Golden Plains Fodder Australia Pty Ltd v Foulis T/As the Foulis Trading Trust - [2005] SASC 130

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
GOLDEN PLAINS FODDER AUSTRALIA PTY LTD v FOULIS T/AS THE FOULIS TRADING TRUST
Judgment of The Honourable Justice Anderson
8 April 2005
APPEAL AND NEW TRIAL - APPEAL GENERAL PRINCIPLES - INTERFERENCE WITH DISCRETION OF COURT BELOW - IN GENERAL - GENERAL PRINCIPLES - FUNCTIONS OF APPELLATE COURT
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH - CONDITIONS
Appellant an exporter of hay - respondent grew hay which he sold to the appellant - respondent brought proceedings against the appellant in the Magistrates Court for underpayment for hay - the appellant alleged that the hay provided by the respondent was of a lesser quality and the respondent was therefore only entitled to a lower price - respondent maintained that the hay he delivered was of a higher quality and that he had therefore been underpaid - evidence before the Magistrate was contradictory, and she chose to accept the respondent's evidence - held: Magistrate's conclusions were available to her on the evidence - no error demonstrated - appeal dismissed.
Warren v Coombes (1979) 142 CLR 531; Fox v Percy (2003) 214 CLR 118, considered.

GOLDEN PLAINS FODDER AUSTRALIA PTY LTD v FOULIS T/AS THE FOULIS TRADING TRUST
[2005] SASC 130

ANDERSON J This is an appeal from a Magistrate which involves the alleged breach of a contract for the sale of hay. The respondent claimed that he was underpaid for hay which he delivered to the appellant in November 2001. The respondent farms land in the mid-north of South Australia and produces hay including hay for export.
The appellant is an exporter of hay and has various markets for its hay, but it mainly sells its best quality hay in Japan. There are reasonably strict requirements in relation to the quality of the hay because a premium price is paid for the export quality hay. All hay is graded, and the appellant had three premium and three lesser grades, and tested all hay before deciding into which grade it fell. In broad terms, the difference in price is that the premium quality hay sells for about double the price of the lower grade hay.
In this case the respondent was successful in proving before the Magistrate that he had delivered the premium grade hay but had only been paid for the lower grade. The difference in price was $11,427.36 which the Magistrate awarded to the respondent together with interest and costs.
The parties entered into the contract in writing in September 2001. The contract required the respondent to supply hay to the appellant from the most productive land at the respondent’s farm, namely, the Gum Camp Paddock. The area involved was approximately 130 ha.
As part of the contract, the respondent had to complete a Paddock Information Sheet in relation to the hay and record details of when the hay was cut, that is, the starting and finishing date, and likewise record the details for the baling of the hay.
At the relevant time there were some interruptions with the cutting because of rain. Rain falling after the hay is cut can affect the quality of the hay, and therefore is referred to in the Paddock Information Sheet as a “rain event”. At the time of one particular “rain event”, only 10.6 ha of Gum Camp Paddock had been cut and it was conceded by the respondent that the “rain event” resulted in a lower grade of hay. It was the contention of the respondent that the remainder of the crop was not rain-affected and was therefore of a higher quality. The hay to be delivered was therefore divided into Sections A and B within that paddock, with A being the affected hay and B the unaffected hay. Only a relatively small percentage was affected according to the respondent.
The appellant claimed that it tested the hay after delivery and found it to be of lower quality, and therefore when payment was due it only paid the respondent at the rate applicable for the lower quality hay. The respondent sued the appellant for the difference. The respondent’s case was that the appellant had incorrectly downgraded approximately 200 tonnes of hay, and that the appellant had therefore been paid at the wrong price. In all, a total of 575 tonnes of hay was delivered in the period between 1 November and 15 November 2001. Approximately 200 tonnes were alleged by the respondent to have been of high quality but payment was made by the appellant on the basis of lower quality hay. That was how the dispute over $11,427.36 arose.
There is no dispute that those 200 tonnes were delivered and were paid for at the lesser rate. The dispute is where the hay came from within the Gum Camp Paddock and whether it was damaged by rain or was inferior in some other way as deposed to by the appellant.
