BJEK Pty Ltd as trustee for the EL and SL Fogarty Family Trust v Henbury Cattle Co Pty Ltd (No 3) - [2021] NTSC 82

CITATION:BJEK Pty Ltd as trustee for the EL & SL Fogarty Family Trust v Henbury Cattle Co Pty Ltd & Ors (No 3) [2021] NTSC 82
PARTIES:BJEK PTY LTD as trustee for the EL AND SL FOGARTY FAMILY TRUST (ACN 105 399 675)

v
HENBURY CATTLE CO PTY LTD (ACN 169 887 629)
and
CROSS COUNTRY FUELS PTY LTD (ACN 080 235 927)
and
ANDERSON, Ashley Robert
and
FAR MANAGEMENT PTY LTD
(ACN 065 559 613)
and
ROHAN, David
and
ANDERSON, Neville

TITLE OF COURT:  SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION:  SUPREME COURT exercising Territory jurisdiction
FILE NO:59 of 2016 (21631761)
DELIVERED:  27 October 2021
HEARING DATE:  On the papers
JUDGMENT OF:  Kelly J

CATCHWORDS:
COSTS – plaintiff essentially unsuccessful on both claim and counterclaim - plaintiff to pay defendants’ costs of and incidental to the proceeding
COSTS – application for indemnity costs – allegations of dishonesty made without evidentiary foundation – allegations contradicted by photographic and documentary evidence – evidence drawn to plaintiff’s attention and plaintiff put on notice of intended application for indemnity costs – plaintiff to pay defendants’ costs of the plaintiff’s claim on an indemnity basis
COSTS – different considerations applying to counterclaim – plaintiff to pay defendants’ costs of the counterclaim on the standard basis to the date of the defendants’ offer of compromise
COSTS – unreasonable refusal of offer to compromise damages claim for an amount less than that ultimately awarded – plaintiff to pay defendants’ costs on an indemnity basis from the date of the offer to compromise
BJEK Pty Ltd as trustee for the EL & SL Fogarty Family Trust v Henbury Cattle Co Pty Ltd & Ors [2019] NTSC 86; Ezekiel-Hart v Law Society (ACT) [2012] ACTSC 103; Simonson Properties Pty Ltd v Hardy [2014] NSWSC 363 referred to
Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; Fountain Selected Meats (Sales) Pty Limited v International Produce Merchants Pty Limited [1988] FCA 202; (1988) 81 ALR 397; NIML Ltd v Man Financial Australia Ltd (No 2) [2004] VSC 510 applied

REPRESENTATION:
Counsel:
Plaintiff:A Harris QC with N Floreani
Defendants:P Franco QC
Solicitors:
Plaintiff:CCK Lawyers
Defendants:Ward Keller
Judgment category classification:    B
Judgment ID Number:  Kel2118
Number of pages:  21

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN
BJEK Pty Ltd as trustee for the EL & SL Fogarty Family Trust v
Henbury Cattle Co Pty Ltd & Ors (No 3) [2021] NTSC 82

No. 59 of 2016 (21631761)

BETWEEN:

BJEK PTY LTD as trustee for the EL AND SL FOGARTY FAMILY TRUST
(ACN 105 399 675)

Plaintiff

AND:
HENBURY CATTLE CO PTY LTD (ACN 169 887 629)
First Defendant

AND:
CROSS COUNTRY FUELS PTY LTD
(ACN 080 235 927)
Second Defendant

AND:
ASHLEY ROBERT ANDERSON
Third Defendant

AND:
FAR MANAGEMENT PTY LTD
(ACN 065 559 613)
Fourth Defendant

AND:
DAVID ROHAN
Fifth Defendant

AND:
NEVILLE ANDERSON

Sixth Defendant

CORAM: KELLY J
REASONS FOR JUDGMENT
(Delivered 27 October 2021)

