Frontlink v Feldman

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S CI 2011 01075

FRONTLINK PTY LTD (ACN 074 034 496)	Plaintiff
v
CYNTHIA FELDMAN	First Defendant
- and -
RAMARIM PTY LTD (ACN 147 722 781)	Second Defendant

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JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	25-27 July 2016, 29 July 2016, 3 August 2016
DATE OF JUDGMENT:	30 November 2016
CASE MAY BE CITED AS:	Frontlink v Feldman
MEDIUM NEUTRAL CITATION:	[2016] VSC 691

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CONTRACT – Preliminary question to be tried – Question of the liability of the first defendant for outstanding debt in relation to a farming property owned by the plaintiff – Whether a variation of the parties’ agreement to the effect of extending its term can be implied from the conduct of the first defendant or her late husband – Moratic Pty Ltd v Lawrence James Gordon & Anor [2007] NSWSC 5 applied – Whether the parties’ agreement was akin to a lease or otherwise such that principles of ‘overholding’ apply – Whether the first defendant has a legal obligation for the debt or is liable for the debt as joint promisee with her late husband – Finding that the conduct of the first defendant did not amount to an assumption of liability for the debt beyond the period of the written agreement – No representation that she continued to be bound by the agreement after its expiry in accordance with its express terms.

QUANTUM – Credibility of evidence as to the quantum of claim – Accounting for missing cattle – Number of stock sold and basis of the plaintiff’s authority to sell cattle and apply outstanding commissions payable to meet outstanding debts – Batrouney v Forster [2015] VSC 230 followed – Creditor entitled to apply proceeds of debt in the manner it sought fit in the absence of instructions to the contrary.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms S Marks QC with Mr R Cook	Belleli King & Associates
For the First Defendant	Mr D Williams QC with Mr M McInnis	Mason Black Lawyers

TABLE OF CONTENTS

Introduction................................................................................................................................... 1
The parties and witnesses............................................................................................................ 1
The transaction.............................................................................................................................. 4
The history of the proceeding..................................................................................................... 8
The pleadings and issues.......................................................................................................... 11
The evidence................................................................................................................................ 20
Mr Sam Mondous.............................................................................................................. 20
Mr Kameel Mondous........................................................................................................ 31
Ms Rachel Ivic.................................................................................................................... 34
Mr Glen Wilmott................................................................................................................ 35
Mrs Cynthia Feldman....................................................................................................... 36
Mr Mark Feldman.............................................................................................................. 39
Ms Sharon Bunting............................................................................................................ 40
Mr Shaun Bilson................................................................................................................. 44
Mr David Mond................................................................................................................. 48
Cattle sales and transfer records..................................................................................... 50

Assessing the credibility of witnesses..................................................................................... 54
Was Mrs Feldman bound by the terms of the Grices Road Agreement, and if so, for what period of time?.................................................................................................................................... 60
Quantum Issues.......................................................................................................................... 77
Conclusion................................................................................................................................... 83

HER HONOUR:

Introduction

This judgment concerns the trial of a preliminary question in this proceeding: whether the first defendant (‘Mrs Feldman’) is liable to the plaintiff (‘Frontlink’) for a debt said to have been incurred by her and her late husband (‘Derek Feldman’) by reason of their alleged occupation and use of a property at 181 Grices Road, Berwick (‘Grices Road property’) between 2002 and 2010 or 2011. The Grices Road property, which until around 2011 was a sixty acre parcel of rural land with a single dwelling upon it, was owned at all material times by Frontlink. The remaining part of the proceeding, concerning the question of whether Mrs Feldman had taken steps to put her assets beyond the reach of her creditors, has been held over until determination of the question of whether Mrs Feldman is actually liable to Frontlink, and if so, in what sum. Frontlink claims to be owed the sum of $129,543.26, plus interest of $72,496.32 to the date of the conclusion of the trial. Mrs Feldman denies any liability to Frontlink whatsoever.

The parties and witnesses

Frontlink is a family owned company with substantial commercial and rural property holdings. It owns and operates childcare centres, aged care centres, and shopping centres, largely in Melbourne’s outer eastern suburbs. It owns substantial parcels of rural land, again, largely on Melbourne’s eastern fringe, including the Grices Road property, which appears to have in recent years been developed in part for residential use.

While the sole director and shareholder of Frontlink is Natalie Mondous, she has played little or at least no visible part in the proceeding, or in the transaction giving rise to this proceeding, albeit that she executed the agreement relied upon by Frontlink to give rise to the debt said to be owed by Mrs Feldman, being the ‘Joint Venture Farming Agreement’ dated 20 October 2002 (‘Grices Road Agreement’). Rather, the representative of Frontlink who has played the principal role in both the transactions culminating in this proceeding, and in giving instructions and evidence in this proceeding is her father, Mr Sohail (‘Sam’) Mondous. Her brother, Kameel Mondous, who works in the family business, also gave evidence during the course of the trial.

Mr Mondous senior (‘Mr Mondous’) had a longstanding business relationship with Derek Feldman, and, to a lesser extent, Mrs Feldman. Derek Feldman was a commercial real estate agent based in Glen Waverley, specialising in aged care and child care centres. According to Mr Mondous, he was ‘the best in the area for aged care and child care’. Derek Feldman operated under the business name ‘Derek Feldman & Co, Property Consultants’. Mrs Feldman was an employee in his business, and helped with bookkeeping and administration, although she did manage a shopping centre for Frontlink on her own. By all accounts, Derek Feldman was a fairly freewheeling businessman, often looking for new opportunities to earn income and pay his debts, with limited attention to details such as keeping records and filing tax returns. His affairs were in some disarray at the time of his sudden and unexpected death on 13 October 2010, when he drowned in a waterway while trying to rescue a dog. He died intestate, and his liabilities far exceeded his assets.

Derek Feldman conducted a cattle raising business on the Grices Road property and two other properties owned by Frontlink, an adjacent property at Pound Road, Berwick (‘Pound Road’) and a nearby property at Soldiers Road, Berwick (‘Soldiers Road’). These properties were managed by Derek Feldman in accordance with agreements with Frontlink on similar terms to the Grices Road Agreement, save that only Derek Feldman was a party to these agreements, not Mrs Feldman. Derek Feldman’s accountant, Mr David Mond, who was engaged by the estate’s solicitors after Derek Feldman’s death, could not locate any records relating to the cattle business operated from these properties (‘three properties’).

As noted above, Mrs Feldman assisted Derek Feldman in his business activities, and, while this is somewhat in contention, apart from a horse agistment business she conducted at the property next door to the Grices Road property, she was not a partner in or principal of any of his businesses. The past years have not been kind to Mrs Feldman. Not only has she lost her husband, and dealt with the ongoing stress of this litigation, which commenced in 2011, her health has been poor, and a scheduled trial earlier in 2016 was adjourned after she suffered a stroke, from which she still is recovering.

Mrs Feldman and Derek Feldman have two adult children, who have been bit players in this proceeding. Mark Feldman, who is apparently estranged from Mrs Feldman, gave evidence at trial about his dealings with his father’s affairs after his death, and in particular his dealings with Mr Mondous. Laura Feldman did not give evidence at the trial, but at one stage was purportedly a party to the proceeding by reason of her alleged participation in a scheme to put Mrs Feldman’s assets, in particular, the family home, beyond the reach of her creditors.

Shaun and Belinda Bilson also gave evidence. They lived in the house on the Grices Road property for approximately ten months prior to the death of Derek Feldman, and for a short time thereafter. They lived at the Grices Road property rent free in exchange for looking after the property and Derek Feldman’s cattle.

Sharon Bunting lived for a number of years in a cottage at Pound Road, although she agisted horses on Pound Road for some time prior to that. She also kept a herd of cattle at Pound Road, and took custody of Derek Feldman’s cattle at Mr Mondous’ request after they were moved from the Grices Road property to Pound Road after Derek Feldman’s death.

Each of Shaun and Belinda Bilson, and Sharon Bunting were subpoenaed to give evidence by Mrs Feldman. Each had previously sworn affidavits in support of an application by Mrs Feldman to adduce further evidence before the Court of Appeal[1] regarding the presence of Derek Feldman’s cattle on the Grices Road property, their removal from the Grices Road property after Derek Feldman’s death, and the number of cattle. Mr David Mond, the longstanding accountant of Derek Feldman and Mrs Feldman, also gave evidence on behalf of Mrs Feldman.
[1]See paragraph 24 of these reasons for more details concerning the procedural history of this proceeding.

Frontlink called two witnesses apart from Mr Mondous and Kameel Mondous: Ms Rachel Ivic, a property manager employed by L J Hooker, and Glenn Wilmott, a handyman engaged on a casual but regular basis by Frontlink.

The transaction[2]

[2]The following narrative is derived from what are, unless stated otherwise, undisputed or uncontroversial facts.

As noted above, Mr Mondous and Derek Feldman had an ongoing business relationship from about the mid-1990s. Mrs Feldman said she knew Mr Mondous socially. At some stage, Derek Feldman decided (against the probably wise advice of his accountant, Mr Mond) to start a business breeding and raising cattle. At that time, Frontlink was conducting farming operations on various properties, but wanted to scale these back because of Natalie Mondous’ health problems. While it is unclear whether Derek Feldman sought the Grices Road property from Frontlink, or Frontlink (via Mr Mondous), offered the property to Derek Feldman (and Mrs Feldman), it appears that in or around October 2002, there was at least one meeting between Mr Mondous and Derek Feldman and Mrs Feldman to discuss the Grices Road property. Mrs Feldman hoped to use the Grices Road property to agist horses, and Mr Mondous, at least initially, agreed to this.

This discussion (or series of discussions) led to Derek Feldman preparing a document with the title ‘Licence Agreement’, with Frontlink described as ‘the Licensor’, and ‘Cindy Feldman and Derek Feldman trading as Derek Feldman & Company Property Consultants’ described as ‘the Licensee’. However, there were a number of errors and anomalies in this document (for example, this document included a term giving the licensee the right to purchase the property), and ultimately, Mr Mondous decided to prepare (or have a staff member prepare) the document which was ultimately executed by the parties.[3]
[3]Exhibit ‘B’.

Given the issues in this trial, it is helpful to reproduce the Grices Road Agreement in full. The document is headed ‘Joint Venture Farming Agreement’, and is dated 20 October 2002. Frontlink is described as ‘the Owner’, and ‘Cindy Feldman and Derek Feldman trading as Derek Feldman & Company Property Consultants’ are described as ‘Farm Consultant’.

