Crabb & Crabb v Lorenzo and Eckerman No. DCCIV-94-1382 Judgment No. D3406

[1997] SADC 3406

Court

DISTRICT COURT OF SOUTH AUSTRALIA

Judgment of His Honour Judge Noblet

Hearing

19/12/95 to 21/12/95, 02/04/96 to 03/04/96.

Catchwords

Case turns on own facts Case turns on own facts

Representation

Plaintiffs BENJAMIN R. CRABB AND JOHN F. CRABB:
Counsel: Mr. G. Harley - Solicitors: HARLEY &; CO.

Defendant SUSAN M. LORENZO:
Represented by: In person

Defendant JOHN ECKERMAN:
Represented by: In person

DCCIV-94-1382

Judgment No. D3406

16 January 1997

(Civil)

CRABB & CRABB V LORENZO & ECKERMAN

Civil

Judge Noblet

Introduction

The Plaintiff's leased portion of their farming land on Kangaroo Island to the first defendant in April 1993 for a period of 2 years.The plaintiffs claim that, because of the negligent manner in which the second defendant carried out farming work on the land on behalf of the first defendant, and because of breaches of contract, they have suffered loss.The loss claimed relates mainly to soil erosion and the costs of remedying it.The plaintiffs claim the sum of $330,645.20 against both defendants.

The defendants deny the negligence and breaches of contract.They have counterclaimed $353 for work which they claim to have carried out at the request of the plaintiffs and $4,800 for fees for permitting the plaintiffs' sheep to graze on the land during the period of the lease.

Statement of Claim

The plaintiffs by their statement of claim alleged as follows:-

1. At all material times the plaintiffs were the registered proprietors of an estate in fee simple in the whole of the land comprised in Certificate of Title Register Book Volume 1316 Folio 43 being section 77 in the Hundred of Newland (hereinafter call "the said land").

2. In or about March of 1993 the plaintiffs leased to the first defendant portion of the said land being that portion known as Paddocks 10, 14 and 15 (hereinafter called "the demised land").

PARTICULARS

The said lease is in writing, between the plaintiffs of the one part and the first defendant of the other part and is undated but was executed by the plaintiffs and the first defendant in or about March 1993.

3. The following were express written terms of the said lease:-

a) The term of the lease would be for a period of two years commencing on the 1st day of April 1993;

b) The first defendant would pay the plaintiffs an annual rental of $12,250.00;

c) Half the said rental would be paid on the 1st day of April of each year and the other half would be paid on the 1st day of January of each year;

d) The first defendant would apply superphosphate to the demised land at the rate of 125kg/hectare in each year of the said lease;

e) The first defendant would repair any soil erosion which occurred upon the demised land immediately; and

f) The first defendant would only crop the demised land with a crop of a type agreed upon by the plaintiffs and the first defendant.

4. It was an implied term of the said lease that the first defendant would not cause or permit soil erosion to the demised land.

PARTICULARS OF IMPLIED TERM

The term is to be implied from trade custom and for the purpose of giving full effect to the express term referred to in paragraph 3 (e) hereof.

5. At all times since March 1993 the second defendant has been the agent and/or employee of the first defendant and has carried out all work on behalf of the first defendant in relation to cropping of the demised land.

6. Since the 1st April 1993 soil erosion has occurred upon the demised land.

PARTICULARS OF SOIL EROSION

Fifty per cent of the demised land suffers from sheet erosion. Five per cent of the demised land suffers from rill erosion. The rill erosion will eventually lead to severe guttering. There has been a serious loss of top soil which has washed downhill into creeks and neighbours properties. Further erosion will occur before the demised land is re-sown in mid 1995.

7. The first defendant has not repaired the said soil erosion.

8. The said soil erosion has been caused by the negligence of the first defendant by her agent the second defendant and the second defendant personally and the breach of contract of the first defendant.

PARTICULARS OF NEGLIGENCE

9. The defendants were negligent in that:-

a) In July 1993 the first defendant was informed verbally by Bob Hagerstrom that the crop upon the demised land was infested with philobota and the same should be sprayed with Dominex but the defendants failed to spray the said crop. In consequence, the said crop was severely damaged and failed to grow properly. In consequence, the crop was unable to hold soil together against wind and water erosion.

b) The first defendant cultivated the headlands as a final operation when he should not have cultivated the headlands at all or, in the alternative, should have cultivated them as a first operation. As a result the cultivation of the headlands formed ruts which permitted water to flow down the land thereby creating soil erosion.

c) The first defendant cultivated the demised land with a cultivator when he should have used a plough.

d) The first defendant repeatedly cultivated the demised land when the demised land should only have been worked once.

e) The first defendant cultivated the demised land in September 1993 when the demised land should not have been worked after May 1993. This meant that the land was bare and uncropped at a time of heavy rainfall.

f) The defendants failed to spray the crop on the demised land in July 1993 for alternaria fungal infection. As a result the crop became diseased and did not grow properly. As a result the crop failed to hold the soil together against wind and water erosion.

g) The first defendant drove a tractor upon he demised land when it was waterlogged thereby causing large wheel ruts in the soil.

h) The defendants did not spray the demised land for the eradication of red legged earth mite in the first week of June 1994 and as a consequence the crop on the demised land was infested with red legged earth mites which destroyed the crop. As a result there was no crop to hold the soil together against wind and water erosion.

i) The defendants did not spray the demised land with a spray to control broad leafed weeds in the first week of June 1994 and in consequence the crop of the demised land became infested with broad leafed weeds. As a result the crop failed. As a result there was no crop to hold the soil together against wind and water erosion.

j) The defendants failed to plant a crop upon the demised land for the 1994/1995 season.

