Bridson v Relf

[2021] NSWCATCD 114

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Bridson v Relf [2021] NSWCATCD 114

Hearing dates:

28 April 2021

Date of orders:

22 December 2021

Decision date:

22 December 2021

Jurisdiction:

Consumer and Commercial Division

Before:

K Ross, Senior Member

Decision:

(1) Jeanette Relf is to pay to Andrew Bridson the sum of $10,017.30 as follows:

reimbursement for cost of repairs to the pump, motor and control panel $10,057.30,

less cost of cattle tags $40.00.

(2) The sum of $10,017.30 referred to in order (1) is forthwith to be applied as a rent credit to the rent ledger.

(3) By 28 February 2022 Andrew Bridson is to effect such repairs as are necessary to bring both the bike shift irrigation system and the Re-Use irrigation system into working order, and he is to maintain both systems in working order thereafter.

(4) Jeanette Relf is to do all acts and things necessary to enable the lessee to operate the MidCoast Water system without interference by the lessor.

(5) Jeanette Relf is to give to Andrew Bridson a copy of the manuals and agreement with MidCoast Water in respect of the Re-Use irrigation system within 14 days of the date of these orders.

(6) If an application to MidCoast Water is required, Jeanette Relf must make that application within 28 days of the date of these orders.

(7) Jeanette Relf must not interfere with the lessee’s use and enjoyment of the property. The lessor and her agents (including Mr Stephen Relf) must not enter upon the property unless in accordance with the provisions of the Act.

(8) By 28 February 2022 Jeanette Relf is to effect such repairs as are necessary to make the boundary fences stock proof.

(9) If either party presses an application for costs, short submissions should be filed and served by 21 January 2022. Submissions in reply should be filed and served by 4 February 2022.

(10) All other claims are dismissed.

Catchwords:

LANDLORD & TENANT— Agricultural tenancy — Obligation to repair and maintain— Termination — breach

Legislation Cited:

Agricultural Tenancies Act 1990 (NSW)

Cases Cited:

Pipeclay Lawson Ltd v Brand Ventures Pty Ltd [2021] NSWSC 909

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Andrew Bridson (Applicant)
Jeanette Relf (Respondent)

Representation:

Solicitors:
James Bell (Applicant)
Barraclough Jones & Associates (Respondent)

File Number(s):

COM 20/34656

Publication restriction:

Nil

REASONS FOR DECISION

Application

1. This dispute arises out of an agricultural tenancy agreement between the applicant lessee and the respondent lessor for the lease of a farm in Gloucester. The agreement commenced on 1 November 2017 for a term of 5 years with a 5-year option. The lessor’s son Stephen Relf represented the lessor in her dealings with the lessee.

2. By February 2019 the parties had fallen into dispute. Each alleged that the other was in breach of his or her obligations under the agreement. A meeting was held on 16 February 2019 and some agreement was reached. However, that agreement was not implemented, and on 9 July 2019 the applicant’s lawyer wrote to the respondent, raising alleged breaches of the agreement in respect of removal of stock, the MidCoast Water System, the bike shift irrigation system, boundary fencing, and removal of rubbish.

3. Further attempts were made to resolve the issues without success. On 6 May 2020 the lessor’s lawyer gave a notice of breach in respect of alleged failures to apply fertiliser, control weeds, maintain the irrigation systems and observe the 5-day cattle withholding period. On 4 August 2020 by letter from her lawyer to the lessee’s lawyer the lessor served what she alleges to be a notice of termination. She claims that the lease was terminated by that notice.

4. The lessee disputes that he is in breach, disputes that there was a termination notice served, and disputes that the lease has been terminated. He has remained in occupation.

5. Both parties claim to be entitled to compensation.

The applicant’s claims

6. The following claims were pressed by the applicant at the hearing:

1. Monetary claims

1. Reimbursement of cost of repairs to the pump, motor and control panel $10,057.30

2. Fencing materials $16,364.73

3. Fodder to feed stock, including claim for lost grazing and loss of sale of silage as a result of failure to provide irrigation in accordance with the lease $61, 229.77

2. Non Monetary claims

1. That control of the MidCoast System be handed over to the applicant in working order within 14 days

2. That copies of all manuals and agreements with MidCoast Water be handed to the applicant within 14 days

3. That any monies found to be owing to the lessee be offset against rent due

4. That the lessor be restrained from terminating the agreement on the basis of the Notice under s 129 of the Conveyancung Act or at all

5. That the respondent be restrained from trespass or otherwise entering upon the property otherwise than in accordance with the lease and the Act and that she procure that Mr Relf be restrained from entering the property otherwise than in accordance with the agreement and the Act.

