Gottabee Pty Ltd v Lawder Pty Ltd - [2019] SADC 155

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
GOTTABEE PTY LTD v LAWDER PTY LTD
[2019] SADC 155
Judgment of His Honour Judge O'Sullivan
30 October 2019
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS
The plaintiff and defendant entered into a contract for the design, supply and installation of an irrigation system for a vineyard in the Coonawarra region of South Australia.
The plaintiff alleges that it was a term of the contract that the irrigation system be designed, supplied and installed by 30 September 2014. Further, the plaintiff alleges that it was a term of the contract that it was not required to pay for the irrigation system until the second week of October 2014.
The defendant denied that it was a term of the contract for the irrigation system to be designed, supplied and installed by 30 September 2014. The defendant further alleged that it was entitled to wait to supply and install the irrigation system until payment was made.
The plaintiff sought relief for breach of contract by virtue of the fact that the irrigation system was not supplied and installed by 30 September 2014.
Held:
1. It was not a term of the contract that the irrigation system would be designed, supplied and installed by 30 September 2014;
2. The defendant was entitled to wait to install and commission the irrigation system until payment was made in the second week of October 2014;
3. The plaintiff’s claim is dismissed.

GOTTABEE PTY LTD v LAWDER PTY LTD
[2019] SADC 155
Introduction

This is an action by the plaintiff for breach of contract. The issue is whether there was a contractual term between the parties, that the defendant was to supply and install an irrigation system for a vineyard in the Coonawarra region of South Australia known as the ‘Julia Hill Vineyard’, before the end of September 2014.
The plaintiff also pleads causes of action in misleading and deceptive conduct and misrepresentation, however I was informed at the commencement of the trial that these causes of action are not pursued.[1]
[1] T3.11.
By orders made by consent dated 2 October 2018, the issue of quantum is not to be determined at this time[2] and the only matter before the Court concerns liability.
[2] Trial Book, p39 at [4]; T3.19.
Further, I was informed at the commencement of the trial by the plaintiff’s counsel, that the defendant’s counterclaim had resolved and did not require determination.[3]
[3] T4.20.
Parties
The plaintiff, Gottabee Pty Ltd, is the registered proprietor of the property situated in Hundred of Penola part sections 530 and 442 situated in the Australian Wine Geographical Indication area of Coonawarra, and known as the ‘Julia Hill Vineyard’. At all material times, the plaintiff was represented by Mr Peter Thompson (‘Mr Thompson’) who is the plaintiff’s managing director.
Mr Thompson is aged 68 years and has spent his working life associated with vineyards, vineyard management and vineyard establishment. He was first employed in the wine industry in 1971 as a cellar hand at Yalumba winery in Angaston, South Australia. He subsequently worked at Chateau Tanunda, Seppeltsfield and Vindana before purchasing his own vineyard in 1973. Since that time, he has worked continually in the viticulture industry, including purchasing and selling numerous vineyards throughout Australia.
Since 1992, Mr Thompson has also established other business interests including mango plantations and labour hire. In the course of his business dealings, he deals regularly with contractors, suppliers, wholesalers, winemakers, mechanics and various irrigation suppliers.[4]
[4] T114.7.
The defendant, Lawder Pty Ltd, is a designer, supplier and installer of irrigation equipment and trades under the name ‘Lawrence’s Irrigation’. The defendant was at all material times represented by Mr Mick Derrington (‘Mr Derrington’), one of the defendant’s three directors.
Lawrence’s Irrigation is based in Naracoorte, South Australia and provides irrigation services in the south-east of South Australia.[5] It designs and installs irrigation systems for domestic, rural and commercial clients.[6] On smaller projects it designs the irrigation system, whereas on larger projects it involves a third party (‘Netafim’) to carry out the design.
[5] T161.20.
[6] T159.11.
Lawrence’s Irrigation also provides irrigation products such as drippers, pop-up sprinklers, PVC pipe, PVC fittings and both above ground and submersible pumps.[7] The installation of irrigation systems forms the majority of Lawrence’s revenue.
[7] T160.6.
Mr Derrington has been involved with the defendant since September 2010. Previously he worked for another irrigation company, Water Dynamics, also based in the south-east of South Australia and in a similar role to that which he now occupies at Lawrence’s Irrigation.
The pleaded case and issues arising
The plaintiff pleads and the defendant admits, that during the period February 2014 to May 2014 the plaintiff entered into a contract with the defendant which was partly oral and partly written (‘Contract’).[8] There is no dispute that pursuant to the Contract, the defendant agreed to design, supply and install an irrigation system (‘irrigation system’) for the Julia Hill Vineyard for the sum of $72,560 (‘Contract Sum’) and that ultimately, the irrigation system was not installed by the defendant.