10. In consequence of the said soil erosion the plaintiffs have suffered loss and damage.

PARTICULARS OF LOSS AND DAMAGE FROM SOIL EROSION

Cost of constructing banking system and dams to halt erosion

$9,000-00

Cost of extra fertiliser over the next four years to compensate

for loss of top soil

20,000-00

Cost of planting demised land for four years with a pasture

mixture of subterranean clover to repair erosion

11,729-20

Loss of net profit on crops for 4 years

260,800-00

11. Any cultivating ploughing, harrowing or other working of the demised land prior to June 1995 will cause further soil erosion.

12. In September 1993 the second defendant, as agent for the first defendant, purchased from the plaintiffs 205 litres of diesel fuel valued at $159.00 and 40 litres of Delo 400 valued at $127.00.

13. On the 11th July 1994 the plaintiff demanded in writing payment by the first defendant of the sum of $286.00 for the said diesel fuel and Delo 400.

14. The first defendant has not made payment to the plaintiffs of the same sum of $286.00.

15. In March 1993 it was expressly orally agreed between the first plaintiff as agent for the second plaintiff and the second defendant, as agent for the first defendant, that:-

a) the first defendant would plant crops of coriander;

b) the plaintiffs would make available to the defendant upon request by the defendant certain of the plaintiff's plant and equipment namely their combine, plough, cultivator, boom spray and silos provided such equipment was not at the time when it was required by the first defendant in actual use by the plaintiffs; and

c) the first defendant would permit the plaintiffs to graze their sheep on the stubble of the crop at the end of each cropping season and prior to the commencement of the next cropping season;

("the crop agreement").

16. At the time of entering into the crop agreement the second defendant represented to the first plaintiff that:-

a) the second defendant was an expert on coriander;

b) the nutrient value of coriander stubble was the same as for pea straw;

c) the stubble of the coriander crop to be planted on the demised land was highly suitable for grazing by sheep; and

d) the growing of coriander upon the land would not adversely affect the land;

("the said representations").

17. The said representations were made by the second defendant for himself and as agent for the first defendant in order to induce the plaintiffs to enter into the crop agreement.

18. The said representations were false in that:-

a) the second defendant was not an expert on coriander;

b) coriander stubble has a nutrient value considerably less than that for pea straw;

c) the stubble of a coriander crop is not suitable at all for the grazing of sheep; and

d) the planting of a coriander crop for more than one year in row will result in a decrease of the nutrient levels in the land.

19. The first defendant by her said agent the second defendant and the second defendant were personally negligent in making the said representations.

20. The second defendant made the said representations well knowing it to be false or recklessly indifferent as to whether it was true or false.

21. Whilst misled and deceived by the said representations and in reliance upon the said representations the plaintiffs entered into the crop agreement.

22. In consequence of the said misrepresentations and negligence the plaintiffs have suffered loss and damage.

PARTICULARS OF LOSS OF DAMAGE FROM BREACH OF

CROP AGREEMENT

Loss of feed valued at $35.00 per acre for 406.8 acres=$14,258-00

[This claim was abandoned at trial]

23.The first defendant has not spread superphosphate upon the demised land in the final year of the term of the lease.

24.In consequence, the plaintiff will incur a charge of $20,000 for not spreading superphosphate on the demised land.

AND the plaintiffs claim:-

(a) damages in the sum of $330,645-20 against both defendants

(b) payment by the first defendant of $20,286-00.

(c) an injunction restraining the defendants whether by themselves, their servants or agents from cultivating, harrowing, ploughing or otherwise working the demised land;

(d) interest;

(e) Costs.

Defence & Counterclaim

The defendants in their amended defence and counterclaim pleaded as follows:-

1. The defendants admit the allegations contained in paragraphs 1 and 2 of the Statement of Claim save and except that the lease referred to was not executed by the plaintiffs until December 1993.

2. The defendants admit the allegations contained in paragraph 3 of the Statement of claim save and except for paragraph 3(f). The defendants say that there was no agreement as alleged that the plaintiffs were permitted to graze their sheep on the stubble of the crop at the end of each cropping season. The defendants say that there was a verbal agreement entered into between the second defendant and Benjamin Crabb in about March 1993 that the plaintiff Benjamin Crabb would allow the defendants to use his cultivator for the purposes of cultivating the demised land without charge to the defendants, and in return the defendants would allow the plaintiffs to graze their sheep on the stubble of the crop at the end of each cropping season.