When solicitors acting on behalf of the respondent wrote to the appellant, they maintained that the 200 tonnes were delivered on three days, namely, 122.8 tonnes on 3 November 2001, 33.26 tonnes on 4 November, and a further 44.42 tonnes on 5 November.
The response from the appellant was that it had correctly downgraded the hay. The solicitors for the respondent pointed out that the appellant had failed to answer the suggestion that the hay was all from one section of Gum Camp Paddock, namely, Section B, and asked for confirmation that the hay from that section was of the higher quality.
There was no response to this request, and finally, before issuing proceedings, the solicitors for the respondent asked the appellant to confirm from their records the section number for the deliveries totalling 200 tonnes referred to earlier. There was no response to that request.
The learned Magistrate had evidence before her to support the following:
1The normal procedure was that the truck drivers engaged by the respondent would advise the weighbridge operators of the appellant which section the hay was from and it would be noted on the weighbridge dockets;
2The respondent knew he had to advise the appellants where the hay was from so that it could be so noted;
3The respondent omitted on this occasion to tell the drivers but then informed the weighbridge himself that the hay from that point on would be Section B hay until further notice;
4There were in fact several communications from the respondent to the appellant at the relevant times supported by his telephone records;
5The respondent’s evidence of the order of cutting the hay and baling it would tend to indicate that when Section B deliveries commenced they would logically follow in sequence until all that hay was delivered.
The learned Magistrate was therefore able to conclude that the loads in question on 3, 4, and 5 November 2001 were Section B hay, and that the respondent had telephoned the weighbridge to advise them accordingly.
The appellant, by means of reconstruction from various records, attempted to show that a similar amount of Section B hay was delivered to the appellant’s competitor Gilmac, and that perhaps an error had been made with approximately 200 tonnes delivered to the wrong place. Counsel produced, by way of final submission, a document to illustrate that fact. Whereas there might be approximately the same number of disputed bales illustrated by this summary and delivered to Gilmac, it is, as the Magistrate said, merely an exercise after the event to attempt to rationalise the deliveries. No one from Gilmac was called in relation to any explanation for the tonnage delivered to it and whether it was an expected delivery or one over and above its expectations.
In my view, there was good reason for the learned Magistrate to find that the evidence of the respondent as to the logical sequence of cutting and baling, followed by his evidence of the notification to the weighbridge as support for the finding that the Section B hay was delivered to the appellant when the respondent said it was. This finding followed from the Magistrate’s acceptance of the evidence of the respondent.
The learned Magistrate had the opportunity of observing the witnesses, and in particular the respondent who was in the witness box for quite a long time. The hearing proceeded over six days. The learned Magistrate made certain findings which were vital for her conclusions. As indicated, the respondent gave evidence as to the pattern of cutting and baling the hay in the Gum Camp paddock. The respondent claimed that the weighbridge dockets did not accurately reflect the correct details of the delivery of Section B hay, but that his evidence based on what had actually occurred was accurate.
The learned Magistrate found as follows at [45]:
“I accept the plaintiff’s evidence of the sequence of cutting and baling in Gum Camp in preference to all other witnesses on this topic. I thought the defendant’s hypotheses were more exploratory than factual and that much theory was advanced to match the weighbridge dockets. I find that for the purpose of resolving this dispute, the weighbridge dockets are imprecise and unreliable.”
The appellant in this court, and before the Magistrate, spent a considerable amount of time analysing the weighbridge dockets and reconstructing the most likely series of events in an attempt to show that the finding set out above by the learned Magistrate was incorrect.
Her Honour at [43] summarised the sequence of deliveries recorded on the dockets as follows:
“1 November. 7 deliveries of Gum Camp, the first 6 entries do not record either Section A or Section B and the last delivery was altered, split two entries with the second recorded as from ‘Gum Camp B’. The last delivery was graded P3.
