Butler Market Gardens Pty Ltd v GG & PM Burrell Pty Ltd
[2018] VSC 768
•10 December 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
MAJOR TORTS LIST
S CI 2016 00471
| BUTLER MARKET GARDENS PTY LTD (ACN 007 019 865) | Plaintiff |
| v | |
| GG & PM BURRELL PTY LTD (ACN 006 006 613) | Defendant |
| and | |
| GAVAN WILSON t/as GJ WILSON CONTRACTING | Third Party |
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JUDGE: | Richards J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 3–7, 10–13, 18, 20–21 September 2018 |
DATE OF JUDGMENT: | 10 December 2018 |
CASE MAY BE CITED AS: | Butler Market Gardens Pty Ltd v GG & PM Burrell Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2018] VSC 768 |
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TORTS — Nuisance — Private — Herbicide spray drift damage to neighbouring spring onion crop — Substantial and unreasonable with use and enjoyment of land.
TORTS — Negligence — Duty to take reasonable care, when spraying herbicides, to avoid a foreseeable risk of damage to neighbouring crop — Breach established — Causation established.
DAMAGES — Quantum — Loss to be compensated — Method of calculating loss — Determination of likely yield rate and likely price.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr DA Klempfner and Ms JR Anthony-Shaw | Atticus Lawyers |
| For the Defendant | Mr BF Quinn QC and Mr JF Richardson | Meridian Lawyers |
TABLE OF CONTENTS
BMG’s Swan Hill project................................................................................................................ 2
Winter clean-up of Burrell’s lucerne crop.................................................................................... 6
Issues for determination................................................................................................................ 8
Evidence........................................................................................................................................ 10
Issue 1:Was the spring onion crop damaged prior to the crop spraying?............................. 11
Issue 2:What was the nature and extent of any prior damage?.............................................. 14
Issue 3:Did the crop spraying take place in weather conditions conducive to spray drift?. 14
Issue 4:Did the crop spraying cause damage to the spring onion crop?............................... 17
Observations after 28 July 2014.......................................................................................... 18
Expert witnesses.................................................................................................................. 23
Possible alternative causes................................................................................................. 24
The crop spraying caused damage to the spring onion crop.......................................... 26
Issue 5:What was the nature and extent of the damage caused by the crop spraying?....... 27
Issue 6:Was the crop spraying a substantial and unreasonable interference?....................... 28
Issue 7:Standard and content of duty of care........................................................................... 34
Issue 8:Did Burrell fail to take reasonable precautions?......................................................... 35
Issue 9:Did the crop spraying materially contribute to any loss and damage of BMG?...... 40
Issue 10:Quantum of loss and damage..................................................................................... 40
Methodology....................................................................................................................... 41
Contingencies...................................................................................................................... 43
Yield...................................................................................................................................... 45
Price...................................................................................................................................... 48
Disposition.................................................................................................................................... 49
HER HONOUR:
Butler Market Gardens Pty Ltd (BMG), is a company owned by Peter Butler and Johanna Butler. BMG was until 2015 the trustee of Butler Market Gardens, a market garden business first established by Peter Butler in 1968. Peter and Johanna’s son, Rick Butler, has worked in the business since his youth in roles up to and including managing director. In 2015, after the events that are the subject of this proceeding, the business was transferred to another company owned by Rick.
Butler Market Gardens grows a range of vegetables, mainly leafy green vegetables, on land that it owns or leases in the sandbelt region of south eastern Melbourne and the Mornington Peninsula. From early on, spring onions were a significant crop for the business and over the years BMG became a steady supplier of spring onions to the major supermarkets. It developed a special relationship with Coles, taking on the role of ‘category captain’ for spring onions. This meant that BMG was responsible for ensuring a continuous supply of spring onions to Coles, either from its own crops or from other growers.
GG & PM Burrell Pty Ltd (Burrell) is another family company that, until 2015, owned a 1,150 acre farm at 43 Scotties Point Road, Beverford, near Swan Hill in northern Victoria. Craig Burrell lived on that farm with his wife and children from the mid-1990s, and developed the farm’s irrigation system. For some years, the Burrells grew vegetables at Beverford and in about 2010 moved to growing broadacre crops such as lucerne. The family have moved away and the farm was sold in 2015.
Gavan Wilson worked for Burrell at Beverford from the 1990s until the farm was sold, in addition to working his own land. After Burrell began growing lucerne, Mr Wilson worked for Burrell spraying and harvesting that crop. It was Mr Wilson who did the spraying in July 2014 that BMG alleges damaged its spring onion crop.
Although Burrell joined him as a third party, Mr Wilson took no active part in the proceeding and did not give evidence at the trial. Burrell alleged in its pleadings that it had engaged Mr Wilson as an independent contractor to spray its lucerne crop, and that (if Burrell was found liable to BMG) he was liable as a concurrent wrongdoer or alternatively was obliged to contribute to any damages Burrell had to pay. On the pleadings, there was an issue as to whether Mr Wilson did the spraying in July 2014 as Burrell’s employee or its independent contractor, and whether Burrell was vicariously liable for what he did. However, in opening its case at trial, Burrell accepted that Mr Wilson sprayed its lucerne crop as its agent and that it was liable for his actions. Burrell did not press the third party claim or its proportionate liability defence at trial.
BMG’s Swan Hill project
Spring onions are not a winter crop; they do not grow well in southern Victoria in the cold months of July and August. In the winter of 2012, spring onions were particularly scarce. BMG had an arrangement with a Queensland grower to supply enough spring onions over winter to meet BMG’s supply commitment to Coles. But the price for spring onions in Queensland was so high during that winter that the grower was able to sell his whole crop in the Brisbane market, and was not interested in sending any to Victoria. Rick Butler had to travel to Queensland and knock on some doors to secure the stock that he needed. After that experience, he looked for ways to have a more certain supply the following winter.
The Butler family have a property at Swan Hill, where the winters are usually warmer than in southern Victoria. After spending some time there in late 2012, Rick Butler developed a plan to secure BMG’s spring onion supply for the next winter, by growing a winter crop in Swan Hill that would be ready to harvest in the dead of the southern winter. He contacted Craig Burrell and arranged for BMG to lease 60 acres of land under irrigation at the western end of the Burrell farm, to the south of the Murray Valley highway. Mr Burrell understood from Mr Butler that he wanted to lease the land to grow spring onions, some parsley and a few other herbs.
In about February 2013, Mr Burrell and Mr Wilson did the work for BMG to prepare this block for planting. Greg Rankin, BMG’s farm production manager, went up to Beverford and planted the spring onion crop between mid-March and May 2013. Mr Rankin took care of the pre-emergent spraying and BMG engaged Mr Wilson to do other spraying that was needed as the crop grew, using Burrell’s tractor and spray boom.
The spring onions grew well and the crop was ready to harvest during the target months of July to September.
There were, however, some problems with the crop in 2013. Mr Rankin recalled that there were mildew issues that affected the yield, and that some areas were so badly affected that they were not harvested at all. Rick Butler had a different recollection. He said that the only problem with the 2013 crop was that BMG had planted too much. There were still spring onions in the ground in October, when the weather had warmed in southern Victoria. It was not economic to transport spring onions from Swan Hill when there was good supply available closer to Melbourne, and so BMG did not harvest about 20% of the crop. Mr Butler said that downy mildew only took hold in that part of the crop that BMG had already decided to leave behind.
Although part of the crop was left in the ground due to oversupply, or downy mildew, or both, BMG’s first planting of spring onions at Swan Hill was a moderate success. The soil and the climate proved suitable for growing spring onions in winter. In October 2013, the BMG production team reviewed the season. They were keen to plant another spring onion crop at Swan Hill the following winter, although they identified several areas for improvement. One was for BMG to rely less on Burrell’s capabilities, which would mean supplying its own labour and equipment.
In January 2014, Rick Butler produced a document headed ‘Swan Hill 2014’ that drew on the experience of the previous year to propose leasing 30 acres from Burrell for spring onions and parsley, with five to six plantings of spring onions for harvest in the gap period in July and August. He proposed that Adam Langshaw, a tractor operator employed by BMG, would work at Swan Hill three days a week, with Mr Butler and Mr Rankin visiting in alternate weeks. His plan was agreed upon and implemented.
Rick Butler and Greg Rankin went to Swan Hill in late January 2014. They agreed with Mr Burrell to lease a different block in 2014, on the eastern side of the Burrell farm near the sheds on Scotties Point Road, to the north of the Murray Valley Highway. The area leased in 2014 was 14.4 hectares (about 35.5 acres). I will refer to it as the ‘Swan Hill block’.
In 2014, BMG planted 49 rows of crops on the Swan Hill block – 43 rows of spring onions and 6 rows of parsley. The area planted to spring onions was 12.1 hectares. The rows ran in a north–south direction. Rows 1 to 21 were spring onions, rows 22 to 27 were parsley, and rows 28 to 49 were spring onions. Burrell had a lucerne crop to the north and north-west of the Swan Hill block, with a smaller oat crop immediately to the north. Figure 1 is an aerial photograph of part of the Burrell farm incorporating the Swan Hill block, showing its position relative to the lucerne, the oats, the sheds on Scotties Point Road and the Murray Valley Highway. Figure 2 is another aerial photograph, showing the location and numbers of the rows planted in 2014.
Figure 1
Figure 2
Planting commenced in the week of 22 March 2014 and continued until the first week in May, as follows:
Week commencing Crop Start row End row 22 March 2014 Spring onions 18 22 Curly parsley 22 23.4 Continental parsley 23.5 26 1 April 2014 Continental parsley 26 27 Spring onions 27 28 Spring onions 12 18 8 April 2014 Spring onions 6 12 Spring onions 28 30 15 April 2014 Spring onions 31 37 22 April 2014 Spring onions 38 45 29 April 2014 Spring onions 46 49 6 May 2014 Spring onions 1 6
By late July 2014, the first of BMG’s spring onion crop was ready to harvest as planned. I will deal with the growth of the 2014 spring onion crop and its condition as at 28 July 2014 below, in relation to Issue 1. Rick Butler was at the Swan Hill block on Monday 28 July 2014, when the first spring onions were harvested, somewhere between row 12 and row 18. That afternoon they loaded more than 500 crates of spring onions into BMG’s truck.
Winter clean up of Burrell’s lucerne crop
Lucerne is a perennial crop: once established, it has a root system that endures from year to year. It is dormant in winter, providing an opportunity for a winter clean up that is usually done between late July and mid-late August. The winter clean up involves spraying the crop with broad spectrum, non-systemic herbicides designed to kill all weeds. Although any foliage on the lucerne is also burnt off, it regenerates once the lucerne becomes active again in the spring.
