Lance owns a chicken farm. He allows chicken effluent to accumulate in his paddock and waits for it to dry out so that it can be removed. Rain recently washed much of this effluent into a stream which runs through his paddock.Susan owns a market garden next to Lance’s farm, and she uses water from the stream to irrigate her vegetables. Recently Susan had to destroy an entire field of carrots worth $10,000 as it had become contaminated by listeria.Due to having to destroy the field of carrots, Susan is unable to fulfil a contractual obligation to supply carrots to Big Supermarket. Under the terms of her contract with Big Supermarket Susan is required to pay them a penalty payment of $2,000.00Susan believes the listeria contamination was caused by Lance allowing chicken effluent to enter the stream. She says that he has been negligent and should pay her the $10,000 replacement value of the carrots. She also wants him to reimburse her for the $2,000 penalty payment she now owes to Big Supermarket. Lance says that he will not pay her a cent as he thinks the listeria contamination was caused by Susan using improperly composted manure as fertilizer. He believes that Susan does not take sufficient care in maintaining the composting manure at the temperature necessary to reduce pathogens, such as listeria.Required:Identify the key issues, explain the relevant law in New Zealand, apply it to the facts and advise Susan whether Lance could be required to pay her the $10,000 replacement value of the carrots and the $2000 penalty payment.
Lance owns a chicken farm. He allows chicken effluent to accumulate in his paddock and waits for it to dry out so that it can be removed. Rain recently washed much of this effluent into a stream which runs through his paddock.
Susan owns a market garden next to Lance’s farm, and she uses water from the stream to irrigate her vegetables. Recently Susan had to destroy an entire field of carrots worth $10,000 as it had become contaminated by listeria.
Due to having to destroy the field of carrots, Susan is unable to fulfil a contractual obligation to supply carrots to Big Supermarket. Under the terms of her contract with Big Supermarket Susan is required to pay them a penalty payment of $2,000.00
Susan believes the listeria contamination was caused by Lance allowing chicken effluent to enter the stream. She says that he has been negligent and should pay her the $10,000 replacement value of the carrots. She also wants him to reimburse her for the $2,000 penalty payment she now owes to Big Supermarket. Lance says that he will not pay her a cent as he thinks the listeria contamination was caused by Susan using improperly composted manure as fertilizer. He believes that Susan does not take sufficient care in maintaining the composting manure at the temperature necessary to reduce pathogens, such as listeria.
Required:
Identify the key issues, explain the relevant law in New Zealand, apply it to the facts and advise Susan whether Lance could be required to pay her the $10,000 replacement value of the carrots and the $2000 penalty payment.
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