The recitals of the Grices Road Agreement include the following:

and whereas the parties hereto wish to enter into terms of agreement to enable the Farm Consultant to manage the land on behalf of the Owner upon the terms and conditions following:-

The terms of the Grices Road Agreement were as follows:

1.This agreement will commence on the 20^th October 2002 and will continue until the day of 21^st October 2005 or extended in accordance with the terms of this agreement.
2.The Owner shall provide the land together with all improvements constructed thereon to be used for farming activity purposes, including cattle grazing, horse agistment and other farm activities.
3.The Farm Consultant shall provide all stock, cattle, horses, machinery, equipment and all feed for stock and shall maintain the farm and all improvements thereon, including plant and equipment in good order and repair.
4.The Farm Consultant shall during the term of the agreement have the sole right of residence in the double storey brick veneer house erected on the land for the purposes of a residence during the currency of this agreement. The Farm Consultant shall attend to repair any damage caused by the Farm Consultant.
5.The Owner shall pay council and water rates and building insurance with respect to the property and the Farm Consultant shall reimburse the Owner for Council rates and for water, power, building insurance and other services used by the Farm Consultant and the Farm Consultant shall insure the plant and equipment and all improvements constructed on the land other than the dwelling and shall maintain public liability insurance of not less than $10,000,000.00 disclosing the interest of the Owner thereon.
6.It is the intention of the Farm Consultant that he makes a profit and for this purpose shall maintain proper books of account with respect to the cost of conducting the farm activity including cattle grazing and horse agistment, the cost of sowing and maintaining the land and the Farm Consultant shall bear all costs and expenses associated therewith. In consideration of the right to receive the profits and maintain the property in accordance with good husbandry practices the Farm Consultant shall pay a fee to the Owner as follows:-
(a)This Agreement shall be for three (3) years with the Farm Consultant having the option to extend the arrangement for a further three (3) years.
(b)For the first year of the term of this agreement the sum of $22,000.00 per annum (plus GST if applicable) shall apply.
(c)In each subsequent year of the agreement or further term the amount of the share of the profits payable to the Owner shall increase in line with the C.P.I. (Melbourne All Groups).
(d)The Farm Consultant shall have the option of paying the Owner his agreed share of annual production ($22,000.00 plus GST if applicable) in farm produce.

7.This agreement may be terminated by mutual agreement on giving at least one year’s written notice by one party to the other.
8.The Farm Consultant and the Owner agree that any improvements, plant and equipment erected on the property by the Farm Consultant at the commencement of this agreement are to remain the property of the Farm Consultant, who may remove them on termination of this agreement subject to the Farm Consultant doing so in a property (sic) workmanlike manner and making good any damage.
9.The Farm Consultant agrees and acknowledges that it will not use any contaminants on the property unless with the express written approval of the owner.
10.The Farm Consultant and the Owner agree and acknowledge that nothing contained in this agreement shall constitute the relationship of partners between the Farm Consultant and the Owner.

The agreement was executed by Natalie Mondous on behalf of Frontlink, and was purportedly signed by both Derek Feldman and Mrs Feldman.

As noted above, Derek Feldman entered into similar agreements for the occupation and use of Soldiers Road (on 1 July 2003)[4] and Pound Road (on 1 April 2005).[5]
[4]Exhibit ‘C’.
[5]Exhibit ‘D’.

Only two payments were made to Frontlink in accordance with clause 6 of the Grices Road Agreement: a payment of $3,666.66 on 14 November 2002, and a payment of $88,000 on 30 March 2007. No invoices were rendered by Frontlink in respect of the ‘rent’[6] payable for the Grices Road property, or for that matter, for the rent for Pound Road or Soldiers Road. Indeed, the first document which made any reference to rent for the Grices Road property was a handwritten document prepared by Mr Mondous sometime after October 2006 and before 18 March 2007. The document is headed ‘History of Rent with Derek Feldman 181 Grices Road Berwick’,[7] sets out the rent of $22,000 being payable for four years up to 20 October 2006, and a notation to the effect that the outstanding amount would be paid from the sale of cattle. A further notation referred to the outstanding amounts for Pound Road and Soldiers Road being payable from commissions.
[6]Of course, it is questionable whether the amounts payable under clause 6 of the Grices Road Agreement are properly characterised as ‘rent’. However, this term is used throughout these reasons for ease of reading.
[7]Exhibit ‘E’.

No further payments were made in respect of the Grices Road property. On or about 17 October 2009, Kameel Mondous prepared a bundle of accounts in respect of each of the properties,[8] each page of which was headed ‘Frontlink Pty Ltd – History of Rent with Derek Feldman’, and the footer of each page stated ‘Frontlink Pty Ltd – Derek Feldman record for Grices, Pound & Soldiers Road’. The statement referred to rent being payable for the Grices Road property at $22,000 per annum,[9] and the amount outstanding was said to be $63,082.34. The amounts outstanding in respect of Pound Road and Soldiers Road were said to be $94,338.31 and $47,297.96 respectively, with the total amount owing on the three properties said to be $204,718.61. These statements were initialled by Mrs Feldman, apparently during the course of a meeting between her, Derek Feldman, Mr Mondous and Kameel Mondous at around that time. In a fax from Derek Feldman & Co dated 22 October 2009,[10] an unknown person, but quite possibly Mrs Feldman, queried some aspects of the statements with respect to Pound Road and Soldiers Road, and asserted that the total amount owing in respect of the three properties was $113,832.88. In a fax from Kameel Mondous to Mrs Feldman dated 7 January 2010,[11] some adjustments were made, with the total owing said to be $164,025.75. No response to this letter was in evidence.
[8]Exhibit ‘W’.
[9]Notwithstanding the terms of clause 6(c) of the Grices Road Agreement, which provides for annual CPI increases.
[10]Exhibit ‘X’.
[11]Exhibit ‘Y’.

Kameel Mondous prepared updated accounts on or about 26 October 2010[12] for the three properties, some two weeks after Derek Feldman’s death, which incorporated amounts payable in respect of insurance, such that the outstanding amount said to be owing in respect of the Grices Road property was said to be $86,397.34. Another version of this document, which was the version sent to Mr Mond’s office on 3 November 2010,[13] included a sum of $8,805.28 in respect of rates, bringing the total to $95,202.62. Yet another version of this document (also dated 26 October 2010) calculated the annual rental payments incorporating CPI increases since 2002, and different sums for rates, bringing the total amount said to be owing to $142,426.93.
[12]Exhibit ‘AA’.
[13]Exhibit ‘N’.

What occurred after Derek Feldman’s death, including how the cattle which remained on the Grices Road property were dealt with by Frontlink, is a matter of some contention, so I shall not go any further here, save to say that Mr Mondous says that Frontlink took possession and sold 23 head of cattle, with Mark Feldman’s permission, while Mrs Feldman says that there were up to 125 head of cattle on the Grices Road property at the time of Derek Feldman’s death, and neither she or Mark Feldman authorised their removal or sale.

The history of the proceeding

The history of this proceeding is quite protracted, involving a large number of court attendances, particularly in circumstances where the quantum of the claim ultimately able to be pursued by Frontlink is relatively modest in the context of contemporary Supreme Court litigation. No particular responsibility for the delays can be sheeted home to any party, but the intense and protracted nature of this proceeding must have been stressful and costly for all concerned.[14]
[14]To give a flavour of the disputation between the parties, there have been three published judgments in the proceeding, at least eight Practice Court listings and approximately fifteen attendances before me. I have delivered at least four written but unpublished rulings upon various interlocutory matters since mid-2014.

Key events during the course of the proceeding include:

(a) on 2 December 2010, Osborn J (as he then was) made orders granting Mrs Feldman Letters of Administration ad colligendum bona of the intestate estate of Derek Feldman;

(b) on 10 March 2011, Frontlink issued this proceeding against Mrs Feldman, both in her personal capacity (in respect to the amount said to be owing in respect of the Grices Road property), and in her alleged capacity as representing the estate of Derek Feldman in respect of Pound Road and Soldiers Road;

(c) on 5 April 2011, judgment in the sum of $637,162.89 was granted in default of appearance in favour of Frontlink;

(d) on 20 June 2011, an associate judge set aside the default judgment, and later heard Frontlink’s summary judgment application in respect of the amounts said to be owing by Mrs Feldman in relation to the Grices Road property;

(e) on 2 November 2012, an associate judge gave judgment against Mrs Feldman in Frontlink’s favour in the sum of $156,225.10;[15]
[15][2012] VSC 530.

(f) on 10 December 2012, a Trial Division judge substantially upheld the decision to grant summary judgment, after allowing Frontlink to amend its statement of claim, and gave judgment in favour of Frontlink in the sum of $148,618.00 plus interest calculated at $29,285.89.[16] An appeal by Mrs Feldman to the Court of Appeal was heard on 5 February 2014, and determined on 3 March 2014. The appeal was allowed, and the proceeding was remitted to the Trial Division for hearing;
[16][2012] VSC 624.

(g) in the meantime, between April 2013 and May 2014, Frontlink took steps to enforce its judgment and to restrain Mrs Feldman from dealing with the proceeds of sale of her Glen Waverley home. Eventually, after a number of attendances before the Practice Court between September 2013 and May 2014, an agreement was reached whereby Ramarim Pty Ltd (now the second defendant in this proceeding), the trustee of a superannuation fund of which Mrs Feldman and Laura Feldman are both members, and which was the beneficiary of a life insurance policy in the name of Derek Feldman, was, subject to certain undertakings, permitted to use the proceeds of sale of the property to retire a debt secured by Mrs Feldman’s Glen Waverley home, and to enable her to purchase a property in Wheelers Hill;

(h) on 23 January 2014, Frontlink filed and served a second further amended statement of claim, which purported to join Laura Feldman and Ramarim Pty Ltd as defendants to the proceeding;

(i) on 16 June 2014, I made orders striking out the second further amended statement of claim insofar as it purported to make claims against Mrs Feldman in a representative capacity, Ramarim Pty Ltd, and Laura Feldman;

(j) on 27 November 2014, I made orders granting leave to file an amended statement of claim, adding Ramarim Pty Ltd as a party to the proceeding;

(k) the proceeding failed to settle at a judicial mediation held on 4 March 2015;

(l) on 17 September 2015, I made orders which, among other things, set out the preliminary questions which were the subject of this trial, being:

(i) is the first defendant liable to the plaintiff by reason of the matters pleaded in paragraphs 1 to 5 of the statement of claim dated 23 December 2014?[17]
[17]The amendments to the statement of claim which post-date the making of these orders do not materially affect this question.