3. The plaintiffs failed to supply their cultivator to the defendants and the defendants were required to hire cultivators from other parties at additional cost to themselves.

4. With respect to paragraph 4 of the Statement of Claim, the defendants deny that there was an implied term that the first defendant would not cause or permit soil erosion to the demised land, or alternatively say that if there was an implied term concerning soil erosion, then the term to be implied from trade custom was that the first defendant would run the farm in a reasonably prudent manner so as to minimise soil erosion.

5. The defendants admit the allegations contained in paragraph 5 of the Statement of Claim.

6. The defendants deny each and every one of the allegations contained in paragraph 6 of the Statement of Claim and each and every one of the particulars of the soil erosion as if each one was set out herein and specifically traversed.

7. With respect to paragraph 6 of the Statement of Claim the defendants admit that there was some minor erosion on a small area of the demised land caused by unusually heavy rain.

8. With respect to paragraph 7 of the Statement of Claim the first defendant has in consultation with the local Soil Board repaired any soil erosion that occurred on the demised land.

9. With respect to paragraph 8 of the Statement of Claim the defendants deny each and every one of the allegations contained therein.

10. With respect to paragraph 9(a) of the Statement of Claim the defendants deny each and every one of the allegations contained therein, except to say that the second defendant requested Bob Hagerstrom to inspect the crop as there was an infestation with the philobota grub, and was advised by Bob Hagerstrom that it was not worth spraying as the infestation was minor. Approximately 20 acres of the demised land was subsequently re-sown and a crop grew without soil damage.

11. With respect to paragraph 9(b) of the Statement of Claim the defendants deny the allegations contained therein, except to say that there was some minor erosion on the headlands, as occasionally occurs with heavy rains, but such erosion was corrected by the cultivation in 1994.

12. The defendants deny the allegations contained in paragraph 9(c) of the Statement of Claim.

13. The defendants deny the allegations contained in paragraph 9(d) of the Statement of Claim and say that the demised land was worked once and then sown, with the exception of an area of 20 acres which was sown twice.

14. The defendants deny the allegations contained in paragraph 9(e) of the Statement of Claim and say that the demised land was not worked after the 22nd July 1993.

15. With respect to paragraph 9(f) of the Statement of Claim the defendants say that the crop on the demised land may have had a minor alternaria fungal infection but that if it did, such infection was of a minor nature and did not require any attention and did not affect the crop in any noticeably adverse manner. The defendants deny that the crop failed to hold the soil together against wind and water erosion.

16. The defendants deny the allegations contained in paragraph 9(g) of the Statement of Claim.

17. With respect to paragraph 9(h) of the Statement of Claim the defendants say that they did spray the demised land for red legged earth mite, but that in the first week of June 1994 there was no crop on the demised land. The demised land was sprayed for red legged earth mite on the 20th July 1994 and then sown on the 17th and 18th August 1994 and fourteen days later sprayed again for red legged earth mite. The defendants deny that there was any problem caused by red legged earth mites and deny that the crop was destroyed.

18. With respect to paragraph 9(i) of the Statement of Claim the defendants deny each and every one of the allegations contained therein and say that they did spray for broad leafed weeds and that a crop grown on the demised land has not failed.

19. With respect to paragraph (j) of the Statement of Claim the defendants say that for the 1994/1995 season they planted a crop of 350 acres on the demised land.

20. With respect to paragraph 10 of the Statement of Claim, the defendants deny each and every one of the allegations contained therein, and each and every one of the particulars of loss and damage alleged therein, and say that there was no soil erosion damage so as to cause any loss to the plaintiffs.

21. With respect to paragraph 11 of the Statement of Claim the defendants deny each and every one of the allegations contained therein.

22. With respect to paragraph 12 of the Statement of Claim the defendants admit the purchase of the diesel fuel and Delo but say that the fuel should be charged at a rate of 40 cents per litre being the tax free amount as the fuel was used in primary production.

23. The defendants admit the allegations contained in paragraphs 13, 14, ad 15 of the Statement of Claim.

24. With respect to paragraph 16 of the Statement of Claim, the second defendant denies that [he made] the representations to the first defendant alleged therein save and except that he did represent to the first plaintiff that sheep were able to graze on coriander.

25. With respect to paragraph 17 of the Statement of Claim, the representation was made by the second defendant as part of the agreement to allow the first defendant to use the first plaintiff's cultivator and not to induce the plaintiff to enter into the crop agreement.

26. With respect to paragraph 18 of the Statement of Claim, the defendants deny the allegations contained therein.

27. The defendants deny the allegations contained in paragraphs 19, 20, 21, 22, 23 and 24 of the Statement of Claim and say that the plaintiffs are not entitled to any damages, injunction, interest or coSts as claimed therein.

COUNTER CLAIM

28. In mid 1993 the first plaintiff requested that the second defendant undertake to spray, workup and spread super on an area of 35 acres of the plaintiffs' land.

