Seven years after the spectacular multimillion-dollar
collapse of the controversial Big Sky dairy farm project in
the Maniototo, farm founder and former shareholder Ewan Carr
is still seeking redress through the courts.
In the latest round of litigation, Mr Carr and his former
legal firm Gallaway Cook Allan, of Dunedin, were recently
before the Supreme Court, with the result that Mr Carr could
be back off to the High Court.
Mr Carr alleged the law firm was ''liable for damages for
professional negligence in relation to a failed commercial
His purchase of farm and hotel assetsfailed after the
settlement deadline was missed.
Mr Carr could not be contacted for comment.
Farm founder Mr Carr and Auckland-based Rodney Humphries
one-third and two-thirds shares in five companies in the
wider Big Sky group, but fell out when the project was placed
in receivership and disputes arose over asset claims.
Multiple hearings and appeals on complex matters in a variety
of courts followed, with the relationship between Mr Carr and
Mr Humphries labelled in various courts as acrimonious, and
The latest judgement, released last week by the Supreme
Court, follows a hearing in Wellington on November 28.
The latest litigation stems from Mr Carr and his Brookside
Farm Trust Ltd.
The Supreme Court background notes said he wanted to purchase
''farming [Big Sky] and hotel [Danseys Pass] assets'' from Mr
Humphries, by 4pm on May 31, 2007.
Mr Carr was unable to complete the deal in the stipulated
time and Mr Humphries terminated the contract, a move upheld
by the courts.
Mr Carr then contended Gallaway Cook Allan was ''negligent in
handling settlement'' of the transaction, causing a delay
that ''ultimately enabled Humphries to cancel the
Mr Carr and Gallaway Cook Allan agreed to arbitration, which
dismissed Mr Carr's claim, and he sought to challenge that
finding in the High Court.
The arbitration agreement included a clause allowing either
party to appeal the result on ''questions of law and fact'',
while the Arbitration Act provides for appeals only on points
The effect of the inclusion of this clause was the subject of
the Supreme Court's November hearing. It ruled
that the clause made the arbitration process void, which
meant Mr Carr could start proceedings all over again in the
The Supreme Court also ordered that Gallaway Cook Allan pay
$25,000 court costs, and yet-to-be-determined disbursements.
Mr Carr's and Mr Humphries' legal battles have continued for
several years about asset ownership relating to Big Sky.
In earlier litigation, in May 2009, Justice Dobson said of
''particular concern'' were ''substantial advances'' and
accrued interest by Mr Humphries of $9 million, advanced
through his company Edgeware Motel Ltd to the Big Sky Group.
The receivers had deemed the $9 million a valid security and
Mr Humphries a secured creditor, but this was disputed by Mr
Carr, who at the time, claimed the $9 million should be
treated as an unsecured debt.
In March 2010 bankruptcy proceedings were brought against Mr
Humphries by Mr Carr over claims of a $238,000 debt, which
was settled on confidential terms in the High Court at
The Patearoa farm was proposed in early 2001 as a ''super
farm'' to run up to about 6000 cows on 1600ha using
supplementary feed, a proposal which attracted widespread
criticism at the time. Until its receivership and subsequent
sale, Big Sky was running up to 3300 cows on about 1300ha.
The New Zealand subsidiary of the multibillion-dollar Harvard
University endowment fund purchased Big Sky from receivership
in October 2010 for about $32 million.
It had since expanded the herd and farms about fivefold to
6318 cows, turning around a $1.1 million loss in 2010 to a
$4.87 million after-tax profit for the year to June 2011.
Big Sky beginnings
• The Big Sky dairy syndicate formed in 2001,
including Dunedin businessman Howard Paterson, who died in
July 2003; Auckland-based Rodney Humphries; and 1992 farm
founder Ewan Carr. The pair later became bitterly
• Big Sky failed to sell for $20 million and when
placed in receivership in March 2007 it owed about $30
million, which included about $17 million to the BNZ.
• Purchased in 2010 out of receivership for $32
million by the multibillion-dollar Harvard University
endowment fund, Big Sky and additional Maniototo farms now
milk more than 6000 cows.