(ii) if so, what is the amount of that liability?

(m)the trial of the preliminary questions was originally set down for 7 March 2016, then adjourned to 19 April 2016. The latter trial date was subsequently vacated owing to Mrs Feldman’s illness; and

(n) on 9 June 2016, I allowed (in part) an application by Mrs Feldman to amend her defence, and made orders allowing her to advance a claim by way of set off and/or damages with respect to the alleged removal and sale of Derek Feldman’s cattle from the Grices Road property.

Further, in addition to the above, there were a number of hearings concerning applications for costs and the enforcement of past costs orders, which are not necessary to detail further here. The legal costs incurred by the parties over the past five and a half years no doubt far exceed the quantum of Frontlink’s claim.

The pleadings and issues

In its fourth amended statement of claim dated 1 August 2016 (‘statement of claim’), Frontlink pleaded, relevantly, as follows:

3.The plaintiff, as Owner, assigned the right to receive profits from the property at 181 Grices Road, Clyde North (the Grices Road property) to the first defendant (Cynthia) and Derek Joseph Feldman (deceased) (together, the Assignee) by a written Agreement dated 20 October 2002 (the Grices Road Agreement).
Particulars

A copy of the Grices Road Agreement may be inspected at the offices of the plaintiff’s Solicitors by prior appointment.

4. The Grices Road Agreement provided, amongst other things, that:
a)The Assignee shall reimburse the Owner for Council rates and for water and building insurance, power and other services (the reimbursement payments).
b)In consideration of the right to receive the profits and maintain the property in accordance with good husbandry practices the Assignee shall pay a fee to the Owner (the profits fee) as follows:
a.for the first year of the term of the Agreement the sum of $22,000 per annum (plus GST if applicable);
b.in each subsequent year of the agreement or further term the amount of the share of the profit payable to the owner shall increase in line with the CPI (Melbourne) All Groups.

4A.By its terms the Grices Road Agreement was stated to be for three years, with the Assignee having the option to extend the agreement for a further three years.
4B.The period of the Grices Road Agreement was extended from time to time by agreement between the parties for the following periods on the same terms and conditions as had before applied.
(a)20/10/05 – 20/10/06
(b)20/10/06 – 20/10/07
(c)20/10/07 – 20/10/08
(d)20/10/08 – 20/10/09
(e)20/10/09 – 20/10/10
(f)20/10/10 – 20/10/11
Particulars

The agreement by the parties to the extension of the Grices Road Agreement period was to be implied, arising from the Assignee continuing in occupation of the Grices Road Property after the completion of its initial three year term for the periods referred to, and conducting thereon farming activities as contemplated by the Grices Road Agreement, and from the plaintiff rendering accounts in respect of the occupation and from the Assignee paying monies in respect of that occupation and usage.
Particulars
Payments were made to the plaintiff by the Assignee as follows:
o14 November 2002 - $3,366;
o30 March 2007 - $88,000.

Further particulars may be provided after discovery.
4BA.Further and in the alternative to 4B, after the initial term of the Grices Road Agreement had expired on 20 October 2005:
(a)the Assignee continued in possession of the Grices Road property until on or about 1 February 2011, alternatively on or about 13 October 2010 (the continued possession period).
(b)the use of the Grices Road Agreement by the Assignee continued as it had since the Grices Road Agreement commenced.
(c)There was no discussion or agreement between the Owner and the Assignee as to the fact that the initial term had expired, or as to any change in who was liable for payment for use of the land, or any changed terms as to amounts due for use of the land.
(d)Amounts that would have been due had the Grices Road Agreement been formally extended or renewed by agreement (which it was not) were agreed by the Assignee as owing.
Particulars
Acknowledgments of monies owing in relation to the Grices Road [Agreement] including for part of the continued possession period were made by the Assignee to Frontlink on or about 30 March 2007 and 17 October 2009.

4BB.In the premises:
(a)the terms of the Grices Road Agreement continued to apply during the continued possession period (save for the terms as to the length of term of the agreement and of any option to renew);
(b)the Assignee continued to be liable to the Owner for the profits fee and reimbursement payments for the continued possession period.
Particulars
The Grices Road Agreement was either a lease or analogous in material respects to a lease. The continued possession period was either a holding over after the lease expired such that the Assignee became a tenant at will, or analogous to a holding over such that the Assignee continued to be subject to the same rights and obligations as it had under the Grices Road Agreement (save for the terms as to length of term of the agreement and any option to renew) in the same way as a tenant at will continues to be subject to the same rights and obligations as it had under a lease which has expires (sic) whilst the tenant continues in occupation of the leased premises after expiry of the term.

4C.Alternatively, for the period set forth in Paragraph 4B after the initial three year term of the Grices Road Agreement, the Assignee represented to the plaintiff that the period of the Grices Road Agreement was to be extended on the same terms and conditions as before had applied (the representation).
Particulars
With the concurrence of the plaintiff, the Assignee remained in occupation of the Grices Road property after the initial period of the Grices Road Agreement carrying on farming activities as contemplated by the Grices Road Agreement and from time to time paid moneys in respect of that occupation and usage.

4D.On the basis of the representation the plaintiff assumed that the Grices Road Agreement was continuing and that the Assignee agreed to a continuation of its terms and acted or abstained from acting in reliance on that assumption or expectation.
PARTICULARS
The plaintiff continued charging in respect thereof and refrained from obtaining possession of the Grices Road property from the defendant and Derek Joseph Feldman and leasing the Grices Road property for profit to others.

4E.At all material times the Assignee knew or intended that the plaintiff would act or abstain from acting in reliance on the assumption or expectation.
4F.In the circumstances the plaintiff’s actions or inaction will occasion detriment to it if the assumption or expectation referred to is not fulfilled.
5.The Assignee in breach of the Grices Road Agreement alternatively in breach of the Assignee’s obligations arising during the continued possession period has failed, neglected and or refused to pay the plaintiff the reimbursement payments and the profits fee by reason of which the plaintiff has suffered loss and damage and/or seeks payment of the moneys due to it under that agreement as so extended, alternatively in breach of the Assignee’s obligations arising under the continued possession period.

Mrs Feldman’s final defence and counterclaim dated 2 August 2016 (‘defence’) is summarised in the following paragraphs.

In paragraph 3 of the defence, Mrs Feldman does not admit to signing the Grices Road Agreement, but if she did, she did so:

(a)not knowing that she was signing a document by which she may assume legal obligations to the Plaintiff;
(b)without having intended to enter into legal relations with the Plaintiff;
(c)not understanding the purport or legal effect of the said document;
(d)at the direction of her husband Derek Feldman (‘the deceased’) who did not explain to her the nature, content or effect of the document she was to sign or that she may assume legal obligations to the Plaintiff upon signing the document;
(e)where the Plaintiff had (unbeknown to her) appointed her husband as its agent for the purpose of securing her signature to the document;
(f)in her capacity as a volunteer, not having any material interest in the cattle business conducted by the deceased at the Grices Road property and accordingly not obtaining any benefit or advantage under the said Grices Road Agreement but only obligations and disadvantage;
(g)not having obtained independent or other legal advice concerning any possible consequences to her of signing the said document and not having been advised and/or required by the Plaintiff to do so;

In the premises of sub-paragraphs (a) to (g) hereof, the Grices Road Agreement is unenforceable by the Plaintiff against her.

While Frontlink did not allege that Mrs Feldman and Derek Feldman exercised the option contained in clause 6(a) of the Grices Road Agreement, in paragraph 4B of the defence, Mrs Feldman alleged that:

(a)according to its terms, the valid exercise of any option to end the Grices Road Agreement beyond its initial term (that is, after 19 October 2005) was contingent upon the First Defendant participating in the exercise of any such option;
(b)she did not at any time participate in the exercise of any such option;
(c)she does not know, and cannot plead to, the allegations that the deceased exercised any such option; but if he did, he did so without any authority or permission to do so from her;
(d)she otherwise denies that the period of the Grices Road Agreement was extended from time to time or at all by agreement between the parties.

Mrs Feldman stated further that, in response to the allegations in paragraph 4BA of the statement of claim:

(a)the deceased remained in possession of the Grices Road Property until his death on 13 October 2010;
(b)the First Defendant was not in possession of Grices Road Property at any time on or after 20 October 2005;
(c)the First Defendant did not use the Grices Road Property on or after 20 October 2005; and
(d)the First Defendant did not agree to manage the Grices Road Property, or otherwise to perform any obligation in relation thereto, at any time on or after 20 October 2005.

In response to Frontlink’s assertion that the continued occupation of the Grices Road Property was akin to an overholding under a lease, Mrs Feldman alleged in paragraph 4BB of the defence:

(a)the Grices Road Agreement was not, by its form or in its terms a lease, nor analogous to a lease; and
(b)in the premises, the obligations which apply to a tenant holding over under a lease have no application to the deceased’s (alternatively the deceased’s and the First Defendant’s) continued occupation of the Grices Road Property after 20 October 2005.

In the particulars under paragraph 4BB of the defence, Mrs Feldman relied upon the full terms and effect of the Grices Road Agreement, and also upon a res judicata and/or issue estoppel arising out of the statements of the Court of Appeal to the effect that the Grices Road Agreement was an agreement to appoint a farm management consultant, and was not a lease.[18]
[18]Feldman v Frontlink [2014] VSCA 27 [2], [40].

Mrs Feldman denied any liability to pay the sum claimed by Frontlink in paragraph 5 of the statement of claim, and further alleged that, if she was liable to Frontlink under the Grices Road Agreement, Frontlink was required to credit in her favour the value of, or the proceeds of sale from, the cattle which remained on the Grices Road property at the time of Derek Feldman’s death, and had been removed from the Grices Road property at the direction of Mr Mondous. At paragraphs 45A to 45E of the defence, Mrs Feldman alleges as follows:

45A.Further or alternatively to all of the foregoing, at the time of the deceased’s death there was a herd of not less than 120 cattle, alternatively not less than 60 cattle, owned by the deceased and/or the First Defendant, located on the Grices Road Property (Remaining Cattle).
45B.Since shortly after the deceased’s death, the Plaintiff has exercised dominion and control over the Remaining Cattle to the exclusion of the First Defendant in that:
(a)in or about October and November 2010, and unbeknown to the First Defendant at that time, the Plaintiff directed the removal from the Grices Road Property of the Remaining Cattle to a neighbouring property owned by the plaintiff and occupied by one Sharon Bunting, and subsequently:
(i)directed that the ear tags which identified those cattle as the property of the deceased be removed; and
(ii)directed that those cattle then be removed from the property and sold – which steps were then taken;

(b)the Plaintiff did not seek or obtain the consent of the First Defendant before taking the steps alleged in sub-paragraph (a) above;
(c)the Plaintiff has not accounted to the First Defendant in relation to any proceeds of sale of Remaining Cattle, whether by deducting the same from any sum claimed by the Plaintiff against the First Defendant in this proceeding or otherwise.