In these proceedings between the owners of neighbouring cattle stations (Palmer Valley owned and operated by the plaintiff and Henbury operated by the first defendant) the plaintiff claimed:
(a)damages for breach of a deed of settlement reached between the parties when they ceased operating Henbury together;
(b)damages for conversion of cattle it claimed had been wrongfully retained by the first defendant;
(c)delivery up of the plaintiff’s cattle;
(d)damages for detention of the plaintiff’s cattle; and
(e)a mandatory injunction compelling the defendants to completely muster the cattle on Henbury, to be supervised and overseen by a representative or representatives of the plaintiff.
The first defendant counterclaimed against the plaintiff for damages for conversion of Henbury cattle which had wandered from Henbury to Palmer Valley and had been retained by the plaintiff and the progeny of such cattle.
The parties had formerly operated Henbury station together; Henbury had largely been stocked by sale cattle purchased from Palmer Valley and another station owned by the plaintiff (Mt Ebenezer). Since the sale cattle bore Palmer Valley and Mt Ebenezer brands, the parties had agreed that sale cattle would be differentiated from Palmer Valley and Mt Ebenezer cattle by having red or purple floppy tags inserted in their nearside[1] ears. After the parties fell out and ceased operating Henbury together they entered into a deed which (among other things) provided for Henbury to be mustered and the drafts attended by a representative of the plaintiff who must not be Mr Ted Fogarty.[2] After Ted Fogarty attended a draft on Henbury, the first defendant conducted a draft without notice to the plaintiff; the plaintiff obtained an injunction restraining the first defendant from conducting further drafts except in accordance with a protocol specified in the injunction; and further drafts were conducted in accordance with the protocol at which cattle were called for Henbury or Palmer Valley or noted as “disputed”.
On 3 December 2020, following the trial of the proceeding, I made the following orders:
ORDERS:
1.    There will be declarations that, of the disputed cattle identified in the musters since June 2016:
(a)all cattle with a red or purple floppy tag in the offside ear belong to the first defendant;
(b)all cattle with a white floppy tag in either ear belong to the first defendant;
(c)the four Palmer Valley branded steers with the backs of floppy tags only belong to the first defendant;
(d)of the 12 Mt Ebenezer branded cattle without floppy tags:
(i)the seven steers mustered from the area around Harts Camp belong to the first defendant;
(ii)the remaining cattle (four cows and one bull) belong to the plaintiff;
(e)of the four Palmer Valley branded bulls without floppy tags:
(i)the three bulls mustered at Mt Gloaming belong to the first defendant;
(ii)the bull mustered at Cave Hole/Three Mile belongs to the plaintiff;
2.    All of the other claims by the plaintiff (including the claim for a mandatory injunction) are dismissed.
3.    In relation to the 18 cattle which the plaintiff took possession of following the 25 June 2016 muster by Mr Crawford:
(a)the plaintiff is to account to the first defendant for the proceeds of sale of such cattle;
(b)alternatively, the plaintiff is to pay the first defendant damages of the full value of such cattle for conversion of the cattle.
4.    The plaintiff is to account to the first defendant for the proceeds of sale of the two “Lucy Creek” cattle which the plaintiff sold to an abattoir.
5.    The plaintiff is to pay damages to the first defendant of the full value of 1,500 cattle (being wandering stock and the offspring of wandering stock) for conversion of those cattle.
6.    The interlocutory injunction granted on 12 August 2016 is dissolved.
On 23 February 2021, I published a written decision on the assessment of damages which contained the following:
[43] I assess damages for the conversion of 1,143 cattle at $1,521,014 made up as follows:
·calves  $     95,121
·adult female cattle                $   644,081
·adult male cattle                   $   781,812
TOTAL  $1,521,014
[44] To that must be added the following amounts for the value of specific cattle which have been agreed between the parties:
·two Lucy Creek cattle  $ 3,588
·20 cattle from Crawford drafts       $28,780
TOTAL  $32,368
[45] That brings the total damages on the first defendant’s counterclaim to $1,553,382 ($1,521,014 + $32,368).
[46] Interest on that amount to the date of judgment (23 February 2021), calculated in accordance with Rule 59.02(3) of the Supreme Court Rules 1987 (NT), will be allowed in the amount of $402,560.
Also on 23 February I made directions for the parties to file and serve written submissions on costs and it was agreed that I would make a decision on costs on the basis of those written submissions without the need for a further oral hearing.
The defendants have submitted that I should order the plaintiff to pay their costs of and incidental to the proceeding on an indemnity basis.
The plaintiff concedes that it would be appropriate for the Court to order the plaintiff to pay the defendants’ costs of the counterclaim but not on an indemnity basis. The plaintiff contends that it should not have to pay the defendants’ costs of the claim, on an indemnity basis or at all. Rather the plaintiff seeks an order that the defendants pay its costs in respect to its claim on “a party/party basis”.
The plaintiff contends:
