Fifteen-year delay too much, court rules

The Court of Appeal has rejected a southern firm’s argument that the fact it took 15 years to lodge a $10,000 “security against costs’’ deposit should not have prevented it pursuing what would now be a $9.3 million legal action.

Security against costs is essentially a deposit required to ensure that should an action fail, the losing side would be able to pay costs the court might then want to impose.

The dispute harks back to the 200203 hay baling season in Southland and involves Southwest Contracting Ltd (South West) , and two companies it engaged for the installation and maintenance of a tractor-bailer combination.

Those companies, Ag Southland Ltd and Taieri Tractors Ltd (now collectively operating as Power Farming Ltd) sued South West for $46,000 unpaid bills.

Southwest contended Ag Southland failed to install the setup properly and then that first it, then Taieri Tractors, failed to fix the problems when engaged todoso.

The response, from Ag Southland, was that the problems were due to operator error.

When South West countersued the two companies for a total $681,000 in lost income the case was kicked up to the High Court, which in September 2006 granted Power Farming’s request to order $10,000 as security against costs.

The proceedings were paused until the security payment was made, which it wasn’t until September 2021.

This led Power Farming to then successfully cite the “inordinate delay” as grounds to dismiss the counter-suit.

South West went to the Court of Appeal to appeal the decision to strike out its claim, which by that stage it had re-calculated to be for $9.3m, based on its assessment of losses during six seasons, plus interest at 5% per annum.

The court, in its decision released February 16, found that the delay meant Power Farming would have real difficulties locating witnesses essential to its case.

And, as earlier judgements had found, the court found that the magnitude of South West’s financial predicament at the time had meant the delay could not, in large part, be attributed to the lost income.

But the court did, in part, grant a separate appeal from South West, which means it will now be able to bring forward further evidence in its epic dispute with Power Farming.

That evidence relates to the machinery – a fuller version of a 2022 report from mechanical engineer Chris Heaslip, which the court accepted provides a “useful description of the baler and tractor and an account of South West’s acquisition of these items’’.