The respondent’s claims

7. The respondent did not file an application but seeks by way of set off:

1. Confirmation of termination of the lease

2. Monetary claims:

1. Repairs to the Reuse system $8000

2. Replacement of electric motor in the bike shift system $7854.00

3. Outstanding single Super applications $18,694.50

4. Labour charges to control and spray weeds around the reuse system $3091.00

5. Cost of feed for the period cattle sales were delayed due to absence of cattle tags

6. Estimated cost to redeploy the bike shift irrigation system $14080.00

7. Replace 12 cattle tags $40.00

8. Estimated cost to properly address weed problems $11401.00

Jurisdiction

8. The Agricultural Tenancies Act 1990 (“the Act”) has the following definition:

"agricultural purposes" means grazing, dairying, pig-farming, poultry farming, viticulture, orcharding, bee-keeping, horticulture, vegetable growing, the growing of crops of any kind, forestry, or any combination of any of those things

9. I am satisfied that this is a dispute in respect of an agreement for agricultural purposes as defined. The Tribunal has jurisdiction to hear and determine it under s 20 of the Act.

The hearing

10. Because of Covid 19 restrictions, the hearing was conducted by phone and VMR. There were frequent difficulties in maintaining the connection, particularly on the second day, and the standard of the sound was poor.

11. In addition to these problems, the parties had filed some of the documents electronically, in accordance with the Tribunal’s relaxed Covid guidelines. This made locating relevant documents difficult during the hearing.

12. The Tribunal is grateful for the assistance received from the parties and the parties’ legal representatives in navigating these issues.

Credit issues

13. This is a matter where many of the facts are disputed. This makes the credit of the various witnesses a matter which the Tribunal has to take into account. In this regard:

Applicant’s witnesses

Andrew Bridson

14. Mr Bridson is the applicant and the lessee. I found Mr Bridson to be a witness of credit. He directly answered questions put to him. He did not attempt to evade the questions, or to make submissions in reply to questions put. His evidence was consistent and he remained firm in that evidence under cross examination.

Robert Ruysch

15. Mr Ruysch worked for Mr Bridson on the farm. He was not called for cross examination and his evidence supported that given by Mr Bridson. There was no challenge to his credit.

Tobias Bowen

16. Mr Bowen inspected the property with Mr Bridson before the agreement was entered into. His evidence collaborated that of Mr Bridson. He was cross examined, but remained firm in his evidence. His credit was unshaken.

Gary Ferris

17. Mr Ferris was the lessor’s agent until he gave notice of termination of the agency agreement because, he was said, he was not prepared to continue to deal with Stephen Relf. Mr Ferris was not available for cross examination. His evidence comprised emails between himself and Mr Bridson. I accept that those emails reflect his contemporaneous account of the matters discussed. There was no challenge to his credit.

Respondent’s witnesses

Jeanette Relf

18. Mrs Relf is the lessor. I accept that she gave her evidence truthfully, but she stated that she had no direct knowledge of various matters because, she said, she had handed the management of the farm to Stephen Relf after her husband’s death (in 1993). She could not recall when the bike shift irrigation system had last been used before the lease commenced but said that it was working when it was used. She said she did not know whether the ingoing report had ever been prepared.

19. I accept that Mrs Relf was truthful in her evidence, but her lack of detailed knowledge of matters in dispute, or recall of those matters, affects the weight which can be given to her evidence.

Stephen Relf

20. Stephen Relf is the lessor’s son. I found him to be an evasive witness. He frequently failed to answer questions put to him in cross examination and had to be reminded to do so on several occasions. He gave conflicting evidence about his role in the arrangements between his mother and Mr Bridson, initially agreeing when it was put to him by his solicitor Mr Barraclough

“your mother left it to you to deal with matters relating to the lease with Mr Bridson”

“Yes”

but later insisting that he didn’t know whether the initial inspection report had been completed because he had only been advising his mother. It is clear from the various emails in evidence that Mr Relf was giving instructions to Gary Ferris on his mother’s behalf, was attending meetings with Gary Ferris and the lessee and was doing much more than simply advising his mother during the first 2 years of the lease. In re-examination, he agreed with his solicitor’s proposition that his role was to oversee the performance of the lease conditions, but the general impression was that he was attempting during cross examination to minimise his involvement in the lease.

21. Mr Relf was also evasive in his answers to questions about whether Mr Bridson had been given a copy of the MidCoast Water agreement. He agreed that Mr Bridson had not been given a copy but continually qualified his answers, stating that “he hadn’t complied with the withholding period which I think is stated in the lease” (it isn’t), that at meetings the terms had been explained to Mr Bridson, that he had a section of the agreement handed to him at the November meeting, that he had been given one page “to demonstrate the end user”, but that he (Mr Relf) had never maintained that because of the terms of the agreement with MidCoast Water, it was not possible to hand over control of the system to Mr Bridson.

22. Further, Mr Relf was evasive in his answers to questions about the weight of a standard bag of super. He initially answered “2 bags is 250 kg to the acre”, then said “50kg”, then said “The last bag I bought was 1000kg”. When the question was put again “What is the standard weight of a standard bag?” he said “it says 2 bags of single super to the acre there’s nowhere stated in there anything about standard”. Across more than a dozen questions, Mr Relf gave varying answers. I was left with the impression that he was being deliberately evasive and answering questions in a way which he felt would advance his case.

