Central Otago vineyard's appeal in case against driller fails

Grapes grow under the Central Otago sun in Earnscleugh. Photo / Jeff Kavanagh

A claim and counterclaim against a drilling company by a vineyard in Central Otago have been dismissed by the High Court with the law falling on the side of the drilling company.

The saga between Earnscleugh Vineyards Ltd (EVL) and McNeill Drilling Company Ltd (McNeill) began in 2016 when EVL contracted McNeill to bore for water on its property at Blackman Rd, Earnscleugh.

McNeill claimed $8996.64 for an unpaid portion of its invoiced costs of $25,696.64.

EVL counterclaimed $201,375.69 for payments it had made in connection to the disputed bore and damages for claimed orchard production loss.

Court documents detail a back-and-forth dispute between the parties.

In 2009 Hayden Johnston, of EVL, spoke with Graeme Stewart, of McNeill, about irrigation and the latter advised Johnston the flat area of the property was an area McNeill had not had success with for irrigation bores.

Stewart discussed options with Johnston and had the property divined.

In March 2016, McNeill provided a quote for drilling and said the estimated depth of the selected location was 70m.

Johnston emailed McNeill agreeing to the work about a month later.

However, McNeill exceeded that depth and drilled to 88.7m and sent EVL an invoice for $25,696.64.

Johnston then emailed McNeill and said he was unhappy about being charged for 88.7m.

In December 2016, McNeill filed a claim for the unpaid drilling costs and EVL paid $10,700.

In March 2017, EVL fired back denying liability and claimed McNeill was in breach of its agreement, the site was unsuitable, the drilled water bore provided insufficient water, and McNeill had charged EVL for drilling in excess of 70m when EVL had not instructed it to do so.

In October 2017, after a judicial settlement conference in the Dunedin District Court, EVL paid another $6000.

The district court referred the matter to the disputes tribunal in Invercargill.

No resolution was reached.

In August 2018, EVL filed a counterclaim in the district court.

EVL alleged if McNeill had drilled into the Earnscleugh Terrace Aquifer, it could have obtained sufficient water to irrigate the property and provide water for household use, but McNeill advised EVL against drilling in that area and failed to disclose the existence of the aquifer.

The counterclaim also alleged that by McNeill drilling on the hill rather than the flat area, EVL obtained a water supply that was insufficient for its requirements and McNeill obtained a five-fold increase in revenue because of the increased depth of drilling required.

In short, EVL alleged McNeill had engaged in conduct that was misleading or deceptive.

The proceedings went to a hearing in the District Court on October 10, 2019.

District Court judge Tony Christiansen gave judgement for McNeill on both the claim and the counterclaim in November last year.

EVL appealed that judgement, resulting in the case being referred to High Court jurisdiction for what was essentially a lengthy rehearing of the entire case.

In the High Court at Dunedin last month, Justice Gerald Nation dismissed EVL's appeal against the district court ruling and gave McNeill until October 28 to seek costs.

EVL has until November 11 to reply.