Pleadings
[8] Statement of Claim dated 29 January 2016 [3], Second Amended Defence and Counterclaim dated 14 May 2018 [3.1].
The central dispute in this matter concerns the terms of the Contract and in particular, whether it was a term of the Contract that the irrigation system would be designed, supplied and installed before the end of September 2014.[9] It is alleged by the plaintiff that this term was both oral and written.[10] It is also alleged that this term was an ‘essential’ term and was for ‘installation and full completion’ of the system by the end of September 2014.[11]
[9] Statement of Claim, [3], [4].
[10] Statement of Claim, [3], [4].
[11] Statement of Claim, [3].
In its defence, the defendant denies that it was a term of the Contract that the vineyard irrigation system was to be designed, supplied and installed by the end of September 2014.[12]
[12] Defence, [4].
Apart from pleading the essential term in paragraphs 3 and 4 of its Statement of Claim, the plaintiff also pleads that it could not pay for the irrigation system until the second week of October 2014,[13] and that this was also an essential term of the Contract. There is no pleading as to whether this term is oral or written, however the defendant admits that payment was to be made by the plaintiff in the second week of October 2014. The defendant pleads that the irrigation system would not be supplied and installed until the plaintiff had paid it the Contract Sum.[14]
[13] Statement of Claim, [4], [5].
[14] Defence, [3.2], [5].
The defendant further pleads that payment to the defendant for the irrigation system was to be made by mid-October 2014, notwithstanding the defendant’s quotation for the irrigation system which was accepted by the plaintiff contained an express term that ‘a bank guarantee [is] to be shown, or a 50% deposit paid in full prior to the order of any materials with the balance to be paid within 21 days of invoice’.[15]
[15] Second Amended Defence, [8.3.2].
The alleged essential terms are not particularly well pleaded. I understand the reference in paragraph 4 of the Statement of Claim to ‘full completion’ to mean installed and ready for use. I take the reference to ‘could’ in paragraph 5 of the Statement of Claim to mean that the plaintiff would not be required to pay for the irrigation system until the second week of October 2014. Further, although the plaintiff’s pleaded case is that the irrigation system was to be designed, supplied and installed by the end of September 2014, the plaintiff conducted its case and led evidence on the basis that the irrigation system was to be designed, supplied and installed by 30 September 2014.
Issues
The issues between the parties may be stated as follows:
1Was it a term of the Contract that the irrigation system would be designed, supplied and installed by 30 September 2014? If yes, was it an essential term?
2If yes to issue 1 above, was it a term of the Contract that notwithstanding the requirement for the irrigation system to be designed, supplied and installed by 30 September 2014, the plaintiff would not be required to pay for it until the second week of October 2014? If yes, was it an essential term?
3If it was not a term of the Contract that the irrigation system would be designed, supplied and installed by 30 September 2014, was the defendant entitled to wait to supply and install the irrigation system until after it was paid in the second week in October 2014?
4If yes to issue 1 above, is the defendant in breach of the Contract?
Witnesses
The plaintiff and the defendant called one witness each, being Mr Thompson for the plaintiff and Mr Derrington for the defendant.
Generally, I considered that both witnesses were truthful and attempted to assist the Court however, I formed the view that Mr Thompson was re-constructing various parts of his evidence to suit his case. In particular, notwithstanding he is an experienced businessman who had engaged in numerous contracts over many years, he repeatedly referred to telephone conversations with Mr Derrington in non-specific terms, referring on a number of occasions to where he ‘would have’ had a telephone call. I bear in mind his use of the expression ‘would have’ may be a turn of phrase, however he did not produce any notes, emails or any written record confirming the conversations. I also bear in mind the difficulty he faced given the passage of time since the conversations, however I note that he communicated with Mr Derrington by email on some occasions, yet chose not to on other occasions which were important and where one might have expected him to communicate in writing.
Much of Mr Derrington’s evidence was limited as he could not recall the events which occurred in 2014, however when propositions were put to him, as to for example the timing of the installation of the irrigation system, he was adamant in his view, based on what he described as his long-standing practice.
Where I prefer the evidence of one witness over another in these reasons, I indicate the evidence I prefer.
Facts
In these reasons, where I refer to Mr Thompson or Mr Derrington doing or saying anything, I do so on the basis they are acting on behalf of the plaintiff or defendant respectively.