45C.In the premises, the Plaintiff converted the Remaining Cattle to its own use.
45D.Further or alternatively, the Plaintiff has had and received the money constituting the sale proceeds of the Remaining Cattle to its own use and benefit.
45E.If (which is denied) the First Defendant is otherwise liable to the Plaintiff pursuant to the Grices Road Agreement, the First Defendant is entitled to have accounted for as a credit in her favour against such liability, further or alternatively is entitled to and hereby does set off against such liability:
(a)damages, representing the market value of the Remaining Cattle; further or alternatively
(b)the sum or sums had and received by the Plaintiff from the sale of the Remaining Cattle.

Particulars
The Remaining Cattle included 25 head of cattle that were taken into the possession of the Plaintiff and sold on 17 and 18 January 2011, for the gross sum of $14,917.64 (including GST). The First Defendant refers to invoices issued by Alex Scott and Staff to the Plaintiff on 17 and 18 January 2011.
As to the balance of the Remaining Cattle, the First Defendant is unable to give further particulars because details of the Plaintiff’s subsequent dealings with and/or disposal of those cattle are not known to her. Further particulars may be provided following further discovery and the return of any further subpoenas.

In her counterclaim, Mrs Feldman seeks a declaration that the Grices Road agreement was not enforceable by Frontlink against her on the basis that, by reason of the trust and confidence she reposed in her husband, which was known by Frontlink, it would be unconscionable for Frontlink to enforce the terms of the Grices Road Agreement.

In its reply and defence to the counterclaim filed on 23 June 2016, Frontlink, in summary:

(a) joins issue with the bulk of the allegations in the defence;

(b) in relation to the allegations made by Mrs Feldman concerning the cattle, it denies that there was a herd of the size alleged by Mrs Feldman, but rather, it alleges that there was an agreement between Mr Mondous and Mark Feldman that Frontlink would take possession of and sell cattle belonging to Derek Feldman and credit the proceeds against the debts owed by Derek Feldman, and that the number of cattle taken and sold was 23;

(c) denies that the Grices Road agreement was voidable at the instance of Mrs Feldman, and that her avoiding of the Grices Road Agreement amounted to an acknowledgement on her part that she signed the Grices Road Agreement, and that it was effective and binding upon her; and

(d) denied that any extension or exercise of any option was invalid by reason of any contravention of the Instruments Act 1926 (Vic), and said, at paragraph 15 of the Reply and Defence to Counterclaim:

It denies each and every allegation made in paragraph 54 thereof and says:
(a)that the deceased and the first defendant continued in occupation of the Grices Road property until after the death of the deceased, utilising the same to run stock thereon, paying rent from time to time, and occupying the house thereon and from time to time confirming the tenancy in writing:
Particulars
Derek Feldman on her behalf and on his own behalf sent letters dated 14 November 2009 and 14 April 2010 to the plaintiff in which the tenancy was confirmed. The plaintiff may provide other correspondence in this regard when discovery is complete.

(b)the plaintiff permitted the deceased and the first defendant to do so on the basis that the Grices Road Agreement was still in operation, rendering accounts to the deceased and the first defendant in respect of such occupation;
(c)that by reason thereof the first defendant is now estopped from saying that it did not so continue in occupation of the Grices Road property under the Grices Road Agreement and is required to pay rent in respect thereof.

The trial of the preliminary question concerned questions of both liability and quantum. The ‘liability’ issues are as follows:

(a) did Mrs Feldman sign the Grices Road Agreement?

(b) if yes to (a), is there some other reason why she should not be bound by its terms?

(c) if yes to (b), is Mrs Feldman estopped from avoiding the agreement by reason of her continued occupation of the Grices Road property?

(d) did the terms of the Grices Road Agreement bind Mrs Feldman after its expiry in October 2005 by reason of:

(i) an implied extension on a year by year basis?;

(ii) the continued occupation of the Grices Road property by Derek Feldman and Mrs Feldman amounting to an overholding akin to an overholding of a lease agreement; and/or

(iii) by continuing to occupy the Grices Road property, paying rent, and acknowledging outstanding rent due, Derek Feldman and Mrs Feldman represented to Frontlink that they continued to be bound by the terms of the Grices Road Agreement?

In relation to the question of the quantum of any liability of Mrs Feldman, the issues are as follows:

(a) has Frontlink proved the amount owing to it by Mrs Feldman under the Grices Road Agreement?

(b) was Frontlink entitled to allocate any payments received or offset any commissions owed by Frontlink to Derek Feldman to the amounts owing in respect of the three properties in any manner it saw fit?

(c) how many cattle were on the Grices Road property at the time of Derek Feldman’s death, and what became of them?

(d) what was the value of the cattle on the Grices Road property at the time of Derek Feldman’s death?

(e) is Frontlink required to credit in Mrs Feldman’s favour any amount representing the value of any cattle sold or retained by it?

The evidence

Before turning to the parties’ submissions and my analysis of the issues arising out of this trial, I will summarise the evidence relied upon by the parties. While it is possible to disaggregate the evidence according to the issues, I have not done so, as the evidence given by some witnesses on some issues goes to the credibility of the evidence of the witnesses on other issues. I refer in particular to the evidence of Mr Mondous in that regard.

Mr Sam Mondous

The main witness called by Frontlink was Mr Mondous. During the course of his examination-in-chief, Mr Mondous gave evidence that he assisted his daughter in running the business of Frontlink. He first met Derek Feldman in the mid to late 1990s. They had business dealings for many years. He met Mrs Feldman a number of times in his home based office. He observed that Derek Feldman was the person who negotiated real estate transactions, while Mrs Feldman handled the documentation of those transactions.

Mr Mondous gave evidence that he first discussed the Grices Road property with Derek Feldman in August 2012. During a conversation about a range of business matters, Derek Feldman expressed interest in entering the farming business. Frontlink had a farming property it wanted to lease out, and Derek Feldman expressed interest in taking over the Grices Road property.

Sometime after that first discussion, Derek Feldman and Mrs Feldman came to his office. Mrs Feldman said that she wanted the Grices Road property for herself, as she had a few horses, a few cattle, and she wanted her daughter Laura to live in the house on the property. Derek Feldman had no objections, and it was no concern to Frontlink as to whose name the property was in. At the meeting they discussed what rent would be payable, and agreed on the sum of $22,000 per annum.

Derek Feldman said that he would prepare an agreement, which he did,[19] but it was full of errors. Mr Mondous requested Frontlink’s accountant to prepare an agreement based upon a precedent Frontlink had in its office. He gave the agreement to Derek Feldman, who read and approved it, and Natalie Mondous signed and sealed it. A few days or a week later, Derek Feldman returned with a copy of the signed agreement, and gave it to Mr Mondous. They did not discuss the agreement any further on that occasion. He did not recognise the signatures on the document.
[19]Exhibit ‘A’.

Mr Mondous did not really understand why the Grices Road Agreement referred to a share of profits rather than rent. He was more concerned about the amount of money to be paid than how it was described. He had no subsequent discussion with anyone about the Grices Road Agreement, and never entered the Grices Road property to find out who the occupier was.

Mr Mondous gave evidence that, after he entered into the Grices Road Agreement, he drove past the Grices Road property from time to time, perhaps a few times per year, as he lived only four kilometres away. He saw a couple of horses at the Grices Road property, he saw some cattle, and on a couple of occasions he saw a light on in the house. He first passed the Grices Road property about a month or two after the agreement was signed.

Mr Mondous never had any discussions with Derek Feldman about whether the house at the Grices Road property was occupied. However, he recalled a short discussion he had with Laura Feldman three or four years after the Grices Road Agreement commenced. He met her, for the first time, with Derek Feldman at the Endeavour Hills shopping centre, and asked her whether she was happy living in the house. She replied, ‘Yeah, everything’s all right.’ He never met or spoke to her again.

Mr Mondous did not recall who made the payment of $3,666.66 in November 2002. He did recall Derek Feldman bringing the cheque for $88,000 to his office in March 2007.[20] He had many discussions with Derek Feldman regarding the payment of rent, Derek Feldman was always telling him to be patient, the money will be coming.
[20]Exhibit ‘F’.

Mr Mondous gave evidence that Frontlink entered into two other farm management agreements, the first for Soldiers Road in 2003. Frontlink had been managing the farming business at Soldiers Road, and Mr Mondous asked Derek Feldman if he wanted to take over the property, and Derek Feldman agreed. Mr Mondous did not discuss this property with Mrs Feldman. He asked Derek Feldman whether he was happy with the same form of agreement, and Derek Feldman replied, ‘Yeah, but just put Derek Feldman’.

As for Pound Road, Frontlink had decided to stop farming on that property because of Mr Mondous’ daughter’s health problems. He asked Derek Feldman if he could lease it out for him, and Derek Feldman agreed to take it over himself. Again, the agreement was with Derek Feldman alone. At that time, he was owed a lot of money by Derek Feldman, but he had confidence that he would get paid, or that the money could be deducted from commissions Frontlink owed to Derek Feldman on various property transactions, as they did business together regularly. When asked whether he discussed the outstanding arrears with Mrs Feldman, he said ‘She was aware of all of that’, but he then gave evidence that he did not speak to her directly about these matters.

Mr Mondous gave evidence that Derek Feldman told him that he had raised the sum of $88,000 by selling some cattle. He gave evidence that Derek Feldman said ‘We sold some cattle and that’s part of payment for the cattle we sold’. He personally wrote the document headed ‘History of Rent with Derek Feldman 181 Grices Rd Berwick’,[21] with the reference to ‘sale of cattle by 18/3/07’. After that time, his son Kameel managed the account.
[21]Exhibit ‘E’.

Mr Mondous gave evidence that he lent Derek Feldman money on two occasions in 2010 to enable Derek Feldman to pay outstanding rates he owed to the City of Casey, but he did not know to which property those outstanding rates related. These loans were documented in writing.[22] He could not recall any discussions with Derek Feldman about the repayment of these loans.
[22]Exhibits ‘G’ and ‘I’.