23. I have considered that there were severe difficulties in the audio quality during Mr Relf’s evidence, but I am not satisfied that his answers were affected by those difficulties. When asked questions by his own lawyer in examination in chief and re-examination, Mr Relf appeared to have no difficulty in answering, but during cross examination, he appeared to be intent on arguing his case rather than directly answering the questions.

The written agreement

24. The written tenancy agreement comprises 3 pages, and was prepared by the managing agent Gary Ferris of Webbs Real Estate Gloucester. It is more akin to a heads of agreement document, with no standard terms or conditions usually found in a lease document. It relevantly includes the following:

“1 The property comes with a 15 year, water entitlement contract with Mid Coast Water

(a) Approximately $1.5 million in irrigation infrastructure has been installed.

(b) It services lots 398, 401 and approximately 60% of lot 400

(c) The system is fully automated and controlled via the internet

(d) It includes a 255 mega litre effluent re-use allocation of which the property is obliged to take at least 25% annually.

(e)The infrastructure belongs to the landlord and includes power for 7 years at no charge a 15 year water entitlement and then power for years 8 – 15 at MidCoast Water’s concessional rate.

(f) The obligations and conditions of this agreement will need to be complied with as a component of the overall lease agreement.

(g) Operations of effluent Re Use system has not yet been fully commissioned and signed off by the Land Owner, Mid Coast Water and Gosford Irrigation.

(h) Stephen Relf agrees to assist the Lessee with the desired water applications and organise it in his behalf until the Lessee has familiarised himself with the operations of the farm and irrigation system and the Effluent Re-use system is fully commissioned.

2 The property comes with a water license that services bike shift irrigation on lots 3, 412, 399 and part lots 400 and 20.

3 A 40 HP pump on the river supplies water to the bike shift irrigation. The pump is powered by 3 phase electricity and is separately metered. “

Lessee responsibilities

(ii) The Lessee accepts the property in the condition it was in when inspected on 24/09/2017.

(iii) The Lessee acknowledges it is their responsibility to control weeds over the duration of the lease

(iii) The Lessee will apply a minimum 2 bag/acre (432 bags) of single super annually.

(vii) The maintenance of internal fences is the responsibility of the lessee.

(viii) The lessee shall be responsible for maintaining the pump in good working order. If the pump breaks down the lessee is responsible for its repair. In the event of flood the lessee is responsible for moving the pump out of the flood zone.

(ix) The lessee shall be responsible for maintaining the bike shift irrigation system in good working order. Repairs and maintenance of this irrigatiom system are the responsibility of the lessee.

(xi) The lessee will not restrict access to the excluded houses or the right of carriageway to Lot 21.

Boundary fences

Boundary fences will be maintained by the Land Lord (Lessor)

From time to time the Lessee may be required to do on the spot repairs to boundary fences, The Land Lord will supply the materials for the temporary repair.

The Land Lord will subsequently make a permanent repair at their earliest convenience (within one month from the repair being reported),

All materials required for boundary fencing repairs will be provided by the Land Lord”

The issues

25. The following issues arise:

1. What was the condition at the commencement of the lease of:

1. The fences

2. Weeds

3. The bike shift irrigation system?

2. What obligations are imposed by the lease and/or the Agricultural Tenancies Act 1990 (“the Act”), and on whom, in respect of:

1. The fences

2. Weeds

3. The irrigation systems

4. Fertiliser application?

3. Is either party in breach of any obligation under the lease?

4. If so, what remedy is available to that party in respect of that breach?

5. Has the lease been terminated? Is the lessor entitled to terminate the lease?

The condition of the property at the commencement of the lease

26. Section 12 of the Act provides:

12 RECORD OF CONDITION OF FARM

(1) It is a term of the tenancy that a record of the condition of the following matters must be made jointly by the owner and the tenant, if either so requires it, at the commencement of the tenancy and at reasonable intervals during the tenancy:

(a) the land and any cultivation of the land,

(b) any buildings, fences, gates, roads, drains or other works or things on the farm,

(c) any other improvements.

(2) It is a term of the tenancy that a record of any improvement carried out by the tenant or the owner, and a record of any fixture that the tenant may remove under this Act, must be made jointly by the owner and the tenant, if either so requires it, at reasonable intervals during the tenancy.

27. There was no record of the condition of the farm prepared at the commencement of the tenancy. I accept the evidence of Mr Gary Ferris, who managed the property on behalf of Mrs Relf until terminating the agreement on 15 November 2019, that the lessor did not agree to pay for it to be prepared.

28. Generally, the lessee contends that the property was rundown at the commencement of the tenancy. The lessor denies that was the case and says that the property was in good order.

The fences

29. The lessor claims that the boundary fences were put in order before the commencement of the agreement. The lessee says that they were in poor condition. He is supported by Robert Ruysch, who says that he had to repair the boundary fences, which were in some cases non- existent, and were not suitable for cattle.

30. I take into account:

1. There is no evidence before the Tribunal that the lessee raised any issues in respect of the fencing at the commencement of the lease.