(a)that the application for an injunction was precipitated by the fact that the defendants conducted a muster on 16 and 17 June 2016, without notifying the Fogartys and the interlocutory injunction served a purpose in that after the interim injunction was granted on 12 July 2016 (and the later interlocutory injunction on 12 August 2016), the drafts proceeded according to the protocol fixed by the injunction;
(b)it was necessary for the Court to determine the ownership of the “disputed cattle”;
(c)the plaintiff was successful in relation to part of its claim; and
(d)one of the causes of the difficulties the parties experienced in determining the ownership of cattle on Henbury was the fact that the defendants had not diligently transferred all the sale cattle onto the Henbury PIC. (The plaintiff contended that the defendants should not be rewarded for their failure in this regard.)
I do not accept these contentions by the plaintiff. The plaintiff was essentially unsuccessful on both the claim and the counterclaim and should pay the defendants’ costs of and incidental to the whole proceeding.
The basis for the granting of the injunction was an allegation by the plaintiff, which turned out to have no evidentiary basis, that the defendants had dishonestly dealt with Palmer Valley cattle in an attempt to steal them. There is no reason why the plaintiff should not pay the defendants’ costs of the injunction.
In the main proceeding, the plaintiff made the following categories of claim against the defendants:
(1)The Orange Creek mob
The first category of disputed cattle consisted of cattle which Mrs Fogarty says she saw on Henbury on 22 June 2016. The plaintiff failed to establish the facts underlying its claim that the defendants converted cattle associated with the Orange Creek mob and this claim was unsuccessful.[3]
(2)Cattle classed as “disputed” in the 2016 and 2017 drafts after 22 June 2016
· Beasts with red or purple floppy tags in the offside ear
The next (and largest) category of disputed animals comprised 144 cattle with a red floppy tag in the offside ear, which were disputed by the plaintiff at drafts after 22 June 2016. The basis of the plaintiff’s claim was an assertion that the Andersons had tampered with the ear tags on some Palmer Valley cattle, placing red ear tags in their offside ears to disguise them as sale cattle.[4]
This claim was unsuccessful. The plaintiff failed to establish that there was any dishonest tampering with tags by any of the defendants. I found that the objective evidence as well as the observations of the various witnesses established clearly that some of the sale cattle were tagged with red floppy tags in the offside ear. Accordingly, I found that the disputed cattle which had red floppy tags in the offside ear were sale cattle belonging to the first defendant.[5]
· Cattle with white floppy tags
The second largest category of cattle comprised 110 cattle with white floppy tags. The bulk of these comprised 90 cows drafted in Dead Bullock West paddock in the second Henbury draft in 2017.
This claim was also unsuccessful. The evidence pointed to the overwhelming likelihood that, once the red and purple tags ran out, sale cattle were tagged with white floppy tags from Mt Ebenezer endorsed with the Henbury brand (TVX), and, accordingly, I found that the disputed animals tagged with white floppy tags were sale cattle.[6]
· Mt Ebenezer branded cattle without floppy tags
Among the cattle classed as “disputed” in the 2016 and 2017 drafts, were 12 Mt Ebenezer cattle with no floppy tags: seven steers, four cows and one bull.
The plaintiff did not make any submissions specifically directed to these animals[7] and called no evidence in relation to the issue.
I found that the seven steers were sale cattle.[8] I found that the remainder of this category of cattle (four cows and one bull) were not sale cattle, but belonged to the plaintiff.[9] This finding was not based on any evidence called by the plaintiff but was essentially a default finding based on the animals’ brands in the absence of evidence to establish that they were sale cattle.
· Palmer Valley branded bulls without floppy tags
Among the cattle disputed in the 2016 and 2017 drafts were four Palmer Valley branded bulls with no floppy tags. The defendants contended that these bulls were part of a cohort of 35 bulls delivered to Mt Gloaming on Henbury in September 2014, all of which were branded ‘TF4’ and which had red floppy tags in their near side ear, red floppy tags in their far side ear, or no floppy tags at all.
The plaintiff made no submissions and called no evidence in relation to these particular bulls.[10]
On the basis of evidence called by the defendants, I found that the three bulls mustered at Mt Gloaming formed part of the sale cattle.[11] There was insufficient evidence to establish that the fourth bull - mustered at Cave Hole/Three Mile – was part of the sale cattle so I made a finding that that bull belonged to the plaintiff.[12] Again, this finding was not based on any evidence called by the plaintiff but was essentially a default finding based on the animal’s brand in the absence of evidence to establish that it was part of the sale cattle.
· Palmer Valley branded steers with the backs of floppy tags only
Among the cattle disputed at drafts in 2016 and 2017 were four Palmer Valley branded steers which had the backs of floppy tags in their ears, but not the fronts – these presumably having fallen off. I found that these were sale cattle and therefore belonged to the first defendant. Accordingly, this claim was unsuccessful.[13]
· 28 cattle sent to Tongala Abattoir