In July 2014, Craig Burrell asked Gavan Wilson to do the winter clean up of the lucerne on the Burrell farm, including the lucerne crop to the north and north-west of the Swan Hill block. Mr Burrell did not give Mr Wilson any specific instructions, beyond asking him to get it done and to be mindful of the spring onions.
A Swan Hill Chemicals paddock inspection form dated 22 July 2014 recommended application of two herbicides: SpraySeed at the rate of 3 litres per hectare, and Valor at the rate of 60 grams per hectare. There was a note on the form to deliver 300 litres of SpraySeed and 6 kilograms of Valor to ‘Gavin’.
Mr Burrell initially thought he was present for this paddock inspection but, after being taken to his mobile telephone records, agreed that he was elsewhere. Mr Burrell was away in Queensland from 26 to 29 July 2014.
Mr Wilson’s diary records that he ‘sprayed lucerne’ between 22 and 28 July 2014. On 28 July 2014, the diary notes ‘Sprayed lucerne 10 hrs’. There is no other record of when, where or what he sprayed.
On 28 July 2014, Rick Butler observed a tractor spraying the lucerne crop to the north of the spring onion crop. He saw Gavan Wilson’s ute parked near the sheds and saw him return there to have lunch. Mr Butler also observed empty SpraySeed containers around the tank filling area. He noticed Mr Wilson spraying at around 4 or 4.30 pm, as he was closing up the truck loaded with the first of the harvest.
Burrell admitted in its answers to BMG’s interrogatories that the spraying was carried out by Gavan Wilson, using Burrell’s spray boom to spray SpraySeed and Valor supplied by Swan Hill Chemicals. These admissions are consistent with the other evidence.
Based on this evidence, I find that Mr Wilson did the winter clean up of Burrell’s lucerne crop between 22 and 28 July 2018. He did so by spraying a combination of SpraySeed and Valor, probably at the rates recommended by Swan Hill Chemicals – namely SpraySeed at 3 litres per hectare and Valor at 60 grams per hectare. Mr Wilson sprayed the lucerne crop to the north and north-west of the spring onions on the Swan Hill block on 28 July 2014. Mr Burrell did not supervise any part of the winter clean up in 2014 and was interstate on 28 July.
On 28 July 2014, Adam Langshaw received a telephone call from one of the pickers working on the Swan Hill block, Graham, who told him that there was an issue with the spring onions. I infer that this call was made in the late afternoon or early evening, after Mr Butler had left for Melbourne. Mr Langshaw drove up to Swan Hill that night and was at the block around 7 am the next day. I set out what he saw, and the observations made by others in the days and weeks that followed, in dealing with Issue 4 below.
Issues for determination
The parties agreed a statement of issues under s 50 of the Civil Procedure Act 2010 (Vic). By the end of the trial, some of those issues had fallen away or had been resolved. The issues that remain for my determination are:
(1) Was the spring onion crop damaged prior to the crop spraying on 28 July 2014?
(2) If yes to question 1, what was the nature and extent of the damage?
(3) Did the crop spraying take place in weather conditions conducive to spray drift?
(4) Did the crop spraying cause damage to the spring onion crop?
(5) If yes to question 4, what was the nature and extent of the damage?
(6) If yes to question 4, having regard to all of the relevant circumstances, did the crop spraying constitute a substantial and unreasonable interference with the plaintiff’s use and enjoyment of the Swan Hill block?
(7) When the crop spraying took place, what was the standard and content of the defendant’s duty of care to the plaintiff?
(8) Did the defendant fail to take precautions against the risk of damage to the spring onion crop that, in the circumstances, a reasonable person in the same or similar position would have taken?
(9) Did the crop spraying on 28 July 2014 materially contribute to any loss and damage suffered by the plaintiff?
(10) If yes to question 9, what is the quantum of that loss and damage?
I have determined these issues as follows:
(1) No. The spring onion crop was in good condition before the crop spraying on 28 July 2014.
(2) Does not arise.
(3) Yes. The spraying took place in weather conditions that were conducive to spray drift. There was a gusty north to north-westerly wind on 28 July 2014 that was stronger than 15 km/h for most of the afternoon.
(4) Yes. Drift from the spraying of Burrell’s lucerne crop on 28 July 2014 damaged BMG’s spring onion crop.
(5) The spray drift damaged the entire crop, just as it was ready to harvest, making the crop unsaleable during the window of late July to early September.
(6) Yes. The damage to BMG’s spring onion crop caused by Burrell’s spraying on 28 July 2014 was a substantial and unreasonable interference with BMG’s use and enjoyment of the Swan Hill block. Burrell is therefore liable to pay BMG damages for nuisance.
(7) Burrell owed a duty to its neighbour, BMG, to take reasonable care, when spraying herbicides, to avoid a foreseeable risk of damage to the spring onion crop that BMG was growing on the Swan Hill block.
(8) Yes. Burrell failed to take reasonable precautions, and did not take reasonable care, to avoid the foreseeable risk of herbicide spray damage to BMG’s spring onion crop
(9) Yes. Burrell’s crop spraying on 28 July 2014 materially contributed to the damage to BMG’s spring onion crop and caused loss to BMG. It is appropriate for the scope of Burrell’s liability to extend to the harm that its negligence caused as a matter of fact
(10) I assess BMG’s loss occasioned by the damage to its spring onion crop to be $1,346,570.
Evidence
BMG called the following lay witnesses at trial:
(a) Peter Butler;
(b) Rick Butler;
(c) Adam Langshaw;
(d) Greg Rankin;
(e) Steven Lorimer, an agronomist and area manager for EE Muir & Sons, who inspected BMG’s Swan Hill spring onion crop in July 2014;
(f) Stuart Grigg, an independent agronomist who inspected the crop in August 2014; and
(g) Andreas Cruz, an agronomist who has worked for BMG since May 2015 and is now its technical manager, responsible for quality assurance and production planning.
The lay witnesses called by Burrell were:
(a) Craig Burrell;
(b) Keith Munro, a crop assessor who was engaged by Burrell’s insurer to assess the damage to BMG’s spring onions and who inspected the crop in August and October 2014;
(c) Brian Cumming, a horticultural manager with Swan Hill Chemicals who inspected the spring onion crop in late July 2014.
Each party called expert evidence from an agronomist. BMG called Dr Peter Taylor, an agricultural consultant who specialises in determining the causes of crop failures. Dr Taylor is a Doctor of Philosophy in plant pathology, and has several decades of practical experience as a plant pathologist. Burrell called David Bell who is also an agricultural consultant. Mr Bell’s formal qualifications include Master of Applied Science and he has significant experience in testing the effects of herbicides on crops and in agriculture more generally.
Each expert witness was asked to prepare a report that addressed common questions agreed between the parties, which annexed relevant photographs and other documents. After they had produced their respective reports, the expert witnesses met and produced a joint report dated 2 October 2017, identifying the matters on which they agreed and did not agree. They gave evidence concurrently late in the trial, after all of the lay witnesses had given their evidence.
The parties agreed on the contents of a court book which was tendered by consent at the end of the trial. A small number of other documents were tendered by BMG.
Issue 1: Was the spring onion crop damaged prior to the crop spraying?
Burrell opened its case on the basis that BMG’s 2014 spring onion crop was already damaged by around late June, perhaps as a result of its own spraying. The evidence did not bear this out.
On about 25 June 2014, Rick Butler observed a small patch of the youngest spring onions, in rows 1 to 6, to have some discolouration in the leaves. He was concerned, and so got in touch with the agronomist Stuart Grigg. Mr Grigg asked Mr Butler to send some high resolution photos of the issue, but Mr Butler did not do so. Within a fortnight, the area that had been a bit pale was looking normal – it had grown and was a lot greener. There was no need for him to contact Mr Grigg again about that issue.
Otherwise, there were very few concerns about the 2014 spring onion crop at Swan Hill before 28 July 2014.
Adam Langshaw worked at the Swan Hill block three or four days each week and spent more time there in 2014 than any other witness. He said that there had been a ‘tiny bit’ of mildew but ‘we sprayed it off’ and that there had been a small area at the northern end of rows 1 to 6 that were a bit yellowish and pale. Otherwise it was ‘a really good crop’ that was ‘nice and thick and green’.
Greg Rankin visited the Swan Hill block once a week, when he would walk through the crop and check everything. Until late July, he had no concerns: everything was looking really good and he was very happy with the way things were going.
Rick Butler was there less frequently. He visited on 23 July 2014 and found a healthy, green crop that was ‘within spec’ at exactly the right time. On that occasion he took some photographs that he posted on Facebook of rows of very healthy looking spring onions. He explained that he was proud and excited that his plan to close the winter supply gap was ‘ready to go’. He returned to Melbourne and arranged to start the harvest at Swan Hill the following week. Mr Butler was back at the Swan Hill block on 27 July 2014 when he took some more photographs showing verdant spring onions and continental parsley in good condition.
It was not only BMG’s staff who thought the spring onions were doing well. Steven Lorimer of EE Muir and Sons inspected the crop on 15 and 17 July 2014 and found ‘no visible symptoms/damage that would indicate any issues associated with inappropriate use of crop protection products’. The more straightforward observation of Craig Burrell was that in July 2014 the spring onion crop was looking ‘fantastic’.
The evidence as to the condition of the spring onion crop does not bear out concerns raised by the expert witnesses, in particular Mr Bell, that BMG may have damaged its own crop. These concerns were based on BMG’s crop spray records for the Swan Hill block for 2014. These records were derived from entries made by Adam Langshaw, who did all of the spraying in 2014, in an application called LiveFarmer. He was able to make entries in LiveFarmer using his phone while he was still in the tractor.[1]
[1]Two versions of BMG’s spray records for Swan Hill during the relevant period were tendered, at tabs 19 and 21 of the court book. Both versions recorded the same chemicals being sprayed on the same rows on the same dates. There were, however, some differences in the application rates recorded between the two versions. Those differences are not material, given my findings at [33] to [47] and [76] to [80]. Had it been necessary, I would have accepted the version behind Tab 21 as the more reliable of the two. That version was produced and provided to Burrell’s insurer in May 2015. The version behind Tab 19 was printed in April 2018, after Mr Cruz had made changes to the applications rates programmed in LiveFarmer.