There is no dispute that in September 2013, the plaintiff purchased the property upon which the Julia Hill Vineyard is located. The property is 100 acres, 35 acres of which was under vine at the time.
Prior to purchasing the property, the vineyard was, in Mr Thompson’s words, ‘very run down’. The plaintiff planned to restore the vineyard and to extend it by establishing a further 50 acres of vineyard using rootlings. In order to achieve this, Mr Thompson’s initial intention was to obtain cuttings, callus them, place the callused cuttings in a nursery for approximately 12 months and then plant them out in the new vineyard as rootlings in October 2015.
Mr Thompson explained in his evidence that callused cuttings are vine canes which are cut in autumn at a length of between 300 – 375mm, with the top cut at a 45 degree angle and the bottom cut flat. The canes are buried upside down, under 300mm to 450mm of top soil and left through the winter. This process causes the flat bottom of the cutting to callus, which enables roots to grow out of the side of the canes once they are planted out. The cuttings are dug up at the end of September and planted in a nursery where the roots grow and the vines shoot and grow leaves before becoming dormant the following winter. If that occurs, they are then referred to as rootlings and are planted out as such. An alternative is for the callused cuttings to be planted out in Spring before bud burst and have their first growing season in the vineyard. In that case, they are referred to as callused cuttings.
Mr Thompson said in evidence that he first discussed his intention to expand the Julia Hill Vineyard with Mr Derrington in late 2013, soon after the property was purchased. He said this conversation occurred in Mr Derrington’s office in Naracoorte. According to Mr Thompson, he and Mr Derrington discussed the plaintiff purchasing an irrigation system and having a design for the extension of the vineyard drawn up for that purpose. On this occasion, Mr Thompson told Mr Derrington that he intended to plant the vineyard in October 2015, after establishing rootlings in a nursery.
Initial discussion about an irrigation system
In February 2014, Mr Thompson said he commenced negotiations with Mr Derrington for the defendant to design, supply and install an irrigation system on 24 hectares (approximately 50 acres) of undeveloped land on the plaintiff’s property. At this time, Mr Thompson said he also commenced negotiations with Mr Derrington for the installation of pop-up garden sprinklers around his house which was located on the same property as the Julia Hill Vineyard.
Although Mr Thompson gave evidence that he thought that he first became acquainted with Mr Derrington sometime after 2006 when Mr Thompson bought a different vineyard in the Coonawarra, he clarified that their dealings were limited to the purchase of irrigation supplies. He said in evidence that February 2014 was the first time he had engaged the defendant, or dealt with Mr Derrington, in relation to the design, supply and installation of an irrigation system as a whole.
Mr Derrington said that he had known Mr Thompson for many years prior to 2014. He could not recall exactly how long, but prior to this project he had very rarely dealt with him in his professional capacity. Their dealings were limited to the sale of sundry items for vineyard irrigation systems. Mr Thompson had a standard trading account with the defendant which required payment in 30 days.[16]
[16] T176.30.
Mr Derrington gave evidence that he could not recall when Mr Thompson first approached him about the installation of the irrigation system in question. He was taken to an email dated 3 March 2014[17] in which Mr Thompson provided a copy of the vineyard extension plan, and agreed that this was when they first had a conversation about the project.[18] His recollection of the conversation however, was limited to Mr Thompson asking for an irrigation system to be installed for the new vineyard.[19]
The evidence about the 30 September 2014 deadline
[17] Exhibit P1, p10.
[18] T177.31.
[19] T177.37.
The plaintiff alleges that the defendant agreed that the work of designing, supplying and installing the irrigation system would be completed by 30 September 2014. That allegation is denied by the defendant.
Whilst Mr Thompson could not recall how or when it arose, he said in evidence that a conversation occurred between he and Mr Derrington about trying to gain a year in fruit production by planting out the callused cuttings in the vineyard after they had been dug up, thereby avoiding the need to convert the callused cuttings into rootlings over a 12 month period in a nursery. He continued that he and Mr Derrington came to an agreement over the course of a few conversations, that there was sufficient time to establish the vineyard with callused cuttings in 2014 if the irrigation system was installed early.[20] He did not explain what ‘early’ meant but I understand it to be by 30 September 2014.
[20] T78.25 – T82.2.
Mr Thompson said he could not recall over what period these conversations occurred other than to say that some of the conversations had occurred prior to the email on 3 March 2014. Mr Thompson also alleges that during the course of these conversations, Mr Derrington said words to the effect that ‘if we are quick enough, if we do it right, we can get the design done and the irrigation materials in place for it to be done’.[21]
[21] T81.25-29.