29. No agreement was reached in relation to the payment of the work undertaken, and the defendants claim payment as follows:

a) spraying Roundup using defendants' equipment

35 acres at $2.50 $87.50

b) 4.5 tractor hours working up paddock at $20 per hour $90.00

c) 4.5 hours labour at $15 per hour $67.50

d) cultivator hire at $2.00 per acre $70.00

e) 1.9 tractor hours to spread super at $20.00 per hour $36.00

$353.00

30. In addition the plaintiffs grazed sheep upon the demised land being approximately 1,500 head from the 1st February 1994 until on or about the 15th July 1994.

31. No agreement was reached between the plaintiffs and defendants concerning the fees for grazing, and the defendants now claim fees as follows:

a) sheep at 20 cents per head per week for 16 weeks $4,800.00

AND the defendants claim damages in the sum of FIVE THOUSAND ONE HUNDRED AND FIFTY-THREE DOLLARS ($5,153.00) together with costs and interest.

Hearing and Witnesses

At the hearing, the plaintiffs were represented by counsel and the first and second defendants appeared in person.

The first plaintiff, Benjamin Ronald Crabb, gave evidence.Where I refer to Mr Crabb, I am referring to him.The other plaintiff, his brother, did not give evidence and had no involvement in the arrangements with the defendants.The plaintiffs also called Mr Robert Hagerstrom, an agricultural consultant from Kangaroo Island, and Mr Mark Ramsey, a senior plant pathologist.

The defendants both gave evidence.They also called Mr Matheson, also an agricultural consultant, and Mr Wandel a Kangaroo Island farmer who was also a member of the Kangaroo Island Soil Conservation Board.

The Plaintiffs' Case

Mr Crabb is 45 and has been farming on his family property on Kangaroo Island since he was 13.The property has been variously used to raise sheep and cattle and to crop oats, barley, wheat and lupins.Mr Crabb was also involved in other pursuits, including working as an earth mover.

Mr Crabb saw an advertisement in a local paper inquiring about leasing land on Kangaroo Island.He followed this up and commenced discussions with the second defendant, Mr Eckerman.Eventually Mr Crabb agreed to lease about one half of his property for a period of two years.A lease was prepared and Mr Crabb then became aware of the involvement of Ms Lorenzo.The lease went through several drafts and the final version was not signed by the parties until well after the commencement of the term.

The lease agreement is a simple document which appears to have been drawn up without benefit of legal advice.Some of the drafting is less than satisfactory.The term of the lease which is particularly relevant to the claim by the plaintiffs is that which imposes an obligation on the lessee:

"(c) To destroy and keep destroyed all noxious weeds and vermin and shall repair any soil erosion immediately on the said premises".

(In fact the lease does not specifically impose this obligation upon the lessee, but this must be what was intended.)

Mr Crabb said that Mr Eckerman told him he proposed to plant coriander on the land.Mr Crabb did not have any problem with that.He also said that Mr Eckerman advised him that he was an expert on coriander and that coriander stubble was good sheep fodder with a nutrient value the same as for pea straw.

Mr Crabb said that one of the problems with growing crops in the area of his property was that the land was very undulating and there was a tendency for rain to wash down the headlands.He said that during the initial inspection of the property by Mr Eckerman he explained to Mr Eckerman that the headlands should be cultivated first rather than last.He also said that he told Mr Eckerman some areas of the paddocks not to go onto because they became very wet in winter.Mr Crabb said that Mr Eckerman failed to heed his advice on both these matters.

Later, after Mr Eckerman had cultivated the paddocks, Mr Crabb said that he pointed out to Mr Eckerman particular areas where he should not go with machinery because there had been some heavy rain.However, he observed Mr Eckerman going into these areas and causing deep furrows with his tractor.On one occasion Mr Eckerman became bogged in paddock 10 and it took Mr Crabb a half day to pull the tractor out.

Mr Crabb produced in evidence an arial photograph of his property taken in 1989 (exhibit P9).On the photograph he had delineated and marked some 18 paddocks.The photograph shows that these paddocks have considerable areas of natural scrub and dams as well as areas of cultivation and an airstrip.All paddocks are separately fenced.

The areas subject to the lease are marked on that photograph as paddocks 10, 14 and 15.

Mr Crabb said that part of the 1993 crop of coriander grew surprisingly well, but other parts were totally waterlogged.He said that there were very heavy falls of rain in January 1994 and it was then that he noticed some soil erosion on the paddocks worked by Mr Eckerman.

Mr Crabb arranged for another arial photograph of the property to be taken in December 1993 (exhibit P10).He circled on that photograph what he claimed to be the areas of soil erosion.I note that the areas he marked extend into the cultivated land considerably further than those subsequently marked by the Soil Conservation Board on exhibit P9.

Mr Crabb also produced a number of photographs (exhibit P8).As far as he could recall, these photographs were taken in September or October of 1993 and all related to paddock number 10.

Mr Crabb in his evidence placed a great deal of emphasis on the time that it takes to develop a small amount of top soil suitable for cropping and how easy it is to lose this top soil unless proper precautions are taken.