The principal concern raised by Mr Bell was that BMG had applied some chemicals at vastly excessive rates. It is the case that the spray records show the herbicides Select and Tribunil and the fungicide Rebound were applied at rates per 100 litres. If those chemicals were applied at those rates, Dr Taylor agreed with Mr Bell that they were likely to cause crop damage. However, I am satisfied that each of those chemicals was in fact applied at rates per hectare. Mr Langshaw’s firm evidence was that they were all sprayed at a per hectare rate. He explained that the rate type (per 100 litres or per hectare) was already programmed in to LiveFarmer, and that he was unable to change it from his phone. I accept that this was a glitch in the software in 2014, which has since been addressed by BMG’s technical manager, Mr Cruz. I am more comfortable accepting this explanation given the evidence that the spring onions were healthy and showed no sign of over application of any chemical.
Mr Bell identified four other aspects of BMG’s spray records that gave rise to the possibility that its spray regime might have damaged the spring onion crop. I have considered each of these carefully, and find that none of them in fact caused any damage.
First, Mr Bell pointed out that a number of the chemicals used were not, at the relevant time, registered with the Australian Pesticides and Veterinary Medicines Authority (APVMA) for use on spring onions. Some were registered for bulb onions only, others were not registered at the time they were used but were registered at a later date. Dr Taylor was of the opinion that all the chemicals used were suitable for use on spring onions and did not agree that their use might have damaged the crop. I prefer Dr Taylor’s opinion, because there is no evidence of damage to the crop before 28 July 2014.
Second, Mr Bell identified that the various fungicides sprayed by BMG were sprayed at below label rates. Mr Bell said that this would result in poor control of downy mildew. The evidence was, however, that downy mildew was well controlled by BMG’s spraying.
Third, Mr Bell said that many chemicals were sprayed in combination with others, in tank mixes that were not recommended on the labels registered by APVMA. He was particularly concerned about the combination of Barrack and Agri-Fos sprayed on 24 June. Dr Taylor did not share this concern and, again, the absence of damage before 28 July leads me to prefer Dr Taylor’s opinion.
Fourth, Mr Bell said that the application of the fungicide Barrack on 24 June and the adjuvant Hasten on 30 June, within 10 days of each other, could have damaged the spring onions in rows 1 to 6. Dr Taylor agreed that application of an oil spray such as Hasten less than 10 days after the application of Barrack could have caused damage. However, the evidence is of a healthy, undamaged spring onion crop before 28 July 2014. Mr Butler noticed a paler area in rows 1 to 6 on 25 June, which was before the potentially harmful application of Hasten on 30 June and could not have been caused by it.
I find that the spring onion crop was not damaged prior to the crop spraying on 28 July 2014. To the contrary, it was in good condition and ready to harvest.
Issue 2: What was the nature and extent of any prior damage?
As there was no damage to the spring onion crop before 28 July 2014, this issue does not arise.
Issue 3: Did the crop spraying take place in weather conditions conducive to spray drift?
The warnings on the registered label for SpraySeed include a warning for protection of crops, native and other non-target plants:
DO NOT apply under weather conditions or from spraying equipment which may cause spray to drift onto nearby susceptible plants/crops, cropping lands or pastures.
There is a similar warning on the Valor label:
DO NOT apply Valor 500 WG Herbicide under weather conditions or from spray equipment that may cause spray to drift onto nearby susceptible crops/plants, cropping lands or pastures.
Dr Taylor and Mr Bell agreed that the recommended weather conditions in which to conduct spraying of SpraySeed and Valor were:
(a) a steady wind greater than 3 km/h and less than 15 km/h, blowing away from sensitive areas;
(b) air temperature below 28°C;
(c) Delta T between 2°C and 8°C;[2] and
(d) no temperature inversion present.
Weather conditions outside these parameters are conducive to spray drift. Of particular concern is when wind that is blowing towards sensitive areas is gusty and is stronger than 15 km/h.
[2]Delta T is the difference between wet and dry bulb temperatures.
There is little evidence of the weather conditions at the Burrell farm on 28 July 2014. There was no record kept by Mr Wilson of the wind speed and direction while he was spraying. Rick Butler recalled that, around 4 to 4.30 pm, it was becoming overcast, there was a little bit of rain, and the wind was coming from the north. He did not recall the strength of the wind.
There is, however, comprehensive weather data for 28 July 2016 from the Bureau of Meteorology automatic weather station at the Swan Hill aerodrome, about 19 km to the south-east of the Burrell farm. According to that data, the air temperature and the Delta T were suitable for spraying all day. There was a north to north-westerly wind of above 15 km/h between 7 am and 5 pm. It was also gusty, with several gusts recorded above 30 km/h. The wind speed was above 20 km/h for most readings between 11.30 am and 4.30 pm, with the biggest gusts also recorded during that period. The expert witnesses agreed that these weather conditions were conducive to spray drift from the crop spraying of the lucerne to the spring onion crop, as illustrated by this diagram prepared by Mr Bell:
Burrell points out that it cannot be assumed that the weather conditions at the Burrell farm mirrored the weather data recorded at Swan Hill aerodrome. Both Dr Taylor and Mr Bell regarded that as a reasonable assumption to make, although Mr Bell noted his experience that it is not always the case. Mr Langshaw’s experience was that wind conditions in the area could be very different between farms a short distance apart, for example between a flat area and a hilly one. Accepting that there is likely to have been some variation in the wind speed and gusts between the two sites, it is still reasonable to assume that the wind conditions at the Burrell farm were broadly similar to those recorded at the nearby aerodrome.[3]
[3]There was similar reliance on Bureau of Meteorology records in Riverman Orchards Pty Ltd v Hayden [2017] VSC 379 (Riverman), [73]–[74].
Allowing for some variation from the wind recorded at the Swan Hill aerodrome, I am satisfied that there was a gusty wind at the Burrell farm on 28 July 2014, which blew from the north to north-west and was stronger than 15 km/h for most of the afternoon. These conditions were conducive to spray drift from crop spraying of the Burrell’s lucerne to BMG’s spring onion crop to the south and east of the lucerne.
Issue 4: Did the crop spraying cause damage to the spring onion crop?
In a negligence claim, causation is typically considered after a finding of breach. Here, however, BMG claims damages in both nuisance and negligence. Factual causation is a necessary element of legal causation in negligence,[4] and is also central to the question of whether there was a substantial and unreasonable interference with BMG’s use and enjoyment of the Swan Hill block. In relation to both claims it is necessary to determine whether, as a matter of fact, Burrell’s crop spraying caused damage to BMG’s spring onion crop.
[4]Wrongs Act 1958 (Vic) s 51(1)(a). This is not a case in which it is necessary to consider whether causation may be inferred from breach and subsequent damage.
As was submitted for Burrell, the cause of an occurrence is a question of fact to be determined by applying common sense to the facts of each case.[5] The question is whether the relevant act or omission was ‘so connected with the plaintiff’s loss or injury that, as a matter of ordinary common sense and experience, it should be regarded as a cause of it’.[6]
[5]March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 (March v Stramare), 515 (Mason CJ).
[6]March v Stramare, 522 (Deane J).
The determination of factual causation requires the application of the ‘but for’ test, namely that the harm that in fact occurred would not have occurred absent the relevant act or omission.[7] The ‘but for’ test is, however, a negative criterion of causation rather than a comprehensive test, and should be applied with some caution.[8] The act or omission must have materially contributed to the damage suffered, which may be the case even if other factors have played a significant role.[9] Scientific proof is not required.[10]
[7]Wallace v Kam (2013) 250 CLR 375, [16]. See also Wrongs Act s 51(1)(a).
[8]Roads and Traffic Authority v Royal (2008) 82 ALJR 870 (RTA v Royal), [32] (Gummow, Hayne and Heydon JJ), [83] (Kirby J), [135] (Kiefel J).
[9]RTA v Royal, [85] (Kirby J), [143] (Kiefel J).
[10]Amaca Pty Ltd v Ellis (2010) 240 CLR 111, [6], [70]; Meandarra Aerial Spraying Pty Ltd v GEJ Geldard Pty Ltd [2013] 1 Qd R 319 (Meandarra), [43].
The following evidence is relevant to determining factual causation here:
(a) the evidence of the witnesses who observed the damage to BMG’s spring onion crop in the days and weeks following 28 July 2014;
(b) the evidence of the expert witnesses, Dr Taylor and Mr Bell; and
(c) the evidence that Burrell says indicates that the damage to the spring onions was not caused by its crop spraying.
Observations after 28 July 2014
After Mr Langshaw arrived at the Swan Hill block early in the morning on 29 July 2014, he met Graham, who had called him the day before. Starting about a quarter of the way down row 28, he walked westwards, about a quarter of the way in to the paddock. He saw a peppering of white spots on the spring onions, which he immediately concluded was chemical burn. The more he looked, the worse it got – he could see it everywhere. He noticed that the spotting was only on one side of the onions, the north side. Viewed from the south, they looked good. He inspected the crop in several other places – the top half of rows between 40 and 49, the southern end of rows 38 to 40, and rows 1 to 10 on the eastern side of the block. The damage was worst on the western side, between rows 28 and 49. Rows 1 to 10 were the least affected. During this inspection, Mr Langshaw called Greg Rankin and told him there was a ‘massive issue’. Although he was focused on the spring onions, Mr Langshaw also looked at the parsley. There was some damage to the parsley, but it was not too noticeable and the parsley was still being picked.
Mr Rankin went to the Swan Hill block the next morning, on 30 July 2014. He met Mr Langshaw at the northern end of the parsley, and saw the odd mark or dot on the parsley. They walked from row 28 across to row 49 and Mr Rankin saw lots of white dots on the spring onions, which he described as burn marks typical of herbicide residue. The marks were on the western side of the spring onion leaves, and were ‘four times worse’ on the western side of the block, in row 49, than they were in row 28. Mr Rankin also looked at rows 1 to 21, where he observed ‘hardly any dots whatsoever’.
Craig Burrell was alerted to the damage to the spring onions while he was in Queensland. He had returned home by 30 July 2014, and he met Mr Rankin at the Swan Hill block that day. They started in the north-western corner of the block, where Mr Burrell observed a lot of spotting on the spring onions – ‘there was damage for sure there’. He described the spotting as a ‘white blister’. He also observed three or four instances of ‘arrowing’ in that corner, areas that looked like a puff of wind had taken a spray drift across the paddock. These ‘arrows’ went 50 to 70 feet into the spring onions. The damage pattern was ‘pretty consistent all the way down’ the western side of the crop, although there was a lot more damage on the north-western side.