2. The minutes of the meeting held in February 2019 do not record any discussion about the fencing.

3. The minutes of the meeting held in November 2019 record that the parties agreed

“to assume that all boundary fences were stock proof at the beginning of the lease meaning that they were all strained and not falling over.”

and agreed to conduct an audit of the fencing.

4. During the inspection/audit, Mr Relf became angry when Mr Ferris indicated that the distance between some posts exceeded what would generally be acceptable.

31. Taking all of this evidence into account, I find that the fences were generally stock proof at the commencement of the lease, but required some adaptation, particularly to make them suitable for cattle rather than dairy cows.

Weeds

32. The lessor says that there was no excessive weed infestation at the commencement of the tenancy. The lessee says there was. The lessor relies upon marketing photos of the property taken some months before the lease commenced. The lessee says that the photos are not of the infested areas.

33. I prefer the lessee’s evidence in respect of the weeds. I am not satisfied that the weeds depicted by Mr Relf could have reached the size shown since the commencement of the tenancy. I find that there was some pre-existing weed infestation on the property.

The Bike Shift Irrigation system

34. Stephen Relf states that the bike shift irrigation system was functioning at the commencement of the tenancy. The lessee says that it was not.

35. I accept the lessee‘s evidence in respect of the bike shift irrigation system for the following reasons:

1. Mrs Relf’s evidence was that it was working when they last used it, but she couldn’t say when that was.

2. Tobias Bowen states that on his inspection of the property, the bike shift irrigation sprinklers and pipes were spread haphazardly around the paddock, and some had been damaged (he thought by having been run over by a tractor). He said that the pump appeared to have been flooded and looked like it had not functioned for a long time. He also said that he was present when Mr Bridson asked Mr Relf whether the system worked, and Mr Relf made an excuse “as to why it wasn’t necessary to run the irrigation system”.

3. Mr Relf did not ever demonstrate to the lessee that the system was working. When cross examined about why, he stated that he could not do so because Mr Bridson had removed the sprinkler heads and hoses and had not put them back, but that was the situation in 2019, not 2017.

4. The evidence of the engineer in October 2018 was that there was significant play in the pump, and the email dated July 2019 states that the pump was irreparable.

36. On the balance of probabilities I find that the bike shift irrigation system was not in working order at the commencement of the lease.

What obligations are imposed by the lease and/or the Act, and on whom?

Acceptance of condition at commencement

37. The agreement provides that the lessee accepts the property in the condition it was in when inspected on 24/09/2017. I accept the evidence of Mr Tobias that the lessee was prepared to accept the property in the condition it was in at the commencement because “it had great potential”. Mr Tobias noted that he observed that the fences were rundown, there were weeds on the property, the pump to the bike shift irrigation system appeared not to have functioned for a long period and the pipes and sprinklers of that system were scattered around in a haphazard fashion.

The fences

38. The agreement provides that the lessor is responsible for the maintenance of the boundary fences, whilst the lessee is responsible for the maintenance of internal fencing. In respect of the boundary fences, the agreement provides that, if from time to time the lessee needs to make spot repairs, the landlord will supply the materials, and will make a permanent repair within 1 month of notice.

39. The Act provides by section 7 that the “making of permanent subdivision fences” is an improvement which can be made by a tenant without the owner’s consent. The owner must pay fair compensation to the tenant for any such improvement.

Weeds

40. The agreement provided that the lessee was liable for the control of weeds during the term of the lease. Destruction of prickly pear and control of weeds is also an improvement which a tenant is entitled to make and for which compensation is payable by an owner (section 12 of the Act).

The irrigation systems

The bike shift system

41. The agreement provides for the lessee to maintain the pump and the bike shift system in good working order. It further states that the lessee is responsible to maintain this system in good working order. “Maintain” is defined in the Macquarie Dictionary as

1.  to keep in existence or continuance; preserve; retain: to maintain good relations with New Zealand.

2.  to keep in due condition, operation, or force; keep unimpaired: to maintain order; maintain public highways.

3.  to keep in a specified state, position, etc.

4.  to affirm; assert (with a clause, or with an object and infinitive): maintain that it is right; maintain it to be true.

5.  to support in speech or argument, as a statement, etc.

6.  to keep or hold against attack: to maintain one's ground.

7.  to provide with the means of existence.

42. The question as to how an obligation such as the obligation to “maintain and repair” or to “maintain the pump in good working order” is to be understood is the subject of many decisions. In Pipeclay Lawson Ltd v Brand Ventures Pty Ltd [2021] NSWSC 909 the Supreme Court discussed the general principles:

“49 In Proudfoot v Hart (1890) 25 QBD 42 Lord Esher MR, with whose reasons Lopes LJ agreed, referred to Payne v Haine (1847) 16 M&W 541; 153 ER 1304 where the contract was to keep premises in “good repair”, the expression used in clause 13.1(a). His Lordship said that that is “much the same thing as ‘tenantable repair’” (at 51).