Mr Derrington had no recollection of any agreement that the defendant was to install the irrigation system by 30 September 2014, and said that it was never raised. In particular, he had no recollection of such a deadline being raised by Mr Thompson prior to receiving a letter from the plaintiff’s solicitors.[22] He did not say when that was.
[22] T209.34 – T210.13.
Mr Derrington said that it was his practice not to agree to deadlines. He went on to explain that had a deadline been raised it was definitely something he would remember.[23] He said he could not guarantee a deadline because there are significant variables that can delay a project including rock type, weather, machinery malfunction, as well as the discovery of unknown underground cabling and piping.[24] He said that the defendant’s quotes for the plaintiff’s project did not mention a deadline for those reasons.[25]
The design proceeds and quotes are provided
[23] T219.14.
[24] T169.5 – T173.23.
[25] T193.19.
There is no dispute that on 5 March 2014, Mr Derrington emailed Mr Matthew Forward at Netafim requesting a design to be prepared for the Julia Hill Vineyard.[26] Attached to the email was a design brief and existing drawings of the property. Mr Derrington explained in his evidence that his usual practice after receiving the design from Netafim was to check it himself, have the client confirm that the client is happy with it,[27] and then prepare a quote.
[26] Exhibit P1, p12.
[27] T167.20.
I note that the email sent 5 March 2014 from Mr Derrington to Netafim (Exhibit P1, p12), finishes with the statement that, ‘This bloke wants to go to the bank in about one week to obtain finance, so we are on a tight deadline but it is an easy one I reckon’.
On 6 March 2014 Mr Derrington emailed Mr Thompson with a cost estimate for the Julia Hill Vineyard.[28] The email explained that Netafim was delayed in providing a design for the Julia Hill Vineyard and rather than a quote, he had done an estimate which was attached to the email.[29] The estimate is in the sum of $175,000 plus GST. I find that the provision of a cost estimate on 6 March 2014[30] to which I have referred as opposed to a quote, arises from the plaintiff requiring the cost of the irrigation system for the purpose of an application for finance.
[28] Exhibit P1, p18.
[29] Exhibit P1, p19.
[30] Exhibit P1, p18.
Mr Thompson said he read this email and the attached letter.[31] He stated that he was still making further enquiries about frost protection as he needed a lot more water for use for frost protection.
[31] T83.6.
Under cross-examination, Mr Thompson was taken to the estimate,[32] dated 6 March 2014, prepared by Mr Derrington which stated that it ‘does not include installation of the tube or clipping of the tube to the wire’. Mr Thompson explained that this was separate to the installation of the irrigation system as the installation of the dripper tube is often done by a contractor.[33] In this case, he intended to employ his own contractor to complete the task. He denied that he intended to do the below ground installation himself,[34] although in an email from Mr Derrington to Mr Thompson dated 7 March 2014, Mr Derrington refers to Mr Thompson mentioning that he was going to install the entire Julia Hill Vineyard system himself including underground.[35] I find that the plaintiff did not intend to perform the underground installation and ultimately it was the defendant who was to do that work.
[32] Ibid.
[33] T118.20.
[34] T118.34.
[35] Exhibit P1, p21.

On 18 March 2014[36] and 1 April 2014[37] Mr Derrington emailed Mr Thompson in relation to the pump for the system. Mr Thompson did not reply to either email. He said that he did not reply because of the cost involved and his hesitation about the frost protection system. He said there ‘would have’ been conversations during this period in which Mr Derrington was ‘explaining the quotes which he was giving me, asking for me to make a decision as time was important’.[38]
[36] Exhibit P1, p25.
[37] Exhibit P1, p29.
[38] T86.25-33.
No quotes were provided by the defendant (as opposed to estimates which were provided prior to the detailed design being received from Netafim) until 2 April 2014. On that basis, I consider Mr Thompson to be mistaken when he said in evidence Mr Derrington was ‘explaining the quotes which he was giving him’ in the period between 18 March 2014 and 1 April 2014. I accept however, that Mr Thompson may have been referring to estimates, as opposed to quotes, provided by Mr Derrington.
There is no dispute that by 2 April 2014, the design for the vineyard irrigation system had been received from Netafim and on that date Mr Derrington sent an email to Mr Thompson attaching a letter containing a quote for the project (‘First Quote’) which contained a number of options.[39] The email concluded:
P.S. I can show you a copy of the design if you call into the shop or if I visit you, however I can’t give you a copy until such time as you accept our quote.