They looked at the southern end of the parsley crop. Mr Burrell was surprised to see no damage to the parsley, particularly when there was damage to the spring onions on either side. They then drove along the southern edge of the crop and walked through the south-eastern corner. There, Mr Burrell saw ‘spotting everywhere’, although not as much as on the western side of the crop. He also observed that the spotting was on the north to north-western side of the plants; they looked ‘fairly clean’ from the other side. The northern end of the parsley was also undamaged. He was not worried about the oats – ‘not one little bit’ – and did not notice whether there was any damage to that crop. Mr Burrell agreed that the spring onion crop deteriorated in the days following his initial observations.
Both BMG and Burrell arranged for samples of the damaged spring onions to be taken and analysed for chemical residue. Testing of these samples did not detect residue of the active ingredients of SpraySeed or Valor. Neither Dr Taylor nor Mr Bell drew any conclusions from these negative results. SpraySeed, in particular, is quickly metabolised and would not be present in a sample collected more than two to three days after spraying. In addition, there was no evidence about the handling of the samples or the time between collection and analysis. Dr Taylor explained that good practice is to freeze the plant samples as soon as possible after collection to minimise any change between collection and analysis.
While the chemical testing was inconclusive, the people who took the samples also made useful observations of the spring onion crop.
Brian Cumming of Swan Hill Chemicals visited the Swan Hill block on 31 July 2014 at Craig Burrell’s request, to take samples of the damaged onions for testing. In the north-western corner of the crop, Mr Cumming saw spring onions that were starting to wilt and, in his opinion, ‘it was fairly evident or obvious that there’d been some level of drift from the lucerne operation into the spring onions’. He also observed desiccation and dying of the plants in that area. As they walked four or five rows in to the crop, Mr Cumming saw that the effects of the drift were ‘quite severe’ close to the lucerne, and that the effects dissipated as they moved east. Closer to the parsley, the spring onions had brown spots or flecks on them, but did not have the twisting or severe wilting he had seen near the lucerne. Away from the worst area, the pattern of damage was remarkably consistent. On the eastern side of the block he also saw brown spots or flecks on the spring onions, even over the brow of the hill. He had a good look at the parsley, but did not see any flecking on the parsley.
Steven Lorimer of EE Muir & Sons also inspected the spring onions on the Swan Hill block on 31 July 2014, at BMG’s request. He recorded in an email written in early September 2014 that the crop ‘appeared to have leaf damage consistent with herbicide use’.
By the end of July, Mr Burrell had notified his insurer of a possible claim. The insurance assessor arranged for Keith Munro to inspect the spring onion crop, which he did on 6 August 2014. Mr Munro’s assessment report completed that day records:
Insured’s Pre-Survey Comments
…
Damage level 100%.
Spring Onion Crop – all crop damaged as the foliage is what is marketed.…
Survey Comments
…
• Control areas/fields and why selected
No control area, all damaged
• Damage evidenced by
Burning of foliage on all plants making them unsaleable
• Concerns
- Damage is consistent instead of variation over the whole crop
- Crops next to spring onions (Parsley & Oats) not affected at all
Mr Munro took a number of photographs at various places on the block that show rows of spring onions with wilted, burnt tips. The parsley crop alongside the spring onions is noticeably greener in those photographs. While he was not there to look at the parsley crop, he observed that there was no spotting or tip burn on the parsley, compared to the spring onions on either side. Mr Munro said that everywhere had some evidence of white burning on the onions. He agreed that, while the type of damage was consistent throughout the crop, the damage was slightly heavier in the north-western corner. He did not recall that one side of the plants was more affected than the other; it was the tips that were most damaged. He thought that the damage looked like a possible chemical burn, that corresponded with what he would expect from SpraySeed damage.
Rick Butler did not see the damage to the spring onion crop at Swan Hill until 19 August 2014. On that day, he walked up and down the rows and assessed the damage quite thoroughly. It was worse than he had expected – most of the crop had some type of damage, was not ‘in spec’ and hence was unsaleable. The damage was worst in the north-west corner, where the crop was ‘completely annihilated’. It was not as bad in the south-eastern corner, on the other side of the hill. The damage pattern was fairly consistent, with lots of white dots on the north side of the leaves. Those white dots were not visible from the south, although the damage to the tips of the onions was. He took some photographs in around rows 18 to 20 that showed clearly the different appearance of the north and south sides of the plants. He did not look closely at the parsley, which (unlike spring onions) is regenerative – any damage could be cut out and it would grow back.
Rick Butler then arranged for an independent agronomist, Stuart Grigg, to inspect the spring onion crop. He sent Mr Grigg the photographs he had taken on 19 August, and told him that Burrell had sprayed his lucerne crop with SpraySeed and another herbicide that had damaged his spring onions. Mr Grigg conducted a careful and thorough survey of the Swan Hill block on 25 August 2014. He took a number of photographs, which he included in his report together with his observations. Those observations are worth reproducing here:
1.Spring Onion crop was suffering severe crop damage at the north western corner of the paddock resulting in almost total crop failure. It looked as if a number of plants had died at the crop edge as patches of crop were missing in preformed beds.
2.A little further to the South East of this assumed dead crop a large area of crop was suffering severe crop retardation where plants were severely yellowed and stunted. These plants were also suffering damaged leaf tissue resulting in upper leaf death and phytotoxicity a little more so on the north western side of these affected leaves.
3.Throughout the majority of the crop the previously mentioned damaged/bleached leaf tissue was clearly evident. A visual estimation was made that approximately 80-90% of this damage was clearly evident affecting the north western side of older leaves.
4.All of the above mentioned damage was observed to be affecting older crop leaves with no damage observed on younger leaf which may have been up to one to two months old.
5.Crops were assessed for root health. All roots were visually observed to be white, healthy and not showing any signs of ill health.
6.Very little damage was noted in the parsley crops however these crops were growing in an area where Spring onions were suffering less damage (approximately 200 metres from the most severely affected Spring onion crop).
Mr Grigg’s opinion was that the damage was consistent with a ‘phytotoxic event’ that had occurred one to two months earlier. The damage to the spring onion crop had caused suspected crop death in the north-west corner, some significant crop retardation in another area and phytotoxicity throughout almost the entire crop. Damage levels reduced towards the southern and eastern areas of the crop. Although Mr Grigg’s engagement and the preparation of his report were not in accordance with the code of conduct for expert witnesses, he was a careful and considered witness and I have no reservation about accepting his evidence.
In the end, BMG was able to harvest some of the Swan Hill spring onion crop from the least affected rows on the eastern side of the block. Those spring onions were harvested in September and October, by which time they had grown through the worst of the damage. Peter Butler was working in BMG’s packing shed at Heatherton when the harvest arrived from Swan Hill. He saw that many of the onions had white dots on the leaves – some were too damaged to use and others had only one or two spots. He described a fairly labour intensive process of manually picking over these spring onions, discarding those that were unsaleable and removing damaged leaves from others.
Expert witnesses
Dr Taylor and Mr Bell were asked to describe the expected effect of SpraySeed and Valor, should they come into contact with a crop of spring onions. Their responses, as expressed in their joint report, were:
(a) Dr Taylor said ‘Individually I would expect SpraySeed to cause spotting and, where droplets were dense, blotching, whereas Valor would cause tip dieback (due to more mobility), yellowing and stunting.’
(b) Mr Bell ‘would expect to see white spray marks as dots or lesions on the spring onions leaves, dead and dying tips on the onion leaves if the level of spray drift was high. The key effect would be the white marks on the spring onion leaves which would occur from the SpraySeed component of the herbicide tank mix.’
The expert witnesses agreed that damage is often, but not always, worse closer to the source of the spray drift and is usually not uniformly distributed across a crop. They also agreed that the damage shown in photographs taken by Rick Butler on 19 August was consistent with spray drift from SpraySeed and Valor.
The experts’ expectations correspond with the evidence of the witnesses who inspected the spring onions in the days and weeks after 28 July 2014. That evidence was, in the end, remarkably consistent. Throughout the crop, there were white spots on the north to north-western side of the plants, and dead and dying tips. Although the nature of the damage was the same throughout the crop, its distribution and severity were not uniform. Initially, there were signs of ‘arrowing’ on the north-western side of the crop, closest to the lucerne crop that was sprayed on 28 July. After several weeks the crop in that north-west corner had almost completely failed. The least damaged area was the south-east corner, furthest from the spraying. Some saleable spring onions were eventually harvested from the eastern rows.
Possible alternative causes
A number of possible alternative causes were explored by Burrell in the course of the trial. In closing submissions it relied on only three, all arising from BMG’s own spraying of its crop:
(a) the application of the adjuvant Hasten on 21 July 2014 and the fungicide Barrack on 29 July, within 10 days of each other;
(b) the combined application of Barrack, Agri-Fos and Humega on 29 July 2014; and
(c) general concerns about the reliability of BMG’s spray records.
As to the first of these, Dr Taylor and Mr Bell agreed that the application of Barrack and Hasten within 10 days of each other could have damaged plants in rows 38 to 49. They agreed that the possible damage would take the form of leaf burn, with spotting developing into white areas on the leaves, and that any damage would appear within 24 to 48 hours of the second application. Dr Taylor expected that the damage would be relatively uniform throughout the rows sprayed with both chemicals, while Mr Bell did not agree that would necessarily be so.
I do not accept that the application of Hasten and Barrack caused the damage to BMG’s spring onion crop, for the following reasons:
(a) As a matter of timing, it cannot have been a cause. The damage was first noticed late on 28 July, the day before Barrack was applied to rows 38 to 49. Mr Langshaw observed spotting across the whole spring onion crop early on the morning of 29 July 2014, before he started the spraying in question.
(b) Barrack and Hasten had been applied to rows 1 to 6 on 24 and 30 June respectively, with no observed ill effects. Dr Taylor and Mr Bell agreed that the order of application did not affect the possibility of damage.
(c) The combined application of Hasten and Barrack was limited to rows 38 to 49, and does not explain the damage to the rest of the spring onion crop, east of row 38.
The second alternative cause posited was the combined application of Barrack, Agri-Fos and Humega to rows 1 to 12 and 27 to 49 on 29 July 2014. Mr Bell’s opinion was that this was an inappropriate tank mix that could have caused significant damage to those spring onions. Dr Taylor did not share this concern. Whether or not the theory is valid, it does not explain the damage to the spring onion crop that was in fact observed. The damage was first observed before the tank mix was sprayed on 29 July, and it was observed across the entire crop, including in rows that were not sprayed with the mix. Further, the pattern of damage – spotting on the north-western side of the plants only, with damage most severe in the north-west corner and dissipating to the south and east – is not consistent with the theory that the damage was caused by a spray mix applied directly to the crop.
