BB Harvesting Pty Ltd v Bogan Farms Pty Ltd
[2024] VCC 972
•2 July 2024
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-22-01918
| BB Harvesting Pty Ltd (ACN 146 924 772) | Plaintiff |
| v | |
| Bogan Farms Pty Ltd (ACN 138 078 921) | Defendant |
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JUDGE: | HIS HONOUR JUDGE MACNAMARA | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 27-31 May 2024, 7 and 20 June 2024 | |
DATE OF JUDGMENT: | 2 July 2024 | |
CASE MAY BE CITED AS: | BB Harvesting Pty Ltd v Bogan Farms Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2024] VCC 972 | |
REASONS FOR JUDGMENT
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Subject:CONTRACT
Catchwords: Contract for harvesting services – Alleged oral variation to charging regime – Whether oral variations may be made to written contract providing all variations to be in writing and signed by the parties – Rain interrupted harvest – Harvesting contractors departing without completing harvest – Whether departure made with authority and consent of farming principal – Claim for recovery of amounts under unpaid invoices calculated by reference to revised charging regime – Alleged misleading or deceptive conduct leading farming principal to consent to variation – Harvesting company alleged to be estopped from relying upon validity of oral variation – Counterclaim for loss of crop – Whether quantum of counterclaim properly proven – Whether liability excluded as “indirect” or “consequential” loss – Counterclaim based on misleading or deceptive conduct unsuccessful – Balance of counterclaim established as to 65 per cent; judgment accordingly – Judgment for unpaid amounts under invoices
Legislation Cited: Penalty Interest Rates Act 1983; Evidence Act 2008
Cases Cited:GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 128 FCR 1; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; Keys Consulting Pty Ltd v CAT Enterprises Pty Ltd [2019] VSCA 136; Briginshaw v Briginshaw (1938) 60 CLR 336; Environmental Systems Pty Ltd v Peerless Holdings Pty Ltd (2008) 19 VR 358; Patersons Securities Ltd v Financial Ombudsman Service Ltd (2015) 108 ACSR 483; Macmahon Mining Services Pty Ltd v Cobar Management Pty Ltd [2014] NSWSC 731
Judgment: 1. Within 14 days the parties must bring in short minutes to give effect to these reasons.
2.Costs reserved.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr. G. Lubofsky | Terrill and Holmes Lawyers |
| For the Defendant | Mr. J. Castelan | Colin Biggers and Paisley |
HIS HONOUR:
Background
1The Burke family was reared on a rural property in Donald, central Victoria, which is approximately 270 kilometres west of Melbourne in the direction of Mildura. In 2010, the family established the company BB Harvesting Pty Ltd, the plaintiff in this proceeding (“BBH”). The directors of the company are Mr Leigh Burke and his brother, James.
2The company’s business was contract harvesting. It commenced with a single combine harvester or “header” operating in the area around Donald. According to Mr Leigh Burke, the enterprise was “pretty successful”. The company acquired additional headers and expanded its operations north into New South Wales. The company now operates 17 headers and has five permanent employees throughout the year, putting on additional labour at harvest time, being September to January. They harvest a variety of crops including wheat, barley, canola, lentils, chickpeas and field peas. It operates principally or solely with John Deere headers with the use of an “app” entitled “MyJohnDeere”.
3When a grain farmer uploads maps of his fields into the app the system can be used to guide harvesting operations and make precise measurements, making arrangements to avoid trees and other obstacles. The mapping process requires farmers to drive around the perimeters of their paddocks in vehicles equipped with GPS. (Transcript (“T”) 40, Lines (“L”) 21 – T42, L28)
4If the mapping process is not properly undertaken, according to Mr Leigh Burke, “it disrupts your machines – your John Deere autosteer, that it won’t work if the mapping’s not correct because it thinks you’re inside the field when you’re not”. (T62, L31 – T63, L3)
5Mr Bootle is the managing director of the defendant, Bogan Farms Pty Ltd (“Bogan”). He said he is the seventh generation of his family farming in the area Nyngan in Central West New South Wales. The company “leases farms from [Mr Bootle] and various farming companies, owned by [Mr Bootle’s] family”. It grows the winter crop on approximately 8,000 hectares dependent on the season, and runs 2,000 cows – predominantly Herefords. (T358) The company derives its name from the Bogan River which runs through the area where its properties are located. (T4, L20-24)
6Mr Bootle is also qualified as and practises as a solicitor, spending 80 per cent of his time on farming and 20 per cent in legal practice. (T356, L30 – T357, L3)
7Mr Bootle resides in Claremont Cottage, about 3 kilometres south-west of Nyngan, with his husband, Mr Ian Perkins. (T359, L30 – T360, L4) Mr Perkins is also a solicitor by profession. (T630, L27) Mr Perkins is a director of the company but he says he has “no day-to-day operations in relation to the farm. I’m more involved in … business or financial decision making”. (T631, L14-17)
8In May or June 2020, Mr Bootle placed an advertisement in The Weekly Times and The Land and “on a few Facebook sites looking for a harvest contractor”. (T364, L9-12)
9Mr Leigh Burke telephoned Mr Bootle in mid-2020 and they “had a broad discussion about the job and the size”. (Ibid, L14-16)
10According to Mr Bootle:
“my recollection is that he [Mr Leigh Burke] perhaps came out and had a look at the job … And … then he said that he was interested and … he said it was important to them to … get a contract and … I think we first saw a contract that he sent through.” (Ibid, L20-26)
11Mr Bootle and Mr Perkins signed a document styled “Supply of Services Agreement” between Bogan and BBH. (Court (“CB”) 458-472) Mr Leigh Burke’s wife is also a legal practitioner and she prepared the various drafts of the agreement which was ultimately executed. The agreement may have gone through as many as four drafts. (T135, L29 – T136, L4)
12Whilst Mrs Leigh Burke provided the drafting service, the negotiation was done by her husband, though she was apparently with him whilst he and Mr Bootle “had a few hook-up phone calls”. (T136, L7-14)
13The “services” provided for in the agreement were “for harvesting and related services provided by the Supplier [BBH] … as set out in more detail in the Specifications”. The “Specifications” were set out in Schedule 2 as follows “Harvesting of crops at the Company’s locations, at the times and within the scope agreed by the parties under a Request for Services …” (CB 470) and “Any other services agreed by the parties under a Request for Services (agreed in accordance of this Agreement) [sic]”. (Ibid)
14Schedule 3 provided the rates chargeable: (CB 471)
Description
Rate (excl. GST)*
Cereals (harvested to the stubble height required to harvest grain)
Taking in any more straw than is necessary to harvest the grain may be charged at rotor hour rate (see below)
● Yields <2.5t/ha: charged at rotor hour rate
● Yields equal to or greater than 2.5t/ha $43.00/harvested ha + $11/t above 2.5t/ha
● Yields 4t and over charged at rotor hour rate (see Below)
Canola (harvested to a reasonably practical stubble height agreed with company’s/owner’s representative)
● Yields <2t/ha:
● Direct head: $65/harvested ha
● Windrowed: $60/harvested ha
● Yields greater than <2t/ha: Charged at Rotor hour rate (see below)
Lentils, harvesting
● Flex mode: $80/harvested ha
All pea and bean varieties, harvesting (ridged mode)
● $65/harvested ha
● Flex mode: $75/harvested ha
Chaser bins
● $160/engine hour
Other (harvester hourly rate)
● $600 per Rotor hour for S680
● $550 per Rotor hour for 9770sts
15The Schedule included a set of Haulage Rates on a sliding scale beginning at $13/Tonne for distances up to 20 kilometres and rising to $31/Tonne for distances 191 kilometres to 200 kilometres. For haulage above 200 kilometres, charges were to be made “at a set rate per loaded km” in a single truck of 27 tonne “$4.50/loaded km for a B double (45 Tonne) - $5.50/loaded km”. (CB 472)
16Referring to the “MyJohnDeere” app processes, Mr Leigh Burke said that BBH was provided with “rough maps” but “Nothing … compatible with the John Deere system”. (T70, L25, 29-31)
17However, he said “the app” could make its own map:
“So you make your own mapping, then. And then you have the coordinates, so you – it gives the next header that you follow – so, same coordinates: put this one in at 12 metres, then. And so you’re not doing overcutting or undercutting; you're just doing it precisely.” (T71, L15-20)
18The Court Book (“CB”) has an Annexure to the expert report of agronomist, Mr Tony Hartley, a set of “header yield monitor data” for the 2021 harvest year, (CB 115-172) which illustrates what Mr Leigh Burke was referring to. (T71, L21-22)
19In January 2021, the charges to be made by BBH for the 2020 harvest were under consideration and discussion. Mr Josh Potter is BBH’s manager. (T72, L13‑15) On 4 January 2021, he emailed Mr Leigh Burke, stating inter alia “I am trying to currently work out all the data so that it can be billed out accordingly. However we are running into a few issues that we need to clarify.” He raised issues as to haulage rates and also said “how we are going to bill out for the following paddocks – what process do you want to do for this?” There followed a list of paddocks. (CB 491) The problem, according to Mr Leigh Burke was as follows:
“It was really hard because their mapping and our mapping weren’t correct. They had it initially in acres so then you had to convert it to hectares as well and there was just a lot of … just differentials of how many hectares. We’ve said we’ve harvested and how many hectares they’re saying that they have in the paddock and so.” (T72, L31-T73, L7)
A long list of disparities or anomalies, 15 in number, appeared in Mr Potter’s email. (CB 491‑492) This led to exchanges of emails between BBH and Ms Janet Hamblin, an administrator with Bogan. (T74, L6‑12) Further exchanges of emails between Mr Leigh Burke and Mr Bootle appear at CB 479‑484 where the parties exchanged tables and spreadsheets. At 8.16pm on 14 January 2021, Mr Leigh Burke referred to a telephone conversation he had had with Mr Bootle stating “I’ve gone through our invoice trying to work out the fairest way for both of us over a 3 year term, I would think it’s fairest if we proposed a fixed rotor hour rate.” (CB 481) The harvest rates in Schedule 3 of the Agreement executed the previous September provided for charging basically on a per hectare basis, providing for charges per rotor hour only in limited circumstances. The term “rotor” means an hour of actual operation of the header, presumably excluding down time. Mr Leigh Burke said:
“… most companies want to do it [that is, charge on a per rotor hour] that way because they’ve got track of the hours of the machines so they can log onto our MyJohnDeere operations and can see the hours and everything you’re doing at the times as well. It’s basically for simplicity but the rule of thumb is that it’s probably somewhere in between what it can be, so the – on a lean year you could be doing $900 a road [viz rotor] hour by doing 17 or 18 hectares an hours [sic]. So it just makes it fairer.” (T76, L17‑25)
The “fairness” advocated by Mr Leigh Burke, as I understand it, is that in a “lean” year, a paddock could be completed in a relatively brief number of rotor hours because the going is light. In a “good” year, harvesting would be slower and more rotor hours would be used. Charging on a per hectare basis would levy the same charges in a lean year as in a good year, whereas charging on a “rotor hour” basis would levy the heavy charges in good years and lower charges in lean years; hence, the contention that it would be fairest over a three-year cycle.