The last time Mr Mondous spoke to Derek Feldman was in August 2010. Derek Feldman said he had enough stock, about 200 to 300 head of cattle, to sell to cover his debts to Frontlink. Mr Mondous did not observe any cattle on the Grices Road property, but it was not easy to see cattle from the road. He took Derek Feldman’s word for it.

Mr Mondous gave evidence that he heard of Derek Feldman’s death on the day he died, or perhaps the day after. He telephoned the office to offer Mrs Feldman his condolences, and they did not discuss any business matters at that time. About a week later, he telephoned Mrs Feldman and asked her what she was going to do, and whether she going to continue with the business. Mrs Feldman told him that he should deal with Mark about business matters concerning Derek Feldman. He did not know at that time who Mark Feldman was.

Mr Mondous gave evidence that Mark Feldman visited him one or two days later. They had a general discussion about Derek Feldman, and then Mr Mondous said: ‘Look, your dad owe me a lot of money, your dad and mum owe me a lot of money. How would you like to deal with it and what your intention to do.’

Mr Mondous gave evidence that Mark Feldman replied as follows: ‘Look, you know, it’s too early, I’ll discuss the matter with my mother, I’ll come back to you’. They did not discuss how much they owed, or why it was owed. They discussed two things: the plan about payment, and whether they wanted to stay at the three properties.

Mr Mondous gave evidence that he thinks Mark Feldman returned to him after 5 November 2010, being the day he visited the Grices Road property with Rachel Ivic (‘5 November meeting’). Mark Feldman told him that it was too hard for his mother, and he personally ‘wasn’t in this business’. Mr Mondous then said words to the effect that there is some stock on the property, and what was he (being Mark Feldman) intending to do with it. Mr Mondous then said, ‘I’ll sell it and deduct it from the rent’. Mark Feldman did not object or say, ‘I’ll come back to you’.

Mr Mondous gave evidence that at the time of the 5 November meeting, he knew that there were cattle on the Grices Road property. He did not see any cattle, but Mrs Bilson (whom he had not previously met, and of whom he did not know prior to that meeting) told him there was cattle on the property. She did not say how many.

Mr Mondous gave evidence that Soldiers Road was empty when he visited there a few days after the 5 November meeting. Sharon Bunting, a tenant of part of Pound Road, (she leased the property from Derek Feldman) told him there was cattle on Pound Road. She did not tell him how many. He asked Sharon Bunting to sell Derek Feldman’s cattle for him, probably a couple of weeks before they were sold, and that those sales took place on or about 16 or 17 January 2011 (‘January 2011 sales’). He had not heard from either Mark Feldman or David Mond about the cattle, and he had signed a lease for Pound Road to commence on 1 February 2011, so the cattle had to be moved from the Grices Road property. According to what Sharon Bunting signed for and what he received, there were 25 head of cattle.[23] Sharon Bunting organised everything, including providing ear tags for untagged cattle.
[23]There is some confusion between the pleadings and the evidence as to whether 23 of Derek Feldman’s cattle were sold in January 2011, or whether 25 was the correct number. In the end, little turns on this discrepancy.

Mr Mondous confirmed that he had no further discussions with either Mark Feldman or Mrs Feldman concerning the cattle. Frontlink had no other cattle belonging to Derek Feldman in its possession apart from the cattle sold by Sharon Bunting. He has no knowledge of whether there were any other cattle owned by Derek Feldman at the time of his death. Frontlink did not receive any money from the sale of Derek Feldman’s cattle apart from the proceeds of the January 2011 sales.

Mr Mondous gave evidence that he knew that David Mond was Derek Feldman’s accountant, as Derek Feldman had previously introduced Mr Mond to him. He called Mr Mond on one occasion about the money owed to Frontlink on account of the three properties. Mr Mond asked him to send an account, which Mr Mondous believes Kameel Mondous sent on about 3 November 2010.[24] This account, which was dated 26 October 2010, stated that the amount owing with respect to the Grices Road property was $95,202.62, the amount owing on Pound Road was $143,537.72 (approximately $120,000 in commissions owing to Derek Feldman had been applied against the amount outstanding for Pound Road), and $135,185.87 for Soldiers Road, which included the amounts said to have been ‘rates given to Derek’ on four occasions in 2010. The total amount said to be owing in respect of the three properties was $373,295.20. The fax cover sheet for the accounts referred to ‘our discussion this afternoon regarding money owed by Derek Feldman on farmland’.
[24]Exhibit ‘N’.

Mr Mondous gave evidence that the commissions owed to Derek Feldman were deducted from the amount owing, because ‘Pound Road was just him’. He identified the documents provided to Frontlink regarding the January 2011 sales. When asked about how Frontlink accounted for the proceeds of sale of the cattle, he identified a reference in a statement dated 5 June 2014[25] in relation to the amounts outstanding for Pound Road to the effect that the proceeds of sale of 23 cattle (approximately $12,000-$14,000) were to be deducted from council rates, water rates, and insurance paid by Frontlink.
[25]Exhibit ‘Q’.

Finally, Mr Mondous identified the share farming agreement he entered into with Mr Geoff Murray with respect to part of the Grices Road property and Pound Road,[26] which referred to the properties only being used for cattle raising.
[26]Exhibit ‘R’.

After some questions about the order in which the Grices Road Agreement was signed, senior counsel for Mrs Feldman commenced his cross‑examination of Mr Mondous by pointing out the occasions when Mr Mondous, during the course of his examination‑in‑chief, had shifted from referring to Derek Feldman in the singular, to referring to Derek Feldman and Mrs Feldman in the plural. It was suggested that he was being careful to make sure that he referred to Mrs Feldman in his evidence because he knew Frontlink could only recover from Mrs Feldman. Mr Mondous rejected this contention.

Mr Mondous could not explain why there were no documents in existence concerning the Grices Road Agreement for the first few years. He said that any typed documents in existence would have either been created by Frontlink’s bookkeeper, Christine, or his son Kameel. His explanation for why these documents only referred to ‘Derek Feldman’ was that Derek Feldman was the ‘contact point’ for the couple.

Mr Mondous confirmed his evidence that Mrs Feldman was involved in the Grices Road property, it was the first property, she wanted it for keeping horses, as it was small and it suited her. She had a few cattle, one named ‘Elizabeth’,[27] horses, and her daughter wanted to live at the house on the Grices Road property.
[27]I assume this to be a reference to Jezebel, Mrs Feldman’s pet Jersey cow.

Mr Mondous denied the proposition that he told Mrs Feldman that she could not agist horses on the Grices Road property for land tax reasons. He knew that farming land was exempt from land tax, and that the agistment of horses did not fall within the definition of farming, but Mr Mondous said that he did not have any further conversations with Mrs Feldman about keeping horses at the Grices Road property. At the first meeting, Mrs Feldman referred to having three horses. The Grices Road property was not suitable for agistment of horses. It would have cost approximately $100,000 to provide facilities for the agistment of horses. Mr Mondous wanted it to be used for cattle. Mr Mondous was not aware that Mrs Feldman had leased the property next door to keep horses.

Mr Mondous denied the proposition that Laura Feldman only stayed one night at the house on the Grices Road property because it was in poor repair: the house was in excellent condition, at least at the time of the commencement of the Grices Road Agreement. He did not know when the Bilsons moved in, or what work they had to do to the house to make it habitable. He accepted that he could have seen a light on in the house when the Bilsons were there.

Mr Mondous rejected the contention that he treated all three properties as a single enterprise operated by Derek Feldman. He considered that Derek Feldman was acting for Mrs Feldman. He stated on two occasions that he had never been notified that the Grices Road property had become the sole responsibility of Derek Feldman. When he made a loan to Derek Feldman to cover the payment of rates, he did not know to which property the unpaid rates related. He agreed that a reference to the loan being repaid following certain real estate transactions being completed was a reference to the loans being repaid from commissions owing to Derek Feldman.

Mr Mondous rejected the proposition that he had not called Mrs Feldman after Derek Feldman’s death. He denied telling Mark Feldman there were approximately 120 to 150 head of cattle on the Grices Road property, and maintained he had two conversations with Mark Feldman. He noted that a few months lapsed between Derek Feldman’s death and the sale of the cattle. No-one claimed the cattle in the meantime.

Mr Mondous emphatically denied that there was any discussion about cattle at the 5 November meeting. He went there with Rachel Ivic as he was considering letting out the house on the Grices Road property. He referred to the evidence Rachel Ivic was expected to give as support for his contention that there was no discussion about cattle at this meeting: rather the tenants begged to stay there, then they moved out after a month. They moved to the house on Soldiers Road, but left on bad terms because they did not pay the rent.

Mr Mondous gave evidence that Frontlink has its own cattle, on properties at Cranbourne and Inverloch.

Mr Mondous rejected the contention that the Bilsons’ evidence was consistent with Sharon Bunting’s evidence, and his own evidence with what he did with the cattle. He stated once again that there was no discussion about cattle, or numbers of cattle, at the 5 November meeting, rather, he and Rachel Ivic were at the Grices Road property to look at the house. He said that ‘there is a big difference between 60 and 120’. At the time of the 5 November meeting, he did not know that Mrs Feldman did not want to continue with the property.

Mr Mondous agreed that he was on good terms with Sharon Bunting. He denied asking the Bilsons to remove Derek Feldman’s ear tags from the cattle, but did ask Ms Bunting to put Frontlink’s ear tags on untagged cattle, because they had to have ear tags before they could be sold.

Mr Mondous was taken at some length to the documents subpoenaed by Mrs Feldman’s solicitors from Meat and Livestock Australia (‘MLA records’).[28] The MLA records are somewhat difficult to understand in the absence of a full explanation as to how they should be interpreted, and Mr Mondous clearly found them difficult to follow. He did not accept that Frontlink only purchased 24 cattle between 2008 and 2015, in 2004 and 2005. He could not recall these purchases. He could not explain why the MLA records showed cattle associated with Derek Feldman’s PIC number being sold on 3 May 2011, or as late as February 2014.[29] He denied that any of Derek Feldman’s cattle were moved to other properties owned by Frontlink. He was not aware of any calves being born while the cattle were in the care of Sharon Bunting, and he gave evidence that he gave no instructions to anyone to sell Derek Feldman’s cattle apart from the January 2011 sales.
[28]Exhibit ‘4’.
[29]See the discussion of these records at paragraphs 147 to 151 of these reasons for more details.