The plaintiff contended that among the cattle drafted by the first defendant on 16 and 17 June 2016 and trucked to Tongala Abattoir in Victoria and slaughtered, there were 28 Palmer Valley cattle. The plaintiff claimed the money the defendants received for these cattle.
The plaintiff adduced no evidence that these 28 animals were not sale cattle and Mrs Fogarty conceded that she did not know whether or not these 28 cattle belonged to the plaintiff. Accordingly, the plaintiff’s claim in relation to those cattle failed.[14]
· Other un-mustered cattle on Henbury
The plaintiff claimed that at the time of the making of the deed of settlement between the parties (11 December 2015) there were between 800 to 1,500 head of Palmer Valley cattle on Henbury. It was common ground that during the drafts carried out in 2016 and 2017, 508 head of Palmer Valley cattle were returned to Palmer Valley. The plaintiff claimed, in the pleadings, to be entitled to the return of the balance of the Palmer Valley cattle on Henbury – ie between 300 and 1,000 cattle.
The plaintiff did not pursue this claim in final submissions and the evidence was that, by the end of 2017, Henbury had been fully mustered, so that any Palmer Valley cattle which had been on Henbury would have been returned under the agreed protocols at the supervised musters (ie 508 beasts). There were no additional cattle. Accordingly, this claim failed.[15]
· Twelve additional cattle
The plaintiff claimed 12 animals which were sold from Henbury and had Palmer Valley NLIS buttons made in 2015 on the basis that all sale cattle were transferred to Henbury before the end of 2014 and would therefore have had NLIS buttons manufactured in 2014 or earlier. The evidence failed to establish this: rather there was evidence of Palmer Valley NLIS buttons being used on Henbury cattle in 2015 and later. Accordingly that claim failed.[16]
In short, the plaintiff succeeded in its claim to ownership of the following disputed cattle only:
(a)four cows and one bull from the 12 Mt Ebenezer cattle with no floppy tags classed as “disputed” in the 2016 and 2017 drafts; and
(b)one bull mustered at Cave Hole/Three Mile from the four Palmer Valley branded bulls with no floppy tags disputed in the 2016 and 2017 drafts.
Further, the plaintiff succeeded in its claim to those animals by default, based only on the animals’ brands and an absence of evidence to establish that they were sale cattle. The plaintiff called no evidence and made no submissions in relation to its claim to these animals. The gravamen of the plaintiff’s claims was that the defendants had acted dishonestly by tampering with ear tags in order to pass off Palmer Valley cattle as sale cattle and otherwise stealing the plaintiff’s cattle, and the plaintiff failed completely to establish any ear tag tampering or other dishonesty on the part of the defendants.
As for the contention that it was necessary for the Court to determine the ownership of the disputed cattle: if the plaintiff had acted reasonably, this would not have been necessary. There was no reasonable basis for the major categories of “disputed” cattle to be disputed.
I likewise reject the plaintiff’s contention that the defendants should not have their costs of the claim because they did not diligently transfer all the sale cattle onto the Henbury PIC and this caused difficulty in determining the ownership of cattle on Henbury. There was no finding to this effect in the judgment and, in any case, there would have been no difficulty in determining the ownership of cattle on Henbury if the plaintiff had acted reasonably.
The defendants contend that the plaintiff should pay their costs on an indemnity basis because the plaintiff propounded serious (essentially criminal) allegations of misconduct against the defendants, accusing them of ear tampering and theft of cattle and at no stage did the plaintiff have a proper evidentiary basis for these allegations. The defendants pointed to “insuperable difficulties” with the plaintiff’s claims.
(a)The plaintiff’s case theory made no sense. The plaintiff alleged the defendants inserted tags in the offside ear of the plaintiff’s cattle in order to pass them off as sale cattle whereas sale cattle were to be identified by tags in the nearside ear.
(b)The plaintiff’s assertion that none of the sale cattle had tags in the offside ear or white floppy tags in either ear was contradicted by photographic and video evidence and the evidence of the objective witnesses.
The defendants place reliance on the following finding by the Court:[17]
It beggars belief that, with the full scrutiny of the Court proceedings on foot, the defendants would accelerate the alleged conduct of inserting floppy tags and that they would still be putting the floppy tags in the ‘wrong’ ear.
The defendants say that the evidence in question – and the absence of any rational basis for the plaintiff’s allegations – was drawn to the plaintiff’s attention on numerous occasions.[18] The plaintiff was invited to withdraw the allegations and was put on notice that the defendants would seek payment of costs on the indemnity basis if the plaintiff failed to do so. The defendants rely on a letter dated 25 August 2016 from the defendants’ solicitors to the plaintiff’s solicitors which referred to the relevant evidence, invited the plaintiff to withdraw the allegations of dishonest tampering with ear tags and advised, “We put your client on notice that, should your client maintain these serious allegations against our client, our client will seek its costs of the allegations, if not the proceedings, on the indemnity basis.”[19]