20Mr Bootle preferred charging per hectare. He said whatever might be the case in Victoria or in other regions where he said grain farming was “dominated by big corporates. ... In central west New South Wales we’re farmers and you know, every dollar counts and the method that we work here is on a per hectare basis.” (T369, L3‑6) He referred to his “insistence that we had, you know, a fixed hectare rate at least as the primary basis for costing over time.” (Ibid, L10‑12) Where charging was made on a per hectare basis, he said “as a farmer I know my ultimate cost each year.” (Ibid, L22‑23) He agreed this debate on costing was, to some degree, analogous with debates on legal costing as between item remuneration and pure time costing. (Ibid, L14‑19)
21There was no blanket change to a per rotor hour rate of charging for the 2020 harvest. (T372, L6‑8) Bogan created a document styled “Crop Summary – Gargaloo – Winter 2020” (CB 476), which identified the various paddocks involved and set out the number of acres and hectares compromised in them, together with the tonnes delivered. This document, created by Bogan, was annotated with recalculations by Mr Leigh Burke. The original typescript table was prepared by Ms Janet Hamblin, whom Mr Bootle described as “my partner’s PA”, and Mr Bootle. (T371, L14‑19) The costing regime under the September 2020 agreement distinguished between paddocks where the yield of wheat was above or below 2.5 tonnes per hectare. (T372, L15‑22) In applying this benchmark, Mr Bootle conceded that the yield was to be calculated on a per paddock basis, not on an average across the entire harvest. (T373, L8‑17) This process led to a tax invoice dated 2 March 2021, which finalised this year relative to the 2020 harvest. Mr Castelan (Bogan’s counsel) commented “and it works out at about 45,000 less than the 474 that I took your Honour to on that previous page.” That is, the annotated typescript. (T 374, L2‑4) Mr Bootle said of this final invoice “I would have paid it instantly, it would be within a day or so.” (Ibid, L6‑7) He noted that the invoice provided for some $300,000 plus goods and services tax, which had already been paid by way of progress payments. (Ibid, L8‑11) Mr Bootle said this conclusion was reached following “a fair bit of argy bargy over where um, for instance, they had charged all the canola at a rotor hour basis, um, and, you know, eventually after some discussion he acknowledged that, that most of it on the contract was per hectare and so there was a price reduction for that. You can see there is various other price reductions from his initial claim. But we got there.” (Ibid, L13‑20) He said Bogan first ensured that all grain had been delivered “and then the rest of the delay was me haggling with Leigh, effectively.” (Ibid, L24‑30)
22Mr Bootle disagreed with the view expressed by Mr Leigh Burke that the “argy bargy” had resulted from insufficient surveying or mapping of the paddocks by Bogan and an inability for Bogan’s mapping and data to interface with the MyJohnDeere app. (T375, L22‑27) Mr Bootle said that his brother, in earlier years, had gone around with a GPS and measured all of Bogan’s paddocks and those measurements had been used by harvesters for years. (Ibid, L29‑31)
23In the run-up to the 2021 harvest, Mr Leigh Burke emailed Mr Bootle a copy of a three-year contract which BBH had entered into “with a corporate farm near Boort [Victoria].” This provided for charging on a rotor hour basis. Mr Leigh Burke said “to make things easier I would prefer to agree on a rotor hour charge. F--- Hectares my head is still sore from last season.” (CB 507‑9) Mr Bootle was unpersuaded. His recollection was that he knocked this proposal back in a telephone conversation. (T377, L20‑26) Mr Bootle’s view was that, by insisting on charging per hectare in 2020, he had saved $45,000. (T378, L1‑5)
24On 5 September 2021, Mr Leigh Burke, his brother, James, and one of BBH’s employees, Mr James Launer, travelled to Nyngan bringing a harvester loaded on one truck with another vehicle “towing the comb” and the pilot vehicle. (T92, L3‑8) Apart from delivering the header, the group made the trip “to have a look around at what the crops are looking like, get a bit of … working out of how we’re going to go about this harvest, any things that they might think of that we need, you know, to be better and more efficient the following season.” Fundamentally, this was a planning trip or, in military language, a reconnoitre. (T92, L9‑18) According to Mr Leigh Burke “we had a good drive around, had a few beers, had a great afternoon, um, Richard’s partner cooked us dinner, and then we just … stayed the night, had a lot of drinks later on, and just enjoyed [the] company. We also, earlier on, we touched on obviously the rota [scil rotor] hour charge and agreed upon that.” (T93, L10‑16)
25During the visit, according to Mr Leigh Burke, he presented Mr Bootle with a revised fee schedule which provided for charges to be levied for the 2021 harvest solely by reference to rotor hours. Mr Leigh Burke said “I showed him a piece of paper that had what we were offering to do with the amount – like the rota [scil rotor] hours charges.” (T93, L18‑20) According to Mr Leigh Burke “it was agreed upon the rota [scil rotor] hours. The only thing in question at that time was the chaser bins.” (T94, L8‑10) The “chaser bins” followed the headers for the purpose of unloading the grain when the headers were full. According to Mr Leigh Burke, Mr Bootle said “I’m not agreeing to the chaser bins.” (Ibid, L15‑16) Mr Burke added “he was thinking possibly of getting his own because he’s got tractors and whatever else.” (Ibid. L20-22) Mr James Burke gave a similar account, saying “Josh [Potter] had printed off a … sheet of paper … which was … given to … Mr Bootle … as the proposal for that harvest.” (T265, L7‑10) Mr James Burke said Mr Bootle “agreed to the rotor hour of the harvester and he at that time was discussing on buying his own chaser bin or running his own chaser bin and hadn’t decided on whether he required our chaser bin, and … it was left that he was … going to make that decision.” (Ibid, L12‑17) Mr Bootle’s account of these events was as follows – “at dinner, or just before dinner … I think … Leigh pulled out a piece of paper and said … ‘have a look at this, cob’”, and he (Mr Bootle) replied “not a chance … Put it away. Let’s have … a few drinks and dinner today. … I’m not signing that.” (T379, L22‑25 - T380, L7‑10) Whether Mr Bootle agreed or not, the document which provided for costing entirely by reference to rotor hours remained unsigned. (CB 914‑15) I asked Mr Bootle if the upshot was that he “dismissed this proposal summarily” and he agreed. (T380, L17‑18) He denied that the document remained unsigned solely because of some issue relative to chaser bins. (Ibid, L23‑26) The third member of the BBH party, Mr Launer, who might be described as its foreman, said of these events “so it was late and we stayed there and … Richard and Leigh spoke about … rates and stuff like that, but that’s none of my business, so I tuned out of that.” He said he took no part in the discussion. (T346, L21‑27) Mr Perkins, who, it will be recalled, cooked dinner for the party, remembered a discussion “about the upcoming harvest” or supposed about rates for the harvest as follows – “I think maybe Leigh tried to bring it up during the dinner but I think we ended up deciding just to have a pleasant dinner, so it was more just a friendly kind of dinner between sort of country people who were going to work together.” (T632, L1‑7) Asked for further detail, Mr Perkins said “I think he [Mr Leigh Burke] raised the terms of like the schedule to the agreement which was going to apply to that particular year.” Mr Perkins said Mr Bootle’s reply was “just not wanting to discuss it”, stating “come on guys, we’re just going to have a nice dinner.” He said that this was “a relationship building dinner, not a business negotiation dinner.” (Ibid, L9‑20)
26The following day, there was an exchange of texts. According to Mr Bootle, he was exchanging texts with Mr Leigh Burke. (CB 514) One of Mr Bootle’s texts stated “let’s talk later in the week about how we sought the numbers. Thanks for coming over.” Mr Bootle said that the numbers he was speaking of were “the rotor hours numbers.” (T381, L13‑17) The upshot, according to Mr Bootle, was that he was not ruling out discussion as to charging by rotor hours. Rather, he rebuffed an attempt to raise the subject during dinner. (T382, L10‑12) A further text from Mr Leigh Burke said “hey mate, can we get these numbers sorted out today. I’m in the office with Potsy [viz Mr Josh Potter] today.” (CB 515) This was on 14 September 2021. (T383, L3) Mr Leigh Burke had sent an earlier text the same day, stating “the longer you leave it the prices go up.” (CB 515) Mr Bootle said that he had a telephone conversation with Mr Leigh Burke on 13 September where Mr Burke said “mate, we’ve got … to get these numbers sorted” and he (Mr Bootle) replied “I’m happy with where they are”, to which Mr Burke responded “oh, you know, it’s got to change. Last year it was such a hassle, um, I can’t do that again … I want to go to contract rotor hours. I want to go to rotor hours.” (T384, L18‑23) Mr Bootle said the discussion continued with Mr Burke stating “I tell you undertake to you that they will be the same as they were at last year or as good or better than … the contract rates effectively, the rates from last year or what you paid last year.” (T385, L‑4) Mr Bootle said he replied “on the basis that they are better or the same as last year, then I agree.” (Ibid, L6‑7) Mr Bootle added “I think that [Mr Burke] reduced one of the rates down from … 600 to 575 or something … per rotor hour.” (T385, L12‑15) He said on his recollection this rate applied to the “main type of harvester”, viz the John Deere 680. (Ibid, 16‑18) Mr Bootle said he thought that there were specific rates agreed for the different types of machines. (T386, L10‑12) Whether there were any further rate adjustments beyond the reduction from $600 per rotor hour for one type of header, he could not recall. (T386, L16‑20) On 15 September, Mr Potter sent a text to Mr Bootle inquiring about totals for harvest. He also inquired “when you think the canola and oats are going to be ready?” He concluded “I’ll be getting the John Deere app organised asap too will sort that out.” (CB 518) The next step was to “upload” map material to the John Deere app. Mr Bootle denied that the mapping information that he uploaded was incompatible. He said he rang “my agronomist”. He agreed that there were “problems with some margins”, that he felt “that a header driver could probably just drive – steer themselves for maybe one or two runs on that. I didn’t appreciate the significance of that.” (T587, L23‑26 - T588, L5‑21) Responding to the text query as to total, Mr Bootle sends an email to Mr Potter on 28 September 2013 headed “3103 ha canola/monola Claremont Komoora” (CB 523) followed by a series of what were described as “maps”, which appeared to me more accurately to be described as aerial photographs highlighting in yellow the paddocks to be harvested. He said these SIX Maps were derived from “New South Wales mapping” (T388, L30‑31) The 31.03 square hectare was a measurement made, according to Mr Bootle, by New South Wales Department of Land software. (T389, L17‑23) There were further similar emails and attached maps at CB 528 for wheat at the properties at Claremont and Rutherglen and at CB 531 for canola. (T389, L28 ‑ T390, L9) And so the material continued covering other parts of the farm area for harvest. On 29 September, Mr Potter continued pressing for “that John Deere stuff”. (CB 541) On 5 October, Mr Potter sought an update on the “windrowing”. That is a process where a different contract machine cuts the canola and puts it into rows ready for final harvest. (T391, L10‑13) On 15 October, Mr Potter inquired about rain last night and received a response “2mm more last night”. As to the various follow-ups, Mr Bootle said “I would’ve called him after each of these and had a discussion.” (T392, L19‑21)
27There were further text exchanges on 12 and 13 October 2021 (CB 778), the purpose of which, according to Mr Bootle, was “we’re looking at when … the headers should arrive. So we’ve done the windrowing … and normally it would be seven to 10 days from windrowing … but because of some rain that was going to delay the ripening process.” (T393, L21‑25) Mr Bootle said that the operation started with three headers harvesting canola from the windrows. He said he “directed that we follow … predominantly the way that the windrower had gone because that makes sense that, … he’d cut it that way.” (T394, L3‑12) The harvesters would harvest in the same order in which the crop would windrow. (Ibid, L23‑26)
28BBH sent a tax invoice for $110,000 dated 29 October 2021. This amount included goods and services tax of $10,000. The balance was described as “Deposit – balance to be worked out at a later date.” (CB 540) Mr Bootle said he received a “phone call from Leigh … saying again they were short of cash, and could I stump them up some money.” (T395, L1‑2) A transaction report by way of receipt shows that this invoice was paid by Bogan on 29 October 2021. (CB 746)
29As events moved into November, Mr Bootle said “things were pretty tough. The canola finished, and the wheat … and barley … was ripe but we kept getting showers.” (T395, L22‑24) Mr Bootle explained that if the moisture content of wheat exceeds 12.5 per cent, the receival sites would not accept it “because it would mould.” (T396, L7‑12) He said the harvest proceeded until 19 November. (Ibid, L15-16) At that time he said “there was a forecast for a fairly significant rain event coming, and when I mean fairly significant, sort of 70 to 80 mils, something like that.” (Ibid, L18‑20) Mr Bootle said he was “stressed about it.” He talked to Mr Leigh Burke when some headers which were due to join the harvest from Queensland failed to materialise. Mr Bootle kept asking Mr Leigh Burke “mate, where are the headers.” (Ibid, L21‑26) By 19 November, there were six headers in situ and operation. (Ibid, L27‑30) The problem was, as Mr Bootle saw it, the last three of the six arrived late. (T397, L2‑3) In the old scale, Mr Bootle said the rain threatening was “more than 3 inches.” (Ibid, L10‑11) He said his plan was “to help as much as we could to maximise the amount that they [BBH] harvested. … I bought a grain bagger to make sure – because by the time – I think a seventh header arrived at one point, is my recollection, but by the time they were at capacity, then I may not be able to keep the grain away. So I bought a new grain bagger to make sure … that we could keep the grain away … I asked them to cut higher … you know, because that would speed them up so we could get more done … or praying was all that we could do at that point.” (T397, L15‑25) Seventeen hour days were worked. (Ibid, L26-27)
30On 20 November Mr Bootle said that he had moved harvest operations “from Bonaire back to Claremont because the rain system looked like it would … go north of us. … we pushed … the headers fairly far south … That actually worked for a couple of hours. So we got a few more hours done in the late afternoon, but then … we caught the edge of that next storm and … the rains came, and we’d arranged with Leigh in advance of that … to try and get the headers out of the paddocks and into a relatively dryer [sic], safer area near where we had Richmond Roads.” This was a set of cattle yards. He said he moved the headers “all from that area and … I and my men assisted getting things there and headers for a few hours.” (T398, L16‑31)
31Mr Bootle said the headers were now safe from flooding for three weeks because the Bogan River was a very flat river. (T399, L1‑8) This move took place on the night of 20 November 2021 and included all six headers. (Ibid, L19‑23) After this, according to Mr Bootle, “we had a bit of a get together that night.”