3 November. 5 deliveries from Gum Camp, not described as Section A or Section B. All deliveries were graded A2.
4 November. 1 delivery from Gum Camp, not described as Section A or Section B but graded A2.
5 November. 3 deliveries, the first from Gum Camp not described as from Section A or section B but graded as A2. The second delivery noted as Gum Camp B and graded P3 and the final delivery that day from Gum Camp not described as from Section A or Section B.”
The learned Magistrate, in accepting the plaintiff’s evidence of the pattern of cutting and baling of the hay, found it “implausible that he did not transport the first hay cut and baled and then follow in sequence of the next hay cut and baled”. In addition, the learned Magistrate accepted the plaintiff’s evidence that the hay was transported to the appellant as soon as possible. The learned Magistrate made three particular findings which are relevant to her ultimate decision.
The learned Magistrate said at [46]:
“I find it logical and probable that the loads shown on docket 5023 come from Section A.”
She then made a further finding as follows at [47]:
“I find the delivery on 1 November involved a split load, which was when Section B deliveries commenced. I find the sticker ‘Section 2 – no rain 2-11-01’ was written by Mr Coombe during his testing of hay that was not rain affected.”
Finally, in relation to the same topic, the learned Magistrate found at [48]:
“I find the deliveries on 3 November involved too much hay to support the contention that this hay came from Section A.”
The learned Magistrate came to a decision which, in my view, was quite open to her on the evidence. She was entitled to accept the respondent’s evidence and reject the appellant’s evidence. She was entitled to use her impressions as to what was the most likely series of events, having regard to the evidence and having regard to the documentation which she analysed in some detail.
In this court, the appellant argued that the inferences drawn by the learned Magistrate should be reversed, and referred to the principles in an appeal by way of rehearing. The High Court has said in Warren v Coombes (1979) 142 CLR 531, in the joint judgment of Gibbs ACJ, Jacobs and Murphy JJ at 551:
“[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it.”
This statement was approved in Fox v Percy (2003) 214 CLR 118 at 127-8 where Gleeson CJ, Gummow and Kirby JJ said:
“After Warren v Coombes, a series of cases was decided in which this Court reiterated its earlier statements concerning the need for appellate respect for the advantages of trial judges, and especially where their decisions might be affected by their impression about the credibility of witnesses whom the trial judge sees but the appellate court does not. Three important decisions in this regard were Jones v Hyde, Abalos v Australian Postal Commission and Devries v Australian National Railways Commission. This trilogy of cases did not constitute a departure from established doctrine. The decisions were simply a reminder of the limits under which appellate judges typically operate when compared with trial judges.
The continuing application of the corrective expressed in the trilogy of cases was not questioned in this appeal. The cases mentioned remain the instruction of this Court to appellate decision-making throughout Australia. However, that instruction did not, and could not, derogate from the obligation of the courts of appeal, in accordance with legislation such as the Supreme Court Act applicable in this case, to perform the appellate function as established by Parliament. Such courts must conduct the appeal by way of rehearing. If, making proper allowance for the advantages of the trial judge, they conclude that an error has been shown, they are authorised, and obliged, to discharge their appellate duties in accordance with the statute.” (footnotes omitted)
One important aspect of her Honour’s reasoning is contained in paragraph [41] of her reasons. Her Honour says:
“I find on the evidence that the plaintiff’s complaint stems from the Tax Invoice (P7) and his belief that his Section B hay had not been properly graded. It was significant that the defendant’s witnesses had no memory of the context of the plaintiff’s complaint. They remember the plaintiff was displeased, they remember there being a complaint about the price, but none of the defendant’s witnesses recollect the plaintiff was complaining about the error in the Tax Invoice’s account of how much hay came from Section B. I can only conclude by the lack of recollection and the lack of detail about attempts to resolve the dispute that the defendant concluded that the plaintiff’s grievance was not genuine or that his behaviour towards them led them to step back from a proper process of resolution. It is open to suggest that the defendant’s officers were not really listening, given they were not clear about what the complaint was. I find that it was not about the overall grading of the hay but the plaintiff’s belief that the defendant had failed to account for a large quantity of Section B hay and had wrongly graded it, assuming it had come from Section A.”