In May 1994, before the second crop was planted, Mr Crabb contacted the Kangaroo Island Soil Conservation Board because of concerns he had about some erosion on his property which he thought would become worse if Mr Eckerman were to cultivate the paddocks again using the same methods as previously.He had discussed his concerns with Mr Eckerman, whose reaction was simply to say "these things happen" and to suggest that when he ran over the effected areas the following year with a cultivator, the erosion would not be seen.

The Board discussed Mr Crabb's concerns with him and then separately discussed them with Mr Eckerman.Mr Crabb said that the result was that the Board directed certain "no go" areas to be avoided for 2 years.He said that this decision of the Board could be legally enforced.However, as will appear later in these reasons, that is not the case.In any event, the "no go" areas recommended by the Board were marked by the Board in green on the arial photograph exhibit P9.

In July 1994, before the paddocks were worked a second time, Mr Crabb made a video tape showing some of the soil erosion in paddocks 14 and 15.Most of the areas shown on the video tape were part of the "no go" areas designated by the Soil Conservation Board.He said that he believed that the soil erosion problems in these areas could be cultivated out after the harvesting of the 1994 crop.

At some stage during the Eckerman's work, he ran out of diesel fuel and Mr Crabb supplied him with 205 litres of fuel and also 40 litres of"delo 400". He sent an account for these but the account was not paid.He thought the total account was for about $250 (in fact the amount claimed in the statement of claim is $286).

In cross examination, Mr Crabb agreed that the paddocks to the west of paddock 10 (paddocks numbered 8 and 9 on exhibit P9) and certain areas around the house had previously suffered from soil erosion.He said that these areas had not been cropped since 1993 and that in that year paddocks 7, 8 and 9 had been used only for the growing of pasture feed.

Mr Hagerstrom, the plaintiffs' expert, is a graduate of Roseworthy college and was formerly employed by the Department of Agriculture.He retired from the Department after 37 years and now works on Kangaroo Island as an agricultural consultant.He inspected the plaintiffs' property and prepared several reports.

Mr Hagerstrom first inspected the property in June 1993 at the request of Mr Eckerman.He thought that a portion of the crop on paddock 10 was suffering from the effects of the insect philobota.He visited the property again in July 1993 and said that by this time the property was quite water-logged and it would have been quite impossible to get on it to spray it.

It is interesting to note that when Mr Hagerstrom visited the property on these two occasions, he noted the areas cropped by Mr Eckerman and gave general advice, but he did not then make any complaint about the cultivation practices of Mr Eckerman, nor warn him that his farming practices might result in erosion.If that was the case, then it would surely have been plainly obvious to Mr Hagerstrom.

Later Mr Hagerstrom found that a portion of the crop was infected with alternaria, a fungal disease which restricts the growth, and therefore the yield, of the crop.He said that this disease can be prevented by testing the seed before planting.

Mr Hagerstrom also observed some problems with soil erosion.He dug some holes to determine the depth of the top soil.He noticed some rills, small gutters and some sheet erosion which had washed some of the top soil away.He said that this was exacerbated by the cultivation of the head lands.

When Mr Hagerstrom inspected the property in January 1995, at the request of Mr Crabb, he thought that the soil erosion was less than it had been in 1993. He said that the areas that were sown were less liable to erosion problems but "nevertheless there were significant erosion problems in that area".He thought that the paddocks in which soil erosion had occurred would need to be spelled and the pastures improved with fertiliser.He also considered that a system of contour banks would be required to prevent further erosion.He agreed that December 1993 and January 1994 had been a particularly wet period.

In his report at the end of August 1994, Mr Hagerstrom expressed the view that "the erosion is considered to be under control at present, with the proviso that if at any time it reactivates, contour banks and suitable waterways and necessary dams will be designed, surveyed and constructed."He estimated the cost of "erosion control structures" at $360 plus two dams at $500 each.

In cross examination, Mr Hagerstrom agreed that, although Mr Crabb would know the headlands of each paddock from previous experience, Mr Eckerman would not know of the headlands until he had gone around the paddocks.He also conceded that there had been some soil erosion in paddock 10 before Mr Eckerman's involvement.He pointed out that much of the land had slopes of 5 to 15%.He said that if cropping was done on a regular basis, contour banks would be required, but "if it's only one crop in 8 or 10 or 15 years, as often was the case, there is no need for that to be protected by contour banks".He agreed that rill damage could be worked out by cultivating.However, he said that if there was only a small amount of top soil the soil would be more erodable and would erode rapidly if further rain occurred.

As to the quantum of the plaintiffs' loss, Mr Crabb in evidence estimated it at about $130,000 - considerably less than the amount originally claimed.By the time counsel for the plaintiffs addressed me at the end of the trial, the amount claimed had been reduced still further.