32Mr Leigh Burke said that whilst he forgot the date, the harvesting finished on a Saturday. (T180, L1‑4) He said three headers were to remain at Nyngan and three were to be taken away for other work “as at 19 November”. Ordinarily, headers stay at the property until the job is finished. (Ibid, L14-20) As to the get-together described by Mr Bootle, Mr Leigh Burke said “so at the end of each job we ever have, we have what we call a cutout party, … the client puts on a party, beers, pizzas, whatever, as a bit of a shindig,… a few beers and see youse later, see you next year … this took place.” (T119, L15) Mr Burke said “so the rain came in. It was a storm, basically, came in, and it got heavier and heavier and heavier. As the night went on, Richard [Bootle] said, ‘this isn’t a cutout party. This is a wake” in terms saying that there’s nothing going to be left after this.” (T120, L15‑19) Mr Leigh Burke said that Mr Bootle “mentioned that there was going to be nothing left to do here, and you guys can take your machines and go.” (T121, L3-5) Mr Leigh Burke said that he “agreed to it. It was … raining heavily, looking like they’re on the Bogan River which I was actually worried at the time that it could flood, and we have machines stuck there for a period of time. It was ... pretty worrying times.” He said there was no discussion about BBH returning. (T121, L6‑11)
33Mr Bootle gave a different account. He said that he had a discussion with Mr Leigh Burke “about … the forecast … Leigh said ‘you know, what do you think’ I said ‘well, the forecast is pretty clear and we are going to get something like 80 millilitres, a big chunk tonight and then a bit more in seven-days time.’… and he said ‘you know, so it’s pretty grim’, and I said ‘yeah for a, it’s just, that’s how it is, … I think we’re going to be wet for a bit’ He then said … ‘can I take some headers then? … and he said you know, ‘can I three, three to Griffith?’” (T400, L4‑13) Mr Bootle said he understood the three headers under discussion were the three which were intended to stay “on my farm”. He said he thought about it and since he was not going to be able to use the headers for 10 days, said “you take some headers as long as we got … as long as we’ve got four headers back here in 10-days’ time.” According to Mr Bootle, Mr Leigh Burke replied “yes, absolutely.” (Ibid, L14‑22) Mr Bootle said, as to the gathering, “I would never have referred to it as a cut-out party.” He said “we were celebrating the fact that we’d got a lot done before the rain, but, … it was pretty clear that the rain that was coming was going to wipe several millions dollars off my crop … yeah, that’s something to be sad about.” (T401, L16‑28)
34Mr Bootle said he was not at the gathering very long, arriving at about 8.30-9.00pm and departing at 10.00-10.30pm. (T402, L1-4) He said that Mr Perkins joined him at one stage. Mr Perkins said he remembered having a discussion with Mr Launer and telling him “oh, mate, I’ll see you when you come back.” (T634, L10‑12) He said Mr Launer replied “sure thing, yes.” (Ibid, L31) He said he spoke to Mr Leigh Burke, telling him “mate, I wouldn’t let you go”, to which Mr Burke replied “oh, come on, cob, don’t be like that”, continuing “you know what, I’ll see you soon.” (T633, L22-24) Mr Perkins said he had “sort of been involved in buying pizzas and burgers and delivering them to the guys, and so I think we dropped off some beer and pizza that night.” (Ibid, L9‑12) Mr Perkins said that when Mr Bootle broached the possibility of releasing BBH to go “to their next farm along where it was dry and to do harvesting before they returned”, he was “a little bit against the idea, I wasn’t comfortable but that’s Richard and he wanted to be fair and do the right thing.” (Ibid, L3‑7) Mr Leigh Burke said there was no discussion about BBH returning in 10 days. He continued “at this stage, we were under the impression that the place was going to flood. They were getting 300 mil of rain.” (T122, L5‑12) He said that had it been suggested that harvesting would resume in 10 days’ time “we would have left three machines there like mentioned.” (Ibid, L13‑15) He said moving headers was very expensive, “it cost us inhouse $10 a kilometre to shift our headers because we have to run two trucks and a pilot vehicle three – three workers.” (Ibid, L17‑19) Therefore, to move and return the header 900 kilometres one way and 900 kilometres the other way, a total of 1,800 kilometres “that’s $18,000 per machine to go there and back.” (Ibid, L22-24)
35Mr Leigh Burke said the following morning he had a conversation with Bogan’s manager, Mr Steve Johnston, asking him “Steve, what are you going to do with all this leftover fuel you’ve got?” He said Mr Johnston replied “I’ll put it through the tractors to plough the rest of this crop back into the fields.” (T204, L1-7) Asked about this, Mr Bootle said “I have no knowledge of him [viz Mr Johnston] saying that, he may well have been joking about that, he certainly doesn’t make those decisions”. (T403, L2-4)
36At this stage there were 2,400 hectares remaining unharvested on Bogan’s properties. Mr Bootle said that assuming the forecasts of a “rain event” were correct, the crop from those hectares:
“would be downgraded, ... the week [scil wheat] would be called ‘shot and sprung’, ... that would reduce the value, I assume there was something like 6,000 tonnes left there, it could easily have done $1.5-$2 million worth of damage but certainly it was still harvestable, there is no question of that, but it would be a loss.” (T402, L8-14)
37Mr Bootle added “I would never have abandoned anything, we always harvest.”
38At about 10.30 that morning, Messrs Bootle and Perkins were leaving Nyngan. Mr Bootle said he had a telephone conversation with Mr James Burke asking him “Where are you? We’re heading to Sydney”, and Mr Burke said he was loading headers down the road. They passed Mr Burke and greeted him. Mr Bootle got out of the car. He said Mr Burke remarked “Thanks very much, mate, for letting us take the headers”. He said he replied “no problem ... just as long as they’re back here in ... ten days. Four headers back here in ten days.” Mr Burke asked, according to Mr Bootle, “What? Did Leigh promise that?”, and then asked “What if you’re not ready in ten days?” Mr Burke said, according to Mr Bootle, “Well, what if we gave you two days’ notice. We can get things back in two days. Um, you know, will that do?” After considering this, Mr Bootle said he replied “okay.” He said “the two days seemed like a reasonable time to get headers back to me”, and Mr Burke agreed. (T403, L28 – T404, L18) Then Mr Bootle said he queried who was to give the two days’ notice, suggesting that it should be Bogan, to which, according to Mr Bootle, Mr Burke replied, “Agreed. We can do it that way.” (T404, L19-25) Mr Bootle and Mr Perkins were heading to Dubbo, apparently to fly to Sydney. (T405)
39Mr James Burke recollected having a conversation with Mr Bootle in the circumstances described. His account of the conversation was as follows:
“it was very brief. He [viz Mr Bootle] pulled up. Said, ‘G’day.’ It was a nearly hollow, ‘Goodbye, I’ve got to go. I’m catching an aeroplane. ... there’s a storm coming.’ ” (T275, L8-10)
40Mr James Burke was in charge of moving the headers. It was only when he woke on 21 December that he came to understand that his task was to remove not three headers but six. (T275, L16-28) Since he had only arranged sufficient trucks to move three headers, the operation required a shuttle by the trucks and some of the headers moving some of the distance on the roads themselves. (T275, L29 – T276, L11)
41Mr Bootle made an Instagram post on 21 November showing a photograph of a paddock called ‘Innisfallen’ on the morning of 20 November. The caption was “Staring down certain defeat”. (CB 575; T405, L22 – T406, L1) The “defeat” was the downgrading of the crop. (T406, L10-12) Instead of being the valuable milling grade, the wheat would be degraded to feed grade – pig food. (Ibid, L17-21)
42On 26 November there was an exchange of texts which, amongst other things, had Mr Bootle enquiring of the Burkes “Will you get Donald done in ten days?” The response was “Well, it won’t be from not trying.” Mr Bootle said “I think I’d had some sort of updating from the Instagram that the headers had gone further south than what I’d imagined, but yeah, that was the first confirmation that they were in Donald.” (T407, L21-24)
43There was a further exchange of texts between Mr Bootle and the Burkes from 30 November to early December. (CB 786-7) On 30 November, Mr Bootle texted “Hey lads. Looks like we will miss the rain today. Or not get much. I’m thinking Friday it will be right for sure. What do we do?” The following day at 7.40 he texted “No rain! Woot! Need 4 headers back here ready for Friday start please.” At 5.08pm on 30 November 2021, Mr Leigh Burke telephoned Mr Bootle. Mr Bootle was unable to take the call, and texted “Can I call you later?” Eventually Mr Bootle telephoned Mr Burke, stating, according to his evidence, “Mate, you know, where are my headers? What’s happening?” (T407, L24-25) Mr Bootle said he continued telling Mr Burke he had promised that the headers would return. Mr Bootle said Mr Leigh Burke responded, “You’d have to be stupid. They’re not coming back. You’d have to be stupid to let me take the headers off your farm before we finished.” (T409, L29 – T410, L1) Mr Leigh Burke gave a similar account of the conversation, having Mr Bootle enquire “Where are the headers? ... When are we going to get them?” Mr Burke said he responded “No”, and Mr Bootle said “That was the basis for our agreement.” (T195, L11-14) As to references to Mr Bootle’s being “an idiot” or “stupid”, according to Mr Burke, when Mr Bootle told him “You need to bring those headers back”, he replied “Mate, you can’t bring them that far”, continuing “You’re an idiot for telling us to leave, to say it’s finished.” (T195, L23‑26) Mr Bootle said he responded “You’re fucking kidding me”, or something like that. (T410, L23‑24)
44Mr Bootle said Mr Burke eventually said “Maybe we can help you out.” (T411, L3) Mr Bootle said Mr Burke told him BBH “might be able to get another header and ... send me up one.” (Ibid, L5-6) Mr Bootle said he was “angry and upset and ... realised I’d been lied to”. (Ibid, L7-8) Mr Bootle said he then made some local calls, asked Mr Johnston if he could find someone, and put an ad out on 2WEB Bourke radio. This station broadcasts in the Bourke area and to the north into southern Queensland. (T411, L24 – T412, L2) Mr Bootle said he saw the situation as very urgent:
“After you get ... a big chunk of rain like that and it stays moist for a period of time, the grains and their heads start shooting, so, as I said, that process of going from starched sugar [sic, scil starch to sugar]. But they also start putting little shoots and some roots out, so ... they expand, and they start just pushing the glumes, which are the things that hold the grain in. They push those open slightly ... so then it dries, it dries, it closes back, and then ... you’ve got a very, very short period of time ... every bit of wind and every consequential rain will knock that grain out and on the ground [meaning a loss of that grain]”.” (T412, L14-30)
45By the afternoon of 1 December, one of Bogan’s neighbours, Mr Robert Pack, texted “I will pack up header in morning n head your way with it.” (CB 787) A Mr Grahame Burrell, known as “Pud”, also turned out with a header from Gilgandra. (T413, L22-26; CB 791, 795)