When the inconsistency between his evidence and Sharon Bunting’s evidence in her 2014 affidavit regarding the number of cattle was pointed out to him, Mr Mondous suggested that if Ms Bunting was correct in saying there were sixty of Derek Feldman’s cattle, the likely explanation is that 25 were sold in his name, 26 were sold in her (Sharon Bunting’s) name, four belonged to the Bilsons, and one belonged to Mrs Feldman. He took no action regarding Sharon Bunting selling these cattle in her own name, as he accepted her explanation that they were her cattle, and denied that Frontlink received any benefit from the 26 cattle that Ms Bunting sold.

Mr Mondous emphatically rejected the suggestion that, in relation to any of Derek Feldman’s cattle which remained after January 2011 sales, he had done precisely what he had said he would do at the 5 November meeting: that is, sell the cattle to reduce the debt owed to him by Derek Feldman. He protested that he was not a cattle thief. When taken to records produced upon subpoena by Alex Scott & Staff Pty Ltd (‘Alex Scott’), a stock and station agent, which recorded sales of thirty head of cattle on 3 May 2011, he denied that they were Derek Feldman’s cattle, and that Sharon Bunting was solely responsible for the sale of Derek Feldman’s cattle. Once again, he was emphatic that he gave no instructions to anyone to take any cattle, and he had no interest in Derek Feldman’s cattle.

Mr Mondous gave evidence that the proceeds of the January 2011 sales were applied to the amounts outstanding for rates and insurance and the like. When asked to identify a document which showed how these proceeds were accounted for by Frontlink, he was referred to the statement of account dated 5 June 2014, which was prepared after Sharon Bunting prepared her affidavit. His response was that it did not matter if the funds were applied in 2012 or 2014.

Finally, Mr Mondous was taken to the following statement made by him in an affidavit sworn in support of an application by Frontlink to amend its statement of claim shortly prior to the hearing of Mrs Feldman’s appeal against the grant of summary judgment:[30]

Shortly before his death I spoke to Mr Feldman about the amounts outstanding, which were then considerable. I knew that at the time Mr Feldman owned 300 to 400 head of cattle on the various properties of the plaintiff on which he and/or his wife were operating. Mr Feldman told me that he intended selling the herd and he was going to give me the proceeds in order to settle the debt he and his wife owed to me. In the event, shortly after this conversation, Mr Feldman died, whilst, I am told and believe verily, rescuing a dog from a waterway. Following his death the herd was sold but Mrs Feldman did not pass the monies on to me in payment of the debt owed to me, but has apparently kept the monies herself.

[30]Exhibit ‘5’.

Mr Mondous became quite agitated when confronted with this evidence, which is clearly at odds with what is now common ground between the parties: that Mr Mondous arranged for Sharon Bunting to take custody of Derek Feldman’s cattle and arrange for their sale. At trial, the only real factual dispute between the parties regarding the cattle was how many head of cattle were on the Grices Road property at the time of Derek Feldman’s death, what became of them, and whether Frontlink was authorised to take and sell the cattle. Mr Mondous eventually conceded that the statement in his affidavit must have been a mistake.

Mr Mondous was later recalled to give evidence after Mark Feldman gave evidence regarding an email he sent to David Mond on 9 November 2010 regarding his meeting with Mr Mondous (‘Mark Feldman email’).[31] This email, which was located by Mr Mond and discovered by Mrs Feldman during the course of the trial, stated, among other things, as follows:

Meeting with Sam Mondous was ok, asked what was going on and how would he get his money? asked to be briefed by Wednesday on whats [sic] happening. Picked up some info which I have given to Sasha. He told me that he is holding the following cattle stock 44 cows, 5 heifers and 2 bulls (told me only 1 bull but saw 2 clearly written on his list). He did mention legal action to recover his monies but as he and Derek had a good long term relationship it was the last thing he would want to do but would.

[31]Exhibit ‘1’.

Mr Mondous was also clearly agitated by the emergence of Mark Feldman’s email. He described it as a ‘fabrication’, and that he would not alter his evidence. He denied having a list of the cattle, he denied having any discussions about cattle at the meeting at the Grices Road property, and he denied that he spoke about cattle in the manner suggested in the Mark Feldman email (that is, disaggregating them into bulls, heifers et cetera).

When taken to a document in the court book which had been discovered by Frontlink and was headed ‘Copy List of Stock – From 1 January 2008 to 31 December 2010’, Mr Mondous said he had no knowledge of this document, he was only assisting his daughter with cattle, and did not know much about cattle. He would use the terminology ‘head of cattle’, as was used in this document.

Mr Kameel Mondous

Mr Mondous’ son, Mr Kameel Mondous, was also called to give evidence, largely to verify account statements and other correspondence created by him, or to which he was a party.

Kameel Mondous gave evidence that he first started working for Frontlink in 2006, aged twenty, predominantly doing accounting and bookkeeping work for Frontlink’s farming businesses, of which there were six to eight in 2006. He shared the work with another bookkeeper, Christine. He did not prepare the original versions of the account statements which were in evidence, but he updated them. He first met Derek Feldman in 2006, and Mrs Feldman, he believes, in 2008.

Kameel Mondous gave evidence that he believes he held two meetings with both Derek Feldman and Mrs Feldman where accounts in relation to the three properties were discussed. Mr Mondous was also in attendance at these meetings. He believes the first meeting was in 2008, at Frontlink’s office, which was a general catch‑up, but he did recall discussing some accounts, because they were really behind in the payments. He gave the following evidence about what he recalled from the first meeting:[32]

I’m asking do you remember anything specifically said by Derek? Did he say, ‘We’re both aware?’ I’m not putting words into your mouth. I’m asking what did Derek say?---I cannot be specific.
Do you remember anything specific said by Cynthia at that meeting?---Not particularly very specific, but we did – something along the lines of we discussed the accounts and we discussed Derek’s – we discussed 490 Soldiers Road and 1275 Pound Road, more so with Derek, and something along the lines of, ‘Okay, now we’ll discuss Grices Road with Cynthia’, that was her baby, she’d call it. Along those lines, words to that effect.
When you say she would call Grices Road her baby, when did she use those words to you?---That would be in the – possibly both meetings, words to that effect.
Is that a phrase you recall her using or was that the effect you thought of what she was saying?---More so the effect of what she was saying.
Was anything said at that first meeting as to why that was effectively Cynthia’s baby, that property?---No, not really, not at the first meeting.

[32]T199, 1-21.

Kameel Mondous was responsible for preparing the statements of account which were annotated ‘received from Sam on 17 October 2009’.[33] He gave evidence that these statements were prepared by him and annotated and signed by Mrs Feldman at a meeting attended by him, Mr Mondous, and Derek and Mrs Feldman on 17 October 2009, the second meeting held regarding the accounts which Mrs Feldman attended.
[33]Exhibit ‘W’.

Kameel Mondous gave the following evidence regarding what occurred at the second meeting:[34]
[34]T200, 6-31; T201, 1-11.

What do you actually recall was discussed at that meeting?---I recall discussing 1275 Pound Road and 490 Soldiers Road specifically with Derek.
What did you say to him; what did he say to you?---So we – the accounts were in arrears quite a bit and it was concerning that the outstanding amount was building up and he would say yes, he understood there were outstanding accounts and he had been working on it for some time, he had a few deals coming in through his business, so he would be able to catch upon the outstanding amounts.
If you look at p.47, there are figures of $47,297.96 owing for Soldiers Road; $94,338.31 owing for Pound Road?---Yes.
Were they figures that you had calculated by updating the records?---Correct.
What discussion did you have in relation to Grices Road?---Grices Road, I specifically remember discussing the matter with Cynthia because she was the one that was dealing with that property. I understood since day one that Grices Road was her property and she was using it for her use.
What gave you that understanding?---She told me at the previous meeting earlier, and any prior meetings I had with Derek alone discussing any of the accounts, he would always say, ‘Cynthia would have to discuss Grices Road with you because that’s her one.’ There was one stage where the accounts were so far in arrears we were saying, ‘You may have to leave the three properties,’ and Derek, at that meeting, actually put his hands together and said, ‘Please, please, please. These two are for me and Cynthia needs it’. That was ‘her outlet’, I recall him saying.
Was that at this meeting of 17 October 2009 or was that - - - ?---No, it was much prior to that meeting.
That was before that meeting?---Yes.
So where this was said by Derek, that he said, ‘Please, these two for me. That is Cynthia’s property’, that was before this meeting on 17 October 2009?---Yes.
And who was present when that was said?---Myself, Derek and Sam.

Kameel Mondous confirmed that he saw Mrs Feldman apply her signature to the statements of account provided to her at the meeting on 17 October 2009. She signed the documents to confirm receipt because Mr Mondous wanted to make sure she had her statement. That is why he called for her to be at the meeting.

Kameel Mondous confirmed that he faxed to Mrs Feldman some updated account statements on 7 January 2010.[35] He recalled discussing with Derek Feldman the outstanding accounts on about a dozen occasions, and Derek Feldman’s proposal that commissions be applied to outstanding accounts. On many occasions Derek Feldman said he would discuss the matter with Mrs Feldman and return to him.
[35]Exhibit ‘Y’.

Under cross‑examination by senior counsel for Frontlink, Kameel Mondous gave the following evidence, in summary:

(a) he asked Mrs Feldman to acknowledge receipt of the account statements on 17 October 2009 because in the past he had given documents to Derek Feldman and he had not attended to them;

(b) when it was put to him that none of the account statements referred to Mrs Feldman, he referred to Derek Feldman as being the ‘point of contact’ for the couple. He rejected the suggestion that his father had suggested to him that he refer in his evidence to Derek Feldman being the ‘point of contact’: rather, he had suggested to Mr Mondous that it was a good expression to use;

(c) he recalled that he had specifically requested that Mrs Feldman be at the meeting on 17 October 2009 and rejected the suggestion that Mrs Feldman just happened to be accompanying her husband on that occasion;

(d) while he had first seen the Grices Road agreement in 2008 or 2009, he did not update the amount owing to take into account CPI increases, he just continued with what Christine was doing. The reference to ‘Derek Feldman’ alone on the account statements was something he overlooked;

(e) he first stated that he discussed the Grices Road property specifically with Mrs Feldman, but then conceded it was a discussion between the four of them regarding all of the accounts;

(f) he cannot recall why CPI increases were only added to the accounts after Derek’s death, or why the outstanding commissions owed to Derek Feldman were offset against the debt owing on Pound Road. He agreed that it may have been upon instructions from his father; and

(g) Frontlink allowed Derek Feldman to stay at the three properties because Mr Mondous had a good relationship with Derek Feldman. He does not believe he ever discussed ‘kicking them off’ with Mr Mondous or Natalie Mondous.