[39] Exhibit P1, p30 – 35.
The First Quote itself made no mention of a time by which the irrigation system was to be supplied and installed. Under the heading ‘Terms and conditions’ the letter stated:
Terms of Trade: A bank guarantee plus 50% deposit paid in full prior to the order of any materials with the balance to be paid within 21 days of invoice…
Mr Derrington explained that the ‘Terms of Trade’ was a standard term for the defendant for all large projects.
There were amendments to the design of the Vineyard following the defendant’s quote and when Mr Thompson said in evidence that he ‘would have’ had conversations during this period in which Mr Derrington was ‘explaining the quotes which he was giving me, asking for me to make a decision as time was important’,[40] to which I referred above, I find that these conversations occurred after the First Quote was received from the defendant.
[40] T86.7-38.
On 20 May 2014, Mr Derrington emailed Mr Thompson a revised quote (‘Revised Quote’) for the Julia Hill Vineyard.[41] The Revised Quote related to the use of the existing pump at the vineyard, instead of the installation of a new one. Under the heading ‘Terms and conditions’ the Revised Quote now read:
Terms of Trade:
A bank guarantee to be shown or 50% deposit paid in full prior to the order of any materials with the balance to be paid within 21 days of invoice. (emphasis added)
[41] Exhibit P1, p60.
Mr Thompson recalled reading the email and the quote.
In relation to the requirements for payment, Mr Thompson said that he had face-to-face conversations with Mr Derrington in relation to this matter. He said that he informed Mr Derrington that the Julia Hill Vineyard’s finances relied on income from his other properties following harvest, which was paid on 30 June of each year, and that he would not be in a position to pay for the irrigation system until after 30 September 2014.[42]
[42] T89.3.
Mr Thompson said in evidence that he thought that after reading the Revised Quote he ‘would have contacted Mr Derrington straight away saying its terms were not what we had agreed to, that we could not pay until the second week in October, and those terms and conditions weren’t right and I was not signing it’.
Mr Thompson thought this conversation occurred over the telephone and gave evidence that Mr Derrington said that this payment arrangement was acceptable,[43] but that Mr Derrington needed to order the products to get it completed by the 30 September 2014 deadline.[44] I deal with the question of the 30 September 2014 deadline later in these reasons however, I accept Mr Thompson spoke to Mr Derrington prior to 20 May 2014 in relation to the plaintiff being unable to pay for the irrigation system until the second week of October.
[43] T89.35.
[44] T94.7 – T95.14.
On 26 May 2014 Mr Thompson replied to Mr Derrington’s email dated 20 May 2014 stating:[45]
Hi Mick,
This Quote is ok.
Please go ahead and do your ordering, but remember we cannot pay for it until second week of October 2014.
Thanks.
[45] Exhibit P1, p65.
Mr Derrington replied 20 minutes later stating:[46]
Thanks very much for the order Pete, we really appreciate it. I’ll touch base closer to the date and if we are quiet will get onto it a bit earlier, knowing you can’t make payment until mid-October…
[46] Exhibit P1, p65.
Following this email exchange, Mr Thompson said he could not recall when he and Mr Derrington next had a conversation. As far as Mr Thompson was concerned the deal had been completed.[47]
[47] T98.19.
It was Mr Thompson’s evidence that he did not sign the last page of this quote. He recalled that Mr Derrington never asked him to do so in any conversation. However, he acknowledged that it was requested in the letter which accompanied the email dated 20 May 2014 from Mr Derrington.[48]
The period after 26 May 2014
[48] T96.10.
An order to Netafim from the defendant dated 29 May 2014 requested that the material not be delivered until 1 September 2014.
Invoices from Lawrence’s Irrigation to various suppliers, including DM Plastics dated 30 July 2014[49] and Iplex dated 5 August 2014,[50] for the delivery of spiral clips and PVC pipe respectively called for the delivery and invoicing of the products in the first week of October.
[49] Exhibit P1, p68.
[50] Exhibit P1, p69.
Mr Thompson said in evidence he ‘would be ringing Mick on a regular basis to make inquiries as to how it was going, whether we were on target, whether we were on time’.[51]
[51] T98.13-24.
Mr Thompson also said in evidence he recalled a telephone conversation with Mr Derrington when Mr Thompson was in Katherine in the Northern Territory sometime after 26 May 2014. He said in evidence that he telephoned Mr Derrington to ask what was happening with the project and when it was going to be started. He said that Mr Derrington told him that ‘It’s getting there. It will be done.’.[52]
[52] T99.35.