46On 3 December at 8.30am, Mr Bootle texted Mr Leigh Burke stating “Morning. We got going yesterday and did 5 hours with a mates 2388 (til it broke down). I am attempting to mitigate my losses by putting ads on 2web radio and Facebook. Any news?” (CB 587) The reference was to Mr Robert Pack and his Case 2388 header. Mr Pack described a breakdown “out the front of home” which took a couple of hours to fix. Describing his machinery, he said “She’s an old girl, mate, it’s not like she’s – like a handy old unit but it’s nothing flash, no, by all means. She’s an old girl.” (T622, L2-13) He described what seemed to be further breakdowns which were “just normal”. (Ibid, L21-22) Problems with blocked filters, broken knives, rotary belts, etc. (Ibid, L21-27) Mr Pack said there were other headers operating. He said “I sold one, another old header, an old 1688 to my ... friends, and they end up coming helping as well.” (Ibid, L29-31) These friends and neighbours were Matthew and Luke Selfe. (T623, L1) Mr Pack described this header also as “pretty old, mate, yeah. She’s pretty rough.” (Ibid, L10-11) He described his header and the Selfes’ header as “pretty old and small”. (Ibid, L18) He continued:
“the crops were so thick and we were trying to go so quick, there would have been a fair bit coming out the back but the problem is if you’re like going slow ... we would have been losing the quality of the grain as well, so we were just trying to go quicker and get whatever crop we could get off but you always know when it’s going out the back with them older, older headers, probably put a bit more out the back than the good ones do obviously.” (T623, L21-30)
47The concern was more rain which would further downgrade the crop. According to Mr Pack, “It’s like you just go for bloody 440 to $500 a tonne down to 280.” (T624, L2-8) He said there was another header operator described as “Graham” (presumably Mr Burrell) with his unit known as a “Gleaner”. Mr Pack said “we were all in the same boat, mate, like we were just trying to push it to get the crops off”. (Ibid, L11-14) As to Mr Burrell and his “Gleaner”, Mr Pack said:
“he wasn’t doing a bad job, Graham, yeah, he wasn’t doing a bad job either, mate, but obviously the same thing, because we were going quick, it’s spitting it out. Because if you’re going too fast it’s ... like once the wheat gets in the drum and all that, it’s not processing it enough and spitting more out the back.” (Ibid, L21-27)
48Meanwhile, Mr Leigh Burke said he conferred with his brother James about purchasing a further header, which his brother agreed to. (T125, L29 – T126, L7) This was a new machine, and according to Mr Leigh Burke he “had to pull some strings to actually buy this machine”. He said he was able to make the deal happen because of his good relationship with the dealer. (T126, L10-17) He recollected delivering the header to Nyngan on 4 or 5 December. (T127, L10-12)
49In the result, therefore, Mr Bootle was able to mobilise four headers: three from his neighbours Mr Pack, Mr “Pud” Burrell, and the Selfe brothers, and one from BBH. BBH rendered a tax invoice, dated 12 November 2021 but in fact dispatched on 21 February 2022, seeking payment of $344,627.25 inclusive of goods and services tax of 10 per cent. The bill was calculated solely by reference to rotor hours. (CB 561) Mr Leigh Burke said that in contrast to what had happened in the wake of the 2020 harvest, Mr Bootle never sent BBH particulars of the tonnages per paddock, and he remained ignorant of that information. (T128, L15-20)
50This invoice remained unpaid, but, according to Mr Leigh Burke, no explanation for the non-payment was ever provided by Mr Bootle on behalf of Bogan. (T129, L9-14) Attempts to obtain an explanation by telephone proved unavailing. A series of texts from BBH to Mr Bootle in February and March went unanswered. (CB 598) A letter of demand was dispatched 1 April 2022 seeking payment for that invoice and another for $158,834.50. The letter demanded payment of a total of $503,461.75. (CB 622) There was no response to that letter. (T130, L5) A solicitor’s letter of demand dated 28 April 2022 was to similar effect, but that received no response. (Ibid, L8-11) The other invoice referred to in the letters of demand is at CB 582. It is dated 29 November 2021, but, like the other invoice, was in fact dispatched on 21 February 2022. It sought payment of $158,834.50 inclusive of goods and services tax. Finally, there was an invoice dated 7 November 2022 seeking payment of $1,804.80 inclusive of goods and services tax. This invoice referred to services by way of “chaserbin hire per engine hour for period 8 December 2021 to 16 December 2021”. This was also unpaid. (T130, L24-25)
This proceeding
Statement of claim
51By its amended statement of claim dated 9 September 2022, hereafter referred to as the “statement of claim”, BBH first alleged its own incorporation and the incorporation of Bogan Farms.
52Next, it alleged an agreement by BBH “to provide harvesting and related services to [Bogan] for the 2021/2022 harvest season” which was said to be partly in writing, partly oral, and partly to be implied. The written portion was said to be the Supply of Services Agreement dated 25 September 2020, and email and text messages between the parties. The oral portion was said to be comprised of “conversations between Richard Bootle (on behalf of [Bogan]) and Leigh Burke and/or Josh Potter (on behalf of [BBH]) between January 2021 and the end of September 2021”. The statement of claim alleged a series of terms in the agreement which were said to be partly in writing and partly oral. It also alleged “an implied term of the agreement that if weather conditions were too wet, [BBH] may halt the harvest and/or not complete the services requested by the defendant.”
53The statement of claim alleged provision of “first services” in late September 2021 rendered as a result of requests on behalf of Bogan being “partly in writing and partly oral”. The services were said to extend to 3,016.23 hectares of canola, 116.22 hectares of barley, and 2,224.43 hectares of wheat harvested between 17 October 2021 and 20 November 2021 for a fee of $554,765.75 for services rendered by three header units and a chaser bin calculated by reference to rotor hours.
54It then referred to the invoices described above, and alleged that the amount remained unpaid.
55The Statement of Claim said that the defendant ceased services on 20 November 2021 due to heavy rain, with the cesser being pursuant to an oral agreement made:
“during a conversation between Richard Bootle (on behalf of [Bogan]) and Josh Potter and Leigh Burke (on behalf of [BBH]) on the evening of 20 November 2021 at “cut out party” Richard Bootle described as “not a harvest party but a wake”.” (CB 54)
56Next it was alleged that “second services” were rendered pursuant to an agreement made “on or about 3 December 2021” which was oral, comprised in a telephone conversation between Richard Bootle and Leigh Burke “on about 3 December 2021”.
57According to the statement of claim, a tractor and a chaser bin were provided to Bogan “on 5 December 2021” and an S780 header was provided on 6 December 2021, and between 8 and 16 December 2021 BBH harvested 123.39 hectares of barley/canola mix and 787.07 hectares of wheat for a fee of $58,696 inclusive of goods and services tax, with the charge being calculated by reference to 92.8 rotor hours at a rate of $575 per hour. Invoices inclusive of GST in the sums of $344,627.25 and $158,834.50 were alleged, and remained outstanding despite demands for payment.
58Interest was claimed, either under the terms of the Supply of Services Agreement or under the Penalty Interest Rates Act.
59The statement of claim sought payment of the amounts invoiced, interest, or alternatively “the reasonable amount for the services provided by the plaintiff to the defendant on a quantum meruit basis” together with interest and costs.
Defence and counterclaim
60By its amended defence and counterclaim dated 11 October 2022, hereafter referred to as “the defence and counterclaim”, Bogan admitted the formalities of incorporation.
61It admitted the making of the written Supply of Services Agreement dated 25 September 2020 and requesting the rendering of services. It denied the implied term alleged in the statement of claim to the effect “that if weather conditions were too wet, the plaintiff [BBH] may halt the harvest ...” It alleged a series of further terms to the agreement. As to the “first services”, it alleged that they were not completed. It said the invoices were “not in accordance with the Agreement” as being “issued prior to the completion of the Requested Services” and were calculated on rates not provided for in Schedule 3 of the Agreement.
62Alternatively, it was said that BBH represented to Bogan:
“that a change in the method of calculating the rates of the Requested Services at $575 per rotor hour for S680s and S780, and $550 per rotor hour for 9770 rather than rates per hectare would work out the same or cheaper than the previous year’s harvesting for the defendant on the per hectare rates under the Agreement”.
63This representation was said to have been made in trade and commerce as to a future matter, and hence, by virtue of s4 and 22A of the Australian Consumer Law, BBH was taken not to have had reasonable grounds for making the representation, and therefore it was to be taken to be misleading or deceptive for the purposes of ss18, 21 and 22 of the Australian Consumer Law. It was said:
“The cost of the Canola harvesting that was invoiced at rotor hours was greater than the cost of Canola harvesting at the rates under the Agreement.”
64In reliance on the representation, however, Bogan agreed to change the rates under the Agreement. As a result of Bogan’s reliance on the representation, it was said that it suffered “loss and damage in the increase in the Invoices issued by [BBH]”. Alternatively, it was said that BBH “should be estopped from relying upon the change in rates”.
65Bogan admitted that it had not paid the invoices, but said it was entitled not to pay. If it were found liable “to an award of damages”, then it said it was “entitled to set-off against any such award its entitlement to relief against [BBH] on the grounds alleged in its counterclaim”.
66By its counterclaim Bogan alleged a breach of agreement by BBH in failing to complete the requested services and failing to return to the site with four headers, and failing to “immediately notify [Bogan] that [BBH] was, or anticipated it would be, unable to perform all or part of the Requested Services”. It alleged engagement of three contractors – namely “MZ Partnership” [presumably the Selfe brothers], Mr Pack, and Grahame and Sharon Burrell – to provide harvesting services, incurring costs respectively of $23,886.15, $49,588.00, and $53,350.00 to those contractors. It was said that Bogan suffered loss and damage by incurring the costs of advertising, the costs of replacement headers, and reduced crop yield. It sought damages including damages pursuant to s236 of the Australian Consumer Law, interest pursuant to statute, costs, and other relief.
67In his opening statement, Mr Castelan on behalf of Bogan conceded that there was likely some amount owing to BBH on balance, even after the set-off of whatever was recoverable under the counterclaim. (T59, L9-11) In his closing submissions, paragraph [128], Mr Castelan said that after allowing for Bogan’s counterclaim, BBH was entitled to judgment for $94,220.91.