The Defendants' Case

Ms Lorenzo said that she had employed Mr Eckerman to carry out the farming work in the 1993 and 1994 seasons and that he had video-taped his farming work to keep her informed of progress.The video tapes were produced in evidence. They indicate that there was some erosion present before Mr Eckerman's operations.In particular, paddock 10 showed evidence of rills or bogging from previous crops, and paddock 15 had some erosion

Mr Eckerman gave evidence.He said that he was aged 35 and had been farming since he left school at 15.His farming experience was mainly on mid-north properties, growing wheat and barley, and with sheep husbandry.He had been involved with cropping coriander since 1984.

Mr Eckerman claimed that when he initially inspected the property with Mr Crabb, he noticed a number of gutters and rough patches.In particular, there was a gutter running down from the dam in the south eastern corner of paddock 10 to the western end of that paddock.He also claimed that the south eastern portion of paddock 14 was so rough that he could not cultivate it at all.The photograph marked exhibit P10 confirms that this corner was not cultivated.

Mr Eckerman agreed that Mr Crabb requested that he not work certain areas, such as wet springs.He said that this was largely a matter of common sense and that these areas were obviously patches that had not been cropped before. He denied that Mr Crabb had told him not to work the headlands last.

Mr Eckerman said that when he commenced work on the property he was not aware of the location of the headlands because the paddocks were so irregular in shape.Also, he said that the wet areas and soaks depended upon weather patterns and the headlands may therefore vary from time to time.

Mr Eckerman denied telling Mr Crabb that coriander stubble had a nutrient value as good as pea straw.

Mr Eckerman admitted that he had some problems with the first crop, particularly with an area of paddock 10 that was infested by the philobota grub.He said that he contacted Mr Hagerstrom for advice as soon as he became aware of this infestation.Mr Hagerstrom told him it was critical to attend to this immediately because bad weather seemed to be developing and this might make it impossible to get onto the land.Mr Hagerstrom advised that the alternative would be to re-cultivate and re-sow.Mr Eckerman did in fact re-sow some 20 acres where the philoboa grub had wiped out the crop.

Mr Eckerman said that he was aware of some soil erosion in 1993 in the areas he had worked, but that this was due to a very heavy rainfall in July 1993 which caused some rills to form in the paddocks he had cultivated.He said that he had experienced these problems before.He said that normally, if that occurs, cultivating and cropping the area in the following year would result in the rills being "flattened out".He referred to some "wheel grooves" that were caused by going through some wet patches.He said that the soil tends to be displaced to the sides, making the grooves look deeper than they actually are. He said that subsequent working across these areas would also flatten them out.

Mr Eckerman said that when he visited the crop in January 1994, it had been badly damaged by a hail storm and there were stock all over the property which appeared to have been grazing on it for some time.He said that the sheep had ruined nearly all the crop in paddock 10.(Mr Eckerman blamed Mr Crabb for letting the sheep into the paddocks;Mr Crabb said that Mr Eckerman left the gates open.It is impossible for me to say where the truth lies, but this issue is largely irrelevant to the various claims and counterclaims in any event.)

After the Kangaroo Island Soil Conservation Board had held discussions with Mr Crabb and Mr Eckerman, Mr Eckerman received a letter dated 28 July 1994 from Mr Wandel, as secretary of the Board.The letter reads as follows:

After the Kangaroo Island Soil Conservation Board's inspection of Mr Ben Crabb's property on Saturday 9th of July 1994, at which you were present, you agreed to implement the following recommendations.

The specific areas marked out on an arial photograph where erosion has taken place, are not to be sprayed or cropped in any way.

In these same areas all traffic is to be kept to an absolute minimum over the next two years.This will enable the pasture to re-establish and stabilise the soil.

Remaining cropping areas can be sprayed and direct drilled.

A further inspection will be made by the Soil Conservation Board after harvest, but before the paddocks are stocked.

These measures should reduce the possibility of any further erosion in the marked out areas from taking place.

I hope we have your support in implementing these recommendations."

Mr Eckerman agreed that in 1994 he cultivated right up to the edge of the "no go" areas, but he said he did not go through them apart from in one particular place.He explained that paddock 15 was split up with a creek across it and a "no go" area bordered the bottom of the creek line, so it had to be crossed.

Ms Lorenzo called Mr William Matheson, an agricultural expert who had provided a very detailed report to the defendants.Mr Matheson said that the property in question has soils which are fairly common to Kangaroo Island and that such soils are prone to winter/spring water-logging because of the poor draining sub-soils.Some areas have a moderate to high water erosion potential depending on the slope.

Mr Matheson examined a 1978 arial photograph of the property and said that in his view there was erosion apparent in paddock 10 and minor gullies or rills in paddocks 14 and 15.Mr Matheson, in his report, concluded that "erosion occurring in 1993 is considered not to be serious and will disappear in future years as a result of normal cropping activities".As to the rill erosion in the "no go" areas, he said:

"In our view, these rills are easily worked out with cultivation of these deep sandy soils, as was evident in the cropped areas up slope where these was little sign of the rills formed in 1993.Additional support for this being a minor problem is revealed by comparison of 1989 and 1993 arial photographs: rills evident in 1989 could not be seen in 1993.

In our opinion the rill erosion is a minor problem."