Mr Thompson said in evidence that on the basis of the agreement with Mr Derrington that the irrigation system would be supplied and installed by 30 September 2014, Mr Thompson took steps to prepare the Julia Hill property for the installation of the vineyard. During the months of June to August 2014, Mr Thompson used some of his contracting staff to take cuttings off the existing vineyards. He said that the cuttings were then put into bundles of 50 to 100 and buried in the ground at Julia Hill Vineyard.
Mr Thompson gave evidence that apart from taking the cuttings, the plaintiff also removed internal fencing, cleared trees, levelled the property, had surveyors peg out the vineyard and installed some of the posts with such work being completed at the end of August 2014.[53]
[53] T102.2 – T103.4.
During the middle of September 2014, Mr Thompson said he began making enquiries with other irrigation suppliers to ascertain whether it was possible to have an irrigation system installed by the end of September. He contacted a ‘loyal source’ in the Barossa Valley with whom he had dealt before. He was advised that they could not provide a system by the required date.[54] The loyal source was not identified. Mr Thompson said he did so because ‘it became obvious it wasn’t going to go in’.[55]
[54] T103.29.
[55] T104.5-9.
Mr Thompson said that he contacted Mr Derrington just prior to 30 September 2014. He questioned where the system was and was informed that it was still coming. He stated that there was no discussion as to payment in this conversation.[56] Why Mr Thompson should contact Mr Derrington just prior to 30 September 2014 having made enquiries with other irrigation suppliers in mid-September 2014 is unexplained.
[56] T105.9.
On 28 October 2014, Mr Derrington emailed Mr Thompson[57] in which he stated:
Attached is the invoice for the Julia Hill Project. Once you have paid this in full, I can release the tube & Pipe which have been made & is sitting in the depot ready for dispatch. I will then also order the rest of the materials.
Please note, I have also attached four invoices dating back to May which need to be paid ASAP please.
[57] Exhibit P1, p73.
That email was sent at a time when, if it had been a term of the Contract that the irrigation system be supplied and installed by 30 September 2014, the defendant would have been in breach of that term. Nonetheless there was no response from Mr Thompson to this email about the failure to supply and install the irrigation system by 30 September 2014.
On 18 November 2014, Mr Thompson was interstate when his son contacted him to tell him that a semi-trailer full of irrigation dripper line was being delivered to the Julia Hill property.[58] Mr Thompson said after late September or 30 September he had not had contact with Mr Derrington. Self-evidently that was not correct since, as I have noted above, on 28 October 2014, Mr Derrington emailed Mr Thompson,[59] in which he attached the defendant’s invoice for the ‘supply and installation of drip irrigation system at Julia Hill Vineyard as per quote’.
[58] T103.11.
[59] Exhibit P1, p73, 74.
In any event, Mr Thompson said that it was his view that at this point the agreement had been breached. He explained that he did not contact Mr Derrington when the dripper line was delivered as he had no interest in the project until 2015 as he could no longer plant out the callused cuttings until that time.[60]
[60] T163.21.
On 2 December 2014, Mr Derrington emailed Mr Thompson requesting payment for the dripper line which had been delivered to the Julia Hill property.[61] Mr Thompson did not reply to this email either.[62]
[61] Exhibit P1, p83.
[62] T137.13.
Findings
The plaintiff’s pleaded case[63] as to the formation of the Contract is in the following terms:
3.The plaintiff agreed (orally and in writing) with the defendant during the months of February 2014 to May 2014 that the defendant would design, supply and install an irrigation system for a vineyard extension (‘the system’) on, the plaintiff’s property on or before the end of September 2014 for the sum of $72,560.00.
4.The installation and full completion of the system before the end of September 2014.
5.The plaintiff confirmed to the defendant that it could not pay for the system until the second week of October 2014. This was an essential term of the contract.
[63] Trial Book, p6 [3] and [4].
Although the plaintiff alleges that the term that the irrigation system would be designed, supplied and installed on or before the end of September 2014 was written and oral, there was no such written term.
The question of whether an oral term existed in the Contract that the irrigation system would be designed, supplied and installed by the end of September 2014 is a question of fact. It is not a question of construction of an existing term, rather it is a question of whether such a term exists. On that basis, I have considered the factual matrix surrounding the formation of the Contract. I have not relied on post-contractual conduct to determine whether the alleged contractual term existed.