50 In Payne v Haine Baron Parke said (at 545, 1306) that the age and class of the premises let with their general condition as to repair at the commencement of a lease must be estimated in order to measure the extent of repairs to be done where there is an obligation to keep old premises in good repair. The plaintiff does not dispute this principle.

51 In Butt’s Land Law 7th ed (Professor Edgeworth) Law Book Co 2017, the learned author says (at [7.840]):

“The standard of repair required under a covenant to repair is a matter of construing the terms of the covenant. Every word of the covenant must be considered, construed in the context of the other provisions of the lease (Anstruther-Gough-Calthorpe v McOscar [1924] 1 KB 716 at 731-732; Bonafair Holdings Pty Ltd v Hungry Jacks Pty Ltd [2016] NSWCA 276). For example, a covenant to keep in ‘good and substantial repair’ may impose a higher standard than a covenant simply to keep in ‘good tenantable repair’ (Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349); and a covenant (in a plain language lease) to maintain in ‘good condition and repair’ may impose a higher standard than a covenant simply to keep in ‘repair’, since ‘good condition’ may be a separate concept from, and add significantly to, ‘repair’ (Welsh v Greenwich London Borough Council [2000] 49 EG 118 (CA), noted [2001] Conv 184, as interpreted in Lee v Leeds City Council [2002] 1 WLR 1488 at [61]) … The required standard of repair depends on many factors. They include the following: the nature of the building; the terms of the lease; the state of the building at the start of the lease; the nature and extent of the defect sought to be remedied; the nature, extent and cost of the proposed remedial works, and at whose expense they are to be undertaken; the value of the building and its expected life span, and the effect of the works on that value and life span; current building practices; the likelihood of a recurrence if one remedy rather than another is adopted; and the comparative cost of alternative remedial works and their impact on the occupants’ use and enjoyment of the building (Holding and Management Ltd v Property Holding and Investment Trust Plc [1990] 1 EGLR 65 at 68-69, adopted in Eyre v McCracken (2000) 80 P & CR 220).”

43. The agreement, when read in its entirety, implies that the irrigation equipment was in working order. The agreement states that the property comes with $1.5 million worth of irrigation infrastructure which “services the lots” referred to. The 40HP pump “supplies water to the bike shift irrigation system and is separately metered and powered by 3 phase electricity”. The obligation to repair the pump is stated to be “if the pump breaks down”.

44. However the lease clearly provides that the lessee accepts the property in the condition it was in, and that he has an obligation to maintain the pump and the system in good working order. According to Mr Tobias, it was obvious that the system was not in working order. The lessee was obliged by the terms of the lease to put it into a functioning state so that it could then be maintained in that state.

45. I am satisfied however that by putting the pump into working order, the lessee has effected an improvement with the implied consent of the landlord. He is entitled to compensation for that improvement.

The reuse system

46. The provisions of the lease agreement which relate to the reuse system are somewhat curious. The agreement states that the obligations and conditions of the agreement between the landlord and MidCoast Water “will need to be complied with as a component of the overall lease agreement”, but does not say by whom. The agreement states that “Operations of effluent Re-Use system has not yet been fully commissioned and signed off by the Land Owner, Mid Coast Water and Gosford Irrigation”. It then purports to bind Stephen Relf to “assist the Lessee with the desired water applications and organise it in his behalf until the Lessee has familiarised himself with the operations of the farm and irrigation system and the Effluent Re-use system is fully commissioned”, but Stephen Relf is not a party to the lease agreement.

47. I am satisfied that it was intended that these obligations attach to the lessor, but it was envisaged that they would be performed by Mr Relf as her agent.

Fertiliser application

48. The lease provides that the lessee will apply a minimum 2 bag/acre (432 bags) of single super annually, but does not say what size those bags are to be. Mr Relf’s evidence in this regard was not helpful. He seemed to assert in cross examination that the bags are 50kg each, but also stated that he purchased 1000 kg bags. There was no independent evidence before the Tribunal to enable any finding in respect of this issue.

49. The respondent states in submissions that if there was any uncertainty about the meaning of this obligation, it was clarified at the meeting on 10 November 2019. However, it is unclear from the minutes of that meeting who made the calculation. The calculation was apparently made by reference to a calculation in a NSW Primary Industries Agnote that 1 bag per acre is the equivalent of 125 kg/ha. The minutes record that Mr Bridson did not agree to that interpretation at the meeting.

50. If the Tribunal was to find that the term as expressed in the lease was a term which was common knowledge in the industry, then some independent evidence to support that assertion needed to be put before the Tribunal. Otherwise, on the face of the lease, the term is void for uncertainty. It cannot be rendered clear in a meeting 2 years after commencement of the agreement, or by reference to an example calculation in a document which was not mentioned in the lease.

51. The applicant says in submissions that the area over which the fertiliser is to be spread is also disputed. However, the obligation to apply 432 bags is clear. I do not accept that the clause can be read to require 2 bags per arable or useable acre.