Conclusions
General
68Both counsel furnished lengthy written closing submissions. The closing submissions of the plaintiff’s counsel, Mr Lubofsky, consisted of some 310 paragraphs extending over 82 A4 pages. Mr Castelan, on behalf of Bogan, furnished written submissions of 48½ A4 pages including 128 paragraphs. Overwhelmingly, the written submissions of both counsel, in particular those of Mr Lubofsky, were constituted by commentaries upon the evidence. Having read and considered the closing submissions in their entirety, it is neither necessary nor appropriate for me to traverse every evidentiary observation or contention. I will explain the basis upon which I reach my conclusions.
Cut-out party?
69Mr Leigh Burke attributed to Mr Bootle the statement “This isn’t a cutout party. This is a wake” ([32] above) as describing the “get-together” on the evening of 20 November 2021. BBH’s case is that this get-together marked the end of the harvest and therefore the end of its obligation to provide harvesting services to Bogan. A “cut-out party” is apparently customary in wheat and other grain-growing agriculture to mark the end of the harvest. No one offered a dictionary definition of “cut-out party”, if there is one. Mr Lubofsky on behalf of BBH referred to a definition of “wake” in the Oxford English Dictionary as follows:
“The watching (esp. by night) of relatives and friends beside the body of a dead person from death to burial, or during a part of that time; the drinking, feasting, and other observances incidental to this.” (Closing submissions [167])
70Mr Bootle denied describing the get-together as a cut-out party.
71Had Bogan laid on a cut-out party, or for that matter a wake, it would represent an acknowledgement on its part and on the part of its principals, Messrs Bootle and Perkins, that the harvest was over and that BBH had completed performance of its obligations for harvest 2021. Was that what happened?
72Mr Lubofsky cross-examined Mr Perkins on this subject, putting to him that the night of 20 November 2021 was the first time that he had remained to participate in beers and food at the end of the day. Mr Perkins replied:
“That’s correct, it was a rainy night and then in the country the moment it rains everyone stops and relaxes and has a drink. No one has to get up early the next morning necessarily so we always have a drink or do something.” (T641, L8-12)
73Mr Lubofsky noted that this was not the first rainy night during the 2021 harvest, yet Mr Perkins had not attended any other gathering. Mr Perkins agreed, saying:
“They [BBH] were leaving. Richard had told me they were leaving and so I went down to be polite.” (Ibid, L20-21)
74The thrust of this cross-examination was that the evening of 20 November was, exceptionally, indeed a cut-out party marking the end of the harvest. The problem with this view of things, which was advocated on behalf of BBH, is that, according to the uncontested evidence of the witnesses for both parties, the get-together on the evening of 20 November 2021 was convened and commenced on the assumption that three headers would be retained in situ by BBH for the purpose of further harvesting operations ([30]-[33] above). It was only as the night wore on that, according to Mr Leigh Burke, Mr Bootle concluded that there was going to be nothing left to harvest. Mr Castelan relied on the evidence of Mr Perkins in cross-examination that he and Mr Bootle discussed the arrangement to release all six of BBH’s headers on 20 November and that this discussion took place “before the drinks”. (T639, L28 – T640, L9) This is inconsistent with the accounts given both by Mr Leigh Burke and by Mr Bootle, who were the persons principally involved in these matters. I conclude that Mr Perkins’ evidence was faulty on this point. Accordingly, the mere fact that this party occurred says nothing as to whether the parties agreed or did not agree that the harvest was at an end, or that Bogan did or did not concede that the harvest was over. Those issues can only be determined by reference to the evidence of what transpired at the party.
Oral variations
75Clause 11.2 of the Supply of Services Agreement provided “This Agreement may only be amended in writing signed by duly authorised representatives of the Parties.” (CB 466) Both counsel referred to the decision of Finn J of the Federal Court of Australia in GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 128 FCR 1, 61-62 [217]-[218], to the effect that despite such a clause, oral variations are permissible. His Honour noted that such an oral variation, to be effective, required proof that it was formed and made in accordance with the standard requirements for an enforceable contract. The contest here, as I understand it, is what was said or not said. No points were pleaded as to any alleged oral variations being unenforceable for lack of consideration. In closing submissions, Mr Castelan on behalf of BBH contended that any oral variation which might have discharged BBH of its obligation to complete the unharvested paddocks after 20 November would be invalid for lack of consideration. Assuming, without deciding, that such a contention could be raised on a pleading which merely denied any such agreement, I accept the contention of Mr Castelan that the consideration for such a variation would be the discharge of Bogan from any obligation to permit BBH to carry out further work on the 2021 harvest and thereby earn any additional fees. (T681)
76BBH’s contention that there was an oral variation of contract terminating the harvest as at 20 November 2021 was alleged to have arisen out of a conversation between Mr Bootle on behalf of Bogan and Messrs Potter and Burke on behalf of BBH. Mr Lubofsky, on behalf of BBH, submitted that the case made by Bogan exhibited “inherent commercial unlikelihood”. He contended it was inherently unlikely that Mr Leigh Burke would have lied to Mr Bootle by promising the return of headers after a 10‑day period because there was no obvious commercial advantage to BBH. It would also have been destructive of BBH’s commercial relationship with Bogan. (Closing submissions [182]-[188]) Further, he said it was unlikely because of the cordial relation which had obtained between the parties until December 2021. (Closing submissions [189]-[191]) These observations have some plausibility. On the other hand, it may be thought they are cancelled out by the implausibility of the account given on behalf of BBH.
77As previously noted, the plan at the commencement of the party was that three headers would be retained in situ to enable harvesting operations to resume after the “rain event”. As it turned out, the harvest did resume. Whilst the remaining crop was significantly downgraded, it was clearly worth harvesting. There is disputation as to the precise context and purport of Mr Leigh Burke’s characterisation of Mr Bootle as being “stupid” or “an idiot” during a phone call in December. Mr Bootle would, however, have been both stupid and an idiot if, having made a plan to resume harvesting and made arrangements for headers to be retained on Bogan’s property for that purpose, he “lost his head” on the evening of 20 November and called off further harvesting operations. This would be a remarkable thing to do where he was, at that time, unable to judge how long or how intense the forecasted “rain event” would be. At the very least, before so extreme a judgment were to be made, one would expect him to have taken the opportunity of inspecting some or all of the unharvested paddocks at daylight on 21 November.
78Mr Lubofsky referred to Mr Bootle’s posting on his Instagram page on 20 November a photograph of a lowering sky with the comment “Staring down certain defeat”, and concluding “On the bright side we got a heap actually done.” (Closing submissions [161]) On any view, Bogan had suffered and would suffer a “defeat”. The grain harvested in December was seriously downgraded. Agronomist Mr Hartley agreed with my analogy that it was equivalent to a beef producer “having a beast on the hoof that could be butchered into topside roast, T‑bone steaks, fillet steaks ... and after something has happened to it, it’s only fit to go the pet food manufacturer?” He said “That’s pretty much on the money, your Honour, yep.” (T570, L26 – T571, L3) There certainly was a “defeat”. That is not to say, however, that there was “total destruction”. The “post” also referred to “crop destroying rain”. Again, it is common ground that the rain event did destroy some of the crop. It downgraded a larger portion of what remained unharvested. To say the rain had destroyed or would destroy crops is not to say that it had destroyed or would destroy the entire crop.
79Mr Castelan referred to Mr Leigh Burke’s evidence in response to a question which I asked as to the precise terms in which, according to him, Mr Bootle declared the harvest finished on the night of 20 November. (Closing submissions [68(d)]) Noting Mr Leigh Burke’s evidence that Mr Bootle declared the party a “wake”, I asked if he had said anything beyond that, to which the answer was “Not really, no.” (T185, L9-10) Mr Bootle denied describing the party as a “wake”. Assuming that he did, however, this would not be equivalent to declaring the harvest over. Football teams hold parties at the conclusion of important matches, such as grand finals, where supporters may get together with the team members and coaching staff. No doubt when the team has gone down to defeat these gatherings can be and are metaphorically described as “wakes”. This does not mean, however, that the team will not be taking the field next week or next season. If the Burke brothers and their staff took a statement by Mr Bootle, “This is a wake”, as in effect a declaration of the end of the harvest, in the circumstances described this is an interpretation which a reasonable person could not ascribe to that statement. Mr Lubofsky said that these were not the only words apparently terminating the harvest spoken by Mr Bootle, according to Mr Leigh Burke, who said that Mr Bootle remarked “there was going to be nothing left to do here, and you guys can take your machines and go.” (T121, L1-5)
80BBH found remunerative work for its headers in the Griffith and Donald areas. This is indicative of a clear economic benefit to BBH in declaring the Bogan harvest finished, even if Mr Bootle did not agree. Further, the Burke brothers were concerned that the three headers to be left in situ according to the initial plan might be cut off and isolated, with the result that, in Mr Leigh Burke’s language, “we have machines stuck there for a period of time. It was ... pretty worrying times.” (See [32] above) Mr James Burke described the Burke brothers’ thinking as at 20 November. He said:
“his [Mr Bootle’s] farm is on the side of a river. It was looking at getting 300 mill of rain. There was a fair chance that it could flood, and our ... machinery would be - chances of getting flooded and be locked away for the rest of the harvest, which would be a huge impact to our business. So we, obviously, took them ...” (T196, L2-7)
81Perhaps almost as an afterthought, Mr James Burke continued:
“He [Mr Bootle] told us to leave, ‘Get out of here. Harvest is finished.’ We were expecting the farm to flood at that stage.” (Ibid, L7-9)
82The implication is that the Burkes wanted to remove their machines based on their fear of flooding, whether Mr Bootle agreed or not.
83As an experienced farmer in the Nyngan region, with a family background in this country going back many generations, Mr Bootle’s “take” on the flooding threat was much more likely to be correct than the Burkes’. The evidence did not investigate what flooding, if any, occurred in the Nyngan area and on Bogan’s properties in late November and December 2021. The fact that there remained a substantial harvest to be brought in in December suggests that the Burkes’ concerns as to flooding were exaggerated. What is important, however, for present purposes is that they clearly entertained these fears. This provides an explanation as to why they were prepared to declare the harvest finished, despite this being in breach of contract. Mr Lubofsky made extensive submissions to the effect that acceptance of Bogan’s case as to what transpired at the party on the evening of 20 November would require a finding that Mr Leigh Burke had lied. In so far as his dealings with Mr Bootle are concerned, this would not be a necessary conclusion. Breaches of contract are proven simply by a failure to perform an obligation. In the absence of issues such as duress, undue influence, or misrepresentation, or perhaps an obligation to perform some act “with reasonable care”, the liability is strict. There is no mental element. The fact is BBH did not return to finish the harvest as it was obliged to do. Bogan proves its case on this point without need to prove anything as to what the Burkes might or might not have intended on 20 or 21 November 2021. In so far as Mr Leigh Burke passed on to his employees that the harvest was finished, if he had not been told that by Mr Bootle it may be that this would have entailed a lie. By reason of the relaxation of the hearsay rule in civil proceedings by s64(3) of the Evidence Act 2008, given that the evidence is, however, “second-hand”, it carries relatively little weight.
84Mr Lubofsky argued at length as to the implausibility of Mr Leigh Burke “lying” and “burning” a relationship with Bogan. For reasons already explained, the account of the events on 20-21 November given by BBH’s witnesses is at least as implausible or perhaps more so. There must be an exception for the exchange of texts at CB 580, where Mr Bootle is sending texts to Mr James Burke, who responds, “Yea we have sent to Donald area looks like we have 10 days ok weather”. In closing submissions, Mr Castelan said that this was inconsistent with any expectation that BBH would return to Nyngan before 6 December. However, Mr James Burke was emphatic that the text referred to work that he was doing on his own farm that was unconnected to BBH, and said this was a reference to “my headers [which] are my headers, and I’m harvesting with my harvesters. They’re not BB Harvest things.” (T283, L12-14)
85Mr Bootle agreed that the removal of all six headers was made with his agreement before the downpour or storm on the evening of 20 November. It was already agreed between the parties that three of the six headers on the property would be removed. Again, it was common ground that later in the evening he agreed to the removal of the other three. Rejecting as implausible, for the reasons explained, the suggestion that he had declared the harvest finished, logically his agreement to the removal must have been conditional upon the return of the harvesters to complete the harvest later.