I find that Mr Thompson first advised Mr Derrington of his intention to expand the Julia Hill Vineyard in late 2013. I find that in early 2014 Mr Thompson commenced negotiations with the defendant, through Mr Derrington, for the defendant to design, supply and install the irrigation system. The email from Mr Thompson to Mr Derrington dated 3 March 2014[64] is the obvious result of such conversation or conversations.
[64] Exhibit P1, p10.
It is clear that in the early to mid-part of 2014, specifically from on or about 3 March 2014 – 26 May 2014, the parties engaged in a process whereby the defendant, through Mr Derrington, had a design prepared for an irrigation system for the extended Julia Hill Vineyard, and prepared the First Quote and a Revised Quote for the plaintiff. I find the plaintiff accepted the Revised Quote in writing by his email to Mr Derrington dated 26 May 2014.[65]
[65] Exhibit P1, p65.
Notwithstanding the pleading in paragraph 4 of the Statement of Claim of ‘the end of September’, as I have noted, it is the plaintiff’s case at trial that the Contract included an essential term that the irrigation system would be supplied and installed by 30 September 2014. That is a more precise formulation than that which is pleaded, and Mr Thompson said in his evidence that the words ‘30 September’ were used in all conversations with Mr Derrington.[66] I do not accept that evidence.
[66] T93.24; T95.11.
For the reasons given by Mr Derrington, I do not accept Mr Thompson’s evidence that there was an agreement that the irrigation system would be supplied and installed by 30 September 2014. In my view, it is inherently unlikely that with a design to be prepared and with the variables Mr Derrington described, that he would have agreed to such a term.
Further, insofar as the defendant’s quotes referred to payment of a deposit and payment within 21 days of invoice, I find both Mr Thompson and Mr Derrington agreed that the plaintiff would not pay for the irrigation system until the second week of October 2014. So much so is evident from the emails between the parties dated 26 May 2014.[67] I find that the email from Mr Derrington sent 26 May 2014[68] specifically raises the possibility that if the defendant’s work was quiet, then notwithstanding no payment had been made, the defendant would start work on installing the vineyard irrigation system. That statement merely states a possibility. The fact it refers to the possibility of work starting on installing the irrigation system if the defendant’s work was quiet, notwithstanding no payment had been made, is inconsistent with a contractual term requiring installation of the irrigation system by 30 September 2014.
[67] Exhibit P1, p65.
[68] Exhibit P1, p65.
As I have said, I did not take into account post-contractual matters in determining whether the alleged term existed. Notwithstanding this, I note that the following matters are consistent with my finding.
First, in the email sent 5 March 2014 to Netafim, the reference to the plaintiff having to seek finance explains the urgency to have a design prepared and a quote provided. It is, however, also consistent with both the vineyard being planted out to callused cuttings in October 2014 or with rootlings in spring of 2015. That is because irrespective of when the planting was to occur, some capital was required for the vineyard infrastructure. The vineyard is, of course, more than simply an irrigation system, it also required, at the least, some posts and wires for the dripper line to be attached. Certainly, the cost of an irrigation system would be required to formulate the application for finance to a bank, however the fact that a quote is required for an application for finance to a bank does not, in my view, translate to or support an inference that the vineyard irrigation system had to be designed, supplied and installed by 30 September 2014.
Second, as to the timing, Mr Derrington explained that had payment been received he could have proceeded with the installation almost immediately.[69] He estimated that, subject to any issues arising, the irrigation system could have been installed in one to two weeks. He said that in 2014 he had employees available to install the system. That suggests that although no deadline had been agreed, the issue was not availability of resources to carry out the work. I accept that evidence.
[69] T209.7.
Third, I would have expected there to have been some confirmation or other incidental reference in writing, consistent with the requirement to have the installation of the irrigation system completed by 30 September 2014. The absence of any such confirmation or incidental reference in an email or any other written communication in circumstances where one might be expected, whilst not conclusive, is inconsistent with there being a term of the Contract that required the irrigation system to be supplied and installed by 30 September 2014.
Fourth, when Mr Derrington sent an email to Mr Thompson on 28 October 2014 attaching the defendant’s invoice,[70] I would have expected some response from Mr Thompson in circumstances where, on Mr Thompson’s evidence, a term of the Contract had been breached. However there was no response from Mr Thompson.
[70] Exhibit P1, pp73, 74.
Fifth, as to Mr Thompson’s evidence that he would be ‘ringing Mick on a regular basis to make enquiries as to how it was going, whether we were on target, whether we were on time’,[71] that evidence is lacking in specificity about the inquiries that he said he made of Mr Derrington after 26 May 2014 to ensure that the irrigation system would be supplied and installed by 30 September 2014. Mr Thompson has access to email yet there is no written communication about Mr Thompson’s preparations nor any concern expressed by email as 30 September 2014 approached. Subject to what I say below, I find that Mr Thompson’s evidence, to which I have referred, concerning telephone inquiries of Mr Derrington are a reconstruction on Mr Thompson’s part and I do not accept it.