52. Overall, I am not satisfied that the clause in the lease is sufficiently clear, and I find that this clause is void for uncertainty.

Is either party in breach of any obligation under the lease? If so, what remedy is available?

The lessor

53. The lessee alleges that the lessor has breached the agreement in relation to the bike shift system, fencing, the reuse system, and in failing to remove cattle, equipment and rubbish so as to give vacant possession, and in accessing the farm without his consent. In respect of each:

The bike shift system

54. I am not satisfied that the lessor has breached the agreement in respect of the bike shift irrigation system. It is the lessee’s obligation under the lease to maintain it in good working order.

55. However, the Act provides as follows:

"improvement" means any work or thing carried out on a farm in the course of a tenancy, being a work or thing that would be of value to an incoming tenant, but does not include the repair or replacement of any work or thing on the farm when the tenant first became a tenant, except as provided by this Act.

56. If the system had been working at the commencement of the tenancy, the cost of replacement and repair would have fallen on the lessee, but as it was not, I am satisfied that the lessor should reimburse the lessee for the cost of replacing the pump, motor and control panel, as that work in putting the system into working order amounts to an improvement.

57. The lessee must put the system into working order and maintain it in working condition.

Fencing

58. The lease provides that the lessor is responsible for repairs to the boundary fences. If an on the spot repair is carried out, the lessee is to use materials provided by the lessor. The need for repair on a permanent basis is required to be reported to the lessor, and the lessor is required to effect the repair within one month.

59. Fencing was discussed at the meeting on 10 November 2019. It is clear that the lessor was on notice at least by that time that repairs were required to the boundary fencing. There is no evidence that the lessor has carried out those repairs. I am satisfied that the lessor is in breach of this obligation.

60. The lessee is entitled to an order that the lessor carry out repairs to the boundary fencing.

61. The lessee also claims reimbursement of $16,364.73 for fencing materials. The evidence in support of the claim is a series of invoices from Norco Rural, Dillon Rural and CRT. There is no evidence of what work was actually carried out, or as to whether the work was work on the boundary fences or internal fences. The lessee is responsible for internal fencing.

62. The applicant has the onus of proving that the amount claimed relates to the lessor’s breach of the agreement, or was otherwise expenditure related to the making of permanent subdivision fences (see the Act Schedule 1). I am not satisfied that he has discharged the onus of proof.

The Reuse system

63. I am satisfied that a copy of the agreement between the lessor and MidCoast Water was not given to Mr Bidson. Whilst Mr Relf initially stated that a copy was made available to Mr Bidson during the meeting, he said under cross examination that it was one page which was provided, and that Mr Bridson had been told of his obligations in emails or in the meetings held.

64. The agreement with MidCoast Water has not itself been put into evidence by the lessor. The Tribunal is being asked to find that the lessee is in breach of conditions of an agreement which is not in evidence, and where the lease agreement does not state who is to comply with its terms.

65. However, neither the lessor nor Mr Relf assisted the lessee to make “the desired water applications”. There is no evidence as to when the reuse system was “fully commissioned”, but control of the system has never been relinquished by Mr Relf. Furthermore, Mr Relf gave evidence that he and Mr Ferris decided that the benefit of the agreement would not be transferred to Mr Bidson

66. The lessor is in breach of her obligations to assist the lessee “with the desired water applications”. It was not open to Mr Relf to decide in consultation with the lessor’s agent that he would maintain control of this system.

67. The lessee is entitled to an order that the lessor do all acts and things necessary to hand the management and control of the system to the lessee. However, the Tribunal cannot make an order binding upon MidCoast Water, and the extent to which this order will be effective will depend upon the conditions of the agreement.

Removal of the lessor’s cattle, items in the sheds and rubbish (failing to give vacant possession to the lessee)

68. I am satisfied that the lessor failed to give vacant possession of the property to the lessee at the commencement of the agreement. The whole issue in relation to the use of the lessor’s cattle tags would not have arisen if vacant possession had been given, as the tags would not have been in the old fridge in the shed. The minutes of the resolution meetings support a finding that the lessor’s cattle remained on the property well into the lease term.

69. I can make no finding in respect of the rubbish, in the absence of an ingoing inspection report.

70. The lessee does not press an orders for compensation, but to the extent that any of the lessor’s items remain on the property, the lessee is entitled to have them removed.

Accessing the farm without consent

71. Section 11 of the Act provides:

Right of owner to enter farm

11 RIGHT OF OWNER TO ENTER FARM

(1) It is a term of the tenancy that the owner, or any person authorised by the owner, may at all reasonable times, after giving reasonable notice, enter the farm for any of the following purposes:

(a) to view its condition,

(b) to perform a function of the owner under this Act,

(c) to carry out an improvement (if permitted by this Act).

(2) This section does not authorise the owner to enter any part of the farm used for residential purposes except with the consent of the tenant.

(3) Nothing in this section limits any other right of entry conferred on the owner by or under any other Act or law or by an agreement.

(4) Notice under this section may be given orally or may be served in writing.