The defendants also rely on the conduct of the Fogartys (the shareholders and directors of the plaintiff) in the course of the proceeding citing:
(a)the inconsistent and evasive nature of their evidence;
(b)the shifting nature of their claims; and
(c)the plaintiff’s failure to disclose a critical photograph of the Orange Creek mob.
Findings were made in relation to the inconsistent and evasive nature of the evidence of Mr and Mrs Fogarty and the shifting nature of their claims in the judgment on liability.[20]
The photograph of the Orange Creek mob was taken by Mrs Fogarty on 22 June 2016; a written request for it was made on 11 July 2016;[21] its existence was denied by Mrs Fogarty under oath on 21 November 2017;[22] and it was belatedly disclosed on 25 January 2018.[23] That photograph contradicted the evidence of Mrs Fogarty about what she saw on 22 June 2016. That is important because it was Mrs Fogarty’s allegations of what she saw that day that led to the injunction being granted and precipitated the institution of these proceedings.
The defendants contend that the plaintiff’s willingness to propound very serious allegations of misconduct in the face of these insuperable difficulties warrants an award of indemnity costs. The claims had no real prospect of success and were pursued in wilful disregard of known facts.
In so far as the defendants are claiming indemnity costs on the plaintiff’s claim, I agree.
Principles
The Court’s discretion to award costs is absolute and unfettered but must be exercised judicially.[24] Indemnity costs “can properly be awarded where there is some special or unusual feature in the case to justify the Court exercising its discretion that way.”[25]
The defendants contend that indemnity costs are justified in this case, inter alia, because the plaintiff made allegations of fraud without a proper evidentiary basis. Woodward J said in Fountain:[26]
It is sometimes said that such costs can be awarded where charges of fraud have been made and not sustained; but in all the cases I have considered, there has been some further factor which has influenced the exercise of the court's discretion – for example, the allegations of fraud have been made knowing them to be false, or they have been irrelevant to the issues between the parties.
In Colgate Palmolive Co v Cussons Pty Ltd[27] Sheppard J gave examples of some of the circumstances which have been thought to warrant the exercise of the discretion which included “the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud”.
As Harper J stated in NIML Ltd v Man Financial Australia Ltd (No 2):[28]
Loose allegations of fraud are a blot on the adversarial system, and may – where, for example, the are made in terrorem – amount to an abuse of process. It is therefore important that those inclined to make such a serious allegation on an inadequate, or no, foundation be discouraged in their purpose by the prospect of having to pay costs as between solicitor and client.
The defendants contend that in this case the plaintiff must have known that its allegations of fraudulent tampering with ear tags and of cattle stealing were false. The original allegations of such dishonesty were made in relation to “the Orange Creek mob” seen by Mrs Fogarty on 22 June 2016. Mrs Fogarty swore in her first affidavit that when she first went to Henbury on 22 June 2016 she saw a yard of 40 to 50 mixed cattle most of which appeared to have Palmer Valley earmarks and orange NLIS tags and that among these was a big fat broken baldy cow and a big black bullock. She deposed that when she returned later that afternoon, most of the animals (including the big fat broken baldy cow) appeared to have had the orange NLIS tags removed. They now had no NLIS tag. In their place were red floppy tags in their offside ears and the big black bullock was missing. Mrs Fogarty deposed that she believed, based on what she had observed, that the orange NLIS buttons had been deliberately removed and replaced with red floppy tags to disguise these cattle as sale cattle.