86In the context of these findings, Mr Bootle’s account of an arrangement that the headers would return either in ten days or perhaps on two days’ notice is plausible, indeed inevitable, once one rejects, as I have, the proposition that Mr Bootle declared the harvest finished on the night of 20 November. It follows, therefore, that I accept as part of a coherent narrative the various exchanges described by Bogan’s witnesses as to the return of the headers. (See [34] above) I accept Mr Bootle’s account of his conversation with Mr James Burke as he and Mr Perkins departed for Dubbo airport and the flight to Sydney. ([38] above)
87Mr Burke’s account (at [39] above) was that Mr Bootle, apparently in a rush to get to the airport, stopped and alighted from the motor vehicle for the purpose of saying no more than “Goodbye, I’ve got to go. I’m catching an aeroplane”. A message along those lines could have been shouted through an open window. There must have been more to the conversation for Mr Bootle to take the trouble to alight from the motor vehicle.
88The exchange of texts referred to at [43] above makes no sense if harvest 2021 had already been declared closed. It makes sense if Mr Bootle was expecting BBH to return for “round 2” of the harvest. I reject the contention that these exchanges were just idle “farmer talk”.
Rates of remuneration
89The 2020 Supply of Services Agreement Schedule 3 contained a relatively elaborate remuneration structure. Basically, however, it was to be on a per-hectare basis, with provision in some limited circumstances for charges to be made per rotor hour. This represented Mr Bootle’s preference ([20] above). The Burkes, however, continued to advocate for a conversion of the remuneration scales to a simple per-rotor-hour basis. According to the Burkes ([24] above), during their preliminary visit for the 2021 harvest on 5 September 2021 they produced a revised schedule modifying the remuneration scale to a simple per-rotor-hour basis and invited Mr Bootle to sign it on behalf of Bogan. This revised schedule remained unsigned. The Burkes said this was because Mr Bootle was unsure as to whether Bogan would supply its own chaser bins or not. Mr Bootle denied this, saying he simply rejected the proposal ([25] above). This was either because he disagreed with the proposed revision or because 5 September was to be a social rather than a business occasion. Mr Bootle, however, concedes that he did ultimately accept charging on a per-rotor-hour basis, and this occurred on 13 September 2021 ([26] above). In one sense, therefore, this is a non-issue. By the time the invoices which formed the basis of BBH’s claim were rendered, the parties had agreed to charging on a per-rotor-hour basis, which was the basis on which the invoices were rendered. Bogan contends, however, that its agreement was obtained by misleading or deceptive conduct; namely, the representation that Mr Leigh Burke said:
“I tell you undertake to you that they [the charges] will be the same as they were at last year or as good or better than ... the contract rates effectively, the rates from last year or what you paid last year.” (T385, L1-4)
90It contends that being misled or deceived by this assurance, it suffered loss and damage which it seeks to recover in the sum of $91,493.70. (Defendant’s closing submission [62])
91If I accept BBH’s contention that the rates revision was agreed to on 5 September, that will effectively outflank Bogan’s counterclaim on this point.
92At first blush, BBH’s contention of these matters being agreed on on 5 September 2021 is implausible. Even although, as explained above, it was legally competent for the parties to vary the Supply of Services Agreement orally, it would have been in the interests of both parties to do so in writing because of the certainty which a written variation creates. It avoids the risk of the “he said/she said” disputation which we are now dealing with. The person who derives the primary benefit from and is the instigator of the variation has an even stronger motive to establish with certainty the advantage which it sought to obtain by its advocacy of the variation. It was no doubt with these considerations in mind that Mr Potter of BBH prepared the written revision document and the Burkes took it with them on their visit to Nyngan on 5 September 2021 and sought to have it signed-off.
93As the joint judgment of the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, 180, remarked, the clear trend of judicial authority and academic writings is “to leave the objective theory in command of the field.” ((2004) 219 CLR 165, 180 [41]) Their Honours remarked, at [42]:
“Consistent with this objective approach to the determination of the rights and liabilities of contracting parties is the significance which the law attaches to the signature (or execution) of a contractual document.”
94Their Honours continued at [45]:
“It should not be overlooked that to sign a document known and intended to affect legal relations is an act which itself ordinarily conveys a representation to a reasonable reader of the document.”
95These principles must also apply in reverse: that is, where a document intended or calculated to affect legal relations is proffered for execution to a party, and the party declines to execute it, this is a negative representation to the effect that the contractual revision (in this case) is not adopted. Were the only issue as at 5 September one relative to chaser bins, a relatively minor element of the rates schedule, this issue could have been struck out and initialled by the parties, and the revised schedule could have been executed. The obvious inference from the non-execution is that the variation was not adopted and approved by Bogan on 5 September. The further discussions by way of texts exchanged (referred to at [26] above) are consistent with the view that BBH’s push to replace the original rates schedule by a revised one was unsuccessful as at 5 September.
96I am fortified in that view by the fact, as pointed out by Mr Castelan, that the rates per rotor hour set out in item 10 of the proposed revised schedule were higher than those ultimately charged. (CB 914) This document was not originally part of the Court Book; nor, it seems, was it discovered. Mr Castelan urged me to draw adverse inferences against BBH, suggesting there was a deliberate attempt to suppress the document’s existence. Mr Lubofsky suggested that the non-discovery of the document was the result simply of a failure by an employee (Mr Potter) to follow a direction from one of the Burke brothers to dispatch it to BBH’s solicitors. In the circumstances, I do not regard it as necessary to resolve this controversy.
97It follows, therefore, that, subject to the issue of misleading or deceptive conduct, to which I will turn, and any other counterclaim, the invoices were properly rendered.
Misleading or deceptive conduct
98On behalf of Bogan, Mr Castelan contended that I should find that Mr Leigh Burke represented to Mr Bootle “on 13 September 2021” that:
“a change in the method of calculating the rates of the Requested Services at $575 per rotor hour for S680s and S780 and $550 per rotor hour for 9770, rather than rates per hectare would work out the same or cheaper than the previous year’s harvesting for Bogan Farms on the per hectare rates under the Agreement”. (Closing submissions [57])
99He said that Mr Bootle’s evidence in this regard “aligns with common sense” (paragraph [58]). As the narrative above shows, there had been repeated, and on my findings unsuccessful, attempts by the Burkes to persuade Mr Bootle to agree to the revision of the mode of charges. He referred to Mr Leigh Burke’s evidence that the per-rotor-hour mode of charging was simpler (T141, L14-16), and this was the basis on which he prevailed on Mr Bootle to approve the change. (Ibid, L17-18; to similar effect, T165, L4-8) He continued:
“It is inherently unlikely in all of the circumstances that Bootle would have agreed to a change in the charge out rates without any representation having been made by BBH that Bogan Farms’ position would not be worse than under the Agreement. Richard Bootle’s evidence ought to be accepted that it was represented to him by Leigh Burke that the methodology of using the rotor hours would be the same or better than the previous season using the contract, which was a mix of rotor hours and hectares.” (Closing submissions, paragraph [58(b)])
100Mr Bootle said he agreed to the revised charging regime in the end upon an assurance that it was “as long as it was broad”. (T490, L24-30)
101Mr Lubofsky on behalf of BBH contended:
“there are a number of reasons why the Court ought to prefer Mr Burke’s evidence over Mr Bootle’s and conclude that no such representation was made.” (Closing submissions, paragraph [131])
102He referred to Mr Leigh Burke’s evidence that he did not make the representation:
“... at all. I said that over a three-year period it would work out the fairest and best way to do it. Never said anything about it being cheaper than the year before because I would never know what the yields are gonna be, I wouldn’t know how many hours we’re gonna spend there until we put a header in the paddock to understand it.” (T99, L2-8)
103Mr Lubofsky said Mr Leigh Burke would never use language such as “I undertake to you”. (Closing submissions, paragraph [132]) So much was conceded by Mr Bootle in cross-examination. (T492, L26-30) He noted that the “fairness” advocated by Mr Leigh Burke in an email of 14 January 2021 was only to be worked out over a three-year period, as explained in the email. (CB 481) He said since Mr Burke did not know at the time of the conversation what the crop yield would be, he could not have given any such assurance. (Closing submissions, [135])
104In judging the plausibility of Mr Bootle’s accounts of his exchange with Mr Leigh Burke on 13 September 2021, account must be taken of Mr Bootle’s knowledge and expertise. As he explained in his evidence, he is a seventh-generation farmer. He also explained how grain farmers in central western New South Wales on his understanding favour a per-hectare regime of remunerating harvesters because it introduces a finite element into prospective costing that a pure time-based regime does not have. The sort of assurance attributed to Mr Leigh Burke lacks plausibility for anyone with a knowledge of the grain industry and a willingness for a moment’s reflection. Mr Leigh Burke presented as an astute individual. He would realise that he would do no more than impair his own credibility by giving so implausible an assurance to Mr Bootle as Mr Bootle attributes to him. Mr Bootle would not believe it; therefore, there would be no point in proffering such an assurance. When Mr Burke sought to put his assurance in writing, he explained it as a regime that would work out on a fairer basis only over a three-year term. Again, having presented that rationale for the charging regime in writing via email, he would have realised that making a balder and more unqualified assertion would simply lack credibility. Mr Burke sought to sell the regime of charging per rotor hour on the basis it would be cheaper in a “lean” year. When Mr Burke provided details of the charging regime for the “corporate” farm near Boort, it was part of a three-year contract. The implication must be that things come out “even” or “as long as they are broad” only over a three-year period, not necessarily in any particular year except a “lean” year. There has been no suggestion that 2021 (at least until the rain event occurred) was shaping to be a lean year.
105In my view, the probable cause for Mr Bootle’s acceptance of the per-rotor-hour regime was simply that he was “worn down” by Mr Burke. There was no misleading or deceptive conduct in this respect. Mr Bootle had an obvious interest in BBH’s approaching the 2021 harvest in a positive manner, rather than feeling that it was being unfairly dealt with under a rates regime which it opposed. It is therefore unnecessary to consider whether there was any reliance or any damage sustained. For reasons already given, I could not accept that so experienced a grain farmer as Mr Bootle would have relied upon the assurance which he attributed to Mr Leigh Burke.
Estoppel
106Rejection of Bogan’s case that Mr Bootle was subjected to and induced by misleading or deceptive conduct necessarily disposes of Bogan’s defence based on estoppel by representation. The alleged representation was not made, or, if made, was not an inducement to Mr Bootle or acted upon by him.
Loss of grain
107In Bogan’s original defence and counterclaim, and in its amended defence and counterclaim, it was contended that as a result of BBH’s breach of its obligations to Bogan, Bogan had suffered loss and damage “caused by the delay in harvesting”. (CB 35, paragraph [17], ‘Particulars’) By letter dated 17 April 2023, Bogan’s solicitors, at paragraph 3.1, under the heading ‘Questions for the expert’, asked the following question:
“3.1 On behalf of Bogan Farms, we wish to engage you to provide an expert opinion as to:
(a)the quantum of loss allegedly suffered by Bogan Farms due to the alleged delay in completing the harvesting services in December 2021”. (CB 109)
108Agronomist Mr Tony Hartley provided an expert report responding, inter alia, to this query, dated 30 January 2024. (CB 81) Mr Hartley stated as part of his report (paragraph [7.26]):
“I do not believe the rain and wind conditions in December up until 16 December 2021 [the date on which the second round of harvesting concluded] would have resulted in any loss of yield that would be measurable.” (CB 90)
109In light of Mr Hartley’s opinion that delay in commencing the December round of harvesting – or round 2 – did not in itself create any loss of grain, Bogan’s contention at trial was that the need to resort to a “scratch” team for round 2 of the harvest led to a grain loss because of lack of efficiency. At paragraph [7.54] of his report, Mr Hartley said:
“When the pre and post November rain [scil grain] yields are considered, for the total area that was harvested there was a loss of yield of 1,596 tonnes rounded (3.117t – 2.439t = 0.678t x 2,353ha = 1,596t).”