Ms Rachel Ivic

Ms Rachel Ivic was also called by Frontlink to give evidence. She has worked for LJ Hooker for seventeen years, where she is a property manager, and has been dealing with Frontlink for eleven years. Mr Mondous called her and asked her to attend the Grices Road property so she could look at the house on the property with a view to renting it out. She recalls meeting Shaun and Belinda Bilson. She had not previously met them. When asked whether anyone else was present at the 5 November meeting, she replied ‘not that I remember’. She discussed the house on the Grices Road property with the Bilsons. They had been living there for about ten months, and they told her about what they had done to get the property to a liveable standard. She also attended on 10 November 2010 to inspect the house, on that occasion only Belinda Bilson was there. The Bilsons wanted to stay on, which they did, but no lease was ever signed.

Under cross‑examination, Ms Ivic agreed that at the 5 November meeting, she was only concerned with the house on the Grices Road property, not the farm. She stated that the contents of her notes[36] reflected what was told to her by the Bilsons. She did not recall Sharon Bunting being at the meeting. She knows who she is, but just does not recall whether she was there. She agreed that if there had been a discussion about farming matters at the meeting, she could well have ‘tuned out’. She could not say that it was not possible that such a conversation occurred.
[36]Exhibit ‘U’.

Mr Glen Wilmott

Finally, Mr Glen Wilmott gave evidence, briefly, on behalf of Frontlink. He works on a casual but regular basis for Frontlink. He first became familiar with the three properties in 2010. He did some tree work, house demolition, and fencing. He never saw any cattle at the Grices Road and Pound Road properties. He was engaged by Frontlink to remove trees and demolish the house at the Grices Road property in 2010.[37] He saw some cattle at Soldiers Road, when he went to fix some fences there. He does not know how many. He never shifted cattle from one property to another.
[37]On the basis of other evidence given at trial, that must have occurred in 2011, not 2010.

Mr Wilmott gave evidence that he knows how to yard a cow. He has done a lot of work for Mr Mondous over the past five years, which is ongoing. He met Sharon Bunting about eight to nine years ago. He knew her ex‑husband. There was no‑one living at the Grices Road property when he went to demolish it. He agreed with Sharon Bunting’s evidence about taking some cattle from Soldiers Road to be sold, some months after he did some tree work at the Grices Road property, when Carlos and Frank Sofra were present. He thought there were about thirty cattle there, perhaps under thirty.

Six witnesses gave evidence on behalf of Mrs Feldman: herself, Mark Feldman, David Mond, Sharon Bunting, and Shaun and Belinda Bilson. The latter three witnesses had sworn affidavits when this matter was before the Court of Appeal, but on this occasion attended court pursuant to subpoenas issued on behalf of Mrs Feldman.

Mrs Cynthia Feldman

Mrs Feldman gave evidence that she is retired. She was married to Derek Feldman from 1975 until his death in 2010, and assisted him in his real estate business by carrying out office duties. Derek Feldman also bought and bred cattle. He owned all of the cattle on the three properties, apart from her pet, Jezebel. Jezebel had been rescued from the abattoir when she was a day old and raised in the backyard of her Glen Waverley home until she grew too large, following which she was agisted with her horse. Although she helped Derek Feldman from time to time, she had no role in the cattle business.

Mrs Feldman gave evidence that she first heard of the Grices Road property when Derek Feldman was looking at properties with Mr Mondous. She and Derek Feldman thought that they might lease the Grices Road property, as they were behind on the mortgage payments on their home, and thought they might have to move there. This did not eventuate. Their daughter, Laura Feldman, stayed at the house on the Grices Road property for one night: she left after she saw a rat in the house. That was quite some time after they had the property, as by then the house was in disrepair.

Mrs Feldman gave evidence that she was now aware of the Grices Road Agreement, but did not recall signing it. She would have signed thousands of documents at Derek Feldman’s request. She had never refused to sign a document he had asked her to sign. She did not read the contents of any documents she signed, because she trusted her husband.

Indeed, I can infer from the evidence that there was some benefit to Frontlink from its arrangements with Derek Feldman in respect of the three properties, notwithstanding the arrears. Mr Mondous’ evidence is that Frontlink no longer wanted to farm the properties itself. He conceded that there had to be farming businesses operating from the properties for land tax exemption purposes. I can infer from Mr Mondous’ evidence that Derek Feldman was ‘the best in the business’, in the context of giving evidence as to why Frontlink allowed the arrangement to continue despite the arrears, that it was in Frontlink’s broader commercial interest to maintain a good relationship with Derek Feldman. Accordingly, I am far from satisfied, even if it could be established that the absence of any change amounted to a representation on the part of Mrs Feldman, and leaving aside the question of whether it was unconscionable for Mrs Feldman to resile from any representation, that the remaining necessary elements of a promissory estoppel have been established.

Similarly, the evidence does not support a finding that a common law conventional estoppel operates to bind Mrs Feldman to the terms of the Grices Road Agreement after its expiry in October 2005. Frontlink may well have assumed that Mrs Feldman continued to be so bound (although I suspect that Mr Mondous and/or Kameel Mondous did not even turn their minds to the question of whether Mrs Feldman herself was liable under the Grices Road Agreement until after Derek Feldman’s death), but the evidence does not support a finding that Mrs Feldman assumed she was so bound, or knew that Frontlink assumed that she was so bound. I also refer to my comments regarding my reservations as to whether Frontlink suffered any real detriment as a result of any departure by Mrs Feldman from any assumed state of affairs.

Finally, for completeness, while I accept that Mrs Feldman may have reaped some modest benefit from Derek Feldman’s continued occupation of the Grices Road property, such as being able to keep her pet cow there, or possibly even a horse or two, her acceptance of such benefits does not give rise to any legal liability on her part to Frontlink. In Lumbers v W Cook Builders Pty Ltd (in liq),[56] the High Court emphatically rejected a restitutionary claim made by a sub‑contractor against the building owner in circumstances where the building owner did not know that the work was being done, not by the head contractor, but the sub‑contractor. Accordingly, Frontlink could not (and did not) rely upon any claim that Mrs Feldman received an incontrovertible benefit from any use she made of the Grices Road property. Indeed, in that case the High Court emphasised the primacy of contractual rights and obligations over those arising under inconsistent informal arrangements.
[56](2008) 232 CLR 635.

Frontlink also submitted that it was open to the Court to find that, in the absence of any finding that the Grices Road Agreement was extended from time to time by agreement between the parties, the agreement became, or became akin to, a tenancy at will. As such, the parties continue to be bound by the terms of the original agreement.

Senior counsel for Mrs Feldman did not take issue with the proposition that there could be a tenancy at will, or the principles governing the obligations of the parties to such an arrangement. However, he submitted that the concept of ‘overholding’ has no application to a commercial agreement for the management of a farm. He relied upon the statement of the Court of Appeal to the effect that the Grices Road Agreement was not a lease, noting that it was Frontlink that prepared the Grices Road Agreement. Senior counsel noted that there were many aspects of the Grices Road Agreement which distinguished the agreement from the usual landlord‑tenant relationship, in particular, the obligation imposed upon the farm consultant to actively farm the land, and to keep accounts, unlike a tenancy arrangement, which merely confers a right of occupancy upon the tenant.

In the current case, I agree that the principles governing an ‘overholding’ under a lease do not assist Frontlink in the current case. Senior counsel for Frontlink could not direct me to any authority that establishes that the principles of overholding could extend beyond the orthodox relationship of landlord and tenant. Given the Grices Road Agreement had come to an end, and I have found that there was no conduct on the part of Mrs Feldman which could support a finding that she had consented to an extension of the Grices Road Agreement, similarly, there was no conduct on her part which could be pointed to as establishing she had assumed the obligations of a tenant at will. If there was a tenant at will at the Grices Road property, it was Derek Feldman.

Quantum Issues

Having found that there is no liability on the part of Mrs Feldman to Frontlink, strictly speaking, it is not necessary for me to deal with the question of quantum. However, I shall do so given the time and attention given to these issues at trial, and if I am later found to be wrong on the question of liability.

The issues concerning quantum are as follows:

(a) has Frontlink proved the amount owing to it by Mrs Feldman under the Grices Road Agreement?

(b) was Frontlink entitled to allocate any payments received or offset any commissions owed by Frontlink to Derek Feldman to the amounts owing in respect of the three properties in any manner it saw fit?

(c) how many cattle were on the Grices Road property at the time of Derek Feldman’s death, and what became of them?

(d) what was the value of the cattle on the Grices Road property at the time of Derek Feldman’s death?

(e) is Frontlink required to credit in Mrs Feldman’s favour any amount representing the value of any cattle sold or retained by it?

In relation to (a) above, subject to a modest adjustment to the amount of outstanding rent and rates to take into account my finding (explained further below) that Frontlink resumed possession of the Grices Road property on 5 November 2010, Frontlink has proved the quantum of its claim. The quantum of the claim was verified by the documents tendered in evidence through Kameel Mondous, who prepared and updated the account statements, and identified the documents concerning the rates and insurance payable in respect of the Grices Road property. The calculations of these amounts were agreed between counsel at the conclusion of the trial.

As for the relevant date, Frontlink contended that the relevant date ought to be 1 February 2011, being the date that Frontlink entered into a Share Farming Agreement for Pound Road and part of the Grices Road property with Mr Murray. However, it is clear from the evidence of Mr and Mrs Bilson, and Ms Ivic, that Mr Mondous, on behalf of Frontlink, resumed control of the Grices Road property at the 5 November meeting. Ms Ivic gave evidence that Mr Mondous took her to the 5 November meeting because Frontlink wanted to lease out the house on the Grices Road property, and she returned a few days later to prepare a condition report, presumably on Mr Mondous’ instructions. Mrs Bilson gave evidence that at the 5 November meeting Mr Mondous said they would be leasing the house at the Grices Road property through either him or his real estate agent. On 18 November 2010, Ms Ivic wrote to the Bilsons enclosing a condition report for the house on the Grices Road property, and stating that once she had received the farm lease from Mr Mondous she would send it through for them to sign. Thereafter, the Bilsons paid rent to Frontlink (or Mr Mondous). Mr Mondous directed the Bilsons to move the cattle to Pound Road. This evidence is entirely consistent with Frontlink resuming control of the Grices Road property on 5 November 2010.