The third alternative put forward by Burrell is not so much a possible cause of the observed damage, as speculation that there might have been something harmful in BMG’s spraying because its record keeping was imperfect. The doubts that were cast on the accuracy of BMG’s spray records did not persuade me that it was likely that BMG damaged its own spring onion crop in some other, unspecified, way.
The crop spraying caused damage to the spring onion crop
I conclude that drift from the spraying of Burrell’s lucerne crop on 28 July 2014 damaged BMG’s spring onion crop. Before that day, the spring onions were in ‘fantastic’ condition and were ready to harvest exactly on target. There was no sign of damage before the spraying, and the first of the spring onions were in fact harvested on 28 July 2014. After Gavan Wilson sprayed the lucerne to the north and west of the spring onions with herbicide, in weather conditions that were conducive to spray drift, many people observed damage to the spring onions. There were white spots or flecks on the north and north-west side of the spring onions – the side that the wind was blowing from on 28 July.
The nature and pattern of the damage was consistent with herbicide spray drift.[11] This was the opinion of the independent expert witnesses, Dr Taylor and Mr Bell, and was also the opinion of several other experienced and informed observers – Adam Langshaw, Greg Rankin, Craig Burrell, Brian Cumming and Steven Lorimer. The opinion was shared by the agronomist Stuart Grigg, based on his careful survey of the spring onion crop and its surrounds made four weeks after the damage was first observed.
[11]See [75] above.
Other possible causes of the damage to the spring onions were thoroughly explored at trial. As discussed, none of these alternative theories was borne out by the evidence of the damage that was actually observed. In the end, the only possible cause of the damage to BMG’s spring onion crop was herbicide spray drift from the spraying of Burrell’s lucerne crop.
I have not overlooked the evidence to the effect that there was little or no damage to the parsley crop, in contrast to the spring onions on either side of the parsley. I find that the spray drift did cause some damage to the parsley – as observed by Mr Langshaw, Mr Rankin and, later on, Mr Grigg – although for some reason the parsley did not suffer as much damage as the spring onions.
I was not really persuaded by Dr Taylor’s theory that the taller spring onion plants would intercept more spray drift than the parsley, which was lower to the ground. The difference may be due to the fact that no-one was really concerned about the parsley, which would grow back after any damage was cut out, and most witnesses paid little attention to it in the immediate aftermath of the spray drift. There was even less attention paid to the oat crop and to weeds along the sprinkler lines, and the evidence about the extent of damage to those plants is scant and inconclusive.
The difference observed between the damage to the parsley and to the spring onions does not displace my conclusion, based on all of the evidence reviewed above, that BMG’s spring onions were damaged by herbicide spray drift from the spraying of Burrell’s lucerne on 28 July 2014.
Issue 5: What was the nature and extent of the damage caused by the crop spraying?
As described already,[12] BMG’s entire spring onion crop was damaged by spray drift. The crop in the north-west corner of the block was destroyed. There was spotting and tip damage throughout the crop, which dissipated to the south and east of the block.
[12]See [75] above.
Spring onions are not ornamental plants, however, and the description of the cosmetic damage is only a starting point. This was a commercial crop, grown to meet the product specifications of the big supermarkets. Coles’ specification requires ‘bright, straight, erect leaves tightly wrapped around the central core’. Major defects include broken, damaged leaves, tip burn and stem browning. The Woolworths specification is similarly stringent. Both supermarkets will reject a consignment where more than 2% of spring onions are affected by major defects.
Mr Burrell readily accepted that the damage to BMG’s spring onion crop that he saw in late July meant that the onions would be rejected by Coles. Mr Munro, the crop assessor, concluded in early August that the burning of the foliage on all plants made them unsaleable. The timing of the damage coincided with the window from late July, when supply was usually low and prices were expected to be high. None of the crop was saleable between late July and early September.
In view of the damage, BMG did not attempt to harvest any of its Swan Hill crop until early September 2014. The least damaged spring onions, in rows 1 to 6 on the eastern side of the block, were also the youngest and ‘grew through’ the damage. Some spring onions on the eastern side of the block were able to be harvested and sold between early September and mid October 2014. However, Peter Butler’s observation was that about half of the spring onions that were sent from Swan Hill to the packing shed at Heatherton during this period were so damaged that they were not saleable and had to be discarded.
Issue 6: Was the crop spraying a substantial and unreasonable interference?
The parties agree that BMG has a claim in nuisance if Burrell’s crop spraying constituted a substantial and unreasonable interference with BMG’s use and enjoyment of the land it leased from Burrell. As Mr Burrell knew, BMG leased the Swan Hill block from Burrell for the purpose of growing a commercial spring onion crop during the winter of 2014, with a view to selling the crop to Coles and other buyers. It is not controversial that the interests in land protected by the tort of nuisance include ‘an occupier’s actual use of land for agricultural purposes’.[13]
[13]Marsh v Baxter (2015) 49 WAR 1, [251] (McLure P) (Marsh v Baxter), cited in Riverman, [177].
Whether there has been a substantial interference is a question of fact.[14] I have found that BMG’s entire spring onion crop was damaged by herbicide spray drift from Burrell’s spraying of its lucerne, just as BMG had started to harvest the spring onions. BMG was unable to sell any of its crop during the window from late July to early September. In light of those findings, there can be no doubt that the spraying amounted to a substantial interference with BMG’s use and enjoyment of the land.
[14]Riverman, [179].
Whether that interference was also unreasonable calls for consideration of a variety of factors including:[15]
… the nature and extent of the harm or interference; the social or public interest value in the defendant’s activity; the hypersensitivity (if any) of the user or use of the claimant’s land; the nature of established uses in the locality (eg residential, industrial, rural); whether all reasonable precautions were taken to minimise any interference; and the type of damage suffered.
This involves weighing the respective rights of the parties in the use of their land to make a value judgment as to whether the interference is unreasonable.[16]
[15]Southern Properties (WA) Pty Ltd v Executive Director of the Department of Conservation and Land Management (2012) 42 WAR 287, [118] (McClure P, Buss JA agreeing) (Southern Properties); Riverman, [180].
[16]Southern Properties, [119].
BMG submitted that nuisance is a tort of strict liability, while Burrell contended that it always involves fault. On this issue, Burrell relied on two decisions of the New South Wales Supreme Court, Quick v Alpine Nurseries Sales Pty Ltd[17] and NM Rural Enterprises Pty Ltd v Rimanui Farms Ltd.[18] Both Quick and Rimanui Farms analyse nuisance in a way that is difficult to distinguish from negligence, starting with the proposition that nuisance always involves fault, and then moving to consideration of foreseeability, including whether the defendant created the nuisance, and the state of its knowledge.[19] Nuisance remains, however, a separate and distinct tort that has not been subsumed into the law of negligence.[20]
[17][2010] NSWSC 1248 (Quick).
[18][2013] NSWSC 309 (Rimanui Farms).
[19]See, eg, Quick, [139]–[154] and Rimanui Farms, [945].
[20]Southern Properties, [117] (McClure P, Buss JA agreeing).
Quick and Rimanui Farms, and the authorities they cite, can be traced back to a passage in the Privy Council’s advice in Wagon Mound (No. 2):[21]
It is quite true that negligence is not an essential element in nuisance. Nuisance is a term used to cover a wide variety of tortious acts or omissions and in many, negligence in the narrow sense is not essential. An occupier may incur liability for the emission of noxious fumes or noise although he has used the utmost care in building and using his premises … And although negligence may not be necessary, fault of some kind is almost always necessary and fault generally involves foreseeability, e.g. in cases like Sedleigh-Denfield v O’Callaghan the fault is in failing to abate the nuisance the existence of which the defender is or ought to be aware as likely to cause damage to his neighbour. …
Their Lordships went on to hold that foreseeability is a necessary element in all classes of nuisance, in that a defendant is not liable for harm that is the direct result of a nuisance if the harm was ‘in the relevant sense unforeseeable’.[22]
[21]Overseas Tankship (UK) Ltd v The Miller Steamship Co. Pty [1967] 1 AC 617 (Wagon Mound (No. 2)), 639.
[22]Wagon Mound (No. 2), 640.
There is a relationship between the foreseeability of a risk of harm and a defendant’s obligation to act to prevent the harm eventuating. In the case of the risk of ignition of oil discharged into the waters of Sydney Harbour:[23]
The most that can be said to justify inaction is that he would have known that this could only happen in very exceptional circumstances. But that does not mean that a reasonable man would dismiss such a risk from his mind and do nothing when it was so easy to prevent it. If it is clear that the reasonable man would have realised or foreseen and prevented the risk, then it must follow that the appellant is liable in damages. …
[23]Wagon Mound (No. 2), 644.
The relationship between ‘fault’ and nuisance was explained in a different way by McClure P in Southern Properties:[24]
Although the ‘fault’ of the defendant may be a relevant consideration in an assessment of whether the interference with the claimant’s enjoyment of land is unreasonable, the duty not to expose one’s neighbours to nuisance is not necessarily discharged by the exercise of reasonable care. Liability in nuisance is strict. Once a prima facie case has been established, it is for the defendant to prove its defence.
[24]Southern Properties, [119] (McClure P, Buss JA agreeing). See also Marsh v Baxter, [247] (McClure P) and Riverman, [181]–[182].
In my view it is more useful to focus on foreseeability rather than ‘fault’. It is foreseeability that is an essential element of the tort of nuisance. A defendant is not liable for harm that was not foreseeable. Whether a risk of harm was known, or could be foreseen, also bears on what measures might have been taken to avoid the harm eventuating, and in turn whether the interference was unreasonable. However, whether an interference was unreasonable is to be determined having regard to a range of considerations that is broader than whether reasonable precautions were taken to mitigate a foreseeable risk of harm.
This is not a case where the defendant did not know, and could not have foreseen, that its use of its land might interfere with its neighbour’s crop. It was entirely foreseeable that herbicide spray drift from the Burrell farm might damage BMG’s spring onion crop. Mr Burrell was well aware of the risk of damage, hence his caution to Mr Wilson to be ‘mindful of the spring onions’ when spraying the lucerne.
Burrell accepted that, if BMG established that Burrell’s spraying substantially interfered with its use and enjoyment of the land, the evidentiary burden shifted to Burrell to show that the interference was reasonable. That concession was made based on modern authorities dealing with nuisance,[25] and also finds support in older authority.[26]
[25]Ibid.
[26]Discussed in Kraemers v Attorney General (Tasmania) [1966] Tas SR 113, 122–5 (Burbury CJ).
