Justice Gerald Nation in the High Court at Christchurch found largely in favour of Milton farmer Ross Clark in his claim against the South Island’s largest privately-owned stock agent, Rural Livestock.
He awarded Clark more than $270,000 plus interest and costs – less than the nearly $640,000 he sought.
“At least, historically, it was often a source of pride among New Zealand farmers and stock agents that all that was needed to secure their dealings was a handshake,” Justice Nation said.
“The experience of the parties to these proceedings may well suggest that should now be consigned to history.”
The case centred on a series of livestock deals brokered for Clark between 2015 and 2016 by Balclutha-based former Rural Livestock agent John Williams.
In the most significant transaction Williams bought 176 in-calf heifers on Clark’s behalf before leasing them out for him.
When it came time to return the animals at the end of the lease they couldn’t be found.
Rural Livestock lodged a complaint with the Serious Fraud Office in relation to Williams in August 2016.
Justice Nation noted Clark put a significant degree of trust in Williams given how often he failed to provide paperwork properly documenting the deals.
It was obvious Clark felt this was outweighed by the agent’s abilities to place stock on his behalf.
“I accept that Mr Clark was unduly trusting of Mr Williams, naively optimistic that all was in order as far as the leasing of the stock was concerned and casual to an extent that differed from usual farming practices in never checking on the stock,” the judgment says.
However, any negligence on Clark’s behalf did not exempt Rural Livestock from liability.
He disagreed with Rural Livestock’s insistence Williams had acted in a personal capacity in drawing up the leases without authority to do so from the firm.
“I consider this is a case where Rural (was) contracted to produce a particular result … Rural, through Mr Williams, failed to do so.”
In a statement Rural Livestock said it accepted the judge’s findings and in particular his comments regarding undocumented livestock transactions.
“The judge’s comments about handshake deals … add further impetus to address and minimise the potential for improper activity in the future.”
As a member of the NZ Stock and Station Agents Association the company said it supports discussions now under way for greater industry regulation.
It is continuing to help the ongoing SFO investigations.
The firm was back in the High Court last month defending itself against a claim from another south Otago client of Williams.
The court is yet to issue a judgment on that case.