[71] T98.13-24.
Sixth, as to Mr Thompson’s evidence that he telephoned Mr Derrington from Katherine in the Northern Territory after 26 May 2014 to enquire as to when the project would be started, I find that such a conversation is, on balance, likely to have occurred. I find that in response to Mr Thompson’s enquiry of Mr Derrington in the telephone call from Katherine, Mr Derrington said words to the effect that ‘it’s getting there. It will be done’.[72] However that response was merely a confirmation that the work required would be done but without reference to a time frame.
[72] T99.35.
Seventh, Mr Thompson said that he contacted a ‘loyal source’ in the Barossa Valley with whom he had dealt before in relation to the installation of the irrigation system mid-September 2014. That indicates that he must have been at least concerned by mid-September that the defendant was not going to install the irrigation system by 30 September 2014. Had Mr Thompson truly understood that it was a term of the contract with the defendant that the irrigation system be supplied and installed by 30 September 2014, one might expect Mr Thompson to be actively demanding the defendant install the irrigation system by that date, and for those demands to be put in writing as he became increasingly concerned. Nonetheless, there was no documentation or other communication in writing to the defendant in relation to the alleged bargain.
I find that Mr Thompson contacted his ‘loyal source’ in the Barossa Valley and did not press the defendant to keep to the alleged essential term that the supply and installation of the irrigation system by the end of September 2014 because there was no such term. Indeed, Mr Thompson’s conduct is more consistent with suddenly realising prior to September 2014, that he might be able to plant out all the callused cuttings that spring if the irrigation system was installed.
Eighth, I have also noted the delivery dates for equipment required for the installation of the vineyard irrigation system. It seems incongruous that in circumstances where the irrigation system was, on the plaintiff’s case, to be supplied and installed by 30 September 2014, the defendant was ordering materials to be delivered to the Julia Hill Vineyard in the first week of October 2014. In my view that is because there was no term of the Contract that the irrigation system had to be supplied and installed by 30 September 2014.

Ninth, although Mr Thompson said in evidence that he and Mr Derrington had no conversation about the requirements for the plaintiff to pay the defendant prior to the works commencing, I accept Mr Thompson’s evidence that on no occasion did a representative of the defendant contact him saying that he needed to pay prior to the works commencing.[73] However, Mr Thompson’s evidence that there was no conversation about payment prior to the work commencing, does not advance the plaintiff’s case. The absence of any conversation to this effect is explained by the position that payment was not required until the second week of October 2014, notwithstanding the Terms of Trade. Under those circumstances there was no need for Mr Derrington to raise the topic, it being understood between the plaintiff and the defendant that payment would not be made until that time. That does not, however, mean that it was a term of the Contract that the vineyard irrigation system would be supplied and installed by 30 September 2014.
[73] T100.6.
As to the preparation of planting material and other preparatory works for the establishment of the vineyard, irrespective of whether the vineyard was to be planted in 2014 to callused cuttings or 2015 to rootlings, cuttings were required to be taken during the winter of 2014. The fact that Mr Thompson arranged for cuttings to be taken during this period is of no weight and does not assist the plaintiff’s case.
Issues
Against that background, I address the four issues below:
Was it a term of the Contract that the irrigation system would be designed, supplied and installed by 30 September 2014? If yes, was it an essential term?
It was not a term of the Contract that the irrigation system would be designed, supplied and installed by 30 September 2014.
If yes to issue 1 above, was it a term of the Contract that notwithstanding the requirement for the irrigation system to be designed, supplied and installed by 30 September 2014, the plaintiff would not be required to pay for it until the second week of October 2014? If yes, was it an essential term?
In view of the answer to issue 1 above, this issue does not arise.
If it was not a term of the Contract that the irrigation system would be designed, supplied and installed by 30 September 2014, was the defendant entitled to wait to supply and install the irrigation system until after it was paid in the second week in October 2014?
Yes. The terms of the quote set by Mr Derrington on 20 May 2014 make that clear.
If yes to issue 1 above, is the defendant in breach of the Contract?
This issue does not arise.
Conclusion
As a result of the matters I have set out above, I dismiss the plaintiff’s claim. I will hear the parties on the question of costs and any other orders that may be sought.