This is important, in my view, because it fits in with the Magistrate’s belief that the appellant attempted to reconstruct around the weighbridge dockets and around imperfect recollections in an attempt to defeat the respondent’s claim. I appreciate that the respondent also had to reconstruct, but his reconstruction was based on his practice and procedure in relation to the cutting and baling procedures in that particular paddock. The learned Magistrate was quite entitled to prefer the evidence of the respondent over that of the appellant and its witnesses.
As previously indicated, the evidence of practice in the business and in particular related to the drivers indicating to the weighbridge operators which section of the property the hay came from was important. This was a matter of practice, apparently, and the respondent had indicated that he had informed the weighbridge that the hay would be Section B hay until further advised after he realised he had omitted to instruct the drivers where the hay came from.
The respondent made several telephone calls and faxed information regarding the hay, all of which were important aspects of the Magistrate’s conclusions. The respondent says he phoned to actually indicate when the delivery from Section B was to commence. His phone records indicate that between 31 October and 12 November he telephoned 11 times, and this was important for the Magistrate in finding that the respondent was conscientious in keeping the appellant informed about what was happening. Her Honour found that the phone calls were made, although none of the appellant’s witnesses could remember the calls.
The weighbridge dockets themselves are not conclusive, and contain mistakes on their face. Whilst these mistakes are not relevant to the actual details of the dispute before the court, what the dockets do show is that mistakes are made, and that not everything is recorded accurately on these dockets by the employees of the appellant.
The learned Magistrate found that the dockets were imprecise and unreliable, and accepted the respondent’s evidence of the sequence of cutting and baling in Gum Camp. Her Honour preferred the plaintiff’s evidence on all topics. She found that there was no evidence of any significant mistake or of any intention by the respondent to mislead. She found him to be a good historian and found that he gave his evidence in a straightforward manner without embellishment. She found that he was a conscientious and an impressive witness.
The matters argued by the appellant in this appeal are related to inferences of fact which it is suggested should have been made by the learned Magistrate.
The discrepancy in relation to the delivery of the 200 tonnes and where it came from was the focus of the appeal. In addition, I was asked to draw the inference that the 200 tonnes of Section B hay went by mistake to Gilmac.
No one from Gilmac was called, as I have already indicated, and therefore the argument depends on drawing inferences from documents, principally from those who cut and baled the hay. Her Honour dealt with all of that evidence but found it inconclusive.
It is possible that those inferences could have been drawn from the evidence. In other words, they were possible inferences. Her Honour’s conclusions were available on the evidence, in my view, and were reasonable inferences.
This is not a case where it is suggested that the learned Magistrate has overlooked any evidence or that she has wrongly taken any matters into account.
In relation to the evidence as to the testing of the hay, led in some detail by the appellant, the learned Magistrate rejected it. Her Honour dealt with this aspect in some detail in her reasons. She summarised all the evidence given on behalf of the appellant relating to the testing it performed, and concluded at [50] and [51]:
“The defendant’s testing of the plaintiff’s hay in December 2001 and April 2002 is flawed because of the defendant’s purpose in conducting tests and its inability to present a chain of evidence about the testing. On the defendant’s evidence, its officers were unaware that the plaintiff wanted a review of how much Section B hay had been delivered. The defendant’s officers were doing a reassessment of the quality of all hay provided.
The defendant’s witnesses were unable to prove on balance that the December 2001 and April 2002 testing was on the loads in dispute delivered between 1 November and 5 November. The Laboratory Reports tendered by the defendant (D8, D11, D13, D15, D17, D19 and D20) did not advance the defendant’s case because there was no chain of evidence about where each sample came from.”

It seems to me, on reviewing that evidence, that her Honour was quite entitled to reject it for the reasons she gave.
In all the circumstances, it is my view that there was ample evidence to support the findings of the learned Magistrate, and this is not a case in which this court should interfere with either the findings of fact or any inferences to be drawn from those findings. Neither should new inferences be drawn. The appeal is therefore dismissed.