72. Mr Stephen Relf asserted that he had to access the farm in order to access his own property. There is no dispute that he is entitled to access through farm via the right of way. He is also entitled to visit his mother, at her property. However it is clear from the photos and evidence given in these proceedings that Mr Relf has carried out inspections of the property without having given notice to the lessee. I do not accept that he is entitled to do so, and the lessor is in breach of her obligations in this regard.

73. The lessee is entitled to an order restricting the lessor her servants and agents (including Mr Stephen Relf) from accessing the property other than in accordance with the Act.

The lessee

74. The lessor alleges that the lessee has breached the agreement in relation to weed control, application of fertiliser, repair and maintenance of the bike shift system, the conditions of use of the reuse system, and maintenance of that system. In respect of each:

Weed control

75. The lessee’s obligation is to “control weeds” on the property. I am satisfied that this obligation extends to controlling weeds which were present at the commencement of the lease, and also to control weeds on areas of the property on which the lessor’s cattle had been grazing.

76. However I am not satisfied that this means that the lessee is in breach of this obligation if there are any weeds on the property at any time. The fact that the lessor may provide photographs of weeds does not mean that the lessee does not have a system in place to control the weeds, or that the weeds are out of control. There is for example no evidence that any statutory authority has taken action in respect of the weed control. Mr Relf acknowledged in his email dated 23 January 2020 that “There are some farms up the river that don’t control hence why we are seeing breakouts down river”. Mr Bridson and Mr Ruysch both gave evidence that poisoning and digging out weeds (including Cestrum, and including along the river) forms a large part of Mr Ruysch’s responsibilities.

77. I am therefore not satisfied that the lessor has proven that the lessee is in breach of these obligations.

Application of fertiliser

78. I have found that the condition which required the application of 2 bags of super per hectare is void for uncertainty. There can be no breach of this clause.

79. This is not to say that the lessee does not have an obligation to apply adequate amounts of fertiliser as a matter of good farm management. If he does not do so he may be liable to the lessor for any deterioration in the condition of the farm as a consequence (see s 19A of the Act).

Repair and maintenance of the bike shift system

80. I am satisfied that the lessee is in breach of his obligations to maintain the bike shift irrigation system in good working order, for the reasons set out above. However, as the system was not working at the commencement of the lease, the lessor should reimburse the lessee for the costs incurred in putting it into working order.

The Reuse system

81. I can make no finding that the lessee is in breach of any obligations under the MidCoast Water agreement in respect of the reuse system, for the reasons set out above, namely:

1. A copy of the agreement is not in evidence and I do not know what it requires.

2. The lessee was not provided with a copy of the agreement, and cannot be in breach of obligations which do not fall on him, especially where control of the system has not been given to him.

3. There is no evidence, in any event, that the lessee has breached the agreement by selling cattle within the withholding period as alleged.

82. The lessee concedes that there has been some damage to sprinkler heads and states that he will repair that damage. I am satisfied that he should be ordered to do so.

Termination of the agreement

83. The lessor alleges that she is entitled to an order enforcing termination of the agreement. The lessee denies that the letter relied upon was a notice of termination, and seeks an order restraining the lessor from terminating the agreement.

Was the letter dated 4 August 2020 a Notice of Termination of the lease?

84. The lease itself contains no provisions in respect of termination for breach, nor any provisions in respect of service of notices. The Act by s 28 provides that notices are sufficiently served if served on a legal practitioner acting for a party.

85. There is no restriction in the Act on termination for breach. In these circumstances, the general law of contract will apply.

86. The lessor by her solicitor on 6 May 2020 gave notice of the alleged breaches of the agreement. The letter dated 4 August 2020 states that “We are instructed to serve Notice of termination of the Lease effective on the date of this letter.” No separate notice was served.

84. I am satisfied that the letter serves as a Notice of termination. There is no requirement for service of a separate notice.

85. However, in order for the lessor to be entitled to terminate the agreement, the breaches must go to the root of the contract. I have found that the breaches alleged in respect of weed control and fertiliser application have not been made out. I am not satisfied that the failure to put the irrigation systems into repair, in circumstances where the obligations of both parties were unclear, goes to the root of the agreement such as to entitle the lessor to terminate the agreement at the time the notice was served.

86. However, if the lessee were to fail to comply with these orders, that may well entitle the lessor to issue a further notice and to pursue termination.

The applicant’s claims

90. In respect of the claims pressed by the applicant at the hearing:

Monetary claims

Reimbursement of cost of repairs to the pump, motor and control panel $10,057.30

91. I am satisfied that the lessor is liable to reimburse the amount claimed and I will order accordingly.

Fencing materials $16,364.73

92. I am not satisfied that the applicant has discharged the onus and decline to award the amount sought

Fodder to feed stock, including claim for lost grazing and loss of sale of silage as a result of failure to provide irrigation in accordance with the lease $61, 229.77

93. I am not satisfied that the lessor was in breach of her obligations in respect of the bike shift irrigation system. In respect of the reuse irrigation system, there is no evidence that the failure to hand over control of the system caused the loss alleged. I am not satisfied that the lessee is entitled to the compensation sought.