By my calculations, by applying an end date of 5 November 2010 rather than 1 February 2011, the quantum of any debt owing by Mrs Feldman to Frontlink is reduced from $129,543.26 to $126,564.19. I will seek input from counsel as to whether there needs to be a corresponding adjustment to the interest component of Frontlink’s claim.

As for (b) above, while senior counsel for Mrs Feldman submitted that Frontlink’s accounting for the commissions owing to Derek Feldman at the time of his death was unsatisfactory, and queried why they were applied to the amount outstanding with respect to Pound Road only, in the absence of any express instructions on the part of Derek Feldman as to how any payments should be allocated, Frontlink was entitled to allocate any payments received or offset any commissions owed by Frontlink to Derek Feldman in any manner it saw fit, on the basis of the well‑established principles referred to by Robson J in Batrouney v Forster:[57]

There are several well established principles relating to the allocation of payments to satisfy debts due between a debtor and creditor. If a debtor owes several debts to a creditor, the debtor may inform the creditor to which debt a payment by the debtor should be applied. If a debtor fails to inform the creditor of an allocation, the creditor may make the allocation. If the allocation is made by the creditor in his or her books of account, the creditor may alter the allocation at any stage before the debtor is informed of an allocation.

[57][2015] VSC 230 [204].

In the absence of any evidence that Derek Feldman instructed Frontlink to give priority to reducing the debt in respect of the Grices Road property (and there could have been none, given the circumstances of his death) it was open to Frontlink to apply the proceeds of the sale of cattle, or commissions, to the debt owing on the Pound Road property. The fact that proceeds of the sale of cattle were used to pay rent on the Grices Road property in 2007 does not assist Mrs Feldman on this question. Further, the evidence of the Bilsons and Ms Bunting to the effect that Mr Mondous said he was going to apply the proceeds of the sale of the cattle to the debt of both Derek Feldman and Mrs Feldman (which he denies) does not bind Frontlink either.

Turning now to questions (c), (d) and (e) above, being Mrs Feldman’s contentions concerning the size and value of Derek Feldman’s herd of cattle, and her contentions regarding how the proceeds of sale of any cattle should be applied, senior counsel for Mrs Feldman submitted that it was plain from the evidence that not only has Frontlink appropriated all of Derek Feldman’s cattle, but has refused to acknowledge that the number of cattle present upon Grices Road at the time of Derek Feldman’s death far exceeded the 25 cattle sold in the January 2011 sales.

Senior counsel for Mrs Feldman submitted that Mr Mondous’ evidence stands alone amongst all of the relevant witnesses. He noted Ms Ivic’s evidence that if there was a discussion about cattle at the 5 November meeting, she may well have tuned out. Mr Wilmott agreed that there was a later yarding of cattle at Soldiers Road. As for the other witnesses, it is inconceivable that the evidence of the Bilsons is wrong. Sharon Bunting’s evidence was broadly consistent with the evidence given by Mr and Mrs Bilson. As for the evidence of Mark Feldman, it entirely contradicted the evidence given by Mr Mondous. Senior counsel for Mrs Feldman submitted that I should not treat the number of cattle referred to in the Mark Feldman email as a cap on the size of the herd, because it may well be that what Mr Mondous told Mark Feldman in the meeting referred to in the email was wrong, given what Mark Feldman said about being told there was only one bull, when Mr Mondous’ list referred to two bulls. The cattle which remained after the January 2011 sales and the sales on 3 May 2011 may well have been integrated into herds at Frontlink’s other properties.

Senior counsel submitted that the value of the remaining cattle could only be valued in their absence based upon the average value of the cattle being sold, being approximately $600 per head. He submitted that it was only fair that the total value of the herd ought to be offset against any amount said to be owing by Mrs Feldman in respect of the Grices Road property. The cattle were on the Grices Road property at the time of Derek Feldman’s death, and there had been a discussion between Mr Mondous and Derek Feldman about selling the cattle to reduce debt in the months prior to Derek Feldman’s death.

Senior counsel for Frontlink submitted that ‘the cattle are a red herring’. She submitted that there was no legal obligation imposed upon Frontlink to apply any proceeds of sale of any cattle to the debt owing with respect to the Grices Road property. In any event, Mr Mondous’ evidence is that he told Mark Feldman that he would sell cattle to reduce the debt, and no‑one came back to him in the two month period between this conversation and the January 2011 sales. Further, if, contrary to Mr Mondous’ evidence, it is found that there was a list of cattle held by Mr Mondous, this information can only have been provided by the Bilsons. Glen Wilmott’s evidence is consistent with the number of cattle referred to in the Mark Feldman email. Much of Sharon Bunting’s evidence seemed to have been reconstructed, and the Bilsons could not even agree with each other. Accordingly, I should not place too much weight upon the figures given by them.

Further, senior counsel for Frontlink submitted the MLA records show that only one of the cattle sold on 17 January 2011 belonged to Derek Feldman, as none of the other cattle sold on that day show up as having been purchased by Derek Feldman in the previous years. Of the cattle sold on 18 January 2011, only nine of them were Derek Feldman’s cattle.

I accept the evidence of Shaun and Belinda Bilson that there were in the range of 110 to 125 head of cattle. In the absence of any compelling reason to disbelieve them, their eyewitness evidence is difficult to impeach. They were resident on the Grices Road property, part of their role was to care for the cattle, and Mr Bilson gave evidence that he and another person actually counted the cattle a few weeks before Derek Feldman’s death. Any inconsistencies between each other’s evidence, and their evidence and Sharon Bunting’s evidence is relatively minor, and explicable by the passage of time. They were emphatic in their rejection of the contention that there were only 44 head of cattle on the Grices Road property, as reported by Mr Mondous to Mark Feldman, and passed on to Mr Mond. Their evidence is also consistent with Mr Mondous’ evidence that in August 2010 Derek Feldman told him he had 200 to 300 cattle. While this was clearly an exaggeration, it would be odd if Derek Feldman told Mr Mondous that if he only had 25 head of cattle, and the MLA records do not disclose any significant sales by Derek Feldman in 2010.

It is difficult to understand, in the light of the evidence of the Bilsons, and Ms Bunting, how the figure of 44 head of cattle came to be included in the Mark Feldman email. This figure was what was included in the statement of assets and liabilities of Derek Feldman’s estate: Mr Mond’s evidence is that he had no other information upon which to rely when putting this figure in the accounts. The evidence of Mr Mondous is of course unenlightening: he rejects knowing anything about the number of Derek Feldman’s cattle at the time of his death, and says that the Mark Feldman email is a fabrication. I reject this evidence, but am no wiser as to how the figure referred to in Mark Feldman’s email was arrived at. This figure is consistent with Mr Wilmott’s evidence, but it seems that he only saw the herd of cattle once, while the Bilsons and Ms Bunting had the responsibility of caring for the herd at different times. Also, it appears that while the MLA records are helpful in tracing cattle from one owner to another, they do not provide a complete picture of changes in the custody of cattle, given that there is no doubt that all of the cattle sold in the January 2011 sales were Derek Feldman’s cattle.

As for (d) above, I agree with senior counsel for Mrs Feldman that the best evidence of the value of the cattle is based upon the average sale price of the cattle which Frontlink admitted it sold and applied to the amounts outstanding in relation to one or more of the three properties, being approximately $600 per head. That would value the herd of cattle removed from the Grices Road property and unaccounted for at $66,000.

However, despite the time and attention this matter received at trial, in the end, I would echo the words of senior counsel for Frontlink to the effect that ‘the whole thing is a red herring’. I agree that there is no factual or legal basis for the contention that Frontlink was required to account to Mrs Feldman for the value of the cattle, or was obliged to set off the value of the cattle, whatever that value, against the amounts owing to Frontlink with respect to the Grices Road property. Given the size of the amounts outstanding on both Pound Road and Soldiers Road, the value of the cattle, if applied against those debts, would not have extinguished those debts.

While I do not condone Frontlink’s ‘self‑help’ with respect to the taking of Derek Feldman’s cattle, or Mr Mondous’ denial of having taken and sold any more than 25 cattle, the reality is that the only party which would have a claim in respect of the cattle is the (bankrupt) estate of Derek Feldman. All of the evidence points to the cattle belonging to Derek Feldman alone. Mrs Feldman herself asserts no proprietary interest in the cattle. Simply because the cattle were located on the Grices Road property at the time of Derek Feldman’s death does not of itself give rise to an entitlement of Mrs Feldman to insist that their value be set off any amount owing by Mrs Feldman to Frontlink in respect of the Grices Road Agreement. As noted in paragraph 210 above, in the absence of any express instructions by Derek Feldman himself as to how any payments or other credits were to be applied, Frontlink is entitled to allocate any such payments or credits in any manner it sees fit, at any time up to trial.

Conclusion

Accordingly, the answer to the preliminary questions is as follows:

(a) Is the first defendant liable to the plaintiff by reason of the matters pleaded in paragraphs 1 to 5 of the statement of claim: No.

(b) If so, what is the amount of that liability: not applicable, but if the answer to (a) above was yes, $126,564.19, subject to any adjustment to the interest component of $1,339.98 referred to in the particulars to paragraph 5 of the statement of claim.

Applying these answers and my findings generally to the parties’ pleadings, my conclusions are as follows:

(a) Frontlink has proven the allegation made in paragraphs 3, 4 and 4A of the statement of claim, and Mrs Feldman’s defences to those allegations are not made out (noting that Mrs Feldman’s contention in paragraph 4 of the defence to the effect that the Grices Road Agreement was void for uncertainty was not pressed at trial). Further, Mrs Feldman’s counterclaim fails;

(b) Frontlink has failed to prove the allegations in paragraphs 4B, 4BA, 4BB, 4C, 4E, and 4F of the statement of claim;

(c) if I am wrong with respect to (b) above, Frontlink has established that it suffered loss and damage in the sum calculated according to the revised particulars produced at trial. Accordingly, paragraphs 5 and 45A to 45E of the defence are not made out, at least insofar as to reduce any liability of Mrs Feldman to Frontlink.

Finally, having regard to my findings regarding the absence of any liability on Mrs Feldman’s part, the claims by Frontlink against Mrs Feldman and Ramarim fall away, as Frontlink has suffered no loss as a result of this conduct. Accordingly, I will make orders dismissing the proceeding, and will hear further on the form of any further order, and the question of costs.

[2016] VSC 691

30 November 2016