He considered that if a contour banking system were to be required, it would cost no more than $1,500.He did not believe that extra fertiliser would be required over a four year period to compensate for the loss of top soil. However, he suggested that the paddock should be sown back to pasture to let the fertility build up.

Mr Matheson expressed the view that most cases involving soil erosion involve imprudent farming practices.On the other hand, he said that, if there are bad weather conditions, soil erosion can occur even when normal farming practices are followed.

The defendants called Mr Wandel, who is an experienced farmer on Kangaroo Island and who was, at the relevant time, a member of the Kangaroo Island Soil Conservation Board.Mr Wandel had been farming on Kangaroo Island since he left school in about 1981 and he lives only 4 - 5 kilometres from the plaintiffs' property.

Mr Wandel had been particularly interested in Mr Eckerman's activities because he thought that coriander might be a useful future crop for Kangaroo Island. He therefore viewed the work on several occasions.When he observed the crop flowering in 1993, he said that he found it difficult to believe that there could be more flowers in a square meter than he observed.

Mr Wandel was one of the members of the Board who attended the property in May 1994 at the request of Mr Crabb.He said that in 1993 he had also suffered some problems on his property caused by a combination of heavy rainfall and loose soil.He described what the Board saw on Mr Crabb's property in May 1994 as "normal".

The Plaintiffs' Case in Rebuttal

The Plaintiffs recalled their expert Mr Hagerstrom in rebuttal and he confirmed that he had seen the report of Mr Matheson and the photographs accompanying that report.He said that when he inspected the property in March 1996, the sheet and rill erosion were no better.He noted that Mr Crabb had subsequently sown the three relevant paddocks 10, 14 and 15 with oats and rygrass.Although he did not see the crops themselves, he said that from the look of the stubble, the crops had been very successful.When asked what remedial action could be taken in relation to the soil erosion in the three paddocks, Mr Hagerstrom said:

"... There needs to be a system of banks designed and constructed to remedy and stop from getting worse the soil erosion that has occurred there, and that will have the effect of rehabilitating those paddocks.The system should possibly also include the construction of a dam, if that is desired, and then re-seeding to pasture, clovers and grasses, and obviously adequate fertilising."

He considered that the contour banking system, plus seed, fertiliser, cultivation, sowing etc., would cost $10,000 in the first year and $2,500 in the second year.This seems to involve a remarkable increase in his previous estimate of $360 for "erosion control structures" plus two dams at $500 each. He considered that the loss of income from either oats or wool and stock sales during the two year period would be about $7,000 per year.

In his final address, counsel for the plaintiffs relied upon this evidence of Mr Hagerstrom as supporting a claim for:

survey, design and construction of banks$10,000

second year seed cultivating$2,500

net loss of income ($7,000 per year)$14,000

loss of income for a further 2 years$14,000

Total$40,500

Findings

I do not agree that it was an implied term of the lease that Mr Eckerman would not cause or permit soil erosion on the demised land, as pleaded in paragraph 4 of the statement of claim.This would be rather like implying a term that he would successfully resist the forces of nature.The agreement was in fact that the lessee "repair any soil erosion immediately".This requirement must be interpreted as requiring reasonable remedial action to be taken as soon as practicable.The parties can not have intended a literal interpretation of "immediately", as the evidence establishes that sometimes, particularly after heavy rain, "immediate" action would do more harm than good.

I find that there was some soil erosion on the property before Mr Eckerman's involvement and that the plaintiffs had not always repaired this erosion in the manner that they now expect of the defendants (i.e. by the use of contour banks and dams).I consider this to be a relevant factor in determining the reasonableness or otherwise ofwhat they expect the defendants now to pay for.

There is no doubt that any soil erosion in the paddocks leased by Ms Lorenzo became worse as a result of the cultivation and cropping in 1993 and the extremely heavy rainfall.I think the rainfall was the major cause, rather than any significant deficiencies in Mr Eckerman's farming methods.However, for the purposes of the claim in contract, it is not necessary for me to make a finding about the extent of any negligence on his part, because the obligation to repair any soil erosion exists independently of any fault on the part of the defendants.

It was the plaintiff Mr Ben Crabb who called in the Kangaroo Island Soil Conservation Board when a dispute arose with Mr Eckerman about the soil erosion.The minutes of the Board's first meeting with Mr Crabb on 15 May 1994 include the following:

"Mr Crabb said he does not want the area to be worked as it was last year and is concerned that Mr Eckerman may use two cultivations, two harrowings, and then a combine, and this will do further damage to the areas already showing signs of erosion.

Mr Crabb has now requested help from the Board to convince Mr Eckerman that this type of farming practice is not acceptable here on the Island, especially in wet areas such as the Crabb property."

I note that the lease of the property provides that:

"(m) In the event that both the lessor and the lessee cannot resolve any matter contained within this lease agreement the lessor shall appoint an independent professional arbiter whose decision will be binding upon both parties."