110Mr Hartley attributed this loss to two factors:
“In my opinion the difference between the yield pre the November rainfall event and post the event is due to two factors as follows:
(a) Wheat that is classified as milling grades has a higher bulk density than wheat that is classified as feed grades. This weight difference is called the test weight and is the equivalent weight of a one hectolitre (100 litre) container full of wheat. For example the test weight of APW1 is 76kg/hl and the test weight of AH9 is 68kg/ha; and
(b) The efficiency of the three alternative headers Bogan Farms had to source to complete the harvest of the wheat. I am instructed that when the crop was harvested in December, the alternative contractors headers that were used were significantly older headers than the BB headers used in November and December. I am also instructed that it was noted by Mr Richard Bootle of Bogan Farms that there was significant grain loss from the alternative headers.” (CB 95, paragraph [7.55])
111He referred to the three non-BBH headers involved in the harvest in December, attributing the following years of manufacture:
“(i)Case 1680 (1993 to 1995).
(ii) Case 2388 (2008 to 2009).
(iii) Gleaner S77 (2010 to 2012).” (CB 96)
112He remarked, at paragraph [7.56]:
“In my experience, all headers will have a percentage of grain loss. However, generally the older a header is, the less efficient it is in relation to grain loss. I am instructed that in 2021 BB’s headers were current John Deere models. By current models I mean they had recently been manufactured.”
113He continued in the following paragraph:
“I do not consider it is possible that machines ranging in age difference of between 10 and possibly 28 years would be able to harvest a crop as efficiently as current John Deere units. While I cannot determine what the difference in grain loss would be between all of the models in question, I consider the grain loss could have been significant.” (CB 96)
114In his conclusion at paragraph [8.2], Mr Hartley said:
“The only basis of loss that I have established is due to Bogan Farms having to use contractors whose headers ranged in age from approximately 1994 to 2011 as opposed to the headers used by BB, which I understand were current model John Deere units. ...”
115At paragraph [8.3] of his report, Mr Hartley said:
“The net loss I have quantified is $273,590.00 rounded excl. GST.” (CB 100)
116This formed the basis for the second component of Bogan’s counterclaim.
117BBH relied, on these issues of expert evidence, upon evidence from its director Mr James Burke, who claimed lengthy experience in the operation, maintenance, and repair of headers (T242). Describing the phenomenon of grain loss, he said the industry standard was 1.5 per cent:
“BB Harvesting, we try and work to 1 per cent, so we work to 1 per cent loss of what the tonnage is at the time.” (T245, L13-15)
118Grain loss occurs, according to Mr Burke:
“when you’re separating ... the straw and the grain, there is an amount of grain that can come through the harvester and out the back.” (Ibid, L17-20)
119When this occurs, grain can be seen “spewing out the back”. (Ibid, L22-23) Mr Burke said it was incumbent on the operator of the header to observe the occurrence of this phenomenon and readjust his machine. The rate of loss could be assessed by the rule of thumb that 1 per cent grain loss is equivalent to 60 grains in a square metre. (T246)
120As to the difference between newer and older models, according to Mr Burke the introduction of newer technologies accounts for the differences. He said on newer machines “you can do ... adjustments inside the cabin. On older machinery you would do a manual adjustment down beside.” (T249, L28-30) In addition:
“the newer the header [it] can do more tonnes an hour. It can harvest then more grain for the day, where ... an older header with lesser horsepower ... not that it will lose any more grain or anything, but it will not harvest as many tonnes in a day, meaning that a job would take longer.” (T250, L15-20)
121Mr Burke continued:
“I can go back to the first harvester I ever drove on our farm [which] was a Case 711 and they were actually more efficient in grain loss because they ran what they called a small grains collector ...” (Ibid, L23-27)
122As to the concept of efficiency, Mr Burke said:
“So efficiency is ... how many tonnes an hour that the harvester can do. It’s how it is efficient. So ... some of our newer headers ... can do around ... 35 tonne an hour. Our older headers could be anywhere from 20 to 25 tonne an hour, which gives the efficiency for how many hectares and tonnes it can do in a given hour.” (T252, L15-22)
123Page 919 of the Court Book is a table headed “Header specifications” which Mr Burke verified as being true. (T253, L20) It showed that of the six John Deere headers used in the November phase of the harvest, the year of manufacture ranged from 2008 to 2020, with the header deployed by BBH for the December phase of the harvest manufactured in 2021. Mr Pack’s header, the Case 2388 used in December, was assumed to date from 2008, the same year of manufacture as one of BBH’s, being a John Deere 9770. Mr Burrell’s “Gleaner S77” was assumed to date from 2010, being the same year as one of BBH’s, being a John Deere S680. In light of Mr Burke’s explanation of his understanding of the concept of “efficiency” for headers, namely the amount of horsepower and therefore the capacity to complete a harvest speedily, six of BBH’s seven headers were 473-horsepower units, with unit number 5, dating from 2008, having 360 horsepower. The three members of the scratch team in December supplied by Bogan’s neighbours had horsepowers ranging from 235 Case 160, the Selfe brothers, to 360 and 370 horsepower for the units supplied by Mr Pack and Mr Grahame Burrell.
124Mr Hartley was taken through his curriculum vitae and asked about his professional experience and attainments by way of cross-examination. He conceded that he did not have any experience driving headers or harvesting machines. (T579, L25-27) Mr Lubofsky put to him “you don’t have a close understanding of the mechanical inner workings of a harvesting machine?”, and Mr Hartley replied “Yeah, that’s correct, but I have a basic understanding of what they do.” (T580, L3-6)
125In a supplementary report, Mr Hartley said:
“The difference between the BB yield t/ha pre versus post rainfall after adjustment of the post rain yield (t/ha) for hectolitre weight is only 2.5%.” (CB 890, paragraph 1.1(d)(iii))
126He continued:
“From the BB yield data the pre rain yield was in close agreement with the post rain yield. This means the pre rain yield can be used ... as the yield that should have been achieved if the alternative contractors did not have to be used by Bogan Farms.” (CB 891, paragraph 1.3)
127Mr Hartley’s analysis therefore ascribes all of the alleged grain loss and lack of efficiency to the three non-BBH headers. Mr Lubofsky said that this would mean that the three non-BBH headers had been responsible for a grain loss 41 times the industry standard of 1 per cent, which he contended was entirely implausible. (T543, L14-15) Were the industry standard taken to be 1.5 per cent grain loss, the loss calculated by Mr Hartley would be 28 times that standard. (See Mr Lubofsky’s closing submissions, paragraph 235)
128In light of the information as to the relative antiquity of the various headers involved in harvesting in November and December, the contention that the relative antiquity of the non-BBH headers can be seen as causative of the alleged grain loss cannot be accepted. Indeed, the resort to “efficiency”, whatever that concept may mean, as the cause of the grain loss or alleged grain loss was made by Mr Hartley only by way of exclusion. He explained in answer to a question from me:
“The only thing ... that I could measure was the yields. I was trying to identify, in my analysis of all the information, whether I could find any other reason for the grain loss ...” (T596, L27-31)
129I then put to him:
“As Sherlock Holmes used to say, once you have excluded the impossible, whatever remains, no matter how improbable, must be the explanation. So was that your methodology?” (T597, L1-4)
130He did not dissent, replying:
“And I went to pains to look at the data prior to me committing pen to paper in relation to a report because I made it very clear to Mr Bootle and Mr Francis [I presume Bogan’s solicitor] that if we could not identify ... that there was a measurable loss, there was no point in proceeding.” (T597, L4-9)
131Mr Hartley resorted to this explanation as one who “doesn’t have an engineering background”. (T596, L22) Mr Pack described breakdowns and difficulties encountered by his unit, but he kept harvesting. The age of the alternative header does not explain the alleged loss.
132It is regrettable that there was relatively limited evidence as to how the December harvest progressed. I have sought to convey the substance and flavour of Mr Pack’s relatively brief evidence on this subject. There was no evidence from the other two non-BBH operators, or indeed from those who operated the BBH unit in December. Mr Bootle’s evidence as to the December round was relatively detailed. Mr Perkins said that it was Mr Bootle and foreman Steve Johnston who were “intimately involved in working with BB”. (T638, L28-29) He agreed that:
“Mr Johnson ought to be able to [make] more illuminating observations [about the December harvest] first because he is a specialist in agriculture, and secondly because ... he would have devoted more time to supervising and coordinating than [Mr Perkins] did.” (T638, L23-27)
133To reach a confident conclusion is therefore difficult. I put to Mr Hartley that a possible view of the situation is that no explanation has in fact been proven, and Mr Hartley agreed that this was a possible view of matters. (T612, L1-6; Plaintiff’s closing contention, paragraph [27]) The upshot, therefore, is that there is a meagre evidentiary basis for reaching a conclusion. Nevertheless, I conclude that there is just sufficient evidence available to reach a conclusion.
134I put the issue of the antiquity of the replacement or alternative headers to one side. Mr James Burke, in passages quoted above, accepted that units with lesser horsepower, as these alternative units had, take longer to complete a harvest. This seems readily understandable even to a non-expert. Mr Pack’s evidence was that substantial grain loss occurred because he was under constant pressure to speed up the harvesting process. There was no suggestion that he was uniquely pressured. It may be inferred that the other two neighbour header operators were in the same situation. Mr Hartley’s ex post facto opinion was that delay in the December phase of the harvest did not, in itself, increase loss. Nevertheless, Mr Bootle’s account of the December phase showed that there was persisting rain and rain interruption. (T412-T436) In so far as there was pressure, presumably from Messrs Bootle and Johnston, upon the December harvesters to complete the work, this was not unreasonable. Mr Hartley’s study seemed to demonstrate that the BBH header achieved close to the same yield in December as the BBH headers had achieved in November. It is reasonable to conclude, therefore, that the more powerful BBH header team, had it been deployed in December, could have avoided the grain loss which apparently occurred during that second round by being able to complete the harvest more quickly without driving their machines so as to create grain loss.
135Mr Lubofsky contended that in the events that occurred, no breach of the original Supply of Services Agreement had been proven. He said, correctly, that the Agreement made no stipulation as to numbers of headers to be made available. In re‑examination, Mr Leigh Burke said that a single header could appropriately have been assigned to deal with what remained of Bogan’s 2021 crop after 20 November. (T234, L19-24) One header was dispatched; therefore, according to this contention, there was no breach of contract by BBH. I reject that contention. Mr Castelan took me to a number of provisions, to which it is unnecessary to turn, which required the harvesting to be carried out in accordance with proper industry practice with reasonable care etc. If these express terms did not appear in the Agreement, absent an exemption clause, they would apply anyway by implication of law. The arrangement, as things stood in the early evening of 20 November, was that three headers (of the more powerful BBH type) were to remain stationed at Bogan’s property to await the end of the rain event. This represented, one may infer, the Burkes’ assessment of what was required to carry out the harvest properly. Despite Mr Leigh Burke’s ex post facto opinion referred to above, I conclude that this was a proper allocation of resources, and merely to dispatch one header, albeit a brand-new one, was not a proper discharge of BBH’s obligation. The fact that the three substitute headers seemed to have been fully engaged and under pressure serves to underline this point.