Non Monetary claims

That control of the MidCoast System be handed over to the applicant in working order within 14 days and that copies of all manuals and agreements with MidCoast Water be handed to the applicant within 14 days

94. I am satisfied that I should order the lessor to do all acts and things necessary to enable the lessee to operate the MidCoast Water system without interference by the lessor. I will order that a copy of the manuals and agreement be made available to the lessee within 14 days.

95. If an application to MidCoast Water is required, the lessor must make that application within 28 days (I am cognizant of the fact that at this time of the year, the relevant officers may be on leave and a shorter period might be impractical).

That any monies found to be owing to the lessee be offset against rent due

96. I am satisfied that an offset is a practical way of avoiding further enforcement proceedings and will order accordingly.

That the lessor be restrained from terminating the agreement on the basis of the Notice under s 129 of the Conveyancing Act or at all

97. I have found that there was no entitlement to terminate the agreement for the reasons set out above. However the lessor will be entitled to issue a fresh notice if there are breaches of the agreement which have occurred since the notice was issued or if these orders are not complied with by the lessee.

That the respondent be restrained from trespass or otherwise entering upon the property otherwise than in accordance with the lease and the Act and that she procure that Mr Relf be restrained from entering the property otherwise than in accordance with the agreement and the Act.

98. The lessor must not interfere with the lessee’s use and enjoyment of the property. The lessor and her agents (including Mr Stephen Relf) must not enter upon the property unless in accordance with the provisions of the Act.

The respondent’s claims

99. The respondent did not file an application. In relation to the orders sought:

Confirmation of termination of the lease

100. For the reasons set out above I am not satisfied that the lessor was entitled to terminate the agreement.

Monetary claims:

Repairs to the Reuse system $8000

101. The lessor has not incurred this cost. The Tribunal will order the lessee to effect the repairs and to ensure that the Re-use system is maintained in working order.

Replacement of electric motor in the bike shift system $7854.00

102. The lessee has purchased a replacement motor and the lessor is to reimburse the cost thereof.

Outstanding single Super applications $18,694.50

103. This claim is dismissed on the basis that I have found the clause in the lease to be void for uncertainty. However, the lessee is on notice that he must maintain the property in accordance with good farming practice and if he does not do so he may be liable for compensation at the end of the tenancy.

Labour charges to control and spray weeds around the reuse system $3091.00

104. This amount has not been incurred. The lessee must control weeds on the property in accordance with good farming practice and if he does not do so may be liable to the lessor for compensation in accordance with the Act at the end of the lease.

Cost of feed for the period cattle sales were delayed due to absence of cattle tags

105. As stated above I am satisfied that the issue in respect of the cattle tags was caused because the tags were not removed from the shed, and vacant possession of the property was not given to the lessee. I accept the evidence of the lessee that the tags were not intentionally used.

106. In any event I am not satisfied that the issue in respect of the tags is a breach of the lessee’s obligations under the lease. I decline to make the order sought.

Estimated cost to redeploy the bike shift irrigation system $14080.00

107. To the extent that the lessee removed the infrastructure from the paddocks, he is responsible to bring it back into working condition. I will so order

Replace 12 cattle tags $40.00

108. The lessee consents to this order.

Estimated cost to properly address weed problems $11401.00

109. As stated above, the lessee must control the weeds on the property. If he does not do so he will be liable for compensation at the end of the lease.

Costs

110. I will provide for submissions to be made in respect of costs.

Orders

1. Jeanette Relf is to pay to Andrew Bridson the sum of $10,017.30 as follows:

reimbursement for cost of repairs to the pump, motor and control panel $10,057.30,

less cost of cattle tags $40.00.

2. The sum of $10,017.30 referred to in order (1) is forthwith to be applied as a rent credit to the rent ledger.

3. By 28 February 2022 Andrew Bridson is to effect such repairs as are necessary to bring both the bike shift irrigation system and the Re-Use irrigation system into working order, and he is to maintain both systems in working order thereafter.

4. Jeanette Relf is to do all acts and things necessary to enable the lessee to operate the MidCoast Water system without interference by the lessor.

5. Jeanette Relf is to give to Andrew Bridson a copy of the manuals and agreement with MidCoast Water in respect of the Re-Use irrigation system within 14 days of the date of these orders.

6. If an application to MidCoast Water is required, Jeanette Relf must make that application within 28 days of the date of these orders.

7. Jeanette Relf must not interfere with the lessee’s use and enjoyment of the property. The lessor and her agents (including Mr Stephen Relf) must not enter upon the property unless in accordance with the provisions of the Act.

8. By 28 February 2022 Jeanette Relf is to effect such repairs as are necessary to make the boundary fences stock proof.

9. If either party presses an application for costs, short submissions should be filed and served by 21 January 2022. Submissions in reply should be filed and served by 4 February 2022.

10. All other claims are dismissed.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 10 February 2022