In this case, whether the interference was reasonable turned on whether Burrell took reasonable precautions to prevent or avoid damaging BMG’s spring onions. Burrell does not contend that it was reasonable for it to spray its lucerne for some other reason – for example social utility or the nature of the location.[27] Nor does it say that BMG’s use of the Swan Hill block was unduly sensitive.[28]
[27]Cf Southern Properties, [120].
[28]Cf Marsh v Baxter, [783]–[786] (Newnes and Murphy JJA).
Burrell has not established that it took reasonable precautions to prevent or avoid damaging BMG’s spring onions when it sprayed its lucerne on 28 July 2014. It has not established that it took any precautions beyond Mr Burrell’s instruction to Mr Wilson to be ‘mindful of the spring onions’. There is no evidence that Mr Wilson took any precautions at all. Burrell has not discharged its evidentiary burden.
Even if the evidentiary burden had not shifted to Burrell, I am positively satisfied on the evidence that Burrell’s interference with BMG’s use and enjoyment of the Swan Hill block was not reasonable. My reasons for reaching that conclusion are as follows.
First, although Mr Burrell was aware of the need to be careful spraying around the spring onions, Mr Burrell gave no specific instruction to Mr Wilson about what care should be taken. For example, he did not tell Mr Wilson to avoid spraying in windy conditions that might cause the herbicide to drift onto the spring onions, or to ensure that the boom sprayer was adjusted so as to minimise spray drift. He did not supervise any aspect of the winter clean up, leaving it entirely to Mr Wilson.
Second, there is evidence that Mr Wilson did not take reasonable care to avoid damaging the spring onion crop. He sprayed immediately to the north and west of the spring onions on a day when the wind was conducive to spray drift onto the spring onions. Rick Butler saw him spraying on the afternoon of 28 July, at a time when the wind was gusty and in the north. The height of the boom sprayer was above the sprinklers, about waist height. Mr Butler observed that ‘the sprayer was coming down the hill and [the] boom was up and he had high pressure in the water … or the spray that was coming out of the bottom of the booms’. The spray coming from the booms looked ‘like a tornado’. From these observations I infer that Mr Wilson did not set up the boom sprayer so as to minimise spray drift, and in particular did not have the boom set low to the ground.
Burrell submitted that I should treat Rick Butler’s evidence of his observations on 28 July cautiously, given his ‘evident emotional attachment to the fate of the spring onions’. I have heeded that caution, but am comfortable accepting his evidence on this issue. Mr Butler gave evidence of what he saw on 28 July in a matter of fact way, without exaggeration. He was careful not to venture evidence about what he did not remember, in particular the strength of the wind. He described the spray coming out of the booms behind the tractor as ‘the picture that’s vividly in my head’, and I do not doubt that is what he saw.
Third, neither Mr Burrell nor Mr Wilson held an agricultural chemical user permit or a commercial operator licence under the Agricultural and Veterinary Chemicals (Control of Use) Act 1992 (Vic) (Control of Use Act). In order to obtain such a permit, a person must undergo appropriate training and demonstrate a minimum level of competence, as Mr Langshaw did when he obtained his permit. While I accept that Mr Wilson was experienced in agricultural spraying, the evidence does not disclose that he had any particular knowledge or expertise in how to avoid spray damage to a neighbouring crop. Given that Mr Wilson did not hold a relevant qualification, it was not reasonable for Mr Burrell to assume that ‘Gav was right’ to do the winter clean up without any specific instruction or supervision.
Fourth, in addition to spraying without a permit, Burrell used chemicals to spray its lucerne crop contrary to the Control of Use Act. The Control of Use Act prohibits use of a registered chemical at a rate that is higher than the maximum application rate for that use, as stated on the label, except in accordance with a permit.[29] It also prohibits use of an unregistered chemical, other than in accordance with a permit.[30]
[29]Control of Use Act s 19(1)(a).
[30]Control of Use Act s 6(1)(a).
Burrell sprayed its lucerne crop with SpraySeed at the rate of 3 litres per hectare. The registered label for SpraySeed specified a maximum application rate to lucerne in winter of only 2.4 litres per hectare. Burrell also sprayed its lucerne with Valor, at the rate of 60 grams per hectare. Valor was not registered in July 2014. Although another product with the same active ingredient, flumioxazin, was registered, it was not then registered for use on lucerne.[31] According to Dr Taylor and Mr Bell, the addition of Valor to the spray mix had the effect of enhancing the impact of the SpraySeed: it is a longer acting herbicide than SpraySeed, and was likely responsible for the yellowing and tip damage seen on the spring onions. The use of Valor was therefore a matter of some significance.
[31]Since July 2014, Valor has been registered, although not for use on lucerne. The other product containing flumioxazin, Terrain, is now registered for use on lucerne.
I am conscious that Burrell sprayed both chemicals as recommended by Swan Hill Chemicals. However, I do not accept that it was reasonable for Burrell to act on the advice of a representative of a purveyor of agricultural chemicals, instead of complying with the regulatory regime. Burrell’s non-compliance indicates a want of care in its use of herbicides to spray its lucerne crop.
I conclude that the damage to BMG’s spring onion crop caused by Burrell’s spraying on 28 July 2014 was a substantial and unreasonable interference with BMG’s use and enjoyment of the Swan Hill block. Burrell is therefore liable to pay BMG damages for nuisance.
Issue 7: Standard and content of duty of care
BMG also claims that its spring onion crop was damaged due to Burrell’s negligence. While Burrell accepted that it owed BMG a duty of care, there was some difference between the parties as to the standard and content of that duty.
The duty of care pleaded by BMG was a duty to take such care as in all the circumstances was reasonable to see that BMG and its property were not injured or damaged by reason of the state of the Burrell farm or of things done or omitted to be done in relation to the Burrell farm. Further or in the alternative, BMG pleaded that Burrell owed it a duty to take reasonable care by its employees, servants or agents to:
(a) ensure the crop spraying was carried out without risk to adjacent properties;
(b) ensure that the crop spraying did not cause injury to BMG or its property; and
(c) take reasonable steps to avoid foreseeable risks of injury to persons or property being at or near the Burrell farm.
Burrell conceded that it owed BMG a duty to exercise the care and skill reasonably to be expected of a farmer in the same or similar circumstances. It accepted that this extended to a duty to take reasonable care to avoid spraying in conditions or in a manner conducive to spray drift to an extent likely to damage neighbouring crops.
The difference between the parties really turned on whether magnitude of the danger posed by Burrell’s crop spraying to BMG’s spring onion crop required a stringent degree of diligence, as was the case in Burnie Port Authority v General Jones Pty Ltd.[32] In that case, the High Court explained how the standard of care that is reasonable varies with the risk involved:[33]
Where a duty of care arises under the ordinary law of negligence, the standard of care exacted is that which is reasonable in the circumstances. It has been emphasized in many cases that the degree of care under that standard necessarily varies with the risk involved and that the risk involved includes both the magnitude of the risk of an accident happening and the seriousness of the potential damage if an accident should occur. Even where a dangerous substance or a dangerous activity of a kind which might attract the rule in Rylands v. Fletcher is involved, the standard of care remains ‘that which is reasonable in the circumstances, that which a reasonably prudent man would exercise in the circumstances’. In the case of such substances or activities, however, a reasonably prudent person would exercise a higher degree of care. Indeed, depending upon the magnitude of the danger, the standard of ‘reasonable care’ may involve ‘a degree of diligence so stringent as to amount practically to a guarantee of safety’.
[32](1994) 179 CLR 520 (Burnie Port Authority).
[33]Burnie Port Authority, 554 (citations omitted).
As is clear from this passage, the standard of care is essentially to take reasonable care in the circumstances of the particular case. Those circumstances include the risk involved. It is not helpful to reformulate or embroider this standard of care in a given category of case, as the pleadings here attempt to do. In a case involving aerial spraying of herbicides, the Queensland Court of Appeal held:[34]
Having regard to the potentially catastrophic and widespread consequences of careless aerial spraying of potent herbicides the appellants were obliged to fulfil a very high standard of care, but their duty remained a duty to take reasonable care.
John Dixon J reached a similar conclusion in Riverman, another case involving herbicide spray drift.[35]
[34]Meandarra, [8].
[35]Riverman, [197]–[205].
Burrell owed a duty to its neighbour, BMG, to take reasonable care when spraying herbicides on the Burrell farm, to avoid a foreseeable risk of damage to the spring onion crop that BMG was growing on the Swan Hill block.
Issue 8: Did Burrell fail to take reasonable precautions?
Whether Burrell breached its duty to BMG is to be assessed having regard to the matters set out in s 48 of the Wrongs Act 1958 (Vic):
(1) A person is not negligent in failing to take precautions against a risk of harm unless—
(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known); and
(b) the risk was not insignificant; and
(c) in the circumstances, a reasonable person in the person's position would have taken those precautions.
(2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things)—
(a) the probability that the harm would occur if care were not taken;
(b) the likely seriousness of the harm;
(c) the burden of taking precautions to avoid the risk of harm;
(d) the social utility of the activity that creates the risk of harm.
(3) For the purposes of subsection (1)(b)—
(a) insignificant risks include, but are not limited to, risks that are far-fetched or fanciful; and
(b) risks that are not insignificant are all risks other than insignificant risks and include, but are not limited to, significant risks.
The fact that a risk of harm could have been avoided by doing something in a different way does not of itself give rise to or affect liability for the way in which the thing was done.[36] The question is not whether the harm was avoidable, but whether reasonable care was taken in the circumstances.
[36]Wrongs Act s 49(b).
The risk of spray damage to BMG’s spring onion crop was not only foreseeable, it was foreseen by Mr Burrell – hence his instruction to Mr Wilson to be ‘mindful of the spring onions’. Mr Burrell readily agreed that it was foreseeable that, if SpraySeed hits a spring onion plant, it will damage it.
As to the significance of the risk of spray damage, Mr Burrell agreed that SpraySeed creates a path of destruction in anything it touches, and volunteered that it ‘targets everything’. The general significance of the risk is apparent from the fact that it is a criminal offence to damage a neighbour’s crops when spraying – s 40(1) of the Control of Use Act prohibits carrying out agricultural spraying which injuriously affects any plants outside the target area. The risk that Burrell’s spraying of its lucerne with herbicide might damage BMG’s spring onions was, plainly, a significant risk. Its significance was heightened because the spring onion crop was ready to harvest, at the start of the window, leaving no time to grow through any spray damage.
The particulars of negligence pleaded by BMG were:[37]
[37]Further Amended Statement of Claim dated 23 February 2018, [23].