136For the above reasons, I accept that BBH breached the Supply of Services Agreement. In paragraph 15 of the amended counterclaim, the allegation of breach of contract made by Bogan against BBH alleges breach of both the Further Agreement and the Agreement. That latter Agreement is the Supply of Services Agreement referred to above. The Further Agreement is alleged in paragraph 6D of the defence section of the amended defence and counterclaim, entailing an alleged promise that BBH:
“would take the relevant drivers, plant and equipment to an unrelated job in Griffith, and return with at least four headers and drivers and a chaser bin to complete the Requested Services in 10 days’ time, or alternatively upon two days’ notice.” (CB 29)
137In my view the better analysis of the situation is that BBH contracted, under the terms of the Supply of Services Agreement, to harvest the Bogan 2021 crop in its totality. The “rain event” of 20 November 2021 and following days was an interruption, but the obligation which BBH failed to perform arose under the original Agreement.
Indirect or consequential loss
138Mr Lubofsky referred to and relied upon clause 8.6(b) of the Supply of Services Agreement providing:
“Neither party is liable to the other party in contract, tort, negligence, breach of statutory duty or otherwise for any loss, damage, costs or expenses of any nature whatsoever incurred or suffered by the other party of an indirect or consequential nature.” (Closing submissions, paragraph 280)
139He contended that if the amounts claimed by Bogan by way of counterclaim were otherwise recoverable, BBH was protected from liability by this clause. He referred to Environmental Systems Pty Ltd v Peerless Holdings Pty Ltd (2008) 19 VR 358; Patersons Securities Ltd v Financial Ombudsman Service Ltd (2015) 108 ACSR 483, 507 [126] per Mitchell J; and Macmahon Mining Services Pty Ltd v Cobar Management Pty Ltd [2014] NSWSC 731 [16]-[19]. According to Mr Lubofsky, Nettle JA (as he then was), with whom Ashley and Dodds-Streeton JJA agreed, held that the distinction between normal losses and consequential losses did not neatly overlap with the distinction between the first and second rules in Hadley v Baxendale. (Closing submissions, paragraph 285) Hadley v Baxendale (1854) 9 Exch 341 stated the fundamental rules as to recovery of damages for breach of contract. The analysis in that case remains the locus classicus on that subject in Australia even today. A party aggrieved by breach of contract may recover the losses which would follow from such a breach in the ordinary course, together with special additional losses, so long as those special and additional losses arose out of facts that were known to both parties and were therefore in their contemplation. Nettle JA, as he then was, said:
“Obviously, that is not the same as the distinction between the first and second rules in Hadley v Baxendale, since some ‘consequential loss’ may well fall within the first rule in Hadley v Baxendale as loss arising ‘naturally’, ie. according to the usual course of things, from the breach of contract.” (Environmental Systems Pty Ltd v Peerless Holdings Pty Ltd (2008) 19 VR 358, 387 [88])
140Without descending too far into the consideration of other authorities which are remote in factual context from the present, in my view the amounts sought to be recovered by way of counterclaim by Bogan here fall both within the first limb of Hadley v Baxendale and are not to be regarded as merely consequential. The most obvious and direct consequence of a harvesting company failing to complete the harvest is that what remains unharvested may become a total loss because of the inability of the farm owner to arrange alternative harvesting services before the unharvested crop is lost. This is direct, and not merely consequential.
141If the loss of the entire crop can be regarded as, in appropriate circumstances, the natural and obvious consequence of a harvester “knocking off” with the task incomplete, the loss of part of that crop must likewise be regarded as a natural consequence of such a breach of contract. Losses which might be regarded as consequential in a context such as this would be, for instance, the loss of another commercial opportunity for the farm company because of interruption to its cash flow. Absent an exclusionary clause prohibiting recovery of consequential losses, such a loss would be recoverable against a harvesting company if the facts and circumstances relative to the lost commercial opportunity were known to both parties and therefore in their contemplation. The counterclaim, if proven, is within the first limb of Hadley v Baxendale, and is not to be regarded as indirect or consequential. Nettle JA, in the Peerless Holdings case, said, (2008) 19 VR 358, 389 [93]:
“In my view, ordinary reasonable business persons would naturally conceive of ‘consequential loss’ in contract as everything beyond the normal measure of damages, such as profits lost or expenses incurred through breach.”
142In my view, the loss or partial loss of a crop would be regarded as within the normal measure of damages. The concept of a “consequential loss” seems to be bound up with the thought that there is something else which is to be regarded as the “primary” loss to which some consequences leading to the consequential loss appertain. In the present instance, one may ask what is the primary loss if not the loss of part of the crop?
143I turn now to the difficult issue of quantum. Mr Hartley was extensively cross-examined by Mr Lubofsky on behalf of BBH, and Mr Lubofsky made elaborate contentions, in closing, attacking Mr Hartley’s methodology in making his calculations. (Closing submissions, paragraph 299) Mr Lubofsky said:
“Mr Hartley did not seek to distinguish between the lost yield of the area harvested by the alternative contractors (1,442.54 hectares) as against the lost yield in the area harvested by BB Harvesting (910.46 hectares). That is a significant weakness in the quantum of Mr Hartley’s calculations.”
144Secondly, he said:
“Mr Hartley’s yield calculations were based on BB Harvesting carrying out 2,166 hectares of harvesting in November.” (Closing submissions, paragraph 300)
145This figure was derived, he said, from BB Harvesting’s “yield monitor data”. Because of “mapping” issues in November, the number of hectares harvested may have been under-counted, and the November harvest “might be substantially higher than 2,166” hectares. He continued:
“That would both decrease the yield in November (because the number of hectares would increase, but the tonnage remain the same) and increase the yield in December, and therefore substantially reduce the alleged amount of “grain loss” that occurred in December.” (Ibid)
146He noted my acceptance of this possible discrepancy in Mr Hartley’s analysis, in the course of which I said that:
“if you’ve got tonnages that have been harvested and they’re ascribed to a paddock that consists of zero hectares, then the yield that you’re going to come up with per hectare is going to be higher than reality.” (T588, L2-6)
147Next (closing submissions, paragraph 301), Mr Lubofsky observed that in allowing for the difference in test rate between milling-grade wheat as harvested in November as compared to downgraded feed-grade wheat harvested by reference to test rates of 70kg/hl for the latter and 76kg/hl for the former. He said, however, that the receival data for the November round of the harvest showed that:
“almost all of the wheat delivered in November had a test weight well above 80kg/hl, which means that the reduction in weight caused by the rains (all else equal) would be much greater than what Mr Hartley had estimated. Mr Hartley could have, but chose not to, use accurate data instead of standardised figures.”
148He noted that under cross-examination Mr Hartley accepted this proposition. (T591, L1-9)
149Next, at closing submissions paragraph 302, Mr Lubofsky said that the figure 2,225 at paragraph [7.53] of Mr Hartley’s report was an error, and Mr Hartley conceded that it should have been 2,166. (T582, L30 – T583, L2)
150Mr Lubofsky (closing submissions paragraph 304), continued:
“All of these matters cast real doubt on the veracity of the figures adopted by Mr Hartley in his report, and should cause the Court to have caution in accepting those figures as being accurate.”
151He also noted, at closing submissions paragraph 278, that:
“Mr Hartley did not reject the proposition that wind and rains could have damaged the remaining crops. However, his evidence was that he did not conclude that wind and rains had that effect simply because he was not provided by Bogan Farms with any evidence to that effect.” (T610, L21-27)
152Later, Mr Hartley remarked as to these matters:
“whether there was wheat that had lodged, fallen over; or whether there was wheat that had shattered, where there was a lot of grain on the ground, I would have thought that somebody would have taken a photo or tried to get some representative photos relative to that issue and I haven’t seen any of that information.” (T611, L1-7)
153In Keys Consulting Pty Ltd v CAT Enterprises Pty Ltd [2019] VSCA 136, the Court (Maxwell ACJ, Niall JA and Macaulay AJA) said at [69]:
“it is well established that a mere difficulty in quantifying damages does not necessarily defeat the plaintiff’s entitlement to a remedy against the wrongdoer. In appropriate circumstances, where some sort of actual loss has been established, the court must estimate the damages as best it can.”
154Having referred to authority, the Court continued in the following paragraph [70] to state:
“However, there is a distinction to be drawn between a situation that does not permit damages to be assessed with certainty, and one in which the plaintiff has simply failed to produce evidence that was otherwise reasonably available. The plaintiff is entitled to have the court do the best it can in the former case, but not in the latter. Where a party is able to produce evidence about loss and damage, they must do so with as much certainty and particularity as is reasonable in the circumstances.”
155In the Keys Consulting case, a claim for damages for misleading or deceptive conduct which succeeded at a trial before me was reversed by the Court of Appeal because of a lack of accounting evidence adduced on behalf of the aggrieved party. That evidence would have been available if income tax returns had been completed so as to show the benefit that the aggrieved party would have derived from the transaction as a reduction of the “headline” loss. The Court therefore considered that of the two scenarios which it was considering, the appeal before them fell into the second rather than the first. In Keys’ case there was simply a gap in proof as to a vital element of the equation which needed to be worked out to assess damages.
156In my view, the present situation falls within the first category of cases identified by the Court in Keys’ case. There is an elaborately-analysed expert report that has been put into evidence. It has been subjected to a critique which in some, perhaps all, respects, is convincing. The critique, however, is not sufficient, as I see it, totally to destroy the credibility of the conclusions reached by Mr Hartley. There must be a possibility, perhaps a probability, that the loss as assessed and calculated by Mr Hartley has been overstated: first, because of some methodological issues as identified by Mr Lubofsky in his closing submissions; and secondly, because I accept what Mr Lubofsky has said to the effect that Mr Hartley’s rejection of the possibility of grain loss resulting from rain damage simply because of a lack of provision of photographic evidence (from a party which had no interest in emphasising or playing up this possible explanation for grain loss) casts doubt on Mr Hartley’s conclusions.
157Finally, despite denial by Mr Bootle, it would seem that it would have been common sense for the higher-yielding paddocks to have been harvested before 20 November on the basis that exposing those higher-yielding paddocks to the “rain event” risked greater loss than exposing the lower-yielding paddocks to the rain event. Therefore, I am left with an expert report which is impressive and well-reasoned as far as it goes, but subject to a number of uncertainties. Using the time-honoured phrase “doing the best I can” in these circumstances, and in the absence of any competing expert opinion, I would reduce the loss quantified by Mr Hartley by 35 per cent but otherwise allow the counterclaim in that amount of damages.
Quantum of proof
158I have made my findings not upon “a mere mechanical comparison of probabilities independently of any belief in [their] reality”, but rather upon “an actual persuasion of [their] occurrence or existence”: Briginshaw v Briginshaw (1938) 60 CLR 336, 361.
Disposition
159Aside from matters of counterclaim, and having concluded that the invoices rendered on the basis of charges per rotor hour were in that respect properly rendered, the plaintiff should have judgment for the total face value of the unpaid invoices.
160There should be judgment for the defendant on its counterclaim for the amount assessed by Mr Hartley for grain loss reduced by 35 per cent. In so far as the counterclaim is based upon misleading or deceptive conduct or estoppel, it fails.
161I will direct the parties within 14 days to bring in short minutes to give effect to these reasons.
Costs
162I have heard no submissions on the question of costs, and so I will reserve them.
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Certificate
I certify that these 51 pages are a true copy of the judgment of his Honour Judge Macnamara delivered on 2 July 2024.
Dated: 2 July 2024
Alexandria Peck
Associate to his Honour Judge Macnamara
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