It is perhaps unlikely that Mr Crabb was specifically relying upon that clause when he called in the Soil Conservation Board.However, the fact is that the Board did act as an "arbiter" and did so with the full consent and co-operation of both Mr Crabb and Mr Eckerman.The Board resolved "to make all attempts to solve the issue amicably, giving both parties opportunity for dialogue".It seems to me therefore that all parties should accept the recommendations of the Board as to the appropriate method of repairing the soil erosion.

The minutes of the meeting of the Board held during and after its discussions with Mr Eckerman on 9 July 1994 indicate that the Board told Mr Eckerman that it would "monitor the situation".These minutes also record that "Mr Eckerman was advised to have the Soil Board (as an independent authority) assess the area prior to his departure when the lease expires.No doubt Mr Crabb will want the area assessed at the same time."

It seems that there was in fact no final assessment by the full Board. However,Mr Wandel did inspect the property after the second coriander crop had been harvested.He said in evidence that "as far as I was concerned on behalf of the Board we were happy that the agreement had been followed through".He also said that subsequent grazing on the land had denuded it and opened up the old erosion areas.

I was very impressed with Mr Wandel's evidence.Both the consultants called by the parties tended to favour the party by whom they were being paid.Mr Wandel was completely independent and had no reason to favour either party.He also had the additional advantage of being a highly experienced farmer in the area in question.I prefer his evidence where it is in conflict with that of Mr Hagerstrom or Mr Matheson.

I find that the compliance by Mr Eckerman with the recommendations of the Kangaroo Island Soil Conservation Board amounted to taking reasonable steps to repair the soil erosion as required by the lease.In particular, I do not consider that the plaintiffs have made out a case for the need to construct soil banks and dams.

As to any continuing problems with soil erosion, I find that the plaintiffs contributed to any such problems by grazing the land after the second coriander crop was harvested.

As to the claim in negligence, I am satisfied that there were some deficiencies in the farming methods used by Mr Eckerman, but the evidence does not enable me to identify them precisely.Some of the evidence of Mr Crabb was based upon assumptions on his part, as he was not present during the whole of the time when Mr Eckerman was working on the property.

But even if there was some negligence, what damages have the plaintiffs suffered as a result of it?The erosion was, in the opinion of Mr Wandel, "normal" given the terrain and the rainfall.It was, as I have found, satisfactorily repaired.To the extent that there may be ongoing problems, they were significantly contributed to by grazing the land after the second crop was harvested.

I am not satisfied that the plaintiffs have made out their claim for damages in negligence.

The plaintiffs have established their claim for $286 for the supply to Mr Eckerman of diesel fuel and "Delo 400".This amount is payable by the defendant Lorenzo, as Mr Eckerman was merely acting as her agent.

The plaintiffs abandoned at trial the claim in paragraph 22 of the statement of claim for loss of feed.I therefore do not need to make any findings regarding the claims alleged to have been made by Mr Eckerman regarding his expertise, the nutrient value of coriander stubble, and so on.

The final claim by the plaintiffs is for breach of the contractual requirement to "apply superphosphate to the area of the lease at the rate of 125 grams/hectare in each year of the term".Mr Eckerman admitted that in the second year he applied superphosphate at only about half that rate.The amount claimed is $20,000, but no evidence was called by the plaintiffs to substantiate the quantum of that claim.In fact Mr Crabb estimated that that cost of applying superphosphate to the relevant paddocks (presumably at the rate he required to be used under the lease) was $5,000 per year.Mr Eckerman said ("by memory, without checking dockets") that in 1993 it cost him $4,000 to apply superphosphate at the rate required by the lease.It is not clear whether these estimates are just for the cost of the superphosphate or whether they include the cost of applying it, but the former seems more likely.I therefore propose to accept Mr Crabb's estimate of $5,000.I allow one half of that amount.It may well be that applying the superphosphate at half strength, then applying the other half later, is not equivalent to one application at full strength, but there is no evidence of that.I therefore allow damages of $2,500 against the defendant Lorenzo for breach of the contractual requirement.

There were various discussions between Mr Crabb and Mr Eckerman regarding other matters referred to in the pleadings and in the evidence.These include the use by Mr Eckerman of some of Mr Crabb's equipment, the grazing of Mr Crabb's sheep on the coriander stubble, and the performance by Mr Eckerman for Mr Crabb of some work on Mr Crabb's land.I am quite unable to make any precise findings about these matters.It seems that they were informal discussions that were so vague as to be incapable of creating any legal obligations.For example, the defendants agree that there was no agreement reached about payment for the work done by Mr Eckerman for Mr Crabb, and all parties seem to agree that the lending of the equipment and the grazing of the sheep were supposed to cancel each other out.

The counterclaim by the defendants is based entirely on these vague discussions.The counterclaim is dismissed.

For the above reasons there will be judgment for the plaintiffs against the defendant Lorenzo for $2,786 ($2,500 plus $286).The plaintiffs' claim against the defendant Eckerman is dismissed, as is the defendants' counterclaim.

I will hear submissions from the parties on the question of costs.

THURSDAY, 16thJANUARY, 1997

There will be no order as to costs.