However, Mrs Fogarty’s descriptions of what she saw were contradicted by her own notes made when she returned to witness a draft of those cattle on 25 June. When this was pointed out to Mrs Fogarty in cross-examination, she said, for the first time, that the cattle she saw on 25 June were not the same cattle she had seen on 22 June.[29] There had been no suggestion in any of her affidavits that the entire mob of cattle had been switched. Rather, she was complaining that the big black bullock and the broken baldy cow were missing from the mob and that others in the mob had had their ear tags tampered with. It was only when faced with the objective evidence of her handwritten record of the draft on 25 June, which contradicted what she said she saw on 22 June, that she claimed, for the first time, that the cattle that were drafted on 25 June were not the cattle she had seen on 22 June.
Further, a photograph taken by Mrs Fogarty at Henbury on the afternoon of 22 June did not support her evidence that most of the mob had red floppy tags in their offside ears at that time. This is the photograph which Mrs Fogarty originally denied taking and belatedly disclosed.
Other examples given by Sheppard J in Colgate of circumstances which have led to an award of indemnity costs include commencing or continuing proceedings for some ulterior motive or in wilful disregard of known facts or clearly established law.[30]
The defendants contend that the plaintiff’s conduct in the course of this proceeding also satisfied this criterion for an award of indemnity costs. The plaintiff proceeded with their claims of dishonest conduct against the defendants in wilful disregard of known facts. Mr and Mrs Fogarty both knew that their evidence that all sale cattle were marked by having red or purple tags placed in their near side ears was false. Mr Fogarty was present when sale cattle were delivered with red tags in their offside ears, white tags or no tags. Further, that evidence was contradicted by photographs and videos and entries in the station diaries of both Palmer Valley and Henbury.[31]
I agree that for these reasons, the plaintiff should pay the defendants’ costs of and incidental to the plaintiff’s claims on an indemnity basis.
The same considerations do not apply to the costs of the counterclaim. The defendants contend that up until 3 December 2019 (the date of the liability judgment), the plaintiff’s false claims of ear tampering and other dishonesty were relevant to both the claim and the counterclaim. I do not agree. The issues on the counterclaim were quite different. They involved an assessment of the number of cattle on Palmer Valley that could not be explained by natural increase, expert evidence and evidence of the wandering behaviour of cattle in that part of the Northern Territory.
The plaintiff contends that there is no warrant for an order for indemnity costs against the plaintiff on the counterclaim; that the plaintiff reasonably disputed the number of cattle claimed by the defendants and reasonably disputed “the exaggerated quantum of damages sought”. I agree that it was not unreasonable for the plaintiff to defend the counterclaim and test the quantum of damages sought with one caveat. Among the examples of circumstances which have been found to justify an order for indemnity costs given by Sheppard J in Colgate[32] is an imprudent refusal of an offer of compromise and in my view it was unreasonable for the plaintiff to reject the defendants’ offer to settle the quantum of their claim for $1.5 million.
The costs of the counterclaim should be awarded on the standard basis until the date of the defendants’ letter of 8 October 2020 offering to settle quantum for $1.5 million, which was less than the amount awarded by the Court. In my view, it was imprudent for the plaintiff to refuse that offer and they should pay the defendants’ costs of the proceeding on an indemnity basis from that date.
ORDERS:
1.The plaintiff is to pay the defendants’ costs of and incidental to the proceeding including the costs of the injunction applications and the costs application.
2.In default of agreement, the defendants’ costs on the plaintiff’s claim are to be taxed on an indemnity basis.
3.In default of agreement, the defendants’ costs on the counterclaim are to be taxed on the standard basis to 8 October 2020.
4.In default of agreement, the defendants’ costs of and incidental to the proceeding after 8 October 2020 are to be taxed on an indemnity basis.
----------