(a) failure to appropriately conduct the crop spraying;
(b) failure to warn BMG about the crop spraying;
(c) failure to conduct the crop spraying in appropriate weather conditions;
(d) failure to take adequate steps to prevent the crop spraying from spreading to adjoining properties;
(e) failure to prevent the crop spraying from affecting the spring onions.
Although pleaded at a high level of generality, BMG’s case on breach went well beyond Burrell’s narrow characterisation of that case. Burrell argued that BMG’s pleaded case was no more than an allegation that Mr Wilson sprayed in unacceptably windy conditions on 28 July 2014. I do not agree. BMG’s pleaded case, and its case at trial, was that Burrell failed to take reasonable care in spraying its lucerne crop with herbicides. In closing, BMG refined its case on breach to the following:
(a) Burrell purchased and used dangerous chemicals on the Burrell farm when Mr Burrell was not appropriately certified or licensed to do so;
(b) Burrell employed Mr Wilson to spray dangerous chemicals when he was not appropriately certified or licensed to do so, and failed to make any enquiries as to whether Mr Wilson was appropriately certified and licensed;
(c) Burrell failed to supervise Mr Wilson in the application of dangerous chemicals on the Burrell farm, including by failing to give Mr Wilson adequate instructions and remaining wholly ignorant of where and in what quantities Mr Wilson actually sprayed SpraySeed and Valor; and
(d) Burrell sprayed herbicides in weather conditions that were wholly unsuitable for spraying.
I deal with each of these in turn below.
As I have found in relation to BMG’s nuisance claim, Burrell purchased the herbicides SpraySeed and Valor to spray its lucerne crop. It used SpraySeed at a rate 25% higher than the maximum application rate on the label, and used Valor at a time when it was not registered for use as an agricultural spray. Neither Mr Burrell nor Mr Wilson held a permit that allowed them to use those chemicals as recommended by Swan Hill Chemicals. The recommendation of Swan Hill Chemicals was not shown to be informed by any expertise that made it reasonable for Burrell to disregard the regulatory regime established by the Control of Use Act.
There was a want of reasonable care in relation to the chemicals used by Burrell for its winter clean up. Specifically, it was not reasonable for Burrell to spray its lucerne with SpraySeed in the concentration it did, and it was not reasonable to use Valor at all. The use of Valor was significant, because it enhanced the effect of the SpraySeed and was probably responsible for the extensive tip damage among the spring onions.
Mr Wilson held neither an agricultural chemical user permit nor a commercial operator licence under the Control of Use Act. I accept that failure to comply with a statutory requirement does not, of itself, establish a failure to take reasonable care.[38] In this case, however, the fact that Burrell left the spraying to a person who did not hold a permit or licence under the Control of Use Act is evidence that it did not take reasonable care.[39] As mentioned, obtaining a permit involves undergoing some training and demonstrating competence in the use of agricultural chemicals. While Mr Wilson had done a lot of spraying over the years, I cannot infer from that experience that he understood what precautions he should take to avoid herbicide spray drift damaging a neighbouring crop. Had he held a permit or licence, I would have been more ready to share Mr Burrell’s confidence in Mr Wilson.
[38]Mitchell v Clancy (1960) 107 CLR 86, 90–1 (Dixon CJ); Sibley v Kais (1967) 118 CLR 424, 427; Leighton Contractors Pty Ltd v Fox (2009) 240 CLR 1, [49].
[39]Henwood v Municipal Tramways Trust (SA) (1938) 60 CLR 438, 461.
It might have been reasonable for Burrell to engage Mr Wilson to do its spraying, even without a permit, if Mr Burrell had given him any instruction about what precautions he should take to avoid damaging the spring onions, or if he had supervised him to any degree in his work. Mr Burrell did neither. Other than telling Mr Wilson to be careful spraying around the spring onions, Mr Burrell left him to undertake the winter clean up on his own. Mr Burrell was not present when the representative of Swan Hill Chemicals inspected the lucerne and recommended the chemicals to be sprayed on 22 July, and was in Queensland on 28 July 2014. Burrell did not take reasonable care in instructing or supervising Mr Wilson.
And then, as I have found, Mr Wilson did not take reasonable care to avoid damaging the spring onion crop when spraying on 28 July 2014.[40] He sprayed an area of lucerne close to the spring onions in weather conditions that were conducive to spray drift and did not set up the boom sprayer to minimise the risk of spray drift.
[40]See paragraph [105] above.
Turning to the matters to which s 48(2) of the Wrongs Act directs attention, it was likely that spraying herbicide on the lucerne would damage the spring onion crop if care was not taken to avoid or minimise the risk of spray drift. The damage was likely to be serious, rendering some or all of the crop unsaleable at the very point that it was ready to harvest. It would not have been especially burdensome to take reasonable precautions to avoid the risk of harm – this involved no more than complying with the regulatory regime, a reasonable level of instruction and supervision of Mr Wilson, setting the boom sprayer to minimise the risk of drift, and waiting until the wind had dropped or changed direction. The social utility of spraying a lucerne crop to eliminate weeds is not of such a high order that it was not reasonable to take those precautions.
Taking all of these matters into account, I find that Burrell did not take reasonable care to avoid the foreseeable risk of herbicide spray damage to BMG’s spring onion crop.
Issue 9: Did the crop spraying materially contribute to any loss and damage of BMG?
I have already determined, as a matter of fact, that drift from the spraying of Burrell’s lucerne crop on 28 July 2014 damaged BMG’s spring onion crop.
In relation to BMG’s negligence claim, I must also consider whether it is appropriate for the scope of Burrell’s liability to extend to the harm that its negligence caused as a matter of fact.[41] This involves a normative judgment as to the scope of liability. I have no difficulty concluding that it is appropriate for a farmer to be held liable for damage to a neighbouring crop caused by its negligent use of herbicide spray. Liability in negligence has been found in other similar cases.[42] In this particular case the harm that eventuated was foreseeable, and indeed was foreseen by Mr Burrell, and was the direct result of Burrell’s failure to take reasonable care. There is no reason why Burrell should not be held liable for the full extent of the damage its negligence caused to BMG’s spring onions.
Issue 10: Quantum of loss and damage
[41]Wrongs Act s 51(1)(b).
[42]For example, Meandarra and Riverman.
The final issue for determination is the amount of the loss suffered by BMG as a result of the herbicide spray damage to its spring onion crop. The objective in assessing damages for both nuisance and negligence is to put BMG in the same position that it would have been in had its spring onion crop not been damaged on 28 July 2014.[43] The aim in awarding damages is to make good, so far as money can do, the loss BMG suffered, bearing in mind that the assessment is not ‘a mere matter of mathematics’ and may call for judgment rather than calculation.[44]
[43]Livingstone v Rawyards Coal Co (1880) 5 App Cas 25, 39, cited in Riverman, [233].
[44]Amaca Pty Ltd v Latz (2018) 92 ALJR 579, [92] (Bell, Gageler, Nettle, Gordon and Edelman JJ).
In some cases, awarding damages for nuisance requires an assessment of the cost of remediating the land or of the diminution of the value of the land caused by the interference.[45] This is not such a case. Here, the interference was the spray damage to BMG’s spring onion crop, and it is that damage that is to be compensated. BMG’s intention was to harvest and sell all of the spring onions it grew on the Swan Hill block, during the six week period from late July to early September when supplies were low and prices were high. As I have found, the spray drift damaged BMG’s entire crop, just as it was ready to harvest, making it unsaleable during that window. That is the loss to be compensated by an award of damages.
[45]As discussed in Riverman, [234]–[240].
Methodology
BMG submitted that its loss should be calculated using the following method:
(a) First, identify the likely yield in bunches per hectare;
(b) Second, calculate the total number of crates that would be harvested from 12.14 hectares, at the rate of 20 bunches per crate;
(c) Third, multiply the total number of crates by the likely price per crate;
(d) Fourth, subtract the actual income from the sale of the spring onions that were able to be harvested and sold in September and October 2014;
(e) Fifth, subtract the savings in transport labour costs, because most of the crop was not harvested;
(f) Sixth, add the loss incurred by BMG in purchasing and transporting spring onions from a Queensland supplier, in order to meet its supply commitment to Coles;
(g) Finally, add pre-litigation disbursements, being the cost of two reports submitted to Burrell’s insurer in support of BMG’s claim.
Burrell challenged both this method of calculating BMG’s loss, and the figures that BMG said should be used in the calculation.
As to the method, Burrell submitted that the preferable method was simply to quantify how much BMG had spent to ensure that it was able to meet its supply commitments to Coles. The evidence was that, between 8 August and 16 October 2014, BMG spent about $665,000 buying spring onions from a Queensland grower, Campsey Ash Farms, and transporting them to Victoria. It was this amount, Burrell said, that reflected the cost to BMG of replacing the damaged spring onions.
I do not agree that this is an accurate measure of BMG’s loss. It represents only the amount that BMG had to spend to maintain its relationship with Coles, when what BMG lost was the opportunity to sell its entire crop, during a narrow winter window when spring onions were in short supply. BMG had committed to Coles to supply about 98,000 crates of spring onions, plus or minus 15%, over the period from 28 April to 21 October 2014. When it could not meet this commitment from the Swan Hill crop, in August and September 2014, BMG had to buy and transport spring onions from a Queensland grower. However, the supply commitment was a minimum, not a ceiling on the amount that BMG could sell to Coles. Rick Butler’s evidence was that BMG had in previous years supplied Coles in excess of its supply commitment. He was confident that BMG could sell all of the spring onions it harvested during the window – ‘there’s always a home for stock in August’. In addition, although Coles was BMG’s main customer, it was not its only customer – BMG also sold to Woolworths and at the wholesale market.
I consider that the method proposed by BMG is an appropriate way to quantify its loss.
A number of the variables within that method are straightforward:
(a) I accept that 12.14 of the 14.4 hectares leased by BMG from Burrell in 2014 were planted to spring onions.
(b) It was agreed that there are 20 bunches of spring onions to a crate;
(c) BMG established to my satisfaction that it actually harvested 16,234 crates of spring onions from the Swan Hill block between 6 September and 16 October 2014. This figure is the difference between BMG’s total sales of spring onions over that period (29,228 crates), and its purchases from Campsey Ash, its Queensland supplier, over the same period (12,994 crates). BMG’s income from the sale of the Swan Hill spring onions in 2014 was $383,771.76.
(d) BMG quantified the amount it saved in transport labour costs as $372 per trip, with the number of trips saved dependent on the yield rate.
(e) BMG calculated its loss from the purchase and transport of spring onions from Campsey Ash in Queensland, in order to meet its supply commitment to Coles, to be $35,955.00. I accept that calculation.
