For Christine Drummond it was death by a thousand cuts. Sister Julie O’Rorke would only agree to terms for sale of their Taranaki dairy farm when dragged to the court door, subsequently raising new objections only settled again at the last minute before yet another court hearing.
The High Court was told five sisters initially farmed at Opunake in partnership before Mooncoin Farm Ltd, controlled by Christine and Julie, took ownership in 2002. Some fifteen years later, Christine was looking to sell up. The farm was valued at $8.2 million. Julie offered $6.6 million. One year on, with no agreement reached, Julie faced the possibility of a court-appointed liquidator forcing a sale when Christine took action under the Companies Act. Before a court hearing, the two sisters agreed terms. The High Court was told Julie subsequently failed to pay the agreed deposit and failed to settle on settlement date. With further court action looming, a substantial part of the agreed price was paid, with money held back as part of the ‘wash up.’
Julie then haggled over compensation for diseased cows, empty heifers and livestock she claimed were hers but wrongly counted as part of Mooncoin’s herd. These issues were settled in the face of yet another scheduled court hearing. There was more. The High Court was told Julie subsequently demanded an agreed eight per cent interest calculation on the difference between Christine’s drawings from Mooncoin and her drawings should be calculated with interest compounding. Their latest ‘court-door’ agreement had been silent on whether interest payable meant simple interest or compound interest. This dispute did get a court hearing. Justice Clark ruled simple interest applied; accounting calculations reviewed by all sides during the sisters’ earlier negotiations expressly excluded compound interest. The two sisters difference in drawings was not disclosed in the published court judgment, but Christine had threatened earlier to demand a management fee of some $208,000 to counter Julie’s demand for compound interest on compensation for the difference between their two loan accounts.
Drummond v. O’Rorke – High Court (21.08.20)
20.144