[1] left

[2] Mr and Mrs Fogarty are the shareholders and directors of the plaintiff. In 2015 there had been an incident as a result of which Ted Fogarty was charged with assaulting Mr Ashley Anderson (a director of the first defendant and manager of Henbury), and this led to a falling out between the Fogartys and the Andersons.

[3] BJEK Pty Ltd as trustee for the EL & SL Fogarty Family Trust v Henbury Cattle Co Pty Ltd & Ors [2019] NTSC 86 (‘BJEK’) at [48]

[4] The agreed method of marking sale cattle was to place red or purple tags on their nearside ears.

[5] BJEK at [87]

[6] Ibid at [100] and [101]

[7] BJEK at [106]

[8] Ibid at [108]

[9] Ibid at [109]

[10] Ibid at [113]

[11] BJEK at [114]

[12] Ibid at [115]

[13] Ibid at [120]

[14] BJEK at [125]

[15]Ibid at [128]

[16] BJEK at [134]

[17] BJEK at [86]

[18] Affidavit of Michael Grove sworn 1 May 2020 at paragraphs 2 to 5, filed 1 May 2020.

[19] Exhibit MJG2 to the affidavit of Michael Grove sworn 1 May 2020, penultimate paragraph.

[20] BJEK at [54] to [61]

[21]Exhibit MJG1 to the affidavit of Michael Grove made 1 May 2020.

[22]Transcript 21 January 2017 at p 183 last two lines.

[23] See paragraph [103] of the defendant’s trial submissions.

[24] Fountain Selected Meats (Sales) Pty Limited v International Produce Merchants Pty Limited [1988] FCA 202; (1988) 81 ALR 397, per Woodward J (‘Fountain’) at 400

[25] Ibid

[26]Ibid

[27] (1993) 46 FCR 225 (‘Colgate’) at [24]

[28]NIML Ltd v Man Financial Australia Ltd (No 2) [2004] VSC 510, quoted with apparent approval by Sackar J in Simonson Properties Pty Ltd v Hardy [2014] NSWSC 363 at [17] and by Refshauge J in Ezekiel-Hart v Law Society (ACT) [2012] ACTSC 103 at [131]

[29] Her evidence and the relevant findings of fact are set out at paras [36] to [48] of the judgment on liability; BJEK.

[30] Colgate at [24]

[31] BJEK at [63]

[32] Colgate at [24]