(f) The pre-litigation disbursements were proved to be a total of $8,922.01, being $1,387.01 for Stuart Grigg’s report and $7,535.00 for the Freshlogic Market Report.
Contingencies
Burrell submitted that, if BMG’s method were to be used, it should include allowances for rejections, and for negative contingencies.
As to rejections, Burrell relied on Rick Butler’s evidence that around 95% of spring onions that are picked are saleable, and those that are not are left behind. It also pointed to evidence that, in 2012, Coles rejected 0.72% of the spring onions supplied to it by BMG. I consider that the yield rate that I have determined to use includes a sufficient allowance for rejections, in particular of those spring onions that may not be included in yield data because they are left on the ground.
As to negative contingencies, Burrell submitted that the value of BMG’s lost opportunity should be assessed according to the likelihood of its occurrence.[46] Negative contingencies that it put forward for consideration were:
[46]Sellars v Adelaide Petroleum NL (1994) 179 CLR 332, 355; Johnson v Perez (1988) 166 CLR 351, 366; Waribay Pty Ltd v Minter Ellison [1991] 2 VR 391, 397.
(a) The exigencies of growing the crop for only the second year in Swan Hill;
(b) The chances of downy mildew, nutrient deficiency or any other crop damage;
(c) The imprecision of the timing for harvest, and the real prospect that some of the crop would miss the window; and
(d) General commercial farming contingencies such as equipment breakdown and labour shortages.
I am not persuaded that I should make any additional allowance for these contingencies, beyond the judgment I have formed about the likely yield rate and the average price per crate. The evidence was, and I have found, that in 2014 BMG grew a healthy spring onion crop at Swan Hill, which was not damaged before 28 July, and which was ready for harvest on time in late July, at the beginning of the window. BMG had started to harvest the crop and had the necessary equipment and labour on hand to continue harvesting.
I have also considered whether I should make some allowance for the possibility that BMG might not have been able sell everything it harvested at Swan Hill. Burrell points out that in 2013, when BMG grew twice the area of spring onions at Swan Hill, it supplied a total of 216,567 crates of spring onions to Coles and Woolworths. Further, it had rarely sold more than 20,000 crates of spring onions to Coles in any one month, exceeding that figure for the first time in December 2013. Given that background, Burrell submits that it is unlikely that BMG could have sold between 55,995 and 72,840 crates of spring onions in the window between late July and early September, and that it would probably have left some of the 2014 crop to go to seed.
Against that submission is the considerable evidence that spring onions are in short supply in the south in the winter months. Very little can be grown to maturity in Victoria, and for a period of about six weeks spring onions can only be sourced reliably from Queensland. The Brisbane market price for spring onions is high throughout the winter months, particularly in August when it can exceed $50 per crate.[47] In order to meet BMG’s supply commitment to Coles during August and early September, Rick Butler had to buy and transport spring onions from Queensland at a loss. In that market, I find that BMG would probably have been able to sell everything it could harvest at Swan Hill in the window from late July to early September. I do, however, consider that a plentiful supply of Victorian grown spring onions would have affected the price.
[47]Freshlogic market report, State market prices for Spring Onions, 2012-2014.
Even if BMG might not have sold its entire Swan Hill crop during the six week window, I find that it would have been able to continue to harvest and sell the crop throughout September and into October. It did, in fact, harvest and sell what could be salvaged from Swan Hill during this period, albeit at lower prices than might have been expected during the winter window.
Yield
The first variable on which the calculation of BMG’s loss depends is the likely yield per hectare. BMG has only recently started to keep yield records and there was, unfortunately, no yield data from the 2013 spring onion crop at Swan Hill. BMG put forward four alternative yield rates:
(a) 120,000 bunches per hectare – the estimated yield rate at Heatherton, given by both Greg Rankin and Andreas Cruz in their evidence;
(b) 115,000 bunches per hectare – the highest rate among the yield records tendered by BMG;
(c) 100,000 bunches per hectare – the rate actually used by Mr Cruz for planning purposes, as ‘the most safe, easy to achieve for us through history from all my measurements’;
(d) 92,249 bunches per hectare – the average yield across the yield records tendered by BMG.
None of these alternatives is entirely satisfactory. The first two are best case scenarios that include no allowance for contingencies. The fourth is based on very limited data indeed – only four yield records were in evidence, from 2016 and 2017 – and does not provide a sufficient basis for calculating average yield.
The third alternative is the best of those available. It is an informed estimate by a qualified and experienced agronomist, who does BMG’s production planning, and who has settled on 100,000 bunches per hectare as an achievable yield. It makes an appropriate allowance for contingencies that might otherwise have to be factored in to my assessment. I would have preferred to have more evidence about the ‘measurements’ on which Mr Cruz based his estimate, but am willing to accept it given his expertise, his role at BMG and his evidently scrupulous approach to keeping records. It is also significant that Burrell did not challenge this aspect of Mr Cruz’s evidence.
On that basis, the likely yield from the 12.14 hectares of the Swan Hill block that were planted to spring onions in 2014 was 1,214,00 bunches, or 60,700 crates.
Burrell submits that none of these rates should be accepted, and proposed several alternative methods of working out the likely yield rate. As I explain below, I am not persuaded that any of these alternative methods is preferable to using the estimated yield rate given by Mr Cruz.
The first alternative method was based on the number of spring onions that were actually harvested on 28 July 2014. Rick Butler described half filling BMG’s truck with spring onions harvested from ‘more than one entire row’ that day. The capacity of the truck is 1,188 crates, and Mr Butler estimated there were ‘a bit more than 500 crates’ harvested that day. Burrell submits that this can be multiplied by the number of rows (43) to calculate the likely yield from the Swan Hill block – around 25,000 crates.
The difficulty with this method is that it is based on a misunderstanding of Mr Butler’s evidence. In cross-examination, he said that the spring onions were harvested from ‘multiple rows that are on one land’. This highlighted some confusion about the meaning of the word ‘row’ as used by Mr Butler. He explained during his evidence that there are three rows in each ’land’ of spring onions. In its submission, Burrell used the word ‘row’ to refer to what Mr Butler called a ‘land’. The result is that, applying Burrell’s first alternative method, the estimated yield from the Swan Hill block in 2014 would have been more like 75,000 crates. This suggests that the yield of 60,700 that I have arrived at is a conservative figure.
Burrell’s second alternative method is based on Rick Butler’s evidence that he would expect to harvest 10 bunches of spring onions per metre of row – or 30 bunches per metre across the three rows in a ‘land’. The basis for this estimate was not explained, and I am not confident of its accuracy. In any event, it is not possible to use it to calculate the likely yield, because there was no evidence of how many metres of spring onions BMG planted at Swan Hill in 2014. Burrell proposed a figure of about 13,000 metres, calculated by counsel using the scale shown on the aerial photograph at Figure 2. That is far too imprecise a means of working out either the length of the crop, or the likely yield.
The third alternative proposed involved extrapolating from a production guide published by a seed company, Terranova, which indicated that for its ‘Onion – Bunching’ seeds the average marketable yield is five tonnes per hectare. The hypothesis that this figure reflects BMG’s actual yield was not put to any of BMG’s witnesses. In those circumstances it would not be fair to accept it, even leaving aside the uncertain state of the evidence about how much seed was planted per hectare and the average weight of a bunch of spring onions.
The next alternative was based on a planning document prepared by Rick Butler in early 2014, which predicted sales to Coles of 600 crates per day in the period May to October. Burrell calculated that, over the six week window from late July to early September, this amounted to only 25,200 crates of spring onions. This submission overlooked the predicted sales to other customers, which were estimated to range from 120 to 720 crates per day depending on demand. It also overlooked that spring onions from Swan Hill might be harvested and sold throughout September and into October – as in fact occurred. More fundamentally, I do not accept that the high level sales predictions in this document are a reasonable basis for estimating yield per hectare.
The final alternative basis for calculating the yield rate was based on a marketing presentation made by Rick Butler to Coles in April 2014, which referred to the sale of 1,000,000 bunches of spring onions from Swan Hill in 2013. Burrell submitted that, since BMG grew only half the area of spring onions in 2014, it would only have sold 500,000 bunches, or 25,000 crates in that year. This does not take account of the fact that about 20% of the 2013 crop was not harvested. In addition, Mr Butler clarified that the figure of 1,000,000 bunches represented sales to Coles only, and so it does not represent the entire Swan Hill crop from 2013. And again, I cannot accept that a figure in a marketing document is a reasonable basis for estimating crop yield.
Price
That leaves the remaining variable, the price per crate.
BMG claims that it could have sold all of the spring onions it harvested during the window for $32.00 per crate. Rick Butler had negotiated that price with Coles for the week commencing 27 July 2014, up from $27.00 or $28.00 the previous week. However, the Coles buyer foreshadowed that the price would be reviewed the following week ‘as availability will be stronger given Swan Hill’s stock being harvested’.
Burrell submits that it is wholly unrealistic to expect that BMG could have sold its entire Swan Hill crop for $32.00 per crate, when this price was struck with Coles when supply was at its most scarce. I agree. The evidence indicates that the price of spring onions is fairly volatile, both with the large supermarkets and at the wholesale markets. Rick Butler readily agreed that the price is affected by the available supply. The availability of 60,700 extra crates of Victorian spring onions could only have reduced the price below its winter peak of $32.00.
Determining a ‘realistic’ price per crate, as Burrell submitted I should do, is a matter of judgment rather than calculation. Burrell did not suggest what that price might be, although it pointed out that the average price at which Coles bought spring onions from BMG during September 2014 was $24.10 per crate. Doing the best I can, I consider that $28.00 per crate is a fair estimate of the average price that BMG’s spring onions would have fetched if they had been saleable from late July 2014 as planned.
At that rate, BMG could have sold 60,700 crates of spring onions for a total of $1,699,600.
From that amount must be deducted the $383,771.76 that was received for the sale of the spring onions that could be harvested, and savings in transport labour costs of $14,136.00.[48] To that amount must be added the loss of $35,955.00 incurred in purchasing and transporting spring onions from Queensland, in order to meet BMG’s supply commitments to Coles. Pre-litigation disbursements of $8,922.01 should also be added.
[48]BMG estimated that 52 trips would have been required to transport 60,700 crates, 38 more than the 14 trips used to transport the 16,234 crates that were harvested. The saving of 38 trips at $372 per trip is $14,136.
I assess BMG’s loss occasioned by the damage to its spring onion crop at a total of $1,346,570.
Disposition
There will be judgment for BMG, with an order that Burrell pay BMG damages in the sum of $1,346,570.
I will hear from the parties on the questions of interest and the costs of the proceeding.
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