so plaintiffs succeed on the claim that their options survived to the 2016 harvest and thereafter but fail on causation of earlier non-exercise and on implied extension/rectification claims.

Court Disposition

Plaintiffs succeed on second cause of action (declaration options exercisable for 2016 and subsequent harvests); plaintiffs fail on first and third causes; defendants' counterclaims for declaration and rectification dismissed; inquiry as to damages ordered.

Orders

  • Declaration that Savvy Vineyards 4334 Limited and Savvy Vineyards 3552 Limited were entitled to purchase the 2016 harvest and are entitled to purchase subsequent harvests on the terms of the Weta and Tirosh grape supply agreements
  • Inquiry into damages to be held (quantum to be assessed in second phase)